[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
THE FISCAL YEAR 2013 HHS BUDGET
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
MARCH 1, 2012
__________
Serial No. 112-121
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
_____
U.S. GOVERNMENT PRINTING OFFICE
77-557 PDF WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chairman DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
_____
Subcommittee on Health
JOSEPH R. PITTS, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois EDOLPHUS TOWNS, New York
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
PHIL GINGREY, Georgia TAMMY BALDWIN, Wisconsin
ROBERT E. LATTA, Ohio MIKE ROSS, Arkansas
CATHY McMORRIS RODGERS, Washington JIM MATHESON, Utah
LEONARD LANCE, New Jersey HENRY A. WAXMAN, California (ex
BILL CASSIDY, Louisiana officio)
BRETT GUTHRIE, Kentucky
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
(ii)
C O N T E N T S
----------
Page
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 2
Prepared statement........................................... 3
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 5
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, prepared statement.............................. 56
Witness
Kathleen Sebelius, Secretary, Department of Health and Human
Services....................................................... 5
Prepared statement........................................... 8
Answers to submitted questions............................... 58
Submitted Material
Statement, undated, of Catholic Charities USA, submitted by Mr.
Pitts.......................................................... 19
THE FISCAL YEAR 2013 HHS BUDGET
----------
THURSDAY, MARCH 1, 2012
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:00 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Joe Pitts
(chairman of the subcommittee) presiding.
Members present: Representatives Pitts, Burgess, Whitfield,
Rogers, Myrick, Murphy, Blackburn, Gingrey, Latta, McMorris
Rodgers, Lance, Cassidy, Guthrie, Barton, Upton (ex officio),
Pallone, Engel, Capps, Schakowsky, Christensen, Markey, and
Waxman (ex officio).
Staff present: Clay Alspach, Counsel, Health; Gary Andres,
Staff Director; Mike Bloomquist, General Counsel; Howard Cohen,
Chief Health Counsel; Brenda Destro, Professional Staff Member,
Health; Nancy Dunlap, Health Fellow; Paul Edattel, Professional
Staff Member, Health; Julie Goon, Health Policy Advisor; Debbee
Keller, Press Secretary; Ryan Long, Chief Counsel, Health;
Carly McWilliams, Legislative Clerk; Nika Nour, NewMedia
Specialist; John O'Shea, Professional Staff Member, Health;
Monica Popp, Professional Staff Member, Health; Chris Sarley,
Policy Coordinator, Environment and Economy; Heidi Stirrup,
Health Policy Coordinator; Phil Barnett, Democratic Staff
Director; Alli Corr, Democratic Policy Analyst; Eric Flamm, FDA
Detailee; Amy Hall, Democratic Senior Professional Staff
Member; Ruth Katz, Democratic Chief Public Health Counsel;
Purvee Kempf, Democratic Senior Counsel; Elizabeth Letter,
Democratic Assistant Press Secretary; Karen Nelson, Democratic
Deputy Committee Staff Director for Health; and Anne Morris
Reid, Democratic Professional Staff Member.
Mr. Pitts. This subcommittee will come to order.
As agreed earlier with the Democrat side of the aisle, each
side will be recognized for 1 minute for opening statements.
Then we can move straight to Secretary Sebelius's testimony and
questions. The Chair reminds the members that pursuant to the
committee rules, all members' opening statements will be made
part of the record. The Chair recognizes himself for 1 minute
for an opening statement.
OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
First, I would like to thank Secretary Sebelius for being
here with us today to discuss the fiscal year 2013 budget. One
of the most striking features of this year's budget is just how
much of it is not dependent upon Congress.
For example, the phrase ``ACA Mandatory Funding'' appears
throughout the budget tables, and this designation means, of
course, that the Affordable Care Act requires automatic
appropriations for certain items. The phrase ``Prevention
Fund'' also appears numerous times, referencing the Prevention
and Public Health Fund, a multibillion-dollar fund over which
the Secretary has sole discretion.
Beyond the absence of Congressional authority over these
funds, I am deeply troubled by the lack of accountability and
transparency practiced by the department, and I hope the
Secretary will be able to explain why her department is so late
on so many of the rules required by PPACA.
[The prepared statement of Mr. Pitts follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. The Chair now recognizes the ranking member of
the subcommittee, Mr. Pallone, for 1 minute for an opening
statement.
OPENING STATEMENT OF FRANK PALLONE, JR., A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairman Pitts, and Secretary
Sebelius for being here today.
I know I have to limit my remarks so I just want to say
with regard to the Affordable Care Act, I think we are making a
lot of progress and I certainly urge the President and the
Secretary to continue taking the steps necessary under the ACA
to improve our health care system.
But I am also a strong believer in the importance of
government investment in advancing science and research. That
is why I was also pleased to see the President's continued
support towards innovative biomedical and behavioral
advancements through investments in the NIH and the FDA.
I was also pleased to see that the administration has
proposed an expansion of the Small Business Health Care Tax
Credit that could benefit almost 3 billion workers this year.
My state of New Jersey has a high cost of living and a high
wage base, which has made it tougher for New Jersey small
employers to access this tax. I would like to see the wage base
in each State included in the calculation for eligibility of
the tax credit, and therefore I am planning on introducing
legislation that would remedy this issue, and I hope I can work
with HHS on this.
So thank you, Madam Secretary, for being here.
Thank you, Mr. Chairman.
Mr. Pitts. The Chair thanks the gentleman.
Our witness today will be the Secretary of the Department
of Health and Human Services, the Honorable Kathleen Sebelius.
Secretary Sebelius, we are delighted to have you back with us
today, and you are recognized for 5 minutes for an opening
statement.
STATEMENT OF KATHLEEN SEBELIUS, SECRETARY, DEPARTMENT OF HEALTH
AND HUMAN SERVICES
Ms. Sebelius. Thank you so much, Chairman Pitts and Ranking
Members Pallone and Waxman and members of the committee. I am
pleased to be with you today to discuss the President's 2013
budget for the Department of Health and Human Services.
Our budget helps to create an American economy built to
last by strengthening our Nation's health care, supporting
research that will lead to tomorrow's cures and promoting
opportunities for American children and families so everyone
has a fair shot to reach his or her own potential.
It makes investments that we need right now while reducing
the deficit in the long run to make sure that the programs that
millions of Americans rely on will be there for generations to
come, and I look forward to answering your questions, Mr.
Chairman, about the budget, but I want to just take a few
minutes to share some of the highlights.
Over the last 2 years, we have worked to deliver the
benefits of the Affordable Care Act to the American people.
Thanks to the law, we now have 2.5 million additional young
millions already getting coverage through their parents' health
plans. More than 25 million seniors have already taken
advantage of the free recommended preventive services under
Medicare, and small business owners are getting tax breaks on
their health care bills that allow them to hire more employees.
This year we will build on that progress by continuing to
support States as they work to establish affordable insurance
exchanges by 2014. Once these competitive marketplaces are in
place, they will ensure that all Americans have access to
quality, affordable health coverage.
But we know that a lack of insurance isn't the only
obstacle to care, so our budget also invests in our health care
workforce. The budget supports training more than 7,100 primary
care providers and placing them where they are needed most. It
also invests in America's network of community health centers.
Our budget helps health centers provide access to quality care
for 21 million Americans, 300,000 more than were served last
year.
This budget also continues the administration's commitment
to improving the quality and safety of care by spending health
dollars more wisely, and that means in health information
technology. It means funding the first-of-its-kind CMS
Innovation Center, which is partnering with physicians, nurses,
private payers, hospitals and others who have accepted the
challenge to develop new, sustainable methods for the health
care system. In addition, the budget ensures that a 21st
century America will continue to lead the world in biomedical
research by maintaining funding for the National Institutes of
Health.
At the same time, we recognize the need to set priorities,
make difficult tradeoffs and ensure we use every dollar wisely.
That starts with continuing support for President Obama's
historic push to stamp out waste, fraud and abuse in the health
care system. Now, over the last 3 years, every dollar we have
put into health care fraud has returned more than $7. That is a
pretty good investment. Last year alone, those efforts
recovered more than $4 billion, which are both in the Medicare
and Medicaid trust funds around the country. And this week, our
administration arrested the alleged head of the largest
individual Medicare and Medicaid fraud operation in history.
Our budget builds on those efforts, giving law enforcement the
technology and data to spot perpetrators early and prevent
payments based on fraud from going out in the first place. The
budget also contains more than $360 billion in health savings
over the next 10 years, most of which comes from reforms to
Medicare and Medicaid. These are significant but they are
carefully crafted to protect beneficiaries.
For example, we proposed significant savings in Medicare by
reducing drug costs, a plan that not only reduces the costs of
pharmaceuticals but puts money back in the pockets of Medicare
beneficiaries. The budget makes smart investments where they
will have the greatest impact, and it puts us all on a path to
build a stronger, healthier and more prosperous America for the
future.
Again, thank you, Mr. Chairman, for this invitation,k and I
look forward to our conversation.
[The prepared statement of Ms. Sebelius follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. The Chair thanks the gentlelady and we will now
begin questioning, and I will recognize myself for 5 minutes
for that purpose.
Regardless of one's opinion of the health care law, I think
everyone can agree there is a lot of regulatory uncertainty
regarding the rules of the road moving ahead. States, health
providers, small businesses and patients have been asking HHS
for final or even just proposed Federal rules as they relate to
PPACA's exchanges. The stakes are high since taxpayers are on
the hook for a new $1 trillion entitlement. With that in mind,
I would like to ask you about the status of PPACA rules
required by the statute, and given my limited amount, I would
respectfully ask that you answer yes or no. I have a series of
questions.
First, has HHS released a final rule as it relates to the
individual market exchange?
Ms. Sebelius. The State-based market exchange, a final
rule? No, sir.
Mr. Pitts. Has HHS released a final rule detailing what
States must do to receive Federal approval for their exchange?
Ms. Sebelius. We have not issued a final rule, sir, but we
have certainly put out bulletins and guidance. We are preparing
an interim final rule. We want feedback at every point along
the way and we are actively working with States around the
country----
Mr. Pitts. But a bulletin has no real guidance for the
State. You have not proposed a final rule?
Ms. Sebelius. We have not proposed a final rule, sir, but
they have a lot of guidance and are very actively engaged in
the process of helping us shape the final rule.
Mr. Pitts. Thank you. Has HHS released a final rule related
to the establishment and operation of a Federal exchange?
Ms. Sebelius. Again, no, Mr. Chairman, but we are in the
process. I don't think you would want us to do that without
actively engaging stakeholders along the way, and that is
exactly what we are doing including the last weekend when the
governors were in town and we spent hours with state officials
talking about----
Mr. Pitts. So the answer is no. Has HHS released a final
rule related to Federal accreditation requirements for health
plans?
Ms. Sebelius. Regarding? I am sorry.
Mr. Pitts. Federal accreditation of health plans.
Ms. Sebelius. No, sir.
Mr. Pitts. Has HHS released a final rule related to
guaranteed issue and community rating bands?
Ms. Sebelius. We do not have the final rules released at
this point.
Mr. Pitts. Has HHS released even a proposed rule for cost
sharing or federally mandated benefits, otherwise known as
essential health benefits?
Ms. Sebelius. We have released guidance. Most recently we
are talking to States about the interim final rule. We have
given them a strategy with a----
Mr. Pitts. But not a final rule?
Ms. Sebelius [continuing]. Benchmark plan, and we are
preparing the rules as we speak, Mr. Chairman.
Mr. Pitts. No final rule. The Federal requirements on
benefit coverage and cost sharing are two of the most basic and
critical pieces of information needed for States to implement
an exchange. We are less than 18 months from when plans are
supposed to enroll customers in exchange plans yet HHS has not
even issued a proposed rule on these fundamental pieces of law.
Is that correct?
Ms. Sebelius. Mr. Chairman, again, we are actively engaged
in benchmark plans. We have released guidance. We are getting
input on that. We are trying to make sure that when we release
an interim rule and when we move to final rules that these are
workable arrangements with States, with markets around the
country. So that guidance is very much underway. We are engaged
in dialog and----
Mr. Pitts. I understand.
Ms. Sebelius [continuing]. They are beginning to frame
their plans but----
Mr. Pitts. My time is limited.
Ms. Sebelius [continuing]. We would agree that we need
rules to monitor them.
Mr. Pitts. Let me continue. I would submit this is symbolic
with the state of regulation in Washington. States, small
businesses and individuals are shoved aside and told that a
Federal agency is needed to meddle around in their lives and
then we pass a law giving Washington almost universal control
over one-sixth of the economy and then Washington writes some
vague rules for some parts of the law and delays rules for
other parts of the law. Deadlines are not met. States, health
care providers and consumers are left in the dark and
Washington thinks it can just dump a thousand requirements on
States and the private sector at the last minute with no
consequences for patient health.
I have just 35 seconds left. Yesterday, I was contacted by
Catholic Charities, and I was asked if I would read into the
record their actual position on this so-called accommodation
because they believe some have mischaracterized where they
stand, and upon the announcement of the so-called
accommodation, Reverend Larry Snyder, President and CEO of
Catholic Charities USA, stated ``Catholic Charities USA
welcomes the administration's attempt to meet the concerns of
the religious community and we look forward to reviewing the
final language. We are hopeful that this is a step in the right
direction. We are committed to continuing our work to ensure
that our religious institutions will continue to be granted the
freedom to remain faithful to our beliefs while also being
committed to providing access to quality health care for our
70,000 employees and their families across the country.''
However, upon actually seeing what was proposed and having
their position mischaracterized as if they believed the
accommodation was sufficient to protect religious liberty, they
posted the following clarification: ``In response to a great
number of mischaracterizations in the media, Catholic Charities
USA wants to make two things very clear: One, we have not
endorsed the accommodation to the HHS mandate that was
announced by the administration on February 10. Two, we
unequivocally share the goal of the U.S. Catholic Bishops to
uphold religious liberty and will continue to work with the
USCCB towards that goal. Any representation to the contrary is
false.''
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. Now the Chair recognizes the ranking member, Mr.
Pallone, for 5 minutes for questions.
Mr. Pallone. Thank you, Mr. Chairman.
Madam Secretary, I apologize but I have to try to get in
two questions, one on Children's Graduate Medical Education and
the other is on cosmetic user fees, so if I cut you short on
the first one, it is only because I want to get to the second
one.
I want to say I am pleased that the administration has come
to its senses and included funding for the Children's Graduate
Medical Education, or CHGME, in this year's budget. However, I
am dismayed that the White House only proposes $88 million,
approximately one-third the amount which Congress appropriated
for the program last year. As you know, there are serious
national shortages in many pediatric specialties, shortages
which the CHGME program has been crucial in helping to address.
Children's Specialized Hospital in New Jersey has told me that
significant reductions to the program would exacerbate these
shortages and create additional barriers to access to specialty
care for children.
So I wanted to ask you, if the CHGME is not adequately
funded, which obviously I don't think it is, how do you expect
to train these providers, not only for the shortage in primary
care pediatrics but also in the specialties with this level of
funding essentially?
Ms. Sebelius. Well, Mr. Pallone, we have had this
discussion before, and I know we share your interest in
training of primary care providers and particularly pediatric
providers. There are other streams of funding available. We are
trying to use what are relatively limited resources to focus on
a broad array of primary care training programs, and in a
better budget time, we clearly would have proposed additional
resources but this reflects tough decisions made at a very
difficult time.
Mr. Pallone. No, and I appreciate that. I just wanted to
stress that I just don't think the investments in the pediatric
specialty loan repayment program alone will be enough to
compensate for the cuts, and I know that the budget eliminates
the IME costs and only funds the direct medical expenses for
pediatric GME, but the problem is, and again, I am very
conscious of this and I am not saying this to you personally,
but I always think that we worry about adults, particularly
senior citizens, and then at the same time we were not doing
what we should for kids. And so the administration has not
proposed to completely cut the IME funding for adults in the
Medicare population but eliminates this funding that directly
benefits the health of kids, and it just seems like the kids
are always taking the back seat. It is not just here, it is in
so many other aspects of the budget, and I just think the
consequence of that is that, you know, we are really going to
threaten the already vulnerable pediatric health care
workforce.
But let me get to my second question on cosmetic user fees.
The President's budget for the FDA includes a proposed new user
fee that would address cosmetic safety, and that fee would
cover activities relating to the establishment of registration
fees, cosmetic standards and refine inspections and sampling of
imported and domestic products. You know that myself, Mr.
Dingell and Mr. Waxman have been working on a proposal that
would require registration of cosmetic facilities and listing
of products requiring substantiation of the safety of cosmetic
products, requiring adverse-event reporting and giving FDA the
authority to recall cosmetic products. It is obvious the
administration agrees that the cosmetics program is in need of
resources because your budget includes fees for activities like
registration and standard setting, but if we were to adopt my
proposal and add on more responsibilities in the cosmetic area,
do you agree that there would be an even greater need for
additional fees? That is my question.
Ms. Sebelius. Mr. Pallone, we do share your interest in
this important area. I think that the fees in the budget would
support, according to the FDA, a cosmetic registration program.
We would be very eager to work with you looking at other areas
that might be appropriate but are reluctant to do that without
additional resources, giving the FDA lots of assignments
without the resources to carry them out effectively. But this
is an area that I think needs attention, which is why the
President has proposed the cosmetic registration program and it
would allow us to implement and standardize and collect
information that just isn't available right now for consumer
safety.
Mr. Pallone. And I appreciate that. I mean, we all want the
FDA to do a good job ensuring the safety of cosmetic products,
and I think it is critical that we ensure that they have the
resources to do it, and I appreciate your----
Ms. Sebelius. And we would be eager to work with you to do
that.
Mr. Pallone. Thank you.
Thank you, Mr. Chairman.
Mr. Pitts. The Chair thanks the gentleman and now
recognizes the chairman of the full committee, Mr. Upton, for 5
minutes for questions.
Mr. Upton. Thank you, Mr. Chairman.
Welcome, Madam Secretary. A couple things that I would like
to ask this morning. I am seeing different numbers in the 2013
budget than the spending levels that you provided to the
committee a year ago, and I don't know if you want to respond
by letter in response back, but let me just walk you through a
couple things. Last year, you stated that HHS was estimated to
spend $400 million on State exchange grants in fiscal year 2012
but according to your latest budget, your department will have
spent $900 million plus on these very same grants in fiscal
year 2012, more than double your estimate from a year ago. Is
that correct?
Ms. Sebelius. Mr. Chairman, we have spent so far out of the
allocation 2 years of a billion dollars about $475 million, and
261 of that was spent by HHS.
Mr. Upton. No, this is specifically the State exchange
grants.
Ms. Sebelius. Oh, the State exchange grants.
Mr. Upton. You might want to come back to us.
Ms. Sebelius. And I would be happy to get back. I want to
make sure we get all these details.
Mr. Upton. As a former budget official, we look forward to
a written response.
Now, Congress in the President's health care law
appropriated a billion dollars for the implementation yet in
this year's budget you estimated that the fund will be
exhausted by the end of 2012 and you have asked for another
billion to implement the law. Is that correct?
Ms. Sebelius. Yes, Mr. Chairman, and that is the question I
was answering. I apologize. We had an original $1 billion in
the Affordable Care Act when it was passed.
Mr. Upton. Now it is two.
Ms. Sebelius. Pardon me?
Mr. Chairman. And now it is two.
Ms. Sebelius. Well, the CBO estimate in March of 2010 was
that it would cost about a billion dollars a year to implement.
We have actually well underspent that estimate so we are now in
fiscal year 2012. We have spent at HHS about $261 million,
total with our other agency partners of $475 million but we
think by the end of 2012 that original billion dollars will be
spent and 2-1/2 years will have expired. So we are
significantly underspending what the estimates were.
Mr. Upton. Let me put this then in writing and let me point
some of these out. I want to get to a question as it relates to
my State and my district.
This committee, we received a memo from CRS, Congressional
Research Service, outlining possible penalties for religious
employers if they failed to comply with the HHS mandate to
cover drugs and services that they have religious or moral
objections toward, and according to CRS, those penalties of
$100 per day per affected individual could be levied against
the institution for following their conscience. In my State and
in my district, I have a hospital, Borgess Hospital, a pretty
large institution. It is part of the Ascension Hospital System
in Michigan. They employ throughout the State 31,000 people. So
according to this CRS memo, Ascension is likely to be subject
to fines of over a billion dollars--that is B as in big--
because of that mandate. So my question, Ascension, like many
religious-affiliated organizations in fact is self-insured, so
the so-called accommodation announced by the White House on
February 10th doesn't attempt, as I understand, to address the
violation of conscience against self-insured employers. So what
are your plans for accommodating self-insured employers with
conscience issues like Borgess Hospital?
Ms. Sebelius. Mr. Chairman, the accommodation that the
President talked about on the 10th of February would apply to
the non-exempted employers who currently do not offer
contraception because of religious objections. As you know,
churches, church auxiliaries, we think many parochial and
Catholic elementary schools and high schools are likely to
already be totally exempted. Grandfathered plans are totally
exempted. The accommodation----
Mr. Upton. So schools are totally exempted?
Ms. Sebelius. If a parochial school meets the definition
that is in the IRS where they have a majority of Catholic
employees, serve a majority of--or religious employees, serve a
majority of----
Mr. Upton. So how would this impact an institution like
Borgess Hospital?
Ms. Sebelius. Well, I am getting to that, Mr. Chairman. So
that the rule that we intend to propose, we will propose a rule
in the near future after reaching out and having dialog with
folks. It would require insurance companies in a directly
insured plan to provide contraceptive coverage so that a
religious employer who had objections would not have to either
pay for or provide or refer people for contraception. We are
confident that similar arrangements can be made with self-
insured institutions who work with third-party administrators.
There is an independent body outside the board. There are a
variety of arrangements already in place in the 28 States that
have this already in place, and we intend to be informed by
that when we propose the rules. So whether it is through a
third-party administrator, which would not be the employer
group, or a side-by-side plan as operates in Georgetown or many
other hospital arrangements, we will offer a variety of
strategies to make sure that religious liberties are respected
at the same time that millions of women who work in these
institutions and spouses of employees and daughters of
employees have access to these important health----
Mr. Upton. I know my time is expired but I am not sure that
that is going to work, but I yield back.
Mr. Pitts. The Chair thanks the gentleman. We are voting.
We are going to go one more 5-minute break and come back
immediately after the vote. The Chair recognizes the ranking
member of the full committee, Mr. Waxman, for 5 minutes for
questions.
Mr. Waxman. Thank you very much, Mr. Chairman.
Madam Secretary, welcome to the committee.
Ms. Sebelius. Thank you.
Mr. Waxman. I must say, in the decades that I have been in
the Congress, you are one of the finest Secretaries we have had
for Health and Human Services, and I am somewhat amused at the
questions you are going to get and have already gotten today
because you almost can't win. If you came in with rules and
regulations that spelled them out, you would be criticized for
dumping a lot of regulations on the table without consulting,
and now that you are consulting, you are being criticized for
not having the rules already in place
I know there is a lot of work to be done leading up to 2014
to create a transparent and competitive marketplace where
consumers will be offered quality insurance products that cover
their health care needs. Insurers, consumer groups, States and
others have been encouraging the administration to share their
thoughts early to allow for maximum planning and preparation. I
recognize the need to share information early. I also recognize
the need to work through issues thoroughly. That is why I was
pleased with the issuance of subregulatory guidance on the
formation of the essential health benefits package and on the
actuarial value and cost sharing and qualified health plans.
This starts the conversation early. It allows for input before
more formal and lengthy rulemaking is released. You have been
criticized for this position, wrongly, in my view. Can you tell
us what you see as the advantage of this approach and confirm
whether you intend to continue towards formal notice and
comment rulemaking process?
Ms. Sebelius. Mr. Waxman, I think you have spelled out what
has been part of the strategy, which is to actually put in
place around framework issues where States need to know, so we
do have proposed rules, in answer to the chairman's questions
earlier, around the exchange setup. We have proposed rules for
Medicaid expansion, both of which were informed by active
conversations from the States. We have now put out lengthy
guidance on a strategy toward the essential health benefits and
are having many conversations trying to reach the balance
between affordable coverage and comprehensive coverage, making
sure that we are mindful of the law but know that having a
product priced and able to be operated in a State is also an
essential piece of the puzzle. So we fully intend to put out
interim rules and final rules. You can't enforce without final
rules in place. But we want to be informed by State insurance
commissioners, employers on the ground, our colleagues in
governors' offices across this country, and that dialog is
very----
Mr. Waxman. Well, that sounds like to me a very reasonable
approach.
This hearing is about the budget, although you are going to
be asked about the budget, although you are going to be asked
about everything, but the budget includes important funding to
ensure effective administration of Medicare, Medicaid, child
health program, continued implementation of the health care
law. The budget request includes an increase of a billion
dollars over the fiscal year 2012 level. That includes a
request for $864 million for establishing insurance exchanges
in the States.
Now, it is essential that Congress meet the President's
budget request. Some of my colleagues may wish to deny your
agency this funding in an effort to halt the progress of the
health reform law. I think this political approach would
jeopardize all the progress we made. More than 2.5 million
young adults under the age of 26 now have health insurance
under their parents' plan. More than 85 million people
including those in Medicare and private health insurance plans
have access to free preventive coverage. More than 30 States
have begun to plan health exchanges, helping make good on the
promise of affordable coverage for all, and more premium
dollars going to health benefits, not corporate overhead. So
this will help consumers get the value for their dollar.
Can you address the critics that are claiming that your
budget request for implementation money for the Affordable Care
Act is a wasteful overspending by the government? Can you
describe the kinds of initiatives that money will be used for?
Ms. Sebelius. Well, Mr. Waxman, the additional billion
dollars in Medicare and Medicaid is for really two categories.
One is about $800 million that actually is for the one-time
build-out of the federally operated exchange program--IT,
consumer outreach, the variety of services that will be needed
for those areas in the country where the State has chosen not
to set up a State-based exchange or wants a State-based
exchange in partnership with the Federal government, and we
will be picking up the other pieces. So part of the dollars are
for that. Part of the dollars actually about $200 million are
directed toward increases and enhancements in the Medicare and
Medicaid programs themselves. So the overall administration of
these two efforts where we have about 118 million people
currently enrolled in either Medicare or Medicare and needs to
continue to update. I will tell you, Mr. Chairman, even with
that additional request, our overall administrative costs for
the largest insurance programs in the world are running just
under 3 percent, even with that billion-dollar increase.
Mr. Waxman. That is very impressive. Thank you.
Mr. Pitts. The Chair thanks the gentleman. The committee
will stand in recess until the end of the last vote, and we
will reconvene immediately. The committee stands in recess.
[Recess.]
Mr. Pitts. The committee is reconvened, and the Chair
recognizes the vice chairman of the subcommittee, Dr. Burgess,
for 5 minutes for questions.
Mr. Burgess. Thank you, Mr. Chairman, and Secretary,
welcome back to our committee.
I have a lot of stuff to ask today. I know we have 5
minutes, so I will of necessity be having to submit a lot of
questions for the record and I really would appreciate a
thoughtful yet timely response to those questions, but let me
follow up on where Chairman Upton was going a few moments ago.
We have got the 2013 budget from the President on the
Refundable Premium Assistance Tax Credits, and the line items
between the fiscal year 2012 budget as submitted and the fiscal
year 2013 budget as submitted are different year by year, and
in fact, the total increase in this year's President's budget
is $111 billion. So what has happened that accounts for this
change? Are you having to reassess the number of people that
perhaps might be driven out of employer-sponsored insurance
onto an exchange?
Ms. Sebelius. Mr. Burgess, the one issue that I think has
changed definitively is that there was a legislative change
dealing with the adjusted gross income for people in Medicaid
versus the exchange, which we feel will actually have an impact
on fewer people eligible for Medicaid and more people eligible
for the exchange. Much of the changes in those numbers are also
again in the Treasury Department budget, not in our budget. I
would be glad to get you a very specific answer in writing but
I am not as familiar with some of the Treasury issues, but I
can tell you that legislative change has impacted the estimates
of how many people will be eligible for the exchange, the MAGI
rule.
Mr. Burgess. Fair enough, but this is a budget hearing and
that is a 30 percent increase and----
Ms. Sebelius. I just----
Mr. Burgess. We would like----
Mr. Sebelius. There is a legislative change. I would be
delighted to get additional details from the Department of
Treasury.
Mr. Burgess. From the standpoint of the oversight function
of this committee, I think we have to have that.
Now, speaking of the Treasury, can you give us a line item
on how much money has been transferred to the Internal Revenue
Service for their role in the Affordable Care Act?
Ms. Sebelius. Mr. Chairman, let me see if I can get the
Treasury number up. I know that of the $474 million, $261
million has been spent by our department, and the rest is our
partners. Treasury dollars, we have transferred $210 million to
the Treasury Department. In terms of how they have allocated
those funds, I cannot answer that question.
Mr. Burgess. And that was my next question. Do you require
for them to provide you with the allocation numbers?
Ms. Sebelius. Yes, we do.
Mr. Burgess. And when do you expect to receive those from
Treasury?
Ms. Sebelius. Again, I would be happy to get you that
answer in writing. I know that is $210 million, and I will give
you the detailed report of what we have so far.
Mr. Burgess. I think it is important.
Ms. Sebelius. We get a quarterly report from them in terms
of how they are expending and what dollars, and I would be
happy to answer that for you.
Mr. Burgess. Well, they are your partners on this. After
all, they are the enforcers who are going to enforce the
individual mandate, so I think it is important that you share
that information with the committee.
Now, last year, you were asked whether Section 1311(h) of
the Patient Protection and Affordable Care Act provided you the
authority to exclude doctors and other health professionals
from participating in exchange plans. Are you prepared to
answer that question today?
Ms. Sebelius. Sir, what is the question?
Mr. Burgess. Section 1311(h) of the Patient Protection and
Affordable Care Act that deals with exchanges, (h) starts out,
``Beginning January 1, 2015, a qualified health plan may
contract with--it goes through A, which is hospitals. Paragraph
B is ``may contract with a health care provider only if such
provider implements such mechanisms to improve health quality
as the Secretary may by regulation require.'' So are you
prepared to exclude providers from the exchange? Are you
developing that set of criteria? Are providers to see the day
soon where they would be prohibited from participating in an
exchange if they don't comply with all the things that you set
forth?
Ms. Sebelius. Mr. Burgess, we see that issue as one that at
the State level will be decided between the board of the
exchange and the issuers who----
Mr. Burgess. How about a State that doesn't do an exchange?
My State is not right now, as you know, and there will be a
Federal exchange.
Ms. Sebelius. Pardon me?
Mr. Burgess. And there may be a Federal exchange if we can
get through the problems with the tax code.
Ms. Sebelius. We will again make decisions at the Federal
exchange level about which issuers who have networks of their
own to include based on their quality performance, based on
their----
Mr. Burgess. But the Congress in its wisdom said that you
would decide, not that the State would decide.
Ms. Sebelius. I am telling you, for the Federal exchange,
we will be making decisions about issuers. We do not intend to
reach into a State exchange. They will be making the
determinations at the State level.
Mr. Burgess. Well, are you asking us for a change in
legislative language in the Affordable Care Act to allow you
the freedom to do that?
Ms. Sebelius. I am not, Mr. Burgess.
Mr. Burgess. But it says in statute that you will make that
decision, correct?
Ms. Sebelius. Well, I am just telling you how I will make
the decision. We will be working with the State-based exchanges
so they will make determinations based on their issuers. If for
some reason there was an outlier, we could have a conversation,
but we intend to work with the States as the law intends so the
State will set up a State-based exchange. We will at the same
time be establishing a program for a Federal exchange.
Mr. Burgess. And will you exclude providers from an
exchange?
Ms. Sebelius. This is not an issue of providers, this is an
issue of which plans will be able to be operated. Plans have
their own networks, and we will be----
Mr. Burgess. So if you don't belong to a particular ACO,
you may not be able to see your patient of long standing. Is
that correct?
Ms. Sebelius. Mr. Burgess, that is not at all what I said.
Clearly, determinations will be made about how many providers,
how many plans.
Mr. Burgess. We might infer that from what you said.
Mr. Pitts. The gentleman's time is expired.
Mr. Burgess. I thank the Chairman.
Mr. Pitts. The Chair recognizes the gentlelady from
California, Ms. Capps, for 5 minutes for questions.
Mrs. Capps. Thank you, Honorable Kathleen Sebelius,
Secretary of Health and Human Services, for your testimony.
You know, we are all so aware of the challenging economic
climate in which we are living. However, I believe on the whole
that the President's budget does strike an important balance
between curbing spending and promoting the public's health. As
a nurse, I know that we cannot reach our health care goals
without a strong health care workforce made up of a range of
health care professionals. So I would like to ask a couple of
questions, if you could discuss briefly what steps have been
taken in the budget to ensure that we have a health care
workforce well equipped, diverse and large enough so as to help
us successfully reach these goals. It is a tall order.
Ms. Sebelius. Well, I think you are absolutely right, Ms.
Capps, about the workforce being a critical part of this effort
to transform the health care system, and certainly primary care
providers become essential, not just physicians but nurses,
nurse practitioners, mental health technicians, dental
assistants. We are very pleased that this budget continues the
progress we have made. So far in this administration, we have
tripled the number of National Health Service Corps providers.
This budget intends to continue the training of 7,100 new
health care providers who will be serving in the most
underserved areas, and I have the privilege of meeting with
some of these young people every day who are thrilled with the
idea they can both provide service to their communities or
underserved communities as well as having their loans paid off
so they don't emerge with so much debt.
We are also, as you know, part of the Affordable Care Act
is encouraging more providers to deal with Medicaid patients so
changing Medicaid rates to Medicare, using our graduate medical
resources to focus on slots for primary care, so we are very
aware of the looming issue. If we are going to change from a
sick care system to a health care system, the primary care
workforce and an additional community care workforce is
essential, and we are trying to use all the leverage that we
have, many of which were part of the Affordable Care Act.
Mrs. Capps. Thank you. And I want to just highlight the
commitment to the nursing workforce, which has clearly been
expanded in the Affordable Care Act including funds to train
advanced practice nurses, which can take some of the expensive
care costs away and transform them into excellent care that can
be delivered by nurses and others.
I am going to be circulating a letter in support of these
nursing programs and urge my colleagues to join me in support
of them.
Just one other topic I would like to get to. In addition to
a robust health care workforce, we all know that improving
public health requires investments in research, in development
and in innovation. However, during the recent economic
downturn, I have heard from researchers, many in my district,
about the lack of reliable grant funding now available,
especially in the private sector. And this limits their ability
to pursue the kind of scientific achievements and advancements
that we need, and I think it also highlights the importance of
the National Institutes of Health, NIH, which has traditionally
been such a bipartisan issue. The President's budget only
includes flat funding for NIH. However, reports indicate that
management streamlining is going to free up money for 8 percent
more grants to be awarded. Would you please expound on that a
bit and explain what will go into that process and how it can
actually improve the economic situation in many of our
Congressional districts?
Ms. Sebelius. Well, I certainly share your view that
biomedical research is a critical component of not only saving
lives but lowering costs and improving strategies so that the
leadership at the National Institutes of Health led by Dr.
Francis Collins I think have reorganized the resources at that
very critical institution so that we anticipate with this
budget funding 672 new research grants. New research grants
will be funded.
Mrs. Capps. Wow.
Ms. Sebelius. About a 7.7 percent, almost an 8 increase in
current grant funding. As you know, there is also a new Center
for Translational Science thanks to work that we were able to
do with Members of Congress that focuses on some of the most
promising areas, a Cure Acceleration Network that is in place,
again, moving resources to the most promising strategies. So
yes, funding is flat. About 40 percent of our discretionary
budget is in the National Institutes of Health so we found ways
to make sure that those critical programs go on and I would say
that the administrative costs will be diminished and more of
those resources will be focused on the research that needs to
go forward.
Mrs. Capps. Thank you very much.
Mr. Pitts. The Chair thanks the gentlelady and recognize
the gentleman from Kentucky, Mr. Whitfield, for 5 minutes for
questions.
Mr. Whitfield. Madam Secretary, in the health care act,
2010-2011, it provided for basically $1,250,000,000 for the
Prevention Fund, and under the Prevention Fund, you have the
authority I guess almost unilaterally to move that money into
various accounts at HHS. So I would like to ask you to provide
to the committee for the year 2010 and 2011 the amounts of
money that were transferred to which particular accounts, and
then from those accounts if grants were made to grantees around
the country, the name of the grantee, the amount of the money,
the purpose of the grant and the date of the grant. Would you
be able to do that for us?
Ms. Sebelius. I would be happy to do that.
Mr. Whitfield. Thank you. Thank you very much.
Now, one of the things that is a little bit troublesome to
me in the President's 2013 budget is that he in essence
eliminates part of the anti-lobbying provisions of the use of
Federal funds. As you know, in the appropriation bills since
the mid-1970s, we have had prohibitions against using Federal
funds for lobbying, and to define it more specifically,
prohibits using Federal funds to influence in any manner an
official of any government to favor, adopt or oppose by vote or
otherwise any legislation, law, ratification or policy. Why
would the President want to omit that from his fiscal year 2013
budget?
Ms. Sebelius. Mr. Whitfield, I have to confess, I am not
sure exactly what is being referred to. I know that our fiscal
year 2012 budget, our budget, and there may be other statements
in other budgets that I am not as familiar with, but our fiscal
year 2012 budget actually included additional lobbying
restrictions which we are actively working to comply with which
not only apply to our department, which have been in place
traditionally for years and we have complied with in terms of
lobbying but also now apply to downstream grantees who receive
money through the Prevention Fund. So we are updating our grant
language, enhancing our oversight of grantees, retraining----
Mr. Whitfield. Well, I mean, I----
Mr. Sebelius. So I am not----
Mr. Whitfield. I think that is commendable and I do
appreciate it, but the prohibition has been very specific about
using those funds at the Federal level, State level or local
level, and the President explicitly in his 2013 budget allows
those funds to be used at the local level, and my question to
you would be, do you know why that action was taken by the
White House?
Ms. Sebelius. Again, I would be--I will provide a more
thorough answer in writing. What I have just been told by our
staff is that the language that we are proposing be eliminated
is duplicative of existing law, that it already exists in
statute. I will verify that and get back to you, but I am not
aware of any new measures that we are talking about.
Mr. Whitfield. So from your perspective, you are already
doing that?
Ms. Sebelius. That is what----
Mr. Whitfield. Now, the reason I am asking the question is
because I have seven pages here of 25 specific instances where
grantees of HHS receiving money from HHS are explicitly trying
to influence laws at the State and local levels relating to all
sorts of issues. For example, in one town in California,
Baldwin Park, they are using these--the entity, the grantee, is
using this money to reduce the density of fast food
establishment and convenience stores, for example, and we have
seven pages of this, and it looks to me just on the surface
that it is explicitly violating the law as set out in the
Appropriation Act.
Ms. Sebelius. Again, Mr. Whitfield, the new language in our
budget for fiscal year 2012, we have not issued any new grants
where that new language would be applicable. We are updating
our grantee advice. We are updating but the prospective
language has not impacted any of the grants in place. We are
going to comply with the law. The language that has been
statutory applied to our use of our Federal funds. We have also
complied with that law for years. So I can assure you that the
new language attached to the fiscal year budget, and it did go
beyond statutory language, is one that we are currently
updating and updating grantees about but there have been no
grant releases where that new language would apply.
Mr. Whitfield. Mr. Chairman, I might just make the comment
that it was my understanding that this prohibition also applied
to fiscal year 2010 and 2011, so----
Ms. Sebelius. Not by grantees, Mr. Whitfield. It applied to
us but not our grantees.
Mr. Pitts. The Chair thanks the gentleman.
The gentlelady from Illinois, Ms. Schakowsky, is recognized
for 5 minutes for questions.
Ms. Schakowsky. Thank you, Mr. Chairman.
Just in regard to family budgets, I wanted to point out and
thank you for the fact that 54 million Americans were provided
at least one preventive service in 2011 through their private
health insurance plan for no cost, and I think that the
consequences of that are probably priceless in terms of
colonoscopy screenings and flu shots and all the disease that
has been prevented, so this is one of the consequences of the
Affordable Care Act.
But I also wanted to tell you that I had the privilege of
going out with the Fraud Prevention and Enforcement Action Team
on a drive-around, which was very interesting, where there is
this real effort to make sure that we are spending all the
taxpayer dollars correctly, although we didn't have anything
quite as exciting as what we learned earlier this week about a
Dallas doctor arrested for a shocking $375 million in health
care fraud schemes.
So what I wanted to ask is how the Affordable Care Act
contributed to greater oversight and enforcement and what kind
of additional--how much money was found through that effort,
and that is it.
Ms. Sebelius. Well, Ms. Schakowsky, I think there is no
question that the Affordable Care Act contains provisions that
are probably the toughest anti-fraud provisions ever in the
history of the Medicare program. Criminal penalties were
enhanced. Civil penalties were enhanced. We were given tools to
re-credential providers in some of the most fraud-ridden areas,
new resources for these law enforcement teams that are a
Justice Department-HHS partnership on the ground. We now have
teams in seven cities. We are expanding to nine. We intend to
continue that. Probably as important as anything are the
resources that allow us to for the first time ever catch up
with the private sector and put together a data system where
real data is pulled together in real time. In the past, 12
different billing systems had various parts of CMS billing data
so you could never identify the provider in Texas in one space.
It was coming through too many portals. So data analysis is now
in 2 years significantly better than it was in the past and we
now have a predictive modeling system to look at billing
errors--not errors, billing anomalies and be able to target our
resources on the ground to immediately investigate and stop
money from going out the door.
So the Attorney General and I were able to announce a
couple of weeks ago that $4 billion, the largest amount ever,
came back to the taxpayers and to the trust funds because of
these anti-fraud efforts, and yesterday alone, as you
identified, a provider--I am sorry--on Tuesday in Texas, a
provider was arrested who has been fraudulently billing we
think 28 or 29 home health agencies. We knew that that was an
area fraught with problems and we targeted that area, used the
new analytics, identified this provider, but I think it is the
first of many, many that will follow.
Ms. Schakowsky. So did the additional resources and tools
in the ACA, was it responsible for this increase in recovery,
the $4 billion that were recovered?
Ms. Sebelius. I think it was enormously helpful. There is
an ongoing underlying fraud program but the new resources and
the new tools we have allowed us to for the first time put
together some of these technology advances that really have
been used by the private sector very effectively for a long
time but missing in our critical health care programs.
Ms. Schakowsky. In the moments remaining, there are two
issues that I would like to work with you and your staff on.
One is, Medicare beneficiaries are often designated as being in
the hospital on an outpatient observation status, and they
could be in the hospital up to 3 days or whatever under that
status, and they are not really admitted as an inpatient, and
this affects when they are sent to a nursing home or put in an
ambulance, and often they don't really understand what
observation status is. You are in a hospital bed. You think you
are in the hospital. You think you have full insurance
coverage. I would like to work with you on that.
And the other is, the important information, Hospital
Compare, that is a useful tool for consumers, but there is also
the feeling that some of the safety-net hospitals for reasons,
for example, dealing with non-English speakers, that their
ratings get lowered and that concern has been brought to me. I
would like to work with you on this. These are little tweaks
that I think we can fix. And I want to thank you for the fact
that you are working with the States, you are working with
Members of Congress to make this a better bill and a better
policy. Thank you.
Mr. Pitts. The gentlelady's time is expired.
The gentleman from Michigan, Mr. Rogers, is recognized for
5 minutes for questions.
Mr. Rogers. Thank you, Mr. Chairman.
Madam Secretary, thank you for being here. I have been
working with my Democratic colleague Anna Eshoo on the BARDA
reauthorization bill. I would hope that we could submit some
questions for the record. It is very important to us and I know
it is important to you.
Ms. Sebelius. That would be great.
Mr. Rogers. And we look forward to working with you on
that.
In the 2013 budget, how many employees are dedicated and
committed to getting the health care law up and implemented and
coordinated with the States?
Ms. Sebelius. I do have those numbers here if you could
give me just a moment to make sure I give you the accurate
number. We have 210 people in the division that is specifically
working on exchanges, health insurance reform and others. We
have about another 146 working on the parts of the Affordable
Care Act relating to Medicare and Medicaid, and then some
department-wide folks who have picked up basically some of this
effort, so about 800 people throughout CMS are actually
dedicated to this effort.
Mr. Rogers. And do you expect that number to rise in future
budgets just for the implementation and management and
regulatory administration of the health care law?
Ms. Sebelius. And this is an fiscal year 2013 number that
we are supporting so it includes any increase that we are
seeing right now. A lot of what we are doing I think is covered
by the folks that we have.
Mr. Rogers. So my concern was, when the chairman went
through, and there is no Federal-State exchange rule, there is
no--for States--excuse me. There is no Federal exchange rule.
There is no guidance and rule on what is an accredited health
plan, nothing that outlines benefits. We have about 18 months.
And my concern here is--and I understand what you have been
saying, but we have insurance agents who have been a bastion
for small business being laid off. As a matter of fact, I had
150 workers at one company, 30 of which were in my district
alone, we think there are thousands and thousands across the
country, because I think the Medical Loss Ratio rule is wrong.
We have a very bipartisan effort to fix it. Can you commit to
fixing that today?
Ms. Sebelius. We are following the guidance from the very
bipartisan National Association of Insurance Commissioners. We
adopted their rule on the MLR and we intend to stay with their
rule.
Mr. Rogers. So it is OK that we are going to continue to
lose these jobs and we are losing them today, we are going to
lose more tomorrow, and these are the very people who are going
to try to make some sense out of this massive set of rules that
is only going to give them a matter of months before they are
fined by the Federal government. You understand why I am
concerned, I think.
Ms. Sebelius. Well, I think that there is a slight
mischaracterization about our progress on the rules. We do have
a proposed rule that is out, has been for months, on the
framework of the exchange, on----
Mr. Rogers. But I understand that, but----
Ms. Sebelius [continuing]. Medicaid. We have a very
detailed bulletin----
Mr. Rogers. And reclaiming my time. I get it. I have heard
your answer on that earlier. That does nothing if you are the
person who actually has to raise the money, sell the money--
excuse me--sell the product, raise the money, hire the people.
A proposed rule does nothing for certainty for me, nothing, and
so here is, I guess, my point: It doesn't seem like there is
any sense of urgency about what is going to hit these very
companies who are fighting for their very survival, and the one
sector of that that was at least going to give them some
guidance are now eliminated. The Federal Government by that law
and by your rule eliminated these broker agents from even
having the opportunity to show up at the small cafe and say let
me guide you through this before you get slapped with a $2,800
fine.
Ms. Sebelius. But there is no elimination of brokers and
agents, and having served as insurance commissioner, I can
guarantee you that----
Mr. Rogers. Reclaiming my time----
Ms. Sebelius [continuing]. They are valuable folks.
Mr. Rogers. That is great, except they are losing their
jobs.
Ms. Sebelius. The Medical Loss Ratio in no way eliminates
brokers and agents. It didn't define brokers and agents----
Mr. Rogers. It just adds to their costs so they are
eliminated through the back door, and Secretary, that is----
Ms. Sebelius. Exchanges at any point along the way can----
Mr. Rogers. We ought to at least just be frank with each
other and admit the fact that these brokers are going away.
Yes, the law didn't directly say you are going away but the
impact of this law is, they are going away. I am very, very
concerned.
Let me get to the second part here. I don't have much time
left. Thirty percent of doctors according to the AMA have
already said they are restricting the number of Medicare
patients in their practices. Two-thirds of physicians have
looked into opting out of Medicare for treating patients. We
see this huge cultural shift in the practice of medicine. They
are selling to hospitals at an alarming rate. Costs go up. They
are reducing the number of appointments per week for senior
citizens and they are stopping to take new patients. How are
you going to stop this and fix this for the future? This is a
disaster for our seniors and it is something I hope you are
spending a lot of time trying to get right.
Ms. Sebelius. Well, I think the best way to actually make
sure that the 97, 98 percent of doctors who currently have
contractual arrangements with Medicare continue those
contractual arrangements is a long-term discussion and actual
fix of the payment rate, which over the last 3 years expires a
week at a time, a month at a time, a year at a time. The
President has proposed in his budget and paid for in his budget
a 10-year fix for the Sustainable Growth Rate. That is the
biggest issue that I hear day in and day out from physicians
practicing is, they don't know if they are going to get paid.
Being a good payment partner for the 48 million Americans who
rely on Medicare benefits I think is the most essential thing,
and we would love to work with Congress to get that done long
term.
Mr. Terry. And I would agree with you on that. Also, if you
talk to those doctors, the Medicare health care bill has made
it almost impossible for them to survive.
Ms. Sebelius. The Medicare health care bill?
Mr. Rogers. No, excuse me, the health care law, which is
why you see this cultural shift in the way medicine is
practiced.
Mr. Pitts. The gentleman's time is expired.
Mr. Rogers. And I hope that you get a sense of urgency on
this, because people are impacted today.
Thank you. I yield back my time.
Mr. Pitts. The gentleman's time is expired. The Chair
recognizes the gentleman from New York, Mr. Engel, for 5
minutes for questions.
Mr. Engel. Thank you very much, Mr. Chairman.
And Madam Secretary, I want to echo the remarks that Mr.
Waxman made. I think you are doing a fine job as Secretary and
I want to thank you for the job and the good work that you do.
I am very proud of the fact that my State, New York, trains
the largest number of medical residents in this country. We
have over 15,000 residents developing all kinds of lifesaving
skills in our State as of 2010 and New York also trains the
largest number of primary care physicians in the country. Given
the increasing age of our Baby Boomer generation and 32 million
newly insured Americans projected to enter into our health care
system in the next few years, I am concerned about the
significant physician shortage that this country is facing.
So I want to echo the statements that Mr. Pallone made
earlier. I was disappointed to see that the President's budget
included a 10 percent cut to indirect medical education funding
and $177 million cut to children's hospital graduate medical
education funding. I think we need to be training more
physicians and adequately supporting our teaching hospitals,
not cutting their funding as they strive to train more
providers. Hospitals already see significant cuts to bad-debt
and DSH payments, which disturbs me greatly because we fought
for DSH payments for New York in the Affordable Care Act. So as
a result of H.R. 3630, the Middle Class Tax Relief and Job
Creation Act, bad-debt cuts and DSH payments cuts are there. So
I would just ask that the administration reconsider additional
cuts, especially when it comes to training our physicians.
Ms. Sebelius. Well, again, I share your feeling that a
critical piece of this puzzle for the United States having
better health care, better patient care, better health is
certainly a robust workforce focused on prevention and so we
would work with you to make sure that we are using all of the
assets, all of the resources to do just that.
Mr. Engel. Well, on prevention, one of the best parts of
the Affordable Care Act, I think, was the establishment of the
Prevention and Public Health Fund. I think that should be a
priority, and I was also disappointed to see that significant
reductions were made to various HHS agencies including the CDC
as part of the budget request. The rationale which we read was
that the Prevention Fund would help fund these programs facing
cuts, but the point of the Prevention Fund was to add to the
budgets of various public health programs, not to just supplant
their existing funding. So given the fiscal year 2013 budget
request and in light of the fact that the Middle Class Tax
Relief and Job Creation Act cut over $5 billion from the
Prevention Fund, I am concerned that we won't be able to
fulfill the goals of the Prevention Fund. So could you please
explain how the various programs facing cuts, especially those
at the CDC, will be impacted, given the payroll tax extension
legislation which is now law?
Ms. Sebelius. Well, I think that we are eager to not only
have the basic programs of the Centers for Disease Control and
Prevention continue on, they are vital, they are vital to
States around the country. They are vital to the health of all
Americans and some of the prevention funding, you are correct,
is paying for those ongoing programs. I would say that also
there are some innovative and new programs that are showing
great promise that also are part of that prevention funding and
we are going to, now that we have an outline for the further
reduction of $250 million, be working closely with Congress to
make sure that these initiatives don't take even more disabling
cuts. Unfortunately, at the State level, as you know,
Congressman, the States have made some serious reductions in
their public health budgets. So we are really trying to not
only make sure that the national efforts go forward but that
the State workers who are embedded in state departments across
this country doing vital public health are also continued.
Mr. Engel. I want to quickly mention dental care. In a
report, the Pew Center says that preventable dental conditions
were the main cause for over 830,000 emergency visits in 2009,
which is a 16 percent increase from 2006, and in New York, we
estimate $32 million was spent treating children for dental-
related ailments in emergency rooms in 2008 alone.
I introduced H.R. 1606, the Special Care Dentistry Act,
which would require Medicaid programs to provide dental
services to aged, disabled and blind beneficiaries, and I am
just wondering, is HHS working to address the shortage of
dentists in both our urban and rural areas, and how can we
encourage more dentists to serve children and vulnerable adults
on Medicaid?
Ms. Sebelius. Well, Congressman, we would be really eager
to work with you on this. It is an enormously challenging
problem. I think more so than virtually any other provider
group, we see a great shortage of dentists who are willing to
participate in the Medicaid program. We are working actively
with States and others to figure out strategies to engage more
dentists but I would say that we would love to have your
strategies, your ideas because it is a challenge in virtually
every part of the country, rural and urban, where we see this
lack of providers who actually deliver incredibly important
health services.
Mr. Engel. Thank you, Madam Secretary. I will be in touch
with your office on this and another bill that I have
introduced, the Moms and Babies Act.
Thank you, Mr. Chairman.
Mr. Pitts. The gentleman's time is expired.
The Chair recognizes the gentlelady from North Carolina,
Ms. Myrick, for 5 minutes for questions.
Mrs. Myrick. Thank you, Mr. Chairman. Thank you, Madam
Secretary, for being here.
I want to go back to the Medicaid expansion issue again. I
know Dr. Burgess touched on it a little bit. Beginning in 2014
under the health reform law, it will expand to include all non-
elderly individuals with incomes below 133 percent of the
Federal poverty level, and that accounts for more than half of
the newly insured population under the law. The CBO,
Congressional Budget Office, estimates that by 2022, Federal
outlays for Medicaid are expected to total $605 billion, more
than twice the 2012 amount. Obviously, many millions of new
people would be covered by Medicaid at that point but it
certainly is a pretty disastrous budget outlook.
So, as you know, the President's budget forces about $60
billion worth of additional Medicaid burden on to States, and
States already can't afford their Medicaid programs. I know the
problems we have in North Carolina. So long as the
administration doesn't allow the States more flexibility and
insists on enrolling these millions of new Medicaid recipients,
how are we going to afford as a country double spending on the
program in less than a decade? And I don't see that the budget
really addresses it this year.
Ms. Sebelius. Well, Congresswoman, the Affordable Care Act
laid out a program, as you say, that in 2014 regardless of
where an individual lives in the country, the Medicaid
enrollment eligibility will be identical so that individuals up
to 133 percent of poverty will qualify for Medicaid. Those up
to 400 percent will qualify for tax credits in the exchange
program. The vast majority of those new enrollees are paid for
by the Federal Government. They do not add to the State budget.
In fact, the first several years it is 100 percent Federal
funding. It decreases over the first 10 years so that the
highest level a State would be paying for those additional
enrollees is a 10 percent match. The Congressional Budget
Office estimated that actual State expenditures on Medicaid
populations would go down, not up, and States will also be
saving what is estimated to be about $80 billion that they are
spending on an annual basis right now in uncompensated care,
having a payment system under a lot of the individuals who come
into community hospitals, who come into the health system but
have no payment strategy whatsoever.
Mrs. Myrick. Well, most of that money is paid by us, the
Federal Government, when we pay the hospitals. The States don't
pay that.
Ms. Sebelius. We pay some of it, but I can guarantee you as
a former Governor, States pick up an enormous amount of that
uncompensated care at the State level also.
Mrs. Myrick. Right. I yield back, Mr. Chairman.
Mr. Burgess. Would the gentlelady yield?
Mrs. Myrick. Yes, I will.
Mr. Burgess. Madam Secretary, let me just ask you, because
when the President came out announcing the compromise a couple
of week ago----
Ms. Sebelius. I am really having trouble. I am sorry.
Mr. Burgess. When the President came out and announced the
compromise on the conscience in contraception a couple of weeks
ago, he described that he wanted this to be free, and I got to
tell you, I was a little taken aback by the President's
seemingly superficial knowledge of health economics. So have
you tried to help educate him when things are free that they
are really not free if they have health care or medicine
stamped on the side of them? Even assume you get the active
pharmaceutical ingredient for next to nothing, which under some
generic scenarios you might if you were willing to impose a
formulary on all the patients in the country, you still have to
involve a doctor's office. A doctor's time is still involved
with evaluating the patient and writing the prescription. A
doctor is still going to be required to manage that patient,
hear about the complications as they occur, answer their phone
calls at 2 o'clock in the morning and the doctor still has to
buy liability insurance. So none of those things looks free to
me, having practiced medicine for 25 years. Have you tried to
help educate the President on the fact that health care is
generally not free?
Ms. Sebelius. Mr. Burgess, I think what the President was
referring to, and I think he understands the economics of the
insurance industry very well, is that this directive first of
all in the law is to insurers, and in an insurance pool, there
is a balance of risk. What is estimated by actuaries, by
Federal actuaries, by company actuaries to be free is the
provision of contraception to women balanced against unintended
and in some cases unhealthy pregnancies. That is not only a no
cost but estimated by----
Mr. Burgess. It was already working. Why did we have to
interfere? Obviously it was in the marketplace in that
instance.
I yield back, Mr. Chairman.
Mr. Pitts. The Chair thanks the gentleman and recognizes
the gentleman from Georgia, Dr. Gingrey, for 5 minutes for
questions.
Mr. Gingrey. Mr. Chairman, thank you.
Madam Secretary, thank you for being here this morning.
Ranking Member Waxman was quoted in The Hill newspaper
yesterday as saying, and this is a quote, ``IPAB is a useful
backstop to impose some discipline on Congress to stop out-of-
control Medicare health spending.'' Do you agree with that
statement?
Ms. Sebelius. I do.
Mr. Gingrey. Does the President believe we need to save the
Medicare program from bankruptcy like Ranking Member Waxman
obviously does and you obviously do?
Ms. Sebelius. I think the President believes very strongly,
which is why he has proposed in this budget and supported
aspects of the Affordable Care Act----
Mr. Gingrey. And my time is limited, so yes or no is fine
on this, and your answer to that is yes, and I thank you for
that, Madam Secretary.
Ms. Sebelius. I didn't give you an answer, sir.
Mr. Gingrey. I know the President has used the slogan we
can't wait to highlight Congressional inaction really on many
issues. Tell me this, should we take Ranking Member Waxman's
advice and start showing discipline to reform Medicare this
year or should we tell our seniors to wait until after the next
election? Yes or no.
Ms. Sebelius. The President's budget has a very positive
proposal for Medicare which not only ensures that the 48
million people have the benefits that are committed to them but
that we continue to slow the growth rate, which has happened
every year since----
Mr. Gingrey. Well, I understand that, and my time is
limited, so let me just say this. I asked you the question,
does the President think that we need to address this issue now
or----
Mr. Sebelius. He would ask that you pass his budget, yes,
sir.
Mr. Gingrey. And the answer is yes. Thank you.
Are you aware that the CMS Actuary predicts that the
Medicare program could become bankrupt as early as 2016?
Ms. Sebelius. Mr. Gingrey, I think that again action is
required. We are taking that action. We would ask you to pass
the budget which has additional slowdown in the growth rate,
adding another 2 years to the trust fund. As you know, the
Affordable Care Act added an additional 12 years to the trust
fund and we would love to engage in a more comprehensive
discussion as long as we don't blow up the benefits that 48
million people rely on, which seems to be the alternative.
Mr. Gingrey. Madam Secretary, I think I just heard you say
that the Affordable Care Act according to the Medicare trustees
adds another 12 years.
Ms. Sebelius. It was according to the Congressional Budget
Office.
Mr. Gingrey. According to the CBO, an extra 12 years. Well,
I think that is possibly based in part, Madam Secretary, with
all due respect, upon your belief that $500 billion in cuts to
Medicare under the Affordable Care Act, Obamacare, can be spent
twice and other disingenuous accounting gimmicks. What do you
say to that?
Ms. Sebelius. This was not our number. It was the
Congressional Budget Office number, sir, and also numbers that
are included in the Republican proposal that was put forward
last year. So there seems to be some bipartisan agreement that
we could slow the growth rate of Medicare by $500 billion over
the next 10 years.
Mr. Gingrey. Thank you, Madam Secretary. Let me shift to
the issue of the individual mandate. In December, actually a
December 14, 2010, editorial in the Washington Post, you wrote
with Attorney General Holder, and here is what you stated, ``It
is essential that everyone have coverage. Imagine what would
happen if everyone waited to buy car insurance until after they
got in an accident. Premiums would skyrocket, coverage would be
unaffordable and responsible drivers would be priced out of the
market.'' In your opinion, if the individual mandate is found
to be unconstitutional by the Supreme Court, would premiums
skyrocket or would the cost curve for PPACA remain unchanged?
Ms. Sebelius. I can't speculate about that but I am
confident that given the review by the majority of justices who
have looked at the bill that the Affordable Care Act will be
found constitutional.
Mr. Gingrey. Well, that really wasn't my question. So in
your opinion, is the individual mandate the linchpin to the
other insurance reforms in the bill?
Ms. Sebelius. I think having everyone included in the
insurance market is an essential component.
Mr. Gingrey. So in other words, the individual mandate is
essential to ensuring that everyone has coverage and the
remainder of the bill of course would not work effectively
without that coverage?
Ms. Sebelius. I didn't say that, sir. I think it is an
essential component of the bill.
Mr. Gingrey. Close enough, Madam Secretary. Thank you.
Ms. Sebelius. Sir, you can't----
Mr. Gingrey. Let me ask you this question about Medicaid.
Ms. Sebelius. Could I answer your question, or not?
Mr. Gingrey. You did. I thank you for----
Ms. Sebelius. I did not.
Mr. Gingrey. I thank you for your question, and I have only
got 15 seconds left, but let me address Medicaid, and this is
going back to what Representative Myrick addressed but taking a
step further. Can you assess the impact of the provision of
PPACA requiring States to raise Medicare primary care physician
rates up to the Medicare level in 2013 and 2014 with Federal
funding for States and doctors, especially in 2015 when the
requirement and the funding goes away, resulting in an
inevitable cut to their reimbursement? Have you thought about
that?
Ms. Sebelius. We would hope that Congress would work with
us to make sure that that cut does not occur in future budgets.
Mr. Pallone. Mr. Chairman, can I just----
Mr. Gingrey. Madam Secretary, thank you, and I yield back.
Mr. Pallone. Mr. Chairman, I just want to ask, you know, I
think that Mr. Gingrey was asking questions, then not giving
the Secretary the time to answer them. I know that he has only
5 minutes, but I really think if she feels that she needs an
opportunity to answer his questions, I don't mind if----
Mr. Gingrey. You know, the gentleman, I think I need to
respond to him, Mr. Chairman. You make a statement in regard to
my approach, and Mr. Pallone, I think you spent 4-1/2 minutes
of your 5-minute allotted time giving a speech. So when I ask
questions and I want a yes or no answer, I expect a yes or no
answer. It is my time, not hers.
Mr. Pallone. I didn't----
Mr. Gingrey. She gave her opening 5 minutes.
Mr. Pallone. I understand, but if you don't give her an
opportunity to answer the question and then you go back and
suggest what she said and she disagrees that she said that, I
mean, it is really not an opportunity for her to respond, in my
opinion.
Mr. Pitts. The Chair thanks the gentleman and recognizes
Dr. Cassidy for 5 minutes for questions.
Mr. Cassidy. Hello, Madam Secretary, how are you?
Ms. Sebelius. Is that a yes or no question?
Mr. Cassidy. Believe me, that is a greeting, not a true
inquiry. I can imagine how you are.
Listen, you said something earlier to Ms. Myrick which I,
you know, was intrigued by. You suggested that under the ACA
that Medicaid costs for States will decrease. Now, I know I
heard that. The reason I find that curious is the New York
Times just had an article speaking about how Medicaid costs
have gone from 21 to 23 or 24 percent, expected to rise
further. There is a blog, Ed Watch, Education Watch, which is,
you know, obviously not even part of this fight except that
they are saying that they anticipate continued crowd-out of
funding for education by the money required for Medicaid
expenditures. In my own State, even though you speak of the
newly eligible having 90 percent coverage and at some point
falling off or 100 percent falling off to 90, my own State,
Louisiana, predicts that there will be $7 billion State general
funds required to comply with the ACA over the next 10 years.
We may quibble whether it is $7 billion or $5 billion but it is
a significant expense.
Now, I say that in context, and if I interrupt, I am not
trying to be rude, it is only because we have limited, when you
mention that the ACA is going to save the States money, that
seems to be contrary to objective analyses from those not
connected with government.
Ms. Sebelius. Well, Mr. Cassidy, I would love to get you a
more detailed answer but I can tell you that part of what is
going on is overall Medicaid expenditure and State portion of
Medicaid expenditure, two very different numbers. Overall
Medicaid expenditure will go up with a number of newly insured
Medicaid beneficiaries. What I was referring to is the State's
share of that newly insured----
Mr. Cassidy. So if I may, absolute dollars will increase
even if these States' percentage of that total spending
decreases?
Ms. Sebelius. That is correct.
Mr. Cassidy. But absolute dollars will still increase?
Ms. Sebelius. Absolute dollars certainly, sir. If we pay 90
percent of the costs, I mean the absolute dollars are going up.
Mr. Cassidy. Now, the next issue that arises though of
course is important. I am a doctor that works in a public
hospital for the uninsured, and they always point out that when
more people are put on Medicaid, my lines get longer because
the Medicaid dollar is spread more thinly. And California is
kind of like a case study in this right now. Just for
everybody--you and I know this--but they receive $2 billion a
year for the next 5 years to expand Medicaid coverage. Now they
are paying but since then their deficit has caused them to now
decrease payments to physicians--Mr. Engel spoke about
dentists--to $12 a visit that providers have filed lawsuits to
stop this but your administration, your office has filed a
friend of the court on behalf of California while acknowledging
that low reimbursement does affect access. So I have always
been struck that we have the form of insurance without the
power of it. Can you respond how if California is paying a
dentist 12 bucks to see somebody, we don't really have access,
how do we defend that, number one, and number two, how will
that improve under the ACA?
Ms. Sebelius. Well, I think the reference that Mr. Gingrey
made to the increase for Medicaid providers to Medicare rates
is part of the strategy. We understand that----
Mr. Cassidy. Now, of course, it doesn't affect dental
because dental is not a Medicare-covered benefit, and so dental
I presume will stay at 12 bucks.
Ms. Sebelius. Oh, I am sorry. Yes.
Mr. Cassidy. This is heterogeneous. It doesn't cover
specialists, for example. It won't cover many other entities.
It is just primary care in particular.
Ms. Sebelius. Well, it covers primary care.
Mr. Cassidy. And that is for 2 years, correct, and then it
reverts back to----
Ms. Sebelius. It is built in for 2 years in terms of the
overall budget but there is no question, I think, that the
concerns about provider rates and Medicaid are ones that we
share. As you know, the court case was----
Mr. Cassidy. I know we share that, but how can the ACA make
it better if it is, one, increasing cost as an absolute dollar?
California is already going bankrupt, which is acknowledged by
the administration. And yet somehow as we increase absolute
cost and put more people on we are going to somehow improve
rates. I don't follow that.
Ms. Sebelius. Well, I would say a lot of those folks right
now are entering the health care system at various points with
no reimbursement strategy whatsoever. So Medicaid rates may be
too low in many instances but I would suggest that it is better
than no rate at all, which is being absorbed in some way in
those same budgets that you are talking about.
Mr. Cassidy. Twelve dollars a doctor's visit is not. Fair
statement? I mean, $12 is way below the threshold for somebody
covering their cost and so, again, it seems as if the ACA is
providing the form of insurance without the power of it.
Ms. Sebelius. Again, this is, as you know, a State-Federal
partnership. Decisions about provider rates are made at the
State basis. We are trying to work with States to make sure
that they don't deny access to beneficiaries based on slashing
provider rates.
Mr. Cassidy. It seems inevitable with the policies, but I
am out of time. I yield back.
Mr. Pitts. The Chair thanks the gentleman and recognizes
the gentleman from Kentucky, Mr. Guthrie, for 5 minutes for
questions.
Mr. Guthrie. Thank you very much. Thanks for coming this
morning.
I kind of want to touch on what my colleague from Kentucky,
Congressman Whitfield, was talking about on the grants, the
community transformation grants, and there is evidence they are
being used to advocate or lobby pending positions, and I would
agree that if you look at the language in the budget, you are
striking the language that was put in the Appropriations Act
but you do leave ``no part of any appropriation contained in
this act shall be used to pay the salary, expenses of Federal,
State'' but you do leave in for local. So it seems that the
proposal would grant access to the local because it says in the
law that no money shall be enacted by Congress without express
authority by Congress. So it appears the way I read this that
you are asking for authority to do local. But anyway, but the
current law, the way I read it, now, that is going forward,
obviously it is not enacted because it is a proposed budget.
But the grants were put out under the existing laws, as you
said, and I think you said it applied to you but not the
grantee at the end of his comment.
Ms. Sebelius. Pardon me?
Mr. Guthrie. You said that the language applied to us, I
guess meaning the government, but not the grantee. I am not
sure exactly what you meant by that. That is what I was going
to ask you on that.
Ms. Sebelius. The original language that has been part of
the law that we have administered and had our grantees
administer applied to grantees lobbying the Federal government.
That has been prohibited. That is part of the underlying law.
What was added to our appropriation bill in 2012 and what I was
trying to explain is that no new prevention grants have been
issued under this new language and we are retraining grantees
is that a prohibition for grantees to lobby at the local level
or the State level is now an additional piece of the law that
was not part of the underlying statute. So that is new. We will
administer the directives to grantees to comply with that.
There have been no funds that have been issued under the new
law, and I think the pages of examples which began to be
recited were grantees who are lobbying at either the State or
local level, not lobbying the Federal Government.
Mr. Guthrie. OK. Well, it says in the current law that you
cannot use the grant money intended to design or influence in
an any manner a Member of Congress or jurisdiction or an
official of any government to favor, adopt or oppose or vote
otherwise any legislation or ratification, policy or
appropriation. So I don't think it just limits--current law
doesn't limit you to Congress. It is any lobbying. And U.S.
Code 1913. So the point is, that is the way I read it. It says
a Member of Congress or jurisdiction or any official of any
government or an official of any government to favor or oppose,
vote or otherwise, and maybe that is the misunderstanding
because in the Recovery Act on the Web site in the Recovery
Act, Connecticut said a grassroots coordinator spent 163 hours
establishing community support by educating, advocating
adoption of smoke-free policies. There is several. In Idaho, to
address obesity through nutrition, and it says working for
proposals in the 2012 State legislature for vending machines
for schools. And I can give these to you. And then in the
grants, so that was Recovery Act money. Now it has gone to
community transformation grants and the department that has
been approved actually in their grant proposal says they want
to pass at least 70 regional local institutional policies to--
and the New York public fund says they want a tax on lobby for
local--they say advocate but lobby for a tax on sugar-sweetened
beverages.
Having said that, my reading of the law is that is a ban on
any form of government. Does the department think it is only
Federal Government?
Ms. Sebelius. Again, Congressman, I apologize. I do not
have the existing statute here. I would love to answer this
question in writing. I can tell you fiscal year 2012
appropriations through Congress that we just have added new
language.
Mr. Guthrie. Right.
Ms. Sebelius. The new language, which was not part of the
underlying law, applied to grantees lobbying at the local
level. So----
Mr. Guthrie. Except you have a grant based on----
Ms. Sebelius. The underlying law clearly didn't cover some
of what is covered in the new language.
Mr. Guthrie. Well, that may be where we are--I am agreeing
with you that the money that--you haven't seen grants out with
the appropriation language in section 503 but I think the
existing law--and maybe that is where we--because it says to
me--and I know you didn't have a chance to read it, and I agree
with you, you need the time to read it, but it says any Member
of Congress, a jurisdiction or an official of any government,
so I think that would be city governments, State governments.
And if you all don't think that is the case, I would like to
have that in writing what your position is.
Ms. Sebelius. I would be glad to do that.
Mr. Guthrie. I appreciate that. Thank you.
Mr. Pitts. The Chair thanks the gentleman and recognizes
the gentlelady from Tennessee, Ms. Blackburn, for 5 minutes for
questions.
Mrs. Blackburn. Thank you, Mr. Chairman.
Madam Secretary, thank you for staying with us to take
these questions. I want to ask you about Section 220. And we
had Section 220. The President supposedly----
Ms. Sebelius. Section 220 of----
Mrs. Blackburn. Of the Obamacare bill, you know.
Ms. Sebelius. The Affordable Care Act? Is that----
Mrs. Blackburn. Yes, ma'am. The President goes back to 2009
saying we are going to have transparency, we are going to have
open government, and this was a major push. Fiscal year 2012
appropriations bill that the President signed included Section
220. This was an important thing. We are going to have
transparency, going to let you know where the money gets spent
on this bill. Yet we get the 2013 budget and Section 220 has
been removed in its entirety.
So we have a lot of concerns about what is happening with
the transparency components and how the money is going to be
spent. So I would encourage you to look at this and see if you
can find out what has happened with the money that was going to
be designated to transparency. We would like to have an answer
to that one if you do not mind.
Ms. Sebelius. I would be glad to do that.
Mrs. Blackburn. Thank you. I appreciate that.
In light of that, in trying to keep track of where the
money is going with this bill, you and I have talked about
TennCare and the lessons that should have been learned from
TennCare as the test case for public option health care. One of
those we repeatedly or I repeatedly discussed, and I know you
didn't think TennCare was a traditional public option program,
not sure what we think was a traditional public option, but
nonetheless, your estimates for the Obamacare bill were to be a
trillion dollars in spending, and now I am looking at the
figures for 2014 through 2023 as being a $2 trillion estimate.
So you are already running ahead of estimates. Forbes is
looking at these programs, these grant programs being about 30
percent over budget. Forbes had an article out on that.
So I just want--you know, our problem with TennCare, Madam
Secretary, was that within 5 years it had quadrupled in its
cost over the original estimates. So how do you see this
playing out and what accommodations are you and your team
making for this program doubling and then possibly quadrupling
in its anticipated cost?
Ms. Sebelius. Well, Congresswoman, I would be happy to try
and get you an answer. I don't know what you are quoting. I
don't know what it is based on. So I would be delighted to get
you a specific answer. We don't think the program will double
or quadruple in cost. We tried to give as accurate an estimate
as we could at every point all the way.
Mrs. Blackburn. Let me ask you----
Ms. Sebelius. Two years in, we are underspending a lot of
the estimates----
Mrs. Blackburn. OK. Let me ask you this. As we worked on
this legislation, I asked repeatedly if you had any example
where spending these near-term, ramping up all these near-term
expenses had resulted in long-term savings. To my knowledge,
you had no example of any program that showed where ramping up
these near-term expenses would yield a long-term savings. Were
you all ever able to find an example? Because you are running
over budget. You have got a budget that has increased 25
percent since 2008. Your estimates are running ahead of what
they have been, and we are at record spending, record deficits,
record debt in this country. So if you ever came up with that
example, I sure would like to see it, and I have got some
constituents that would certainly like to see it.
Let me shift gears for just a moment. I want to your narrow
religious exemption rule and what I think is a fee-for-faith
principle that is out there. USA Today had an op-ed, an
editorial, and they made the comment that not only had you
crossed the line on religious liberty but you had galloped over
it. I just have to ask you, Madam Secretary, did you all
consult the Department of Justice before you made this
decision?
Ms. Sebelius. Which decision are you referring to,
Congresswoman?
Mrs. Blackburn. Religious liberty, the First Amendment.
Ms. Sebelius. Which decision are you referring to?
Mrs. Blackburn. The mandate to the Catholic churches. I
think you know what I am talking about.
Ms. Sebelius. We have consulted with a number of people.
Did we consult before we finalized the rule on prevention with
the Department of Justice?
Mrs. Blackburn. Yes, ma'am.
Ms. Sebelius. No, we did not.
Mrs. Blackburn. You did not? OK.
Thank you. My time is expired. I yield back.
Mr. Pitts. The Chair thanks the gentlelady.
The Chair recognizes the gentleman from Pennsylvania, Dr.
Murphy, for 5 minutes for questions.
Mr. Murphy. Thank you, Madam Secretary. I want to follow up
on the religious freedom First Amendment issue as well. I just
want to be sure. If an employer is saying that he or she cannot
find it in their conscience in terms of practicing their
religion that they cannot pay for a plan or have a plan that
allows for or requires provision of abortifacient drugs and
they therefore do not provide that plan, just clarify for me,
do they pay the $2,000 tax for not having it or do they pay the
$3,000 tax for having a plan that is in violation?
Ms. Sebelius. There is no penalty attached to the provision
of preventive care. There certainly are penalties for employers
who don't comply with the law. There also is no abortifacient
drug that is part of the FDA-approved contraception. What the
rule for preventive care----
Mr. Murphy. Ma'am, that is not true.
Ms. Sebelius. Well, the scientists----
Mr. Murphy. Isn't the morning-after pill or something like
that an abortifacient drug?
Ms. Sebelius. It is a contraceptive drug, not an
abortifacient.
Mr. Murphy. Yes or no, does it----
Ms. Sebelius. It is not an abortifacient. It does not
interfere with a pregnancy. If the morning-after pill were
taken and a female were pregnant, the pregnancy is not
interrupted.
Mr. Murphy. Ma'am, I appreciate that is your
interpretation.
Ms. Sebelius. That is what the scientists and doctors
inform me, and----
Mr. Murphy. We are not talking about scientists, we are
talking about religious belief.
Ms. Sebelius. I am telling you that----
Mr. Murphy. Ma'am, I am asking about a religious belief.
Ms. Sebelius [continuing]. The definition of an
abortifacient----
Mr. Murphy. In a religious belief, that is a violation of a
religious belief based upon those within a religion.
Now, let me expand on that then. So if an employer says I
cannot have this plan provided for by the employer whether it
is paid for directly or someone says it is going to be paid for
by somebody else, do they end up paying the $2,000 tax or the
$3,000 tax per employee?
Ms. Sebelius. The rule which we intend to promulgate in the
near future around implementation will require insurance
companies, not a religious employer but an insurance company to
provide coverage for contraceptives for employees who choose to
access that----
Mr. Murphy. Ma'am, that is not what I am asking about.
Ma'am, I am not asking about that. This is very important. This
is a First Amendment issue. You keep talking about these things
in a different way.
Let me try and help make this clear, because one of the
things I think you say is that if an organization has people
within that organization that are not part of that same faith
value system, that they therefore couldn't claim an exemption.
Am I correct in that? So let us say Catholic Charities has
other employees who are not Catholic or a Jewish hospital may
have other doctors who are not Jewish or Catholic Charities may
provide services to non-Catholics that they therefore could not
claim a religious exemption. Is that accurate?
Ms. Sebelius. They don't fall under the definition that is
total exemption from the rule. They will fall under the
secondary rule of a religious objection to the service and----
Mr. Murphy. But under that, they would still have to
provide the objectionable medical services.
Ms. Sebelius. Absolutely not. The religious employer who
objects to contraception because of religious beliefs will not
provide, will not pay for, will not refer employees to an
objectionable service. On the other hand, the insurance company
will----
Mr. Murphy. Ma'am----
Ms. Sebelius [continuing]. Provide the service to
employees----
Mr. Murphy [continuing]. Let me make sure I understand this
correctly. So if a child in school----
Ms. Sebelius [continuing]. Upholds religious liberty and it
makes sure that it doesn't----
Mr. Murphy. Ma'am, no it doesn't. Ma'am----
Ms. Sebelius [continuing]. Access to benefits.
Mr. Murphy. Ma'am, no, you are wrong. You are wrong for
this reason. You know, you are setting up a rule that not even
Jesus and his apostles could adhere to. Jesus was Jewish. He
recruited Jewish people--tax collectors, sinners, Mary
Magdalene and others--and therefore saying you know what,
because you are not bringing all Christians into this fold you
can't do this. What you are missing here is because someone
else is paying for it, somehow that makes sense. If I go to a
tire store, which I recently did, it was buy three, one free
tires, I know I am paying for that extra tire by the other
three being pumped up or someone else is paying for it by their
costs going up somewhere else. It is one thing--I have searched
for ways of trying to help you understand it, and I don't know,
maybe the administration just refuses to understand so
therefore can't happen. Whether or not you have someone else
pay for it or whether something else is under the guise of
being free, as long as it is imposed upon someone to have this
available, that it is still a violation of their faith, which
gets into the First Amendment. I don't understand why this
isn't clear.
Ms. Sebelius. Well, first of all, I think the tire analogy
is not quite accurate. Insurance is----
Mr. Murphy. Well, who is going to pay for it?
Ms. Sebelius [continuing]. About a balance of risk----
Mr. Murphy. Who is going to pay for the----
Ms. Sebelius [continuing]. We know because it was done in
the Federal employees----
Mr. Murphy. Who pays for it? There is no such thing as a
free service.
Ms. Sebelius. The reduction in a number of pregnancies
compensates for the cost of contraception. The overall plan----
Mr. Murphy. So by not having babies born, we are saving
money? I just want to get this on the record, Mr. Chairman. So
you are saying by not having babies born, we are going to save
money on health care?
Ms. Sebelius. Providing contraception as a critical
preventive health benefit for women and for their children
reduces----
Mr. Murphy. Not having babies born is a critical benefit.
This is absolutely amazing to me. I yield back.
Ms. Sebelius. Family planning is a critical health benefit
for----
Mr. Murphy. You said avoiding pregnancy----
Ms. Sebelius [continuing]. Women in this country according
to the Institute of Medicine, and that is again----
Mr. Murphy. I think that is----
Mr. Pitts. The gentleman's time is expired.
The Chair recognizes the gentleman from New Jersey, Mr.
Lance, for 5 minutes for questions.
Mr. Lance. Thank you very much, Mr. Chairman.
Madam Secretary, the President's budget requests the level
of exclusivity for follow-on biologics, reducing it from 12
years to 7 years, and I think that that might be
counterproductive and I am wondering whether you would be
willing to reexamine that. On a bipartisan basis, this
committee has repeatedly indicated that it favors the 12-year
period. There was a bipartisan vote of 47 to 11 on that issue
in this committee.
Ms. Sebelius. Well, I think, Mr. Lance, this is an
important and ongoing dialog. The balance of making sure we
protect research and development, making sure that companies
can in fact make a profit when they find a successful strategy,
and opportunities for patients to have an affordable adoption
that may be lifesaving is, I think, what is at risk here, and
certainly I think there is a difference of opinion of whether
12 years is the appropriate time, whether 7 years adequately
compensates companies and yet makes more cost-affordable
options available.
Mr. Lance. Thank you. I would encourage you to work with us
on that.
Ms. Sebelius. I would be glad to.
Mr. Lance. I favor 12 years, and I appreciate any work we
might be able to do together on that.
We are hearing from those who have to implement the new
summary of benefits and coverage requirements that the time
period may be difficult to meet. Given the fact that employers
and plans need to get this done and if they don't comply there
are significant financial penalties, might the Department
consider any sort of delay of the non-enforcement period?
Ms. Sebelius. Well, I think, again, the essential health
benefits are a critical component. We put out very detailed
guidance because we were hearing from a lot of States, from
insurers and others saying tell us what is going on. I think
the strategy of suggesting that a benchmark plan already
marketed and in place in a State is a really accelerated
strategy. This is not something that has to be started from the
ground up. This is an ability at a State level to choose a
plan, the most popular small employer plan, the Federal health
benefit plan, a state health benefits plan that is in place, is
marketed, is priced at the State level. We made it very clear
in the guidance that this is what we intend to propose. We are
trying to get as much feedback as possible from insurers, from
States. We have had a very robust discussion and in the very
near future will be issuing the interim rule.
Mr. Lance. Thank you. Regarding the Supreme Court argument
on the health care legislation, undoubtedly the Solicitor
General's Office will be arguing that case. Does your
department also have lawyers who will be involved in the oral
argument or is it exclusively the Solicitor General?
Ms. Sebelius. It is the Solicitor General who will be
involved in the oral argument.
Mr. Lance. Thank you. I am willing to yield back to any
member who is interested in further questions. Thank you, Madam
Secretary.
I yield to Dr. Burgess.
Mr. Burgess. Thank you. It is very kind of you to provide a
little additional time.
Madam Secretary, you were here before and we talked a
little bit about the difference between a voucher and premium
support, and you had some difficulty articulating a difference
between the two. I am going to try to help you, because of
course under the exchanges, you will provide a subsidy, but
that subsidy is not coming in the form of a check or cash to a
household. There will presumably be some sort of
acknowledgement that this help is now available to you to help
you purchase your insurance in the exchange so that might be
regarded as a voucher, a coupon that you could take to the
exchange and in return you get a discounted price for your
health insurance.
Now, premium support, I don't know, you might have your
insurance through the Federal Employee Health Benefits Plan.
Many people in the administration do. That is premium support
where the FEHBP goes out and takes requests for proposals from
all these different insurance companies. There is in fact a
bill, H.R. 360. Members of Congress are going to be required to
buy their insurance in the exchange after 2014. Members of the
administration, members of the Federal agencies are exempted
from that requirement. You in fact could experience the world
of a voucher versus premium support by supporting H.R. 360,
which would move all members of leadership, leadership staff
and the administration and the agencies from the FEHBP into the
exchanges. Would that be a good idea?
Ms. Sebelius. We would be happy to look at it.
Mr. Burgess. I would appreciate your response.
Mr. Pitts. The Chair thanks the gentleman.
That concludes the first round of questioning. We will now
go to Dr. Christensen, who is a member of the full committee,
who has sat patiently since the beginning of the hearing, for 5
minutes for questions.
Mrs. Christensen. Thank you, Mr. Chairman and Ranking
Member, I really appreciate the opportunity to sit on this
hearing and your generosity in allowing me to participate.
Welcome, Madam Secretary.
Ms. Sebelius. Thank you.
Mrs. Christensen. Your being here gives me an opportunity
to formally and publicly thank for you the unprecedented
efforts that the Department has taken under your leadership to
end inequalities in health care and health status through your
national strategy to end health disparities.
On the other hand, I wanted to say briefly that the 2013
budget does raise some concerns about our ability to meet the
goals that you have set out, but I also know that across the
budget, President Obama has worked with agencies wherever there
are cuts to take steps to ensure that important programmatic
activities are not really cut as might appear, that they don't
suffer but are covered in other ways, and 5 minutes doesn't
give me the opportunity to go through those areas of concern,
but would you be willing to meet with the Tri-Caucus to go over
some of those areas and show us perhaps where steps have been
taken to make sure that those programmatic activities have not
been cut?
Ms. Sebelius. I would be pleased to do that. As you know,
we have tried to work carefully with Members of Congress who
share our concern about the health disparities issues present
around the country, and we have lots of strategies, and
agencies hard at work closing those gaps, and for the first
time ever have a national strategy on health disparities that
is a real action plan. So we would be delighted to go over that
with you and meet with you about it.
Mrs. Christensen. Thank you. And the President's budget
proposes a single blended Federal matching Medicaid rate. I am
sure there are different opinions about that, but I think that
the time has come for the territories to have the same
methodology used for setting our match, and we did have that
included in the House version of the Affordable Care Act, and
the Senate actually agreed to it but we weren't able to get it
done because of just technical reasons and how both bills were
structured. If given the authority, would you be supportive of
setting the match according to the way the States are done on
the average income? Right now we are a 50/50 match in statute,
and that is very difficult. Would you be supportive of having
the authority to set our match as the States are set?
Ms. Sebelius. Well, we would certainly be happy to work
with you. I know it is a huge issue for the territories and the
islands and we are working on that. The framework does not
allow us to do that, and we do not have the budget to do that
currently. So we would be happy to pursue that discussion.
Mrs. Christensen. And if we went into the blended rate, if
that does take place, it is my understanding you need about 2
years of history to be able to make the determination, so it
would be helpful--we wouldn't mind going into the blended rate
if that takes--if that is the way we are going to go.
Just one more question. There are two new institutes at the
NIH. One is the one you mentioned on translational medicine and
the other one is the National Institute for Minority and Health
Disparity Research, one created administratively, the latter
one, and the Minority and Health Disparity Institute by the
Affordable Care Act. The budget for the National Institute for
Minority and Health Disparities is one of the lowest of all of
the institutes, and that is despite the major initiatives that
we have to eliminate health disparities. Is there language in
the budget or would you accept language to bring the National
Institute of Minority and Health Disparity Research on par with
the other institutes? And I do know that the Research Centers
of Minority Institutions would--that program was transferred to
the institute and even funding with it, but even that funding
was insufficient to support the research centers so it remains
under underfunded under the institute. So is there language
that would bring the National Institute on Minority and Health
Disparity Research on par with the others or would you be
willing to accept that language?
Ms. Sebelius. Well, again, Congresswoman, I think you have
identified that the transfer along with staff and budget
actually has significantly enhanced this whole effort over
where we were 2 years ago. We would be happy to work with you
around ideas and strategies for continuing improvement, but
there has been kind of a big move forward I would say from
where we were when we began this conversation.
Mrs. Christensen. OK, but my understanding it is still
underfunded even with moving the RCMI in, so we appreciate your
willingness to work with us, Madam Secretary, and thank you for
your testimony and your answers.
Ms. Sebelius. Thank you.
Mr. Pitts. The Chair thanks the gentlelady.
Madam Secretary, we have one follow-up on each side, if you
can stay for that.
Mr. Pallone. And Mr. Markey too.
Mr. Pitts. And Mr. Markey has come in and would like to ask
questions. The gentleman, Mr. Markey, is recognized for 5
minutes for questions.
Mr. Markey. Thank you, Mr. Chairman, very much.
This is my 36th year on the committee, on the health care
committee, so it has been a long time trying to get to this
point where we actually have a plan to deal with the long-term
health care problems of our country, and amongst those includes
the National Alzheimer's Project Act to deal with this very
important issue that costs the Federal Government--Medicare and
Medicaid last year spent $130 billion on Alzheimer's patients
in America. Unbelievable amount of money, and that is with only
5 million Americans having it. By the time all the Baby Boomers
have retired, the cost is going up to maybe $600 billion a year
just on Alzheimer's patients if we don't find a cure for it,
and it is obviously a budgetary crisis that is looming.
And last week, Madam Secretary, we thank you, you issued
your draft national plan pursuant to the National Alzheimer's
Project Act, which I am the principal House author of along
with Congressman Smith, and I think it is great. One thing I
wanted to talk about here today is that at NIH there is $6
billion a year spent on cancer research and there is $3 billion
a year spent on AIDS research but only $489 on Alzheimer's,
even though 15 million Baby Boomers are going to have it. We
have to find a cure.
And so Madam Secretary, I congratulate you and the
administration on announcing the addition of $80 million more
in this coming year's budget on the research for Alzheimer's. I
think that that is absolutely critical, and I congratulate you
on that and I just think it has to be dramatically higher, and
if there is one thing we should just single out and just say
this has to be spared, it is the NIH budget, that just has to
go up and up and up because the National Institutes of Health
are really the National Institutes of Hope, and in Alzheimer's,
there is really going to be a medical catastrophe that hits
this country when all the diseases that we have been successful
in helping to cure lead to people living so long that half our
population winds up in retirement with Alzheimer's. It is going
to be an absolute disaster and it is going to cost us a
fortune.
And the second thing, Madam Secretary, is in the Affordable
Care Act, I was able to include language for an Independence at
Home pilot project, and there are now more than three times as
many applicants, that is, medical institutions, that are
applying for those slots in order to conduct this experiment. I
would just like to draw to your attention the fact that the VA
has already had a wildly successful program that has 10,000,
11,000 people in it that reduced hospital stays by 60 percent
and nursing care days by 80 percent, and so I appreciate all of
your efforts in this area but I think it could help us to
telescope the time frame that is going to take us in order to
put together a program to keep people at home, share it with
the institutions that are working hard in partnership to keep
them at home, making the patients and their families better
able to deal with the disease.
So I was just looking for a little wisdom from you in terms
of what your agency is doing and how much of an imperative you
see this for our country.
Ms. Sebelius. Well, first of all, Mr. Markey, I want to
thank you for your tenacious leadership on the Alzheimer's
issue and continuing to raise it and make sure it is an issue
that is focused on. As you know, not only is there 80 million
new research dollars in the 2013 budget, there were also
reallocated another $50 million in the 2012 budget at NIH. So
it is about a 25 percent increase in Alzheimer's research. We
also have proposed a portion of those funds, additional funds,
not those funds, for care giving and at-home care because we
know family care providers are the largest number of providers
for family members.
But I would share your interest, and we look forward to
working with you on what is the long-term strategy, how fast we
can get there. As you know, some timetables were set for the
first time in the National Alzheimer's Plan. There is a lot of
agreement that we probably need to move ahead of that pace but
at least we have a pace and a measurable pace outlined and so
we would look forward to working on getting the resources,
getting the research, getting the care-giving strategies in
place.
Mr. Markey. A fully implemented Independence at Home
project could save billions of dollars a year if we could just
get to the point where we verify what the VA has already
determined.
Ms. Sebelius. Well, that is a great point, and we will
definitely work with our partners at the VA.
Mr. Pitts. The Chair thanks the gentleman.
Mr. Markey. Thank you for your great work. I appreciate it.
Mr. Pitts. The Chair thanks the gentleman and recognizes
Dr. Burgess for one follow-up for 5 minutes.
Mr. Burgess. Thank you, Mr. Chairman.
I will just point out to Mr. Markey while he is still here,
this is one of the rare instances of bipartisanship in the
Affordable Care Act where we worked with your office on getting
the Independence at Home language refined and included, so
perhaps there is hope down the road.
But actually, going back to State exchanges for a moment,
some States are concerned that without the final rules on the
exchanges, they are bumping up against a deadline that is going
to be pretty tough for them to meet. I mean, they need these
rules probably within the next couple of months if they are to
be able to finalize their issues to meet the deadlines.
Ms. Sebelius. And they will have them shortly. We have the
interim final rule out and we intend to finalize the rule in
the very near future.
Mr. Burgess. So we can look for that by, what, the Ides of
March? April Fools Day? Tax Day? What day can we----
Ms. Sebelius. Shortly.
Mr. Burgess. Shortly? OK.
Ms. Sebelius. So if they need them in the next couple of
months, they will definitely have them in the next couple of
months.
Mr. Burgess. And then the essential health benefits rule
also will be coming out in that same very short time span?
Ms. Sebelius. The essential health benefits rule has not
yet been proposed as an interim rule. I am talking about
finalizing the exchange rule. That will happen in the very near
future. They will have the exchange rule. They will have the
Medicaid expansion rule. That has been out as interim final
rule. The essential health benefits rule will be promulgated in
the near future but there is detailed guidance right now that
States are working on.
Mr. Burgess. I will just make a prediction: that won't
happen until after Election Day in November, but that is just
me being cynical.
For a State like--let us say, for example, there is a State
out there that worries about what is happening under the
Affordable Care Act and really thinks the Federal Government is
maybe going a little too far on this so they are reticent to
set up a State exchange. I mean, I can think of a State that
might fall into that category. I may be going there this
afternoon. So you are preparing a national exchange for those
States that will not either because they haven't had time or
because they did not have the inclination will not have an
operational State exchange?
Ms. Sebelius. There will be a Federal facilitated exchange
in some cases operating fully the exchange for States and
others in partnership.
Mr. Burgess. But the Federal Government will step in and
provide that operational control. Is that correct?
Ms. Sebelius. Pardon me?
Mr. Burgess. The Federal Government will step in and
provide that?
Ms. Sebelius. Yes, sir.
Mr. Burgess. Now, will that be administered through your
office or through the Office of Personnel Management?
Ms. Sebelius. It will be administered through the CMS,
through--we will be operating at HHS the federally funded
exchange.
Mr. Burgess. My understanding is, there will be both a for-
profit and a non-for-profit offered under the language of the
law. Is that correct? Will there be a not-for-profit Federal
exchange?
Ms. Sebelius. No, there will not.
Mr. Burgess. I thought the language of the law said there
had to be a for-profit----
Ms. Sebelius. No, I think you are talking about the co-op
situation.
Mr. Burgess. No, I am talking about the exchanges, or the
Federal exchange for public option, whatever we want to call
it.
Ms. Sebelius. No, there will not be a not-for-profit.
States have that option. That is not at the Federal level, sir.
Mr. Burgess. Let me ask you this. A lot of talk about the
contraception issue and the essential benefits. When will we
see--are you proposing that an institution that refuses to
comply with your contraceptive mandate, what is going to happen
to them?
Ms. Sebelius. Sir, I am hopeful that the rule that we
intend to promulgate in the very near future, which will be
informed by conversations with not only religious employers but
labor leaders, women's groups and others and actually greatly
informed by the 28 States which have a framework like we are
talking about already in place will indeed satisfy the
religious liberty issues and make sure these preventive health
benefits are provided.
Mr. Burgess. Are the noncompliers going to be fined?
Ms. Sebelius. Sir, we will get--as you know, this is a
situation where----
Mr. Burgess. Well, let me just share with you something. It
bothers me that for the first time in this country, regardless
of what the issue is, and I personally support the issue of
contraception but at the same time it bothers me that there
might be a fine for faith. I don't think that has ever happened
before in this country, and I am concerned about the
direction----
Ms. Sebelius. No one will be fined for faith. This is an
issue dealing with insurers----
Mr. Burgess. Well, why did you propose a two-tier system
where some churches might be exempt but a Catholic hospital
might not? I mean, that sounds like that the direction you are
going.
Ms. Sebelius. The exemption, which is in the original rule
finalized in January--I am sorry--in February is the language
used in the majority of State laws which have some religious
exemption. That is where we got that language. It is a
definition that is in the IRS code. It is not something that we
invented. It is a definition of churches and church-affiliated
associations.
Mr. Burgess. If a State required sterilization as a
condition of citizenship, would you be prepared to do that at
the Federal level?
Ms. Sebelius. Sir, I am not going to answer that question.
Mr. Burgess. Thank you, Mr. Chairman.
Before we finish up, can I have unanimous consent? Mr.
Whitfield had a number of observations that he wanted entered
into the record, and I would ask to enter those now under
unanimous consent.
Mr. Pallone. Mr. Chairman, reserving the right to object. I
know you handed that to us but we haven't had time to really
look at it, so if we could take a look at it before we agree to
unanimous consent?
Mr. Pitts. All right. We will wait until you take a look at
that, and recognize the Ranking Member, Mr. Pallone, for 5
minutes for questions in follow-up.
Mr. Pallone. Thank you.
Madam Secretary, I just wanted to give you an opportunity
to address somewhat of a follow-up to Dr. Burgess and others
have said. Clearly the matter of insurance coverage for FDA-
approved contraceptives under the ACA has become controversial.
Unfortunately, what I think has been lost in the debate is an
understanding of how HHS arrived at the decision it has made,
and I would just ask you to take a few moments--you know, I
have got 4 minutes or so--to provide the broader picture, to
tell us about the ACA's provisions on preventive health
services and women's preventive health services, the role of
the Institute of Medicine study on coverage of women's
preventive health services and the HHS's process in developing
these regulations that are now under attack. I know you started
to get into that with Dr. Burgess but take the 4 minutes to
maybe explain it a little more.
Ms. Sebelius. Well, Mr. Pallone, the Affordable Care Act
had a provision that as part of a definition of essential
health benefits various populations should be looked at. The
recommended strategies for children around immunizations would
be included. The strategies for preventive health that are
recommended by the United States Preventive Health Services
Task Force would be included. And recognizing that too many
insurance plans often did not include benefits that were
specifically recommended for women's health, we were asked to
develop a set of preventive health services for women. We
turned to the independent scientifically driven Institute of
Medicine and asked them to make recommendations to us. They
came back with eight various health benefits--domestic violence
screening, mental health benefits, well woman visits and the
full range of scientifically recommended contraception
services.
We promulgated their rules as part of the strategy for
women's health as an interim rule and added a religious
exemption, and to be informed by what language should be used
in that religious exemption, we looked at the 28 States which
have some kind of contraceptive mandate in place right now
often for a decade or more operationally right now and we
included language that was used by the States in the majority
of cases that have an exemption. Many States don't have an
exemption at all. That language was put out. It was finalized
in February and an additional accommodation was made. We
announced that we would have an additional year for religious-
based organizations who had a religious objection to the
provision of contraceptives so that their implementation date
would be deferred until August of 2013, and that we would
promulgate additional rules around their ability to both uphold
their religious freedoms, not refer, not pay for, not provide
contraceptive coverage and yet make sure that women who were
janitors, teachers, nurses, employees, the spouses of
employees, the daughters of employees would have access to this
very critical health benefit.
And so we will be promulgating a rule around the
implementation strategy for preventive health services, which
will be a huge step forward for American women, knowing that
contraception is the most frequently taken prescription drug
for women 14 to 44. Ninety-nine percent of women of all
religions use contraceptives at some point in their health
lives and that often if you purchase contraception out of your
own pocket, it can be an expensive strategy. If it is provided
within an insurance pool, it not only is no cost but often
reduces the cost of the pool.
Mr. Pallone. Thank you very much. I appreciate it.
Thank you, Mr. Chairman.
Mr. Pitts. The Chair thanks the gentleman.
I think that concludes all of our questioning. Thank you,
Secretary Sebelius, for again taking time to be with us today
and for all of your answers.
I ask unanimous consent that all members' opening
statements be made part of the record. Without objection, so
ordered.
I remind the members that they have 10 business days to
submit questions for the record, and I ask the Secretary to
respond to the questions promptly. Members should submit their
questions by the close of business on Thursday, March 15th.
Without objection, the subcommittee is adjourned.
[Whereupon, at 12:40 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]