[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
             PROTECTING AMERICA'S SICK AND CHRONICALLY ILL
=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 3, 2013

                               __________

                           Serial No. 113-24


[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]





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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        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
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas                  PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          JIM MATHESON, Utah
PHIL GINGREY, Georgia                GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey            JOHN BARROW, Georgia
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky                  Islands
H. MORGAN GRIFFITH, Virginia         KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida            JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     2
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     3
    Prepared statement...........................................     5
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, prepared statement..............................     6

                               Witnesses

Susan Zurface, on Behalf of the Leukemia and Lymphoma Society....     7
    Prepared statement...........................................    10
Mary Taylor, Lieutenant Governor, State of Ohio..................    21
    Prepared statement...........................................    23
Sara R. Collins, Vice President, The Commonwealth Fund...........    44
    Prepared statement...........................................    46
Ron Pollack, Executive Director, Families USA....................    70
    Prepared statement...........................................    72
Thomas P. Miller, Resident Fellow, American Enterprise Institute.    76
    Prepared statement...........................................    78


             PROTECTING AMERICA'S SICK AND CHRONICALLY ILL

                              ----------                              


                        WEDNESDAY, APRIL 3, 2013

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:00 p.m., in 
room 2322 of the Rayburn House Office Building, Hon. Joe Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts and Burgess.
    Staff present: Gary Andres, Staff Director; Sean Bonyun, 
Communications Director; Paul Edattel, Professional Staff 
Member, Health; Julie Goon, Health Policy Advisor; Sydne 
Harwick, Legislative Clerk; Katie Novaria, Professional Staff 
Member, Health; John O'Shea, Professional Staff Member, Health; 
Andrew Powaleny, Deputy Press Secretary; and Heidi Stirrup, 
Health Policy Coordinator.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. The subcommittee will come to order. The Chair 
will recognize himself for an opening statement.
    During the last several years, there have been few areas of 
agreement between Republicans and Democrats on how our health 
care system should be reformed to better serve patients. From 
the beginning, however, one area that both sides have 
designated as a top priority is coverage for those with 
preexisting conditions.
    In the Republican alternative to Obamacare, we proposed $25 
billion over 10 years to aid Americans suffering from 
preexisting conditions through new universal access programs 
that reformed and expanded state based high-risk pools and 
reinsurance programs.
    Obamacare, unfortunately, provided only $5 billion in its 
Preexisting Condition Insurance Plan, PCIP, we will call it, 
for this purpose until January 1, 2014. At the time of the 
health care law's passage, Republicans argued that the funding 
level was too low and would not cover all of those it was meant 
to help.
    The first real signs of trouble for the federally 
administered high-risk pools came in August 2012, when CMS 
reduced payments to providers treating a high number of high-
risk pool enrollees, hitting hospitals especially hard. 
Additionally, the agency cut the number of participating 
pharmacies that provided certain types of drugs to program 
enrollees. Next, on January 1, 2013, CMS increased the maximum 
out-of-pocket costs for program enrollees by $2,250 and 
mandated greater use of mail-order pharmacy. Finally, on 
February 15, 2013, CMS announced that it was suspending 
enrollment in PCIP altogether, due to financial constraints.
    All of these actions were taken despite the fact that 
enrollment in the high-risk plans was less than 30 percent of 
what had been expected. Original estimates were that 375,000 
people would sign up for the federal high-risk pools. In fact, 
only approximately 110,000 individuals have joined.
    CMS is now trying to stretch what is left of the initial $5 
billion to cover those already enrolled in the program until 
January 1 of next year. What will happen to those people who 
had pending applications for PCIP when CMS cut off new 
enrollment? What about those, by some estimates 40,000 people, 
who would have enrolled during the remainder of this year? They 
are left without options and without coverage.
    On March 5, Speaker Boehner, Leader Cantor, Whip McCarthy, 
Conference Chair McMorris-Rodgers, Chairman Upton, Dr. Burgess 
and I sent a letter to the President asking that he redirect 
funding from other Obamacare accounts to PCIP to allow the 
program to continue accepting new enrollees.
    Although we still hope for a full repeal of the health care 
law and replace it with other reforms, we have reached out to 
President Obama and asked him to work with us to help those 
most in need get coverage and care. We are still waiting for 
his response.
    I want to thank all of our witnesses for being here today. 
I look forward to your testimony. I would like to conclude my 
statement at this time.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    During the last several years, there have been few areas of 
agreement between Republicans and Democrats on how our health 
care system should be reformed to better serve patients.
    From the beginning, however, one area that both sides have 
designated as a top priority is coverage for those with pre-
existing conditions.
    In the Republican alternative to Obamacare, we proposed $25 
billion over 10 years to aid Americans suffering from pre-
existing conditions through new universal access programs that 
reformed and expanded state based high-risk pools and 
reinsurance programs.
    Obamacare, unfortunately, provided only $5 billion in its 
Pre-Existing Condition Insurance Plan (PCIP) for this purpose 
until January 1, 2014.
    At the time of the health care law's passage, Republicans 
argued that the funding level was too low and would not cover 
all of those it was meant to help.
    The first real signs of trouble for the federally-
administered high-risk pools came in August 2012, when CMS 
reduced payments to providers treating a high number of high-
risk pool enrollees, hitting hospitals especially hard. 
Additionally, the agency cut the number of participating 
pharmacies that provided certain types of drugs to program 
enrollees.
    Next, on January 1, 2013, CMS increased the maximum out-of-
pocket costs for program enrollees by $2,250 and mandated 
greater use of mail order pharmacy.
    Finally, on February 15, 2013, CMS announced that it was 
suspending enrollment in PCIP altogether, due to financial 
constraints.
    All of these actions were taken despite the fact that 
enrollment in the high-risk plans was less than 30 percent of 
what had been expected.
    Original estimates were that 375,000 people would sign up 
for the federal high-risk pools. In fact, only 110,000 
individuals have joined.
    CMS is now trying to stretch what is left of the initial $5 
billion to cover those already enrolled in the program until 
January 1 of next year.
    What will happen to those people who had pending 
applications for PCIP when CMS cut off new enrollment?
    What about those, by some estimates 40,000 people, who 
would have enrolled during the remainder of this year?
    They are left without options and without coverage.
    On March 5, Speaker Boehner, Leader Cantor, Whip McCarthy, 
Conference Chair McMorris Rodgers, Chairman Upton, Dr. Burgess, 
and I sent a letter to the president asking that he redirect 
funding from other Obamacare accounts to PCIP to allow the 
program to continue accepting new enrollees.
    Although we still hope for a full repeal of the health care 
law, we have reached out to President Obama and asked him to 
work with us to help those most in need get coverage and care.
    We are now waiting for his response.

                                #  #  #

    Mr. Pitts. Since we do not have any of the minority members 
here, I will recognize the vice chairman of the committee, Dr. 
Burgess, for 5 minutes for his opening statement.

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. I 
also want to thank the witnesses for being with us today. I 
appreciate you making the effort to be here because this is an 
important issue. Some of you I have met before. For others, 
this is the first time, but welcome all.
    We hear a lot that Republicans don't have alternatives or 
other ideas for the replacement of the President's health care 
law. I know this is untrue. Many of you on the panel know it is 
untrue. If anything, our party has a multitude of ideas. But 
one overreaching aspect of policy that there seems to be 
general consensus is, we do need to address the needs of 
Americans with what are called preexisting conditions. As the 
chairman said, the Affordable Care Act created the new 
Preexisting Condition Insurance Plan, affectionately known as 
PCIP. I think I will refer to that as the federal plan so it 
won't be confused with State plans. But it was arguably 
duplicative of actions taken by 35 States prior to 2010 that 
were operating high-risk pools, and they served an estimated--
well, over 200,000 Americans. It has been shown that State-
based programs do play an important role in lowering the costs 
across markets and providing coverage options for those who are 
faced with a preexisting condition. In some States, the federal 
preexisting program was merged with the State's existing high-
risk pool, and in others, like my home State of Texas, the PCIP 
plan operates parallel to the State's pool. However, the 
federal preexisting plan is providing coverage to 100,000 
individuals, well short of the 375,000 that CMS estimated, but 
still a significant and compelling group of people who all have 
stories and deserve protection.
    As a physician, insuring those with preexisting conditions 
and assuring that they have access to affordable health 
insurance is a top priority for me. As much as I believed that 
the President's Affordable Care Act stretched the bounds of 
constitutionality, and in fact, I still believe that, I was 
concerned that if the Supreme Court felt as I did that day and 
said look, this thing is outside the bounds that the 
Constitution places on the legislative branch, folks are going 
to have the rug pulled out from under them who had been in the 
federal preexisting program and then could be barred from 
merging into a State's pool because the federal program had 
previously provided them coverage. That is why to ensure that 
that did not happen, I was prepared to answer that challenge 
and introduce the Guaranteed Access to Health Insurance Act of 
2012 prior to the Court's decision to provide States with the 
financial backing to decide how best to provide coverage for 
their populations who would be in this risk pool.
    I will also note that unlike many of the complaints that 
the federal preexisting program has faced, the bill did not 
require those with preexisting conditions to jump through hoops 
or to remain uninsured for some unreasonable period of time 
before being eligible for coverage. There are always stories of 
those who have done the right thing, insured themselves and 
then for reasons kind of beyond their control fall out of the 
system--they lose their job, they get a tough medical diagnosis 
and then find themselves forever frozen out of coverage. Those 
were the stories that people thought of, and people did come to 
us with that concern. In the summery of 2009, many of you 
remember the rather tense town halls that were held across the 
country, and what did people tell us? Yes, they were worried 
about people with preexisting conditions. They didn't want us 
to mess up what was already working for arguably 65 or 68 
percent of the country, and they sure wanted some help with 
costs, and it turns out, we failed on all three counts with the 
Affordable Care Act.
    How many people have aged into the 6-month exclusion since 
the Centers for Medicare and Medicaid Services made the 
announcement that the federal program was now closed. Someone 
who said well, I am going to start the clock in October and I 
will be able to enroll in April now find themselves frozen out 
of the system. Was it because that the federal preexisting 
program was designed poorly, because its costs were too high? 
Was it because maybe the problem of serious preexisting 
conditions existing in a population that wanted to purchase 
insurance was lower than estimated? We will never know, but it 
would have been nice to think these things through prior to 
adopting the Affordable Care Act.
    I will admit that many of the current State-based programs 
are underfunded and lack the ability to meet their needs. It is 
costly to deal with these issues. These people are sick. They 
have multiple medical conditions.
    I was prepared to authorize $30 billion. Five billion was 
what the federal program allowed. I was prepared to authorize 
$30 billion. I got people back in my district who say, Dr. 
Burgess, $30 billion, that is way too much money, we don't have 
the money. Well, I will tell you what: it is a lot cheaper than 
the $2.6 trillion that this thing is going to cost, and we 
wouldn't have had to blow up the whole system in order to take 
care of those people that arguably are going to need help. If 
we are serious about funding these programs and dealing with 
these issues, these costs are but a drop in the bucket as to 
what the Affordable Care Act will cost our Nation.
    Mr. Chairman, I see you have already been generous with the 
gavel. I have consumed the time that you yielded back and my 
time as well. I have considerably more, and I will provide that 
for the record, and I am anxious to hear from the witnesses, so 
I yield back.
    [The prepared statement of Mr. Burgess follows:]

             Prepared statement of Hon. Michael C. Burgess

    Thank you Mr. Chairman,
    For far too long, Republicans have been accused of not 
having alternatives to the major parts of President's health 
care law.
    Although we can all attest that this is simply untrue--if 
anything our party has a multitude of ideas--one overreaching 
policy we all agree on that requires action is addressing the 
needs of Americans with pre-existing conditions.
    The Affordable Care Act created the new Pre-Existing 
Condition Insurance Plan (PCIP) which was arguably duplicative 
of actions taken by 35 states prior to 2010 that were operating 
high risk pools which served an estimated 207,000 Americans.
    It has been shown that state-based programs play an 
important role in lowering costs across markets and in 
providing coverage options for those with preexisting 
conditions.
    In some states PCIP was merged with a state's existing high 
risk pool and in others, like Texas the PCIP plan operates 
parallel to the state's pool.
    However, PCIP is providing coverage to over 100,000 
individuals--well short ofthe 375,000 CMS estimated--but still 
a significant group of people who need protection.
    As a physician, ensuring those with pre-existing conditions 
have access to affordable health insurance is a top priority 
for me.
    As much as I believed that the ACA stretched the bounds of 
Constitutionality and still do, I was concerned that had the 
Supreme Court invalidated the law that those in PCIP would have 
the rug pulled from beneath them and could be barred from 
merging into a state's pool because PCIP had previously 
provided them coverage.
    That is why--to ensure that did not happen I was prepared 
to answer that challenge had it arisen by introducing The 
Guaranteed Access to Health Insurance Act of 2012 prior to the 
Court's decision to provide states the financial backing to 
decide how best to provide coverage for this population through 
a high risk pool, reinsurance program or other innovative 
method.
    I will also note--unlike many of the complaints that PCIP 
has faced--this bill did not require those with pre-existing 
conditions to jump through hoops or remain uninsured for 6 
months before being eligible for coverage.
    There are always stories of those who have done the right 
thing and insured themselves, who then fall out of the system--
usually because of a job loss--get a medical diagnosis and even 
when their employment status changes can find themselves 
forever locked out of coverage.
    Those were the stories that people thought of when they did 
say they wanted something done about this issue--they also said 
they wanted us to address cost and not screw up the rest of the 
system for everyone else.
    We obviously failed in both those respects when it comes to 
the ACA and as of February 15th of this year when CMS announced 
it would suspend enrollment in PCIP--the Administration has 
failed in implementing an area that conceptually was 
bipartisan.
    How many people have aged into the 6 month exclusion since 
CMS'sannouncement? How many were awaiting coverage but now are 
told--especially in states where PCIP is the only option--
you'll just have to wait until 2014? And why was enrollment so 
low? Was it because of PCIP's design or because the costs were 
still too high, or was it because maybe the problem of serious 
pre-existing conditions existing in a population that wanted to 
purchase insurance was lower than estimated? We will never 
know, but it would have been nice to think these issues out 
prior to adopting the ACA.
    I will freely admit that many of the current state based 
programs are underfunded and lacking the ability to meet their 
needs. It is costly to deal with this issue--I was prepared to 
authorize $30 billion--House Republicans supported $25 billion 
in our substitute to the ACA. We are serious about funding 
these programs and dealing with this issue. And those costs are 
a drop in the bucket to what the ACA will cost our nation.
    But these efforts recognized that for those who do need 
insurance and are truly uninsurable in the market--it will be 
costly and yet while PCIP's spending has consistently exceeded 
expectations the ultimate solution was not to prepare for 
needing more money, or transfer funds from other parts of ACA 
implementation or even to approach Congress for funding--it was 
to tell people tough luck.
    I cannot underestimate how important that approach by CMS 
and the Administration is to this conversation. If that is the 
attitude, what happens if ACA costs exceed what is expected? 
What about Medicaid expansion? Is there really a question as to 
why states are nervous about seeing exchange subsidies reduced 
or the Medicaid FMAP paired down for new populations?
    The Administration says that will never happen but yet they 
are perfectly willing to turn away sick people--not healthy 
childless adults--currently not categorically eligible for 
other programs. I think that point is worth hovering on for a 
moment. The Administration is saying this is all the coverage 
we can afford so no more is available?
    So again I ask--what happens if subsidies get too 
expensive? What about Medicaid? Already many in Medicaid cannot 
get care because he programs reimbursements drive providers 
from the program. What about Medicare--we actually know the 
answer there too--IPAB. Seems like this could be a trend in 
approaching these tough issues.
    And there are some who will still say that concerns about 
rationing are not based in fact? They will look at us and with 
a straight face and say, coverage without access, isn't 
something we have to be worried about?
    Really? Because I think every single person who is left in 
the void between PCIP's enrollment suspension and 2014 is a 
testament to these being VERY real concerns that are worth 
asking of the Administration and seeing how far they are 
willing to take an ideology that prioritizes coverage over 
lowering costs or ensuring access to care.
    Thank you.

    Mr. Pitts. The Chair thanks the gentleman, and we do have 
statements from the ranking members, Pallone and Waxman, and I 
will ask unanimous consent to enter those into the record. 
Without objection, so ordered.
    [The information follows:]

               Prepared statement of Hon. Henry A. Waxman

    Today's hearing is focused on a critically important topic: 
protecting America's sick and chronically ill. This is a 
concern that has driven much of my work on this Committee for 
more than three decades. It has driven my work to make 
prescription drugs safer and more affordable, it has driven my 
work to expand access to Medicaid, and it was a driving force 
behind the passage of the Affordable Care Act in 2010.
    The Affordable Care Act does more to protect America's sick 
and chronically ill than any piece of legislation in the last 
50 years. It bans insurance company discrimination on the basis 
of pre-existing conditions--protecting tens of millions of sick 
and chronically ill Americans from being priced out of or 
excluded outright from the health insurance market. It has 
already made preventive care available to over 100 million 
Americans with no cost sharing--helping prevent people from 
getting sick or becoming chronically ill in the first place. It 
makes critical investments in our health care workforce and 
community based prevention that will allow millions of 
Americans to lead healthier lives. And it makes comprehensive 
reforms to the health insurance market that will reduce the 
number of uninsured by 30 million people and lower costs by 
offering generous premium subsidies and promoting competition 
among insurance companies.
    Starting in 2014 the Affordable Care Act bans insurance 
companies from discriminating on the basis of health status or 
a pre-existing condition. This is a straightforward, fair 
solution to an insurance company practice that has hurt 
millions of Americans for years. As temporary bridge program to 
full implementation of these reforms, the Affordable Care Act 
created a high risk pool called the Pre-existing Condition 
Insurance Program (PCIP).
    The program was always designed to be a temporary solution 
to help some of the sickest Americans who had been locked out 
of the insurance market get coverage. It was given a fixed 
appropriation of $5 billion and was set up to offer an 
affordable option of comprehensive coverage to a population 
with high health needs. It was also set up to be more 
accessible than the many state high risk pools that charge high 
premiums, have long waiting lists, or are closed to new 
enrollees--as Florida's has been for more than twenty years.
    Republicans have done a complicated dance in their position 
on the PCIP program. They proposed spending $25 billion on high 
risk pools as part of a plan to ``replace'' the Affordable Care 
Act. But despite proposing five times as much spending on high 
risk pools, they criticize PCIP for being too expensive. They 
attack PCIP for getting up and running too quickly. But then 
they criticize it for not enrolling people fast enough. They 
embrace high risk pools as a way to make quality coverage 
available to people with pre-existing conditions. But they 
ignore the fact that state high risk pools have been 
underfunded, oversubscribed, and unaffordable for years. And 
most egregiously, they claim that they want to protect 
America's sick and chronically ill while working tirelessly to 
undermine the Affordable Care Act's ban on pre-existing 
condition discrimination, its critical investments in 
prevention, and its landmark expansion of coverage.
    PCIP has been able to help 135,000 of the sickest Americans 
get treatment for costly and life threatening conditions like 
cancer and heart disease. CMS was prudent with the $5 billion 
Congress appropriated for this program and suspended new 
enrollment last month. This is not ideal but it is not entirely 
unexpected. The agency was working with an imperfect, temporary 
policy solution to an intractable problem. I am pleased that 
the agency has guaranteed that current enrollees will not lose 
their coverage, which is far more than the private insurance 
industry would have done for these patients.
    The shortcomings of the PCIP program are a sign of just how 
dysfunctional the health insurance market was prior to reform 
and how urgently we need the comprehensive reforms in the ACA. 
Expanding access to coverage and efficiently spread risk across 
the market is a far better solution to the problem of rampant 
un-insurance and pre-existing condition exclusions than locking 
sick Americans into increasingly expensive coverage through 
high-risk pools.
    In a few short months applicants who were not able to 
enroll in PCIP will have access to quality affordable coverage 
because of the Affordable Care Act. If my Republican friends 
truly share the goal of caring for sick and chronically ill 
Americans they will work with us to ensure a smooth transition 
to 2014 rather than attacking PCIP for demonstrating how much 
we need comprehensive reform.

    Mr. Pitts. We have one panel today, and I will introduce 
them at this time, and I would like to thank them for taking 
time to come and share their expertise with us today. First is 
Ms. Susan Zurface on behalf of the Leukemia and Lymphoma 
Society. Secondly, the Hon. Mary Taylor, Lieutenant Governor 
from the State of Ohio and Director of the Ohio Department of 
Insurance. Thirdly, Dr. Sara Collins, Vice President of the 
Commonwealth Fund. Fourthly, Mr. Ron Pollack, Executive 
Director of Families USA. And finally, Mr. Thomas Miller, 
Resident Fellow of the American Enterprise Institute. Thank you 
all for coming.
    Your written testimony will be made part of the record. We 
ask that you summarize your testimony and opening statement of 
5 minutes each, and Ms. Zurface, we will start with you. You 
are recognized for 5 minutes for your opening statement.

  STATEMENTS OF SUSAN ZURFACE, ON BEHALF OF THE LEUKEMIA AND 
LYMPHOMA SOCIETY; HON. MARY TAYLOR, LIEUTENANT GOVERNOR, STATE 
OF OHIO; DR. SARA R. COLLINS, VICE PRESIDENT, THE COMMONWEALTH 
FUND; RON POLLACK, EXECUTIVE DIRECTOR, FAMILIES USA; AND THOMAS 
   P. MILLER, RESIDENT FELLOW, AMERICAN ENTERPRISE INSTITUTE

                   STATEMENT OF SUSAN ZURFACE

    Ms. Zurface. Thank you. Mr. Chairman and members of the 
Health Subcommittee, as a patient with blood cancer, it is my 
honor to share my experience and those of other blood-cancer 
patients as they have attempted to utilize the Preexisting 
Condition Insurance Program.
    I am a 42-year-old single mother with a full-time legal 
career. I live in rural southern Ohio in an area that has been 
clearly affected by the economic recession. I am a solo 
practitioner with a modest law practice, a sizable portion of 
which is dedicated to serving indigent clients.
    I have two children, who thankfully have health coverage 
under their father's medical plan. I am active and I strive to 
keep myself healthy. For the last 13 years, I have rarely been 
ill and I have not needed health insurance coverage.
    After my mother's death in September of 2012, I became ill, 
and after nearly 8 weeks, I ultimately saw my family physician 
and a series of tests were ordered. A week and a half later, on 
January 9, I received the first test results confirming a 
diagnosis of chronic lymphocytic leukemia, CLL, one of the most 
common types of adulthood leukemias. The bill for that analysis 
alone was $7,600. After follow-up tests and a three-day stay in 
the MICU at Wexner Ohio State University Medical Center, I 
received over $50,000 of medical bills that I could not afford. 
Thankfully, the social workers at the hospital immediately 
enrolled me in Ohio's Hospital Care Assurance Program, HCAP. 
Because my income met the threshold for eligibility, I 
currently have 100 percent medical coverage. Eligibility for 
HCAP is reviewed quarterly. I have been working full time since 
the beginning of February, so I will likely lose eligibility 
for this program.
    In late February, I learned about the Ohio High Risk Pool 
program. Just before sending in my application, I learned that 
the program was no longer accepting new patients due to lack of 
funding. My options are limited. I cannot qualify for Medicaid 
unless my income is low or I become disabled by my CLL, and I 
cannot afford a high-premium or high-deductible plan. If I am 
working at a normal capacity, I will almost always exceed the 
level to maintain continuous assistance through HCAP but not by 
enough that makes health care affordable. Even without costly 
treatment, my CLL requires regular medical care, blood 
screenings, and screenings for secondary cancers. Without the 
benefit of coverage, I have three options: do nothing at high 
financial and health risk, declare medical bankruptcy or enroll 
in clinical trials out of financial, not medical, necessity.
    The Leukemia and Lymphoma Society has identified three 
barriers that exist in this program. First, the 6-month wait 
without health insurance that a patient must endure before 
becoming eligible to enroll; second, premiums that are 
prohibitively high; and third, the lack of portability across 
networks.
    I have submitted a representative sample of stories from 
patients who have been working with LLS as part of my written 
testimony.
    When seriously ill patients are forced to go uninsured for 
6 months, they risk deeper illness or death, bankruptcy, and/or 
the potential loss of their homes. This barrier cannot be 
changed through the regulatory process. We urge Members of 
Congress to work together to remove this barrier legislatively.
    A second significant barrier is the relatively high cost of 
coverage. Nearly 80 percent of the uninsured with high-cost 
chronic conditions are individuals with incomes less than 400 
percent of the federal poverty level who will likely find PCIP 
premiums unaffordable. Future enrollees in the exchanges will 
be provided subsidized premiums and out-of-pocket spending 
caps. However, that is not the case with PCIP enrollees. 
Furthermore, a small subset of States including Pennsylvania 
and several others have exacerbated the problem by prohibiting 
third parties from assisting patients by covering the cost of 
PCIP premiums. We urge Members of Congress to enact commonsense 
reforms to the PCIP program including providing premium support 
for those patients who may need assistance and by allowing 
patients to receive third-party non-government assistance.
    One final barrier that patients experience in PCIP is a 
lack of portability across networks. For many patients, once 
they have begun their care within a network, it is emotionally 
difficult and cost-prohibitive to reestablish relationships 
with new providers. The PCIP allows patients to visit providers 
outside of a participating network. However, the out-of-pocket 
deductibles are double those within the network. There is no 
out-of-pocket cap, and a 50 percent coinsurance is added to any 
services obtained. We urge Members of Congress to provide 
patients with the flexibility needed to obtain the health care 
they require.
    On behalf of the Leukemia and Lymphoma Society, myself and 
the over 1 million patients living with or in remission from 
blood cancer, thank you for the opportunity to speak with you 
today. We urge Congress and the Administration to work together 
to ensure continuity in the program as well as policy fixes 
that could make it even more helpful for patients who so 
desperately need it.
    [The prepared statement of Ms. Zurface follows:]
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    Mr. Pitts. The Chair thanks the gentlelady, and especially 
thank you for sharing your personal experience and for these 
recommendations.
    The Chair recognizes Lieutenant Governor Taylor for 5 
minutes for an opening statement.

                 STATEMENT OF HON. MARY TAYLOR

    Ms. Taylor. Mr. Chairman and distinguished members of the 
committee, thank you for the opportunity to testify this 
afternoon regarding Ohio's experience with the High Risk Pool 
program under the Affordable Care Act. My name is Mary Taylor, 
and I am Ohio's Lieutenant Governor and also the Director of 
the Department of Insurance.
    States have regulated insurance for decades based on the 
specific needs of their populations, economies and insurance 
markets. Under the leadership of different Administrations, 
Democrat and Republican, over the past 60 years, our department 
has managed and regulated a competitive insurance market for 
consumers and job creators. Because of our regulatory 
environment, Ohio has a very competitive health insurance 
market with 60 companies writing health insurance business from 
which Ohio's consumers can choose.
    In order to determine the impact of the ACA on Ohio's 
vibrant market, my department commissioned a report conducted 
by Milliman Inc. in 2011. This report projected premiums would 
increase in the individual market in Ohio between 55 and 85 
percent. In addition, the report projected a substantial shift 
in how people get their coverage, and as a result, the size of 
the individual market in Ohio is projected to more than double 
with the employer-sponsored insurance market decreasing.
    In addition to these impacts, the ACA does little in the 
way of reducing the underlying cost of care that has 
historically driven the increasing cost of health insurance 
coverage. This law is a one-size-fits-all national approach to 
health care that removes the flexibility from States and is 
laden with very narrow and rigid regulations.
    More specifically to the High Risk Pool. The High Risk Pool 
concept can be a useful tool to address access to health 
insurance coverage if done well. However, implementing them as 
mandated in the ACA is problematic. The federal government's 
poor management and oversight of the program led to its 
unsustainability and ultimately the untimely decision to close 
enrollment in the program for new participants, leaving a very 
vulnerable population without access to insurance coverage.
    Ohio's High Risk Pool was organized in 2010 and is 
administered by an Ohio-licensed private health insurer but it 
is funded by HHS. Our department retained its general 
regulatory authority over the High Risk Pool, including the 
right to review premium rates and resolve consumer appeals. 
Even though the program administered by Ohio was among the most 
efficient and cost-effective in the country, the federal 
management of the High Risk Pool program quickly caused 
disagreements between the two agencies.
    In 2011, the High Risk Pool submitted rates to both HHS and 
the Ohio Department of Insurance for review and approval. The 
Department of Insurance approved the rates that were 
actuarially justified for the two High Risk Pool plans using 
our normal processes. However, HHS refused to approve the rates 
and directed the Ohio High Risk Pool Administrator to 
artificially reduce rates for those in the lower-deductible 
plan and artificially increase rates for those in the higher-
deductible plan. As regulators, we must ensure that each block 
of business is solvent and that one pool of individuals isn't 
subsidizing the cost of another pool of individuals. As a CPA 
and insurance regulator where a primary concern relates to 
company solvency, forcing a company to artificially set rates 
causes serious solvency concerns and potentially puts the 
company at risk where it can't pay the health claims incurred 
by those individuals and families who have insurance coverage 
under the plan. Eventually HHS and the Department were able to 
come to an agreement on rates, but of course, this caused 
consumer confusion and pushed back renewal dates.
    Shortly after the problems with the rates were resolved, we 
began having eligibility disputes with HHS. As the primary 
regulator, the department reserved the right to make final 
determinations on eligibility, but in these cases, HHS demanded 
the Ohio High Risk Pool Administrator ignore the department's 
determination and instead follow HHS's directions. Ohioans who 
were clearly eligible for the High Risk Pool according to our 
department's review were forced out of the program by HHS, 
causing them to lose their only available source of coverage.
    After protracted discussions between the department, the 
Ohio Administrator and HHS, it became clear that HHS would not 
recognize the department's authority. The Ohio Administrator 
was then forced to file a lawsuit against both parties seeking 
clarification from the courts as to which party they were bound 
to follow. An agreement was eventually reached in which the 
department's regulatory authority was upheld but this several-
month-long ordeal demonstrated the federal government's 
propensity to overreach and disregard State regulation of 
insurance that resulted in harm to consumers in the process.
    While our pool has come with challenges, to say the least, 
we feel this tool is not without merit. However, as you seek 
additional funding to allow this program to continue through 
2013, we encourage you to ensure States are given control and 
flexibility. Just as with the High Risk Pool in Ohio, when a 
federal agency steps into a role in which they do not have the 
experience or expertise to properly understand the issue, it 
can have severe consequences for the market and consumers. 
Knowing the challenges that lie ahead, I encourage Members of 
Congress to continue working toward a better solution. We will 
continue our work to improve quality of care in Ohio, reduce 
costs, and truly inform Ohio's health care system.
    Thank you for allowing me the opportunity to testify before 
you today, and I would be happy to answer questions that you 
have at the chairman's request.
    [The prepared statement of Ms. Taylor follows:]
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    Mr. Pitts. The Chair thanks the gentlelady for her 
statement and recognizes Dr. Collins for 5 minutes for an 
opening statement.

                  STATEMENT OF SARA R. COLLINS

    Ms. Collins. Thank you, Mr. Chairman, for this invitation 
to testify on the Affordable Care Act's Preexisting Condition 
Insurance Program.
    The major coverage provisions of the Affordable Care Act go 
into effect in January 2014, providing new insurance options 
for people without health insurance and sweeping new insurance 
market reforms to protect people who must buy health plans on 
their own. The Congressional Budget Office projects the 
combination of new federal subsidies for insurance and 
consumers protections will newly insure at least 27 million 
people by 2021.
    The PCIP program was one of several provisions of the law 
that went into effect in 2010 aimed at providing a bridge to 
2014 for people who have been particularly at risk of being 
uninsured or poorly insured. About 135,000 previously uninsured 
people with health problems who are not able to gain coverage 
in the individual market because of their health have enrolled 
in the PCIP program since 2010. The program has succeeded in 
providing transitional support for thousands of people who were 
uninsurable in the individual market. The 50-State program 
provided more affordable coverage than people could gain in 
most existing State high-risk pools which operated in only 35 
States and, unlike most State high-risk pools, the PCIP program 
offered immediate coverage of preexisting conditions.
    But the program's limitations were expected from the outset 
and demonstrate why high-risk pools in general are an 
inadequate substitute for the comprehensive insurance market 
reforms and expanded health insurance options to go into effect 
under the Affordable Care Act next January. The PCIP's low 
enrollment relative to the millions of uninsured Americans with 
serious chronic health problems reflects the program's lack of 
premium subsidies. This means that its potential benefits are 
out of reach for the vast majority of the population. Seventy-
nine percent of the estimated 7 million people who have a high-
cost health problem who have been uninsured for at least six 
months have annual incomes of less than 400 percent of poverty. 
Half have incomes of less than 200 percent of poverty. In the 
Texas PCIP program, the annual premium for a plan with a $2,500 
deductible is about $3,800. For a person with an income of 
about $11,000, the premium would comprise one-third of his 
income and the deductible 22 percent of his income.
    Like the existing State high-risk pools, premiums in the 
PCIP have run well short of claims cost. Jean Hall and Janice 
Moore found that medical claims relative to premiums or the 
medical loss ratios in both State high-risk pools and the PCIP 
program exceed 100 percent but that the PCIP medical loss 
ratios are as much as seven times that of high-risk pools in 
some states. This difference in medical spending between the 
two risk pool programs is likely because the PCIP program 
provides immediate coverage of people's health problems. 
Combined with the fact that people must be uninsured for 6 
months, this has likely led to an overrepresentation of people 
in the program with serious health problems that have gone 
untreated for a long period of time. The top four diagnoses or 
treatments in the federal PCIP program are cancers, heart 
disease, degenerative bone diseases, and follow-up care after 
major surgery or cancer treatments. These conditions comprise 
more than a third of claims costs in the federal program.
    The experiences of both the PCIP program and the State 
high-risk pools demonstrate the profound inefficiency of 
segmenting insurance risk pools. Without the benefit of a broad 
and diverse group of insured people, both programs operate at a 
considerable loss and depend on federal and State financing to 
fund the enormous gap between premiums and claims cost. Still, 
because of the high premium costs, both programs suffer from 
low enrollment.
    The Affordable Care Act's insurance market reforms take 
effect next year, making it possible for people with health 
problems or who are older to purchase a health plan with a 
comprehensive benefit package. The expanded eligibility for 
Medicaid and premium tax credits for private plans sold through 
the new insurance marketplaces means that people with low and 
moderate incomes with health problems will face far lower 
premiums than they do now in the PCIP program. For example, a 
50-year-old man with an income of $23,000 would contribute 
about $1,400 annually for a private plan offered through the 
State insurance marketplaces next year. In contrast, annual 
premiums for 50-year-olds at this income level in the PCIP 
program exceed this contribution by nearly two times in 
Virginia, which has the lowest PCIP programs, to more than 10 
times in Alaska.
    Starting in January, enrollees from both the PCIP program 
and the State high-risk pool will join millions of new 
enrollees in the new State insurance marketplaces with a 
diverge age and health profile, which will help spread the 
costs of care across a much broader risk pool.
    One of the central goals of the Affordable Care Act is to 
pool risk in insurance markets far more broadly than is the 
case today. Extensive segmentation of risk in insurance markets 
has fueled growth in the number of uninsured Americans over the 
past several decades. The experience of both the PCIP program 
and the State high-risk pools underscores why a shared 
responsibility for health care costs across the population and 
the lifecycle is essential for an equitable and efficiently run 
health insurance system. Thank you.
    [The prepared statement of Ms. Collins follows:]
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    Mr. Pitts. The Chair thanks the gentlelady.
    Mr. Pollack, you are recognized for 5 minutes for an 
opening statement.

                    STATEMENT OF RON POLLACK

    Mr. Pollack. Thank you, Chairman Pitts. Thanks for your 
graciousness in hosting this hearing, and thank you, Mr. Vice 
Chairman, Dr. Burgess, for this hearing.
    Preexisting conditions obviously are a very important 
matter with respect to what we should do for the large number 
of people who are affected by it. I took a look at the 
statistics for Texas and Pennsylvania to get a sense of how 
many people have preexisting health conditions. I looked at the 
totality of them. So in Pennsylvania, more than one out of four 
people from birth through 64 have a preexisting health 
condition. In Texas, it is 22.5 percent. Obviously, the older 
you get, those between 45 and 64, in Pennsylvania, it is 48 
percent; in Texas, it is 46.4 percent.
    Now, we are obviously not talking about all these people in 
this hearing, and that is because most of them get protection 
because they have employer-sponsored insurance, and we think 
that is good. So what do we do with respect to employer-
sponsored insurance and what can we learn from that?
    Well, in employer-sponsored insurance, we do not deny 
coverage to people because they have a preexisting condition, 
and we think that is good. Employers don't typically ask new 
employees, do you have diabetes, do you have a history of 
cancer, do you have heart problems, and they don't charge 
discriminatory premiums based on health status, and we think 
that is good. We don't deny coverage for clinical care that may 
relate to one's preexisting condition, and we think that is 
good. We don't charge a prospective woman employee a higher 
premium because she is more likely to be pregnant than one of 
her male colleagues, and we think that is good. We don't charge 
those of us who have a few gray hairs a whole lot more in terms 
of premiums because of our age, and we think that is good. And 
for workers who have difficulty paying for premiums, say, a 
middle-class worker who might be getting a salary of $60,000 
and yet family health coverage now averages over $15,000, one-
fourth, we provide them with help. Employers provide and pay 
for a substantial part of the premiums, and we think that is 
good.
    Well, as more and more people lose employer-sponsored 
insurance, either because employers are finding it too 
expensive or more employees are going into part-time work or 
functioning as contractors, I think there is a lot we can learn 
from that, and the Affordable Care Act helps us do that because 
in the individual marketplace, what the Affordable Care Act 
will say just like we do with employer-sponsored insurance, you 
are not to deny coverage due to a preexisting condition. You 
are not to charge a discriminatory premium because of your 
health status. You are not supposed to deny clinical care to 
somebody that fits with their health care problems. We will not 
charge women a discriminatory premium. We are going to limit 
the differential in what is paid and what people who are older 
have to pay as premiums compared to younger people. And we 
provide premium support for those below 400 percent of poverty. 
And by the way, with respect to premium support, in 
Pennsylvania there will be 896,000 people eligible for premium 
support come January 1. In Texas, it will be 2.6 million 
people.
    The point of all this is that the Affordable Care Act 
creates systemic change starting January 1 that is truly 
responsive to the needs of those people who have preexisting 
conditions, and while we support changes that would enable 
those people who right now during this transition period cannot 
get into the PCIP program, that should not be done by 
undermining the more permanent changes that should be made and 
will be made under the Affordable Care Act.
    Ms. Zurface talked about two different changes in her 
testimony, about there no longer being a 6-month wait and the 
need for premium assistance. We agree with her. Of course, 
those things would occur starting January 1. So our hope is 
that there will be clear recognition that come January 1, we 
have a much better way to deal with those folks who have got 
preexisting conditions and it will work in a way that is truly 
helpful to them.
    [The prepared statement of Mr. Pollack follows:]
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    Mr. Pitts. All right. The Chair thanks the gentleman for 
his opening statement and recognizes Mr. Miller for 5 minutes 
for your opening statement.

                 STATEMENT OF THOMAS P. MILLER

    Mr. Miller. Thank you, Chairman Pitts, Vice Chairman 
Burgess and members of the subcommittee for the opportunity to 
speak today on protecting America's sick and chronically ill.
    Preexisting condition insurance plans, or PCIPs, 
represented a poorly designed, halfhearted gesture within the 
Affordable Care Act. It was aimed primarily at minimizing 
political risks rather than addressing a serious problem more 
immediately and comprehensively. PCIP coverage served more as a 
cosmetic match to cover the consequences of slow implementation 
of complex coverage provisions scheduled to begin nearly 4 
years after enactment of the ACA.
    The program never received sufficient funding to do its job 
seriously. The relatively small amount of funding and limited 
attention to the program's structural details appeared to 
conflict with the exaggerated rhetoric of the Obama 
Administration in claiming that the extensive problems of lack 
of coverage for tens of millions of Americans with preexisting 
health conditions were the primary political rationale for 
enacting the ACA's regulatory coverage and financing 
provisions.
    The political ideology behind the core policies of the ACA 
to install guaranteed issue, community rating, mandated 
coverage, richer standard benefits and federal regulation of 
health insurance trumped targeting the smaller but significant 
problem of several million Americans with limited or no 
insurance coverage due to serious preexisting health conditions 
and addressing it more effectively.
    The PCIP program managed to solve less of the problem, 
enrolling fewer Americans than traditional State high-risk 
pools had enrolled but at a higher per-person cost while still 
running out of money. Pretty good for government work. At the 
same time, it discouraged continuation beyond 2013 of better 
tested State alternative mechanisms, the better-funded high-
risk pools. By setting its premiums for all at no more than 
standard rates, contrary to the better practices of the older 
State high-risk pools, or HRPs, and also imposing a 6-month 
spell as uninsured to qualify for coverage, PCIP only succeeded 
in mostly enrolling very desperate high-cost individuals who 
had no other alternatives for coverage.
    Now, States administering pre-ACA HRPs did a better job by 
charging enrollees somewhat higher premiums, offering less 
comprehensive coverage and focusing on those individuals who 
presented the most serious and costly medical conditions. 
However, they too still need more robust sources of funding to 
do their job more thoroughly and effectively. But remember, 
simply trying to average or hide the same total health care 
claims costs across a somewhat wider base--that is the ACA 
approach--it may redistribute them but it doesn't reduce those 
costs. If the forthcoming health exchanges are plagued by 
premium spikes, implementation misfires, limited enrollment and 
adverse selection, they may end up more closely resembling 
somewhat larger versions of State-level PCIPS than more 
competitive alternatives to the current private insurance 
market.
    Policymakers should consider the following ten points. One, 
recognize that health care markets are local, not national. So 
too are problems for persons with high-cost conditions. Two, 
the rhetoric of delegating administration of sensitive health 
policy provisions to State governments needs to be matched by 
the reality of federal officials letting go of tight reins and 
trusting State officials with more discretion over eligibility, 
benefits and appeals issues, within much broader outcome-
oriented federal parameters. Three, be very cautious about 
imprecise estimates, and they are often guesses, regarding the 
scale, scope and costs of the medically uninsurable and others 
with inadequate resources to handle very high-cost/high-risk 
health conditions. Four, we should commit a generous amount of 
a series of capped annual appropriations to support continued 
operations of state HRPs and/or restructured PCIPs, to be 
revisited upon subsequent evidence of larger enrollment demand 
or higher but medically necessary costs. Five, publicly 
subsidizing the high-cost tail of health risks can strengthen 
the rest of the private health insurance market. Six, raise 
unsubsidized premiums charged for most enrollees in high-risk 
pool plans to at least 150 percent of standard rates, but then 
provide income-based subsidies for lower-income people. 
Separate the issue of income support from that of protection 
against losing or lacking coverage solely due to elevated 
personal health risk. Seven, complementary policy reforms can 
help such as better portability from group to individual market 
provisions with creditable coverage, no requiring exhaustion of 
COBRA benefits, retargeting premium subsidies, and building 
information transparency mechanisms that reward better patient 
choices and provider practices. Eight, keep as many older state 
HRPs as possible in business after 2013, as an insurance policy 
against major problems in exchange implementation and 
individual mandate enforcement or compliance. Allowing such 
coverage to be considered qualified insurance under ACA would 
minimize post-2013 disruptions in the continuity of coverage 
and care. Nine, if the overall costs of health care don't rise 
more slowly, and individual incomes don't rise more rapidly in 
the near future, no amount of subsidized insurance tinkering 
can keep up with the larger problem. Finally, the preexisting 
condition issue is still a largely limited, modest problem. 
Solve it instead of using it as a political excuse to 
politically hijack the rest of the private insurance market. 
Thank you.
    [The prepared statement of Mr. Miller follows:]
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    Mr. Pitts. The Chair thanks the gentleman and thanks all 
the witnesses for their opening statements, and I will now 
begin questioning and recognize myself 5 minutes for that 
purpose.
    Mr. Miller, let us just continue with you. You have given 
us a great list. When Obamacare was enacted into law, you wrote 
that the program was designed in a way that would lead to 
inevitable problems. What are the principle features, if you 
could name a couple, of PCIP that led you to believe that the 
program would run out of funding?
    Mr. Miller. The program was weighed down by the larger 
overall program, but within the provisions of PCIP, the two 
core provisions, of course, are designing it with the 6-month 
requirement for uninsured coverage, which created a flaw in it 
from the start, and secondly, the massive underfunding relative 
to what the potential range of the problem was. The only reason 
why some budget estimates said, well, we might get under the 
wire on this, CBO simply said, well, they will close down the 
program when they run out of money, and the actuary who 
readjusted a little bit of the original program from HHS 
basically said the same thing. They have provisions written 
into the law for the PCIP administrators or HHS to carry out 
the worst practices of the private insurers they blame, which 
is as soon as we run out of money, we hollow out the benefits, 
we close the doors, and therefore we have met our budget, and 
it is not surprising that we got there. Maybe we got there a 
little later because it was a slow take-up but in essence it 
was a program designed to have an early expiration date on the 
coverage.
    Mr. Pitts. Thank you.
    Governor, you mentioned a number of administrative problems 
and litigation. Are you still having administrative problems 
with the feds or with HHS regarding the administration of your 
pool? Is all the litigation solved?
    Ms. Taylor. The most recent lawsuit has. We have come to an 
agreement on the resolution of that. As I did say in my 
testimony, we are pleased that the Department of Insurance 
continues to be seen as the regulatory arm of health insurance 
in Ohio, at least as it relates to the High Risk Pool, so at 
this point the two major issues that we face, both the rate 
issue in 2011 and protecting consumers and protecting 
consumers' coverage in Ohio have both been resolved.
    Mr. Pitts. Thank you.
    Ms. Zurface, can you describe your thoughts at the time 
when you found out that PCIP was not an option due to HHS 
closing the program to new applicants?
    Ms. Zurface. I can try. It was sort of an interesting 
experience for me. I had, as I indicated in both my written and 
my oral testimony, started in February trying to figure out how 
I would now begin to finance this very expensive health 
venture, and one of the things that I came across was the Ohio 
High Risk Pool insurance. I saw my specialist at the end of 
February, and at that time my specialist indicated to me that 
he would like for me to enter into a clinical trial that is 
having very good results for lenalidomide in the treatment in 
my specific chronic lymphocytic leukemia, which is chemotherapy 
resistant and a bit more aggressive due to chromosomal 
mutations. So he had suggested that I go ahead and enter into 
that clinical trial at this time. I actually took some time to 
step back from that, being basically healthy at this point, and 
said I think I want to take a little bit of time and watch my 
numbers and see exactly what this cancer is doing inside my 
body and what I need to do to manage it at this time. It was 
within about a week and a half, 2 weeks from that point in time 
that I found out that maybe I don't have the time to step back 
and do that because if I don't enter into that clinical trial 
sooner rather than later, then it is likely that that trial 
will fill up and there won't be any type of reasonable, 
affordable treatment option available for me. So I really had 
to step back and assess what I am going to do with regard to my 
health care condition at this time.
    Mr. Pitts. Now, because you are self-employed and not able 
to work at this time, as I understand it, your treatments are 
covered by Ohio's Hospital Care Assurance Program. Is that 
correct?
    Ms. Zurface. At this time, as long as I take my care 
through Ohio State Medical Center, I do qualify under their 
regulations for the HCAP program, and in fact, there is a 
separate program administered for OSU physicians. So as long as 
the part of my care that is managed at OSU Medical Center is 
actually covered on a quarterly review basis, so each quarter 
they will flag my status and I will have to resubmit income, 
profit and loss information for that.
    Mr. Pitts. So long as your income remains below a certain 
level, this program will cover you?
    Ms. Zurface. Yes, sir.
    Mr. Pitts. And are you saying that it would be more 
beneficial for your health to not work and be covered by HCAP 
than to work full time and surpass the income minimum and have 
no coverage at all?
    Ms. Zurface. I would argue that it is never more beneficial 
for my health for me to not be working. Both mentally and 
physically, it is better for me to be as active as I possibly 
can be. From a financial standpoint, it may look like at least 
on paper that it would be more beneficial for me to choose not 
to work or at least not to work at a full capacity in order to 
maintain health care.
    Mr. Pitts. My time is expired. I have a lot more questions 
for you but let us go to the vice chairman, Dr. Burgess, for 5 
minutes for questions.
    Mr. Burgess. Thank you, Mr. Chairman.
    Ms. Zurface, let me just ask you, you are an attorney. I 
actually am a physician in my previous life. So we both are in 
professions that are--we went into them to help people, and if 
I understand your testimony correctly, you in fact function as 
a public defender at some point. Is that correct?
    Ms. Zurface. Somewhat. The program that we have in my 
county is called court-appointed counsel. All of the attorneys 
in our area that practice criminal law actually serve as court-
appointed counsel, but it is very similar to the public 
defender program.
    Mr. Burgess. And you of course are paid for that work, are 
you not?
    Ms. Zurface. I am.
    Mr. Burgess. And where does that payment come from?
    Ms. Zurface. That money comes out of the county fund. Our 
county commissioners establish an hourly rate for our court-
appointed counsel.
    Mr. Burgess. Well, wouldn't it be better if the federal 
government just took that over and we paid you for that?
    Ms. Zurface. Oh----
    Mr. Burgess. You don't have to answer.
    Ms. Zurface. I was just going to say----
    Mr. Burgess. It is rhetorical.
    Ms. Zurface [continuing]. It is a rhetorical question. I 
wonder how the federal--where that money would come from with 
regard to the federal government and why would it be better if 
the federal government----
    Mr. Burgess. The same place all of the money comes from. 
Take it from someone else at the point of a spear and they give 
it to us willingly after we threaten them with lifetime 
incarceration and the impounding of all their personal 
property.
    But Lieutenant Governor, your discussion of how difficult 
it is to work with Health and Human Services and the Centers 
for Medicare and Medicaid Services, to me, that would be an 
argument against the federal government taking over that 
program that the county is so ably administering and taking 
care of those people who get into trouble with the law but are 
too indigent to afford their own lawyer. Would that be a 
correct assumption?
    Ms. Taylor. Mr. Chairman, Dr. Burgess, yes. Our experience 
specifically with the High Risk Pool working with HHS, working 
with the federal government, has proven to be less than 
rewarding. I think States are well prepared to regulate 
insurance as we have done for, you know, decades, and I think 
that these types of issues are best addressed closer to home 
where you can react quicker and in a more thoughtful way with 
regard to market changes, economic conditions, the needs of 
your citizens. It is a long way of saying yes.
    Mr. Burgess. Yes, you can react quicker, and that is 
important, and you know the people with whom you are dealing. I 
mean, your State is arguably a little different from my States, 
and the needs and the things that would need to be met for the 
constituents might be different in the two States, and you are 
in a position and your counterpart in my State would be in a 
position to have the facility to be able to make those 
decisions on a much more real-time basis.
    I just have to tell you, I sat down with your counterpart 
in my State on Monday, and of course, this is a little far 
afield from what we are talking about today but the Medicaid 
expansion, which is being much discussed, and the litany of 
complaints that come forward from the State folks about trying 
to deal with the Centers for Medicare and Medicaid Services. 
They have created a regime over there which is almost 
impenetrable. So it is any wonder that no one at the State 
level wants to buy--they don't want to buy any more of that. 
They have had enough of it, and I certainly understand that.
    Mr. Miller, I remember back to 2008, and we actually talked 
about this issue of the State risk pools a lot back in that 
year, as I recall. I don't remember why we discussed it but we 
did, and I got to tell you, I was a little bit encouraged after 
the summer town halls of 2009 that I alluded to, and those were 
somewhat rough events, but we came back to Washington in 
September and the President was going to address a joint 
session of the House and Senate, and I thought, oh, good, they 
have realized the error of their ways and they are going to put 
the pause button on here and we are going to hit the reset 
button, but alas, I was mistaken. It was fast forward, if 
anything.
    But one of the things the President said that day that 
really got my attention or that night and it really got my 
attention was that Senator McCain was right with his approach 
to helping people with preexisting conditions and this 
expansion of the State pools and reinsurance, that might be the 
way to go, and I thought for a brief moment there was a glimmer 
of understanding but what do you think happened?
    Mr. Miller. Well, they had some of the music but not all 
the lyrics. Consensus is often a mile wide and an inch deep in 
those type of things, and that was in a compromise moment to 
try to get some type of legislation through while bowing in the 
direction of temporary bipartisanship. There are always seeds 
of agreement between the two sides and then we kind of get 
overpowered by broader imperatives to get it all and to 
implement your program and get it, you know, comprehensive. You 
can find Republicans and Democrats agreeing we need to help 
people who are in desperate straits, who can't help themselves. 
We need to be generous and kind and compassionate as a good 
society. But there is a difference between doing that and 
running everybody else's life in micro detail, and that is what 
we got as kind of--you know, the loss leader was, well, we will 
do some things for some people we can give you an anecdote 
about, but meanwhile, look at the rest of what the law is going 
to do. It is turning upside down what are the arrangements that 
people are quite happy with and would like to continue and you 
are going to be in a different world within a year. All these 
ideas that somehow waves of happy, young and healthy people 
will be ready to pay twice as much in their insurance premiums 
and everyone will come out ahead and everybody will be 
subsidized, it is not going to work that way, and that is the 
problem in trying to shoehorn people into theoretical 
arrangements that don't match their preferences and practices.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman. We are going to 
continue with another round. We have got lots of questions 
here.
    Let me continue with you, Ms. Zurface. What do you plan to 
do now that funding for the new enrollees in the PCIP program 
has been pulled by HHS?
    Ms. Zurface. I am going to take it one day at a time. I 
have no choice but to continue with my medical care, so I am 
going to continue making my appointments and managing my care 
as best I can, do my very best to not incur great expense to 
myself and see what is available for me, and I will take 
advantage of the HCAP program and any similar program that is 
available. I will take advantage of whatever the Leukemia and 
Lymphoma Society is able to offer. I will just take it one step 
at a time.
    Mr. Pitts. The added burden of not knowing if your CLL 
treatments will be covered must add unneeded stress to your 
life as a single mother, does it not?
    Ms. Zurface. It sure does.
    Mr. Pitts. Mr. Miller, after HHS's announcement that new 
applicants would be shut out of the preexisting condition 
program, we sent a letter to the President asking to work 
together to redirect funding in the President's health care law 
to ensure that no sick American is turned away, and as I 
mentioned, 1 month later we have yet to hear from the 
President. My understanding is at the time of enactment, 
roughly 18 programs in PPACA received greater or comparable 
funding than the preexisting condition program. Couldn't this 
funding such as the mandatory appropriations in the Prevention 
and Public Health Fund provide the resources to help enroll new 
individuals in a high-risk pool program?
    Mr. Miller. It could certainly help contribute to it. The 
Administration apparently has broader priorities which look 
more at 2014 than what people are going through in 2013. I know 
some of the money has been taken out of the Prevention and 
Public Health Fund for the doctor fix, so it is a bit of a 
basket that gets raised several times. There might be, I think, 
$8 billion or $9 billion, depending on how you want to count 
it, for the remaining authorization. That could certainly make 
a contribution to provide real relief of a tangible nature. A 
lot of the stuff in the Prevention and Public Health Fund is a 
little bit more on the exotic side. It could be done in the 
right way but we don't have much evidence that is actually 
working in that manner. It is a little bit more of a political 
slush fund. So that would provide some means of a contribution.
    We will need more money than that if you wanted to do this 
on a longer-term basis, and I think there have been previous 
proposals for more enhanced funding in a different environment, 
and I am not sure if the votes are there to get that right now. 
But when you are looking at people who have a very identifiable 
condition--you know, these are the folks who you would want to 
put into a special-needs plan. We know they have got a serious 
condition. They need actually more intensive medical 
management. You would like to coordinate. You have already 
identified the population. It is going to cost money to 
subsidize them. That is something we should do and that should 
be a higher priority perhaps than subsidizing everyone's 
insurance all the way up to 400 percent of the federal poverty 
level. But that is a different political agenda than helping 
the most unfortunate people right now in ways that can help.
    Mr. Pitts. Dr. Collins, in your opening statement you said 
that PCIP provided immediate coverage for preexisting 
conditions. However, this leaves out an important context. 
Didn't the ACA require patients to be uninsured for 6 months 
before they became eligible for PCIP?
    Ms. Collins. Right, so the intent of the PCIP program was 
to provide immediate coverage for people who had been uninsured 
for a long period of time, or at least 6 months, and to 
immediately cover their preexisting conditions. As Mr. Miller 
pointed out, most State high-risk pools do not cover your 
preexisting condition right away, so the intent of the law was 
to cover people's conditions immediately. The intent was also 
to provide insurance coverage to people who didn't have health 
insurance coverage, so that was very clear in the law. It was 
designed as a transitional provision so that people who are 
uninsured who had immediate health care needs could get 
coverage over this 3-year period.
    Mr. Pitts. Well, Ms. Zurface's testimony indicates that 
this requirement had real effects on patients desperately 
seeking coverage for a preexisting condition. Didn't this 
requirement essentially force patients to let their conditions 
deteriorate while they waited for the ACA's arbitrary 6-month 
waiting period to run out?
    Ms. Collins. It was certainly difficult for people who had 
to wait to get coverage. It is one of the characteristics of 
our current insurance system that will go away next year where 
people are prevented from pursuing careers like Ms. Zurface is 
right now in terms of having more flexibility in their jobs, 
their educational pursuits because they have to not make above 
a certain amount of money to maintain their health insurance 
coverage. All that goes away in January so that people don't 
have restrictions on what they can do anymore in their careers 
just to maintain their health insurance coverage. So this was 
again a transitional provision. There were several transitional 
provisions in the law. This wasn't the only one--the ban on 
lifetime benefit limits, the phase-out of annual limits on what 
health insurers can place on your benefits, so this was part of 
a large number of provisions that went in right away that did 
provide coverage to a lot of people who really needed them--
young adults. About 6 million young adults came on to their 
parents' policy over the last year. So they were in no way 
designed as the endpoint in the provisions but as really a 
beginning point.
    Mr. Pitts. I wanted to get one more question in. Mr. 
Pollack, does it concern you that the Administration has cut 
off funding for this program?
    Mr. Pollack. Obviously I would like to make sure that 
everybody who has a preexisting health condition can get 
coverage, and it is very concerning that people who have a 
preexisting condition like Ms. Zurface are right now without 
the opportunity to get the coverage they need. But what is very 
important in terms of the compassion that we have all talked 
about with respect to people with preexisting conditions is 
that come January 1, all these problems are a thing of the 
past. People are not going to have to wait 6 months in order to 
get coverage. People are no longer going to be put in a totally 
different pool just because they have got a health problem. 
People are no longer going to be charged a discriminatory 
premium because they have got a health problem. So to the 
extent that you, Mr. Chairman and Mr. Vice Chairman, are 
interested in fixing this temporary problem with additional 
funds, we support that, but not by undermining the long-term 
architecture of the legislation which is going to be far more 
effective than this temporary measure.
    Mr. Pitts. Thank you. My time is expired. Dr. Burgess, you 
are recognized for another 5 minutes, second round.
    Mr. Burgess. Undermining the long-term architecture. Well, 
that is an elegant of talking about something when in reality 
what we should have been told 3 years ago before this thing was 
signed was the dog ate my homework so I am going to turn in the 
rough draft, and Ms. Zurface in her testimony talks about how 
this particular provision was not in the bill that passed this 
very committee on the House side in July of 2009 but it was 
added. The Senate Finance Committee staff added it. In fact, 
most of this was written by the Senate Finance Committee staff. 
It wasn't even written by legislators. And the thing was rushed 
through on Christmas Eve. There was a big snowstorm coming to 
town and the Senators wanted to get home for Christmas so they 
had to vote on it. And they voted, and they got 60 votes for 
the Affordable Care Act.
    Now, everybody felt--I am sure Chairman Waxman if he were 
here would tell us that he was working on the conference 
committee even before Christmas and New Year's that year, and 
he was preparing himself for the conference committee. The 
President came to the Democratic retreat that year and all the 
discussion was how we are going to get this ironed out even 
before the conference and we will get a bill that both the 
House and the Senate can support. But it didn't happen, did it? 
Because there was a special election in Massachusetts. Scott 
Brown was elected, the first time a Republican was elected from 
Massachusetts since the Earth cooled the first time, and there 
were no longer 60 votes in the Senate. So Harry Reid told Nancy 
Pelosi this is it, this is what you get, I can't change it. So 
most people don't realize this. H.R. 3590 was the bill that was 
voted on on Christmas Eve. Thirty-five ninety was passed by the 
House of Representatives in July of 2009 but it wasn't a health 
care bill then, was it? It was a veterans' housing bill. A 
veterans' housing bill passed the House. I don't think many 
people voted against it. It went over to the Senate, sat in the 
hopper, and then it was amended, and the amendment read 
``Strike all after the enacting clause and insert'' and this 
was what inserted.
    So here you had a bill that had passed the House in a 
different form, passed the Senate, came back over to the House, 
and if you don't change anything, you can sign it into law, and 
that is what the next 3 months was all about: how to convince 
enough Democrats to vote for really what was a rough draft. It 
would never have done what this thing has done to Ms. Zurface 
if it had been fixed but there was not the ability to fix it 
because there weren't 60 votes for any type of fix in the 
Senate. It was the very worst type of process that gave rise to 
the very worst type of policy and then for reasons that I will 
never understand got signed into law, and we are having to deal 
with it, and we can see it affects real people in very profound 
ways.
    Now, I would submit that the letter that the chairman 
referenced to the President, and I realize it is just a band-
aid on a problem, Mr. Miller, but the Prevention and Public 
Health Fund, yes, we have raided it for a lot of things--trade 
promotion authority, doc fix--so let us raid it for this as 
well. I mean, goodness knows, it is a political slush fund. It 
was added, again, by Senate Finance staff for reasons that I 
certainly am not privy to. I think, Mr. Chairman, perhaps we 
can submit again to the President that he reconsider his 
inaction on this because we have heard testimony from 
compelling witnesses today that something needs to be done 
before we can all lay down in the Elysian Fields of the 
Affordable Care Act on January 1, 2014, we are going to have to 
deal with this, and the Prevention and Public Health Fund I 
think is the logical place to go. If there is not quite enough 
money there, then certainly let us go to the Patient Center for 
Outcomes and Research Initiative. There is another place where 
a lot of dollars are just sitting. The Center for Medicare and 
Medicaid Innovation, a lot of dollars are just sitting. There 
is no reason to have them just sit there. Let us them let them 
help real people and help real people today.
    Now, Mr. Pollack, in your testimony you said in your 
calculation 68 million people have preexisting conditions, and 
100,000 are now covered under the federal PCIP program. There 
is a bit of a discrepancy between those two numbers, isn't 
there?
    Mr. Pollack. Of course there is, and I explained that. The 
reason that----
    Mr. Burgess. And I accept your explanation.
    Mr. Pollack [continuing]. There is a discrepancy with 
respect to that----
    Mr. Burgess. Let me ask you the question, sir----
    Mr. Pollack [continuing]. Explained right at the 
beginning----
    Mr. Burgess [continuing]. Before my time runs out----
    Mr. Pollack [continuing]. Is that most of those folks are 
in employer-sponsored insurance, and it has the same attributes 
and protections----
    Mr. Burgess. And those very folks begged us----
    Mr. Pollack [continuing]. That will not be provided in the 
individual market.
    Mr. Burgess [continuing]. Begged us not to disrupt what 
they were receiving, and it looks like we have. But let me ask 
you a question. If you thought that this was a serious problem 
that it was, was the Administration wrong in only putting $5 
billion toward this problem?
    Mr. Pollack. Would I favor more money put into this as the 
temporary measure? Of course I would. And I certainly would 
like to see the temporary problems that are significant 
problems that they be fixed but not by undermining, as I said 
before, the key architecture of the Affordable Care Act, 
whether it is a prevention care fund, which is very important 
to promote good health care. It shouldn't be sickness care; it 
should be health care.
    Mr. Burgess. Sir----
    Mr. Pollack. And I don't think that we should be 
undermining----
    Mr. Burgess. Reclaiming my time.
    Mr. Pollack [continuing]. With respect to clinical 
guidelines.
    Mr. Burgess. The architecture underlying the Affordable 
Care Act is anything but elegant; it is bizarre. It would be 
the nicest way to describe it. It is macabre.
    And honestly, I cannot--if the money is there in other 
programs, Mr. Chairman, I cannot see why the President and the 
Secretary have not responded to what is a very reasonable 
request that this committee has submitted in written form, and 
I will just reiterate that I think they should respond, and if 
they don't, I believe we should ask the question again as 
nicely as we possibly can. I will yield back, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman. We are going to 
go to another round, if that is OK. I still have some 
questions. I think you do.
    Governor Taylor, in your testimony you state that Ohio 
commissioned a study to estimate the effects of PPACA on 
premiums when the law is fully implemented. It found that 
premiums will increase by as much as 85 percent. Recently, the 
Society of Actuaries issued a report with a similar finding, 
estimating that Ohio's individual market could see premium 
increases as high as 80 percent. Do these estimates lead you to 
believe that many will forego coverage because of the ACA's 
costly requirements?
    Ms. Taylor. Mr. Chairman, we are clearly concerned by the 
changes that will be implemented starting in 2014 that are 
going to very severely negatively impact the cost of premiums 
in Ohio. Both studies are somewhat consistent in that premiums 
in our individual market will rise by as much as 85 percent. Of 
course, from a State perspective, yes, I am concerned. I would 
prefer to have more flexibility to come up with individual 
State solutions that solve Ohio's problem and Texas, solve your 
problem the way it best suits Texas, and I think given some 
flexibility, our goal would be to use a more market-based 
approach and help make the cost of insurance more affordable 
and more accessible using free-market approaches rather than 
providing federal subsidies that I think the High Risk Pool 
must somewhat look at what we might expect in the future where 
you have premiums being artificially held down by companies who 
are pressured by HHS and then ultimately premiums aren't 
covering the cost of the type of care that is being provided, 
and as a regulator, one of our primary concerns is, of course, 
solvency of the companies. Consumers are severely harmed if 
companies don't have enough capital or reserves to stay in 
business to pay those claims and ultimately it is the consumer 
who will suffer. So my preference would be back to a market-
based approach that reduces the cost of premiums for everyone 
and makes it more affordable and more accessible that way.
    Mr. Pitts. Would you continue to elaborate on what efforts 
Ohio is undertaking to reform health care in Ohio?
    Ms. Taylor. Yes, Mr. Chairman. Well, as I stated in my 
testimony, unfortunately, a lot of what we see in the ACA is 
not dealing with the root of the problem which is how you 
actually drive down the costs of health care. Really, it is 
more just insurance regulation or changes in insurance 
regulation. In Ohio, we have our Medicare and Medicaid groups 
working together so that they are coordinating the coverage of 
individuals that are eligible under both plans in order to save 
money. We have an office of health transformation that is 
working with individual providers, hospital providers across 
the country to help better coordinate care between those that 
receive services for mental health, for example, and then also 
how they receive services for physical health, doing a better 
job of coordinating those services to help drive down costs 
using technology to look at how we provide better care for 
patients, higher quality at lower cost. So working both on the 
Medicaid side but also then working on the private-sector side 
by partnering with providers across the State. And ultimately 
it has allowed us to hold down the increases that we would have 
otherwise seen in Medicaid so that we can have more flexibility 
with how we manage the Medicaid program and also the Governor 
has broken out in this most recent budget separately identified 
our Medicare director as a cabinet-level director versus 
working for a different agency.
    Mr. Pitts. Now, based on the problems you have dealt with 
already, could similar regulatory problems occur? Do you 
foresee your State having additional problems with the 
implementation of the Affordable Care Act once the law is fully 
implemented?
    Ms. Taylor. Mr. Chairman, I guess if we look back at our 
experience with the High Risk Pool, and I guess the statement 
is pretty much true that if you want an indication of the 
future, look at the past. Of course, we are concerned about 
disagreements with federal regulators both as a State regulator 
but then how does that impact consumers? Ultimately it impacts 
consumers, impacts companies, creates uncertainty in the 
market, which makes it much more difficult from an 
administrative perspective for all of us to deal with the 
difficult issues.
    Of course, we are concerned about the premium increases and 
the costs that that will bring. If you look at Ohio's High Risk 
Pool just as an example, we have about 3,500 people covered in 
our High Risk Pool and the costs ultimately we are projecting, 
costs being paid for by the federal government, somewhere 
between $135 million and $140 million to provide subsidies for 
that care. So of course, we have a cost issue. And then of 
course, I have already stated the concern we have with 
artificially holding down premiums that ultimately puts at risk 
the companies that are there to pay the provider claims and pay 
the claims for consumers.
    Mr. Pitts. Thank you. I want to sneak one more question in 
here.
    Ms. Zurface, your situation is not a special case. Can you 
talk a little bit about the number of patients who you 
reference in your written testimony who are facing the same 
government barriers as you do?
    Ms. Zurface. My situation is not a special case, and I 
think that is why I am here is because it is becoming almost 
the rule as opposed to the exception, especially now that there 
is not the funding available for this preexisting condition 
insurance program available right now. I believe that we 
submitted about eight different testimonies in the written 
transcript that was provided to you. Each one of those people 
is obviously too sick to be before you today, which is why I am 
representing those people as well. The problem that we have in 
trying to identify how many people are being affected is, we 
are only aware of the people who are being affected when they 
contact us directly, so we don't know who is having trouble, 
who got kicked out of the program, who applied too late to be 
permitted into the program. We don't know those numbers right 
now. I do know that the Leukemia and Lymphoma Society is 
working on making sure that we can have additional data to 
submit to the committee and we would be happy to provide more 
written information to you, but at this time the only people 
that we have direct information on are the ones whose stories 
are already in the record.
    Mr. Pitts. Now, how did you hear about the Leukemia and 
Lymphoma Society and how have they helped you through this 
trying time?
    Ms. Zurface. I had a magnificent experience with the 
Leukemia and Lymphoma Society. In 2005, shortly after my 
grandmother had been diagnosed with non-Hodgkin's lymphoma, I 
joined the Leukemia and Lymphoma Society's Team in Training and 
became an advocate and a fundraiser for them through cycling, 
so I did that for a season and then many of my friends that I 
met through that excursion remained advocates for Team in 
Training. So I was already familiar with the Leukemia and 
Lymphoma Society when I received my diagnosis in January, and 
they were one of the first resources that I looked up to 
determine whether there would be any type of premium assistance 
available in the event--as I am self-employed, one of the 
things that does happen is, I can't say I have X amount of 
dollars available for monthly income, so on a month-to-month 
basis my income may change and fluctuate so I may have a good 
month followed by a bad month, and I am sure that a lot of 
people who are self-employed understand exactly what I mean by 
that. So what I would need is something to fall back on, a 
fallback position, to even be able to make those premiums on a 
regular basis to make sure that I don't have a lapse in care 
once I am able to become insured, so I was researching that 
issue and came back in contact with the Leukemia and Lymphoma 
Society, who actually provided a symposium in March in 
Cincinnati, and I attended that symposium and reconnected with 
the agency. So they do have a lot of resources available for 
people in my situation.
    Mr. Pitts. Thank you, and again, thank you for sharing your 
personal experience and representing the other patients that 
you have referenced.
    Dr. Burgess, you are recognized for another 5-minute round.
    Mr. Burgess. Thank you, Mr. Chairman. Are you sure you want 
to do this?
    Let me just ask Ms. Zurface, you are a lawyer. You followed 
what happened in the Supreme Court last year, and a lot of the 
argument that was brought against the Affordable Care Act was 
based upon the constitutionality of using the Commerce Clause 
to compel the purchase of health insurance. Now, had the 
individual mandate existed 4 years ago, would you have had 
health insurance?
    Ms. Zurface. If the individual mandate had existed 3 years 
ago, it would appear that I would have been mandated to have 
insurance, so by nature, yes, I would have to say I would have 
had insurance 3 years ago prior to the time that I would have 
been diagnosed with this.
    Mr. Burgess. Except that those things that were a barrier 
for you to purchase insurance 3 years ago would still have been 
a barrier. I mean, the cost. You yourself point out how your 
income can fluctuate quite a bit during the year. One could 
even visualize a scenario where at one point you might be 
eligible for the Ohio Medicaid expansion, under 138 percent of 
the federal poverty level. At another point when you get a lot 
of work, you might be making too much money to qualify even for 
the subsidies in the exchange. And of course, as you know, 
people who then earn more income than would have allowed them 
to receive a subsidy. You don't know going into a year what 
kind of year you don't know going into a year what kind of year 
you are going to have, do you?
    Ms. Zurface. Not, not at all.
    Mr. Burgess. As far as your billings and collections. So 
you may be eligible for a subsidy and receive the subsidy but, 
you know what, at the end of the year, we may ask for that 
subsidy back because you have had a good year. So it is not 
quite as straightforward as just yes, if the mandate had been 
there, I probably would have had insurance. The barriers would 
have still existed, I submit, that the very things that 
prevented you from purchasing that insurance 3 years ago will 
in fact still be there for people who are now simply required 
to buy insurance, and some will because, well, it is the law, I 
got to do it, and others will no, it is still too expensive, it 
is still too much of a barrier, the fine is relatively modest, 
at least for several years for a single individual earning 
under a certain level, it is $600 or $700, and yes, if they 
catch me, then fine, I will pay the fine, but otherwise, I can 
make a payment on a bass boat for what I can buy insurance, and 
a lot of people are just simply going to elect not to do that. 
So I don't know if we changed, and Mr. Miller, you are bound to 
have some thoughts on the concept of whether the individual 
mandate will change the behavior of people who are looking at 
the insurance market and are kept out of it because of some of 
the barriers that have been discussed today.
    Mr. Miller. Well, CBO relied upon a small sample size of 
Massachusetts to basically make its projections on coverage 
take-up, and although they have their covered their tracks a 
little bit since then, they were assuming that people would 
just be good Americans obeying the law, and the mandate as a 
command was a big factor in its projections of the take-up, not 
just the subsidies alone. They haven't really dialed back on 
what those assumptions are in terms of what would be the 
coverage from the mandate, which is now just seen as a tax, and 
when you see things as a tax, other people have looked at this 
and said well, you are going to make a financial calculation: 
do I pay a small tax or do I pay a much higher premium, 
particularly with those premiums for some individuals are going 
much higher than what it actually cost them in insurance. So 
there is a lot of skepticism as to how effective the weak 
mandate as it currently exists both before and after the 
Supreme Court, what it will really mean in terms of pushing 
people into coverage to pay much more than they ordinarily 
would pay.
    Mr. Burgess. And there is still the safety net of community 
rating and guaranteed issue. You can buy the insurance in the 
emergency room or perhaps even in the ambulance on your 
smartphone on the way to the hospital after the accident.
    Mr. Miller. Correct. We have Medicaid coverage, which is 
actually provided after the fact, and it has been going on for 
some time. We have signed them in surgery actually. And 
certainly it depends upon--all the regs aren't there as to how 
they will handle the guaranteed issue under the Affordable Care 
Act, whether they will have a waiting period or only an 
enrollment period for a couple of months.
    Let me just take a moment, because I know we are about to 
finish. I sit here. I would like to stand in astonishment. Ron 
means well and said a lot of nice things at the hearing. I read 
his report last summer for Families USA in July of 2012. There 
was no nuance in that. It was a screaming headline: nearly 65 
million Americans at risk of losing their coverage but for the 
Affordable Care Act. Not one word or sentence in there about 
all the protections for people with employer-sponsored 
coverage. This problem of overshooting the mark and saying run 
for your lives, you are about to lose everything. HHS had a 
report in 2009, had over 125 million people at risk. It is 
marked down to 65 million in Ron's report. And another by 
Commonwealth, 12.5. When the serious people look at this and 
say where is the problem, you can get to about 4 or 5 million 
where it actually--that is where people are not getting 
coverage. Now, in some cases they may get a little bit of a 
rate-up in their premiums, but we ought to talk about where the 
problem is and what the dimensions are. It is a serious enough 
problem without exaggerating it, and then we can deal with it 
in a forceful, effective way. But it is used to leverage a 
larger agenda, which is to rope everybody into something else 
which we wouldn't support because you want to scare people that 
you are about to be at immediate risk, when that is overstated.
    Mr. Pollack. Well, it is not people----
    Mr. Burgess. I am about to run out of time. In fact, I am 
out of time. But Mr. Chairman, if I could, I would just like to 
ask a question of Dr. Collins because the issue of cost has 
come up, and of course, we were tasked to fix were preexisting 
conditions, not messing up the system as it currently exists, 
and then to help people with cost. It looks like we failed on 
all three points, but on the aspect of cost, the Commonwealth 
Fund put out a paper a few months ago from Minnesota that 
talked about--I think you called it the activated patient where 
the costs were lower for someone who actually was an active 
participant in their care, and we had all the hearings leading 
up to the Affordable Care Act and we heard from experts on 
Medicaid and we heard from experts on this, experts on that, 
but we never brought on, say, Governor Mitch Daniels from 
Indiana, who with his Healthy Indiana plan and creating that 
activated patient population found that he brought his costs 
down significantly over a 2-year span.
    It seems like that would be a logical way to approach 
things. We are talking about States expanding Medicaid. We are 
not talking about people who are already mandatory populations, 
that is, people in nursing homes, people who are blind and 
disabled, children. We are talking about new coverage for 
basically young adults who are healthy. Why wouldn't we use 
this activated patient model that the Commonwealth Fund wrote 
about in incorporating that expansion?
    Ms. Collins. You know, I think you raised a very good 
point, and I think the discussion of costs earlier is really 
important. I think the viability of the Affordable Care Act and 
the coverage expansions over time will depend on the 
affordability of the premiums, but half the law does address 
the underlying cost drivers in the system through a significant 
set of delivery system reforms, a lot of which have already 
gone into place. I think the law also encourages, unlike some 
of the comments that have been made here, huge innovations at 
the State level, so States have enormous flexibility in 
designing their insurance exchanges if they want to do so. They 
also have primary responsibility for regulating their insurance 
markets, and the delivery system reforms, we are seeing a 
slowdown in health care costs over the last couple years. Part 
of that is recession related but part of that is probably 
structural, so we are seeing changes in the system that are 
both being driven by innovations like going on in Ohio, 
Indiana, but also some that are being driven by incentives and 
new grant funding provided under the Affordable Care Act.
    This is a hugely important problem for the United States. 
It will determine the viability of the coverage provisions over 
time. There are insurance market regulations that do address 
premium growth. We have already seen a huge decline in the 
number of premium rate increase requests from insurance 
companies because of the rate review program that has been in 
effect for the last year. The medical loss ratio requirement is 
also having a huge impact, 1.5 million in rebates and 
administrative cost savings last year just as a result of that 
provision alone. So the Affordable Care Act is not just about 
coverage. In fact, over its 10-year budget projection, it 
actually reduces the overall deficit because of these 
additional delivery system reforms in addition to the coverage 
requirements.
    Mr. Burgess. Well, Governor Daniels said in a piece in the 
Wall Street Journal several years ago now, even before while we 
were still debating the Affordable Care Act, that by providing 
his State employees with a high-deductible policy for 
catastrophic coverage and then providing them the funds to pay 
that high deductible should they be required to do so, allowing 
them to keep the money in those health savings account if they 
didn't spend it, he came to the conclusion that something magic 
happens when people spend their own money for health care, even 
if it wasn't their own money in the first place, and I don't 
know why there has been such a resistance to accepting that 
lesson that he has shown so elegantly in Indiana and why we 
won't allow it to occur in more places.
    Lieutenant Governor, I will give you the last word. I 
rather suspect that the flexibility that Dr. Collins spoke 
about is something that you would welcome. Is that not correct?
    Ms. Taylor. Mr. Chairman, Dr. Burgess, yes. I guess my 
comment with regard to all of the flexibility that has 
portended to be given to the States both in how exchanges are 
organized, if you read the rules and regulations, if you look 
at at least Ohio's history with dealing the High Risk Pool, my 
definition of flexibility as it relates to dealing with HHS and 
CMS is, you can have as much flexibility as you want as long as 
you do it my way, and unfortunately for Ohio, we have the 
experience that we have had little flexibility, and if there 
was as much flexibility as is being suggested, I think you 
would have less concerns or issues coming from individual State 
regulators who say you tell us we can regulate our market, but 
when you disagree with what we have concluded as with the High 
Risk Pool and whether or not individual consumers were eligible 
for coverage, it was up to us until you decided no, and that is 
unfortunately the experience that we have had.
    Mr. Burgess. Thank you, Mr. Chairman. My time is expired. I 
will yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    We have other questions, but we will ask the members to 
submit their questions for the record and ask the witnesses to 
respond promptly when you receive those questions. This has 
been an excellent hearing, very, very important issue, and I 
want to thank the witnesses for taking time to come present 
their testimony.
    I remind the members they should submit their questions by 
the close of business on Wednesday, April 17. So without 
objection, with thanks to the witnesses, this subcommittee is 
adjourned.
    [Whereupon, at 2:26 p.m., the subcommittee was adjourned.]

                                 
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