Interview transcript

Terry Gerton So as we speak, the main topic that generated the last government shutdown, the Affordable Care Act subsidy extension, has expired and we’re potentially looking at a partial shutdown again just at the end of this month. Talk to us first about what the expiration of the subsidies means for Americans.

Carolyn Bordeaux So yes, it’s a very intensely felt issue among some big sectors of the population. What people need to realize is there were two subsidies. You have the standard credits that were originally adopted as part of the Affordable Care Act. Those continue to be in effect. But what expired on Dec. 31 was the enhanced subsidies that were passed as part the American Rescue Plan and then renewed in the Inflation Reduction Act. And those ensure that no one had to pay more than 8.5% of their income for health insurance. And these are people who are purchasing health insurance on the exchange. So a very distinct subset of the American population, but this is people who are small business owners, who are self-employed, that kind of universe of folks. And just to give you one day-to-day example in my life, the woman who does my hair, right? She and her husband purchased health insurance on the Exchange. And what, you know, who is affected by this lapse is people like my hairdresser. It is, she is in that 55 to 65 age range. These are folks who tend to pay higher premiums for health insurance. And they are the ones that, and they’re not super wealthy, right? They kind of fall into sort of that middle range, $65,000 to, you now, maybe over $100,000 a year, but folks like that are seeing their insurance premiums double or even triple in some cases.

Terry Gerton And it’s happening in real time. Is that correct?

Carolyn Bordeaux That is correct, yes. So this went into effect during open enrollment and really the debate at the end of last year was whether they would be able to make changes. Now, there may be further debate coming up in the coming days here, but it has expired and so people are now, starting this month, are going to be paying those higher premiums.

Terry Gerton So Congress spent a lot of time on this topic at the end of the year, three months, really debating it back and forth. From your perspective, what were the sticking points? Why couldn’t they find some way forward?

Carolyn Bordeaux First, from Concord’s perspective, I just want to point out that this is expensive. It is give or take, depending on how it’s structured, around $30 billion a year. What Democrats put on the table was not only the enhanced premium subsidies, but also removing a number of cost-saving measures that passed as part of the One Big Beautiful bill back earlier in 2025. So their proposal, which is a three-year extension, cost $300 billion over the next three years. So there are a lot of really big cost issues out there around this. There are some pretty reasonable ways, into my mind, to pay for it. But of course, whenever you put a pay for on the table, then that opens up another political fight. But a lot of folks like Concord and the Committee for Responsible Federal Budget had suggested things like site-neutral payments in Medicare could be a way to pay for this, stopping Medicare up-coding. Those are all ways that would probably more than pay for the enhanced premium credits. So we were interested in some kind of pairing of those two to get it done. However, you know, there were a number of people who were like, wait, it’s not paid for, and a lot of the proposals put on the table, that was one sticking point. And then what’s very interesting is, I talked to members of Congress about this, and some members’ districts are more heavily affected than others by it. Some districts have more people who are purchasing health insurance on the exchange, whereas other districts, people are more likely to get employer coverage on Medicare, have government coverage, and so there is a lot of disparity over who is really being affected by this when you look at the sweep across the country.

Terry Gerton I’m speaking with Carolyn Bordeaux, former member of Congress and currently executive director of the Concord Coalition and Concord Action. Carolyn, you talked about some of the options to pay for this. Why is it so difficult to get agreement on those if reasonable people think that they’re reasonable options?

Carolyn Bordeaux I personally think that there are lots of great options here to pay for it. I think it would not have been that hard for them to just extend it for a year or two, pay for, it and then work on fixing the premium tax credits. So one of the challenges is, while it is very important for bringing down people’s health insurance costs, right, there’s a very real human cost on the other side these things. Really what they’re doing is papering over the cost of rising health insurance. So it’s basically saying you don’t have to pay more than 8.5% of your income in health insurance if you’re purchasing it on the health insurance exchange. But what’s been happening is insurance companies are like, oh, well, great. I can raise premiums more and more and more, you as a customer are protected because the federal government will step in and cover any additional costs. So, it’s not a particularly good policy way to bring down the costs of insurance premiums, which is what we really need to do. And we were just talking about what some of the objections were to it, and those were also some of objections, that the underlying policy is not a really good policy. We really should find other ways to bring the cost of health insurance.

Terry Gerton Folks have been facing rising health care costs for a while. It far exceeds the pace of inflation. So talk us through the fundamental policy changes that would really restore sort of a balance to health care cost for people across the country.

Carolyn Bordeaux Well, originally when the Affordable Care Act passed, there were a number of provisions in there to try to bring down the costs of health insurance across the board. A lot of those ended up getting knocked out for various reasons. One of them was, of course, the individual mandate. Because if you have an insurance pool, you need for everybody to be chipping in a little bit so that you’re spreading the risk over the broadest population possible. So that was one thing that got knocked out. There was another piece, which was called cost-sharing reimbursements. Actually, there is legislation that — likely to pass the House, but probably won’t make it through the Senate — that would restore cost-sharing reimbursement. It’s a bit complicated, but to try to briefly explain it, what it was funding. So, insurers are not allowed to charge more than a certain amount on copays. So you go into the doctor, you make a payment, your insurance will cover 50% of that visit or 30% or whatever that is. Under the Affordable Care Act, there were certain restrictions that if you were poor, you didn’t have to pay X amount in copayment. There were certain restrictions around that. And then there was funding on the back end to cover the insurance companies’ loss. What happened was that funding was pulled out. However, the requirement that the insurance companies still cover a share of the copay was kept in place. So what did the insurance do? Well, they pass that cost on to the consumers in the form of higher premiums. So that’s another place. There are many little examples like that. There were various insurance risk pools for high-risk people that were in place and a lot of these things got pulled out of the Affordable Care Act and really need to be put back one way or another if we’re going to start addressing the costs of health insurance and there are probably a number of other great ideas out there as well to try to tackle that problem.

Terry Gerton So these are complicated policy discussions on the first hand, and they also have a lot of constituencies on the second hand. So, as Congress gets back up to speed at the beginning of this year, what are your expectations for an effective policy negotiation that might help resolve some of these issues and bring down the cost of health care without, as Concord is so concerned about, adding to the national debt?

Carolyn Bordeaux Yes. So this is, I have to say, health care and health insurance is something that just has bedeviled this country for many decades now. And we need to start thinking about more effective ways to address it, to do it. One of the largest drivers of costs going forward, things that are really going to expand the deficit and add to our really staggering national that are a lot of those healthcare and health insurance costs, particularly as they are in Medicare, and to some degree in Medicaid. So there are huge menus of options out there to try to bend the cost curve on health insurance. And we do need to tackle that in a comprehensive way. Given our current level of dysfunction, I am not seeing that happening. I think from Concord’s perspective [it] is, you know, just step one, we would like to see Congress create a fiscal commission, ideally composed of members of Congress as well as people from the outside to sit down and to start charting a path forward. And part of that path forward is going to have to involve some forms of health care reform to bring down costs.

Terry Gerton I was just going to ask you what your prognosis is for broader fiscal reform. What does this particular discussion tell you about the broader ability of Congress to tackle all of the kinds of issues that have to be addressed in order to deal with the debt?

Carolyn Bordeaux Well, we saw the meltdown that happened at the end of last year. We are coming up on the end of the continuing resolution at the of January. And Congress is really struggling. The House and the Senate, of course, are very fine margins within each party. There are a lot of fissures and fights going on. So it is really hard to see how they do much that is constructive until we kind of re-center ourselves as a country. My hope is that they will move quickly on some kind of omnibus appropriations bill and that they would put into that the fiscal commission legislation so that they can at least get started on a path to reducing the debt and deficit. And it is getting to the point where many economists are really saying this is going to be, getting our debt under control, it is going to be extremely important for our economic health in the years to come, and so it is my hope that they’ll start taking some positive steps, at least get that commission moving.

 

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Terry Gerton States are facing some new requirements in determining Medicaid eligibility that go into effect at the end of December. Specifically, they have to verify recipient community engagement. Can you talk us through this change in new requirements? Where does it come from? What’s its purpose?

Rob Miller Yeah, as a result of the One Big, Beautiful Bill Act, we’re looking at implementing what we like to call community engagement for the Medicaid expansion population. So sometimes it’s commonly referred to as work requirements, but it’s really a little bit more comprehensive than that. So we’re looking at the Medicaid expansion population and essentially running them through what we like to call our five-tier verification structure at Citizen. As part of that, we are looking to essentially identify the folks that we actually need to reach out to. So you may look at different types of data sources — if we have existing records of people already working, if we have existing record of people hitting exemptions, whether that be pregnancy, a Native American, medically frail, whatever that might be — and essentially filtering down as far as we can through an automated fashion to identify the population that we actually need to reach out to that need to come back and either prove that they’re working 80 hours a month or find a job or help them do volunteer work and things like that. So this is really about trying to put some, I guess you can call it accountability on this particular population as a result of the legislation.

Terry Gerton That new requirement can be pretty challenging to validate. I mean, this is a very dispersed population. They may or may not have access to technology. They may or may not have the proof of verification. How do states respond to this kind of new federal mandate?

Rob Miller Yes, I mean, I think one of our biggest concerns and I think some of the states as well is this sort of member abrasion. And we’ve seen this in a couple of other implementations over the past let’s say 10 years or so where where these types of programs have resulted in members falling off the rosters that really shouldn’t have. So our approach is to ensure that sort of reducing member abrasions almost hopefully as much as to zero percent, if you will, is one of our core themes. So we, again, start with what can we do to automatically confirm these folks are good to stay in the program? And that is, when we’ve talked to [the Centers for Medicare and Medicaid Services (CMS)], their number one goal. So the last thing that we want to do is have to reach out to a member to actually perform this extra check,because like you said, it may be hard to get in touch with them. There may be technical concerns. There maybe a various number of reasons, and we need to make this as easy as possible. So another way to handle that, of course, is to reach to these consumers with that in mind. So there may be folks that have only cell phones. There may be folks going to the library to get to their computers. There may folks that are expecting to be able to do this over the phone, through paper as well. And so by having all of those sort of different channels available for some of them, maybe 20 years old versus some one that’s in their 60s, right? And having those different paths will hopefully make it so that we can reach those members in a clean way and ensure that the right people are staying covered at the right time.

Terry Gerton Many of these folks that are covered by Medicaid may also be receiving benefits through other programs. We’ve seen new work requirements go into place with the [Supplementary Nutrition Assistance Program (SNAP)], for example. So when we think about validating individual eligibility, are we looking across all of these different benefit programs to try to only have to validate them once, or do they have to validate themselves in every single eligibility program?

Rob Miller Yeah, I think, unfortunately, it’s going to be a state-by-state approach. I think we do see a lot of siloed states where some of their systems are in different places, which does require members, unfortunately, to have to do those different types of checks. We were just at a conference the other week and heard about a state talking about 80 different portals with 80 different logins for members, which is not a great user experience, let’s put it that way. I think one of the things that we can do from a technology perspective is help those different silos. And we did that in Mississippi, actually, where we took about 15 different state and federal data sources across different agencies and connected the Human Services [Department] and the Department of Medicaid together so that once somebody makes a request to apply for SNAP, and then maybe they also then apply for Medicaid at the same time, which happens often. Those transactions continue to funnel through us. And we’ll identify that so that one, they’re not getting double charged for those checks to the different credit bureaus and what have you for property and things like that. But more importantly, that data can come back to the state immediately as well if it’s available. So there’s technology solutions, if you will, to help bridge that gap. But that is certainly gonna be something that we might expect. Now, one other thing I think is important on your question specifically around SNAP is that we’ve already received, as part of that sort of five tier filter, if you will, that we’re going to try to go through when we get the Medicaid expansion population is if you’re on SNAP or [Temporary Assistance for Needy Families (TANF)], there’s already additional checks being done on those other programs that will already put you basically into good compliance for this program. So that is actually one of the automated checks we’re going to have. If somebody’s already on one of those other programs, but particularly SNAP and TANF, that’s an all-ready elimination for you for us to have to reach out. We’re already going to basically check off to say that you’re good to stay on the program without us doing any additional verifications.

Terry Gerton I’m speaking with Rob Miller. He’s general manager and senior vice president at CITIZ3N. We mentioned the Medicaid requirements up front. Really states are only getting months to not only receive these new mandates, but have them implemented, which is like lightning speed in terms of tech innovation, and every single state has to do it themselves. What are you seeing in terms of state compliance: Are they ready? Are they not? Are some states ahead of this game?

Rob Miller That’s a great question. I think everybody’s still waiting, to be honest with you, with the formal guidance from CMS. And there’s been some things that have come out already as well. I think one of the things that we talk about is not starting from home base, if you will. We’re starting from third base. And then at Softheon, we had done a lot of this work in Kentucky back in 2018 when they were looking to implement work requirements. So we had a pretty decent idea of what we might expect to see from a state, as well as the potential flexibility that we might see different states try to implement as well. And so I think a couple things we’re going to see. One, we’re not going to see likely a lot of RFPs coming out, requests for proposal, because of the timeline. It may take three or four months just to get all the approvals in place just to publish something, a couple months before you get responses, a couple of months after that before you’re able to evaluate that. And right then we’re already looking at we’re like in September of next year, and that’s going to be too late. We’re looking at probably having to have systems in place by June, certainly notifications and communications going out to members definitely by September, if not sooner than that as well. Because if we’re looking for members to comply with this in January 2027, they need to be notified, again, back to our chat a little bit earlier about this, they need to notified much sooner. So we do think states are probably a little bit behind just because of the timing and the lack of maybe full clarity on what’s expected from a detailed policy perspective. So what we’re seeing is we’re seeing a lot of states look towards their existing vendors. And so our strategy on the citizen side, we have a bunch of existing customers, but we’re also talking to the bigger system integrators as well to help them because they also tend to be slower to respond as well, as a bigger organization. I think the one biggest concern I think we have in general with that is that we don’t want them to use that as an opportunity to make another buck. And one of our biggest missions at CITIZ3N and Softheon is to make health care affordable, accessible and plentiful, and we really do believe that. In fact, we spoke about one of the previous conferences, about being able to split the cost of the implementation. That’s not something I think some of the bigger guys would talk about doing. They’ll use an opportunity to charge the same amount in each different state as they see it, customize it to crazy when maybe CMS comes out and makes a policy change, that’ll be a change order. That’s just not exactly how we operate. And so we want to make it easy and something where they can define their budget ahead of time and not worry about having all these extra costs as we work towards the implementation date.

Terry Gerton You mentioned that you and CITIZ3N have worked through these kinds of programmatic changes in the past. What have you found with the beneficiary population? Do they understand the new requirements? Are they going to be prepared to meet them? And what happens to their coverage if they’re not?

Rob Miller Yeah, I mean, unfortunately, if they don’t hit it, they’re going to lose coverage. And that’s certainly the last thing, back to our mission, the last thing that we want. And so we want to make sure that the communications are clear, they’re easy to receive. But we can go through any channel, whether it be a text message, a letter in the mail, an email, a push from a mobile app or whatever it might be. All of those different potential channels to get to those members. I think there’s going to be a lot of educating that’s going to need to happen as part of this because it’s going to be new for some folks, and I can’t imagine everybody sitting there watching and reading through the One Big Beautiful Bill Act. So we’re going to need make sure that folks are communicated to properly, which is why that timeline is even more crunched, as we talked about, than it is because we don’t want to send that letter to them in December, expecting them the month after to just be ready for it. So that communication is going to really be key.

Terry Gerton And are states adequately funded to do both the modernization and the outreach that’s going to be required to bring folks across the spectrum into compliance with these new requirements?

Rob Miller Well, I think there’s definitely going to be some federal funding available to them in the typical 90-10 rules, but it is going to be a challenge. And I think we’ve already talked to a few states on the CITIZ3N side where they’ve reached out to their existing vendors and again they’re seeing major dollar signs just to analyze the requirements and so that’s something where we come in hopefully and could be a little bit more nimble and agile than than they can and and help these states out because again our mission here is to is to help sustain the program and ensure nobody gets dropped off the rails, not to make a quick buck off of some impending legislation, if you will.

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