[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
THE CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT, AND THE
ANNIVERSARY OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
MARCH 21, 2012
__________
Serial No. 112-129
Printed for the use of the Committee on Energy and Commerce
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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 TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire MIKE ROSS, Arkansas
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
_____
Subcommittee on Oversight and Investigations
CLIFF STEARNS, Florida
Chairman
LEE TERRY, Nebraska DIANA DeGETTE, Colorado
SUE WILKINS MYRICK, North Carolina Ranking Member
JOHN SULLIVAN, Oklahoma JANICE D. SCHAKOWSKY, Illinois
TIM MURPHY, Pennsylvania MIKE ROSS, Arkansas
MICHAEL C. BURGESS, Texas KATHY CASTOR, Florida
MARSHA BLACKBURN, Tennessee EDWARD J. MARKEY, Massachusetts
BRIAN P. BILBRAY, California GENE GREEN, Texas
PHIL GINGREY, Georgia CHARLES A. GONZALEZ, Texas
STEVE SCALISE, Louisiana DONNA M. CHRISTENSEN, Virgin
CORY GARDNER, Colorado Islands
H. MORGAN GRIFFITH, Virginia JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California (ex
FRED UPTON, Michigan (ex officio) officio)
(ii)
C O N T E N T S
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Page
Hon. Cliff Stearns, a Representative in Congress from the State
of Florida, opening statement.................................. 1
Prepared statement........................................... 3
Hon. Diana DeGette, a Representative in Congress from the State
of Colorado, opening statement................................. 5
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 6
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, opening statement.......................... 7
Hon. Steve Scalise, a Representative in Congress from the State
of Louisiana, opening statement................................ 8
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 8
Witnesses
Hon. Ron Johnson, a United States Senator from the State of
Wisconsin...................................................... 24
Prepared statement........................................... 26
Hon. Donna F. Edwards, a Representative in Congress from the
State of Maryland.............................................. 29
Prepared statement........................................... 31
Steven B. Larsen, Director, Center for Consumer Information and
Insurance Oversight, Centers for Medicare and Medicaid
Services, Department of Health and Human Services.............. 39
Prepared statement........................................... 42
Submitted Material
Report, dated February 17, 2012, ``Early Retiree Reinsurance
Program: Reimbursement Update,'' submitted by Mr. Waxman....... 10
THE CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT, AND THE
ANNIVERSARY OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT
----------
WEDNESDAY, MARCH 21, 2012
House of Representatives,
Subcommittee on Oversight and Investigation,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:02 a.m., in
room 2322 of the Rayburn House Office Building, Hon. Cliff
Stearns (chairman of the subcommittee) presiding.
Members present: Representatives Stearns, Terry, Murphy,
Burgess, Blackburn, Gingrey, Scalise, Griffith, Barton,
DeGette, Schakowsky, Green, Christensen, Dingell, and Waxman
(ex officio).
Staff present: Gary Andres, Staff Director; Sean Bonyun,
Deputy Communications Director; Paul Edattel, Professional
Staff Member, Health; Julie Goon, Health Policy Advisor; Sean
Hayes, Counsel, Oversight and Investigations; Debbee Keller,
Press Secretary; Katie Novaria, Legislative Clerk; Andrew
Powaleny, Deputy Press Secretary; Alan Slobodin, Deputy Chief
Counsel, Oversight; Alvin Banks, Democratic Investigator; Phil
Barnett, Democratic Staff Director; Brian Cohen, Democratic
Investigations Staff Director and Senior Policy Advisor;
Elizabeth Letter, Democratic Assistant Press Secretary; Karen
Lightfoot, Democratic Communications Director, and Senior
Policy Advisor; and Matt Siegler, Democratic Counsel.
OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Stearns. Good morning, everybody. I call to order this
subcommittee's hearing on the Center for Consumer Information
Insurance Oversight during the week of the 2-year anniversary
of the Patient Protection and Affordable Care Act.
My colleagues, it has been 2 years since the health care
law was forced on the American people on a purely partisan
basis. As we have done since its initial passage, we continue
to evaluate the effect the law has on individuals, the health
care industry and the United States government. It is fairly
obvious what those effects are: number one, higher cost, higher
premiums, and increased government control.
Now, these are not partisan points. These are objective
facts. Proponents of the law promised lowered premiums, they
promised lowered costs, and they promised that if you didn't
want your coverage to change, it would not. That is simply not
the case.
This month, the Congressional Budget Office announced that
the 10-year cost for the bill is nearly $2 trillion,
substantially higher than the figure used when the law was
passed. The CBO also reported that as many as 20 million
Americans could lose their current coverage, despite the
President's countless promises that if you liked your coverage
you could keep it. These are not partisan talking points. This
is the analysis of the non-partisan Congressional Budget
Office.
Meanwhile, the implementation of the law has failed to
inspire confidence in the future of Obamacare. The cost and
premium increases for some were so large that a waiver program
had to be created to excuse over 1,700 companies, insurers and
individuals from the law's effects. For example, one business
from my home State of Florida needed a waiver so that 34,000
individuals did not face significant premium increases or the
loss of their coverage. Yet, these waivers still expire in
2014, and I fear the premium increases and loss of coverage
will become unavoidable for over 3 million Americans.
The Early Retiree Reinsurance Program is practically broke.
In fact, we will probably learn from one of the witnesses today
whether this program, which was supposed to last until the year
2014, has finally run out of money. As of last month, it had
already spent $4.7 billion of its $5 billion budget.
Despite predictions that 375,000 individuals would sign up
for the temporary high-risk pools in the first year, only
50,000 have signed up 2 years later.
The countless pages of regulations, rules and requirements
for Obamacare have been incredibly confusing. To my
constituents and individuals throughout the country, these
massive new rules and regulations demonstrate the increasing
interference of the Federal Government into their lives, while
to the business community, the uncertainty they create makes
planning for the future nearly impossible.
Lastly, the creation of the Independent Payment Advisory
Board, the IPAB, has been met with universal distain by the
medical community and our seniors. Today we are debating on the
House Floor a bill to repeal this board of unelected
bureaucrats charged with cutting Medicare payments to doctors
and hospitals.
Of course, next week the Supreme Court will address the
question of whether this unprecedented reach into every
American's life is permitted by the Constitution, but today, my
colleagues, we want to evaluate the law's effects since its
passage.
Today's hearing is unique because we will start off with a
member panel featuring both Senator Ron Johnson from Wisconsin
and our fellow House Member Donna Edwards. I welcome both of
them this morning. I thank them for appearing and contributing
their time. We also have Mr. Steven Larsen joining us again
today. Mr. Larsen is the Deputy Administrator and Director for
CCIIO and has previously been a witness of both this committee
and the Subcommittee on Health. So we welcome him back also and
thank him for joining us today.
[The prepared statement of Mr. Stearns follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Stearns. I would like to recognize the ranking member,
Ms. DeGette.
OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Ms. DeGette. Thank you very much, Mr. Chairman.
I want to welcome our witnesses today. I am glad to see our
favorite friend, Steve Larsen, the Director of the Center for
Consumer Information and Insurance Oversight, and of course we
are looking forward to hearing from our colleagues, Senator Ron
Johnson and Representative Donna Edwards. Representative
Edwards, it is nice to see a woman on a panel here to talk
about the women's health provisions of the Affordable Health
Care Act.
Mr. Chairman, in the spirit of basing today's oversight
hearing on the facts, I want to briefly describe some of the
benefits of the Affordable Care Act that have or will soon go
into effect. Because of this law, 2.5 million young adults who
were previously uninsured now have health insurance coverage on
their parents' policies. Five point one million seniors have
saved an average of more than $600 each on their prescription
drugs through Medicare. More than 30 million seniors and more
than 80 million Americans overall now have access to
preventative care with no copays, coinsurance or deductibles.
Over 100 million Americans with private insurance no longer
have to worry about the worst abuses of the insurance industry.
Their coverage cannot be revoked if they get sick, and they no
longer have to fear hitting a lifetime coverage limit because
of unexpected medical costs.
Mr. Chairman, this new health reform law does so much good
for so many people, and under the mantra of repeal and replace,
all the Republican majority has done is vote to repeal it. Now,
we have already had two votes in this Congress to repeal the
Affordable Care Act in the last year, and yesterday
Representative Ryan introduced his budget, which would not only
repeal the health care law but would decimate Medicare and
Medicaid to boot.
Mr. Chairman, I am wondering when we are going to start
having hearings on the second part of repeal and replace, which
is the replace part of the Affordable Care Act.
I want to give you a few examples of how the efforts to
repeal but not replace health care law would hurt women in
particular. In July 2011, the prestigious Institutes of
Medicine made recommendations regarding preventative health
services for women. These experts recommended insurance
companies cover the cost of screening for cervical cancer,
counseling and screening for sexually transmitted infections,
annual well women preventative care visits, screening and
counseling for domestic violence, and services for pregnant
women. Using authority granted by the Affordable Care Act, the
Department of Health and Human Services issued guidelines
ensuring the full range of preventative services outlined by
the IOM will be covered by health plans and available to all
women without copayments, coinsurance or deductibles. Mr.
Chairman, this preventative care will save women's lives and
save money, but the proposal to repeal but not replace the law
that makes sure women could get this care has not been
answered.
That is not all the majority has tried to repeal. Earlier
this week, the National Women's Law Center released a report on
the pervasive discrimination in the insurance market for women.
The report found that the same health insurance policy costs a
woman 30, 50 or even 85 percent more than a man of the same
age, even if maternity care is not covered. Mr. Chairman, this
is simply wrong, and thanks to the Affordable Care Act, it will
not continue. But all I have seen are proposals to repeal and
not to replace the law that would prevent health insurance
discrimination against women.
Mr. Chairman, the facts do not support the drive to repeal
this bill, but facts don't seem to matter in this case.
Republicans have already decided in advance that the law will
not work, and the facts have become irrelevant. Let me give you
an example. In fact, Mr. Chairman, you talked about it in your
opening statement. Last week, the Congressional Budget Office
released new Affordable Care Act estimates. Committee
Republicans were quick to claim that the CBO's estimates had
changed and this was proof that health care reform had failed.
There is only one problem: this is incorrect. Earlier this
week, CBO Director Doug Elmendorf spoke out about this
misrepresentation and here is what he had to say: ``Some of the
commentary on these reports has suggested that CBO and the
Joint Committee on Taxation have changed their estimates of the
ACA to a significant degree. That is not our perspective. For
health insurance coverage, the latest estimates are quite
similar to the estimates we released when the legislation was
being considered. The estimated budgetary impact of the
coverage provisions has also changed little.''
Mr. Chairman, CBO concluded this year what they concluded 2
years ago when health care reform was passed: the Affordable
Care Act will improve health care coverage for hundreds of
millions of Americans. It will cover tens of millions of the
uninsured. It will improve Medicare and it will cut the
deficit. Millions of Americans are seeing the benefits of
health care reform already, and these benefits will continue in
the future. Thank you.
Mr. Stearns. I thank my colleague and recognize Dr. Burgess
for 2 minutes.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. I thank the chairman for the recognition.
You know, I have really been interested in this, what
started life as an agency, the Office of Consumer Information
and Insurance Oversight, for a long time. It has always been a
little bit of a mystery to me. This is the office that is the
lead implementation force, the referee on meeting guidance for
consumers, States and insurance companies on the Affordable
Care Act, but nowhere in the Affordable Care Act is there any
reference to the Office of Consumer Information and Insurance
Oversight. It was a fabrication by the Secretary of Health and
Human Services. Now, when the committee began to look into this
in November of 2010 and January of 2011, the agency morphed
into the Center for Consumer Information and Insurance
Oversight and was drawn back into the Centers for Medicare and
Medicaid Services. And it has been tough to get information out
of this agency. Yes, sometimes it has come but it has come in
small morsels and it has required an inordinate amount of staff
time in order to get the budgetary information, and by the time
we receive it, it is frequently months out of date.
Well, the operations of the of the Center for Consumer
Information and Insurance Oversight are now under the aegis of
the Centers for Medicare and Medicaid Services. This is the
most powerful health agency on earth, and indeed that the earth
has ever known, certainly within the Federal Government,
because they have under their control now Medicare, Medicaid,
SCHIP, and for the first time with the passage of the
Affordable Care Act 2 years ago, private insurance is now
regulated by the Federal Government in the Office of Consumer
Information and Insurance Oversight.
So it is essential that we as an oversight body maintain
the oversight over this, now this very large and crucial
organization. We have a Supreme Court hearing going on, a
Supreme Court case being heard next week. It will be
interesting to know what the contingency plans are at HHS and
CCIIO should the Supreme Court not rule the administration's
way.
I will yield back the balance of my time.
Mr. Stearns. The gentleman yields back.
The gentlelady from Tennessee is recognized for 1 minute.
OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
Mrs. Blackburn. Thank you, Mr. Chairman.
I want to welcome our guests. Senator Johnson, great
article in the Wall Street Journal today on Obamacare. We
appreciate the work you have done. Ms. Edwards, we are so
pleased that you are with us, and Mr. Larsen, I want to welcome
you back.
As we look at what has happened over the past 2 years, we
see that $500 billion has come out of Medicare. Our
constituents are aware of this. They are concerned, and they
look at this cost of this entire bill. Now, as the chairman
said, what we have found out is that the cost has doubled since
the original estimates. Those of us from Tennessee who had
TennCare, the test cast for HillaryCare back in 1994, indeed
reported repeatedly that the cost quadrupled within 5 years. So
we are going to want to look at what is happening with this
cost.
We are concerned about it. We are concerned about the
potential loss of coverage for 5 to 20 million Americans. We
hear from a lot of our constituents about the escalation in
cost of their private insurance premiums, and indeed, many of
my constituents, female business owners, talk about their
concern about loss of coverage and access to consistent
coverage for elderly relatives, for children with chronic
conditions, because they see this insurance market changing and
they know that the changes that are in front of them are not
going to help them with consistent health care, and we express
those concerns and I yield back the balance of my time.
Mr. Stearns. The gentlelady's time is expired and the
gentleman from Louisiana is recognized for 1 minute.
OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF LOUISIANA
Mr. Scalise. Thank you, Mr. Chairman. I appreciate you
having this hearing. I want to thank our panelists who are
going to be testifying later.
You know, I think it is important as we approach the 2-year
anniversary of the President's health care law that we look
back and see just what has happened, what it is doing to the
health care marketplace, and in fact, if many of the promises
that were made have been kept or broken, and I think what we
have seen so far, I know as I have talked to small businesses
throughout my district, the biggest complaint that they give
when they talk about the things that are keeping them from
hiring people right now, keeping them from creating jobs, is
the President's health care law, the cost that it has added,
the uncertainty that it has added. If you look at, you know,
what it has done to Medicare, $500 billion was raided from
Medicare by the President's law, and in fact the President's
own health care actuaries confirmed that Medicare will go
bankrupt in less than 12 years, and this is the current law of
the land.
And so absolutely we want to repeal it, get rid of the
higher costs, get rid of the broken promises and the lost
health care and the crony capitalism as we will see from these
waivers that have been issued by many friends and supporters of
the law whereas regular hardworking taxpayers, small businesses
weren't able to get those same waivers. I think it is important
that we look back at all of that and, you know, hopefully work
to address the problems like we will be working to repeal this
unelected board of 15 bureaucrats that would have the ability
to ration care.
So thanks again for having this hearing and I look forward
to our panel. I yield back.
Mr. Stearns. I thank the gentleman.
The Chair recognizes the ranking member of the full
committee, Mr. Waxman, for 5 minutes.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Mr. Chairman, as we approach the 2-year
anniversary of the Affordable Care Act, we have an opportunity
to highlight the tremendous benefits that this landmark law has
and will provide for millions of Americans, and I am pleased to
welcome our first witnesses, Senator Johnson and Representative
Edwards, and I know we will be hearing from Steve Larsen from
the CCIIO who will be implementing a lot of the legislation.
But House Republicans seem determined to overturn this law
regardless of the facts. I find it hard to understand. The
Affordable Care Act is giving vital benefits for millions of
Americans. We are living up to the promises of this law.
Nationwide, the law has provided insurance coverage for over 2
million young adults who were previously uninsured. It saves
over 5 million seniors an average of more than $600 each on
their prescription drugs. It provided more than 30 million
seniors, more than 10 million children and more than 40 million
adults new access to preventive care with no copays,
coinsurance or deductibles. Thanks to the Affordable Care Act,
over 100 million Americans no longer have to worry about their
coverage being revoked if they get sick or by hitting a
lifetime coverage limit because of unexpected medical costs.
Last week, my staff prepared reports on the benefits of the
Affordable Care Act in all 435 Congressional districts. Mr.
Chairman, I would like to enter the reports for the 23 members
of the subcommittee into the hearing record.
Mr. Stearns. By unanimous consent, will do.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Waxman. They show that health reform is helping
hundreds of thousands of people in each of our districts. In my
district, health reform has provided 8,600 young adults with
health coverage and given 9,600 seniors an average discount of
$700 per person on their prescription drugs under Medicare Part
D. And Mr. Chairman, in your district, because of health
reform, 113,000 seniors have received Medicare preventive
services without paying copays, coinsurance or deductibles, up
to 42,000 children with preexisting health conditions can no
longer be denied coverage by health insurance, and 250,000 of
your constituents no longer have to worry about lifetime
coverage limits on their health plan. And in the months and
years to come, even more critical benefits and protections will
go into effect.
Later this year, every health insurance policy sold in this
country will begin providing consumers with a clear, consistent
summary of the costs and benefits of their coverage like food
and nutrition labels for health care plans.
In 2014, when the law is fully implemented, plans in the
private market will be sold in transparent and competitive
exchanges where consumers can be sure that the plans they
purchase will be there for them when they need them without
annual or lifetime limits, regardless of a preexisting
condition, without insurers making unjustifiable premium
increases or wasting huge percentages of premium dollars on
administrative costs and profits.
These are the facts. They show the Affordable Care Act is
working and will continue to benefit the American people. What
won't work is the Republican alternative. They want to repeal
the law. They say they we will repeal and replace. Now we know
what their replacement is. From the Budget Committee chairman
yesterday, the proposal would repeal health care reform,
decimate Medicaid, cutting over $800 billion from this critical
safety net program, and it would slash hundreds of billions of
dollars from Medicare. After all the money that people
complained about that was taken from the Medicare overpayment
and some of the insurance companies, the Republicans would
leave that in place and they would cut additional hundreds of
billions of dollars as well, ending the program's basic health
guarantee for seniors.
Mr. Chairman, these Republican solutions are wrong. They
would devastate Medicare and Medicaid, leave tens of millions
of Americans without health insurance at all. Their way of
holding down costs is to shift those costs on to the Medicare
individuals, and for the States, they would tell the States
here is less money for Medicaid, you can cut back on health
care for disabled people and very, very poor people under
Medicaid while we are going to make sure that we are going to
give wealthier Americans further tax breaks. I think that is
obscene and I think the American people will see through this
Republican effort.
Mr. Stearns. The gentleman's time is expired. We will now
go to our witnesses. Our first panel, of course, is Senator Ron
Johnson from Wisconsin and Congresswoman Donna Edwards from
Maryland. We welcome both of you today. And Senator Johnson, we
will recognize you for 5 minutes.
STATEMENTS OF HON. RON JOHNSON, A UNITED STATES SENATOR FROM
THE STATE OF WISCONSIN; AND HON. DONNA F. EDWARDS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF MARYLAND
STATEMENT OF HON. RON JOHNSON
Mr. Johnson. Thank you, and good morning, Chairman Stearns,
Ranking Member DeGette and members of the committee. Thank you
for the opportunity to participate in today's hearing on the
Patient Protection and Affordable Care Act.
Unfortunately, this Orwellian-named law will neither
protect patients nor make health care more affordable. It is my
current mission to paint a picture of what America's health
care system, our freedoms and our Federal budget will look like
in the unfortunate event that Obamacare is fully implemented.
It will not be a pretty picture.
Nancy Pelosi famously stated that we have to pass this bill
so you can find what is in it. I am determined to make sure we
don't have to fully implement it to see what it will cost.
Twenty-eight years ago, our infant daughter, like millions
of other Americans, was saved by a health care system and
medical professionals that dedicate their lives to saving the
lives of others. Today, our daughter is a nurse herself helping
to save infants in a neonatal intensive care unit. These are
the people that President Obama chose to demonize in his quest
to take over one-sixth of our economy. The result of his
efforts was an ill-conceived, totally partisan, 2,700-page bill
whose benefits were wildly overstated and whose costs will
prove to be dangerously understated.
Let me start there, understated costs. To sell the fiction
that Obamacare would provide health care to 25 million
uninsured Americans without adding one dime to our deficit, the
original budget window included 10 years of revenue and
fictional cost savings totaling $1.1 trillion to pay for only 6
years of benefits totaling $938 billion. Increased taxes, fees
and penalties account for roughly half of the $1.1 trillion
``pay for.'' The other half supposedly results primarily from
reduced payments to Medicare providers and cuts in Medicare
Advantage. But Congress has not allowed the enactment of the
$208 billion provider payment cuts required under the
Sustainable Growth Rate formula because it understands those
cuts would dramatically reduce seniors' access to care. For the
same reason, how likely is it that Obamacare's Medicare
reductions will actually occur.
In addition, how likely is it that on net, only 1 million
out of the 154 million Americans that have employer-sponsored
health insurance will lose that coverage and be forced to
obtain coverage through the exchanges. Not very. Yet that was
the CBO estimate that helped produce Obamacare's unrealistic
deficit reduction score.
Instead of trying to interpret and comply with over 15,000
pages of rules and regulations, and instead of paying $20,000
in 2016 for family coverage, why wouldn't business owners
simply pay the $2,000 penalty? And by dropping coverage under
Obamacare, they wouldn't be exposing their employees to
financial risk. They would be making them eligible for huge
subsidies in the exchanges, $10,000 if their household income
is $64,000. A recent study by McKenzie and Company found that
30 to 50 percent -- that would be 48 to 80 million Americans --
30 to 50 percent of employers plan to do just that, drop
coverage.
CBO's March 2012 baseline estimates 9-year Obamacare
outlays will exceed $1.9 trillion. Adding that many individuals
to the exchanges could add trillions to these projections. Can
America afford to take that risk? Those trillions of dollars
for Obamacare will be taken from hardworking American taxpayers
and the private sector filtered through the Federal Government
in order for Washington to dictate the terms of health care
consumption and delivery to every American. If that happens, we
will be ceding a significant portion of our personal freedoms
for the false promise of economic and health care security.
There are too many uncertainties, and the stakes are far
too high to proceed with implementing Obamacare. It is time to
put the brakes on until we fully understand all its costs and
consequences.
In closing, let me ask some questions the administration
should answer before Obamacare is fully implemented and it
really is too late. If the Medicare cuts actually are enacted,
how many doctors will stop taking Medicare patients? What
services will be cut? How will quality suffer? Isn't this how
rationing begins?
Because Medicaid reimbursement rates are often lower than
provider costs, approximately 40 percent of providers do not
accept Medicaid patients. How will the remaining 60 percent
handle the 25 million new Medicaid beneficiaries?
Faith in the Federal Government is appropriately at an all-
time low. How many Americans actually believe Washington can
effectively and efficiently take over one-sixth of our economy?
Does anyone think government would have invented the iPhone or
iPad? What will happen to medical innovation under government
control?
Will Americans like Federal bureaucrats telling them they
cannot get mammograms until they reach the age of 50, or the
Independent Payment Advisory Board becoming Medicare's de facto
rationing panel?
Defensive medicine and junk lawsuits cost Americans
hundreds of billions of dollars each year. Why was malpractice
reform rejected? Did it have anything to do with President
Obama's support from trial lawyers? Why would anyone think that
increasing taxes on health insurance plans, medical devices and
drugs would help bend the cost curve down? The actual result:
instead of lowering the cost of a family insurance plan by
$2,500 per year as President Obama promised, family plans are
now $2,200 higher. Does anyone really think that on net, only 1
million American will lose their employer-sponsored care and be
forced into the exchanges? And finally, why have 1,722 waivers
covering 4 million Americans been granted if implementing
Obamacare doesn't threaten current health insurance plans?
President Obama promised: ``If you like your health care
plan, you will be able to keep your health care plan. Period.
No one will take it away, no matter what.'' I am not sure what
you would call that statement, but whatever you call it, it was
a doozy.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Johnson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Stearns. I thank you, Senator, and we recognize the
gentlelady from Maryland for 5 minutes.
STATEMENT OF HON. DONNA F. EDWARDS
Ms. Edwards. Thank you, Mr. Chairman and Ranking Member
DeGette, and thanks for holding this important and timely
hearing on the Nation's health care system, and for the
opportunity to be here to testify today.
I represent Montgomery and Prince George's counties right
outside of Washington, D.C. Even in my Congressional district
close to the Nation's capital, there are thousands of people
who go without health care every day. I was honored to preside
over the passage of the Affordable Care Act in the House and
filled with pride actually to witness President Obama sign the
landmark bill into law.
Although the health care reform law has faced opposition
from some, I am proud and steadfast in my support of the
Affordable Care Act and the preventive care, the primary care,
the community-based care and the quality care that will now be
received by millions of Americans.
Before the enactment of the Affordable Care Act, our health
care system had been failing a large part of our population who
most needed insurance coverage. In a national survey, 12.6
million non-elderly adults, 36 percent of whom tried to
purchase health insurance directly from an insurance company in
the individual market, had been discriminated against because
of a pre-existing condition just in the last 3 years. With a
Federal high-risk pool, these Americans will have access to a
critical program that provides lifesaving health care coverage,
and the Affordable Care Act also encourages and enables people
to seek out care sooner, saving the system money and increasing
the chance of positive health outcomes in the long run. That we
should look to as very encouraging.
I worked with my colleagues, and I was interested to hear
you, Mr. Chairman, particularly Jan Schakowsky, in championing
a provision that holds insurance companies accountable for
excessive premium increases. That ensures affordability for
working families who have health care coverage, but for whom
costs are skyrocketing.
In my congressional district, this provision has already
helped protect 190,000 residents from price gouging by
requiring health insurers to post and justify rate increases of
10 percent or more. This is true all across the country in
every single Congressional district.
At this important 2-year anniversary, for constituents in
my district and throughout the country, health care reform has
already delivered important and tangible benefits due to a
number of provisions in effect today. I am proud that our
system would allow me the option to keep on my health insurance
policy my 23-year-old up until age 26 in the event that he
doesn't receive coverage through an employer.
I visit senior centers regularly where seniors now
understand that the Affordable Care Act strengthens their
Medicare benefit by closing the prescription drug donut hole
and expanding coverage, all while lowering costs to them. Under
the expanded benefits of Medicare, seniors can receive annual
physical and preventive screenings. And the small businesses in
my district and all across this country have received the
benefit of a 35 percent, enhanced to 50 percent in 2014, tax
credit to help them as employers cover the cost of premiums
paid to insure their workers. And with the filing deadlines
approaching, employers should look for that credit filing on
their return.
And for women, and I am proud that for women all across
this country Affordable Care Act has had a remarkable impact on
their ability to finally obtain affordable and comprehensive
coverage. According to The Commonwealth Fund, when the law is
fully implemented, nearly all the 27 million women in this
country ages 19 to 64 who were uninsured in 2010 will gain
health coverage that meets their needs at a fair price.
By 2014, health care reform will keep insurance companies
from denying women coverage due to preexisting conditions like
experiencing domestic violence or pregnancy or even acne. What
a shame that we needed a law to ensure that insurance companies
would not penalize women for those or other conditions, but you
know what? I am happy we have that law to do exactly that.
And further, as members of this panel, male and female,
know, the act of choosing a doctor for your health needs is an
important and personal decision. The Affordable Care Act
ensures that women are able to choose any doctor they trust
without a referral. As if the insurance companies didn't have
enough influence over the health care decisions of women,
before the passage of the Affordable Care Act insurers could
also choose to charge a woman more for her insurance policy
just because of her gender. The National Women's Law Center
reports the practice of charging women more than men for the
same coverage cost women $1 billion a year with little evidence
to explain the difference.
And now with the Affordable Care Act in place and the
scientific findings of the Institute of Medicine, women will
receive a full range of preventive services at no cost
including mammograms, colonoscopies, Pap tests, as well as
well-woman visits, HPV testing, contraception methods, and
support for interpersonal and domestic violence. To date, 20
million women have accessed these free preventive services.
And for minority women like me who too often go uninsured,
the Affordable Care Act will provide equal access to health
care and close health disparity gaps that plague women in
underserved communities.
And so I appreciate the opportunity to be here today to
celebrate the good news of health care delivery for the
American people through the Affordable Care Act, and I thank
you, and I am happy to answer any questions.
[The prepared statement of Ms. Edwards follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Stearns. I thank both of you.
Senator Johnson, do you have time to answer any questions?
Mr. Johnson. I believe so. I will run out of here at the
last minute.
Mr. Stearns. OK, because I saw that you might have a vote
here in the Senate.
I guess the question for you would be, what experiences in
the private sector have you had that give you insight into our
impending problem with Obamacare?
Mr. Johnson. Well, really, two pretty significant ones.
First of all, as a small- to medium-size business owner, I
purchase health care for the people who worked with me for over
31 years, so I certainly understand the thought process, the
decision-making process that will be going into those health
care purchasing decisions moving forward and certainly the
passage of Obamacare changes the equation entirely. I mean, put
yourself in the position of a business owner trying to comply
with currently 15,000 pages, and that is just simply going to
grow, and then take a look at the cost equation. So we have
totally changed the equation in terms of how are we going to
buy health care.
But the other experience, life experience, that was pretty
significant was the birth of our first child, our daughter,
Carrie, who was born with a very serious congenital heart
defect, her aorta and pulmonary artery reversed. So the first
day of life, she was rushed down where, you know, one of those
doctors came in 1:30 in the morning and saved her life. And
then 8 months later when her heart was the size of a small
plum, some other incredibly dedicated medical professionals
reconstructed the upper chamber of her heart. So her heart
operates backwards right now. But she is a nurse herself and
she is a 28-year-old woman practicing medicine because my wife
and I had the freedom. Again, this was ordinary insurance
coverage. This was no Cadillac plan. We had the freedom to seek
out the most advanced surgical technique at the time which
allowed Carrie to have such a wonderful result. So I have got
very direct experience both in terms of buying health care as
well as being on the consumption side of that in a wonderful
story that has a very happy ending.
Mr. Stearns. Senator, I also had a small business myself,
and understanding the complexities. Do you think if health care
is put in place, do you think employers will sort of dump
employees all into the exchanges? What is your estimation of
what will happen there?
Mr. Johnson. Well, that is a concern, and the CBO initially
estimated only a million people would, but there have been
surveys, and the McKenzie is the one that I quoted that said 30
to 50 percent of employers--and by the way, that percentage
goes up the more they know about the health care law--plan to
do just that.
Now, will they actually do it? Nobody knows. But what we
are trying to get the CBO to do is let us give us the
information just in case. I mean, what if half of the people
that get their insurance through employer-sponsored plans
actually lose it and access the exchanges under very high
levels of subsidy? That would be 75 to 80 million people, and
then of course, that would result in cost shifting, putting
more pressure on premium rates, which would cause even more
employees to lose their health care overage. And quite frankly,
Chairman, I think that is exactly the way that this health care
was designed. It was designed to lead to government takeover of
the health care system basically a single-payer system.
Mr. Stearns. Congresswoman Edwards, you heard the opening
statement of Ms. DeGette in which she talked about the
Medicare, and I think either she or Mr. Waxman talked about
Medicare and how the Paul Ryan budget would impact Medicare.
Are you concerned, I think like a lot of us are, that when we
passed Obamacare, there was a cut of $500 billion from
Medicare? Does that concern you at all that these cuts are,
one, feasible or are they accounting gimmicks or will it ever
happen, I guess?
Ms. Edwards. Thank you, Mr. Chairman, for the question, but
let us look at the facts. In fact, what has happened is that we
are actually saving seniors and providing additional benefits
with the savings that have been achieved in Medicare, because
after all, that went back into the Medicare system, and so when
I look at our seniors, for example, who receive--who are
working up to that donut hole and that they now can actually
receive a benefit that wouldn't by closing the donut hole,
those are benefits. When I look at seniors who now can go for
an annual physical so that they can look down the line to avoid
illnesses or conditions that might otherwise impact them
negatively, those seniors are actually receiving benefits
through the savings that we actually achieve in Medicare. And
so I think the American people should actually have the facts
straight in terms of what we did with Medicare and what we did
was enhance benefits for Medicare recipients so that we can
ensure the coverage of preventive care, close the donut hole,
and make sure that we have a system where we are able to
enforce fraud as well.
Mr. Stearns. I would say in defense of what you said is,
what you are talking about, paying for subsidies, but the $500
billion is actually impacting Medicare and this is something
that the second panel can bring out because most of us feel
that $500 billion will have a huge impact on Medicare and that
is going to what I think Senator Johnson talked about, a lot of
these doctors and others are just going to not want to take
Medicare.
With that, I recognize the ranking member.
Ms. DeGette. Thank you very much, Mr. Chairman.
Senator, thank you for coming over, slumming it with us
here in the House. When you talked about your young daughter
who had the heart surgery, it struck a chord with me because I
have a daughter who was diagnosed with type 1 diabetes at age 4
when I was in my first term in Congress, and I lived like you
did, you know, with the uncertainty of a chronically ill child
who would be ill for her whole life, and I was terrified for
many, many years about the idea that when she turned 18 or when
she graduated from college, she might be uninsurable. In fact,
my husband and I actually went to see our attorney about trying
to set up some kind of a fund from our earnings. You know,
forget about college, we were worried, could she afford to pay
for her diabetes care. And there is 17 million children in this
country who have preexisting conditions like your daughter and
my daughter who now will be guaranteed that they will have
insurance. I would imagine--I know that you are against the
Affordable Care Act and I know that you would like to repeal
it, but I would imagine you would think it would be a good
thing if insurance companies couldn't simply drop kids because
they had preexisting conditions.
Mr. Johnson. Well, first of all, there is a far simpler
solution. We didn't need a 2,700-page bill. We didn't need----
Ms. DeGette. What is that solution?
Mr. Johnson. So the solution is what many States have, most
States have, high-risk pools, and they work very well. And the
way they work is, every insurance carrier that is licensed in
the State has to participate in those pools, and it is a known
risk, it is actually pooling the risk. That is what insurance
is all about. So that when people are uninsurable, they become
eligible for those high-risk pools and those insurance rates
are subsidized. Again, we are a very compassionate society here
and we want to provide a strong social safety net so we are
very certainly supportive of that but we didn't need to pass a
2,700-page bill and a virtual national takeover, Federal
takeover of our health care system to accomplish that goal.
Ms. DeGette. So in Wisconsin, for example, under the
Affordable Care Act, there is 95,000 kids that would be in that
situation. Does Wisconsin have a high-risk pool?
Mr. Johnson. Yes, it does.
Ms. DeGette. And were all of those kids covered in the
high-risk pool?
Mr. Johnson. That I couldn't say. Am I saying the high-risk
pools are perfect? No, but we could have made adjustments to
those on a State-by-State basis as opposed to a total Federal
Government solution.
Ms. DeGette. OK, and do you have any idea how much it would
cost, say, in Wisconsin or Colorado to insure 95,000 kids that
weren't already insured in those high-risk pools?
Mr. Johnson. I don't have exact figures but I have in my
previous life as a business owner, I have looked at the
insurance rates for the high-risk pool in Wisconsin. They were
very comparable to the same rates we were paying on an annual
basis with our business plan, very comparable.
Ms. DeGette. Right. And does every State have a high-risk
pool like that?
Mr. Johnson. I am not sure. Not every State but the vast
majority do.
Ms. DeGette. See, the question I am asking is, all of these
17 million kids who now can't be discriminated against, these
are kids who previously were not insured in the high-risk
pools. So I am just wondering if you or your staff had done the
math to figure out how much extra it would cost in the States
to give those subsidies, because I don't know about your State
but in my State, we are having difficulty keeping our police
officers and our firefighters and our teachers on the payroll.
Mr. Johnson. Let me just answer by saying I would like to
dispel a notion, because I hear it over and over again that now
seniors are obtaining preventive services for free and we are
offering coverage to, you know, children up to the age of 26
for free. Nothing is free. We are just spreading the risks. And
I would say when we spread it and we filter it through the
Federal Government, which by the way there aren't too many
Americans who think that the Federal Government is capable of
taking over one-sixth of our economy, to do it effectively and
efficiently. I think going through a Federal government is the
least efficient way of pooling those risks and taking care of
those individuals.
Ms. DeGette. OK. I hear what you are saying. I disagree but
I hear what you are saying.
Now, Congresswoman Edwards, I just wanted to ask you a
question. The chairman asked you about Medicare cuts under the
Affordable Care Act. Have you glanced at the new Ryan budget
that was introduced yesterday?
Ms. Edwards. Well, it is very disturbing actually because I
think that what the new majority budget does it, it actually
undercuts Medicare. I mean, we would in effect be saying to our
seniors, not only are we going to get rid of the program that
you have known and that you trust and that delivers efficient
care; we would be saying to you, we are going to ask you to
reach into your pocket for thousands of dollars that we know
that you don't have in order to--I don't know. It looks to me
it would be turning Medicare into a private kind of system
where individual seniors would be kind of out on the
marketplace in order to obtain their health care. I don't think
that that is the system that the American people want, and I
think for the seniors that I visit in my Congressional district
and I would imagine that this is true across the country, that
those seniors right now must be wondering what it is that we
are thinking here on Capitol Hill that we would take a system
that is working, that is providing a benefit that they too have
paid into and ripping that out from under them.
Ms. DeGette. Thank you very much.
Mr. Stearns. The gentlelady's time has expired.
Senator Johnson has to leave in about 5 minutes or less.
Anybody on my side would like to ask questions? Dr. Burgess?
Mr. Burgess. I thank the chairman for yielding.
Senator Johnson, this is something with which I worked with
the previous ranking member on the Health Subcommittee, Nathan
Deal, who is now Governor of Georgia, on the preexisting
condition issue, and I think you are exactly right. In fact,
when Senator McCain was running for President, one of the
difficulties he had when he articulated a very detailed plan on
health care as opposed to an amorphous plan but the detailed
plan that Senator McCain talked about in fact built on the very
structure that you talked about, the already existing State
risk pools, State reinsurance programs and I think there were a
couple of other novel ways that States dealt with this. In
Texas, I am a physician. I practiced for a long time. I can't
tell you that I ever saw anyone who was covered under one of
the risk pools but I understand since entering into this
discussion in the last several years that there are many people
in Texas who are covered and do not want to see that coverage
changed in any way whatsoever. I can promise you, I never got a
reimbursement check from the State high-risk pool as a
physician, but at the same time, I think there is ample
evidence that they do work.
The problem is, that the State is limited in the amount of
subsidy that they can provide, so if we were going to build
something, it would have made a lot more sense to build on
those 35 State programs that already existed. Now, Nathan Deal
was very sensitive not wanting to create a new State mandate
but he suggested that a Federal subsidy could be available to a
State that was willing to provide such coverage and make it an
incentive rather than a punishment. Those bills were introduced
in the 111th Congress, H.R. 4019, 4020, for anyone who is
keeping score at home. Those things are ready to go as part of
any replacement strategy if something happens to the Affordable
Care Act like the Supreme Court voids its existence at the end
of June when they provide us with their ruling.
So I just wanted to emphasize, I think you are right on the
mark. We will hear from Mr. Larsen about the high-risk pools
and the success they have had but we were led to believe when
this debate was going on, and I don't believe you were in the
Senate when the debate was going on, but we were led to believe
through the popular media and through discussions with the
President that this number was 5 million people, 8 million
people, 15 million people who were not covered because of
preexisting conditions, 50,000 people in the first 2 years of
this new Federal subsidy that was set up and how much more
could have been done had a program been designed that would
have helped the States do what they were doing already, in
other words, augmented the help that they were providing, and
for the life of me I have never understood why we took it upon
ourselves to set up a brand-new Federal program, a brand-new
Federal agency, all new computers, all new staplers, and didn't
utilize the structure that was already there in your State and
my State and 35 other States across the country. Do you have
any thoughts on that?
Mr. Johnson. Before I go, I will make two points. First of
all, as I recall, and I wasn't here at the point in time, but
it was very difficult to get people signed up for the Federal
program initially. With the initially set premiums, only a
couple thousand people signed up, so they had to drastically
the premium rate to even get the 50,000 which is way under the
estimate. I also want to just dispel the notion that
Republicans don't have solutions. We have plenty of solutions.
You know, why don't we reform our malpractice and save hundreds
of billions in defensive medicine, and finally dispel the
notion that Medicare and Federal Government doesn't deny
benefits. They actually deny benefits to almost twice the rate
of large employers at about a 4 percent rate versus about a 2
percent for most large insurance companies. So again, there is
an awful lot of misinformation, and with that, Mr. Chairman,
again, I appreciate it and I am going to have to go take a
vote.
Mr. Stearns. Senator Johnson, thank you very much for
taking your time to come over from the Senate.
Mr. Burgess. Let me reserve the balance of my time. We will
let the Senator leave, but I just to make one other point on
the preexisting conditions for kids. There was a drafting error
in the Affordable Care Act as it was passed by the House and
Senate and signed. Indeed, the Affordable Care Act said that
insurance companies could not limit coverage for kids but there
was nothing that prevented them from denying coverage to
children. So the actual loophole that would have allowed
insurance companies to get out from under covering preexisting
conditions for children still existed at the signing of the
Affordable Care Act, and because most of the insurance
companies said ``Hey, look, we understand it was a drafting
error, we will do the right thing and not deny coverage to
those children.'' In fact, that is what allowed the Affordable
Care Act to work. But it was just one more example of the
numerous drafting errors that were contained in this thing, and
the reason there were drafting errors was because it was rushed
through, it was force fed through the Congress and force fed on
the American people, which is why it has never enjoyed immense
popularity, and we are going to get into more of that as this
goes on. I will yield back.
Mr. Stearns. All right. We would thank the gentlelady from
Maryland for attending with Senator Johnson. You also can leave
and we will go onto our second panel. Thank you.
I would say just a comment to my colleague from Texas, that
it would be nice to see on the Democrat side their plan to save
Medicare. Congressman Paul Ryan has come up with a plan to save
Medicare and it would be awfully nice to hear either the
President or the Democrats provide us a plan.
With that, the second panel is welcomed. We have just one
witness, my colleague, Mr. Steve Larsen, the Director of the
Center for Consumer Information and Insurance Oversight.
Mr. Larsen, I think you are aware that the committee is
holding an investigative hearing, and when doing so has had the
practice of taking testimony under oath. Do you have any
objection to testifying under oath?
Mr. Larsen. No.
Mr. Stearns. OK. The Chair then advises you that under the
rules of the House and the rules of the committee, you are
entitled to be advised by counsel. Do you desire to be advised
by counsel during your testimony this morning?
Mr. Larsen. No.
Mr. Stearns. In that case, if you would please rise and
raise your right hand?
[Witness sworn.]
Mr. Stearns. You are now under oath and subject to the
penalties set forth in Title XVIII, Section 1001 of the United
States Code. We welcome your 5-minute summary of your written
statement.
STATEMENT OF STEVE LARSEN, DIRECTOR, CENTER FOR CONSUMER
INFORMATION AND INSURANCE OVERSIGHT, CENTERS FOR MEDICARE AND
MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES
Mr. Larsen. Chairman Stearns, Ranking Member DeGette,
members of the subcommittee, thank you for opportunity today to
highlight the efforts of CMS and my office, CCIIO, in
implementing the provisions of the Affordable Care Act.
Over the last 2 years, we have been focusing on
implementing the ACA as smoothly as possible in a way that
continues to strengthen the productive partnership between the
private sector and our office and the government.
I would like to highlight some of the very important
provisions of the ACA and the benefits that they provided to
millions of Americans already. For example, in the past, young
adults making the transition from school to work have been more
likely than any other group to go without health insurance. The
ACA makes it easier for younger Americans to get health
insurance coverage because the law allows young adults to be
covered under their parents' policies up through the age of 26,
and about 2-1/2 million young adults have already gained health
insurance coverage because of this part of the law.
In addition to helping young people find health care
coverage, CMS established the Preexisting Condition Insurance
Program or PCIP, which we talked about. It was created under
the ACA and it provides an affordable coverage option for
uninsured people with preexisting conditions until the broader
reforms of the ACA take effect in 2014. Already, PCIP is
helping 50,000 Americans with preexisting medical conditions to
access critical health care services. Many of these individuals
have been diagnosed with cancer and other life-threatening
diseases, and without PCIP would have no other coverage
options.
Besides ensuring that people have access to private health
insurance coverage, CMS is working to implement new rights and
benefits for consumers. For example, insurance companies can no
longer drop or rescind someone's policy simply because they
made an unintentional mistake on their application. Insurance
companies can't place lifetime limits on the dollar value of
the benefits in the policy. Before, cancer patients and
individuals with serious and chronic and expensive diseases
often had limited treatment or went without treatment because
they had reached their insurer's lifetime dollar limits on
their health insurance coverage. Now with this provision in
place, about 105 million Americans including nearly 28 million
children enjoy better coverage without the worry of bumping up
against lifetime dollar limits.
Also, about 54 million Americans in new insurance plans are
receiving expanded coverage for recommended preventive services
without additional out-of-pocket payments including colonoscopy
screenings for cancer, Pap smears and mammograms for women,
well-child visits, flu shots and other preventive services.
The ACA also increases transparency for consumers. Starting
this September, health insurers in group health plans will have
to provide clear information about health plan benefits and
coverage in a consistent, easily understandable format that
allows apples-to-apples comparisons.
The ACA also helps make sure people get value for insurance
premiums. For example, the rate review program does this by
making sure that proposed rate increases that exceed 10 percent
in the small group and individual market are reviewed by
experts in order to make sure that they are reasonable. Rate
review is primarily a State-based reform with the majority of
the States, not HHS, conducting these reviews.
The medical loss ratio provision makes sure that people get
value for their premiums by requiring that insurance companies
spend 80 or 85 percent of the premium revenue for medical care
and to improve the health care quality for their customers. We
know many insurers are moderating their rates in order to meet
the MLR standard already.
We have worked steadily towards establishing the Affordable
Insurance Exchanges. We have issued extensive guidance to
States and other stakeholders over the last 2 years in many
areas related to exchanges, and earlier this month we released
the final rules on exchanges that provide flexibility to States
to build exchanges that work for them in their State. And we
know that States are making good progress toward establishing
their own exchanges.
CMS is proud of all that we have accomplished in the last 2
years, and I look forward to partnering with Congress, the
States, consumers, businesses and other stakeholders across the
country to strengthen insurance options.
Thank you for the opportunity to discuss the work that CMS
and CCIIO has been doing to implement the ACA.
[The prepared statement of Mr. Larsen follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Stearns. Mr. Larsen, thank you very much. I will start
with my questions.
You know, the main point of contention is the mandate, and
of course, the Supreme Court will be looking at that shortly.
So if you can, just answer the question yes or no. Is your
office going to be responsible for enforcing the mandate? Yes
or no.
Mr. Larsen. Well, in conjunction with our colleagues at the
Department of Treasury and the IRS.
Mr. Stearns. So will you have the main responsibility in
your office for enforcing the mandate?
Mr. Larsen. Well, the individual responsibility provisions
ultimately are enforced through the Tax Code, so it is largely
IRS and Treasury.
Mr. Stearns. But have you worked out any provisions in
terms of a narrative on how you are going to enforce the
mandate in your office?
Mr. Larsen. Not yet, no.
Mr. Stearns. And since you run the exchange, how will you
determine if an individual has purchased health care or not?
Mr. Larsen. Well, that is one of the issues that we are
working through now is the data that we collect through the
exchanges and through employers to know who has coverage and
who doesn't, and again, that is----
Mr. Stearns. Will this data be precise? Will you be able to
tell if a person has health care or not?
Mr. Larsen. Yes.
Mr. Stearns. And how will you determine that?
Mr. Larsen. Well, it will involve getting information from
both employees and individuals and----
Mr. Stearns. Is this going to be voluntary?
Mr. Larsen [continuing]. From employers to provide the
information.
Mr. Stearns. Will this be voluntary to the employees and to
the employer?
Mr. Larsen. Well, the employees and individuals will want
to provide the information so that they can know that we know
that they have health insurance coverage, and employers will
want to give the information so that they know that they----
Mr. Stearns. So you are saying it is all voluntary?
Mr. Larsen. Well, I am not sure quite how to answer that
because obviously there are----
Mr. Stearns. I think it is not voluntary.
Mr. Larsen. Well, there are financial provisions that
apply.
Mr. Stearns. It is called a mandate.
Mr. Larsen. People can choose----
Mr. Stearns. Let me ask you, what kind of manpower is going
to be required in your office to enforce this mandate?
Mr. Larsen. That I don't know yet.
Mr. Stearns. So you have no idea whether you are going to
increase the number of people?
Mr. Larsen. Well, we have plans to increase our staff in
connection with the areas that we are enforcing. I don't know
what the plans are with respect to IRS.
Mr. Stearns. OK. When does enrollment in the exchanges
begin?
Mr. Larsen. Well, the exchanges have to be up and running
in January of 2014, and so there will be an open enrollment
preceding that in October of 2013.
Mr. Stearns. What rulemaking have you issued with regard to
these exchanges?
Mr. Larsen. We have issued a number of rules both final
rules, proposed rules and then guidance to the States on a
range of topics. As I mentioned, we did just release the final
exchange rule. There is a rule that we call the 3 R's rule that
is----
Mr. Stearns. Three R's?
Mr. Larsen [continuing]. Insurance, risk adjustment and
risk quarters, which are financial mechanisms to stabilize the
market in 2014, so that final rule was issued. There were final
rules on the Medicaid provisions that relate to exchanges as
well, and there have been a number of papers and bulletins that
we have released on topics such as----
Mr. Stearns. It sounds a little complicated.
Mr. Larsen. Well, it is not complicated but there is a lot
of work to do to get ready for 2014.
Mr. Stearns. When can we expect the rules on essential
health benefits and actuarial value to be released?
Mr. Larsen. Hopefully soon. We are working on that. We
released initial guidance to the States back in December and we
have issued additional guidance after that in the form of
questions and answers, and we know States and issuers are
anxious to get that information, so hopefully in the near
future.
Mr. Stearns. Have you conducted any analysis of the effect
on family or individual premiums?
Mr. Larsen. We have not conducted an analysis of that at
this point.
Mr. Stearns. Who is going to do that, or when it is going
to be done?
Mr. Larsen. Well, we will be doing that. I know CBO has
looked at that. A number of private entities have looked at
potential rate impacts. States have looked at that. It does
vary----
Mr. Stearns. Wouldn't this affect some of the decisions you
make? You are saying CBO is going to do this but shouldn't you
folks do analysis of your own to see the effect of the premiums
on individuals and families?
Mr. Larsen. We will.
Mr. Stearns. You will? So you are not going to kick it to
CBO, you expect to do your own?
Mr. Larsen. Yes.
Mr. Stearns. In the analysis that you have done so far,
does it appear that the premiums are going to go up or go down?
Mr. Larsen. It really varies by State and by the individual
involved because----
Mr. Stearns. Well, let us take Virginia, for example.
Mr. Larsen. Well, I don't know the specifics of any
particular State. I guess what I was going to say is----
Mr. Stearns. Do you know the particulars of any State?
Mr. Larsen. No, I don't know the particulars of any State.
Mr. Stearns. OK. Your testimony states that beginning in
2014, the exchanges will provide improved access to insurance
coverage choices for an estimated 20 million Americans by 2016.
How was this analysis done? Who did it? In-house?
Mr. Larsen. The 20 million comes from the CBO report, in
other words, when CBO estimated both the financial impact and
the uptake through the exchanges, that was in their--and that
was in their most recent report.
Mr. Stearns. Are these people that already have health
insurance or are these people that don't?
Mr. Larsen. Well, it is a combination of people but it is a
number of people that will be eligible for the subsidies that
are available for people with incomes below 400 percent, and
then there will be people that aren't eligible for subsidies
but will still access the exchanges.
Mr. Stearns. Would it be fair to say a lot of those people
in the 20 million already have health insurance of their own
and that their employer provides?
Mr. Larsen. Most of them won't because again, according to
the CBO estimates, you have got a reduction in the number of
uninsured in the United States by about 30 million people as a
result of the Affordable Care Act so there are many, many
people that don't have access to affordable coverage today that
will be able to have that.
Mr. Stearns. All right. I will just conclude. Mr. Larsen,
if you could provide this analysis for us, that would be
appreciated.
Mr. Larsen. OK.
Mr. Stearns. With that, the ranking member is recognized.
Ms. DeGette. Thank you very much, Mr. Chairman.
Mr. Larsen, Senator Johnson seemed to--one of his main
concerns, and this is a valid concern, I think, is what will
happen to employer-based coverage under the Affordable Care Act
because what we tried to do was to build, as you know--we tried
to build off of the employer-based system that is already in
place while adding some new consumer protections and trying to
increase the pool so that that will decrease actuarial costs.
CBO's most recent analysis of the employer-based health
insurance coverage under the Affordable Care Act, as you know,
presented a range of scenarios for potential changes in
employer coverage, and Senator Johnson seemed to assume that
the vast majority of employers are simply going to drop their
employees. But while CBO said it was possible there could be a
net reduction, they said roughly maybe 3 to 5 million might
lose their employer-based coverage. They also said that ``a
sharp decline in employment-based health insurance as a result
of the ACA is unlikely'' and the CBO maintained its position
that the bill will extend health coverage to more than 30
million people. Do you agree with CBO's assessment that the new
law is not likely to result in a sharp decline in employer-
based coverage?
Mr. Larsen. We don't think it will, and I think if you look
at the number of models that other groups have done whether it
is Rand Health or the Urban Institute, both of those groups
have indicated that in fact employer-based coverage will
increase, and then you are right, CBO estimated a very small
reduction in employer-based coverage, but of course, that is
across a base of about 160 million Americans.
Ms. DeGette. So why would employers choose to keep their
people on insurance under the Affordable Care Act? Why would
they choose to keep their people on employer-based insurance
under the Affordable Care Act?
Mr. Larsen. There are many reasons. One is that both the
employer and the employee get tax advantages from employer-
based coverage.
Ms. DeGette. Right. So like if there is a small employer
that wants to offer insurance right now, and most employers do,
I would think, they would get a tax advantage by offering that
they don't have until this is implemented, right?
Mr. Larsen. Exactly. Yes.
Ms. DeGette. OK. Now, let us say there are some employees
who lose their employer-based insurance. They are like the
Senator. They don't want a Federal mandate so they say I am not
going to offer the insurance. Those employees could go into the
exchanges then, right?
Mr. Larsen. Yes.
Ms. DeGette. Now, what would happen to people like that?
You know, in the economic downturn, a lot of employers just
couldn't offer insurance to their employees. What happened to
those employees who lose their employer-based insurance?
Mr. Larsen. Well, they ended up in--at least now without
exchanges and the protections in the market, they ended up
probably without coverage.
Ms. DeGette. I mean, they have the option in the individual
market right now.
Mr. Larsen. They do.
Ms. DeGette. But that is wildly expensive in most places.
Mr. Larsen. It is expensive, and there is underwriting so
that if you have a preexisting condition, in most States you
may not get coverage or you may not have coverage for your
preexisting condition.
Ms. DeGette. So under the Affordable Care Act, if, heaven
forbid, an employer drops somebody, they can still go through
the exchanges?
Mr. Larsen. That is right.
Ms. DeGette. And is it anticipated that those exchanges are
going to be as costly for those individuals to buy insurance
policies as the private market is right now?
Mr. Larsen. Well, the exchanges bring major advantages
compared to the individual market today. One is administrative
efficiency, and two is a much broader risk pool that is
segmented today and CBO estimated that there were reductions
that would occur in premiums as a result of the better risk
pool and the administrative efficiency.
Ms. DeGette. Thank you. Now, I want to ask you a couple of
questions about the women's health care benefits under the
Affordable Care Act. I just want to ask you a basic question.
Prior to enactment of the ACA, did all Americans and in
particular women have access to basic preventative health
services?
Mr. Larsen. No.
Ms. DeGette. Can you give me an example of the types of
services that are not currently always covered by health
insurance and that will be covered by the Affordable Care Act?
Mr. Larsen. Well, many of the ones that IOM recommended
including, you know, cancer screening, counseling, domestic
violence screening and education, contraception, the
recommendations that IOM came up with.
Ms. DeGette. And the IOM did that on a scientific basis,
deciding what actually was necessary for women's health,
correct?
Mr. Larsen. That is right.
Ms. DeGette. And HHS implemented the recommendations of the
Institute of Medicine?
Mr. Larsen. We did.
Ms. DeGette. OK. Now, my understanding is that an estimated
20 million women nationwide are already benefiting from these
new preventative care requirements. Is that correct?
Mr. Larsen. Well, the broader range of preventive services
that went into effect already, and of course, the specific
dialog about the contraceptive services around a different
schedule.
Ms. DeGette. OK, but everything except for the
contraceptive services----
Mr. Larsen. Yes.
Ms. DeGette [continuing]. 20 million people are already
benefiting from that?
Mr. Larsen. Yes.
Ms. DeGette. One last question. Would you expect that
preventive care benefits might result in cost savings, not only
for patients but for the health care system overall?
Mr. Larsen. Yes.
Ms. DeGette. Thank you.
Mr. Stearns. The gentlelady's time is expired.
Dr. Burgess is recognized for 5 minutes.
Mr. Burgess. Thank you, Mr. Chairman.
Mr. Larsen, again, thank you for being here. Thank you for
the information you have provided our office. In the passed
law, there was a broad $1 billion implementation fund to
administer the implementation of the health care law. Is that
correct?
Mr. Larsen. That is right.
Mr. Burgess. Section 1005, as I recall. You provided us
some documents November 1st, that $150 million of this fund had
been spent by the Senator. Is that correct?
Mr. Larsen. It sounds a little high to me but I would have
to go back and look.
Mr. Burgess. Well, the October numbers you provided showed
$116 million in outlays, so that was about a $35 million
increase, but also in October you provided information that
there were $242 million in obligations. Now, the obligation
figure wasn't provided for December but I have to assume that
the obligation number had to go up as well as the number for
outlays. Is that correct?
Mr. Larsen. I would have to check because we executed a
number of procurement contracts to help with the building of
the exchanges, which would be reflected as an obligation, and
those were done last year as opposed to the outlays, which
were----
Mr. Burgess. Well, here is the question. Can you tell us
today how much money remains unobligated in the implementation
fund?
Mr. Larsen. The entire implementation fund? I can't. I
mean, as I think you saw in the materials we provided in
January, the $1 billion implementation fund is for all agencies
at this point, so IRS, Treasury, Department of Labor, HHS. So
there are kind of other folks that I would have to consult with
to get you that number.
Mr. Burgess. But still, I mean, you know of our interest in
this and we are having the hearing, so we need the information.
Mr. Larsen. OK.
Mr. Burgess. And I referenced this in my opening statement.
I mean, the Supreme Court is going to hear this case next week,
and whether you think that is a good thing or a bad thing, I
mean, it is a fact of life. It is going to happen. They will
rule and they will provide us a ruling presumably before their
term ends in June. Now, you may think that the likelihood is
low that they would agree with Judge Vincent and the Federal
District Court in Florida that the entire law is
unconstitutional, not severable, therefore gone, and you may
disagree with that, but there is a possibility that the court
will find in accordance with Judge Vincent's ruling from
Florida.
Now, I already referenced in my opening statement that you
were never authorized in statute. You don't have to worry. If
they void the entire law, you weren't authorized in it anyway
so you will still be there but your money won't, will it, if
the entire Affordable Care Act were to be struck down, or does
your money exist outside the structure of the Affordable Care
Act?
Mr. Larsen. You know, that is a--I hate to say it. I mean,
I think that is a legal issue that we would have to consult
with our lawyers. If the court were to strike down the law,
which we don't believe it will, and that means the entire law
as opposed to, you know, certain portions of it, I don't know
the exact mechanism that occurs with respect to funding for the
law. For example, the billion dollars largely is for the
implementation of exchange-related activity.
Mr. Burgess. You know, an observation. If I were in your
position, and I thank God every day that I am not, but if I had
your job and this was out there, I think I would at least have
in the back of my mind some contingency plan for what happens
next because you have got all these States that are planning
their exchanges. They are all looking to you for guidance. They
are waiting on the rules to be finalized. I mean, there is a
lot of people whose lives will be turned upside down and you
would be the logical place to minimize that tumultuousness, if
that is a world.
Mr. Larsen. Right, but there is a whole range of activities
and provisions within the ACA, not just the individual
responsibility, guaranteed issue, guaranteed renewability, the
market reforms and of course the exchange provisions, many of
which are not I think being challenged, although some people
would like to see the whole law overturned.
Mr. Burgess. Well, again, Judge Vincent----
Mr. Larsen. Many people are focused primarily on the
individual responsibility part.
Mr. Burgess. Right, but Judge Vincent in his opinion said
the whole thing went away.
Donna Edwards in her testimony, she talked about how women
are going to be able to choose any doctor they want without a
referral. Section 1311(h) in the law, and I questioned the
Secretary about this and she seemed absolutely unprepared to
answer, maybe you can help us with that. Under 1311(h) in the
law as written, really, you are not going to have the
availability of any doctor you want. You are going to have the
availability of any doctor that the Secretary says you can
have, as I read Section 1311(h), the health provider only if
such provider implements such mechanisms to improve health
quality as the Secretary may be regulation require. Now, that
could be something like board certification but it could also
be quality as determined by will you accept Medicare or
Medicaid as well as patients in the exchange. Have you all
looked into how that actual aspect of the law is going to be
administered?
Mr. Larsen. I will have to go back and look at that because
I have not focused on that particular provision.
Mr. Burgess. It seems like no one is focusing on that
within the agency but it is really going to be quite, again,
tumultuous to the provider community out there if their lives
are suddenly turned upside down by a ruling by the Secretary of
Health and Human Services. So do everyone some--provide some
value in doing that.
Thank you, Mr. Chairman. I will yield back.
Mr. Stearns. The ranking member from California is
recognized for 5 minutes.
Mr. Waxman. Mr. Chairman, the benefits from health reform
are already being delivered. Millions of seniors are saving
billions of dollars on Medicare prescription drugs. Hundreds of
millions of Americans have new insurance protections and
millions of children with preexisting conditions have access to
coverage for the first time, and the law will reduce the
deficit by hundreds of billions of dollars. Yesterday, the
House Republicans released a new budget plan that turns its
back on all this progress.
Mr. Larsen, what impact would the Ryan budget have on the
reforms your office has put into place?
Mr. Larsen. Congressman Waxman, I will have to defer on
that question because I actually haven't had----
Mr. Waxman. Well, the Republican budget would repeal the
important Affordable Care Act provisions that expand health
care----
Mr. Dingell. If the gentleman would yield, could you
summarize for the record?
Mr. Waxman. The Republican budget would repeal the
important Affordable Care Act provisions that expand health
care coverage and prevent the worst abuses performed by the
insurance industry.
If the Ryan budget became law, would insurance companies
again be able to impose lifetime coverage limits on the 105
million more Americans who now benefit from this protection?
Mr. Larsen. If it were repealed, absolutely.
Mr. Waxman. If the Ryan budget became law, would the 2.5
million young adults who now have health insurance coverage
continue to be covered under their parents' plan?
Mr. Larsen. No.
Mr. Waxman. If the Ryan budget became law, would insurers
again be able to deny coverage to the up to 27,000 children in
my district and the 17 million nationwide with preexisting
conditions?
Mr. Larsen. Yes.
Mr. Waxman. If the Ryan budget became law, would insurers
again be able to spend, 30, 40, even 50 percent of enrollees'
premiums on profits and administrative costs?
Mr. Larsen. Yes.
Mr. Waxman. And if the Ryan budget became law, what impact
would it have on the number of Americans without insurance
coverage?
Mr. Larsen. Well, they would have the situation that they
have today which is a very challenging, broken market where it
is difficult for individuals----
Mr. Waxman. Thirty million Americans would be covered under
the Affordable Care Act who are not now covered, and I assume
that they will go without coverage if the act is repealed?
Mr. Larsen. As many are today.
Mr. Waxman. There is no Republican alternative to the
Affordable Care Act benefits. They offer only repeal. But the
Republican budget goes beyond repeal. It decimates all the
critical consumer protections in the Affordable Care Act
without offering any solutions to the broken insurance market.
It puts Americans back at the mercy of the health insurance
companies, and it leads to 33 million more uninsured Americans.
But that is not all it does. The Ryan budget eliminates
Medicare as we know it and destroys the Medicare safety net,
all in the name of tax breaks for millionaires and
billionaires. The cuts are staggering and deeply disturbing.
The Ryan budget cuts $810 billion from Medicaid by turning
it into a block grant and then another $931 billion from the
program by repealing the Affordable Care Act. That is a $1.7
trillion cut over 10 years from the program that protects poor
children born with disabilities and pays for the care of our
sickest and most vulnerable seniors.
The Republican budget could not be more wrong for America.
It would roll back the clock on the dramatic benefits we are
already seeing from the Affordable Care Act. It would decimate
Medicaid, cutting three-quarters of our support, three-quarters
of our support for the sickest and most vulnerable people in
the Nation. It would cut hundreds of billions of dollars from
the Medicare program on top of the cuts they complain about on
the other side of the aisle in Medicare expenditures in the
Affordable Care Act. They keep that in place. And they would
end the Medicare program's guaranteed benefit for seniors.
Mr. Chairman, this is not the right path for this Nation. I
yield back my time.
Mr. Stearns. I thank the gentleman. I assume that was a
question you had.
We recognize on this side, Mrs. Blackburn is not here, Mr.
Scalise is recognized for 5 minutes.
Mr. Scalise. Thank you, Mr. Chairman, and Mr. Larsen, I
appreciate you coming back to our committee as we approach the
2-year anniversary. I know a lot of the questions that many of
us have deal with the effects that we are already hearing from
our constituents about, and, you know, unfortunately, the
constituents that I talk to and especially our small business
owners who I constantly meet with back home, the biggest
complaint that they have is that under the rules they have
already seen, let alone the rules that haven't been written,
they don't see how they are going to be able to comply with the
law and in fact many of them are facing the not desirable
option but the almost necessity that they will no longer be
able to provide health care for their employees. We have seen
reports that millions of Americans will lose the health care
that they have today that they like. You know, with that, one
of the big promises that President Obama made was if you like
what you have, you can keep it. Do you feel--you are under
oath. Do you feel that that promise has been kept?
Mr. Larsen. Yes, I do, absolutely, and I think that----
Mr. Scalise. Well, are you denying then that there are
already, millions of people that are facing losing their health
care because of this law that they like?
Mr. Larsen. Well, it is not because of this law, and I
think if you look back----
Mr. Scalise. That might be your opinion.
Mr. Larsen [continuing]. In the last 10 or 20 years, and I
have been doing this for a long time starting with when I was
insurance commissioner, even back in the '90s, the rising
insurance rates for small businesses was a huge issue, and that
continues today, and it really illustrates why we need the
Affordable Care Act.
Mr. Scalise. Well, but if you go back to the beginning of
the debate on the health care law, you know, 3 or so years ago,
you know, the biggest problems back then were cost and other
problems like discrimination against people based on
preexisting conditions. Now, we put forth legislation that
would have actually lowered the cost of health care. That was
rejected by the President. We put forward legislation that
would prevent discrimination based on preexisting conditions.
The President's health care law has actually been scored to
have increased the cost of health care. It actually made it
worse. The cost is worse now. And our small businesses--and
maybe you talk to different people than I do, and I guess that
gets to this question of the waivers. You know, so many small
businesses I talk to would love to have a waiver from the law,
and even components of the law, and I know, you know, we have
talked about this waiver issue before, you know, but it seems
like there was a lot of crony capitalism that was played in
issuing of waivers to people that in many cases helped support
the law, came to Washington and said pass this law, it is
important to pass, and then they went to the White House and
got a special waiver from the law. How many waivers have been
given, you know, whether from----
Mr. Larsen. Well, first, I do have to say that is not how
the process worked. We ran a very open, transparent fair
process that didn't favor anybody based on what their political
background is.
Mr. Scalise. Well, why is it that small businesses I talk
to----
Mr. Larsen. The GAO----
Mr. Scalise [continuing]. Not one of them heard about the
waiver program, not one of them, and I tell them about it. They
said, ``Hey, I would love to get it.'' I mean, we have a list
here. What is the current number? I have got over 1,400
companies that got a waiver from Obamacare----
Mr. Larsen. Well, the waiver----
Mr. Scalise [continuing]. Yet small businesses I talk to
never even heard about it, and once they heard about it, you
all ended the program.
Mr. Larsen. Well, the waiver was for a very targeted group
of employers that offered these mini-med policies that many
people don't like. They don't provide great coverage. Employees
that are in the mini-med policies----
Mr. Larsen. According to you, but somebody who has no
coverage versus that coverage, and they like that coverage, you
are going to sit here and testify----
Mr. Larsen. Well, that is exactly why we had a waiver
program.
Mr. Scalise [continuing]. That is not good coverage. What
if they think it is good coverage?
Mr. Larsen. We came to the same conclusion.
Mr. Scalise. Shouldn't that be their choice?
Mr. Larsen. We came to the same conclusion, which was in
the law, the ACA specifically permitted and authorized and
contemplated this where you would have these groups of
policies. They are a small percentage but nonetheless they are
something for people that have them, so the law permitted the
Secretary to set up a waiver program. We did that for exactly
the reason that you suggest so that people that have that
coverage, even though it isn't great coverage, it is something
and they can continue----
Mr. Scalise. But did you end the program? I mean, this
waiver program, you know, a new company that now knows about
it, because a lot of companies have heard about it because we
have been telling them. You know, you go look, a lot of these
labor unions that came here and said pass this law, we need
this law, they went to the White House and got a waiver, and we
got the list.
Mr. Larsen. Well, the White House didn't make the waiver
decisions, and only 2 percent of----
Mr. Scalise. Well, again, I call it crony capitalism
because it was a lot of the people who supported the law found
out about it. Now, you say it was advertised.
Mr. Larsen. It was.
Mr. Scalise. Most small businesses never heard about it, so
you didn't do a good enough job of advertising or maybe you
only advertised to people who supported the law, but it is
curious that most people that I talk to that don't like this
law that are trying to figure out how to comply with it but
can't, they didn't even know about this waiver program that you
saw was so well advertised yet so many of the groups that came
here and said pass the law conveniently found out about the
waiver program and got it. They got a waiver from a program
that they said we needed. They got the waiver. And the
companies who didn't want it can't get the waiver and now you
have ended the waiver program. Can a company that didn't know
about the waiver program that now knows about it, can they
apply for a waiver?
Mr. Larsen. No, but I can say that small businesses were a
very large percentage of the people that----
Mr. Scalise. So the companies, and I have seen a long list
of Fortune 500 companies that got the waivers too, but, you
know, AARP, groups that supported this law, got the waiver but
these small businesses I talk to, they never knew it existed.
They would love to get the waiver now and you are telling me
under oath that they can't get it today.
Mr. Larsen. That is right.
Mr. Scalise. So the other companies that got the waiver,
are you going to take the waiver away from them or are you
going to let them keep it?
Mr. Larsen. No, they got notice, they applied, they met the
criteria.
Mr. Scalise. So they get to keep it. The guys that knew
about it, friends that helped pass the law----
Ms. DeGette. Mr. Chairman.
Mr. Scalise [continuing]. Get to keep the waiver from it.
They don't have to comply with it, and the folks that----
Mr. Larsen. Well, as I said, the GAO looked at the way we
ran the process and found----
Ms. DeGette. Excuse me, Mr. Chairman.
Mr. Scalise [continuing]. Crony capitalism. I yield back
the balance of my time.
Mr. Stearns. The gentleman yields back the balance of his
time.
Ms. DeGette. I would just make an observation, which is, if
members would actually like the witness to answer questions, I
would suggest they would stop badgering----
Mr. Scalise. It is not badgering.
Ms. DeGette [continuing]. And give them the time to answer
the question.
Mr. Scalise. We recognize the gentleman from Michigan. Mr.
Dingell, you are recognized for 5 minutes. Take the floor. You
are on.
Mr. Dingell. Coming to the waiver question, I would like a
yes or no. At the time of this hearing, waivers have been
granted to over 90 percent of the applicants. The average wait
time for a decision is 13 days, and union health plans are less
likely to receive waivers than non-union plans were. Isn't that
true?
Mr. Larsen. That is true.
Mr. Dingell. Now, some other yes or no questions. As you
know, the Affordable Care Act provides $40 billion in tax
credits for small businesses so that they may offer health
insurance to their workers. I believe that it is true that in
2011, 360,000 small employers took advantage of the small
business tax credit, providing insurance for better than 2
million employees. Yes or no?
Mr. Larsen. I think that is right, yes.
Mr. Dingell. It is true that since the implementation of
the Affordable Care Act, that Medicare Part B deductible has
gone down for the first time in Medicare history? Yes or no.
Mr. Larsen. Yes.
Mr. Dingell. Is it true that over 2 million additional
young adults are now insured because ACA allows them to stay on
their parents' plans until they are 26? Yes or no.
Mr. Larsen. Yes.
Mr. Dingell. Prior to ACA, many people faced lifetime
limits on health insurance. These limits had potential to
financially cripple people if they faced a chronic disease or
severe illness such as cancer. These limits would also force
them to make decisions to compromise the quality of health
care. Isn't it true that since the implementation of ACA in
2010, 105 million Americans no longer face lifetime limits on
their insurance?
Mr. Larsen. Yes.
Mr. Dingell. Is it true that once the Affordable Care Act
is fully implemented in 2014, 20 million more Americans who
still lack coverage will become insured? Yes or no.
Mr. Larsen. Yes.
Mr. Dingell. Is it true that CCIIO's implementation of the
Transitional Preexisting Condition Insurance Plan led to health
coverage for tens of thousands of previously uninsured
Americans?
Mr. Larsen. Yes.
Mr. Dingell. Is it true that CCIIO is moving now towards
full implementation of the Affordable Care Act in 2014 by
working with States to make sure that the health insurance
exchanges required by ACA are designed properly to meet the
needs of each of the individual States?
Mr. Larsen. Yes, sir.
Mr. Dingell. Finally, as we move toward the future, I am
very much concerned about the Americans who will lose coverage
if my colleagues on the other side are successful in repealing
this bill. Am I correct in saying that 33 million Americans
will lose insurance if my colleagues on the other side of the
aisle repeal ACA?
Mr. Larsen. Yes.
Mr. Dingell. Now, wouldn't such an increase in the number
of our uninsured in this country increase costs to the health
care system?
Mr. Larsen. Yes.
Mr. Dingell. Now, isn't it a fact that the ACA has in fact
reduced the deficit?
Mr. Larsen. It is projected to reduce the deficit.
Mr. Dingell. All right. Now, isn't it a fact that in 2008,
people without insurance did not pay for 63 percent of their
health care cost?
Mr. Larsen. I think that is right.
Mr. Dingell. All right. Now, when President Obama was
elected, he quickly recognized the inescapable truth: an
individual mandate was essential to make the plan work. Without
that, the larger pool of premium payers, there is no feasible
way to require insurance companies to cover all applicants and
charge the same amount regardless of the health status of the
beneficiaries?
Mr. Larsen. Individual responsibility is an important part
of the matrix.
Mr. Dingell. Now, I believe this is an overwhelming truth:
Those with insurance now are supporting those who do not have
insurance, and they are winding up paying much of the bill for
those who do not have insurance and that those people are
running up health costs of about $116 billion annually.
Mr. Larsen. That is right.
Mr. Dingell. And so this means that the families and
persons with insurance are now paying more than $1,000 a year
for those who do not have health insurance?
Mr. Larsen. That is right.
Mr. Dingell. Now, the function of insurance is to spread
the risk. Previous to the time ACA was passed, we found the
insurance companies had to avoid the risk and so now we have a
broad pool which covers everybody. Isn't that right?
Mr. Larsen. That is right.
Mr. Dingell. And that makes it possible for insurance
companies to do the things that are mandated in the ACA. Isn't
that right?
Mr. Larsen. Right.
Mr. Dingell. And without that, we are going to go back to
the dismal days when we were not able to take care of our
people, see to it that young people stayed on their parents'
policies and we won't be able to see to it that preexisting
conditions are dealt with without cost and charge to people?
Mr. Larsen. That is right.
Mr. Dingell. Thank you, Mr. Chairman.
Mr. Stearns. I thank the gentleman.
Mr. Griffith is recognized for 5 minutes.
Mr. Griffith. Thank you, Mr. Chairman.
Our staff is going to hand you some excerpts from the
February 17, 2012, Early Retirement Reinsurance Program update.
This is a list of those who received money from the program.
Now, I will give you a second to take a look at that as well.
But before I get to that, as I understand your testimony, the
Early Retirement Reinsurance Program has spent $4.73 billion of
the $5 billion allocated. Is that correct?
Mr. Larsen. That is correct.
Mr. Griffith. Now, that number appeared in that February
17th report and in your testimony today but surely there has
been some of the small amount left spent in that last month. Is
that not true?
Mr. Larsen. Well, there will be, because as we go through
and make sure that all the claims have been submitted
appropriately, it may turn out that we have the money----
Mr. Griffith. But at this point it is certain that $4.73
billion of the $5 billion has already been spent?
Mr. Larsen. We are effectively at the end of the program.
There will be some continued claims.
Mr. Griffith. But wasn't the program supposed to go through
2014?
Mr. Larsen. I think it was originally intended to go
through 2014 but many sponsors took advantage of the program,
which I think reflects the outstanding need for the program.
Mr. Griffith. Can you take a quick look at that material
that was handed to you?
Mr. Larsen. Is there anything in particular you want to me
to--the highlighted ones?
Mr. Griffith. Well, I am getting ready to ask you about all
those companies that are highlighted.
Mr. Larsen. OK.
Mr. Griffith. Could you provide me a yes or no answer to
the following, and I am going to ask you, of the companies I am
going to name off, if they received money from the Early
Retiree Reinsurance Program, and I think the ones that you have
got that I am going to ask you about are highlighted so you can
see them easily. ConocoPhillips?
Mr. Larsen. It looks like they did, yes.
Mr. Griffith. General Electric?
Mr. Larsen. They are listed here as well.
Mr. Griffith. General Motors?
Mr. Larsen. They are listed on the sheet that you have
given me.
Mr. Griffith. Bank of America?
Mr. Larsen. They are here.
Mr. Griffith. Ford Motor Company?
Mr. Larsen. I see Ford Motor Company.
Mr. Griffith. Hewlett Packard Company?
Mr. Larsen. That is here.
Mr. Griffith. AT&T?
Mr. Larsen. Yes.
Mr. Griffith. J.P. Morgan?
Mr. Larsen. Yes.
Mr. Griffith. Citigroup?
Mr. Larsen. Yes.
Mr. Griffith. Verizon?
Mr. Larsen. Yes.
Mr. Griffith. AIG?
Mr. Larsen. Yes.
Mr. Griffith. IBM?
Mr. Larsen. Yes.
Mr. Griffith. Now, what we just went over is a list of
companies that are not just in the Fortune 500 but that receive
this taxpayer money but are companies that are in the top 20.
Twelve of the top 20 of the Fortune 500 received money from
this program. And I think you told us in a previous hearing
that that is because the underlying law didn't make a
distinction for those that needed the money, it was just out
there if you met the criteria.
Mr. Larsen. The law was based on the fact that
historically, the number of companies that are able to provide
retiree coverage has dropped off, I think by half in the last
10 years. So it was not needs-based. And I think as you
probably saw, many of the biggest recipients of the funds were
in fact State retiree programs, State teachers, State
employees.
Mr. Griffith. One of my concerns, though, is that if the
intent of the bill was to give this early retirement assistance
to companies so that they could fund their programs, I think we
have the same problem Mr. Scalise pointed out. A lot of the big
companies got in, the rich folks got it because they had people
to monitor all this stuff and keep track of it. I am not sure
that the small companies that probably needed the assistance
got it. Wouldn't you say that is a fair assessment?
Mr. Larsen. I don't think so. We have had, I think, over
2,800 sponsors of a wide range of size and background come to
get money from this program. Remember, it has to be companies
that are already providing benefits to their retirees, so that
is, you know, typically going to be some larger companies,
although, as I said, it is frequently States and their State
employee retirement systems that got the money as well as some
of the companies you mentioned here.
Mr. Griffith. Now, you said in testimony--and I am
switching gears on you. You said in testimony earlier that this
would not necessarily be enforced, the act would not be
enforced by your agency but by the IRS because it was----
Mr. Larsen. Getting back to the individual responsibility
provision?
Mr. Griffith. Yes. And that would be enforced by the IRS.
Is that the 16,000 new IRS agents we have heard so much about?
Mr. Larsen. I don't believe so. I don't think that it is
how it enforced. It will be enforced electronically through the
filing and through the verification of whether someone has
purchased insurance. And that doesn't occur until 2015 because
that is when the responsibility provisions actually kick in to
confirm that someone had coverage in 2014.
Mr. Griffith. All right. My time is just about up but I
want to ask you about CBO said it going to cost more than the
trillion that we were originally told it was going to cost when
this passed before I got here, and it looks like, is it fair to
say that based on that information over the 10 years that this
may actually cost $2 trillion or more?
Mr. Larsen. Actually, the CBO report found that there would
be about 50 billion fewer costs associated with implementing
this because of the number of changes that they highlighted, so
the numbers in the CBO report that just came out said that over
the 10-year period from 2012 to 2021 would be $49 billion or
$50 billion less than what they had projected a year ago in
March of 2011.
Mr. Griffith. But it is going to be more for the first 10
years. Isn't that correct? Isn't that what CBO said?
Mr. Larsen. No.
Mr. Griffith. All right. I yield back, Mr. Chairman.
Mr. Stearns. The gentlelady, Ms. Christensen, is recognized
for 5 minutes.
Mrs. Christensen. Thank you, Mr. Chairman. And Mr.
Chairman, before I ask my question, I just wanted to make some
comments about the Early Retiree Reinsurance Program because
the attacks on it are really unfair and unjustified.
Prior to the passage of the Affordable Care Act, employers
were dropping coverage for their retirees at an alarming rate
or finding themselves saddled with huge and rapidly increasing
health care costs. The program was an effort to help employers
bridge the transition to 2014 when more affordable coverage
options will be available, and in the face of overwhelming
need, the ERRP program had great results. The program has
helped more than 2,800 employee health plans sponsors across
the country cover the cost of medical care for early retirees.
These plans cover more than 19 million beneficiaries. ERRP
funds support employers that continue to provide private health
coverage and help early retirees keep the private coverage they
already have. This important transitional program worked to
support employers making the right choice for their retirees,
and I think it is an important way to support that choice.
Mr. Larsen, let me ask you some questions about the
Preexisting Condition Insurance Plan. You testified before the
subcommittee on April 1st to discuss the Preexisting Condition
Insurance Plans, the PCIP, or high-risk pools established under
the Affordable Care Act. In that hearing, we heard about
thousands of Americans with preexisting conditions who finally
had access to coverage, and we established that maybe somewhere
around 50,000 Americans have enrolled in the PCIP. And I
understand that many of these individuals have serious health
conditions including 1,900 individuals with cancer, nearly
4,700 with heart disease. What type of coverage options did
these individual with preexisting conditions have before we
passed the Affordable Care Act?
Mr. Larsen. Well, the fact is that they really wouldn't
have any other coverage options. I think many of these people
would be diagnosed with cancer and end up in the emergency room
or not get care at all for their condition.
Mrs. Christensen. And how will those options improve in
2014?
Mr. Larsen. Well, when the insurance reforms kick in, at
that point we will have guaranteed issue, guaranteed
renewability and so we will have a much larger insurance pool
and people that would get locked out of the system today by the
insurance companies won't be locked out in the future, but we
will also have many, many more people in the insurance pool to
offset those costs.
Mrs. Christensen. Thank you. The only complaint I have
about that program is that it didn't extend to the territories,
Mr. Larsen. Still working on that.
But, you know, Republicans should love the PCIP program. It
has been the centerpiece of their past reform proposals, but
instead they attack it because they say it is not popular
enough unless of course they are attacking it for the opposite
reason, that it is too popular and may spend too much money. So
Mr. Larsen, what happens if the program becomes so popular that
the expenditures might exceed $5 billion?
Mr. Larsen. Well, we have to manage within the amount that
Congress has appropriated for this so we continue to monitor
the progress that States are making in their enrollment and
their costs, and if we have to make adjustments in the future,
we will do so.
Mrs. Christensen. Are there procedures in place to make
sure that they don't exceed the program costs?
Mr. Larsen. We have to make sure that we don't exceed
program costs.
Mrs. Christensen. And what happens if you do not spend the
entire $5 billion?
Mr. Larsen. That is a good--I don't know the exact answer
to that but I will say that if we exceed our costs, then there
are a number of different options that we can pursue to make
sure that we stay within the $5 billion.
Mrs. Christensen. OK. So we have a win-win scenario here.
In one case, the program becomes extremely popular, many people
receive coverage and you still have processes in place to
protect taxpayers and to make sure expenditures do not exceed
authorized amounts. The other scenario involves low enrollment.
In that case, I think what happens is you will return the extra
money to the Treasury, which would help reduce the national
debt. So I appreciate your walking us how the money is being
spent.
I know that there are many unfair attacks against the
health reform law, the Patient Protection and Affordable Care
Act, but I think the record is clear that you are administering
the PCIP program and the law as a whole in a very effective and
efficient fashion, and it is a humongous task, so we really
commend CCIIO and the entire department for the way that you
are doing it. And I do have some specific territory-related
questions that I will submit for the record.
Mr. Larsen. OK. We will look forward to answering those.
Mrs. Christensen. Thank you, Mr. Chairman.
Mr. Terry [presiding]. Thank you. Now the Chair recognizes
the gentlelady from Tennessee for her 5 minutes.
Mrs. Blackburn. Thank you, Mr. Chairman, and Mr. Larsen, we
are pleased that you are back with us today.
I want to talk about the nonprofits. You said that you had
awarded more than $638 million in loans already from the
consumer operated and oriented plan, but OMB has estimated that
under the co-op program, that taxpayers could lose $370 million
from unpaid loans to the nonprofit insurers. Do you think that
is accurate? Are we missing something here? Are they missing
something?
Mr. Larsen. Well, I guess for purposes of the loan program,
OMB has to make some type of projection as they would for any
loan program about the rate at which recipients would not repay
their loans. I can tell you that in our review process for the
applicants that we got, we hired an outside consultant with
extensive financial expertise to look at the applications that
we got. So OMB has to make some assumptions, I guess, for
purposes of releasing the money. But we are running a very
vigorous process and we----
Mrs. Blackburn. So basically you are saying this is a bad
investment for the taxpayer?
Mr. Larsen. Not at all, no.
Mrs. Blackburn. You are not saying that?
Mr. Larsen. I am not saying that.
Mrs. Blackburn. You are saying the taxpayer should expect
to lose money because $370 million----
Mr. Larsen. No, I am not. I am saying the opposite.
Mrs. Blackburn [continuing]. Is a health care Solyndra.
Well, you just told me that you thought OMB has to expect a
certain amount of this, and, you know, if they are saying as
much as 50 percent of the loans issued under the program may
not be repaid, I mean, do you think that is accurate?
Mr. Larsen. Well, we don't think there is going to be a
default rate on these loans. I think they have to make
projections for certain purposes, but again, I can tell you
from our perspective, we are doing everything we can to make
sure that we only provide the loans to----
Mrs. Blackburn. Then let me approach it this way with you
because reading this is of concern to me, and after what this
committee has been through looking at the DOE loan program and
the bankruptcies that are there, let us kind of agree to get
out ahead of this, and what I would love for you to do is to
submit the analysis and the documents related to the program
and then your approval of or rejection of the loans. I think as
we oversee this, that that would be very helpful to do that.
Would you submit that to us for the record?
Mr. Larsen. Yes, assuming that we can provide that
application material, but I would be happy to kind of explain
for you exactly what process we ran to make sure that we got
the best applicants.
Mrs. Blackburn. That would be great. I have got just a
little bit of time left, and I do have another question for
you. Last time you were with us and we discussed the waivers, I
asked if you had a plan B for when the waivers ran out, and you
did not have a plan B, and now we are looking at is, what is
it, 1,800 waivers that have been given, as you look at your
cost in the coming years and you look at 2014 when these
waivers--have you come up with a plan B for how you are going
to integrate these programs and what the expectations are going
to be for the impact on the system?
Mr. Larsen. Well, essentially the plan B or the transition
is that in 2014, when the requirements of the annual limits
provisions would apply, these mini-med policies would no longer
be offered because employees would have access to full,
comprehensive coverage. Many of them would be able to access
the tax credits that are available because it is often lower
income workers that are in these mini-med plans and those are
exactly the kinds of people----
Mrs. Blackburn. OK. Let me ask you this----
Mr. Larsen [continuing]. Who would have access to the tax
credit in 2014.
Mrs. Blackburn. OK. All right. As you have gone through the
waiver program, how many people were denied waivers? How many
companies were denied waivers?
Mr. Larsen. It was a very--we approved over 90 percent. I
think it was only, 90 or 100 that were denied.
Mrs. Blackburn. OK. And the waiver program is closed. You
can no longer get a waiver?
Mr. Larsen. That is right.
Mrs. Blackburn. All right. The ones that were denied, what
was the reason for the denial to them?
Mr. Larsen. Well, to be approved for the waiver program,
you had to show that applying the high annual limits, at the
time, $750,000 annual limits, to your policy would result in a
substantial increase in premiums or a decrease in access to
coverage. So for policies that had coverage of $25,000 or
$5,000, which are these mini-med policies, typically applying
that standard, it would raise premiums. Some people might not
be able to afford them. So that is how you were approved for a
waiver. If you weren't approved for a waiver, it meant that you
didn't meet the regulatory criteria. In other words, it wasn't
going to cause a large increase in premiums to comply with the
annual limits provisions that were in place at the time.
Mrs. Blackburn. All right. Yield back.
Mr. Terry. I thank the gentlelady from Tennessee.
Now we recognize the gentleman from Texas, Mr. Green.
Mr. Green. Thank you, Mr. Chairman, and again, welcome, Mr.
Larsen.
I know there are some concerns, and our committee actually
spent a lot of time on the Affordable Care Act when we were
marking it up both in our subcommittee and the full committee 2
years ago, and I have a district that has such a huge impact
the Affordable Care Act will do. Before the passage, the 29th
district that I represent had the largest percentage of
uninsured in any district in our country, a very urban area in
Houston, again, not a wealthy area. We still have a lot of work
to do but things are getting better. As many as 53,000 children
in our district can't lose the security offered by health
insurance due to preexisting conditions. Thirty-four hundred
seniors have saved an average of $540 on prescription drugs and
9,000 young adults have health insurance they couldn't have
before the Affordable Care Act. Additionally, about 60,000 of
my constituents, most of them minority and historically
underserved communities, are receiving an array of preventive
health services without copays, coinsurance or premiums, and
this is a result of the Affordable Care Act and its tremendous
help toward reducing health care disparities in our district
particularly but in our country.
I am proud to represent part of Houston. We have a great
Texas Medical Center there, I think one of the largest in the
country. It is just hard for my folks to get there except
through our public hospital system. Individuals in underserved
communities, minorities, rural areas and communities with high
poverty rates need the Affordable Care Act, and I would like to
ask you some questions about how this act is serving the
underserved areas.
First, what are some of the biggest barriers to access to
care for these underserved communities, again, very urban like
mine or even rural areas?
Mr. Larsen. One of the main ones is cost for lower-income
individuals, the cost of coverage and access and coverage, and
the Affordable Care Act of course addresses that through the
tax subsidies that are available for people.
Mr. Green. The health care law provides billions of dollars
in public health grants for community health center expansion.
I know we had received some of those grants in our district and
we need more because Houston in Harris county is the fourth
largest city in the country and yet we are behind the curve on
community-based health centers, and I know a few years ago when
we authorized it, we had a provision in there that if you are a
very urban area and all being equal, if you had a huge
underserved population, that your grant application was given a
higher priority. I know that is helpful, but will the
Affordable Care Act address some of those barriers, expanding
and health care providers and community health centers?
Mr. Larsen. It will, and there are provisions in the
exchange rule that requires network adequacy to make sure that
health plans have a full network of providers including
essential community providers, which are an important part of
the support for the individuals you are referring to.
Mr. Green. Can you just verbalize some of the preventative
health care benefits that we are seeing now on the second year
anniversary?
Mr. Larsen. Well, there is a whole range, particularly for
wellness visits for women, for children, cancer screenings,
colonoscopy screenings, you know, the things that have been
approved by IOM that have been shown to be effective in terms
of prevention.
Mr. Green. OK. I realize this is not your area but the
health care reform law also contained funding and new programs
to help expand the health care workforce, especially primary
care workforce. Can you give us an update on how that will
help, not only minorities and underserved but individuals in
those underserved areas?
Mr. Larsen. I know that there is substantial funding
available in HHS for a number of workforce initiatives, which
is extremely important and it is significant, the details of
which I don't have in front of me but I know that it is a key
part of this law.
Mr. Green. Finally, the Affordable Care Act coverage
provisions, expansion of Medicaid, new health care credits for
small businesses and the State insurance exchanges that will
make health insurance less expensive and easier for
individuals. I know, for example, in Texas, and a lot of
States, I think 26 States, are waiting until the Supreme Court
decides whether they are going to participate, even though my
home State received planning money for it, they have decided to
wait. But even if they are waiting, HHS will provide an
exchange system for those States that do not participate.
Mr. Larsen. We will. One way or another, there will be an
exchange for the health care consumers in each State including
Texas, although many States, even States that are challenging
the law, actually have applied for and received extensive
grants and are moving forward to be ready in 2014.
Mr. Green. And I know in Texas, again, the political
decision has been made, but hopefully the Supreme Court will
come back with an argument and realize that health care is just
like Social Security, like a lot of other things, Farm Bill,
things like that, that Congress has the right to make that
mandatory.
So Mr. Chairman, thank you for your time.
Mr. Terry. Thank you, Mr. Green.
The Chair recognizes the gentleman from Pennsylvania, Mr.
Murphy, for 5 minutes.
Mr. Murphy. Thank you, Mr. Chairman.
Mr. Larsen, do we have any numbers yet of what we estimate
an individual will pay for their premium and copay under new
insurance plans under the Affordable Care Act?
Mr. Larsen. I don't have an estimate, and the estimate
really varies depending on the State and how old they are and
whether they are buying in the individual and small group
market.
Mr. Murphy. Will it be $1,000 a year, do you think?
Mr. Larsen. I don't know.
Mr. Murphy. Well, current policies now average what
nationwide?
Mr. Larsen. You know, I think the typical estimate is for,
you know, $12,000 for an individual. I think that is in the
individual market.
Mr. Murphy. I understand. Now, with regard to this plan,
will it be open enrollment year round, a person can sign up for
an insurance plan?
Mr. Larsen. Now, there will be open enrollment periods, you
know. In the reg that we put out, there is an initial open
enrollment period that is a little longer and then each year
there will be open enrollment windows.
Mr. Murphy. And do we have estimates of how much we think
that coverage under the Affordable Care Act will increase or
decrease? I know as part of the mandate, everybody is supposed
to get a policy. There is a belief that somehow that will have
an impact. But do we know exactly how much it may reduce
individual costs, keep it the same, increase, slow growth?
Mr. Larsen. You know, there are a number of different
estimates. I know CBO did one that said for the small group
market, it could be flat to advantageous because of the
economies of scale you get coming in. It somewhat depends in a
particular State whether they have a full range of benefits
today or a modest range, and then you get of course the
efficiencies in the individual market of having everyone in one
single insurance pool in a State.
Mr. Murphy. But as far as the States go, there still is a
required amount of coverage that each plan has to have but some
States----
Mr. Larsen. That is the essential health benefits.
Mr. Murphy. So some States have very few mandates, some
States have a lot. This will have a set amount that every plan
has to have?
Mr. Larsen. Well, one of the things we did in the bulletin
that we issued was to allow States to select their own
benchmark for essential health benefits so you are exactly
right. In some States they have more mandates than other
States, and that State could select that as their benchmark,
and the State that has a small, a thinner mandate, benefit
package, assuming that it kind of met the basic criteria, could
choose that as their benchmark.
Mr. Murphy. So we are still not clear on this. Now, we do
know that if an employer drops coverage, they would pay a
$2,000 fine?
Mr. Larsen. There is a penalty, yes, for not offering
coverage.
Mr. Murphy. And I have seen estimates all over the place as
have you. I have seen some as high as 85 million people may not
be covered. Some say it may be 10 million. It is all over the
board. Some say 20 million won't be covered by employers. Does
that sound right, estimates all over the place?
Mr. Larsen. Well, I would say this. There are many
different estimates but I think most of the estimates like CBO
suggest, there could be a small number of people that have it
today that might not have it then, but then there are many
other people that don't get it offered today that will have it
offered in the future. So when you net those things out----
Mr. Murphy. Big question mark there. I know that is
estimated about $40 billion a year is lost for uncompensated
care that hospitals say they need that money, or is it more
than that? Do you know?
Mr. Larsen. Right. I mean, that that was one of the
premises of the act that we all pay for that uncompensated
care.
Mr. Murphy. And what they are looking at, so an employer
may drop coverage and pay a $2,000 fine. As I understand it, an
individual, if they choose not to have coverage, they will pay,
I think, a fine of $695 or 2-1/2 percent of their income,
whatever is higher. Am I correct?
Mr. Larsen. Right.
Mr. Murphy. Now, given what people are facing here now,
there are multiple open enrollment periods during the year, you
have people also facing increased energy costs with the
policies where many coal-fired power plants are going to drop,
we are going to lose about 20 percent of our power generation
so people's electric bills are estimated to go up 30 to 40
percent, with gasoline costs going up now where an individual
this year is paying about $2,500 or $5,000 more a year,
families are going to continue to make individual choices. So
although there is a mandate to require people to purchase
health care, you still can't make them purchase health care. If
they decide to not purchase it, they can still hold off and not
purchase it?
Mr. Larsen. Well, they pay the financial penalty.
Mr. Murphy. But if they say look, I will pay $695 versus
several thousand dollars, they may make that decision?
Mr. Larsen. Some could, although for many lower-income
individuals, up to 400 percent of poverty, there are the tax
credits available that significantly offset the cost.
Mr. Murphy. A tax credit for somebody who is on poverty and
doesn't pay taxes?
Mr. Larsen. Well, many of them do. I mean, obviously people
that are on Medicaid may not but the credits are available for
people up to 400 percent of poverty.
Mr. Murphy. I mean, the issue that still baffles me is the
preventative care issues. I mean, there is still--we know that
there is decreased cost for people who don't see a doctor.
There is decreased cost for people who eat healthy foods,
decreased cost for people who have optimal weight. I think
obesity costs our health care system $147 billion a year.
Decreased costs for people who exercise regularly, follow their
prescriptions carefully. I think misusing prescriptions is a
$250 billion drain a year. People who are chronically ill, if
you monitor them, work with them on health, there can be a 40
percent cost savings. If this is the where all the costs are,
will we be mandating those things in order to really save?
Because those things add up to be several hundred billion
dollars a year. Will we be mandating these behavior changes
too?
Mr. Larsen. Well, not behavior changes certainly but there
are a lot of incentives in the Affordable Care Act for health
and wellness programs for insurance companies who will get a
credit on their medical loss ratio calculation if they provide
health and wellness programs.
Mr. Murphy. So you are believing that the financial
incentives to help people drive to behavior changes on this
versus mandating them?
Mr. Larsen. I think in this case, yes, for the health and
wellness.
Mr. Murphy. Thank you.
Mr. Stearns. The gentleman's time has expired. I think we
are ready, I would say to my ranking member, we will go a
second round to Mr. Larsen, and I will start with this, and I
tell members who would like to stay a second round, stick
around.
Let me just start by sort of asking you, Mr. Larsen, a sort
of general question. We have heard from Mr. Waxman and others
how the cost of health care is going to come down. Do you
actually believe that the cost of health care in America will
come down? Is that what you are saying to us today, that
Obamacare will cause the cost of health care to come down?
Mr. Larsen. Well, many aspects of the ACA will lower health
care costs, first by getting more people----
Mr. Stearns. I understand, but has it lowered premiums so
far? I mean, this bill has been enacted 2 years. Have you seen
the premiums come down, in your opinion?
Mr. Larsen. The provisions that help address the----
Mr. Stearns. I mean yes or no.
Mr. Larsen [continuing]. Insurance premiums don't take
effect until 2014.
Mr. Stearns. So you say it is too early to see the impact
of Obamacare?
Mr. Larsen. Well, with respect to premiums. I mean, we have
expanded coverage, we have provided people with better
coverage. The provisions that help address some of the cost
efficiencies with the exchanges don't----
Mr. Stearns. But the fact is, health insurance premiums
have shot up 9 percent, three times the rate of inflation. This
is according to the Kaiser Family Foundation. And I think you
would agree that the Kaiser Family Foundation said the costs
have gone up 9 percent, 3 percent above inflation. Wouldn't
that indicate that a lot of the things that you have talked
about that have been implemented have really not brought costs
down?
Mr. Larsen. Well, first of all, that rate of increase has
been consistent over the last 10 years, which is why we need--
--
Mr. Stearns. So the fact is, it has not changed with
Obamacare.
Mr. Larsen. Well, in fact, I think the CBO in their recent
report found that the rate of health care spending and premiums
had actually moderated in the last year when they looked at the
estimates for the costs----
Mr. Stearns. Don't you think that is probably the economy
more than anything?
Mr. Larsen. Well, it could be a number of factors. I guess
what I am saying is, that we don't think the provisions of the
ACA are what is at work when you look at the historical rate of
increase of premiums year over year. The ACA will help fix
those provisions.
Mr. Stearns. So Mr. Larsen, you are saying today, we can
expect health care costs for families to go down?
Mr. Larsen. We hope and expect that costs will moderate
with the provisions of the ACA.
Mr. Stearns. Now, the President promised lower premiums by
an average of $2,500 per family. Do you think this is going to
happen?
Mr. Larsen. I think costs will be much lower compared to
what they would have been if the ACA hadn't been enacted.
Mr. Stearns. Your testimony talked about the rate review on
insurance increases in New Mexico, Connecticut, Oregon, New
York and Rhode Island, correct?
Mr. Larsen. That is right.
Mr. Stearns. In any of these situations, did the premiums
go down?
Mr. Larsen. I think in the examples we cited, that the
insurance commissioner in that State worked to lower the
initial rate filings that came in.
Mr. Stearns. Well, I think your testimony indicated that
the rate review situation resulted in premiums going up. The
government really said they couldn't go up so much but I think
that is true.
Mr. Larsen. Oh, I see. You mean their increases were
approved but they were lower than what originally was filed by
the insurance company?
Mr. Stearns. Yes.
Mr. Larsen. Right.
Mr. Stearns. Where in your testimony do you discuss
lowering premiums?
Mr. Larsen. Well, lowering--it is all relative, right? I
mean, lowering premiums means lower than what they would have
been if we hadn't had these types of provisions.
Mr. Stearns. That is like we do in Congress. We say we
reduce spending by lowering the spending more than we
projected.
The example you cite, you say that ``The Government
Accountability Office found that in a survey of seven insurers,
most of the insurers were adjusting premiums.'' Is that it?
Mr. Larsen. Well, that was a result of the medical loss
ratio provisions. GAO did a very limited survey of a number of
companies to see whether they were taking action to comply with
the MLR and what it is, and in some cases, companies were
moderating their premium increases. We did have an example, and
there may be others, of a company that actually lowered
premiums. There is a case----
Mr. Stearns. Can you give me a specific example?
Mr. Larsen. Aetna Insurance Company in Connecticut actually
lowered premiums.
Mr. Stearns. OK. So is that the only one, Aetna of
Connecticut?
Mr. Larsen. Well, that is the one that I am aware of.
Mr. Stearns. Can you name anyone else that has lowered
premiums specifically because of Obamacare?
Mr. Larsen. Well, when you say lowered, you mean moderated
the premium increases that would occur?
Mr. Stearns. To use your term----
Mr. Larsen. I can find that and get it to you in writing
because, yes, many companies have been on the record both with
us and in Wall Street indicating that they were moderating
their rate increases based on the MLR provisions in the
Affordable Care Act.
Mr. Stearns. Do you provide waivers if companies find out
that their premiums are going up significantly? Is that one of
the factors which you provide a waiver for?
Mr. Larsen. Well, in the waiver program that we don't
operate anymore, but at the time, that was one of the criteria,
that is right.
Mr. Stearns. Mr. Scalise talked about, I don't know, 1,200,
1,400, I think there is 1,700 entities that got waivers. Isn't
that true?
Mr. Larsen. Overall, though that included about 400 or 500
companies that offered HRAs, or health reimbursement accounts,
that we really concluded didn't need a waiver under the law.
Mr. Stearns. All right. My time is expired. Mr. Dingell is
recognized for 5 minutes.
Mr. Dingell. Thank you, Mr. Chairman. You have, first of
all, Mr. Larsen, given us a very good statement today, and Mr.
Chairman, I think that the information that we got in this
hearing has been most helpful in understanding how we are doing
and moving forward, and also in having some significant
appreciation of the chores which yet remain. I think if we all
are willing to work together, we are going to see this program
be a good one of which we will all be proud.
Mr. Larsen, you made some points here. In your statement,
you said States are already using this authority to save money
for families and small business. Starting out in New Mexico,
the State insurance division denied a request from Presbyterian
Health Care for a 9 percent rate hike, lowering it to 4.7
percent. In Connecticut, the State stopped Anthem Blue Cross
Blue Shield, the State's largest insurer, from hiking rates by
a proposed 9 percent, instead limiting to a 3.9 percent
increase. In Oregon, the State denied a proposed 22 percent
rate hike by Regency, limiting it to 12.8 percent. In New York,
the State denied increases for Emblem, Oxford and Aetna that
averaged 12.7 percent, holding it instead to an 8.2 percent
increase. In Rhode Island, the State denied rate hikes to
United Health Care of New England ranging from 18 to 21
percent, instead seeing them cut to 9.6 to 10.6 percent. I know
what you are telling us, that these provisions are working in
terms of assuring the protection of consumers. Is that a fair
statement?
Mr. Larsen. Yes, sir.
Mr. Dingell. Now, we have talked a little bit about the
health insurance exchanges. You will note that as you have
indicated, CCIIO is charged with helping States set up these
exchanges. Isn't that right?
Mr. Larsen. Yes.
Mr. Dingell. How will these exchanges change consumers'
experience in purchasing health insurance on the individual
market?
Mr. Larsen. Well, individuals will now have access to a
competitive market, an affordable market.
Mr. Dingell. Will he know what he is getting?
Mr. Larsen. They will know what they are getting, and they
will get comprehensive coverage and they will have the ability
to get tax credits if they meet the criteria.
Mr. Dingell. They will be written in a simple,
understandable way?
Mr. Larsen. Yes.
Mr. Dingell. So that the purchaser of the insurance policy
will be able to understand what he is buying and what the
advantages of the different plans might happen to be. Is that
right?
Mr. Larsen. Exactly.
Mr. Dingell. And you don't need to be a Philadelphia lawyer
to understand this. Is that right?
Mr. Larsen. That is right.
Mr. Dingell. So in addition to improving the market for
individual coverage, then we must assume that the exchanges
will also provide for small businesses to have for the first
time ever the ability to pool their risk and buying power
together to drive down costs. Is that right?
Mr. Larsen. That is right.
Mr. Dingell. Now, there seems to be some misunderstanding
here. Insurance companies over the years have been forced to go
to the idea that they will avoid the risk because they didn't
have a decent insurance pool, so what they did is, they
curtailed the size of the pool by getting rid of the most risky
people, and that is why they used preexisting conditions and
other things to prevent certain classes of people from buying
insurance. Is that right?
Mr. Larsen. That is right.
Mr. Dingell. So now the insurance companies are going to be
able to engage in the practice that is so important in terms of
having real insurance. They will cover everybody.
Mr. Larsen. That is correct.
Mr. Dingell. And this is going to enable insurance
companies to then practice insurance in the classical sense by
making it available to all persons and then we will all share
the risk that flows from the possibility of sickness or illness
or debilitation. Is that right?
Mr. Larsen. That is correct.
Mr. Dingell. And this is one of the main ways in which we
are going to see significant savings of monies to the Federal
Government, to the employers and to of course the purchasers of
the insurance. Is that right?
Mr. Larsen. That is right.
Mr. Dingell. Mr. Chairman, I am going to surprise you. It
is 38 seconds I yield back.
Mr. Stearns. All right. Thank you, Mr. Dingell.
Dr. Burgess is recognized for 5 minutes in our second
round.
Mr. Burgess. Thank you, Mr. Chairman. I am tempted to
actually go to the left of John Dingell but I am going to
resist the temptation.
He was talking about--and we do this all the time--the
ERISA market is not the same as the small group market and the
individual market. Mr. Dingell's questions really were about
the small group market and the individual market, not the
employer-sponsored insurance market, because preexisting
conditions are covered then in the open enrollment, are they
not?
Mr. Larsen. You mean for the self-insured market?
Mr. Burgess. No, no, I am talking about for someone who
works for, say, a big telecom company that is known only by
its----
Mr. Larsen. Yes, that is one of the big advantages of
working for a large company.
Mr. Burgess. Right. Those individuals in the large group
market were not subject to the same constraints that Mr.
Dingell was just discussing. Is that correct?
Mr. Larsen. Typically that is right, yes.
Mr. Burgess. And it really seems like had we wanted to
reform the system, we would have tried to help the individual
market and the small group market behave more like the large
group market, and I think we could have gotten a lot more bang
for the buck, but that is another story. We didn't get to do
it. Am I going to be able to keep my HSA?
Mr. Larsen. There is nothing in the Affordable Care Act----
Mr. Burgess. There is not? What about the medical loss
ratio? Are you going to count the amount of money that I
contribute to my health savings account as a medical expense or
is that administrative expense?
Mr. Larsen. Well, at this point I don't think it counts in
the MLR provisions but we are looking at HSAs and HRAs in
connection with----
Mr. Burgess. Can you guarantee me that I will be able to
keep my HSA when this thing is fully implemented?
Mr. Larsen. I don't see any reason why you couldn't keep
your HSA.
Mr. Burgess. Well, I will tell you, my read of it is that
there is a risk, and if we really want to control costs without
rationing, and I do, because I don't like rationing, but if we
really want to control costs, we will leave the health care
consumer, the patient, in charge of a lot of the decisions and
the money of their expenditures because I know from my own
experience, I am a much more cost-conscious shopper in health
care because it is my money that I am spending, that money
being designated from my health savings account. President
Obama himself, and he is from the White House, told us this
last year when he had all us down there to talk to us about the
debt limit, he referenced how expensive health care was, and he
said he got a rash on his back, he put some cream on it and
there was a $5 copay but he was out on the campaign trail, he
didn't have his card, and he went to the pharmacist to explain
his predicament. The pharmacist got the prescription
transferred--thank you, electronic health records--but when the
prescription was handed up to him, he was told that it would be
$400, and the President said you know, this rash is not that
bad. And exactly right, Mr. President. You became an informed
health care consumer. So the power of putting--putting this
power in the hands of the consumer really can be a powerful
incentive to hold costs down, and the only other thing you have
got, the only other lever you can pull is you say we are going
to have waiting lists or rationing, or we are going to cut
reimbursements to physicians. We saw what happened in Medicare
with the SGR. You cut my reimbursement. My fixed costs remain
the same, so what do I do? I do my stuff so I cost you more
money because I have still got to pay the same bills that I had
to pay before. So I really think getting away from an HSA-type
model, especially for people who are in the immediate pre-
Medicare years, that is going to be a big mistake and it is
going to drive costs up, not the other way around.
Now, having been in practice and having seen what happened
when an insurance company went bankrupt and seeing the effect
on patients and the people who are supposed to be paid by all
those claims that didn't get paid and yes, there was a small
State fund that we could go to but nowhere near covered the
expenses, are you concerned at all that when a company comes to
you and says we need to raise our rate and it is based on
actuarial evidence, are you concerned at all when you hold
these rates down that you may be driving companies toward
insolvency, maybe not tomorrow, maybe not next year, but over
time?
Mr. Larsen. Well, first of all, HHS, when we review rates
in the small number of States that we do it, we don't have the
ability or the authority under the ACA to actually force the
company to do anything different. We make a conclusion and the
company can proceed if they want to with the rate, and
certainly in the States that do have the authority to modify
rates, it is something that they--and I did this as well--you
need to take into account when you are looking at their----
Mr. Burgess. Wait a minute. I thought under the Affordable
Care Act rates are going to go down because you are going to
prevent large increases from the insurance companies? Did I not
hear that said several times this morning?
Mr. Larsen. And I think the evidence shows that that is
happening. I think all I am saying is that when regulators look
at the rates, they have to make sure they are reasonable and
not excessive, and you are absolutely right. They have to make
sure they are not inadequate as well and that companies----
Mr. Burgess. So a recent news story----
Mr. Larsen [continuing]. And that companies have enough
revenue.
Mr. Burgess [continuing]. Said rates went up 26 percent in
Alaska, 23 percent in Florida, 20 percent in Washington State,
all since the implementation of the Affordable Care Act. Is
that going to be modified in the future? Are those rates are
going to be going up less because of the Affordable Care Act?
Mr. Larsen. I am not sure what you are citing there.
Mr. Burgess. Well, there was an article in the general
news.
Mr. Chairman, I will yield back at this point, but I am
going to submit that question with more detail, and I would
appreciate a thoughtful answer to that.
Mr. Larsen. OK.
Mr. Stearns. All right. The gentleman's time is expired.
The gentleman from Virginia is recognized for 5 minutes.
Mr. Griffith. Thank you, Mr. Chairman.
Let us talk about medical loss ratio rebates. Your
testimony states ``Consumers will receive a notice explaining
their carrier's medical loss ratio, MLR, if their carrier owes
them a rebate on their premium payments.'' Now, as I understand
it, this is to be issued in August of 2012. Is that correct?
Mr. Larsen. That is right. If rebates are repaid, they
would come out--they are supposed to be done by August.
Mr. Griffith. By August of 2012?
Mr. Larsen. Um-hum.
Mr. Griffith. And the law requires the companies to send
these notices out, or the rebates out?
Mr. Larsen. Yes. I mean, we proposed in our regulations
that when an individual gets a rebate, that they would get a
notice from their insurance company describing what it is they
are getting and whether their company complied with the law and
what the MLR was.
Mr. Griffith. Let me ask you this question. Does the
carrier have to send all of their customers a letter whether or
not they get a rebate or only if they get a rebate?
Mr. Larsen. Well, two things. One, in the rule that's on
the books now, we from the beginning had made it clear that
when there is a rebate to be provided, yes, the consumer would
get a notice. We did propose for consideration and posted the
idea that for consumers whose company complied with the MLR
requirements but didn't get a rebate, that they would get a
notice so the company would--the consumer would understand that
their company complied with the law and they got value for
their insurance premium. So that is a proposal that we have
made and we haven't finalized that idea yet.
Mr. Griffith. So if that proposal were to be finalized,
everybody would receive a letter in August 2012 talking about
either rebates or we complied with the law in regard to this
section----
Mr. Larsen. Yes.
Mr. Griffith [continuing]. Right before the election, but
all the costs under the bill to the hardworking American
taxpayers occur after the election. Isn't that correct?
Mr. Larsen. Well, the timing----
Mr. Griffith. You didn't fix the timing. I understand that.
Mr. Larsen. And it doesn't have anything to do with the
election.
Mr. Griffith. But it is an accurate statement, is it not,
sir?
Mr. Larsen. It is accurate----
Mr. Griffith. Thank you very much. I yield to Dr. Burgess.
Mr. Burgess. Just one last series of questions on the
budget, and going back to Section 1311(a) on the authority that
you have, CCIIO has, to draw funds from the Treasury and
administer grants to the States and territories to establish
exchanges, the end of November 2011, I think you told us, $733
million was obligated to the States and $27 million had
actually been spent. Does that sound about right?
Mr. Larsen. Yes.
Mr. Burgess. So that was November. You may not have in
right in front of you but can you provide to the committee what
has gone out to the States since November?
Mr. Larsen. Yes, we had another round of establishment
grants so I think the total grants including everything--
innovation grants, planning grants, establishment grants--I
think is up to $800 million or $900 million. The rate at which
States are drawing down on that money continues to lag behind
the grants that we make as they go out and they do a
procurement to hire outside experts and IT consultants and then
procurement has to come on board and then the procurement
agency has to bill, so there is a lag between the obligations
and the outlays for the State grants.
Mr. Burgess. Well, the previous projections estimated total
of $2 billion would be spent in the exchange grants over the
life of the program. When do you expect this money will be
fully exhausted?
Mr. Larsen. Well, unlike the $1 billion, the money that is
available to provide grants to States is not limited. It is
from a separate funding source.
Mr. Burgess. So do you have a new projection for us on what
the----
Mr. Larsen. On how much States ultimately will spend? We
don't. I mean, we are getting better insight into that as
States come in with their grant applications and tell us what
they think it is going to cost to build an exchange in their
State, so----
Mr. Burgess. Let me just ask you something. There are a lot
of things that the last Congress and this Congress has done to
sort of kick cans down various roads, and it looks to me like
all the roads end in December of this year.
Mr. Larsen. December of this year?
Mr. Burgess. Yes, the doc fix, the unemployment insurance
expiration, the unemployment insurance payroll tax holiday,
Bush-Obama tax cuts, a lot of things expire at the end of this
year. Of course, the alternative minimum tax always expires at
the end of every year, so there is a lot of stuff that is going
to happen at the end of this year. It is quite possible we will
be at or near exceeding the statutory debt limit of the United
States of America by that time as well. It is difficult as the
increase in the debt limit was in August of last year. This
time it will be without all the good feelings that we had last
August. Do you worry at all that the subsidies and the
exchange, which Mr. Griffith has already talked about, are you
concerned that that may have to be postponed simply because we
are out of money and cannot afford it?
Mr. Larsen. Well, I certainly hope not and hope that
everyone will come together to make sure that that doesn't
happen because they are an important part of expanding the
coverage provisions in the ACA.
Mr. Burgess. Even if we are borrowing in excess of 40
percent of those dollars that we are going to be handing out to
people to subsidize their insurance?
Mr. Larsen. We hope it doesn't happen because, you know, it
is such an important part of the Affordable Care Act.
Mr. Burgess. There is no place else to go for another
sequester other than the Affordable Care Act. It has been
remarkably protected. It has led a charmed life with all the
other budget-cutting things that are going on. I have to
believe at some point that charmed life expires.
Thank you, Mr. Chairman. You have been generous. I will
yield back.
Mr. Stearns. I thank the gentleman, and we are all finished
with our hearing. Does the chairman emeritus have any closing
comments before I close the committee?
Mr. Dingell. Just to thank you, Mr. Chairman, and thank our
witness. Mr. Larsen, you have done a superb job.
Mr. Larsen. Thank you.
Mr. Dingell. I think it has been a very useful and very
helpful hearing, Mr. Chairman, and I commend you for it.
Mr. Stearns. All right. Thank you.
Mr. Dingell. And I think that we have laid to rest a lot of
the concerns that I have heard expressed, and we have been able
to observe that some of the concerns I have heard have been
essentially red herrings drawn diligently across the pathway of
success in the future. I want to thank you for your fine
participation in this, Mr. Chairman, and you, Mr. Larsen, thank
you for your kindness. To my colleagues here, I want to say we
appreciate your getting these questions out because they are
valuable and they will lead us to a better understanding of the
events before us in this legislation. Thank you, Mr. Chairman.
Mr. Stearns. And with that, I would agree that this hearing
will give us a better understanding of Obamacare.
I want to thank the witness for coming today and for the
testimony and members for their devotion to this hearing today.
The committee rules provide that members have 10 days to submit
additional questions for the record to the witness.
With that, the subcommittee is adjourned.
[Whereupon, at 12:22 p.m., the subcommittee was adjourned.]