The House’s Energy and Commerce Subcommittee on Health held an oversight hearing on Thursday, November 14, during which they took the testimony of Reverend Marilyn Dixon Hill, a registered nurse and Associate Pastor at Camden Bible Tabernacle Church; Michael Astrue, former HHS General Counsel and Commissioner of Social Security; Avik Roy, Senior Fellow at the Manhattan Institute for Policy Research; Roger Stark, Health Care Policy Analyst at the Washington Policy Center, and CHIR’s own Sabrina Corlette.

Committee members from both sides of the aisle agreed that the technical issues with the launch of Healthcare.gov were ultimately going to be solved, but not surprisingly, that is where agreement ended.

My colleague Sabrina Corlette reminded Committee members just why the ACA and its successful implementation are so important.  The pre-ACA individual market for health insurance has had fundamental and systemic problems. The three major problems that the ACA addresses, Ms. Corlette explained in her testimony, are: a lack of access to coverage, unaffordable coverage, and inadequate coverage.

The pre-ACA individual market, Corlette pointed out, was a hostile place, particularly for those in less than perfect health. As documented by CHIR in a recent report supported by the Robert Wood Johnson Foundation, Real Stories, Real Reforms, it was a place in which insurance companies could deny coverage to people with pre-existing conditions, or could charge people much higher premiums because of things like health status, gender, and age.  And, even if you were issued a policy, insurance companies were allowed to pick and choose what they would cover and could even rescind coverage when policyholders got sick if it appeared that condition existed prior to the start of their policy.

Inaccessibility of coverage on the pre-ACA individual health insurance market was not just a problem for the almost 1 out of 5 applicants that were flat-out denied policies, Corlette explained, it was also a problem for those who couldn’t afford to buy the policy being offered to them. Bearing the entire cost of coverage was simply unaffordable for many people on the individual market. The ACA addresses the unaffordability problem by making federal subsidies available to an estimated 17 million people who are currently uninsured or who buy insurance on their own. The ACA also limits the total out-of-pocket costs every policyholder can pay each year, as well as prohibits lifetime and annual limits on essential health benefits.

Another systemic problem with the pre-ACA individual health insurance market was that policies were being sold that provided dangerously inadequate protection, like an umbrella full of holes. The ACA sets new standards for benefits, ensuring that Americans have meaningful, comprehensive coverage.

The transition from the “wild west” of the pre-ACA individual health insurance market to fairer, more affordable and meaningful coverage has caused some disruption, and this is to be expected. As Corlette testified, “in order to fix the health insurance market, you need to change it.” And insurance companies are transitioning. Corlette explained, anticipating the need to make this transition, “insurance companies have taken different approaches,” one of which has been to discontinue some of their current non-ACA compliant policies.

There has been a lot of attention lately to people receiving policy cancellations from their insurance companies. But the decision to modify plans, like changing premiums, benefit levels, and provider networks is nothing new. Insurance companies have always been and continue to be able to change or even discontinue policies when it is in their business interests to do so. Policy proposals to address the plan cancellation issue, like the Upton bill, do nothing to change this. Under the Upton bill, insurance companies would be able to continue this longstanding practice. At least now when policies are discontinued, the health insurance marketplaces give individuals better choices than existed pre-ACA.

Corlette’s message to the Committee yesterday was that despite the upheaval going on in the health insurance marketplace, in fact because of the upheaval, insurance will finally serve the purpose it’s supposed to serve: to provide real financial protection to individuals and families.