An Interview with Yvette Fontenot, Former HHS Deputy Director
By Neha Anand
Yvette Fontenot is a partner at Avenue Solutions, a democratic government affairs firm that offers strategic advice, policy development, and counsel in federal legislative and executive areas. She previously held the position of Deputy Director of the Office of Health reform at the Department of Health and Human Services (HHS) and has helped to draft and implement the Affordable Care Act (ACA). In this interview, she talks to reporter Neha Anand about her involvement with the Affordable Care Act and healthcare reform.
1. You’ve had an extensive career in health policy, what has driven you to become so involved in the field?
I was raised by two physicians, my mom and my dad were both doctors. For a long a time I thought I wanted to be a practitioner. Over time it became clear to me that the real issues were trying to help people to get in to see the doctor and making sure there were enough doctors. That’s what affected healthcare and the country as much as direct provision of care.
2. How is your role in health policy different between the your positions at HHS and Avenue Solutions?
It’s similar and different. It’s different in the sense that when you’re at the department, you’re the regulator and the implementer. You’re working to actually issue the regulations, regulate the stakeholders, and implement the policy as drafted and enacted in Congress. As a partner at Avenue Solutions, I’m working to help the stakeholders first understand the provisions of the law. Second, I help them comply with the provisions of the law and to realize there’s a general understanding that the law is here to stay and will not be repealed. Third, I help them actually capitalize on the law and figure out how they can make the law a net benefit. The positions are the same in the sense that [they] all involve a deep understanding of the Affordable Care Act, but [from] different angles.
3. How did you become involved in writing and implementing the Affordable Care Act?
When President Obama was elected and came into office on the promise of reforming the healthcare system, I went back to the Senate. I was working for the House Committee on Energy and Commerce at the time. I went back to the Senate, which was really where I was more comfortable, and started working with the White House and the other stakeholders getting health reform done. I was professional staff with the finance committee, which was one of two committees of jurisdiction in the Senate that had the primary responsibility for all the coverage provisions.
4. What were some of the biggest challenges in drafting the ACA?
There were both process challenges and policy challenges. Process challenges came from the fact that there were so many different committees of jurisdictions, two in the Senate and three in the House. The involvement of the administration meant there were a lot of priorities that had to be considered and balanced, which is difficult to do.
The challenges from the policy perspective were that you had 160 million Americans getting their health coverage from an employer-based system that, generally speaking, worked pretty well. You then had a separate market that wasn’t working at all in the individual market. The biggest challenge was how to completely revamp the latter without completely the destabilizing the former. This leads you to policies like the employer requirement, which was necessary to make sure that once you created a working individual market, you didn’t lose all your coverage in the employer market. It is a controversial provision of the law. All the provisions on the individual side that guaranteed issue and kept insurers from discriminating based on pre-existing conditions and health status required an individual [mandate] to buy coverage so that you have the right mix of people in the pool. These policies, along with tax credits to make it affordable and the exchanges to give people a place to actually buy the coverage, were all dramatic changes in policy, which is always difficult.
5. Which components of the ACA were you most involved in drafting and implementing?
I was the primary author of Title I, which is all the tax credits, the individual requirement, the employer requirement, the exchanges, all the insurance market reforms, the co-ops, the multi-state plans, and the coverage provisions. When I moved into the administration— first in the White House and then in the HHS to implement, I was in the coordinating role for all the policy related to the Affordable Care Act. That spans all the provisions from Title I to Title X and everything between.
6. A big issue is getting people to sign up for health insurance. President Obama has especially encouraged young people to sign up. As press about the ACA can often be confusing, how do you think people can become more aware of its benefits?
I think the best way that people can find out what’s most important for them to know is to go on healthcare.gov. There is a lot of explanatory language—they can actually look at the plans and they can actually figure out if they are eligible for tax credits. It is by definition presented in a nonpartisan and easy to understand manner. That’s the best source that is not influenced by anyone. Other than young people, those who are going to be eligible to actually buy coverage is anyone below 400% of the poverty level or anyone who has been unable to get coverage previously because of a pre-existing condition.
[However], the critical group is healthy people. Young is sort of used as a proxy for “healthy,” but what the exchange needs is healthy people. Like any insurance product, for every person who spends two cents more than the premium, you need a person who spends two cents less than the premium in order to make it work.
7. Speaking of healthcare.gov, when it was first released, there were some glitches that led to a lot of people losing enrollment. How did you feel about the situation and do you foresee other problems with the bill?
The early launch was disappointing. I think everyone was disappointed. What was disappointing about it was that people who should have had health coverage much earlier didn’t have access to it and the peace of mind health coverage brings.
In terms of the problems I foresee, I think there are still some unknowns in terms of what the premium levels will be for the upcoming year because we are not certain who will enroll for the rest of this month. Ultimately that will work itself out over time. We’ll have to make sure that the people who are eligible for assistance are actually getting it. [In addition], we have to figure out how to get the states that refuse to take Medicaid to take that up so that there is not a tremendous number of poor, uninsured people in those states. We have to figure out how to make sure the networks people are being offered are adequate and that the costs generated are affordable. These are all second-tier design issues.
8. Though the U.S. is seen a big international power, its healthcare system is ranked very low compared to other developed countries. What do you think are the reasons behind this? Do you ever look at healthcare systems of other nations to guide your work?
Yes, at the beginning of the process for the Affordable Care Act, we had a hearing on other healthcare systems around the world. There are lessons that you can learn from looking at other healthcare systems. There are other systems that have the private underpinnings of our healthcare system that are particularly telling. It’s hard to compare our system to a completely public system because that’s not comparing apples to apples. But, there are lessons in terms of access, quality, and cost where other countries seem to have done a little better than us. At the same time, there is no doubt that our system does create and enable more innovation than systems in other countries. You need to find the right balance, which I think is one of the focuses of the Affordable Care Act. While expanding coverage, it maintains a private system that instills innovation. It undertakes cost containment and quality improvement efforts like the integrated healthcare payment system that you see flourishing in Medicare now through accountable care organizations, medical homes, and other value-based purchasing models that will move our system towards both better quality and lower cost.
9. Avenue Solutions is a liberal organization and you have worked under the Obama and Clinton administrations. How has your political stance shaped your perspective on health policy?
I think that Democrats and Republicans agree on the fact that having uninsured people in this country is unacceptable. I think they agree that quality needs to be improved and cost needs to be reduced. We all agree on the general goals of health policy in this country. Being a Democrat means that I think there are times when the market fails to deliver on these goals and therefore the government needs to provide some assistance, whether it be financial, organizational, or regulatory. There is a fundamental role for government in healthcare when the market has failed. I think the Republican position is that those market failures, to the extent they believe there are any, can be addressed by the private sector without any further changes in the rules like through the tax system, through higher cost sharing, or through the expansion of health saving accounts. Generally speaking, that’s how the two parties differ in their approach to solving market failures in health care.
10. The ACA is a huge step in health care reform, what other future reforms do you think are needed to improve our health care system?
I have no doubt that there will be other reforms needed. One prime example involves the physician sustainable growth rate. The payment formula that Medicare pays physicians, which is antiquated and results in significant cuts to physicians every year, needs to be repealed and replaced. Congress is currently debating how to do that now. Medicare needs further changes, Medicaid needs further changes, and I have no doubt that the Affordable Care Act needs, if nothing else, technical corrections and bigger policy changes beyond that. I hope that at some point we can get to point where we can discuss further changes in health policy particularly to continue on the goals we all agree upon: universal coverage, reduced cost, and improved quality.
Neha Anand