[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
         INSURED BUT NOT COVERED: THE PROBLEM OF UNDERINSURANCE

=======================================================================


                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 15, 2009

                               __________

                           Serial No. 111-72


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov




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                    COMMITTEE ON ENERGY AND COMMERCE

   HENRY A. WAXMAN, California, 
             Chairman
JOHN D. DINGELL, Michigan
  Chairman Emeritus
EDWARD J. MARKEY, Massachusetts
RICK BOUCHER, Virginia
FRANK PALLONE, Jr., New Jersey
BART GORDON, Tennessee
BOBBY L. RUSH, Illinois
ANNA G. ESHOO, California
BART STUPAK, Michigan
ELIOT L. ENGEL, New York
GENE GREEN, Texas
DIANA DeGETTE, Colorado
  Vice Chairman
LOIS CAPPS, California
MICHAEL F. DOYLE, Pennsylvania
JANE HARMAN, California
TOM ALLEN, Maine
JANICE D. SCHAKOWSKY, Illinois
CHARLES A. GONZALEZ, Texas
JAY INSLEE, Washington
TAMMY BALDWIN, Wisconsin
MIKE ROSS, Arkansas
ANTHONY D. WEINER, New York
JIM MATHESON, Utah
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA CHRISTENSEN, Virgin Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont                 JOE BARTON, Texas
                                       Ranking Member
                                     RALPH M. HALL, Texas
                                     FRED UPTON, Michigan
                                     CLIFF STEARNS, Florida
                                     NATHAN DEAL, Georgia
                                     ED WHITFIELD, Kentucky
                                     JOHN SHIMKUS, Illinois
                                     JOHN B. SHADEGG, Arizona
                                     ROY BLUNT, Missouri
                                     STEVE BUYER, Indiana
                                     GEORGE RADANOVICH, California
                                     JOSEPH R. PITTS, Pennsylvania
                                     MARY BONO MACK, California
                                     GREG WALDEN, Oregon
                                     LEE TERRY, Nebraska
                                     MIKE ROGERS, Michigan
                                     SUE WILKINS MYRICK, North Carolina
                                     JOHN SULLIVAN, Oklahoma
                                     TIM MURPHY, Pennsylvania
                                     MICHAEL C. BURGESS, Texas
                                     MARSHA BLACKBURN, Tennessee
                                     PHIL GINGREY, Georgia
                                     STEVE SCALISE, Louisiana

                                  (ii)
              Subcommittee on Oversight and Investigations

                    BART STUPAK, Michigan, Chairman
BRUCE L. BRALEY, Iowa                GREG WALDEN, Oregon
  Vice Chairman                        Ranking Member
EDWARD J. MARKEY, Massachusetts      ED WHITFIELD, Kentucky
DIANA DeGETTE, Colorado              MIKE FERGUSON, New Jersey
MIKE DOYLE, Pennsylvania             TIM MURPHY, Pennsylvania
JAN SCHAKOWSKY, Illinois             MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas
DONNA M. CHRISTENSEN, Virgin 
    Islands
PETER WELCH, Vermont
GENE GREEN, Texas
BETTY SUTTON, Ohio
JOHN D. DINGELL, Michigan (ex 
    officio)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Bart Stupak, a Representative in Congress from the State of 
  Michigan, opening statement....................................
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................
    Prepared statement...........................................
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, prepared statement......................................
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachusetts, opening statement...............
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................
Hon. Peter Welch, a Representative in Congress from the State of 
  Vermont, opening statement.....................................
    Prepared statement...........................................
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................
    Prepared statement...........................................
Hon. Donna M. Christensen, a Representative in Congress from the 
  Virgin Islands, opening statement..............................
Hon. Phil Gingrey, a Representative in Congress from the State of 
  Georgia, opening statement.....................................
Hon. Michael F. Doyle, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................
Hon. Janice D. Schakowsky, a Representative in Congress from the 
  State of Illinois, opening statement...........................
Hon. Bruce L. Braley, a Representative in Congress from the State 
  of Iowa, opening statement.....................................
    Prepared statement...........................................
Hon. Betty Sutton, a Representative in Congress from the State of 
  Ohio, opening statement........................................

                               Witnesses

Catherine Howard, Policyholder, San Francisco, California........
    Prepared statement...........................................
David Null, Policyholder, Garland, Texas.........................
    Prepared statement...........................................
    Answers to submitted questions...............................
Nathan Wilkes, Policyholder, Englewood, Colorado.................
    Prepared statement...........................................
Sara R. Collins, Ph.D., Vice President for the Affordable Health 
  Insurance Program, The Commonwealth Fund.......................
    Prepared statement...........................................
Stan Brock, Director, Remote Area Medical Volunteer Corps........
    Prepared statement...........................................

                           Submitted material

Document binder..................................................


         INSURED BUT NOT COVERED: THE PROBLEM OF UNDERINSURANCE

                              ----------                              


                       THURSDAY, OCTOBER 15, 2009

                  House of Representatives,
      Subcommittee on Oversight and Investigations,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:40 p.m., in 
Room 2123, Rayburn House Office Building, Hon. Bart Stupak 
[chairman of the subcommittee] presiding.
    Present: Representatives Stupak, Braley, Markey, Doyle, 
Schakowsky, Christensen, Welch, Green, Sutton, Dingell, Waxman 
(ex officio), Walden, Burgess, Blackburn, Gingrey and Barton 
(ex officio).
    Staff Present: Phil Barnett, Staff Director; Bruce Wolpe, 
Senior Advisor; Mike Gordon, Chief Investigative Counsel; Dave 
Leviss, Chief Oversight Counsel; Stacia Cardille, Counsel; 
Molly Gaston, Counsel; Erika Smith, Professional Staff Member; 
Scott Schloegel, Investigator; Ali Golden, Professional Staff 
Member; Jennifer Owens, Investigator; Ali Neubauer, Special 
Assistant; Ken Marty, HHS-OIG Detailee; Sean Hayes, Minority 
Counsel; and Alan Slobodin, Minority Chief Counsel, Oversight 
and Investigations.

  OPENING STATEMENT OF HON. BART STUPAK, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Stupak. This hearing will come to order.
    Today we have a hearing entitled Insured But Not Covered: 
The Problem of Underinsurance. The Chairman, the Ranking Member 
and Chairman Emeritus will be recognized for a 5-minute opening 
statement. Other members of the subcommittee will be recognized 
for 3-minute opening statements. I will begin.
    A few months ago our subcommittee held hearings on the 
health industry practice of terminating coverage after a 
policyholder becomes sick and files a claim. In our 
investigation we learned that if your insurance company 
believes you have an illness that may be costly, it will go 
back and reexamine your application for health insurance to 
find any excuse to cancel your coverage. As health insurance 
industry executives brazenly told us, this practice, called 
rescission, will continue until there is a national health care 
coverage for all Americans.
    Today we continue our investigation of the private health 
insurance market focusing on the underinsured. An underinsured 
person is one who has health insurance coverage, but the policy 
does not adequately cover the health care costs or high medical 
expenses. Underinsured individuals traditionally have high out-
of-pocket expenses because of high deductibles and copays. In 
some instances people are uninsured because they can only 
afford a basic policy. In other instances policyholders believe 
that they have adequate coverage, only to find that there are 
limits buried within the policy, such as annual caps on the 
amount the insurance will cover or limits on the number of 
times the policyholder can receive certain services or 
treatments.
    Regardless of how you define this financially fragile 
group, the sad consequences of being uninsured can be 
devastating; lead to financial ruin, bankruptcy and making 
medical decisions based on cost rather than care.
    As the cost of health insurance skyrockets, more and more 
Americans are finding they can only afford bare-bone policies, 
leaving them one illness, one accident away from bankruptcy. 
According to the American Medical Association study in 2007, 62 
percent of all bankruptcies filed in the United States were 
related to medical costs, and 78 of these filers had insurance. 
Many of these now bankrupt individuals were well educated, 
owned homes and had middle-class occupations. Unfortunately 
they were underinsured, and their health insurance did not 
cover their medical costs, forcing them to declare bankruptcy 
due to mountains of medical debt.
    Still health insurance continue their unconscionable 
increase in premiums. Between 2000 and 2007, the annual family 
health insurance premium in Michigan rose 78 percent, while 
wages rose just 4.6 percent. I am currently receiving e-mails 
and letters from constituents reporting 22 to 40 percent 
premium increases in their individual health insurance 
policies. The average family health insurance policy now costs 
$13,125, which is, by the way, 34 percent of the median 
household income in my congressional district. The Commonwealth 
Fund, which will testify today, recently reported that, as a 
result, more families are experiencing medical problems or cost 
delays in getting needed medical care. In 2007, nearly two-
thirds of U.S. adults, 116 million people, struggled to pay 
their medical bills, went without needed care because of the 
cost, were uninsured for a time or were underinsured.
    Our first panel of witnesses will put a face on the 
frightening statistics found in the Commonwealth Fund report. 
Catherine Howard was diagnosed with breast cancer at the early 
age of 29 and survived to tell her story. Being young and 
healthy with a limited income, Catherine chose a low-premium, 
high-copay health insurance that left her in financial shambles 
after her breast cancer. At the time of her illness, she was 
earning just $20,000 a year, but her outstanding medical bills 
were $40,000. And Catherine was unable to work through her 
surgery, chemotherapy and radiation. To her credit, Catherine 
did not declare bankruptcy and is paying $1,800 per month on 
her outstanding medical obligations.
    David Null will speak of his family and his daughter Tatem, 
who, at the age of 7, was diagnosed with liver failure. David 
bought health insurance for his family to cover emergency 
situations, not a policy to cover head colds. Still, when Tatem 
was on life support and needed a lifesaving $560,000 kidney 
transplant, David learned his emergency policy would only cover 
between $30,000 and $40,000, and the hospital was demanding a 
$200,000 deposit before they would proceed with the transplant. 
Being underinsured left Tatem fighting for her life and David 
without a hope or a prayer.
    Children's Hospital officials helped the Nulls qualify for 
a government-run, government-sponsored Medicaid health care 
program, and the entire hospital bill was retroactively 
covered. The catch is the Nulls could not earn more than $1,614 
a month or they would lose their Medicaid coverage, which paid 
for Tatem's medication to prevent organ rejection, which can 
cost thousands of dollars each month.
    Nathan Wilkes will tell us about his employer-provided 
health insurance with a $1 million limit for each family 
member. Unfortunately $1 million does not go very far when his 
son was diagnosed as severe hemophilia. Even though the Wilkes 
have paid up to $25,000 in a single year for out-of-pocket 
costs, Mr. Wilkes is unable to get a policy that will 
adequately cover his son's medical expenses. Now on his third 
insurance policy, Mr. Wilkes does not know how they will be 
able to afford his son's lifesaving medical treatments.
    Each of these individuals and families did everything 
right; worked hard, purchased health insurance, paid their 
premiums, but were still left in financial ruin.
    We will also hear, as I said, from Sara Collins of the 
Commonwealth Fund. She will discuss their study on how a number 
of uninsured have dramatically increased over the last few 
years and how now two-thirds, 116 million, of U.S. Adults 
struggle to pay their medical bills, like the Nulls, the Wilkes 
and Ms. Howard.
    Stan Brock is the director of the Remote Area Medical 
Foundation based in Nashville, Tennessee. He has spent his 
lifetime coordinating with physicians, dentists, nurses and 
other health providers to provide free health care services to 
the uninsured and underinsured Americans. Mr. Brock will 
provide his insight and experience on how more and more 
Americans are showing up at his foundation seeking basic health 
care because their insurance policies will no longer cover 
their health care needs.
    Each of us know a family member, a relative, a friend who 
did not go to a doctor when sick, who skipped a dose of 
medication or failed to fill a prescription, intentionally 
missed a medical test or a follow-up appointment, or did not 
see a specialist when needed because they could not afford the 
service, the medication or the test. I would hope every 
American will now take time to look at their policy and really 
understand what medical conditions does my policy cover or not, 
what is your copay, what is your potential for out-of-pocket 
expenses, do you have a lifetime cap of dollars or services 
with your insurance company.
    The U.S. House will soon vote on H.R. 3200, America's 
Affordable Health Choices Act of 2009. H.R. 3200 does not allow 
insurance companies to rescind your policies when you are sick, 
it does not have a lifetime cap, and it will cover all 
Americans. Only the passage of meaningful health care reform, 
then and only then, will two-thirds of all adults not have to 
worry about how to obtain medical care for their families while 
remaining financially secure.
    I next turn to the Ranking Member of this committee Mr. 
Walden of Oregon for an opening statement.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Thank you, Mr. Stupak, for convening this 
hearing.
    As the Congress continues to debate ways to reform the 
health care system, the subject of this hearing should remain a 
top priority. As we will hear today, insurance does not always 
cover the complete cost of an illness or injury. This nagging 
question, if I get sick, will I be able to afford treatment, 
worries many Americans. Today, as we have heard from the 
Chairman, we will hear from several people who thought their 
insurance would be there when they needed it, and it was not.
    David Null faced every parent's nightmare. His daughter 
fell into a coma as a result of a liver failure and needed a 
transplant within days. He thought his insurance would cover 
everything, but instead the policy only covered $25,000 of a 
$561,000 surgery. In order to pay for the transplant, Mr. Null 
had to turn away work in order to qualify for Medicaid.
    Catherine Howard thought she had quality insurance. She had 
been happy with the coverage she had under a previous employer, 
so she purchased an individual policy for herself when she 
started working on her own. After being diagnosed with breast 
cancer, Ms. Howard learned that she would be paying 
approximately 30 percent of the treatment cost. Eventually she 
would end up $100,000 in debt.
    And Nathan Wilkes also thought he had great insurance 
through his employer, yet his newborn son's illness required a 
substantial amount of care, and Mr. Wilkes soon learned that 
his health care policy had a cap, and that cap would eventually 
cut off care for his son. Meanwhile the premiums for his health 
care were beginning to rise substantially. The increased cost 
of care for his son was also driving up the cost of premiums 
for his employer.
    I want to thank our three witnesses on this panel today for 
testifying and making your stories known. Their experiences, 
yours, are incredibly personal, and I want to commend you for 
agreeing to testify before this committee.
    We will also hear from Sara Collins of the Commonwealth 
Fund and Stan Brock from the Remote Area Medical. And I thank 
them for their testimony as well.
    Beyond the astronomical costs the underinsured face, this 
committee will also hear about other problems in the industry 
affecting our witnesses. Mr. Null will testify that he was 
misled by the company salesperson when he purchased the policy 
for his family. He considered himself a savvy purchaser of 
insurance, and he would research plans, purchase the ones that 
had offered him the best rate and coverage, and switched to a 
new insurer if a better deal came along. He told the insurance 
salesperson that he was looking for a policy that would cover 
``the big oh no.'' Instead he was sold a policy that capped 
hospital stays at $25,000, which in his daughter's case turned 
out to be only a few days.
    Whether the salesperson's claims about Mr. Null's policy 
were fraudulent or mere sales puffery does not matter, because 
we can all agree that when selling something as important as 
health insurance, the American consumer needs to be protected 
from both fraudulent statements and over-the-top 
representations.
    Two of the witnesses today are here to discuss the health 
care problems affecting their children. While these children 
are covered under family plans today, in the future their 
preexisting condition could limit the ability to obtain 
insurance themselves. Preexisting conditions affect many 
Americans, and I believe this committee and Congress need to 
work to make sure access to quality and affordable health care 
remains our top priority. We cannot ignore these problems, 
especially in light of rapidly increasing health care costs in 
the United States.
    Over the last decade employer-sponsored health insurance 
premiums have increased 131 percent. Recent studies have found 
that in 1 year as many as 62 percent of all bankruptcies were 
linked to medical expenses, and 1-1/2 million families lost 
their homes due to these costs.
    I again thank our witnesses for joining us, and I thank you 
for holding this hearing, Mr. Chairman.
    On a personal note I would say that my wife and I were 
parents to a son who was diagnosed with hypoplastic left heart 
syndrome. We faced many of the challenges you faced when it 
came to trying to deal with the transplant that he needed. 
Tragically he passed away before he could have that transplant, 
but we faced many of the same issues that you faced and dealt 
with them as a parent, so I am deeply sympathetic to what you 
are encountering.
    Mr. Chairman, I would like to remind this committee that on 
June 25th of this year, Ranking Member Barton and myself sent a 
letter to both you and Chairman Waxman requesting additional 
investigation hearings to follow up on our June 12, 2009, 
hearing on GM and Chrysler dealership closures. Interest in the 
subject was intense, as you know, at the time, and I hope this 
committee will not shy away from its oversight obligations on 
this matter, especially considering how the American taxpayer 
is now substantially invested in these companies. And I again 
urge you to hold additional hearings, including inviting the 
auto czar to testify and making sure that those who did testify 
provide us with the documents and e-mails that they said they 
would when they testified. So I have got another copy of that 
letter, Mr. Chairman, for both of you, and I hope you will take 
a look at it and afford us that opportunity to do the oversight 
that this committee has so proudly done in the past.
    Mr. Stupak. Thank you Mr. Walden.
    [The prepared statement of Mr. Walden follows:]
    Mr. Stupak. Mr. Waxman, Chairman of the full committee, 
opening statement, please.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman. I want to 
commend you for holding this hearing.
    The primary purpose that people have in buying health 
insurance is to protect them when they get sick and not to have 
catastrophic costs of health care drive them into bankruptcy. 
You should not have to go broke because you get sick, so people 
buy insurance to protect themselves. Yet we are finding out in 
the investigation this committee is doing on private insurance 
for health care that there are a lot of schemes that the 
insurance companies have not to pay.
    We had a hearing earlier this year on how there is a thing 
called rescissions. Now, we all have heard that insurance 
companies don't want to cover you if you have preexisting 
medical conditions, and that means a lot of people can't get 
insurance even if they could afford to pay for it. But what 
some of the insurance companies have been doing is that when 
you get sick, they go back and look for some error on the 
application and then decide that they are going to rescind the 
agreement and leave you just high and dry without the coverage.
    Today we are looking into another topic as we examine 
insurance company schemes, and this one is of underinsurance 
that people don't realize that they may face when they get 
sick. In recent years we have been looking at a lot of 
different problems, but we looked at rescissions. Now we are 
looking at underinsurance. But as we examine insurance 
practices, our committee has been looking into business 
practices in the small group market. And I am looking forward 
to the hearing on this topic next week where we will learn more 
about the challenges facing small businesses that seek to cover 
their employees. And they want to get quality, affordable 
health insurance for their employees, but the insurance 
companies will not cooperate and keep that insurance available 
to them.
    But today's topic is underinsurance, and in recent years 
health policies have been costing more and covering less. The 
average cost of a family's premium has risen 131 percent in the 
last decade, while average wages have risen less than a third 
of that amount. Meanwhile benefits are declining, and employers 
are asking workers to shoulder more of the burden by paying 
higher premiums or other out-of-pocket costs.
    Well, insurance companies ask you to pay more, but then 
there are a number of other ways they come up short. They can 
have caps or limits of the amount an insurer will pay for an 
individual's care over a lifetime or in a single year or for a 
particular service. And other plans exclude coverage for 
certain preexisting conditions or limit coverage in other ways. 
So in other words, what we are seeing are insurers increasingly 
shifting the risk to the individuals through greater cost 
sharing, such as higher deductibles, copayments or coinsurance. 
The risk should be borne by the insurance companies. That is 
why we are buying insurance in the first place.
    So with skyrocketing health costs and skimpier coverage, we 
now see the ranks of the underinsured growing. In 2007, there 
were 25 million underinsured Americans, a 60 percent increase 
from just 2003. This is in addition to the 50 million people 
who are completely uninsured. Underinsurance is on the rise 
among both low- and middle-income Americans, and it often leads 
to medical debt that empties saving accounts and ruins credit 
scores. For many the medical debt is simply too much to bear. 
And a recent study found that 62 percent of all personal 
bankruptcies are related to illness or medical bills.
    Underinsurance has grave consequences for a family's 
physical as well as financial well-being. I look forward to our 
hearing today from witnesses who have struggled with steep 
medical expenses despite the fact that they paid for health 
insurance. And I want to thank Ms. Howard, Mr. Null and Mr. 
Wilkes for agreeing to share their stories with this committee. 
And I also look forward to hearing from Sara Collins of the 
Commonwealth Fund and Stan Brock of the Remote Area Medical 
Volunteer Corps about the growing problems of underinsurance.
    This hearing comes at a time when Congress is struggling 
for health care reform. One clear reform has to be insurance 
reform to stop these medical insurance practices from going on. 
People shouldn't be fooled into thinking they are covered and 
then find out when they need their health insurance coverage 
the most that they are, in fact, underinsured.
    This is one of an ongoing series of hearings from this 
committee. I think it is important that we have these hearings 
in order to drive forward legislation to stop these kinds of 
practices from going on in the future.
    Thank you, Mr. Chairman.
    Mr. Stupak. Thank you, Mr. Chairman.
    Mr. Barton, opening statement, please.
    Mr. Barton. Thank you, Mr. Chairman. Thank you, Ranking 
Member Walden, for holding this hearing. I am going to put my 
official statement in the record and just speak 
extemporaneously.
    We obviously, on both sides of the aisle, believe that it 
is time to reform our health care system, and it is just as 
obvious that a part of that reform should be insurance reform. 
Myself, Mr. Green and Mr. Stupak and others offered an 
amendment at the additional day of markup several weeks ago 
where we put a transparency amendment in for the health care 
system, which would include insurance companies. And in 
underinsurance there is nothing more important than providing 
transparency so that individuals know what coverage they are 
really getting and the companies are up front about what 
coverage they are providing and what those caps are before the 
fact. It is terrible to find out after the fact, like Mr. Null 
found out that his what he thought was a catastrophic policy 
really wasn't, or it wasn't in such a way that it covered his 
daughter. So I think this is a good hearing. It is a part of 
the record that needs to be made.
    I do want to say in response to what Chairman Waxman said 
that in the overall effort for health care reform, I do not 
believe a solution is a mandatory coverage requirement for 
individuals, because some individuals will be impacted in a 
very negative way by being mandated that they have to carry it. 
If we can get transparency and get competition and get reform 
across the board, then if you are not covered at work, and you 
want a private plan, and we set up with some of these pools, 
you will be able to choose from plans and know what you are 
getting.
    But I have nothing but respect for the witnesses today that 
are going to give their case histories, because they are very 
moving. And I hope that a good thing will come out of this that 
will create a bipartisan consensus on some of the things that 
need to be done to reform the disingenuity in the private 
insurance market for plans like these folks have had to bear.
    Thank you, Mr. Stupak.
    Mr. Stupak. Thank you.
    For 3 minutes now we hear from the gentleman from 
Massachusetts Mr. Markey for an opening statement.

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
        CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS

    Mr. Markey. Thank you, Mr. Chairman, and thank you so much 
for having this very important hearing.
    As we consider the urgency of expanding health care 
coverage and transforming our sick care system into a health 
care system in our country, this question of the underinsured 
is right at the heart of the matter, because there is an 
estimated 25 million Americans who are insured, but they are 
underinsured at the same time. And let us just focus in on this 
problem.
    Medical bills are the leading cause of personal bankruptcy 
in the United States today. Sixty percent of all bankruptcies 
are because of medical bills, 60 percent. And of the 80 percent 
of people who went bankrupt because of their medical bills, 80 
percent of them had insurance, and they still went bankrupt. 
Insured but not covered.
    Now, I recently received a letter from a constituent in my 
district. He returned home from open-heart surgery and found a 
bill from the hospital informing him that his insurance company 
had denied coverage for the anesthesia used during the 
operation. They deemed the anesthesia, quote, ``medically 
unnecessary,'' and demanded $10,000 for the anesthesia. Now, he 
asked me, did the insurance company expect him to take a swig 
of whiskey and bite a bullet while they cut open his chest? 
Well, unbelievable, but they did, and they sent him the bill 
for $10,000. Insured but not covered.
    This is how we get 60 percent of all bankruptcies in 
America related to medical bills that people receive. It is 
unacceptable that patients must fight their health insurance 
companies for coverage while fighting disease at the same time 
as they are insured. It is unacceptable that parents have to 
help a child overcome a crippling illness while struggling to 
overcome crippling medical debt by postponing necessary 
treatment, skimping on food and even exhausting their savings 
so that they can qualify for Medicaid. It is wrong for health 
insurance companies to deny coverage for critical treatment 
when families need it the most. And I am pleased that the 
health reform bills that we are considering will make 
tremendous progress in this area.
    The plight of the underinsured and the steady creep of the 
underinsured into the ranks of the middle class shows that 
health care affects each and every one of us, and now is the 
time for us to fix this sick care system and turn it into a 
health care system for all Americans.
    Thank you, Mr. Chairman, very much.
    Mr. Stupak. Thank you, Mr. Markey.
    Mrs. Blackburn for an opening statement, please, 3 minutes.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Mrs. Blackburn. Thank you, Mr. Chairman.
    I want to welcome all the witnesses and thank them so much 
for giving their time and for being here to share their 
experiences. And I especially want to welcome these two 
beautiful young girls that are sitting on that front row. We 
are thrilled that they have taken the time out--I bet it is a 
day out of school--and we hope that they see this as a learning 
experience.
    Mr. Chairman, I do thank you for the hearing today. We are 
all concerned about coverage for preexisting chronic 
conditions. We are so concerned about the rescission issue. I 
think that where you are going to see some differences is how 
we approach the badly needed insurance market reforms that are 
out there. I am one of those that wants to keep things patient-
centered, patients first, free-market-oriented. And I would 
like to see more competition in the marketplace as we seek to 
address this, allowing purchase of insurance policies from 
across State lines so that families have more options and more 
choices.
    Now, in Tennessee, where I am from, health savings accounts 
are very popular. We would love to see the contribution and 
allowance limits there enhanced and to see incentives for 
individuals with healthy lifestyles.
    Liability reform has already been mentioned this morning. 
The practice of defensive medicine does drive up costs, but it 
also plays in sometimes to that rescission issue, and we are 
aware of this and seek to address that and to address it in 
good faith.
    I want to give a special welcome to Mr. Brock who is here. 
You are going to love hearing from him, and I commend him to my 
colleagues. The RAM program is one that we are very pleased 
with in Tennessee. Quoting from page 2, the second paragraph of 
his testimony, I want to highlight one thing: The greatest 
impediment to the RAM program is regulation in 49 States 
preventing willing practitioners from crossing State lines to 
provide free care. Now, in Tennessee we have addressed this 
issue; Dr. Burgess has talked about that issue, it came to 
light after Katrina. I am looking forward to hearing from him 
and to welcoming them today, and I yield back the balance of my 
time.
    Mr. Stupak. Mr. Welch, opening statement, please.

  OPENING STATEMENT OF HON. PETER WELCH, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF VERMONT

    Mr. Welch. Thank you, Mr. Chairman and Ranking Member 
Walden.
    And the stories that each of you told really summarize, I 
think, what can only be described as the failure of the 
American health insurance industry. The health insurance 
industry, in fact, has served its own interests very well, but 
it has failed the American families and consumers, it has 
failed the small businesses that pay the premiums, it has 
failed our taxpayers, it has failed our doctors and our nurses 
and the health care providers.
    What it has done is served its own interests very well: the 
CEOs, some of whom make $24 million in a year; Wall Street 
analysts who cheer every time the medical loss ratio goes down, 
meaning that each of every premium dollar has less spent on 
health care and more spent on dividends, on CEO salaries. It 
has served--because it served its own interest very well, 
because essentially it is based on a model that you have heard 
described here, and that model says that if you are healthy, 
and you are wealthy, and you are unlikely to need it, we will 
insure you, and we will keep increasing your rates. But if you 
are sick or likely to get sick, if you are older, we won't 
ensure you; or if we do, we will make a policy so confusing and 
laden with so many loopholes that you won't get much benefit 
for the insurance that you thought you had. As Mr. Markey said, 
you are insured, but you are not covered.
    And just another example to add to the laundry list here of 
horrors, this is much smaller and much more mundane, but it 
shows just the Alice in Wonderland world that the insurance 
companies operate in. We have a woman from Milton, Vermont, 
Cheryl, who had a policy that she thought had covered wellness 
screening. And she got a colonoscopy and was told that it would 
be covered, but lo and behold, a colonoscopy, in fact, 
diagnosed diverticulitis, and the insurance company said that 
procedure was no longer about wellness, it was diagnostic, and 
that was not covered, and they made her pay the $1,000 bill.
    I mean, those days we have to put behind us because the 
insurance company has had its chance, and it has failed. And 
when a person buys insurance, when a small business pays a 
premium to cover its workers, those folks should have assurance 
that they are getting something real, health care insurance and 
coverage, when they need it.
    Thank you, Mr. Chairman, for this very important hearing, 
and I yield back.
    [The prepared statement of Mr. Welch follows:]******** 
COMMITTEE INSERT ********
    Mr. Stupak. Mr. Burgess for an opening statement, please, 3 
minutes.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Dr. Burgess. Thank you, Mr. Chairman. I will abbreviate my 
statement and submit it in its entirety for the record.
    I do want to thank you for holding the hearing today. I 
really believe this is a twofold problem. On the one hand we 
have hardworking Americans who do the right thing day in and 
day out. They go to work, they buy health insurance, and then 
when they get sick, their medical insurance does not cover 
their bills. If they work harder, make tough choices in other 
areas of their life, they still struggle to pay their medical 
debt.
    So I did my town halls this summer, as many of us did. One 
thing I heard over and over again, people are genuinely 
frightened of what Congress is going to do to health care in 
this country, and they are probably justified in that 
skepticism. But the one thing that everyone seems to agree on 
is the issue of excluding someone from insurance coverage 
because they have had a tough medical diagnosis, or the issue 
of excluding someone or the insurance rescission when a tough 
medical diagnosis is rendered for someone who is already 
insured. Those are the processes that have to stop. Nothing 
infuriates people more than thinking that somebody has played 
by the rules, paid their dues, and then when they actually need 
the service, they find it is withdrawn from them. People who 
are responsible and do what it takes to provide for themselves 
or their loved ones are, in fact, to be commended and are not 
to be put in positions that are just absolutely untenable.
    And we do have the issue of insurance as a whole. You do 
want to protect people from those contingencies in life from 
which no one can anticipate, and no one can reasonably be 
expected to save the amount of money that would be required to 
pay for some very, very tough diagnoses. The cost of care has 
gone up significantly. There is no question there is the 
advancing complexity of what we are able to do. When I think of 
some of the saves that I saw during my medical career that--
late in my medical career you have never seen in the beginning 
of my medical career, those things are very important. And we 
certainly don't want to--in our zeal to cap costs, we don't 
want to cap innovation or remove the innovation that has really 
set American medicine apart from medicine that is practiced in 
almost any other country.
    Mr. Barton referenced transparency. Three Congresses ago I 
was charged by the Speaker of the House, who was then a 
Republican, to work on the issue of transparency, and I 
introduced legislation that year. It finally did find a place 
in H.R. 3200 as it left the committee this year in September. I 
don't know if it will survive the cutting room floor over in 
the Speaker's Office, but I am hopeful that it will, because 
transparency is important.
    Another provision that was in the bill that I partnered 
with Mr. Dingell on was the issue of internal and external 
review boards. When you have a--whether it be a public option 
or a private insurance company, if they deny the coverage, a 
patient ought to have the right of appeal; they ought to be 
able to appeal to not just the internal review board within the 
insurance company, but an external review board as well. And 
that is true whether it is Aetna, Signa, United or a new robust 
public option that is instituted by the United States Congress. 
If care is denied for whatever reason, patients ought to have 
the right of appeal. It doesn't mean that we need to be 
spelling out everything that is involved in someone's health 
care.
    And I told the Chairman I would abbreviate my statement and 
submit the balance for the record, and that is what I will do. 
I do thank the witnesses for being here today. It is an 
important part of the process. I will just say I think we would 
have done the American people a service if we had concentrated 
on more how do you get around these nettlesome problems with 
preexisting conditions and rescissions without resorting to 
mandates, which really have no place in a free society and only 
ultimately enrich the insurance companies.
    I will yield back the balance of my nonexistent time.
    Mr. Stupak. Nonexistent? Your summary was longer than your 
statement.
    [The prepared statement of Mr. Burgess follows:]******** 
COMMITTEE INSERT ********
    Mr. Stupak. Let's go to Mrs. Christensen, please.

       OPENING STATEMENT OF HON. DONNA M. CHRISTENSEN, A 
       REPRESENTATIVE IN CONGRESS FROM THE VIRGIN ISLANDS

    Mrs. Christensen. Thank you, Chairman Stupak, and thank 
you, Ranking Member Walden, for holding this hearing, both of 
you.
    It is important to highlight why health care reform and 
providing affordable, secure insurance coverage without caps to 
everyone is so critical; not just the physical, but also the 
economic well-being of our families and our country.
    I also want to welcome the witnesses and their families for 
being here this afternoon and to share those very personal, 
very painful stories and provide more insight on the need for 
affordable, adequate insurance coverage.
    Underinsured Americans far too closely resemble the 
uninsured, but they are often the forgotten faces of the health 
care debate. Currently 25 million Americans, as we have heard, 
cannot afford to pay the gap left by weakened insurance 
coverage and large medical bills. And I was surprised to learn 
recently that even end-stage renal disease patients may find 
themselves uninsured even though they are covered by Medicare.
    Underinsurance is also a contributor to health disparities. 
Despite the presence of full-time workers, in the vast majority 
of their households, racial and ethnic minorities are 
disproportionately underinsured or lack coverage altogether 
and, therefore, less likely to receive quality health care. It 
causes a vicious cycle, as we will hear, in our health care 
system that forces far too often people to forego medical 
treatments and prescriptions after they have already paid for 
insurance, resulting in poor outcomes.
    Even more dramatic is the fact that people don't realize 
they are underinsured until they are already sick and facing 
those mounting health care bills. As we will hear, the average 
working family can faithfully pay their insurance premiums for 
years, but still go into medical debt or face bankruptcy when 
they get sick.
    A study released this summer by the American Journal of 
Medicine found that in 2007 a family filed for bankruptcy every 
90 seconds due to excessive medical bills. If that is not 
shocking enough, 75 percent of those Americans already had 
health insurance. These are hardworking Americans that did not 
choose to wake up one morning with an injury or an illness that 
would not only deplete their productivity, but also deplete 
their bank accounts.
    The insurance companies have profited millions by ensuring 
that their policies are structured to defy the very purpose, as 
Chairman Waxman said, of having health insurance. So 
uninsurance and underinsurance is unacceptable, period. I look 
forward to passing and having the President sign a health care 
reform bill that ends it once and for all.
    And I thank you and yield back the balance of my time.
    Mr. Stupak. Thank you.
    Mr. Gingrey, opening statement, please.

  OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Dr. Gingrey. Thank you, Chairman Stupak.
    First, I want to thank all the witnesses who joined us 
today, and I certainly look forward to hearing your testimony.
    As a physician who practiced medicine for over 30 years, 
one of the most important lessons I ever learned was that a 
medical solution for one of my patients was not necessarily the 
best solution for another patient. Each and every one was 
unique, but their needs, of course, were the same ultimately, 
to get better. So as this Congress debates the nuances of 
health insurance reform and what type of insurance American 
patients should have, I believe that we must frame the debate 
in terms of what is best for the patient.
    With respect to the debate, H.R. 3200 and every other 
iteration of the Democratic Majority reform proposals purports 
to create access to affordable health care, certainly a worthy 
goal which I agree with. However, they do so by requiring that 
all health insurance products meet a one-size-fits-all mode 
through various Federal mandates, and, yes, cost-sharing 
limits. Unfortunately studies have shown that these same 
mandates and limits on cost sharing will drive up the cost of 
all health insurance products by as much as $4,000 a year for a 
family of four.
    In their plan my Democratic colleagues, they seek to combat 
these cost increases with affordability credits. Unfortunately, 
in H.R. 3200, it does nothing to curb the cost of health care 
in this country. In fact, the CBO recognized that H.R. 3200 
would actually increase the cost of health care in this 
country. So these affordability credits they give patients 
today will be worth less tomorrow, while the overall price of 
health insurance will continue to climb, as it has done so for 
decades, as has already been pointed out, only now at a much 
greater rate. One doesn't have to have a medical license to 
figure out that my colleagues are setting up a framework of an 
unsustainable system.
    Where does this leave American patients? If we were to use 
the State of Massachusetts as an example, we would find 
patients losing their health care benefits to offset increased 
cost of care. Just this past June, 92,000 low-income patients 
lost their dental insurance because the State needed to trim 
the cost; 92,000 lost their dental insurance. Now, using the 
definition of underinsurance--I couldn't find it in the 
dictionary, by the way--would those 92,000 low-income 
individuals who lost their dental benefits qualify as 
underinsured? If so, I might suggest that mirroring a health 
reform plan after the Massachusetts model could end up hurting 
those patients who truly need help in the long run.
    Mr. Chairman, while we do need reform to increase access to 
care for patients like those before us here today, we cannot 
simply slap the term ``reform'' on just any bill and assume 
that it will improve the quality of health care. In fact, the 
wrong kind of reform creates a system where these testimonies 
are the rule and not the exception.
    And I yield back.
    Mr. Stupak. Mr. Doyle, opening statement, please.

OPENING STATEMENT OF HON. MICHAEL F. DOYLE, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Doyle. Thank you, Mr. Chairman. Thank you for holding 
this hearing on the issue of underinsurance at such a relevant 
time.
    For the last few months, Congress and the country have been 
engaged in a debate largely focusing on the 45 million 
uninsured Americans, and often leaving out of the conversation 
the 25 million Americans that are underinsured. I look forward 
to our witnesses' testimony that will shine light on the 
problem of underinsurance in our country, a problem that 
unfortunately is growing at an alarming rate. In just six 
years, from 2003 to 2007, the number of uninsured Americans 
rose 60 percent. This is a problem that must be highlighted and 
will be addressed in the health care reform legislation that 
will go before the House soon.
    Underinsurance is when a policyholder believes they have 
adequate health care coverage, and then, when it is too late, 
they are proven wrong. When individuals buy insurance or are 
provided with plan options from an employer, the small print of 
their contracts is often overlooked, text which contains vital 
information about their coverage. This is exactly where people 
need to be paying the most attention because it is here that 
often information on lifetime or even annual limits, copayment 
requirements, treatment exclusions and other limits on coverage 
is hiding.
    We all know we are supposed to read the fine print, but we 
also know that people don't always do it, which brings us back 
to the big picture. People don't know what they need to know 
until it is too late. I believe if you buy an insurance policy, 
you should know what you are getting and not have to hire a 
lawyer to understand it. Hidden traps, fine print and, at 
times, misleading marketing ploys prevent the consumer from 
making an educated decision about their health coverage, and 
this is precisely why it is so important that we pass 
meaningful health care reform this year that will require 
insurers to provide a minimum set of benefits that will take 
care of patients' needs, limit out-of-pocket expenses and 
prohibit insurers from imposing annual or lifetime caps on 
coverage.
    I look forward to hearing from our witnesses.
    Mr. Chairman, I want to thank you for this hearing today, 
and I want to thank the committee for highlighting this very 
serious problem.
    I yield back.
    Mr. Stupak. Thank you, Mr. Doyle.
    Chairman Emeritus of the committee Mr. Dingell for an 
opening statement, please.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Dingell. Mr. Chairman, thank you. And I commend you for 
holding this very important hearing on an issue of great 
importance in our consideration of health reform benefits and 
health reform efforts. I want to commend you for the hearing, 
and I want to thank our panel of witnesses for being here 
today. We are grateful for your assistance, and I thank you.
    In our fight for health care reform, we focus on the 46 
million Americans without health insurance. That is very 
important, but as has been observed already, underinsurance is 
an all too common problem that must also be addressed. In fact, 
by some estimates 25 million Americans were underinsured in 
2007. These 25 million people are paying at least 10 percent of 
their income for medical expenses in addition to the cost of 
the premiums. In more simple terms, there are far too many 
Americans paying for insurance policies that do not cover the 
medical care they need, some of which policies are sold by 
practices close to fraud.
    Now, whether the underinsurance is caused by annual or 
lifetime caps or excessive cost sharing, or whether the policy 
doesn't cover the needs of the policyholder, the result is the 
same: Underinsurance creates an undue financial burden on far 
too many American families. In 2007, 28 percent of American 
adults reported carrying medical debt. Of the underinsured, 46 
percent reported using all of their savings toward their 
medical debt. With statistics like these, it should come as no 
surprise that over 60 percent of personal bankruptcies are due 
to health care expenses.
    These numbers are staggering, but the personal stories are 
even more moving. Just this week the Detroit Free Press ran a 
story about uninsured and underinsured Michiganders in my home 
State. One of the families profiled was the Hurleys of Canton, 
Michigan. The Hurleys have employer-sponsored insurance, but 
are forced to buy extra policies to cover the needs of their 
children, one a 7-year old with severe asthma, and another a 
10-year old with skeletal disorder. Without the extra insurance 
policy, they could not afford the $50,000 spine surgery their 
son needs every 4 months.
    I am particularly grateful for our first panel and to them 
for having joined us today to tell their story of hardships due 
to underinsurance. I want them to know that their testimony is 
going to remind us and others of why it is so critical and so 
crucial that we pass comprehensive health reform legislation 
this year.
    Finally, I would be remiss if I did not mention the 
aggressive steps we take in H.R. 3200 to make underinsurance a 
thing of the past. This bill would, one, remove all annual and 
lifetime caps; two, limit the out-of-pocket expenses for 
everyone; three, provide affordability credits for low- and 
moderate-income people to assist them with premiums and cost 
sharing; and lastly, it would enable all to know that all 
insurance policies provide a minimum level of health benefits 
to all Americans. And, of course, we would see nasty little 
things like rescission of policies and preexisting conditions. 
So I am--we would see them end. So I hope today's hearings will 
serve as a call to action and remind us of the importance of 
the task before us.
    Thank you, Mr. Chairman.
    Mr. Stupak. Thank you.
    We have two votes on the floor. I would love to get all the 
opening statements in before we break if we could. So next, Mr. 
Green, please, for opening. Mr. Green.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman. I ask unanimous consent 
for my full statement be placed into the record.
    Underinsurance is when an individual actually has 
insurance, but their policy does not adequately cover their 
health-related expenses. That is such an important topic that I 
am glad we are having this hearing. And last month when our 
committee worked on or has been continuing to work on the 
health care reform bills, we addressed a great deal of that in 
H.R. 3200.
    As our dean--Chairman Emeritus and dean of the House said, 
insurance premiums have risen steadily over the years, 131 
percent over the past decade, and individuals are uninsured are 
paying at least 10 percent of their--underinsured--10 percent 
of their income, out-of-pocket expenses on top of their 
premiums. And according to the Commonwealth Fund, who we will 
hear with the second panel, 25 million Americans are 
underinsured in 2007, which is a 60 percent increase over 2003.
    All of us have constituents who call us and assist them 
with their insurance company policy problems, whether it is 
very low caps--in some cases in our district it was $25,000--
and either that or they do not provide coverage for certain 
services, such as experimental cancer treatments, certain 
prescription drugs, and those who have been denied coverage for 
a condition that is deemed preexisting. That is why I am so 
glad to have our first panel here today to talk about real-life 
experiences.
    But again, our committee has made a great step on H.R. 
3200, and hopefully we will get the vote on that sooner than 
later. And we can solve a lot of these problems not only with 
the uninsured 47 million, but the millions of underinsured we 
have in our country.
    And, Mr. Chairman, like I said, I will put my full 
statement in the record. Thank you.
    Mr. Stupak. Thank you, Mr. Green.
    Ms. Schakowsky for an opening statement, please.

       OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you, Mr. Chairman.
    First let me thank the witnesses. I read all your 
testimony, and I read it shaking my head. I have heard these 
stories before, but yet to hear the particulars are so 
disturbing. And I really look forward to you telling those 
stories yourself.
    Here is one that was on the front page of the Washington 
Times yesterday. It says, Ian Pearl has fought for his life 
every day of his 37 years. Confined to a wheelchair and hooked 
to a breathing tube, the muscular dystrophy victim refuses to 
give up, but his insurance company already has. Legally barred 
from discriminating against individuals who submit large 
claims, the New York-based insurer simply cancelled lines of 
coverage altogether in entire States to avoid paying high-cost 
claims like Mr. Pearl's.
    In an e-mail, one Guardian Life Insurance Company executive 
called high-cost patients such as Mr. Pearl ``dogs'' that the 
company could get, quote, ``rid of,'' unquote. By the way, in 
the meantime his parents are paying $3,700 and have been a 
month for his care. These are the kinds of horror stories that 
people face every single day in our country.
    And, Mr. Null, you asked in your testimony, is that 
American? And I want to say that I hope at the end of 2009 you 
will be able to look at the kind of health care we provide 
Americans and your daughter Tatem and say, yes, this is 
American. And the kinds of things that we are going to do, I 
hope, are going to resolve the problems of all three of you and 
millions more in our country.
    We address the problem of high deductibles and cost sharing 
by giving individuals access to group rates through the 
exchange, with annual out-of-pocket limits of $5,000 for 
individuals and $10,000 for families. We assure that coverage 
is adequate, eliminating preexisting condition exclusions and 
establishing a basic benefit package. We require that plans 
meet network adequacy requirements so that consumers, 
especially those with disabilities or ongoing health care 
needs, have access to the providers they need. Four, we 
eliminate annual and lifetime limits that leave health care 
consumers with huge medical bills when their coverage runs out, 
but their health needs continue.
    I believe that your testimony today will contribute to 
getting these kinds of reforms. I thank you, and I yield back.
    Mr. Stupak. Thank you, Ms. Schakowsky.
    Mr. Braley for an opening statement, please.

OPENING STATEMENT OF HON. BRUCE L. BRALEY, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF IOWA

    Mr. Braley. Mr. Chairman, I want to thank you and Ranking 
Member Walden for holding this important hearing. I think all 
of us have learned that when health care policy is abstract, 
the American people run away.
    And the reason why your appearance here today is so 
important to us and the entire country is because until health 
care policy becomes personal, people don't realize how broken 
our health care delivery system is in this country.
    This little boy that you see up here on the screen is the 
face of health care for me and my family. This is Tucker 
Wright. He lives in Malcom, Iowa. He father, Brett, is my 
nephew. When Tucker was 18 months old, he was diagnosed with 
liver cancer. He had two-thirds of his liver removed. He was 
lucky that he survived, but every day he has an ongoing 
lifetime medical challenge of survival.
    He continues to accumulate exorbitant medical costs, many 
of which are not covered by his insurance policy. His family 
has already incurred tens of thousands of dollars of uninsured 
medical costs. They hold fund-raisers to try to raise the money 
that is not covered by their insurance policy. And his parents 
are both employed full time and had what they thought was good 
health insurance.
    By the age of 20, he is 90 percent likely to have another 
form of cancer. He goes to Des Moines, Iowa, every month to 
have expensive diagnostic imaging studies to monitor his health 
condition. And until we start looking at health care as this 
type of face and the faces that you present to us today, we are 
never going to get the American people to rally behind the need 
for comprehensive health care reform.
    Your voices here today, Tucker's face and the people in 
this country just like him and just like you are going to be 
the unifying forces we need to transform health care delivery 
and the way we pay for it and the way we insure it in this 
country; and that is why I am personally so grateful that you 
took time out of your busy lives to help us put a human face on 
health care reform.
    I yield back the balance of my time.
    Mr. Stupak. Thank you, Mr. Braley.
    [The prepared statement of Mr. Braley follows:]******** 
COMMITTEE INSERT ********
    Mr. Stupak. Ms. Sutton from Ohio, opening statement, 
please.

  OPENING STATEMENT OF HON. BETTY SUTTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF OHIO

    Ms. Sutton. Thank you, Mr. Chairman. And I too want to 
thank the witnesses for coming forward to tell us your stories 
because, with your voices, you speak for so many Americans who 
are facing similar situations. That is why we are so intent in 
this committee and in this Congress to make health care work 
for you and the people that you love, and all of those out 
there who aren't in this committee room, but whose voices you 
bring by your presence.
    During the August district work period I held many meetings 
with constituents and I heard their views about health care 
reform. Among those whom I met with were Dash and Kathy Sokol 
in Lorain, Ohio. Dash just turned 56 and his wife Kathy is 53.
    In February of 2007, Dash was diagnosed with prostate 
cancer, and as he fought that cancer and was fighting back, 
later that year Kathy was diagnosed with breast cancer. The 
Sokols had health insurance coverage through Dash's job at the 
steel mill.
    However, with Dash and Kathy both receiving treatment for 
cancer, the costs began to add up. Their out-of-pocket spending 
became overwhelming, and the Sokols are now using their pension 
funds to pay for their medical bills instead of saving those 
funds for retirement.
    Kathy told me that she felt guilty about having their 
family pay out of pocket for her cancer treatments in spite of 
the fact that they have insurance coverage. I want to repeat 
that: She felt guilty because their insurance plan did not 
provide adequate coverage.
    Many insurance plans out there today are far from adequate, 
and when the Sokols came to my office, they brought with them 
stacks and stacks of insurance invoices. They had bills, 
explanations of benefits and records of what they had paid for, 
in addition to explanations about why most of their treatments 
were not adequately covered. Dash showed me that aside from 
being sick, aside from emptying their savings, they also were 
keeping full-time records to make sure that they kept up with 
their payments as best they could. Dash has been working on 
arrangements with providers to pay what he can when he can. He 
tells them, ``I am willing to pay, but it will take time.''
    He continues to work to make sure that they keep the 
inadequate coverage that they have. And in these uncertain 
economic times, he is concerned about whether his job will be 
there tomorrow. He told me that he would like to retire, but is 
fearful of doing so before the couple becomes eligible for 
Medicare. And if the job does go away, they worry, they live in 
fear about what will happen because they won't be able to get 
insurance having had cancer. He could not imagine, he 
explained, what individuals who get sick without coverage do 
and how they cope.
    The Sokols came to my office to offer their story and to 
offer their help, just like you here today. They want to do all 
they can to make sure that meaningful, comprehensive health 
care gets passed.
    Dash told me--when I asked about using his story to convey 
what they were experiencing, he said, ``Absolutely. I am 
willing to do whatever it takes.'' Well, I don't think that we 
in Congress should offer any less than what Dash is willing to 
offer: whatever it takes to pass meaningful health care reform.
    We have to do what it takes to make sure that American 
families are not spending their retirement funds just to stay 
alive. That is what far too many insured and uninsured 
Americans are facing. We have to do what it takes to hold 
insurers accountable for the benefits they promise us and, in 
many cases, that people pay for. We have to do what it takes to 
pass health care reform this year.
    I yield back.
    Mr. Stupak. Thank you. That concludes the opening 
statements by all the members of the subcommittee.
    We are going to stand in recess. We have 3 minutes 
remaining on this vote, and then we have another vote. Let's 
try to be back by 2:50, 2:55.
    [Recess.]
    Mr. Stupak. The committee will come to order. We will now 
hear from our first panel of witnesses. Our first panel of 
witnesses, we have Ms. Catherine Howard, who is a policyholder 
from San Francisco, California.
    Welcome.
    Mr. David Null is a policyholder from Garland, Texas, and 
his daughter, Tatum, has joined him at the table.
    Thank you for being here.
    And Mr. Nathan Wilkes is a policyholder from Englewood, 
Colorado.
    Thanks for being here.

 STATEMENTS OF CATHERINE HOWARD, POLICYHOLDER, SAN FRANCISCO, 
   CALIFORNIA; DAVID NULL, POLICYHOLDER, GARLAND, TEXAS; AND 
        NATHAN WILKES, POLICYHOLDER, ENGLEWOOD, COLORADO

    Mr. Stupak. It is the policy of this subcommittee to take 
all testimony under oath. Please be advised that you have the 
right under rules of the House to be advised by counsel. Do you 
wish to be represented by counsel?
    Everyone is shaking their heads ``no,'' so I will take it 
as a ``no.'' Therefore, I am going to ask you to rise and raise 
your right hand to take the oath.
    [Witnesses sworn.]
    Mr. Stupak. Let the record reflect that the witnesses 
replied in the affirmative.
    You are now under oath. We will begin with opening 
statements. Ms. Howard, if you don't mind, we will start with 
you. You may submit a longer statement for inclusion in the 
hearing record.
    Ms. Howard, if you would start. Your light is on, I take 
it. Five minutes, please. And thank you again for being here.

                 STATEMENT OF CATHERINE HOWARD

    Ms. Howard. Thank you, Mr. Chairman, members of the 
subcommittee. Thank you for inviting me to testify today.
    My name is Catherine Howard, and I am from San Francisco. 
Five years ago, I was working as a documentary film producer. I 
wasn't making a lot of money, but I knew that maintaining my 
health coverage was a big priority.
    My employer didn't offer coverage, so I went out and I 
bought myself a private plan; and this plan seemed perfect for 
a young, healthy person. And it was affordable, only $140 a 
month, but I had no idea what it would really cost me. I was 
afraid that I would get hurt in some minor way, take a fall 
snowboarding, need a couple of stitches, not living with a 
life-threatening illness like cancer.
    After my breast cancer diagnosis in August of 2004, I 
thought I was covered. You know, I thought, I am so glad I have 
insurance. But, boy, was I wrong. I discovered that the health 
plan that I was paying for didn't cover a large part of the 
cancer care that I needed, and I was on the hook for tens of 
thousands of dollars in uncovered expenses.
    I had chosen one of those low-premium but high-deductible 
plans, and I had to pay for 30 percent of all my treatments in 
the hospital. And it didn't even cover all the services that I 
needed. I remember staring at this one shot, Neulasta; it cost 
$2,100 per shot, and the insurance company said, well, that is 
30 percent for you. So right there in that needle is $600.
    I endured surgery, grueling chemotherapy, and radiation 
regimes that left me too weak to work full time. I was told all 
along that the key to my recovery was to minimize the stress in 
my life. And, tell me, how do you minimize stress when you owe 
the hospital more than you have earned in the past year?
    As the expenses piled up, I was able to pay for some of 
them. My family helped me. Other things, I just put them on my 
credit card and I thought, if I don't die, I will just deal 
with this later.
    Well, I didn't die, and this is later. So I find myself 
almost $100,000 in debt between the medical expenses and living 
expenses for while I was sick and couldn't work. By the end of 
my treatments, I owed $40,000 in medical expenses alone, and I 
have been paying this off over time slowly, using payment 
plans, paying down on those credit cards. But rather than 
saving money to put a down payment on a house, buy a car, or 
even have a savings account, I spend $1,800 a month, 
essentially all the money I have after the basics, to pay 
towards my debt. I live like a pauper because--to pay for the 
privilege of surviving cancer.
    People have asked me why I don't just declare medical 
bankruptcy and wash my hands of all of this. But bankruptcy to 
me really seemed like a cop-out, and I don't cop out on my 
commitments.
    I have made recovering from cancer my mission for the last 
5 years. And as I look ahead to the next 5, I would like to see 
myself out of debt, and I would also like to make sure that 
this doesn't happen to anyone else.
    In my work as an innovator at Jump Associates, I know that 
things can be different. I am fortunate that my employer offers 
comprehensive coverage, because if they didn't, if I was back 
on the private market, I would be totally uninsurable because 
of my preexisting condition. I couldn't even afford to buy the 
same crummy coverage that left me in this financial 
devastation.
    The kind of health reforms in the House proposal would have 
kept me out of this devastating debt and the financial 
circumstances I am in now despite my best efforts. Limiting 
annual out-of-pocket costs and prohibiting junk policies will 
save other young people from facing the same circumstances I am 
in now.
    Thank you.
    Mr. Stupak. Thank you.
    [The prepared statement of Ms. Howard follows:]******** 
INSERT 2-1 ********
    Mr. Stupak. Mr. Null, if you would like to pull that mike 
up and hit the light, we would like to take your opening 
statement. Again, a longer one will be submitted for the 
record.
    If you would, please. We look forward to your testimony.

                    STATEMENT OF DAVID NULL

    Mr. Null. Thank you. Good afternoon, Chairman Stupak. We 
appreciate the invitation here. It is quite an honor, and we 
thank the entire subcommittee for taking the time to hear our 
story.
    Our story actually begins in 1999, when I became self-
employed. We had a company. We employed 12 people, we had group 
insurance, and then 9/11 hit. And, like many Americans, that 
time hit us very difficult. Within about 6 months we had to 
drop our company-sponsored insurance, and I had to enter into 
the world of individual insurance.
    In January 2005, we had been without insurance for about 
three months. We had a short lapse, and a quick trip to the ER 
for an $800 liquid bandage for my daughter's chin was a costly 
but excellent reminder of the value of insurance, so we began 
looking for a policy.
    Sherry and I spoke at length to an insurance agent at our 
dining room table, and I explained, I don't mind paying for the 
hospital or the doctor visits; it is the big catastrophic 
hospital visits that we need. I told him, quote-unquote, ``I 
need coverage for the big, 'Oh, no'"; and he looked at me in 
the eye and told me that I am a very savvy shopper and that 
this was the policy for us. By the time, he said, that we 
factor in our negotiated rates and what the policy pays out, 
``You will hardly have to pay anything.'' The way he explained 
it, we felt like we were getting what we asked for, and we were 
relieved to be protected again.
    Three months later, Tatum was seven. It was the first night 
of our family vacation and Tatum's touch of stomach flu seemed 
to worsen and so we headed home. Hours later, she slipped into 
a coma. Before the sun set the next day we were told she would 
require a liver transplant within days to save her life if they 
could keep her alive that long.
    While Tatum was clinging to life in the ICU, the transplant 
department administrator came to me and said, We need to talk 
about insurance, and he walked me to a counsel room. As we 
walked, I thought to myself, I wonder what he wants to talk 
about; aren't I glad that we picked up this policy when we did.
    We reached the counsel room, and he proceeded to explain 
that my insurance had capped out at $25,000. That was basically 
the night before. From that point forward, Tatum no longer had 
any sort of insurance, and it was hospital policy to collect a 
$200,000 deposit for them to proceed with the liver transplant.
    I honestly couldn't believe this was happening. Could this 
be true? Surely it is a mistake, because this is the big ``Oh, 
no'' that I was buying protection from. Suddenly, not only were 
we facing the possible death of our child, but now the 
financial death of our family. How could this be happening to 
us? We have insurance for this.
    A donor was located, and Tatum received her transplant with 
probably less than 48 hours less to live. Once she stabilized, 
the hospital helped me apply for Medicaid, and we were narrowly 
approved. The coverage was retroactive, and they covered the 
entire transplant, well over $500,000. Our so-called 
hospitalization policy covered less than one-tenth of that 
cost. Even with insurance, we were left with a balance we could 
never bear to pay back.
    Tatum and our finances both had near-death experiences. 
Although we didn't know at the time what going on Medicaid was 
going to mean to our family, we were grateful for it. But our 
daughter had been on life support for a week, and now our 
finances were going to be going on life support for the next 2 
years.
    Post-transplant is very medically expensive. We never knew 
what each day would bring, but we knew we couldn't afford even 
1 day without insurance. We began to look for insurance that 
would help cover post-transplant expenses so we could get off 
of Medicaid. Then I was told by insurance agents not to waste 
the time, paper, or ink filling out the applications with 
Tatum's name on it because they would refuse to even accept it. 
We now had nowhere to turn, and we were somehow now stuck on 
Medicaid.
    It was simply that the insurance industry would not make a 
policy available to us in the individual market. So in order to 
keep receiving health care for Tatum, we had to voluntarily 
drop our income to near poverty to satisfy the Medicaid 
requirements. The allowed monthly income on Medicaid was a 
shocking $1,630 for a family of four. This barely allowed us to 
cover our mortgage, most utilities, and some of our food bills. 
This meant that I would frequently had to pass on work, and it 
was even suggested that maybe Sherry and I should get a divorce 
for financial reasons. These were tough times, and we found 
ourselves in the red every month.
    Interestingly, though, with Medicaid we never incurred any 
costs for health care. We actually owe nothing due to medical 
debt at this time. The cost of staying on Medicaid is on the 
back side, trying to survive on $20,000 a year. We took 
tremendous debt on, eliminated our savings and retirement, and 
put our growth on hold trying to survive while she got the 
health care that she needed.
    After 2 years, she began to reclaim her new life. There 
were now more good days than bad days, and so her mother 
returned to teaching and group health coverage, an entirely 
different insurance experience.
    I found it interesting, when we transitioned to group 
coverage Tatum was accepted with open arms and without 
question. It would appear as though individual policies and 
group policies exist in completely different universes.
    Her mother and I are thankful that Tatum's physical 
recovery is quicker than our finances. She is growing, 
thriving, and giving back. She regularly appears on behalf of 
Children's Medical Center, the Southwest Transplant Alliance, 
and her favorite charity, Make a Wish. Her life has been a joy 
and an inspiration to many. We would do it all again for her 
sake. And we are thankful Medicaid was there for us. We are 
thankful to be off of Medicaid.
    We do hope our testimony illustrates how the 
hospitalization policy in question today was obviously 
worthless. We have learned that the language of policies can be 
confusing. In spite of both being college educated, we didn't 
understand at the time the $25,000 maximum for miscellaneous 
hospital expenses basically meant all hospital expenses.
    Even today we find the wording still a little bit 
counterintuitive and misleading. But I asked for in very clear 
language, I thought, a policy that would protect us from the 
big ``Oh, no,'' and we ended up with a policy that would do no 
such thing.
    While our testimony should be labeled ``Grossly 
Underinsured,'' we have since learned that even traditional 
million dollar policies, which would seem like a safe bet, are 
no challenge for long-term, life-threatening illnesses. I got 
the call on Tuesday that the hospital had added up Tatum's cost 
at Children's Medical Center, and as of right now her cost is 
$1,284,335. And that does not include any of the doctors' 
bills. They are billed separately.
    But, most importantly, we have learned that being 
underinsured really is the same as being uninsured. They both 
lead to the same end.
    Underinsurance certainly impacted our lives. God carried us 
through, and we trust that he will continue to do so, and we 
are glad. We have learned from this experience, and we are 
trying to move on.
    It seems like the story ends here, but it is actually just 
the beginning for Tatum, as you already know. Underinsurance 
probably isn't the biggest tragedy of our story, if you ask me. 
Her story encompasses other shortcomings that you need to do 
something about.
    What continues to sadden her mother and I is this issue of 
blacklisting because of her preexisting. Tatum is going to grow 
up, and one of these days she is going to need insurance. And 
we are lucky because Sherry's dream has always been to teach, 
and that gives us access to group coverage and the benefits 
that come with that, but that may not necessarily be 
everybody's dream; and I don't think that is really fair, and I 
don't really think that that is American.
    I ask you to consider this. When Tatum was just 4, she went 
to New York City and stood transfixed on Lady Liberty. They 
told her then that Lady Liberty stands and invites the world to 
come to the land of opportunity where anyone can follow their 
dreams. And yet Tatum, a born-and-bred American citizen, might 
not be able to share in this dream through no fault of her own 
simply because the insurance industry has developed a system 
that won't allow it.
    Our Tatum has so much potential, but for now she doesn't 
have full access to Lady Liberty's promise. She can't pursue 
little-girl dreams to be an artist or have a dress shop or 
restaurant or be self-employed in any fashion that requires 
individual coverage.
    When she asks me what she should be when she grows up, I 
can't tell her the same thing that you probably tell your kids. 
I can't tell her she can be anything she wants; and you guys 
need to fix that for me. Do I tell her that the government 
before her today--a government for the people, by the people--
refuses to take the steps to also protect her rights to life, 
liberty, and the pursuit of happiness? What do we tell her?
    In closing, while my purpose today is to testify and answer 
your questions as an American citizen, I also come to pose just 
one question to the very distinguished committee as a father: 
Which of you will commit yourself today to be able to look 
Tatum in the eye and tell her that you will be helping lead the 
way, and you will see to it that when she grows up she will 
have affordable access to adequate health care regardless of 
her occupation; and that today she too can start pursuing all 
of her Americans dreams?
    We sincerely pray that God will bless you and guide you. 
And God bless America. Thank you.
    And please be an organ donor.
    Mr. Stupak. Thank you.
    [The prepared statement of Mr. Null follows:]******** 
INSERT 2-2 ********
    Mr. Stupak. Mr. Wilkes, your testimony, please.

                   STATEMENT OF NATHAN WILKES

    Mr. Wilkes. Mr. Chairman and members of the subcommittee, 
my name is Nathan Wilkes. Thank you for the opportunity to talk 
to you today about the difficulty my family has had in 
maintaining health insurance due to the high cost of the 
treatment for my son, Thomas, the treatment he needs to live a 
healthy and productive life.
    Although we have always been insured, always insured by 
group coverage, our family has come up against the issue of 
lifetime caps--not once, but twice before he was 4 years old. I 
have been able to maintain insurance coverage, but it has been 
a constant struggle and a worry for me. I am going to tell you 
a little bit about what we have had to deal with and how I have 
dealt with it, and ask your help in immediately eliminating the 
practice of lifetime caps as part of health legislation.
    My son, Thomas, was born in 2003 and diagnosed with severe 
hemophilia, a genetic blood-clotting disorder, treatment for 
which means he has to get replacement clotting factor on a 
regular basis. It is easily manageable if he can get it, but it 
is very costly and very expensive to treat. If he does have a 
bleed, it has to be treated quickly or else irreversible damage 
or death could occur. Bleeding into the joints, bleeding into 
the head or brain or abdomen could cause significant long-term 
damage.
    On the day Thomas was diagnosed, a local hematologist came 
to us to help us with what we were facing. Her first question 
was, do you have good insurance? I said, Absolutely. I work for 
a company who made it a mission that we had the best, gold-
plated, Cadillac--whatever you want to call it--plan we could 
have; and they had struggled to maintain that.
    In 2004, he began--we had to start treating him. The cost 
of the treatment that year was roughly half a million dollars. 
The result of that was that in 2005 the insurance company 
forced us to accept a high-deductible plan, where we had been 
on a PPO that had covered everything before. They had shopped 
around all the other insurance companies, all of whom refused 
to cover my company that I worked for previously because of the 
high cost of claims.
    In 2005 and 2006, claims rose to about three-quarters of a 
million dollars a year. These were treatments that were 
necessary for my son's well-being, and today, he is a very 
healthy and productive 6-year-old.
    But one of the things they tacked on was a $1 million 
lifetime cap. When they did so, my wife cried for days. I 
worked with my HR director and the broker that they worked with 
to try to get around it, get an exclusion, get rid of it, do 
whatever it meant. But it couldn't be undone. We knew the 
hourglass had been turned over; it was running out on us. We 
knew we had maybe a year, maybe a little more before we had to 
find some other solution. We discovered that we had choices. We 
had six choices, and I have documented them here in the 
testimony. And as I go through them, I think you will 
understand that we really didn't have any choices at all.
    I could have quit my job and gone to work for a larger 
company, somebody with a larger pool where I could hide in the 
shadows or hopefully lurk and not let them know that my son has 
a serious illness, or face possible termination.
    I could go to work for the government, but frankly, it 
doesn't pay enough.
    I could have my wife go to work. She had already made the 
decision to stay home to take care of our son, who had a 
chronic illness. That would mean putting kids into day care, 
and we just couldn't afford that, either, and that was just 
shifting the problem to another company.
    We tried to turn to Medicaid. Now, Colorado is a difficult 
State to get on Medicaid, and we earn too much money. We didn't 
want to impoverish ourselves and go down that road. We had 
already been racking up significant medical debt as a result of 
this.
    Several social workers told us we could get divorced. Just 
get a paper divorce, then the kids could qualify for Medicaid 
under my wife if she didn't work. But that would both put my 
wife at risk, because it turns out she is a carrier as well, 
and we didn't want to do that; that just wasn't in our family 
values.
    We could put Thomas on the State high-risk pool. That too 
has a $1 million cap. That is something that once he did cap 
out in 2007, we put him in the high-risk pool; he lasted on 
that a year. That was the second million dollar cap. That is 
known as insurance of last resort, but it didn't last for us.
    And finally, the option was to start my own business, quit 
my job, take a pay cut, try to get myself--since you can only 
get insured as an individual if you are healthy and have no 
issues, or by the government if you are Medicare-eligible, or 
impoverished and have a disability for Medicaid, or you have to 
get insured through an employer. I decided to become an 
employer.
    The struggle that we faced--all the while we were insured 
there were years where we were paying roughly $25,000 a year in 
premiums and deductibles and out-of-pocket and ancillary 
medical expenses. This hardship left us fighting to keep up 
with bills, forced us to rely on credit and home equity to stay 
afloat. The more credit we used, the worse our credit rating 
got. The worse our credit rating got, the more we ended up 
paying for everything as our interest rates climbed. Harassing 
collections agencies began calling us. We struggled to get 
providers paid for everything from the day he was born.
    It took us over a year to set up our own business, so in 
May 2008, when my son nearly exhausted his $1 million cap on 
CoverColorado, I would be able to pull him into our own 
company. I had to quit my job even though my employer tried to 
do everything they could to keep me on board. They were fine 
with paying the rising premiums. Other companies weren't 
willing to take me on as that kind of employee, but they did 
everything they could to work with me. Ultimately, I had to 
quit my job and take a pay cut and start this business.
    Now we are covered by another high-deductible health plan, 
a $6 million cap this time. Another hourglass. There has a 
little more sand in there this time, but it won't be long 
before we run out of that as well.
    This thing about where we were now is one single event. We 
are hanging by a thread--death, injury, anything that stops the 
income through my business, or a serious illness that puts him 
in the hospital for a significant length of time means we are 
out.
    I have included with my testimony and chart that shows the 
year-over-year changes to our premiums which I think you will 
find pretty interesting. When we started the claims, our 
premiums, our cost of care, went up 35 percent the next year.
    The other point I want to make very quickly is the impact 
of the high cost of his care was not just felt by my family, 
but everyone I worked with. There were only 150 employees with 
the firm at the time, but moving into the high-deductible plan 
meant that everybody was now paying for medical care out of 
their own pocket.
    Just a couple of quick examples: I had a coworker who got 
his leg cut, didn't have the money to go to the ER to cover it, 
so had a friend stitch up his leg on the kitchen table. Minor 
case.
    Another case, a coworker, a young coworker, his wife was 
pregnant, had to have a C-section. And because of the 
deductible at the time, they were faced with putting over 
$9,000 on their credit cards just to deliver the baby.
    So you have heard today maintaining health insurance has 
been a struggle, but it has allowed me to provide my son with 
the lifesaving treatment that he needs. He is 6 and very 
healthy. But without reforming the existing private insurance 
system in this country, this struggle will continue for me and 
many more.
    It is critically important to me that the individuals and 
families that face health care costs due to chronic conditions 
see reform happen. I am pleased to see that several 
discriminatory practices such as preexisting conditions and 
annual lifetime caps are part of the plan, but I am concerned 
that for those of us currently insured that these changes won't 
take effect until 2013 or even later. Some of the plans we see 
have grandfathered in the caps, or they don't take effect until 
2018.
    I tell people that, in the individual market, rescissions 
are how insurance companies weed out the sick. What happened to 
us, we have always been in the group market. High-deductible 
health plans and caps have been how they have weeded us out and 
how they weeded other out people in the group market; and that 
has to stop and that has to change.
    Our country needs health insurance reform. My family needs 
health insurance reform. And my family is thankful for the 
congressional efforts to eliminate lifetime caps on benefits 
and health reform. Thank you.
    Mr. Stupak. Thank you.
    [The prepared statement of Mr. Wilkes follows:]******** 
INSERT 2-3 ********
    Mr. Stupak. And thank you all for your testimony.
    As many members have said in their opening statements, you 
really help us put a face on what is going on in America with 
health care--those folks who are unfortunate enough to have 
medical problems we do not anticipate, and even when we have 
insurance, we cannot afford to deviate from the norm.
    I am going to ask the chairman, Mr. Waxman, if he would 
like to go first. I know you have some meetings. And if you 
would like to begin questioning, we will have questioning for 5 
minutes.
    Mr. Waxman. Thank you very much, Mr. Chairman. I appreciate 
your courtesy to me.
    I want to say to all of you, what happened to you is wrong. 
It is wrong in this country that people should be forced into 
bankruptcy, that Tatum should face a future where she may not 
get insurance under the way things operate now, that bankruptcy 
becomes the only way to wash your hands of these debts. And you 
all had insurance.
    Tatum, I am going to assure you that if we enact the 
legislation that President Obama is supporting, your future 
will be very bright. It is not going to be hindered by your 
inability to get insurance, yours or anybody else's, in this 
country.
    Insurance should be that we spread the costs over a broad 
population, and then those who need the care will have it 
available to them. But the insurance companies look at it 
differently; they want to avoid having to pay money, so they 
don't want to cover people who might be a risk. They exclude 
you if you have a preexisting condition. They put lifetime 
caps. They have annual limits on the out-of-pocket costs--
annual limits on the costs that they will pay. There are so 
many things they do to avoid living up to what you expected you 
bought when you paid for your insurance coverage.
    Now, Ms. Howard, you thought you were buying insurance 
coverage that would protect you. You knew it was going to 
require that you would have to pay a lot of money up front; but 
then, after that, if it was a huge amount, you would be 
covered. Isn't that what your thinking was?
    Ms. Howard. That is what I thought. But that was wrong.
    Mr. Waxman. Well, your policy said that if your costs 
exceeded $5,000, then the insurance company would pay for all 
of it. Isn't that right?
    Ms. Howard. It did say that.
    Mr. Waxman. So what happened with you was you spent far 
more than $5,000, because under your Anthem policy, every time 
you got a treatment, they didn't count that toward your out-of-
pocket limits for the $5,000. They disqualified costs of out-
of-network treatments and the portion you paid for prescription 
drugs. Isn't that the situation?
    Ms. Howard. Yes. And that amounted to roughly $10,000 per 
year for each of those years.
    Mr. Waxman. $10,000 each year for the----
    Ms. Howard. Each of those years while I was under active 
treatment.
    Mr. Waxman. So even though you exceeded the $5,000, they 
didn't step up to pay the rest. They just said what you paid 
doesn't count toward the $5,000, and kept on--it is almost like 
a goal they kept on moving away further and further from you.
    When you tried to stay within network, because they said 
you have to stay within network--if you go out of network, they 
are not going to count those costs--how difficult was it to 
find somebody within their network?
    Ms. Howard. There were some services that were not 
available in San Francisco.
    Mr. Waxman. So you would have to go somewhere else other 
than San Francisco.
    Ms. Howard. Yes.
    Mr. Waxman. San Francisco is a pretty big city. So I would 
assume that you are talking about hundreds and hundreds of 
miles to get the care.
    Ms. Howard. I made the choice to get the care that I needed 
regardless of cost. And that is why I feel like I am alive 
today.
    Mr. Waxman. And each time you had a prescription filled, 
you had to pay a coinsurance fee of 30 percent of the cost; is 
that right?
    Ms. Howard. Yes.
    Mr. Waxman. And how much out of pocket did you actually 
spend while you had insurance coverage?
    Ms. Howard. It was over $40,000 between 2004 and 2008.
    Mr. Waxman. So for the years you were protected, 
presumably, for expenses no more than $5,000, you ended up 
spending $40,000 over that time?
    Mr. Wilkes, your policy had a cap on out-of-pocket expenses 
as well, but they also had various limitations and exclusions.
    Can you estimate the total out-of-pocket costs that your 
insurance did not cover?
    Mr. Wilkes. In the 6 years total that we have had, direct 
and indirect costs, I would say, well over $50,000, if not 
$100,000.
    There were some claims that--at the very beginning and at 
the very end that they said they either did not cover because 
it was out of network or did not cover because it exceeded the 
cap; and those two individual claims were $50,000 and $80,000 
each.
    Mr. Waxman. Well, we started the hearing today--we had 
opening statements, and some of my colleagues on the side of 
the aisle who opposed health insurance reform said, We don't 
want one size to fit all, we want competition in the system.
    Well, there is no competition when one insurance company 
can sell you a plan that doesn't pay over a certain amount, if 
it doesn't pay within the cap or it is not a one-size--in other 
words, what they are saying is competition--is competition to 
exclude payments.
    And what we need is legislation that would ban the lifetime 
and annual caps, would have no limits on out-of-pocket costs, 
no more discriminatory insurance practices. And what we would 
like is a defined benefit package, so then you can shop around 
between different insurance claims; and you will know that you 
are buying a plan that will cover your needs. And you are going 
to choose between them, based on the price or based on the 
quality, but not based on what they will cover and what they 
will not cover when you find out that you really need that 
coverage to pay for your medical expenses.
    I hope we will get that bill passed. And I thank the 
chairman for allowing me to proceed with these questions.
    Mr. Stupak. Thank you, Mr. Chairman.
    Mr. Walden for questions, please.
    Mr. Walden. Thank you very much, Mr. Chairman.
    I just want to make clear that there are many of us this 
side of the aisle who have also supported health care reform 
and insurance reform during my days in the Oregon legislature 
and here in Congress, and I will continue to. And I support 
dealing with the preexisting condition issue, dealing with the 
caps issue, dealing with the competition issue. I think 
insurance should be available across State lines.
    I was on a hospital board for 5 years in a small community, 
and we looked at the uncompensated care we wrote off every 
month and dealt with the regulators and dealt with the 
companies and dealt with everybody involved.
    I was a small employer, like you were, where we had 15 
employees. We had virtually no option on where to go for 
insurance--maybe one, two companies. And I never could throw 
the dart high enough on the budget board each year to figure 
out what my premium increases were going to be. So I am 
sympathetic.
    And you heard my own personal story as a parent.
    Ms. Howard, I am curious, doesn't the State of California 
regulate the insurance policies like the one that you have or 
had? You don't still have that?
    Ms. Howard. Fortunately, I don't have that policy anymore.
    Mr. Walden. But would that policy have fallen under the 
regulatory scheme of the State of California?
    Ms. Howard. Well, when I realized that expenses were 
mounting in a way that I had not foreseen, I called and I said, 
How is this possible? And they pointed to my signature on the 
contract and said, You signed up for this.
    Mr. Walden. And so what good is the regulatory scheme in 
the State of California then to make sure that--don't they 
determine anything to do with the policies?
    Ms. Howard. At the time that I was facing all of this, I 
was so ill that I had no strength to learn all of those things, 
and it is really only in retrospect that I have attempted to 
piece together the story.
    Anthem, in fact, refused to hand over my records to me. I 
understand that they handed them over to the subcommittee, 
but----
    Mr. Walden. They wouldn't give you your own records?
    Ms. Howard. No. Because I don't have that policy any 
longer.
    Mr. Walden. That is amazing.
    Ms. Howard. I don't know what they could have to hide.
    Mr. Walden. But I assume we subpoenaed them or requested 
them?
    Mr. Stupak. Requested them, and we have them: And she has 
access to them.
    Ms. Howard. Maybe I could look at them.
    Mr. Stupak. Yes, you can. Right after, come on up and we 
will give you a complete copy.
    Mr. Walden. These are the sorts of reforms that there needs 
to be a change here. There is no doubt about it. I am sorry for 
what you have gone through.
    And I guess that is one of the things. You know, we hear 
that we have to have this regulatory scheme State by State; and 
yet I hear your story and think, well, that didn't exactly 
protect you as a consumer.
    And I am sure that--I don't know. When we shop for health 
insurance, trying to read through those policies and figure out 
what is covered and what is not is a challenge. I leave that up 
to my wife, and she makes pretty good decisions on that front, 
but it is still a challenge.
    And yet I want to make sure that you aren't tied to a job 
or have to go broke in order to have insurance for your kids. 
And while I am not convinced the bill before us, the one passed 
out of here, is the best way to achieve that, I do believe 
there are ways to get there.
    And so I don't have any further questions, and I know we 
are going to have votes in another 15 minutes, so I yield back 
the balance of my time.
    Mr. Stupak. Thanks. And I have got to compliment you, 
because you have helped us get Ms. Howard's records.
    But the hearing we are having Tuesday on small businesses, 
that has been adjourned a couple times because even though the 
small businesses have agreed that we can look at their 
insurance polices, the insurance companies have refused to give 
us the records because of the HIPAA requirements. And you and 
your side have been most helpful in having that hearing 
Tuesday.
    We finally got some records, but it is a hassle. Whether 
you are the patient or the policy holder yourself, they do not 
want to give up those records.
    Mr. Walden. Maybe we can have an oversight hearing on 
HIPAA, too. There are lots of issues associated with that law.
    Mr. Stupak. I will take my turn for questions.
    The stories we have heard here from this panel are 
heartbreaking, but unfortunately, are not unique. If I could go 
to slide No. 1 there, The Commonwealth Fund health survey 
provides some remarkable data, if you take a look at--right 
here. This slide comes, as I said, from The Commonwealth Fund 
report. We will hear from Ms. Collins next.
    I would like to highlight the comment labeled Underinsured 
and Used Up All Savings, like this panel. According to the 
report, there were 25.2 million underinsured Americans in 2007. 
This table shows 46 percent of the underinsured burned through 
their savings in order to pay for medical bills. That is 11.6 
million Americans with health insurance who still spent all of 
their savings on medical expenses.
    The table also notes--and you can see the arrows there--
that 33 percent of those underinsured took on credit card debt 
as a result of medical bills. That is another 8.3 million 
people relying on credit cards, often with high interest rates, 
to cover medical expenses just leads to greater financial 
burden.
    I guess--as the chart shows, I think we are just all--the 
underinsured are just one step away of being uninsured, in 
financial ruin.
    Mr. Wilkes, let me ask you this. In your testimony, you 
state your family relied on credit card and home equity to stay 
afloat. Is that correct?
    Mr. Wilkes. That is correct.
    Mr. Stupak. Roughly, how much medical debt did you finance 
through credit, whether home or credit cards?
    Mr. Wilkes. It was spread over several years. I am not 
sure. I even had to cash in a life insurance policy, spend down 
our savings--got no savings left. So many bills. I mean, we 
literally get stacks and stacks of statements and bills from 
the hospital, from the insurance company, from everybody. So it 
is impossible to keep track.
    Just to tell you how impossible it is to keep track, even 
the insurance companies couldn't track.
    Mr. Stupak. Right. You were telling me you requested one 
time, it is in your testimony, one of those nice charts you 
made.
    Mr. Wilkes. In 2006, when we were near the cap, we said 
tell us where we are. Give us a line item list of the bills. We 
got that 22 months later, a year and a half after.
    Mr. Stupak. So what would have happened if you would have 
gone over that waiting for this information, to see if you are 
near that million-dollar cap, you go over the million-dollar 
cap, not knowing.
    If it takes them 22 months after requesting to give you the 
information, all that would have been out of your pocket then?
    Mr. Wilkes. Like I said, we had $80,000 over the cap that 
we were responsible for. Had we waited another week or two, it 
would have been well over a quarter million dollars.
    Mr. Stupak. Could I put up the chart by Mr. Wilkes? Because 
I want you to try to explain this one. You had it to your 
testimony.
    I had a little trouble. I am in July, 2002 there. The green 
line on the bottom. It is about--just your total annual 
premium, right?
    Mr. Wilkes. The green line on the bottom is basically 
employee contributions. Just the portion--not the premiums 
that----
    Mr. Stupak. The employer paid?
    Mr. Wilkes. The minor portion of the premium that comes out 
of your paycheck.
    Mr. Stupak. The blue one there that starts at $7,000 in 
2002, is that employee and employer contribution?
    Mr. Wilkes. Yes, that is basically the full premium.
    Mr. Stupak. And then--so over 5 years you went from $7,000 
to over $17,000, the employee and employer contributions, if 
you follow that top line?
    Mr. Wilkes. When we were under the high-deductible plan, it 
was basically a $12,000-a-year premium. By the time we left, it 
was $10,000 out of pocket on top of that.
    So you are--it was well over $22,000. And that includes--
you know, plus funding the HSA that we had for those of us that 
could afford it.
    Mr. Stupak. So it was basically $17,000 for a premium, but 
you had a $10,000 deductible, first, you had to meet?
    Mr. Wilkes. Right.
    There is another chart there, $6,000 deductible, $10,000 
out of pocket with some coinsurance. The numbers get a little 
funny, but ultimately we had to lose a lot of money out of our 
pocket.
    Mr. Stupak. So with that coverage, even with the $10,000 
deductible, you indicated some of your fellow employees, who 
shared that pain with you, financial pain, had to pay for a C-
section for the birth of a child, sewed up a leg on a kitchen 
table----
    Mr. Wilkes. Everybody in the company now--we were the bomb 
that went off, but they were all casualties, all around us. 
They were all paying this $12,000 premium per family. But every 
time they had to go take their kid in to the doctor or go to 
the hospital, then they were paying 100 percent because they 
hadn't even come close to their deductible yet.
    Mr. Stupak. Well, I know you mentioned--and Mr. Null also 
mentioned--that one way to get around it is to file divorce, 
have one spouse get no income, go on Medicaid to pay for these 
expenses. I am pleased to see neither one of you chose that 
route, but I sure financially you look at it, it makes you 
think at least once or twice. Fair to say?
    Mr. Null, let me ask you this. You had to reduce your 
annual income you said to, what, $16,013----
    Mr. Null. That is correct.
    Mr. Stupak. --in order to qualify? Or you had to be below 
$20,000.
    Mr. Null. You had to maintain below that level; it is 
16,014. You can handle it yourself.
    Mr. Stupak. So at--16,013 is the magic number. I am sure 
you had to divest your assets, get rid of a savings account if 
you had anything left by then.
    Mr. Null. Absolutely. They do a complete asset search, and 
you have to liquidate all of that.
    Mr. Stupak. How long were you on Medicaid then to pay for 
Tatum?
    Mr. Null. We were on Medicaid for about 2 years.
    Mr. Stupak. I think you said you had to avoid work or did 
not take on work because you were afraid to go over that cap?
    Mr. Null. That is correct.
    Mr. Stupak. What would have happened? You would be without 
the insurance?
    Mr. Null. Yes. They would drop us effective immediately.
    Mr. Stupak. During this time, did you look for other 
insurance companies to see if you could get off Medicaid and 
try to get some coverage for Tatum?
    Mr. Null. Yes, sir, we did; and no insurance companies 
would write us because of the preexisting. They, quote-unquote, 
said they would not even accept our policy for review, or 
request or accept our application for review.
    Mr. Stupak. So it was only when you went from a private 
individual plan to a group plan you were able to get insurance 
for Tatum?
    Mr. Null. Correct.
    Mr. Stupak. You indicated Tatum is blacklisted from 
insurance. Can you explain that a little further?
    Mr. Null. It is because of her preexisting. As I mentioned, 
we could not find any insurance companies that would accept our 
application with Tatum's name on it.
    Mr. Stupak. What if you--I guess if you didn't put your 
name on it, when a claim was submitted--if you didn't put 
Tatum's name on it, when a claim was submitted it would be 
rejected because she is not covered underneath the policy, 
right? There is no way to get around it.
    Mr. Null. There is no way around it. No, sir.
    Mr. Stupak. Ms. Howard, we all want to compliment you for 
the struggles you have been through, but still trying to pay it 
and to not file for bankruptcy. I think you said you didn't 
want to go down that road. Could you just explain a little bit?
    Ms. Howard. Oh, I didn't want to go bankrupt.
    Mr. Stupak. Why didn't you want to go through bankruptcy? 
That was one way to clean your debt, right?
    You are single. You could clear off your debt. In 7 years, 
you could probably get your credit reestablished.
    Ms. Howard. I figure in the next 7 years I might be able to 
pay this off. I would like to be able to say that I have stood 
up on my own throughout all of this.
    Mr. Stupak. Well, I think you have got the respect of 
everybody on this committee for trying to do what is right. Not 
that the 62 percent of the Americans who play by the rules, had 
insurance--78 percent of those 62 percent had insurance, but 
they had to file because they just couldn't do it.
    So we compliment you for trying.
    Mr. Gingrey, questions, please.
    Dr. Gingrey. Mr. Chairman, thank you.
    First of all, I certainly want to thank all of you for 
sharing your stories and the courage that you have exhibited in 
trying to deal with the very difficult situation that all three 
of you have experienced. And I wanted to direct my first 
comments to Ms. Howard.
    Again, I want to commend you on the steadfastness with 
which you have taken responsibility for your own medical debt. 
Could you please comment on how that has affected you 
personally?
    And, specifically, did you ever consider Medicaid? You may 
have mentioned that, but if you don't mind talking about that 
again. And were you able to obtain medical care from any other 
group or organization? Was there anybody out there to help you 
other than just that insurance policy that you had?
    Ms. Howard. Yes. For part of 2005, I qualified for a State 
of California MediCal program, specifically for low-income 
breast cancer patients. They offered me some help, but in the 
long term it was just a drop in the bucket.
    I am lucky that now, through my employer, I am covered by 
excellent group coverage. But I know that if I were back on the 
individual market, no one would cover me.
    Dr. Gingrey. In California, Ms. Howard--I know in the State 
of Georgia, my State, and unfortunately, it is underfunded, but 
they have something called State Aid for cancer patients, low-
income cancer patients.
    Did you indicate that they have something similar to that 
in California?
    Ms. Howard. They do. Specifically it is for breast cancer 
and for which I qualified, but the outcome was really minimal. 
I was grateful for the aid at the time, but it was really 
insufficient, given the extent of my debt.
    Dr. Gingrey. It was a minimal help; some help, but minimal.
    How about the providers in the State of California, the 
physicians? Did you run into any difficulty with regard to them 
accepting State aid for cancer reimbursement for their 
services?
    Ms. Howard. You know, it is all somewhat of a blur, looking 
back on 5 years ago. But I fortunately had an excellent 
oncologist and group that was caring for me that--they just 
said, Hey, we will figure this out together.
    What we really figured out is that I have owed them a lot 
of money for a long time, and I am still paying on it.
    Dr. Gingrey. God bless you.
    Mr. Wilkes, I wanted to ask you, too. The chairman of the 
committee, Mr. Waxman, commented in his remarks that many on 
this side of the aisle don't feel that we need to have health 
insurance reform. And maybe my opening remarks led him to 
believe that, that maybe I personally didn't feel that we 
should have or needed to have health insurance reform or health 
care reform.
    But, clearly, I personally believe that we need health 
insurance reform, and I think most members on this side of the 
aisle believe that--firmly believe it. Your testimony today 
certainly well supports the need for reform of the health 
insurance industry. We just believe we can do that without--we 
use the expression sometimes--throwing the baby out with the 
bathwater.
    And Mr. Walden mentioned a number of things that we are 
supportive of in regard to reforming the health insurance 
industry and some of the egregious things that you have 
described, like rescission of coverage after the fact and 
denying the ability for people with preexisting conditions to 
get coverage. Maybe they can get it, but if it is five times 
standard rates, then they essentially can't get it.
    So, Mr. Wilkes, I wanted to ask you in particular. I think 
you had mentioned that you were under group coverage for a 
time, and then when you had to get into the individual or small 
group market, because of the preexisting condition of your son 
with hemophilia, it was just virtually impossible.
    And I want to ask you your opinion of a suggestion that I 
made in regard to reform to say that anybody that, say, a young 
healthy person like yourself with a young family, lots of 
expenses, and you are working and you really can hardly afford 
to get on the company's group policy. But you do it anyway. And 
you do it, you make that sacrifice every month and you pinch 
pennies, and maybe for 15 years or maybe 2 or 3 years even, you 
have done that and then all of a sudden something like this 
happens.
    Don't you think that a company, an insurance company should 
be obligated because you have had this credible coverage, if 
something happens to you after the fact through no fault of 
your own--or one of your family members--that they should 
continue to cover you and your family at those essentially 
standard rates for until you are eligible for Medicare, or 
maybe even for the rest of your life? Because you have bought 
into that system and they have made a nice profit probably on 
covering you until you finally did have those claims.
    Tell us what you are thinking about that.
    Mr. Wilkes. That speaks to a point I talked to other people 
about. Because of the way the group market works, insurance 
functions best as a large pool. And the way we have divided--
the employers are all these little, tiny pools, so depending on 
the size of your company, if one person gets sick, it could be 
very damaging to the company.
    That is what happened to my previous employer. We had the 
high cost; they paid the price. So what you are talking about 
then speaks to community rating.
    We were blessed. In Colorado, in 2008, the State enacted a 
law creating modified community rating. We are one of a handful 
of States that does that for the small-group market now. That 
is the only reason that I can afford small-group coverage today 
is because we have modified community rating in the State of 
Colorado.
    And I just want to speak very briefly to something Mr. 
Walden said about selling insurance across State lines.
    The way I see it, we are talking about underinsurance 
today. I think that is a very bad idea, because that invites 
underinsurance. The average number of things that are required 
to be covered in the State--there are about 45 or so things 
that have to be covered under insurance plans. In Colorado we 
have 51--things like chiropractors, certain types of nurses, 
colorectal cancer screening, breast cancer screening--whereas 
over in Idaho they only have about 16 of these things that have 
to be covered by their plans.
    And I think if you invite selling across State lines that 
way, then the same--the United Health Care in Colorado will now 
have the United Health Care in Idaho come try to sell a low-
cost plan in Colorado that doesn't cover those things. And then 
you run--you create more of the problems that we are having 
with finding that, Oh, the breast cancer is not covered 
anymore, or the liver cancer is not covered anymore.
    So it is just--I hope that answers.
    Dr. Gingrey. Mr. Wilkes, thank you.
    Mr. Null, I don't have time. Maybe in a second round. But, 
again, thank you so much. And your daughter looks great and 
healthy, and thank God for that. I appreciate you.
    Mr. Stupak. Mr. Dingell for questions, please.
    Mr. Dingell. Thank you, Mr. Chairman. Again, to the panel, 
thank you for your presence and your help.
    First question here is, some premises that are interesting. 
What is striking about each of your stories is that in medical 
emergencies, that your insurance policies had shortcomings 
which have limited your career options.
    Mr. Null, in your testimony you mentioned that you had to 
lower your income in order to qualify for Medicaid. I 
understand that because you are a small business owner, that 
decision affected your business. I gather it related to having 
to turn away business to reduce your income so that you could 
qualify for Medicaid. Is that statement true?
    Mr. Null. Yes, it is.
    Mr. Dingell. Tell us a little bit more about it, if you 
please.
    Mr. Null. Well, the limit was $1,613. And because I am 
self-employed, I am the salesman for the company, I am the 
collector, so I know exactly how much I am going to make. If I 
knew I was going to make too much, in order to be able to 
requalify for Medicaid, we would have to turn business away and 
I would be unable to take on that business because I knew I 
would make too much for the Medicaid limits.
    Mr. Dingell. Thank you.
    Now, Mr. Wilkes, you told us how you had to leave a company 
that you liked to work for in order to get better coverage for 
your son. What would you like to tell us about that, please, 
sir?
    Mr. Wilkes. Well, they didn't want me to go. I was 
basically employee No. 9, the lead engineer of the company that 
we started in 2000. The company survived the dot-com bust. The 
company then was stuck facing these rising premiums, and they 
kept me around. For over a year, while we were dealing with 
this. I literally walked the halls of the company, felt like I 
had a big giant target on my back.
    I am very close to other members of the hemophilic 
community. I hear horror stories every time I talk to these 
people about how they started a great job--they were doing 
well, they were performing, they were the top salesperson--and 
as soon as somebody in the company found out that they had a 
kid with hemophilia with the high cost of illnesses, they were 
terminated or let go, or their job was no longer needed.
    So I felt I had that target on my back. I felt I had that 
target on my back for over a year.
    When it came time to leave--I have to go; I don't have 
insurance unless I do this--they didn't want me--they didn't 
want me to go. They worked with me. They did everything they 
could, and I feel blessed that--a guardian angel looking over 
me and my family, that they were able to do that. But I know 
that is not the case for a lot of companies and a lot of people 
across this country.
    Mr. Dingell. Now, I gather that you on the panel have all 
had to shop around for insurance policies in order to meet your 
needs. Did you find that to be an easy process?
    And did you have an easy time of comparing your policies 
or, rather, your choices amongst policies so that you could 
come up with the best choice for you and your family? Did you 
find it easy to know what the benefits would be, what the 
restrictions and the constraints were, what would be the costs, 
and what would be the duration of the policy and the other 
circumstances, including preexisting conditions and questions 
of that kind?
    Would you want to start, Mr. Null?
    Mr. Null. We found shopping for insurance to be very 
confusing. In fact, in Texas it requires a licensed agent in 
order to even be able to come talk to you about policies, it is 
so confusing.
    My wife and I, we are both college educated. We believe 
that we are able to make good decisions. But being able to look 
at these policies and tell the difference--for example, this 
policy that we were on when Tatum had her illness, this policy 
was only 25 percent less than the policy I had been on 
previously with traditional caps in it that would have done our 
family much more service. It was only 25 percent less, and yet 
the cap was 1/40th of a comparable policy.
    No, we did not recognize anything along those lines when we 
were shopping for that policy. Had we seen something like that, 
that would have raised red flags; and we probably would have 
recognized that policy for being the worthless piece of trash 
it was.
    Mr. Dingell. Mr. Wilkes, do you want to make a comment on 
that?
    Mr. Wilkes. Yes.
    Our family had been dealing with this issue about 5 years 
by the time it came time for us to actually shop for a plan. 
The policies themselves were very difficult to comprehend. The 
one thing that was really in my favor is that I was able to 
find an insurance broker who had cancer herself and really 
believed that the private insurance market has no business even 
existing in this country, and knew all the ins and outs and 
knew what to look for. I had her in my favor, who was being an 
advocate for our family.
    And I also took the plans--in Colorado there are like 20-
some different insurance companies that you can pick. We went 
to our hemophilia treatment center and said, Which of these 
companies is least likely to deny care, is least likely to give 
you any problems, is least likely to cause us problems when we 
go to the hospital? And out of those, there were only two that 
they said they have the least problems with and they can work 
with, that pay bills on a regular basis.
    So, in the end, we had two insurance companies out of the 
many that offered that were really an option for us. And beyond 
that, then we had to work with our insurance broker, who had 
fought the fight that we fought before and knew what we were 
dealing with.
    Mr. Dingell. Thank you.
    Ms. Howard, do you have any comments on the last question?
    Ms. Howard. I do.
    I feel like there is a real need to provide consumers with 
assistance in making sense of these plans, to give us an 
apples-to-apples comparison.
    You know, like Mr. Null, I now have a master's degree, and 
I couldn't make sense of that policy. I really feel like it 
behooves the subcommittee to write into the bill that we just 
have to understand what we are signing up for: what would the 
cost be, what would the coverage be for unfortunate but common 
conditions like my own, like breast cancer or other common 
conditions, what would the financial ramifications be for an 
individual or family.
    Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
    Members of the panel, thank you for your very fine 
testimony.
    Mr. Stupak. Mr. Welch for questions, please. We have two 
votes. Let's try to get through some more questions before we 
have to vote.
    Mr. Welch. I just want to, I think, express myself what I 
think all of us feel, and that is, you guys are amazing. To 
have gone through what you have gone through, to be going 
through what you are going through with the medical anxiety and 
then--getting that news, and then learning that you actually 
didn't have insurance. And at a time when you need to have 
total concentration on your health, your child, your partner, 
to find that you are in constant warfare with the insurance 
companies is just astonishing.
    And what I am amazed at is that you all seem to be very 
nice, normal people, and it hasn't worn you down into 
smithereens. Now, you may be fooling us, but I don't think so. 
However you managed to have that strength--a lot of folks don't 
have it and really shouldn't have to have it.
    And, if anything, I think what you have given us are very 
vivid examples, irrefutable, that if you are going to have 
insurance, it ought to be real coverage. You shouldn't have to 
be somebody with extraordinary personal emotional reserves to 
wade through it, willing to make extraordinary sacrifices in 
the long term to get through it.
    And what you are describing really is a business model 
where insurance companies make their money by denying coverage 
or writing policies with obscure loopholes that make it 
impossible for people to get the coverage they need when they 
need it; and it is our responsibility here to change that.
    And I think there really is some desire to have insurance 
reform, but the bottom line, I think the insurance company 
reform, if it is going to be across State lines, has to be with 
some consumer protection so that if you buy a policy from 
Kansas or California or Vermont, when that diagnosis comes and 
you need the care, one of your worries is not whether you have 
got the coverage.
    So you have done just a tremendous service for us here, and 
I think all of us really admire just the personal strength that 
each of you has displayed. Because I think you are--but we 
don't want others to have to go through what you have done. 
That is really the goal here.
    So thank you so much for coming and being so helpful.
    Mr. Stupak. The confusion you see on policies--this 
committee has been doing 2 years on private insurance. We have 
the same situation with Medicare Advantage. People signed up, 
they had no idea what they are signing up for; and that is one 
of the things we are trying to work on with health care reform.
    Ms. Christensen for questions, please. We still have 9 
minutes before we have to vote.
    Mrs. Christensen. Thank you. I will just ask one.
    Another troubling aspect of the underinsurance, besides the 
medical debt, is that it encourages policyholders to put off 
care in order to cut costs.
    And Commonwealth has done some work on that: People don't 
pay for home heating or food or rent--all of that is needed to 
really sustain your health--and then those with chronic 
diseases don't take proper care of their health.
    So I wonder--and I guess I would ask each of you about your 
experiences and have you--for example, Mr. Wilkes, did you ever 
avoid taking time to see the doctor because you knew he was 
near his cap?
    Mr. Wilkes. Absolutely. You know, not only did we have 
coworkers that were putting off primary and acute care, but, as 
we were facing the looming specter of the cap coming up, there 
were times when Thomas would complain about an injured joint. 
And the normal procedure would be treat it right away. That is 
standard. Treat it right away. And if it is a bleed, the factor 
will take care of it. But we were facing this cap, and every 
single dose was precious to us. I mean, we are talking about a 
thousand dollars or more a dose at the time or even $10,000 or 
more for full treatment. So we would wait and see.
    At least three or four different times during that year, he 
would complain about something in his joint hurting, and we 
didn't know if it was his leg falling asleep or what, so we 
would wait. Rather than do the standard care of treat first, 
then check it out, we would wait a few hours, we would wait 
overnight. And, invariably, it would actually turn worse, and 
it would cost us, you know, $80,000.
    Mrs. Christensen. And probably damage the joint in the 
process.
    Mr. Wilkes. Yes. And for 3 months, there was a period for 3 
months, he had an ankle bleed, where he was confined to a 
wheelchair the whole time.
    Mrs. Christensen. Thank you.
    Ms. Howard, did you ever skip any of your treatments?
    Ms. Howard. I did not. I, without regard for expense, went 
forward. And, as I said before, if I don't die, I will just 
figure out how to pay for this later. But it has come at 
tremendous cost to my family and to my personal finances and 
has also affected how I choose to live my life--where I work, 
where I live, how I live.
    Mrs. Christensen. Mr. Null, did you ever?
    Mr. Null. No, ma'am, we never let that be a consideration.
    Mrs. Christensen. I, too, appreciate your coming forward. I 
think your personal histories are very important testimony to 
what we are trying to achieve. And we have great admiration for 
your strength, your courage, and your perseverance.
    Thank you, Mr. Chairman.
    Mr. Stupak. Thanks, Mrs. Christensen.
    Mr. Burgess for questions. There is 5 minutes before we 
have to vote, so we will have to keep it at 5.
    Dr. Burgess. OK. I can walk faster than 50 older Members, 
so maybe I will make it.
    Mr. Stupak. For other members, we will come back.
    Dr. Burgess. Ms. Howard, let me just ask you. And I 
probably won't take the full 5 minutes, but I did want to come 
back and visit with you. You know, we heard Mr. Welch talk 
about how confusing insurance policies can be. And they can be; 
no question about that.
    I don't know if any of you have taken the time to read 
through the legislation that this committee passed on July 
31st. It is pretty confusing, as well. And, for many people, it 
has been hard to discern will their lives be, in fact, better 
or more complicated if this bill passes.
    But you referenced in your testimony having at least paid 
attention to one amendment that was passed, dealing with 
internal and external review. And I want to commend you for 
your ability to sort through a large number of words and dig up 
pieces of what almost would seem to be miniscule events.
    To me, that was very important, to get that included. 
Obviously, I was concerned about the development of a public 
option plan without internal and external review being 
available.
    Would that have helped you in your situation?
    Ms. Howard. Absolutely.
    I had previously had a group policy with the same provider 
that was excellent. And so, when it came time for me to buy a 
private policy, I went back to them willingly and said, ``What 
do you have to offer for me? I have been a great customer of 
yours for several years.'' And had I been able to compare the 
disparity in coverage between a private and a group plan--how 
if I had been through this same illness and recovery under a 
group plan, I would not be in the financial circumstances that 
I am now.
    So if I could have seen that apples-to-apples comparison 
and been told, ``Hey, kid, if you get cancer, this is what it 
is really going to cost you,'' I might have made a different 
choice. But I don't know that there would have been really 
anything better for me out there.
    Dr. Burgess. And, of course, this gets to the larger point. 
When a larger corporation is negotiating for insurance coverage 
and prices, they bring a certain amount of clout to the table. 
I had a policy in the individual market at one point in my 
life, and you are correct, you are negotiating as a single 
individual. If they will even talk to you, you feel grateful, 
because you got the audience with the insurance company.
    But there are many of us who believe that if we would 
permit more aggregation of consumers--it doesn't always have to 
be working for the same company; it might be members of the 
same church or alumni association or people who work in dentist 
offices or physicians offices.
    I was always stuck with having to provide--not stuck, but 
faced with having to provide a competitive insurance policy for 
50 employees. And, yes, while that is better than finding for 
just one individual, still, you are a pretty restricted 
purchaser in that. And we don't seem to be sensitive to the 
fact that, if we would allow aggregation of much larger groups 
with some sort of similarity in their business models, that we 
would give people more purchasing clout.
    Now, interestingly, you have chosen to work out a payment 
schedule, and while it is one that seems aggressive, I was a 
practicing physician for years and certainly can recall, as 
long as a patient was making an honest effort to pay off the 
bill, that was all that our office would do as far as 
collection. Now, the hospital being owned by a big 
corporation--on national TV we won't mention any names, but 
their initials were--well, we won't even say their initials 
because they know who they were--they were less likely to work 
with the patient.
    But as far as the individual physician's office--and 
oftentimes I could go to bat with hospital administration and 
say, look, you can put these folks to a collection agency and 
you will get 30 percent of what you otherwise would have gotten 
if you are willing to wait whatever length of time it is where 
they can pay this out.
    And I just commend you for doing that and for thinking 
through that. Again, your payment schedule is aggressive. I 
never had a patient who paid me that promptly. But I don't 
think people are aware that this is available to them.
    And I got to tell you, Mr. Chairman, I practiced for 25 
years, and I can remember probably getting two bankruptcy 
discharges in my practice. And not that I pushed this person 
into bankruptcy, but, as a creditor, I had to be notified that 
the debt was discharged and I could make no further--if I was 
doing anything to effect collection, that I would have to cease 
and desist. It just was an infrequent occurrence in the years 
that I was practicing. And then I set here listening to opening 
statements on this committee, and it seems like it is rampant.
    One last final thought, Mr. Null. Did you talk to the Texas 
Department of Insurance, the commissioner of State commercial 
insurance, about the problems you had?
    Mr. Wilkes. No, I did not.
    Mr. Stupak. OK. I have to cut you off. You are over time. 
And Mr. Doyle wants to get a question or two in before we have 
to go. Time has expired on the vote for Ms. Schakowsky and us.
    But, Mr. Doyle, go ahead.
    Mr. Doyle. Thanks. And I will try to be quick, Mr. 
Chairman.
    First of all, to the witnesses, thank you so much. It is a 
tremendous help to us for Americans to put a face on this, and 
we appreciate you doing this.
    Mr. Null, I wanted to put your policy up on the screen. I 
have been reading your policy that you bought from United. I am 
licensed in all lines of insurance; I have been for 30 years. I 
have to tell you, as a licensed insurance agent, I was having a 
hard time understanding your policy.
    When you look up there and it shows you that surgical--part 
four, surgical, 100 percent, I mean, how did you read that when 
you first bought that policy? Did you read that to mean that 
they were going to cover 100 percent of surgery?
    Mr. Null. Yes, in Texas, that is what that means; 100 
percent is 100 percent.
    Mr. Doyle. And then you have to go a couple pages further 
into this, and then there is another schedule like this that 
lists different procedures and what they will pay for the 
procedures.
    Did you have any idea what any of these procedures actually 
cost?
    Mr. Null. No, I had no idea. I had never seen a medical 
bill before in my life prior to this experience.
    Mr. Doyle. Mr. Chairman, this is one of the things, when we 
look at insurance reform, when we talk about transparency, that 
we have to get back to consumers to help them out. If it says 
you will pay $5,000 for a procedure and the procedure costs 
$25,000, then would you have bought the policy?
    Mr. Null. Well, no. That wouldn't seem like 100 percent to 
me. I mean, that wouldn't make sense.
    Mr. Doyle. Exactly. And this is the problem. People buy 
insurance policies all the time that have these schedules. Your 
daughter's surgery wasn't even on this schedule, is that 
correct?
    Mr. Null. It is not on there. I can't find it.
    Mr. Doyle. So there would be no way for you to--you just 
assumed it said 100 percent of surgery and so it was going to 
pay.
    Mr. Null. Unless listed otherwise, yes.
    Mr. Doyle. Yes. I mean, the need for health insurance 
reform is just so obvious. And the thought of companies selling 
across lines and nobody watching how these policies are written 
would be a national nightmare.
    But we need transparency. People need to know what 
procedures cost and what their insurance companies are going to 
pay in plain language that you don't have to be an insurance 
agent or an attorney to understand. And, as an insurance agent, 
I still don't understand your policy.
    So I see what you have gone through, and I am sorry that 
you went through it. And we are going to try to fix it.
    Mr. Null. Thank you. That makes me feel better.
    Mr. Stupak. Thank you, Mr. Doyle.
    Tatum, did you want to say anything to this group? We are 
going to go do some votes and come back. But did you want to 
say anything to this committee?
    Miss Tatum Null. I just wanted to say that, knowing what is 
going on right now, I do want to be able to live my American 
dream, and right now I am not able to. So hopefully you can fix 
that.
    Mr. Stupak. I hope we can, too, for everybody.
    Ms. Schakowsky, do you want to say something quick before 
we leave?
    Ms. Schakowsky. Yes, if I could just thank them so much.
    I know you have been here for a long time. We have a couple 
of votes, so I am going to waive my questions, but just say 
that you are emblematic of what could happen to anyone in our 
country. Everyone is one catastrophic illness away from the 
kinds of problems.
    I would love to know who told you to get a divorce. I would 
also just be interested--and I am sure you spent endless hours 
of your precious time in the face of illness dealing with this. 
And we are going to address this issue. And I thank you for 
your contribution to that.
    Thanks.
    Mr. Stupak. OK. We are going to stand in recess. I urge 
members to vote and come back. We have one more panel to go. I 
am going to excuse this panel. I am sure we all have more 
questions. We can follow up in writing.
    But I know we have kept you all afternoon. We appreciate 
your being here. And thank you for sharing your story and 
putting a face on this.
    We are in recess. I urge members come back immediately, get 
to panel number two.
    [Recess.]
    Mr. Stupak. The hearing will now come back to order.
    For the record, I talked to Mr. Walden. We were scheduled 
to be in tomorrow, but because some of the appropriation bills 
are stalled they have dismissed us for the night. So a number 
of Members are trying to catch airplanes with this weather, and 
they are already facing some delays, so a number of Members are 
going to leave.
    I checked with Mr. Walden, the ranking member, and he said, 
``Give my regards to the next panel.'' He had to leave, but he 
was going to--he has asked us to continue with this hearing.
    Members will be back early, even though we may be off 
Monday, members will be coming back early because we have 
another hearing on Tuesday on health insurance, private health 
insurance, especially how it affects small businesses.
    So we are very pleased that our second panel can be here: 
Dr. Collins, Dr. Sara Collins, who is vice president of the 
Affordable Health Insurance Program of The Commonwealth Fund; 
and Dr. Stan Brock, who is director of the Remote Area Medical 
Volunteer Corps.
    I would like to thank both of you for being here and being 
patient with us today.
    It is the policy of this subcommittee to take all testimony 
under oath. Please be advised you have the right, under the 
rules of the House, to be advised by counsel during your 
testimony. Do you wish to be represented by counsel?
    Both witnesses indicated they do not.
    Therefore, I am going to ask you, please rise, raise your 
right hand, and take the oath.
    [Witnesses sworn.]
    Mr. Stupak. Let the record reflect the witnesses replied in 
the affirmative. They are now under oath.
    We would now like to hear a 5-minute opening statement from 
each of you.
    Dr. Collins, if we may, we will start with you. If you 
would just turn on the mike there, a green light should go on, 
and pull it up there. And if you have a longer statement, that 
will be included in the hearing record. But you may begin. And 
thank you, again, for being here.

  TESTIMONY OF SARA R. COLLINS, PH.D., VICE PRESIDENT FOR THE 
  AFFORDABLE HEALTH INSURANCE PROGRAM, THE COMMONWEALTH FUND; 
   STAN BROCK, DIRECTOR, REMOTE AREA MEDICAL VOLUNTEER CORPS

                  TESTIMONY OF SARA R. COLLINS

    Ms. Collins. Thank you, Mr. Chairman, for this invitation 
to testify on the growing number of people who are 
underinsured.
    The soaring cost of health care, along with the economic 
recession and stagnant wages, are leaving many working families 
without insurance or with medical expenses that consume a very 
large share of their income. 46.3 million people lacked health 
insurance in 2008. This is up from 45.7 million in 2007.
    Among people who do have health insurance, The Commonwealth 
Fund estimates that, in 2007, 25 million working-age adults had 
such high out-of-pocket costs relative to their income that 
they were effectively underinsured, an increased from 16 
million in 2003.
    As the extraordinary testimonies of the first panel 
underscore, both these trends have had serious financial and 
health consequences for U.S. families. This committee and the 
other key health committees in the House and the Senate are to 
be commended for pursuing health reform that will help families 
secure access to affordable and comprehensive health insurance.
    The combination of rapidly rising health care costs, very 
slow growth or no growth in real family incomes, and greater 
cost-sharing in health plans are contributing to the growth in 
underinsured adults. Based on analysis of The Commonwealth 
Fund's biennial health insurance survey, between 2003 and 2007 
the share of underinsured adults climbed from 9 percent to 14 
percent of the under-65 population.
    We defined underinsured adults as those who spent 10 
percent or more of their income on out-of-pocket health costs, 
excluding premiums; spent 5 percent or more of their income if 
their incomes were under 200 percent of poverty; or had 
deductibles that amounted to 5 percent or more of their 
incomes.
    Adults with low incomes are the most likely to be 
underinsured. Almost one-quarter of adults with incomes under 
200 percent of poverty were underinsured in 2007. This is up 
from 19 percent in 2003. But the problem of cost exposure is 
moving up the income scale. The share of adults with incomes of 
200 percent of poverty or more who are underinsured nearly 
tripled over the time period, growing from 4 percent to 11 
percent. The most rapid growth occurred among adults earning 
between $40,000 and $60,000.
    Underinsurance is associated with health plans that cover 
fewer health benefits. More than one-quarter of underinsured 
adults reported a deductible of a thousand dollars or higher, 
compared to 8 percent of adults who are not underinsured. 
Forty-eight percent reported that their health plan placed 
limits on the total dollar amount that their plan would pay for 
health care each year. Nineteen percent reported that their 
health plans limited the number of times per year they could 
see their physicians.
    Underinsurance is also associated with reports of health 
plan problems. Forty-four percent of underinsured adults in our 
survey reported that they had had expensive medical bills for 
services that were not covered by insurance. Thirty-eight 
percent of underinsured adults reported that their doctor had 
charged them a higher price than their insurance plan would pay 
and they had to pay the difference.
    Adults with health plans purchased in the individual 
insurance market are more likely to be underinsured. Thirty 
percent of adults who had purchased a plan on the individual 
market were underinsured, compared to about 17 percent of 
adults who were in employer-based health plans.
    Underinsured adults report not getting needed health care 
because of cost at rates that are nearly as high as people who 
are without insurance coverage all together. Sixty percent of 
underinsured adults in our survey reported at least one cost-
related problem getting care.
    Underinsured adults also report high rates of medical bill 
problems. Three of five underinsured adults reported a problem 
paying medical bills or had accrued medical debt over time. 
This is more than double the rate of those who had adequate 
insurance all year. Nearly half of adults who are underinsured 
reported that they are paying off medical debt over time.
    Several provisions in the ``America's Health Choices Act,'' 
or H.R. 3200, would reduce the number of people who are 
underinsured. The bill replaces the individual insurance market 
with a regulated insurance exchange. The new market regulations 
would extend to all health plans. Guaranteed issue and 
community rating would ensure that people could not be denied 
coverage, charged a higher price, or have a condition excluded 
from their coverage because of a preexisting condition.
    Insurance carriers could not impose annual or lifetime 
limits on what their plans would pay and would be prohibited 
from the use of recisions. The bill would establish a new 
minimum benefit standard, which would ensure that families do 
not become bankrupt because of medical costs, encourage the use 
of timely preventive services, and protect against catastrophic 
costs.
    The premium subsidies in Medicaid expansion substantially 
improve the affordability of health insurance for people with 
incomes up to 400 percent of poverty. The cost-sharing credits 
will significantly reduce out-of-pocket expenses for people 
with incomes under 350 percent of poverty.
    For people whose incomes exceed the income threshold for 
subsidies, premium costs will likely decline from current 
levels due to a decrease in administrative costs from 
restrictions on underwriting and reduced marketing and because 
of savings achieved through reduced provider payments and 
profits if a public option is included in the exchange.
    Reducing out-of-pocket costs will also require national 
reforms aimed at improving the overall performance of the 
health system. The House bill includes key provisions for 
improving health system performance and lowering the rate of 
cost growth. These provisions will likely enhance the value 
obtained for health spending and set in motion reforms to slow 
the growth in health care costs over time.
    Thank you.
    [The prepared statement of Ms. Collins follows:]******** 
INSERT 3-1 ********
    Mr. Stupak. Thank you.
    Mr. Brock, your testimony please. If you will turn that 
light on, pull that mike up a little bit. And we look forward 
to your testimony. You may begin. Thank you.

                    TESTIMONY OF STAN BROCK

    Mr. Brock. Thank you. Thank you, Mr. Chairman, members.
    In 1992, Remote Area Medical, a charity formed to provide 
free medical relief services overseas, began receiving requests 
for service here in the United States, including dental 
procedures, eye exams, free eyeglasses, and primary health.
    Today, 64 percent of our work is in America, and we run 
about 30 expeditions per year and have completed 581. Some 
45,000 volunteers have delivered $40 million worth of free care 
in over 400,000 patient encounters and treatment to more than 
64,000 animals. Our most sought-after services are dental and 
vision, with over 55,000 patients served in the U.S. in each 
specialty.
    Demographics reveal that 94 percent of the patients are 
adults, with 83 percent between the ages of 21 and 64, 
reflecting a transition from childhood-covered programs to 
uninsured status prior to receiving Medicare. Sixteen percent 
of them visit a hospital emergency room in the event of 
sickness, undergoing extensive tests caused by the practice of 
defensive medicine, while dentists and eye doctors are 
unaffordable, leading to long lines of desperate Americans at 
RAM free clinics.
    The greatest impediment the RAM programs face is regulation 
in 49 States preventing willing practitioners from crossing 
State lines to provide free care. Even during declared 
emergencies, reciprocity between States is a complex matter 
that current legislation under the ``Uniform Emergency 
Volunteer Practitioners Act'' cannot adequately address.
    The sole exception is the ``Volunteer Health Care Services 
Act'' of Tennessee. Since 1995, a doctor can show up at a RAM 
event in Tennessee with license in hand, roll up their sleeves, 
and get to work. No bureaucratic application process, no fees, 
and no unnecessary background investigations.
    In 1997, Representative John Duncan, Jr., introduced House 
Concurrent Resolution 69 in an effort to persuade States to 
adopt the Tennessee model. HCR 69 was referred to the Committee 
of Commerce. Despite endorsement by the American Medical 
Association in 1998, it gained no ground nationwide.
    RAM attracts thousands of uninsured and underinsured 
patients and requires large numbers of doctors. Patient volume 
invariably exceeds the number of local providers willing or 
available to volunteer free services. This gap can only be 
filled by reinforcing our teams with volunteers licensed in 
other States.
    There are more than 179,000 dentists in America and 800,000 
physicians. They pass a nationally standardized competency test 
and graduate from a nationally accredited school. Many like to 
travel and will do so at their own expense to provide free 
care. Some do in other countries because volunteering outside 
of the U.S. is easier than overcoming bureaucratic hurdles to 
help those 47 million uninsured here in America. This 
demonstrates the need for all States to adopt the Tennessee 
model as proposed in HCR 69.
    That need was recently emphasized at a Remote Area Medical 
event in Los Angeles. In 8 days, we treated 6,344 patients for 
a value of free care exceeding $2.8 million. But those numbers 
could have been doubled. We had 100 dental chairs and 20 lanes 
of eye exam equipment, yet on some days we could only recruit 
25 California-licensed dentists and five or six eye 
specialists. By comparison, in rural southwest Virginia, where 
laws were relaxed to allow the partial use of out-of-State 
doctors, RAM treated 2,715 patients in only 2 1/2 days, a 
patient number not attained in Los Angeles until the 4th day, 
while thousands of uninsured California residents were turned 
away.
    RAM patient surveys indicate that some 46 percent carry no 
insurance, 23 percent are on Medicaid, and 18 percent on 
Medicare. Dental and vision insurance is carried by less than 1 
percent.
    Self-induced health issues wrought by the culture of 
poverty caused by fast foods, smoking, and lack of exercise are 
aggravated by the problem of access. Patients don't have access 
to the doctor. The doctor cannot cross State lines to have 
access to the patients. And the doctor does not have reasonable 
access to protection from lawsuits.
    RAM data proves that allowing doctors to cross State lines 
dramatically increases service to the underserved. If the 
Tennessee statute was enacted by all 50 States or possibly at 
the Federal level, for example under the interstate commerce 
provisions of the Constitution, volunteers would respond en 
masse and serve millions of uninsured Americans at no cost to 
the government and no cost to the taxpayer.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Brock follows:]******** 
INSERT 3-2 ********
    Mr. Stupak. Thank you, Mr. Brock.
    I will open up for questions now.
    Ms. Schakowsky, would you like to go first? I know you have 
a pressing appointment.
    Ms. Schakowsky. Thank you, Mr. Chairman. I really 
appreciate it.
    First, let me just extend my thanks to The Commonwealth 
Fund for the incredible work that has been done to advance our 
knowledge about this whole area of health care and health care 
reform.
    And, Mr. Brock, let me thank you for the Remote Area 
Medical foundation. And, for me, I guess what I would like to 
say about that, it has highlighted and really underscored a 
failure of the American health care system. Obviously, no 
discredit at all to you, because you are filling a gap.
    But what I take away from that is that you should be doing 
this work in developing countries, in places where there is no 
capacity. But we are the United States of America. And I just 
feel ashamed when I see that people have to line up at 3 
o'clock, at 4 o'clock in the morning, even people that have 
some kind of insurance.
    My hope is that your organization will flourish and be able 
to serve people in truly remote areas around the world and that 
your work should be not only applauded but supported.
    I wanted to talk, Dr. Collins, about the issue of health 
insurance market concentration. Today, because of mergers and 
acquisitions by large private health insurance companies, 
consumers in many parts of the country, I think most parts of 
the country, have few choices.
    And I don't know if you have Figure 25 that has a map that 
shows the country and the concentration of private health 
insurance companies in the States. In eight States, you find 
just two private health insurance companies control 80 to 100 
percent of the market. And in medium-blue States, the two 
leading companies have 70 to 79 percent of the market share. 
And in the majority of States, those that are shaded light 
blue, or lighter if you don't have color, two insurance 
companies control more than half the market.
    As you said in your written testimony, there are only three 
States in which the two biggest private health insurance 
companies control less than half of the market. Is that right?
    Ms. Collins. That is right.
    Ms. Schakowsky. And what kind of effect, then, does this 
market concentration have on consumer premiums and out-of-
pocket costs that American consumers face?
    Ms. Collins. What it means is that insurance companies, if 
they are facing concentrated markets, concentrated provider 
markets, so there is not a lot of competition in provider 
markets either, and if they are not able to negotiate lower 
rates with providers, because of the lack of market competition 
in the insurance market, they can simply pass those costs off 
to consumers and employers.
    And we are certainly seeing that now. It is probably 
contributing to the rapid increase in premiums and health care 
costs that we are seeing over time. So we really do need an 
increase in competition in the insurance market to counteract 
that dynamic.
    Ms. Schakowsky. And how do you see H.R. 3200 affecting 
competition in the insurance industry? And what effect would 
this have, then, on underinsurance?
    Ms. Collins. Well, 3200 includes a public plan option. So 
it means, in these markets, there would be a new option for 
people to choose from if they are buying through the health 
insurance exchange. It would mean, if the public plan was 
allowed to negotiate or to set provider payment rates, it would 
break up this dynamic that we are seeing where insurance 
companies just pass on their higher rates through to consumers 
and employers, inject some new price competition into those 
markets, likely lowering premium costs for everyone over time 
and contributing, really, to lower rates of growth in overall 
health care costs.
    The other thing it would do is help spread innovation and 
payment reform, delivery system reform, having this presence of 
a public option.
    So, really, introducing some needed price competition and 
also innovation on the payment and delivery systems reform 
side.
    Ms. Schakowsky. Why don't more insurance companies try to 
enter these concentrated markets? What are the barriers, then, 
under our current system?
    Ms. Collins. Well, many insurers are already contracting 
with current provider networks. So it is really difficult for 
an insurance company to come in and get those providers into 
their network. So that concentration in the market really does 
act as a barrier for other companies or insurance companies 
coming into the market.
    Ms. Schakowsky. Thank you.
    Thank you both.
    Mr. Stupak. Any further questions, Ms. Schakowsky?
    Ms. Schakowsky. No.
    Mr. Stupak. OK. Mr. Green for questions, please.
    Mr. Green. Thank you, Mr. Chairman.
    During our first panel, we heard from our witnesses about 
problems with transparencies in insurance policies. And we took 
some time to look at the policy that David Null brought. He 
thought that it would protect him in a catastrophe. As it 
turned out, the policy didn't protect him as he expected it 
would.
    I understand people should be responsible for reading their 
policies carefully, but all too often policies are confusing 
and loaded with technical jargon.
    Dr. Collins, do you see a widespread problem with 
transparency in health insurance policies, or are consumers 
generally well-informed about their health plans?
    Ms. Collins. I think the problem really does happen in 
individual and the small group markets, where people are really 
on their own when they are choosing plans. They are not often 
aware of what their plans cover. They may think that a lifetime 
limit of a million dollars is a lot until they get really sick 
and it really turns out not to be enough.
    So it is a pervasive problem. I think minimum standard 
benefits and much increased transparency is really needed in 
both of these markets. The House bill really does do that with 
the minimum standard benefit packages just in this new 
environment of transparency that would be available through the 
exchange.
    Mr. Green. In your view, what reforms would help ensure 
that consumers are informed better about their policies?
    Ms. Collins. Well, I do think there needs to be much more 
regulation of the individual market. There needs to be, as 
Massachusetts has done, a way for people to look at what their 
policies have, to know that there is a minimum standard so that 
their policies won't fall below that standard, that there won't 
be limits on what their plans will pay. They will know what 
their deductibles are; they will know what their plans will 
pay.
    And so, having that kind of standardization for this 
market, where people are on their own, is really important to 
counteract a lot of the testimony and experience that we saw on 
the first panel.
    Mr. Green. And I know it was mentioned earlier, but one of 
the--it came out of this Oversight Committee over a number of 
years of hearings on transparency and hospital bills. And both 
Chairman Stupak and Ranking Member Barton and Congressman 
Burgess and I put an amendment on H.R. 3200. Most people don't 
think that that bill had the bipartisan effort in it, but a lot 
of the language in that bill actually came out of both sides of 
the aisle. It is just that we didn't get any votes in our 
committee on it.
    But we did have a transparency amendment that would require 
hospitals to disclose the average prices for their common 
services. And would this help with transparency in insurance 
policies if we did something like that on a national basis for 
insurance policies?
    Ms. Collins. I think having more transparency on the 
hospital pricing side--so, having both the Federal Government 
having those prices much more clear so that the cost is much 
closer to what prices are. Right now there is often no clarity 
on what the costs are for hospital procedures, what the prices 
are. So people who are uninsured, for example, are often 
charged far more than what insured patients would be under 
negotiated contracts.
    So I think having that kind of transparency in pricing will 
be very useful to both Federal Government and also private 
insurers.
    Mr. Green. OK. Thank you.
    And I yield back my time.
    Mr. Stupak. Thank you, Mr. Green.
    Mr. Dingell for questions.
    Mr. Dingell. Thank you, Mr. Chairman.
    I would like to commend the panel for their very helpful 
testimony, and I have no questions.
    Mr. Stupak. I have a number of questions I would like to 
ask.
    Mr. Brock, you indicated that legislation was introduced to 
help you to let doctors come and volunteer their time, dentists 
and all that, and that was introduced one time.
    Has that been addressed yet? Do you still face that same 
problem today, where doctors cannot come to one of your 
operations in this country and volunteer their time?
    Mr. Brock. This is the most difficult problem that we face 
everywhere, except in the State of Tennessee where we have 
treated thousands and thousands of patients using predominantly 
practitioners from outside the State.
    What we do, which is on a massive scale where we are 
dealing with thousands of people, it requires hundreds and 
hundreds of doctors to do that. And it is just not possible, in 
most cases, in virtually every case, to recruit enough local 
providers.
    Mr. Stupak. So, like, when you mentioned Wise County, 
Virginia, you had to use doctors from Virginia, then.
    Mr. Brock. Yes. Now, Tennessee, to my knowledge, is the 
only State that has this across-the-board open-door policy. 
What you have in Virginia is an effort in that direction, which 
has not reached a point where it is really very, very workable. 
We can bring in people for no more than 3 days into Virginia, 
but it was a measure that was opposed by the dentists. So if we 
want to bring in dentists, we have to have them jump through a 
certain number of hoops.
    Mr. Stupak. I see.
    Mr. Brock. The most dramatic case in point, really, was 
just last month--well, August--in Los Angeles, where we treated 
6,344 patients, but we had such an inadequate force of 
California-licensed doctors despite the fact that we petitioned 
to bring in volunteers from outside the State.
    We had a hundred dental chairs set up, we had 20 lanes of 
eye exam equipment. And the best we could do with 25 very fine 
dentists, volunteers from California, and four or five very 
fine optometrists from California, and a dozen or so doctors. 
Meanwhile, we had given out 1,600 numbers. There were 1,600 
people waiting on day 1. We had to turn all of them away except 
the 700 that we could do with the limited force.
    Had we been allowed to bring in people from anywhere in the 
country who would have been more than willing to come--we had 
so many requests, and we had to say, ``No, you are not allowed 
to come because we are going to a State that doesn't allow 
it,'' we could have treated 15,000 people instead of 6,344.
    Mr. Stupak. Let me ask you this. You also indicated that, 
whether it was in Tennessee or in Virginia, I understand you 
conducted some surveys to determine, among other things, what 
portion of your patients had health insurance.
    What did you learn from these surveys regarding how many 
people had health insurance but were still seeking free health 
care provided by your fine organization?
    Mr. Brock. Well, it is all across the board, really. There 
are about 42 percent that do have insurance.
    Mr. Stupak. Some type of insurance.
    Mr. Brock. Of some type. The problem with--so this is not 
just treating people who are the unemployed and the homeless. 
We are getting people just like these wonderful folks that were 
in the first panel, people that have jobs, people that have 
reasonable incomes, but they have issues that are not covered 
on their insurance policy.
    And, in many, many cases, it is a lack of dental coverage 
and a lack of vision coverage. And they simply cannot afford--
or their deductible is too high.
    So even though we may have a thousand people that come on a 
particular morning for treatment--and looking at the profile of 
these patients, you can see that they all have some pretty far-
reaching medical problems: a large percentage of them smoking, 
a large percent of them with obesity problems. But they can 
take some of those problems to the emergency room when they run 
into a problem, but they cannot take dentistry and they cannot 
take vision problems to the emergency room.
    In fact, in our neighborhood, every emergency room has a 
sign up there: ``If you are here because you have a bad tooth 
or you can't see properly, go and see Remote Area Medical, 
because we don't do that here.''
    So virtually a hundred percent of the patients that come to 
our clinic are there because they are in pain and need the 
dentist and they have vision problems and they need a pair of 
eyeglasses, even though they need to see the doctors, but they 
are preoccupied with dentistry and vision.
    Mr. Stupak. And that 42 percent that had some insurance, it 
made no difference whether you were in rural areas or urban 
areas; it was basically the same.
    Mr. Brock. It is very similar across the board, yes.
    Mr. Stupak. Well, thank you for the remarkable work you and 
your volunteers do and your staff that is with you here today. 
We appreciate your being here.
    Dr. Collins, Mr. Brock said something very interesting, and 
he indicated that, you know, these are people who have 
insurance and policies. And you indicated that the most rapid 
growth of underinsured are people between $40,000 and $60,000, 
whose incomes are $40,000 and $60,000, based on your survey. Is 
that correct?
    Ms. Collins. That is right.
    Mr. Stupak. See, like, in my district, my median household 
median is only $38,000. So we would be struggling.
    Your survey included 2007, right?
    Ms. Collins. That is right.
    Mr. Stupak. So you would not have any statistics--because 
the economy really took a nosedive about August, September of 
2008. I am sure your uninsured and underinsured figures would 
be much greater, would they not?
    Ms. Collins. That is right. And it is also compounded by 
the fact that real median incomes actually dropped between 2007 
and 2008. So there is that dynamic. As well, health care costs 
are rising at 6 percent a year. And we know more employers are 
cutting back on their benefits. People have lost their jobs, 
which means that they are either buying on the individual 
market or they are going uninsured. So those numbers have 
probably definitely worsened.
    Mr. Stupak. And most of your numbers are--when you talk 
about underinsured, those are basically people below 65, 
because at 65 most Americans have Medicare, right?
    Mr. Brock. That is right.
    Mr. Stupak. And, Mr. Brock, I think you said the same thing 
in your testimony, that the adults you see are 21 to 64 and not 
65 or over. Is that basically because of Medicare coverage?
    Mr. Brock. Yes, right. Eighty-three percent are in the age 
group of 29 to 64, simply because after they pass that 
threshold out of childhood into adulthood they start letting 
these problems of dentistry and care go by the boards, and so 
that is the age group where they start to run into problems.
    Mr. Stupak. Sure.
    Dr. Collins, if I can go back to you, you indicated that 
the problem of underinsured and uninsured, but really 
uninsured, comes from a combination of rapid rise in health 
care cost, slow growth in family income, and a shift of the 
burden of cost that leaves the family or the policyholder to 
pay more for the health care cost.
    And we have heard testimony and opening statements from 
members saying that premiums have risen 131 percent in the last 
decade, more than three times that of the average family wage 
increase.
    So, Dr. Collins, what kinds of health care costs are 
families now being expected to absorb that they weren't 5, 10 
years ago?
    Ms. Collins. Well, we know from our survey that many more 
people are paying large shares of their income out of pocket, 
whether they are underinsured or insured, have adequate 
insurance. And that has moved dramatically up the income scale. 
So about 30 percent of people who are privately insured are 
paying more than 10 percent of their incomes on out-of-pocket 
costs and premiums.
    So we are seeing rates among even middle-income families 
that we weren't seeing when we did this survey in 2001, for 
example. So those rates among middle-income families, median-
income families are up where low-income families were in 2001. 
So it is really spreading up the income scale, this issue.
    Mr. Stupak. We have heard testimony today, and our last 
panel mentioned it, and we've talked about it, and I think we 
all have some idea, but could you explain a little bit more for 
me about health networks?
    I know we had the map up there of the States, and most of 
them only have, like, two or three dominant providers. But Ms. 
Howard talked about health networks, I think Mr. Null did, and 
I think Mr. Wilkes did too, about they had to stay within their 
network.
    What does that mean from an insurance perspective? Could 
you explain that?
    Ms. Collins. What it means is--and it is also related to 
what you are responsible for paying out of pocket. So if your 
provider is in-network, you are likely to face lower costs. 
Likely your costs will be lower than they will be if you go out 
of network.
    Now, what happens when you go out of network? You may 
understand that your insurance company pays a certain 
percentage of your costs, but not knowing, as that policy that 
was on the screen showed, not really knowing what the cost is. 
So just not going out of network because your insurance company 
doesn't cover out-of-network costs and being left with a big 
bill because of that.
    This map really shows the massive concentration in the 
insurance industry right now. And it really has had an 
increasing pressure on overall health care cost growth, 
certainly on premiums. There just is a lack of competition in 
those markets.
    Mr. Stupak. So, like, my State of Michigan there, Blue 
Cross Blue Shield, it is our biggest carrier. So if I go 
outside of Blue Cross Blue Shield, then I have higher out-of-
pocket or I may have to pay the whole amount because I am not 
in the Blue Cross Blue Shield network?
    Ms. Collins. Right. So they will have some providers that 
are contracting with you that are in-network. If you are out of 
network, depending on your policy, your costs will be covered 
at some percent of the total cost.
    But what is hard to know is what, even if they say they 
will cover this percent, it is hard to know what the total cost 
will be. And so, often, they will cover the share but you won't 
know what your margin of responsibility is until you get your 
bill.
    Mr. Stupak. Sure. And I live on a border community in the 
Upper Peninsula, and most of my medical care--in fact, we only 
have one doctor in my community--is in Wisconsin. So I am 
almost always out of network, just about. So, therefore, I pay 
more out of pocket with my policy.
    For the record, I don't have the Federal employees health 
benefit package. I should, but it is a promise I made. I 
wouldn't take it until everybody had health care, so I don't 
have it. So I am doing myself, probably, a disservice.
    But these are decisions that families are doing every day. 
And if you live on a border, like I do, it can be a lot 
different and greater. So the network is being within there.
    And so, if you only have two of your large providers, if 
you are not one of those two, and they are probably not 
offering you a good plan, and you are out of network, it is 
going to cost you more money.
    Ms. Collins. Probably, yes.
    Mr. Stupak. Let me ask you one more question. And you 
mentioned it in your testimony, about you learned about the 
types of treatments for medical care that underinsured 
individuals forego for financial reasons. And some of the other 
panels, like Mr. Wilkes, he didn't take his son when he thought 
maybe he should, because the cost could be as much as $10,000. 
And I think your survey was showing the same thing. People were 
not filling a prescription, not seeing a specialist, skipping 
appointments.
    Is that pretty common?
    Ms. Collins. It is very common among people who are either 
uninsured or underinsured. The striking thing about our survey 
findings is that people who are underinsured have rates of 
avoiding necessary care because of the cost at rates that are 
nearly as high as people who are without insurance coverage 
altogether.
    So it is a very real problem. We see it in our data. And it 
is a problem that has increased over time.
    Mr. Stupak. Has your organization been able to develop, or 
developed, any data which would show, if I am skipping my 
doctor's appointment or not getting the screening test, how 
much that is costing us in health care? Have you been able to 
put a financial value on these underinsured who are skipping 
payments, premiums--or not payments, excuse me--doctor offices, 
doctor visits, treatment, specialists? Can you put a value on 
that?
    Ms. Collins. You know, we asked people about their chronic 
health conditions, and then we asked that group of patients, 
people in our survey who had a chronic health condition like 
heart disease, diabetes, asthma, whether they had ever skipped 
a prescription drug, tried to cut their pills in half in order 
to make their prescriptions last longer. And about 46 percent 
of people who had a chronic disease who were underinsured said 
``yes'' to that question. Again, those rates are really high, 
almost as high as people who were uninsured.
    And then we also asked this group whether they stayed 
overnight in a hospital or gone to an emergency room because of 
their health condition. And we found that about 32 percent of 
underinsured patients said ``yes'' to that question.
    So you can expect that if people are skimping on their 
prescription drugs, they are probably having more serious 
health conditions. And there is a substantial amount of 
research in the literature that also underscores this finding.
    Mr. Stupak. We have the chart up there, and it is pretty 
interesting. Did not fill a prescription; did not see a 
specialist. The highest bars there are the underinsured or not 
insured, or not insured for part of time in the past year, 
those numbers.
    I am sure, Mr. Brock, you see the same thing, because then 
they must turn to you for trying to get some care, especially 
since you said, in a basic health plan, dental and optical are 
probably not included. But you even see people who need basic 
coverage that are coming to you who have some sort of 
insurance. Is that true?
    Mr. Brock. Yes. In fact, large numbers of them are coming 
now that have insurance, but it doesn't cover those two 
specific areas.
    We are getting people now that are coming hundreds and 
hundreds of miles, buying an airline ticket to come from 
Florida all the way up to Tennessee. We have had a request from 
a nongovernmental organization in Massachusetts wanting to bus 
people down from one of the richest States in the country to 
one of the poorest, to Tennessee, so that we could fix their 
teeth and make them eyeglasses.
    So this is becoming even more common. Even though we are 
really not seeing any more patients in many areas than we have 
been seeing in the last 20-odd years, they are coming from a 
lot further away.
    Mr. Stupak. Well, all the great work your organization 
does--and you have some of your staff here with you today--and 
all the doctors and dentists and ophthalmologists and 
optometrists that have volunteered their time, how do you 
support your organization? Do you receive grant funding? Do you 
get donations? How do you support your organization.
    Mr. Brock. Well, our organization is largely supported by 
members of the public who send in those $10 and $15 donations. 
We do have some foundation support.
    You know, up until early in 1998, the only people who knew 
what Remote Area Medical were doing were the poor, the people 
that came to our clinics. And then ``60 Minutes'' on CBS 
focused on us, and so this has caused a great increase in the 
interest in what we do and, I am glad to say, a certain 
increase in donations.
    But we don't have any corporate support--I wish we did--of 
any magnitude, but we do have some foundation support. We do 
not take any government money. And, in fact, we would never 
apply or want any money from the government.
    Mr. Stupak. So if we passed health care, it would be a good 
idea if we, sort of, put you out of business, right?
    Mr. Brock. Oh, yes. It would be marvelous if we could go 
back to concentrating on places like Haiti and the Dominican 
Republic and India and Africa, which is what I formed this 
organization to do in the first place.
    Mr. Stupak. Did you imagine you would be coming to the 
United States and there would be such a great demand for your 
services here in this country, the richest country in the 
world?
    Mr. Brock. Well, you know, without digressing from that 
question very far, the sixth man to walk on the moon, astronaut 
Ed Mitchell, asked me basically the same question just several 
weeks ago. We had breakfast together.
    I said, ``Well, you know, where I grew up, we were 26 days 
on foot from the nearest doctor.'' This was in the Upper 
Amazon. And he said, ``Well, gosh, I was on the moon, and I was 
only 3 days from the nearest doctor.'' I said, ``Well, the 
people that we are treating right here in the United States 
might as well be on the moon or might as well be in the Upper 
Amazon, for the opportunity that they have to receive the care 
that they need in this country.''
    Mr. Stupak. Well said. Well said.
    Dr. Collins, anything you want to add?
    Ms. Collins. No.
    Mr. Stupak. OK. That concludes all the questioning. I want 
to thank you for your patience and the witnesses for being here 
today and for your testimony. This panel will be dismissed. 
Thank you.
    The committee rules provide that members have 10 days to 
submit additional questions for the record, and I am sure some 
members will submit some.
    I ask unanimous consent that the contents of our document 
binder be entered into the record, provided the committee staff 
may redact any information that is business proprietary, 
relates to privacy concerns, or is law-enforcement-sensitive. 
Without objection, the documents will be entered in the record.
    [The information follows:]******** COMMITTEE INSERT 
********
    Mr. Stupak. That concludes our hearing. This meeting of the 
subcommittee is adjourned.
    [Whereupon, at 5:25 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                                 
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