Insurer CEOs Head to White House to Discuss Obamacare Troubles
WellPoint CEO Joseph Swedish and other health insurance executives will meet with White House Chief of Staff Denis McDonough and Valerie Jarrett, a senior adviser to President Barack Obama.
INN Breaking News, October 23, 2013
(Bloomberg) -- The heads of WellPoint Inc., Aetna Inc. and at least 10 other insurers are meeting with President Barack Obama’s chief of staff and health secretary to discuss the hobbled rollout of the U.S. health-care marketplaces.
The meeting today focuses “on implementation and enrollment,” White House Press Secretary Jay Carney said at a briefing with reporters. He said Kathleen Sebelius, the Health and Human Services secretary, is attending. Chief of Staff Denis McDonough and Valerie Jarrett, a senior adviser to Obama, also are participating, said Robert Zirkelbach, a spokesman for the lobbying group America’s Health Insurance Plans.
The online exchanges, where people can buy private plans with government subsidies, represent a potential windfall for insurance companies of $205 billion a year in added sales by 2021, according to a PricewaterhouseCoopers LLP report last year. The insurance industry has raised alarms about faulty data from the federal insurance website since it opened Oct. 1 as part of the Patient Protection and Affordable Care Act of 2010.
“We have a common goal of increasing access and affordability for health care,” WellPoint Chief Executive Officer Joseph Swedish told analysts earlier today on a conference call. While the exchanges have had a “choppy” opening, WellPoint “remains optimistic” about the long-term opportunities.
Swedish, who runs the second-largest U.S. health plan is scheduled to attend today’s meeting, as is Mark Bertolini, the CEO of No. 3 insurer Aetna Inc., according to a list of participants. The chief executive officers of Humana Inc., Health Net Inc., Centene Corp. and Kaiser Permanente also are among those listed.
The website flaws have made it harder for people to enroll, marring its debut and giving critics ammunition to undercut the law called Obamacare by detractors and supporters alike. The failures may discourage young, healthy, web-savvy consumers whose participation is critical to offset the risk of insuring older, sicker people and to keep the program sustainable.
WellPoint, which covers 35.5 million people, fell 2.9 percent to $85.91 at 2:21 p.m. New York time, and other carriers slipped as well. Swedish declined to give specific enrollment figures for the exchanges or a profit forecast for 2014, said Thomas Carroll, a Stifel Nicolaus & Co. analyst in Baltimore.
“Companies are being just ultraconservative with respect to assumptions on exchange enrollment, the composition of that enrollment and what kind of Medicaid expansion we’ll see,” Carroll said in a telephone interview.
WellPoint raised its profit forecast for 2013, citing lower medical costs and changes from the health law. The stock had jumped 45 percent for the year through yesterday.
Obama yesterday drafted his soon-to-be top economic adviser, Jeffrey Zients, to help fix the flawed federal website, healthcare.gov. The exchange, which serves 36 states, has been plagued by technical issues, preventing many consumers from signing up for a plan. Fourteen state-run exchanges, including those in California and New York, have performed better.
U.S. Senator Jeanne Shaheen, a New Hampshire Democrat, asked Obama in a letter yesterday to extend open enrollment beyond the March 31 closing date. She said that since some people have tried and failed to enroll, more time is needed to allow consumers additional opportunities to access the site.
Representative Nancy Pelosi, the California Democrat who was House speaker when the health law was passed by the then- Democratically controlled Congress, said she doesn’t support Shaheen’s request.
“We should try to fix what we have, move forward with the deadline,” Pelosi said at a briefing today with reporters. “While there are glitches, there are solutions as well.”
Republicans, whose opposition to the law led to a partial government shutdown, are scheduled to hold two congressional hearings on the website over the next week. The administration has already changed the direction of its rescue work on the site, creating a hit list of upgrades it seeks to check off in the coming weeks while bringing in Zients and other advisers.
“We’re in a place now where there’s so much wrong you just don’t know what’s broken until you get a lot of it fixed,” Bertolini, the CEO at Hartford, Connecticut-based Aetna, said during an Oct. 14 interview with CNBC. “We just have to plow through it.”
Swedish, on his call, said “there are some challenges going through the application and enrollment process. We knew there would be choppiness going in.”
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