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Sebelius: 'What Is the Alternative?' Sebelius: 'What Is the Alternative?'

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Sebelius: 'What Is the Alternative?'


HHS Secretary Kathleen Sebelius(Chip Somodevilla/Getty Images)

Almost exactly six months after the passage of the landmark health care reform act and on the heels of an ominous U.S. Census Bureau report on health-insurance coverage, National Journal Live hosted Health and Human Services Secretary Kathleen Sebelius for an update on the law. Sebelius sat down with National Journal Group Editorial Director Ronald Brownstein on September 20 to discuss the progress that HHS has made in implementing the law and the policy and political challenges it faces. Edited excerpts of the conversation follow.

NJ The Census Bureau reported last week that the number of Americans without health insurance increased by 4.3 million last year to 50.7 million. What are the implications of those numbers for your efforts to implement the health care law?


SEBELIUS There's no question that having this enormous number of Americans uninsured just points out the urgency of doing something different than what we were doing. Frankly, we were on a bit of a death spiral. Fewer employers year in and year out would offer coverage. As prices went up, insurance premiums were rising at three times the rate of wages, so a lot of employees found it more and more difficult to even take up the coverage if they were offered coverage, and those in the individual and small-group market found it really difficult to get coverage. With the economic downturn, it's an even more precarious time for most Americans.

NJ Seven million fewer people last year were receiving coverage through their employer than the year before. Is that essentially driven by this very deep recession, or is something larger going on?

SEBELIUS Well, I think you're seeing both. There's no question that the huge plunge in the economy, that 8 million job losses, translated into a lot of health-coverage losses, so that accelerated the gap. But I think that the system was broken, fundamentally broken. And it wasn't just the insurance piece of the puzzle. What the Affordable Care Act does is give an opportunity to begin to transform, reform the delivery system, and produce health benefits for Americans that will be very different from what we're seeing. We spend two and a half times what any nation on Earth spends on health care, and our health results look like we're a developing country.


NJ You have a series of regulations that are going into effect this week. What are people going to see and feel the most?

SEBELIUS The bill is designed in a way that tries to put some stability around the existing market before you get to 2014, where arguably there's a new market. Starting on or after September 23, health plans will no longer be able to rescind policies, which unfortunately was a pretty frequent practice. You can no longer have lifetime limits on policies, and although that affects a fairly small number of people, the people whom it affects are really in life-or-death situations, where again their insurance coverage runs out when they desperately need it. All policies have to be open to adult children, so parents will be able to keep their children on a family policy until the age of 26, and that applies to new policies, grandfathered policies, every other policy. [Regarding] preventive care: New policies, on or after September 23, will start being offered without co-pays or co-insurance, which is going to be huge for a lot of people. And all plans must have a transparent, easy-to-access, easy-to-follow third-party appeal.

NJ As you know, a number of insurers are citing these kinds of provisions and filing for rate increases around the country. What can you do, if anything, about those rate hikes?

SEBELIUS If you look at the trends, companies were implementing double-digit rate hikes year after year after year. What I think is very important is for companies to have accurate trend lines--what are the actuarial projections for these provisions versus what they were going to essentially do anyway.

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