The top Centers for Medicare and Medicaid Services official on Wednesday said the Affordable Care Act could be the health care industry’s turn for transformation.
CMS Acting Administrator Andy Slavitt called the health care law a “disruption” that could force the industry to make major changes, comparing the concerns about rising premiums that arose this summer to concerns that were raised ahead of major changes in the auto and banking industries years ago.
“What we see here, is the opening up of a new $40 billion and growing market with lots of capital,” Slavitt said, referring to the marketplace set up under the Affordable Care Act. “As disruptions go, this is a pretty great one.”
Slavitt was speaking to a group of insurers in Washington as part of a Department of Health and Human Services forum focused on how insurers are finding success on the marketplace. Like HHS Secretary Sylvia Burwell did earlier in the day, Slavitt sought to reassure insurers ahead of the open enrollment period set to start next month.
“If anybody’s premise was that by passing one law we would fix the affordability of health care all at once, this is not how it works,” Slavitt said.
The Affordable Care Act has come under fire in recent months as insurers have announced plans to retreat from selling plans on the exchanges, and officials have stressed that more needs to be done to strengthen the marketplaces. Slavitt acknowledged that many insurers have struggled financially on the exchanges because they originally set their monthly premiums too low, not knowing how much it would cost to cover a new group of consumers.
“Nobody knew what it would cost to cover sick people. We’re still learning that,” he said. “Rates will adjust, and as they do, the ACA will protect consumers with tax credits and with rebates if rates go up too much.”
Slavitt urged insurers not to look backward as they transition on the marketplace, but rather to view adapting to the new marketplace as a time of “opportunity and of competitive advantage.”
“Forgive me if I’m not persuaded by the headlines or the wall street analysts predicting doom and gloom,” he said.