Capretta on 'Fox News Sunday': Is Healthcare.gov the least of Obamacare's worries?

 

This is a rush transcript from "Fox News Sunday," December 1, 2013. This copy may not be in its final form and may be updated.

Joining me now, two experts on health care: Neera Tanden, president of the Center for American Progress. She was a key member of the administration team that wrote and passed ObamaCare.

And James Capretta with the Ethics and Public Policy Center.

Well, it's only been hours since the upgrade of Healthcare.gov. From what you can tell so far, Jim -- start with you -- has it been fixed?

CAPRETTA: Well, it's very hard to tell. We're not going to know for at least a month or so.

Look, the real test of Healthcare.gov is whether or not you make the right payment for the right people to the right insurance plan. It's very easy to fix the front end enrollment if you turn off controls on the back end. It's very clear from multiple media reports that the system is still not accurate when it makes payments to the insurance plan.

In fact, they're doing a workaround. They're going to actually make large lump sum payments to the insurance plan, based on self- reporting from the insurance companies instead of actual individual subsidy calculations.

WALLACE: Yes --

CAPRETTA: So, they're working around the whole problem instead of actually solving it. 

WALLACE: Well, let me pick up on that with you, Neera, because what we hear is that while the IT specialists have been scrambling on the front end of Healthcare.gov -- the idea that you can sign up for it -- there are still problems that the website is sending -- still sending inaccurate information to the insurers and they still haven't even billed the process for payments to the insurers.

That's a big deal, isn't it?

TANDEN: Well, actually that process is known as an 834 file. That process is working much better. It is absolutely the case that this is a fundamental aspect of this and a good benchmark of this is when we have Medicare prescription bills, the Part D program, we actually had hundreds of thousands of seniors being sent to the wrong -- they got the wrong pharmaceutical information. That's a big problem.

So, we want to avoid that problem that already happened in the past. We want to make sure it doesn't happen again. And we are finding that the administration has found over the last week that that has been a much improved process. Obviously, the test will be in a month. But I think that the idea of doom and gloom around that is overstated.

WALLACE: All right. Let's talk about the question of cancellations, because as I say, this is not a Web site problem. It's a lot of problems that have to be fixed.

There has been so much attention to the millions of individual policyholders who have had their policies canceled.

Let's put this up on the screen. In the first month, for every one person that got insurance, 50 people lost coverage. But it now turns out millions more will lose employer policies. Back in 2010, the administration projected about 14 million people who now get health insurance through their jobs will lose that by 2019. Other government estimates are even worse.

Neera, hasn't the President misled all of us about the possibility that we could lose the plans we have?

TANDEN: So, first of all, on these, I haven't seen these estimates of 14 million people from employer-based --

WALLACE: That was from CMS.

TANDEN: That was a higher coverage. CBO has done projections since then. They are much lower than that.

So, I think -- I think we can really find the facts on these numbers. So -- but first and foremost, I would say, look, the president has apologized for the issues around lost coverage for statements he's made. But we should recognize what happened here really, which is that people -- people have -- are -- they're getting insurance notices that they have lost coverage that there other plans available to them, and 70 percent of people actually will get subsidies for health insurance.

Well, we aren't seeing in these data is how many people will be better off from the Affordable Care Act. We're only focused on the insurance lost plan, but there are better plans for many of these people. And I think that's what has gotten really lost.

And the fact is, we have hundreds of thousands of people and hopefully millions of people who will get better health care than they had before.

WALLACE: I want to pick up on coverage in a minute. But I want to ask Jim the same question.

Is it or is it not the case that this isn't just a question -- an issue of problem with people with individual policies, but that a lot of people who get their health insurance through their small business employer or even big corporations are going to lose that coverage?

CAPRETTA: They will. The law requires -- especially small businesses to pay premiums as a large group now, instead of just for the individual enrollment in their company. So, if you have a healthy company and you're small, your premiums are pretty low today, you're going to get cooled with a larger group in the future and your premiums are going to go up. Moreover, you have to buy more expansive coverage that is compliant with the new law.

So, lots of small businesses signed up for 2014 are going to get notices in the coming months saying, hey, you can't get your old plan anymore. The same problem that individuals face, these problems are going to wipe all the way out through the small business community.

TANDEN: I can just make a point about this? James Capretta has a health care plan that he's put out, that he asked for small -- he asked for tax credit. He said we should convert employers to tax credits. Estimates of that were that there would be 11 million people who would lose health care coverage, the coverage they have, and they'd be dumped on to different kinds of health care plans.

So, I have to -- and, you know, John McCain supported a health care plan that had 20 million people lose the coverage they had. So, without better alternatives. So, I think the idea that --

(CROSSTALK)

WALLACE: I don't --

TANDEN: No, no --

WALLACE: With all due respect, I don't want to get into the plans that don't exist. I want to get to the plan --

TANDEN: I know. But I'm just saying, it's a little hypocritical to hear complaints about coverage loss from someone who's authored a plan --

WALLACE: All right. Thirty seconds to respond about a plan that doesn't exist. Go ahead.

TANDEN: It doesn't, no. But it's your plan. So, criticizing the president for a plan that would have less --

WALLACE: OK. We have your point.

Mr. Capretta?

CAPRETTA: She's wrong. My --

TANDEN: I'm not.

CAPRETTA: Yes, the plan I drafted, which I would love to have Congress and other people consider, would not actually affect the vast majority of people in employer based coverage because it wouldn't change the exclusion.

(CROSSTALK)

TANDEN: That's true. Millions of people would lose coverage.

WALLACE: I'm sorry. I want to talk about ObamaCare. I don't want to talk about Capretta care.

TANDEN: I just think it's not -- it's unfair.

WALLACE: Let's turn -- because you brought up, and it's an important thing. This isn't just an insurance issue, it's the coverage issue. It's the health care that you're getting in the end.

Jim, is it true that the cut costs that many of these new plans under ObamaCare will sharply limit your access to doctors and hospitals, as much as Medicaid does today?

CAPRETTA: That's correct. Most of the plans, especially the silver plans and lower cost plans in the exchanges have very narrow networks. Some in Los Angeles don't include the most visited commercially based hospital systems that are used by commercial insurance.

So, yes, the answer is this is going to feel a lot more like the Medicaid program with a narrow network of doctors, a narrow set of hospitals you can use. If you go outside that system, you pay a lot more. It is a very narrow network people are finding. It's going to be difficult, frankly, through the website, the website is not good enough to figure out if your doctor is in the plan. But when you can figure it out, a lot of people will find out their doctor is not in their plan.

WALLACE: All right. Neera, I want to put up, continuing this conversation, a quote from an editorial over the weekend in "The Wall Street Journal." Let's put this up on the screen.

They say, "The awful irony of this new ObamaCare health care system is that all adults now enjoy mandated pediatric vision benefits, even if they don't have kids. But parents can't take their daughter to an expensive children's hospital if she really gets sick."

Isn't it -- if I may, let me ask the question.

TANDEN: Yes, please?

WALLACE: Isn't it true that to meet the increased cost of these mandated coverage, all of these expanded benefits, that a lot of parents are -- a lot of people are not going to be able to use the hospitals and doctors that they currently have.

TANDEN: So, here's the reality of this situation. There are insurers who are offering narrower networks, right?

WALLACE: Under ObamaCare?

TANDEN: Right. So, in the exchanges, there are people who are offering narrower networks under the new law, right? For -- and you pay less for those plans. You can pay more for a plan that has a larger network. That is -- that is the issue here. There are choices in the market. People are paying more for better benefits.

Now, I think a really important point here is that the vast majority of people in the insurance exchanges have never had health insurance before. So, you're not -- they're having a new choice here, which expands health care coverage for them.

There are some people who had health insurance who are going into the exchanges and they face an option here, which is just like conservatives have been telling us for a long time, you should have options, and if you want more expensive care, you should pay for it yourself. That is the situation we get here.

WALLACE: I get the point. I don't think there's any question if you're currently uninsured, you can get health insurance coverage you're better off.

TANDEN: Which at the end of the day, will be the vast majority of people in the exchanges.

WALLACE: The question is whether or not the people who currently have policies are going to get better coverage or not. What about this question as to, you know, Neera says, OK, look, there are bronze, gold, silver and platinum, and the fact is, if you get a cheaper plan, you have less choice?

CAPRETTA: Well, I think people that are getting their plans canceled in the individual market are finding that the premiums are going up on average. People looked at them very carefully. On average, people that are in the individual market today, buying insurance, paying premiums, are going to see about a 30 percent to 50 percent increase in their premiums for worse coverage. Higher deductibles, higher deductibles --

(CROSSTALK)

TANDEN: Without the subsidies. Without the subsidies. 

CAPRETTA: No, with the subsidies.

TANDEN: That's not accurate.

CAPRETTA: And people that are young and healthy are going to see 50 percent to 100 percent --

WALLACE: All right. And that brings me to the final point I want to discuss here, and that is this question of whether or not ObamaCare has massive income redistribution.

Neera, is it not the case that younger, healthier people are going to pay more than they currently do -- you got to let me ask the question.

TANDEN: I didn't say anything. I didn't say anything. I'm just getting ready.

WALLACE: You're warming up. That young healthy people are going to pay more than they currently do in order to subsidize the extra benefits for older sicker people? Isn't that income redistribution?

TANDEN: Let me be crystal clear about this, because I think there's been a lot of misinformation here about the -- broad statements about younger, healthier people. The truth is, the people with health insurance today, 85 percent -- vast majority of people have employer based coverage, that's staying in place, Medicaid, Medicare, you're talking about people today who have health insurance in the individual market, which is, you know, 5 percent of the entire system.

WALLACE: That's 15 million people.

TANDEN: I appreciate that. I appreciate it.

And you're saying that some people may have to pay a little bit more and the idea of the Affordable Care Act is that they have a much better health care plan, because the challenge we have in this --

WALLACE: It sounds to me like you're saying yes, that they --

TANDEN: The challenge we have in this whole system -- no, no.

WALLACE: But it sounds like what you're saying is younger, healthier people are going to paying more to subsidize older, sicker people.

TANDEN: I'm not saying they're going to pay more for subsidies. It depends on their income and a whole variety of issues. A lot of younger people are seeing a much better deal in this whole system.

The problem is you're talking about issues where it's highly -- there is a big question about whether younger people should actually have a much better deal in the system because they're going to get pooled with a lot of other people. That's why --

WALLACE: Jim, is that a better deal or -- final word, is it a better deal or not?

CAPRETTA: Much worse deal. People today, if they're young and healthy can get relatively inexpensive insurance in the open individual market.

You're right about income redistribution, though. If you think about it, it's $250 billion a year in Medicaid expansion, in the subsidy structure, that's basically being paid for by people on Medicare, through Medicare cuts, and a lot of tax increases.

If you want to know what the bill is really about, people in their most honest and candid moments will admit that it's basically taken $250 billion a year out of taxes and Medicare and moving it into the Medicaid expansion and the subsidy structure. This other premium subsidies are also occurring between young and the old. But it is a massive, massive income redistribution.

TANDEN: It's just not fair to say that they're not getting a better health care plan. That's the challenge with the individual markets today, to act like it's a good plan -- people have good systems. The challenge now is not really insurance for a lot of people because when you get sick, it is not their premium. That's the concern.

WALLACE: All right. I never thought we were going to settle this today, we're not. But it was an interesting discussion, and please come back, both of you. And thanks for coming in this holiday weekend.

CAPRETTA: Thank you.

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