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Sebelius: Health Reform Is The States' Responsibility

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States will play a major role in creating interim high-risk pools, controlling health insurance rates and managing other health reform implementation efforts, according to Kathleen Sebelius.

Sebelius, secretary of the U.S. Department of Health and Human Services, testified today at a House Appropriations Committee subcommittee hearing on the HHS budget for fiscal year 2011.

Many lawmakers tried to use the hearing to get Sebelius to talk about what HHS will do to implement the new Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act.

Rep. Dennis Rehberg, R-Mont., noted, for example, that the Obama administration does not seem to be asking for enough money to fund effort to expand the risk pools that would be used to provide health coverage on a guaranteed-issue basis for people with health problems up until 2014, when PPACA and HCERA provisions that would ban use of health status information in health coverage sales to take effect.

“This is not a federal program,” Sebelius said, and she said HHS will not even know which states will be using federal money to set up the temporary risk pool program until responses come in sometime around April 30.

Montana already has a risk pool, but participating in the new federal risk pool subsidy program would be helpful for Montana residents, because the federal government would be using its funding to keep risk pool premium rates under 150% of the usual market rate cost for coverage, and the cost of Montana risk pool coverage is well above that level, Sebelius said.

Similarly, states may have to take charge of keeping health insurers from asking for unreasonable rate increases until federal rate review provisions take effect in 2014, Sebelius said.

“This has to be a state-led, on-the-ground program,” Sebelius said.

Sebelius said she has asked health insurers for actuarial information, including overhead expense information, so that HHS can at least make the price-setting process transportant.

“So far, we haven’t had a terribly robust response, but we’re hoping that will change,” Sebelius said.

Rep. Todd Tiahrt, R-Kan., asked Sebelius about a New York Times article suggesting that efforts to require insurers to sell individual health coverage on a guaranteed-issue basis, without using health status in pricing, had led to sky-high prices in states such as Massachusetts.

The situation will not be the same when federal health reform comes to Kansas, because Kansans will have access to a state-based exchange that will help them negotiate for good deals, and the new law “doesn’t import the mandates from Massachusetts,” Sebelius said.