[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
REVIEWING THE PRESIDENT'S
FISCAL YEAR 2014 BUDGET PROPOSAL
FOR THE U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
=======================================================================
HEARING
before the
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, JUNE 4, 2013
__________
Serial No. 113-20
__________
Printed for the use of the Committee on Education and the Workforce
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web:
www.gpo.gov/fdsys/browse/
committee.action?chamber=house&committee=education
or
Committee address: http://edworkforce.house.gov
_____
U.S. GOVERNMENT PRINTING OFFICE
81-276 PDF WASHINGTON : 2014
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN KLINE, Minnesota, Chairman
Thomas E. Petri, Wisconsin George Miller, California,
Howard P. ``Buck'' McKeon, Senior Democratic Member
California Robert E. Andrews, New Jersey
Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
Virginia Foxx, North Carolina Virginia
Tom Price, Georgia Ruben Hinojosa, Texas
Kenny Marchant, Texas Carolyn McCarthy, New York
Duncan Hunter, California John F. Tierney, Massachusetts
David P. Roe, Tennessee Rush Holt, New Jersey
Glenn Thompson, Pennsylvania Susan A. Davis, California
Tim Walberg, Michigan Raul M. Grijalva, Arizona
Matt Salmon, Arizona Timothy H. Bishop, New York
Brett Guthrie, Kentucky David Loebsack, Iowa
Scott DesJarlais, Tennessee Joe Courtney, Connecticut
Todd Rokita, Indiana Marcia L. Fudge, Ohio
Larry Bucshon, Indiana Jared Polis, Colorado
Trey Gowdy, South Carolina Gregorio Kilili Camacho Sablan,
Lou Barletta, Pennsylvania Northern Mariana Islands
Martha Roby, Alabama John A. Yarmuth, Kentucky
Joseph J. Heck, Nevada Frederica S. Wilson, Florida
Susan W. Brooks, Indiana Suzanne Bonamici, Oregon
Richard Hudson, North Carolina
Luke Messer, Indiana
Juliane Sullivan, Staff Director
Jody Calemine, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on June 4, 2013..................................... 1
Statement of Members:
Kline, Hon. John, Chairman, Committee on Education and the
Workforce.................................................. 2
Prepared statement of.................................... 3
Miller, Hon. George, senior Democratic member, Committee on
Education and the Workforce................................ 4
Prepared statement of.................................... 6
Statement of Witness:
Sebelius, Hon. Kathleen, Secretary, U.S. Department of Health
and Human Services......................................... 8
Prepared statement of.................................... 9
Additional Submissions:
Chairman Kline:
Article, ``ObamaCare Bait and Switch: The Truth About
Those Rate Increases in Oregon and California,'' Wall
Street Journal, June 3, 2013........................... 50
Questions submitted for the record....................... 53
Mr. Miller, article, ``Affordable Care Act Could Be Good for
Entrepreneurship,'' New York Times, May 31, 2013........... 50
Secretary Sebelius, response to questions submitted for the
record..................................................... 58
Thompson, Hon. Glenn, a Representative in Congress from the
State of Pennsylvania, letter dated May 30, 2013, from
Pennsylvania Gov. Tom Corbett to Secretary Sebelius........ 44
Questions submitted for the record:
Barletta, Hon. Lou, a Representative in Congress from the
State of Pennsylvania.................................. 55
Brooks, Hon. Susan W., a Representative in Congress from
the State of Indiana................................... 56
Bucshon, Hon. Larry, a Representative in Congress from
the State of Indiana................................... 55
Gowdy, Hon. Trey, a Representative in Congress from the
State of South Carolina................................ 55
Hinojosa, Hon. Ruben, a Representative in Congress from
the State of Texas..................................... 57
Hudson, Hon. Richard, a Representative in Congress from
the State of North Carolina............................ 56
Messer, Hon. Luke, a Representative in Congress from the
State of Indiana....................................... 57
Petri, Hon. Thomas E., a Representative in Congress from
the State of Wisconsin................................. 54
Polis, Hon. Jared, a Representative in Congress from the
State of Colorado...................................... 58
Roby, Hon. Martha, a Representative in Congress from the
State of Alabama....................................... 55
Roe, Hon. David P., a Representative in Congress from the
State of Tennessee..................................... 54
Rokita, Hon. Todd, a Representative in Congress from the
State of Indiana....................................... 54
Scott, Hon. Robert C. ``Bobby,'' a Representative in
Congress from the State of Virginia.................... 57
REVIEWING THE PRESIDENT'S
FISCAL YEAR 2014 BUDGET PROPOSAL
FOR THE U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
----------
Tuesday, June 4, 2013
U.S. House of Representatives
Committee on Education and the Workforce
Washington, DC
----------
The committee met, pursuant to call, at 10:04 a.m., in room
2175, Rayburn House Office Building, Hon. John Kline [chairman
of the committee] presiding.
Present: Representatives Kline, Wilson, Foxx, Price, Roe,
Thompson, Walberg, Salmon, Guthrie, DesJarlais, Bucshon, Gowdy,
Barletta, Roby, Heck, Brooks, Hudson, Messer, Miller, Andrews,
Scott, Hinojosa, Tierney, Holt, Davis, Grijalva, Bishop,
Loebsack, Courtney, Fudge, Polis, Yarmuth, Wilson, and
Bonamici.
Staff present: Andrew Banducci, Professional Staff Member;
Katherine Bathgate, Deputy Press Secretary; James Bergeron,
Director of Education and Human Services Policy; Casey Buboltz,
Coalitions and Member Services Coordinator; Owen Caine,
Legislative Assistant; Molly Conway, Professional Staff Member;
Ed Gilroy, Director of Workforce Policy; Benjamin Hoog, Senior
Legislative Assistant; Marvin Kaplan, Workforce Policy Counsel;
Rosemary Lahasky, Professional Staff Member; Nancy Locke, Chief
Clerk; Brian Newell, Deputy Communications Director; Krisann
Pearce, General Counsel; Jenny Prescott, Staff Assistant; Molly
McLaughlin Salmi, Deputy Director of Workforce Policy; Nicole
Sizemore, Deputy Press Secretary; Alex Sollberger,
Communications Director; Todd Spangler, Senior Health Policy
Advisor; Alissa Strawcutter, Deputy Clerk; Juliane Sullivan,
Staff Director; Joseph Wheeler, Professional Staff Member;
Aaron Albright, Minority Communications Director for Labor;
Tylease Alli, Minority Clerk/Intern and Fellow Coordinator;
Kelly Broughan, Minority Education Policy Associate; Jody
Calemine, Minority Staff Director; John D'Elia, Minority Labor
Policy Associate; Jamie Fasteau, Minority Director of Education
Policy; Daniel Foster, Minority Fellow, Labor; Scott Groginsky,
Minority Education Policy Advisor; Brian Levin, Minority Deputy
Press Secretary/New Media Coordinator; Leticia Mederos,
Minority Senior Policy Advisor; Megan O'Reilly, Minority
General Counsel; Michele Varnhagen, Minority Chief Policy
Advisor/Labor Policy Director; and Michael Zola, Minority
Deputy Staff Director.
Chairman Kline. A quorum being present, the committee will
come to order. Before we start this morning I want to point out
that our colleague from New York, Mrs. McCarthy, is not with
us. Some of you probably saw the news this morning--Mr. Miller
and I were just talking--she has been diagnosed with treatable
cancer and she will be missing for some time while she is being
treated. And, of course, our prayers are with here.
George, if you have any----
Mr. Miller. Mr. Chairman, just thank you very much. I had
an opportunity to talk to Carolyn yesterday evening and, as you
pointed out, she has been diagnosed with what they believe is
treatable lung cancer but she is in for a rough ride.
Told her we were all cheering for her and she would see us
after Labor Day, and so thank you very much and we are going to
miss her service on the committee in the meantime, but we all
obviously wish her well. Thank you.
Chairman Kline. Well, not always the happiest way to start
off, but good morning, Secretary Sebelius. Welcome back to the
Education and Workforce Committee.
Though the economic recovery began 4 years ago, countless
Americans continue to face serious challenges. Roughly 12
million are searching for work. Families have recouped less
than half of the household wealth lost during the recession.
The economy continues to move along at an anemic pace and the
national debt will soon reach an astonishing $17 trillion.
Congress has a responsibility to examine the programs and
priorities of the federal government, not only to ensure we
provide the best possible services to those in need and spend
taxpayer dollars wisely, but also to deter policies that make
it more difficult for businesses to hire new workers. That
means asking tough questions to demand accountability for every
dollar spent and each new rule imposed.
For example, is Head Start meeting the needs of students
and taxpayers? Two studies released by the department suggest
the answer is no. The gains students achieve in the program are
essentially lost by the time they graduate from the first
grade.
These findings are especially informative in light of the
President's plan to dramatically expand the federal role in
early childhood education. We should not be adding another
program onto an already broken system. Our nation's youth
deserve better.
Does the administration's welfare waiver scheme serve the
best interest of low-income families? The answer is no.
The 1996 bipartisan welfare reform law has helped reduce
poverty and strengthen the income security of millions of needy
families. Last year the department announced a plan to end
welfare reform as we know it by allowing states to waive the
work requirements central to the law's success. This plan would
create more dependency when 47 million individuals are already
trapped in poverty.
And is the health care law living up to the promises the
President made to the American people? Once again the answer is
no.
The President promised to lower health care premiums for
the average family by $2,500, but premiums rose 4 percent last
year and 9 percent the year before. Meanwhile, insurance
providers are warning of rate shock in the years to come.
The President also promised if you liked your health care
plan you could keep it. However, the nonpartisan Congressional
Budget Office estimates as many as 20 million individuals will
lose their current plan. Many will be forced to pay more for
health care they do not want or need in order to meet the
mandates from Washington.
Finally, it was promised the law would create millions of
new jobs, yet barely a day goes by when we don't read reports
of the law wreaking havoc in workplaces across the country.
Once small business owner testified the law will lead to either
higher prices for his customers or fewer hours for employees. A
human resources professional at a North Carolina community
college warned they may have to cut the number of courses
offered to students and described the law as a, ``massive
administrative burden that comes with unanticipated costs.''
To prove these aren't just Republican accusations, here are
a few recent headlines surrounding the law: ``Like your health
policy? You may be losing it,'' warns the Associated Press.
``As health law changes loom, a shift to part-time workers,''
writes National Public Radio. ``Some unions now angry about
health care overhaul,'' also by the Associated Press. ``Health
insurers warn on premiums,'' reports the Wall Street Journal.
The litany of bad news goes on. As one senior Democrat and
architect of the law stated, the law is headed for a train
wreck, and still there are those who want to force every
American to go along for the ride. Isn't it time for the
President to admit we can do better than a flawed health care
law that is raising costs and destroying jobs?
I look forward to your answers to these and other important
questions, Secretary Sebelius.
With that, I will now recognize the senior Democratic
member of the committee, my colleague, Mr. Miller, for his
opening remarks?
[The statement of Chairman Kline follows:]
Prepared Statement of Hon. John Kline, Chairman,
Committee on Education and the Workforce
Good morning. Secretary Sebelius, welcome back to the Education and
the Workforce Committee. Though the economic recovery began four year
ago, countless Americans continue to face serious challenges. Roughly
12 million are searching for work. Families have recouped less than
half of the household income lost during the recession. The economy
continues to move along at an anemic pace. And the national debt will
soon reach a historic $17 trillion.
Congress has a responsibility to examine the programs and
priorities of the federal government, not only to ensure we provide the
best possible services to those in need and spend taxpayer dollars
wisely, but also to deter policies that make it more difficult for
businesses to hire new workers. That means asking tough questions to
demand accountability for every dollar spent and each new rule
proposed.
For example, is Head Start meeting the needs of students and
taxpayers? Two studies released by the department suggest the answer is
no. The gains students achieve in the program are essentially lost by
the time they graduate from the first grade. These findings are
especially informative in light of the president's plan to dramatically
expand the federal role in early-childhood education. We should not be
adding another program onto an already broken system; our nation's
youth deserve better.
Does the administration's welfare waiver scheme serve the best
interests of low-income families? The answer is a resounding no. The
1996 bipartisan welfare reform law has helped reduce poverty and
strengthen the income-security of millions of needy families. Last year
the department announced a plan to end welfare reform as we know it by
allowing states to waive the work requirements central to the law's
success. This plan would create more dependency when 47 million
individuals are already trapped in poverty.
And is the health care law living up to the promises the president
made to the American people? Once again the answer is no. The president
promised to lower health care premiums for the average family by
$2,500, but premiums rose 4 percent last year and 9 percent the year
before. Meanwhile, insurance providers are warning of rate shock in the
years to come.
The president also promised if you liked your health care plan, you
could keep it. However, the nonpartisan Congressional Budget Office
estimates as many as 20 million individuals will lose their current
plan. Many will be forced to pay more for health care they do not want
or need in order to meet the mandates from a few bureaucrats in
Washington.
Finally, it was promised the law would create millions of new jobs.
Yet barely a day goes by when we don't read reports of the law wreaking
havoc in workplaces across the country. One small business owner
testified the law will lead to either higher prices for his customers
or fewer hours for employees. A human resources professional at a North
Carolina community college warned they may have to cut the number of
courses offered to students and described the law as a ``massive
administrative burden that comes with unanticipated costs.''
To prove these aren't just Republican accusations, here are a few
recent headlines surrounding the law:
``Like your health care policy? You may be losing it,'' warns the
Associated Press.
``As health law changes loom, a shift to part-time workers,''
writes NPR.
``Some unions now angry about health care overhaul,'' also by the
Associated Press.
``Health insurers warn on premiums,'' reports the Wall Street
Journal.
The litany of bad news goes on. As one senior Democrat and
architect of the law stated, the law is headed for a train wreck, and
still there are those who want to force every American to go along for
the ride. Isn't it time for the president to admit we can do better
than a flawed health care law that is raising costs and destroying
jobs?
I look forward to your answers to these and other important
questions, Secretary Sebelius. With that, I will now recognize the
senior Democratic member of the committee, my colleague Representative
George Miller, for his opening remarks.
______
Mr. Miller. Thank you, Mr. Chairman. And I join you in
welcoming Secretary Sebelius back to the committee.
From educating our youngest children in Head Start to
ensuring seniors access to health care through Medicare, the
Department of Health and Human Services administers programs to
make our nation stronger and healthier. The department is
handling a number of important policies and proposals and I
would like to focus my comments on just two of these efforts.
First, I believe that President Obama's child care and
early childhood education proposals recognize the overwhelming
evidence that investments in early education more than pay off
down the line. We know that providing greater access to high-
quality preschool, child care, and voluntary home visitations
with mothers of newborns are proven ways to close the
achievement gap and strengthen school readiness. These programs
and proposals have received bipartisan support in the past and
they should have bipartisan support today and in the future.
In the meantime, we should be working hard to stop the
automatic cuts to the Head Start program. They have been having
a devastating impact on tens of thousands of children and their
families.
Despite this, the Republican majority refuses to restore
these cuts. They have already voted to double down on the
sequester with even more cuts in the Republic budget, and when
there were threats to--excuse me--but when there were threats
for the waits of members of Congress at the airports we broke
the land speed record and passed legislation to stop that
sequester. However, when it comes to 70,000 kids' future, the
urgency to restore these cuts haven't received the committee
hearing, let alone a vote. These kids can't afford to lose
access to Head Start.
Likewise, playing politics with the Affordable Care Act has
become something of an Olympic sport for the majority. The
majority has tried in one way or another to repeal the
Affordable Care Act 37 times.
This is outrageous, especially at a time when the
Affordable Care Act is coming into full effect. Already, more
than 6 million young adults have been allowed to stay on their
parents' health plan; 54 million Americans with private health
insurance have been able to get preventative health screening
with no copayment; 6.3 million seniors have saved more than $6
billion in the cost of their prescription drugs; nearly 13
million Americans have received more than $1 billion in rebates
and lowered premiums from insurance companies that were
spending more on overhead rather than on health care.
The federal government is recovering billions of dollars by
reducing Medicare fraud, and growth in health care costs have
slowed and the Affordable Health Care Act has been partially
responsible for that--so much so that CBO says that we are
realizing billions of savings in Medicare and the Medicaid
programs, more expected to come. And beginning in October,
Americans without access to affordable insurance will be able
to shop for health care plans in the transparent marketplace
for the first time.
And there has been good news on that front from the number
of states, including California, which has been one of the most
proactive states implementing reform, and it is going to pay
off for our citizens. In the states that have published the
2014 health insurance premiums, where insurance companies are
competing and offering affordable premiums, contrary to the
predictions of the majority.
For instance, in California's published premiums have come
in or are much lower than plans today and comparable benefits.
This is all good news and stands in contrast to claims that we
have been hearing from the other side for 3 years.
And this also stands in stark contrast to the Republican
health care agenda. More than 3 years ago House committees,
including this one, were to report alternative health care
reform proposals. We have seen none from any committee; all we
have seen is repeal.
And in those 3 years we have produced nothing but these 37
attempts at repeal, and there is more to be done to secure
Medicare in the long term and there is more to be done to
ensure the Affordable Care Act is fully implemented, but these
reforms should be allowed to work because the alternative is
unacceptable. Repeal is unacceptable because it will take away
the important benefits already in the law.
Repeal means working families going bankrupt because of an
expensive illness like cancer. Repeal means sick children will
be denied coverage. Repeal means millions of young adults
losing access to their parents' coverage. And repeal means that
all of the other patient's rights set to go into law in a few
months will never happen, like completely ending the use of
preexisting conditions to deny care or pricing Americans out of
coverage, like ensuring that all Americans have access to
quality and affordable health insurance that is not dependent
on whether or not your employer offers it or not or whether or
not you become unemployed.
Mr. Chairman, the Affordable Care Act is already making a
difference. I applaud Secretary Sebelius for the monumental
efforts that she has made to implement this law in the face of
endless obstruction from this House.
America tried to enact meaningful health care reform for
nearly a century. We have debated it. Republican Presidents and
Democratic Presidents have offered proposals for national
health care. But it couldn't have happened until President
Obama and the Democratic Congress finally made it happen.
Now is not the time to reverse course and go back to the
days when insurance companies were in charge. Our nation's
businesses, families, and governments can't afford it.
Once again, thank you, Secretary Sebelius, for making
yourself available to the committee and I look forward to your
testimony.
[The statement of Mr. Miller follows:]
Prepared Statement of Hon. George Miller, Senior Democratic Member,
Committee on Education and the Workforce
Good morning Mr. Chairman. I join you in welcoming Secretary
Sebelius back to the committee.
From educating our youngest children in Head Start to ensuring
seniors' access to health care through Medicare, the Department of
Health and Human Services administers programs that make our nation
stronger and healthier.
The department is handling a number of important policy priorities
and proposals. I would like to focus my comments on just two of these
efforts.
First, I believe that President Obama's child care and early
education proposals recognize the overwhelming evidence that
investments in early education more than pay off down the road.
We know that providing greater access to high-quality pre-school,
child care, and voluntary home visitation with mothers with newborns
are proven ways to close achievement gaps and strengthen school
readiness.
These programs and proposals have received bipartisan support in
the past. And they should have bipartisan support today and in the
future.
In the meantime, we should also be working to stop the automatic
cuts to the Head Start program. They are having a devastating impact on
tens of thousands of children and their families.
Despite this, this Republican majority refuses to restore these
cuts. They have already voted to double-down on the sequester with even
more cuts in the Republican budget.
But when there were threats of waits for members of Congress at
airports, we broke a land-speed record and passed legislation to stop
it. However, when it comes to 70,000 kids' future, the urgency restore
these cuts haven't received a committee hearing, let alone a vote.
These kids can't afford to lose access to Head Start. I hope we can
get past this fiscal cliff politics and restore funding to this and
other very important programs.
Likewise, playing politics with the Affordable Care Act has become
something of an Olympic sport for the majority. The majority has tried
in one way or another to repeal the ACA 37 times.
This is outrageous, especially at a time when the Affordable Care
Act is coming into full effect.
Already, more than 6 million young adults have been allowed to stay
on their parents' health plan. 54 million Americans with private health
insurance have been able to get preventive health screenings with no
co-payment. 6.3 million seniors have saved more than $6 billion on the
cost of their prescription drugs. Nearly 13 million Americans have
received more than a billion dollars in rebates or lower premiums from
insurance companies that spent more on overhead rather than health
care. The federal government is recovering billions more by stopping
Medicare fraud.
Growth in health care costs have slowed dramatically since the
Affordable Care Act became law.
So much so, that the CBO says that we are already realizing
billions in savings in the Medicare and Medicaid programs with more
expected to come.
And, beginning in October, Americans without access to affordable
insurance will be able to shop for a health plan in a transparent
marketplace for the first time.
There has been good news on that front from a number of states,
including California, which has been one of the most pro-active states
implementing reform. And it's going to pay off for our citizens.
In the states that have published the 2014 health insurance
premiums, insurance companies are competing and offering affordable
premiums--contrary to the predictions of the majority. For instance,
California's published premiums have come in at or much lower than
plans today with comparable benefits.
This is all good news and stands in contrast to the claims we've
been hearing from the other side for three years. And this also stands
in stark contrast to the Republican health care agenda.
More than three years ago, House committees--including this one--
were to report alternative health care reform proposals. But three
years later, we have produced nothing but 37 attempts to repeal the ACA
and efforts to end the Medicare guarantee.
There is more to be done to secure Medicare for the long-term, and
more to do to ensure that the Affordable Care Act is fully implemented.
No piece of legislation is perfect. There will be bumps in the road.
But these reforms should be allowed to work because the alternative is
unacceptable.
Repeal is unacceptable because it will take away these important
benefits already in law.
Repeal means working families going bankrupt because of an
expensive illness like cancer.
Repeal means sick children can be denied coverage.
Repeal means millions of young adults losing access to their
parents' coverage.
And repeal means that all of the other patient rights set to go
into law in a few months will never happen.
Like completely ending the use of preexisting conditions to deny
care or pricing Americans out of coverage. Like ensuring all Americans
have access to quality and affordable health insurance that is not
dependent on whether your employer offers it or not.
Mr. Chairman, the Affordable Care Act is already making a
difference. I applaud Secretary Sebelius' monumental task to implement
this law in the face of endless obstruction from this House.
America tried to enact meaningful health reform for nearly a
century but we couldn't make it happen until President Obama and a
Democratic Congress finally made it happen.
Now is not the time to reverse course and go back to the days where
insurance companies were in charge. Our nation's businesses, families,
and our government can't afford it.
Once again, thank you, Secretary Sebelius, for making yourself
available to the committee.
I look forward to your testimony.
______
Chairman Kline. Thank the gentleman.
Pursuant to committee rule 7(c), all committee members will
be permitted to submit written statements to be included in the
permanent hearing record. Without objection, the hearing record
will remain open for 14 days to allow statements, questions for
the record, and other extraneous material referenced during the
hearing to be submitted in the official hearing record.
Again, Madam Secretary, welcome back to the committee. It
is my pleasure to introduce our witness, but everybody here
knows who you are and knows your background and we are eager to
hear your testimony.
So, Madam Secretary, floor is yours.
STATEMENT OF HON. KATHLEEN SEBELIUS, SECRETARY,
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Secretary Sebelius. Sorry. Chairman Kline, Ranking Member
Miller, members of the committee, thank you for the opportunity
to discuss the President's 2014 budget for the Department of
Health and Human Services.
This budget supports the overall goals of the President's
budget by strengthening our economy and promoting middle class
growth. It ensures that the American people will continue to
benefit from the Affordable Care Act; it strengthens education
and services for our children during their critical early years
to help ensure they can live healthy lives and succeed in a
21st century economy; provides much-needed support for mental
health services and takes steps to address the ongoing tragedy
of gun violence; and it helps reduce the deficit in a balanced,
sustainable way.
I look forward to answering the committee members'
questions about the budget, but first I would like to briefly
cover a few of the highlights.
The Affordable Care Act is already benefiting millions of
Americans and our budget makes sure we can continue to
implement the law. By supporting the creation of new health
insurance marketplaces, the budget will ensure that starting
next January Americans in every state will be able to get
quality health insurance at an affordable price.
Our budget also supports the President's call to provide
every child in America with access to high-quality early
learning services. It proposes additional investments in new
Early Head Start child care partnerships. And it provides more
funding for child care to complement our recent proposed rules
to strengthen child care health and safety standards.
Together, these investments will create long-lasting
positive outcomes for families and provide huge returns for the
children who benefit from these programs and for society at
large.
Our budget also addresses another issue that has been on
all of our minds recently: mental health services and the
ongoing epidemic of gun violence. We know that the vast
majority of Americans who struggle with mental illness are not
violent. Recent tragedies have reminded us of the staggering
toll that untreated mental illness can take on our society, and
that is why this budget proposes a major new investment, to
help ensure that students and young adults get the mental
health care they need, including training 5,000 new mental
health professionals to join our behavioral health workforce.
Even as our budget invests for the future, it also helps
reduce the long-term deficit by making sure programs like
Medicare are put on a more stable fiscal trajectory. Medicare
spending per beneficiary grew at just four-tenths of 1 percent
in 2012 thanks in part to the $800 billion in savings already
in the Affordable Care Act. And the President's 2014 budget
would achieve even more savings. For example, the budget will
allow low-income Medicare beneficiaries to get their
prescription drugs at lower Medicaid rates, resulting in
savings of more than $120 billion over the next 10 years.
In total, this budget would generate an additional $371
billion in Medicare savings over the next decade on top of the
savings already in the Affordable Care Act.
To that same end, our budget also reflects our commitment
to aggressively reducing waste across the department. We are
proposing an increase in mandatory funding for the Health Care
Fraud and Abuse Control program, an initiative that saved
taxpayers nearly $8 for every dollar spent on it last year. And
we are investing in additional efforts to reduce improper
payments in Medicare, Medicaid, and CHIP, and to strengthen our
office of inspector general.
Now, this all adds up to a budget guided by this
administration's North Star of a thriving middle class. It will
promote job growth and keep our economy strong in the years to
come while also helping to reduce the long-term deficit.
Now, I am sure many of you have questions and I am happy to
take them now.
Thank you again, Mr. Chairman, for inviting me today.
[The statement of Secretary Sebelius follows:]
Prepared Statement of Hon. Kathleen Sebelius, Secretary,
U.S. Department of Health and Human Services
Chairman Kline, Ranking Member Miller, and Members of the
Committee, thank you for the invitation to discuss the President's FY
2014 Budget for the Department of Health and Human Services (HHS).
The Budget for HHS provides critical investments in health care,
disease prevention, social services, and scientific research in order
to create healthier and safer families, stronger communities, and a
thriving America.
The President's fiscal year (FY) 2014 Budget for HHS includes
investments needed to support the health and well being of the nation,
and legislative proposals that would save an estimated $361.1 billion
over 10 years. The Budget totals $967.3 billion in outlays and proposes
$80.1 billion in discretionary budget authority. With this funding HHS
will continue to improve health care and expand coverage, create
opportunity and give kids the chance to succeed, protect vulnerable
populations, promote science and innovation, protect the nation's
public health and national security, and focus on responsible
stewardship of taxpayer dollars.
Improving Health Care and Expanding Coverage
Expanding Health Insurance Coverage. Implementation of the
Exchanges, also referred to as Marketplaces, will expand access to
affordable insurance coverage for 25 million Americans. Marketplaces
make purchasing private health insurance easier by providing eligible
consumers and small businesses with one-stop-shopping where they can
compare across plans. New premium tax credits and rules ensuring fair
premium rates improve affordability of private coverage. Marketplaces
will be operational in 2014; open enrollment begins October 1, 2013 for
the coverage year beginning January 1, 2014. The Budget supports
operations in the Federal Marketplaces, as well as oversight and
assistance to State-based and Partnership Marketplaces.
Beginning in January 2014, Medicaid coverage rules will be
simplified and aligned with rules for determining eligibility for tax
credits for private insurance in the Marketplaces, and millions of low-
income people will gain coverage. The Centers for Medicare & Medicaid
Services (CMS) is committed to working with states and other partners
to advance state efforts that promote health, improve the quality of
care, and lower health care costs.
Also beginning in 2014, consumers will benefit from a number of new
protections in the private health insurance market. Most health
insurers will no longer be allowed to charge more or deny coverage to
people because of pre-existing conditions. These new protections will
also prohibit most health insurers from putting annual dollar limits on
benefits and from varying premiums based on gender or any factor other
than age, tobacco use, family size, or geography. In addition, new
plans in the individual and small group market will be required to
cover a comprehensive package of items and services known as Essential
Health Benefits, which must include items and services within ten
benefit categories. Finally, most individuals choosing to participate
in clinical trials will not face limits in health insurance coverage.
This protection applies to all clinical trials that treat cancer or
other life-threatening diseases.
Expanding Access to Care through Health Centers. The FY 2014 Budget
includes $3.8 billion for the Health Centers program, including $2.2
billion in mandatory funding provided through the Affordable Care Act
Community Health Center Fund. In FY 2014, 23 million patients will
receive health care through more than 8,900 sites in medically
underserved communities throughout the nation. The Budget funds 40 new
health center sites for the provision of preventive health care
services, expanding outreach and care to approximately 1.5 million
additional patients.
Increasing Access to Mental Health Services
The FY 2014 Budget includes over $1 billion for mental health
programs at the Substance Abuse and Mental Health Services
Administration (SAMSHA), including the $460 million for the Community
Mental Health Services Block Grant. This block grant provides States
flexible funding to maintain community based mental health services for
children and adults with serious mental illnesses, including
rehabilitation, supported housing, and employment opportunities. The
Budget also proposes funding within the block grant to encourage States
to build provider capacity to bill public and private insurance. This
will support States in an effective transition in the first year of the
Affordable Care Act, which will include expanded coverage for mental
health and substance abuse treatment services.
Expand Prevention and Treatment for Youth and Families. While the
vast majority of Americans with a mental illness are not violent, and
are in fact more likely to be the victims of violence, recent tragedies
have brought to light a hidden crisis in America's mental health
system. The Budget addresses these issues by investing $130 million to
help teachers and other adults recognize signs of mental illness in
students and refer them to help if needed, support innovative state-
based programs to improve mental health outcomes for young people ages
16- 25, and train 5,000 more mental health professionals with a focus
on serving students and young adults.
Helping Families and Children Succeed
In his State of the Union Address, President Obama proposed a
series of new investments to create a continuum of high-quality early
learning services for children beginning at birth through age five. As
part of this initiative, HHS and the Department of Education are
working together to make high-quality preschool available to four-year
olds from low- and moderate-income families through a partnership with
states, expand the availability of high-quality care for infants and
toddlers, and increase highly-effective, voluntary home visiting
programs to provide health, social, and education supports to low-
income families. Specifically, the FY 2014 HHS Budget includes:
Early Head Start--Child Care Partnerships. The Budget proposes $1.4
billion in FY 2014 for new Early Head Start--Child Care Partnerships
that will expand the availability of early learning programs that meet
the highest standards of quality for infants and toddlers, serving
children from birth through age three. In addition to the new
Partnerships, the Budget provides $222 million above FY 2012 to
strengthen services for children currently enrolled in the program,
avoid further enrollment reductions, and support the Head Start
Designation Renewal System. Together, these investments total $9.6
billion, an increase of $1.7 billion over FY 2012.
Head Start Reform. The Budget proposes a $197 million cost of
living adjustment in FY 2014 which will strengthen existing services
for children currently enrolled in Head Start and avoid further
reductions in enrollment. Additionally, the Budget proposes $25 million
in FY 2014 to minimize potential service disruptions by providing new
grantees funding for start-up costs associated with transitioning from
an incumbent grantee as a result of recompetition in the Designation
Renewal System. Under the Designation Renewal System, Head Start
grantees who do not meet quality thresholds established by the
department have to compete for their continued funding with other
potential providers from the community. Requiring grantees who are not
meeting quality benchmarks to compete for funding will improve the
quality of the program.
Improving the Safety and Quality of Child Care. The Budget provides
$500 million above FY 2012 in mandatory funds to serve 1.4 million
children, approximately 100,000 more than would otherwise be served. In
addition to this funding, the request includes $200 million above FY
2012 in discretionary funds to help states raise the bar on quality by
strengthening health and safety measures in child care settings,
supporting professional development for providers, and promoting
transparency and consumer education to help parents make informed child
care choices.
The additional funding to improve child care quality also will
support changes that may come as a result of a new regulation that the
department recently issued for public comment that will better ensure
children's health and safety in child care and promote school
readiness. Under the proposed rule, states, territories and tribes
would be required to strengthen their standards to better promote the
health, safety and school readiness of children in federally funded
child care. While states can use their existing funds to implement
potential changes in these areas, these new resources dedicated to
quality improvement would help states that have further to go in
improving their programs.
We also will continue to work with Congress to reauthorize the
Child Care and Development Block Grant, which was last reauthorized in
1996.
Child Support and Fatherhood Initiative. Additionally, the Budget
includes a set of proposals to encourage states to pay child support
collections to families rather than retaining those payments. This
effort includes a proposal to encourage states to provide all current
monthly child support collections to Temporary Assistance for Needy
Families recipients. Recognizing that healthy families need more than
just financial support alone, the proposal requires states to include
parenting time provisions in initial child support orders, to increase
resources to support, and facilitate non-custodial parents' access to
and visitation with their children. The Budget also includes new
enforcement mechanisms that will enhance child support collections.
Home Visiting. The Budget extends and expands this voluntary
evidence-based program that has shown to be critical in improving
maternal and child health outcomes in the early years, leaving long-
lasting, positive impacts on parenting skills; children's cognitive,
language, and social-emotional development; and school readiness. The
Budget proposes a long-term $15 billion investment beginning in FY
2015.
Protecting Vulnerable Populations
Addressing the Unique Needs of Communities. The Administration for
Community Living (ACL) was formed in April 2012 as a single agency
designed to help more people with disabilities and older adults have
the option to live in their homes and participate fully in their
communities. The FY 2014 Budget reflects the creation of ACL by
bringing together the resources for the Administration on Aging, the
Office on Disability, and the Administration on Intellectual and
Developmental Disabilities, into a consolidated request. This newly
organized agency works across HHS to harmonize efforts to promote
community living, which can both save federal funds and allow people
who choose to live with dignity in the communities they call home.
ACL's Older Americans Act programs, as an example, last year served
nearly 11 million seniors and their caregivers through home and
community-based services. These critical supports complement medical
and health care systems, help to prevent hospital readmissions, provide
transportation to doctor appointments, and support some of life's most
basic functions, such as assistance to elders in preparing and
delivering meals, or helping them with bathing. It is important that we
continue to support alternatives to institutional care that are person-
centered, consumer-driven and support individuals in their homes
through the best evidence-based practices.
Promoting Science and Innovation
Advancing Scientific Knowledge. The FY 2014 Budget includes $31.3
billion for the National Institutes of Health (NIH), an increase of
$471 million over the FY 2012 level, reflecting the Administration's
priority to invest in innovative biomedical and behavioral research
that spurs economic growth while advancing medical science. In FY 2014,
NIH will focus on investing in today's basic research for tomorrow's
breakthroughs, advancing translational sciences, and recruiting and
retaining diverse scientific talent and creativity. Investment in NIH
also helps drive the biotechnology sector and assure the nation's place
as a leader in science and technology.
Alzheimer's Disease Initiatives. The Department continues to
implement the National Plan to Address Alzheimer's Disease, as required
by the National Alzheimer's Project Act. In FY 2014, the Budget
includes a $100 million initiative targeted to expanding research,
education, and outreach on Alzheimer's disease, and to improving
patient, family, and caregiver support.
Included in this initiative is $80 million within the NIH budget to
be devoted to speeding drug development and testing new therapies.
Also, the request for the Prevention and Public Health Fund (Prevention
Fund) includes $20 million for the Alzheimer's Disease Initiative. Of
this, ACL will use $15 million to strengthen state and local dementia
intervention capabilities and for outreach to inform those who care for
individuals with Alzheimer's disease about resources available to help
them. HRSA will use the other $5 million to expand efforts to provide
training to healthcare providers on Alzheimer's disease and related
dementias.
Focusing on Responsible Stewardship of Taxpayer Dollars
Contributing to deficit reduction while maintaining promises to all
Americans. The HHS Budget makes the investments the nation needs right
now, while reducing the deficit in the long term and ensuring the
programs that millions of Americans rely on will be there for
generations to come. While it maintains ongoing investments in areas
most central to advancing the HHS mission to the Budget reduces support
for lower priority areas, reduces duplication, and increases
administrative efficiencies. Overall, the FY 2014 Budget includes
nearly $2.3 billion in discretionary terminations and budget
reductions.
The Affordable Care Act has already helped to slow rising costs
through innovations that tackle the underlying health care costs that
have been driving Medicare and Medicaid spending. In fiscal year 2012,
per beneficiary Medicare spending grew by only 0.4 percent, and total
per beneficiary Medicaid spending actually decreased by 1.9 percent.
For the first time in a decade, overall health care costs grew more
slowly than the economy. We are driving down costs while improving
quality for patients by building a smarter system--for example, after
decades stuck at 19 percent, avoidable hospital readmissions fell to
17.8 percent in Medicare last year with the help of payment reforms and
assistance to hospitals. The Budget invests in programs and policies
that enable HHS to build on this work.
Combating fraud, waste, and abuse in health care. The FY 2014
Budget makes cutting fraud, waste, and abuse a top Administration
priority. In addition to the base discretionary Health Care Fraud and
Abuse Control (HCFAC) funding in FY 2013 and FY 2014, the Budget seeks
new mandatory funding to support these efforts. Starting in FY 2015,
the Budget proposes that all new HCFAC investments be mandatory
spending, consistent with levels in the Budget Control Act. This
investment supports initiatives like the Fraud Prevention System and
screening for Medicare providers and suppliers to reduce improper
payments in Medicare, Medicaid and CHIP; and HHS-Department of Justice
Health Care Fraud Prevention and Enforcement Action Team initiatives,
including the Medicare Strike Force teams and the Fraud Prevention
Partnership between the federal government, private insurers, and other
key stakeholders.
From 1997 to 2012, HCFAC programs have returned more than $23
billion to the Medicare Trust Funds, and the current three-year return-
on-investment of 7.9 to 1 is the highest in the history of the HCFAC
program. The Budget's 10-year HCFAC investment yields a conservative
estimate of $6.7 billion in Medicare and Medicaid savings.
The Budget includes $389 million in discretionary and mandatory
funding for the Office of Inspector General (OIG), an increase of $101
million above the FY 2012 level. This increase will enable OIG to
expand CMS Program Integrity efforts for the Health Care Fraud
Prevention and Enforcement Action Team and improper payments, and also
enhance investigative efforts focused on civil fraud, oversight of
grants, and the operation of Affordable Care Act programs.
The Budget also includes $82 million for the Office of Medicare
Hearings and Appeals (OMHA), an increase of $10 million from FY 2012,
to address OMHA's adjudicatory capacity and staffing levels and
maintain quality and accuracy of its decisions. The increase allows
OMHA to establish a new field office in the Central time zone supported
by additional Administrative Law Judge teams and attorneys, and
operational staff.
Thank you for the opportunity to testify. I will be happy to answer
any questions you may have.
______
Chairman Kline. Thank you, Madam Secretary.
Madam Secretary, it gets very frustrating, of course, for
us here as we look for information from the departments--all
the departments--of the administration. We asked in the Child
Abuse Prevention and Treatment Act--CAPTA--Reauthorization Act
of 2010 for your department to conduct three studies on child
abuse prevention and treatment activities.
One was examining whether state and local laws and
regulations on immunity from prosecution facilitate or deter
individuals from cooperating, consulting, or assisting in
reporting known instances of child abuse and neglect. The
report was due December 2011.
Another one was examining efforts to improve coordination
of child abuse and neglect organizations. The report was due
December 2011.
Third was examining the effectiveness of reports of
programs receiving state grants for child abuse and neglect
prevention and treatment. That report was due December 2012.
In July of 2012 Mr. Miller and I sent you a letter asking
for an update on the status of the reports. At the time just
two of the three were overdue. In August your department
responded, stating that it planned to complete them by the end
of December 2012, and of course, that hasn't happened.
So some frustration is coming through here, but we put
these things in law. We need information, we have
responsibilities here to legislate and provide oversight, and
we don't get the answers.
I appreciate there was an apology for not complying. When
can we expect to get these reports?
Secretary Sebelius. Mr. Chairman, you will have the three
reports by the end of the month.
Chairman Kline. Congressional record. We are writing it
down. Okay.
Secretary Sebelius. June 2013 you will have all three
reports.
Chairman Kline. I got it. And I certainly hope you are not
hearing from me on July 1st about that.
Secretary Sebelius. Me too.
Chairman Kline. All right.
Head Start: The first round of the recompetition of Head
Start grantees is almost complete. After almost a year of
delays the potential grant winners announced this spring will
be finalized this summer. I have a couple of questions about
that.
The first round of recompetition consists of the lowest-
performing grantees. Is that right?
Secretary Sebelius. That is correct.
Chairman Kline. How many of these grantees will receive a
new grant?
Secretary Sebelius. I can't tell you the exact number, Mr.
Chairman, off the top of my head. I know some of the recompeted
grants were given back to the original grantees; in some cases
they were the only grantees applying.
Chairman Kline. Well, we have seen some reports that an
overwhelming majority of the 125 grantees that compete in the
first round will continue to receive federal funding. If these
grantees are the lowest-performing grantees, how does that fit
in with the rest of the program? If an overwhelming majority of
the lowest-performing grantees are going forward I am a
little--you can see where I am going----
Secretary Sebelius. Sure.
Chairman Kline. I am a little concerned about how that
would play out.
Secretary Sebelius. Well, Mr. Chairman, first of all, as
you know, the recompetition is a first of its kind effort to
make sure that grants are just not automatically rolled over,
which had been the case in the past. I can tell you that in all
cases the lowest-performing grantees have a series of steps
that they need to continue to take as well as additional
oversight visits to make sure that the quality standards are on
an improvement plan.
We did have situations where in some cases they were the
only re-applicant, and the choice of having the children put
out of a Head Start program or working with the existing
grantee to improve standards seemed to be a pretty easy
question to answer.
I share your concerns that we need to constantly look at
the quality and improvement. We do have the authority and we do
take that authority to pull grant applications in the case
where there are health or safety issues at risk. We will not
put a child in a program that is putting that child at risk.
In most of these cases it could be a lack of oversight of
financial management; it could be that they haven't raised the
standards in a quality way. And we are putting improvement
plans and extra visits in place for the recompeting grantees
that got the awards back.
Chairman Kline. Well, I am certainly pleased that we are
going to pay attention to health and safety, but that is not
the only reason that Head Start exists so I hope that you are
going to put in place or have in place a system to make sure
that we are not just throwing money down the drain, that these
kids are getting the head start that they are supposed to get.
A reminder to my colleagues: While the secretary has
unlimited time--and she very graciously limited that time in
her comments--we don't. My time is expired. I yield back.
Mr. Miller?
Mr. Miller. Thank you, Mr. Chairman.
And welcome, Madam Secretary.
I would like to pick up a little bit where the chairman
left off. As one of the major proponents of the recompetition
of Head Start--and I have got all the arrows in my back to
prove that I was there at the beginning--I think this is a very
important thing for us to do. And I recognize that in some
areas there was nobody to compete, and my understanding is that
all of the people who will be awarded Head Start will be on a
5-year timetable, not this idea that you have this program in
perpetuity and----
Secretary Sebelius. Correct.
Mr. Miller [continuing]. There are conditions of monitoring
going forward.
I will have to say that in my own area--my district--one of
our major providers was greatly diminished and a substitute
provider was brought in because of the issues that were raised,
and I think it was the right thing to do. I don't think--and I
think that Head Start got a little of itself--that somehow it
was the only premier program and they were entitled to just
continue to run forever, and I think this competition will turn
out to be a beneficial thing for the kids and the program and
for the taxpayers.
I would like to go back a little bit to this argument that
somehow Head Start doesn't make any difference. What we have
known all along in the area of early childhood education and
child care is that good child care, good early childhood
education is good for the children; bad child care, bad early
childhood education is not good for you at all.
And then there is the question of when you leave a high-
quality program that you may have in many areas where you have
poor schools and you take that child and you put them into a
poor school, yes, you start to lose some of the benefits of
child care. We know that in even transferring between schools;
we know that in the summer session.
One of the things we worry about is kids in poor schools,
low-income schools, lose much of what they acquired during the
year during the summer session. There is a problem of support
systems. But the idea that somehow all of a sudden that this
doesn't make any difference when it flies in the face of the
evidence, and we are not just talking about the Ypsilanti
study; we are talking about recent evidence that suggests, in
fact, it makes a difference.
The other thing I always find interesting is, you know, you
kind of what to know, what are the rich folks doing. Well, in
conversations I have with a lot of people of good wealth and
even upper middle-income people and middle-income people who
struggle with this question, but others who don't struggle as
much and can answer it and pay for it, they are looking for the
very best early childhood education they can find.
We see almost a scandal on Wall Street: People are trading
inside information to try to get into a preschool program
because it is considered to be the best in the development. I
don't suggest that that is the way they do it, but the fact is
they know what this means in terms of the acquisition of the
skills necessary to succeed in school, and studies tell us what
it means in terms of the acquisition of skills to survive in
the American economy and to thrive and to go forward.
And so this idea that some--it is sort of like there is now
kicking around the idea that college really isn't worth it
anymore. Oh, yes it is. Oh, yes it is.
And the fact of the matter is, whether it is dealing with
unemployment or it is dealing with earnings over lifetime, it
is worth it. And I just worry that we are building up this sort
of rhetoric about somehow this really isn't worth it.
High-quality programs are clearly worth it and clearly pay
a benefit, but you have to sustain them. If you are going to
dump them into a school where you have ill-prepared teachers
and no support systems then you are going to have a problem and
you are going to fritter away your investment.
This home visitation is strongly supported by district
attorneys all over the country, by law enforcement all over the
country. All of these early childhood efforts are strongly
supported because of what we see in terms of the outcomes.
But if you are going to cheat on quality, if you are going
to cut the Title I schools that these children are going into,
which we are doing under sequestration, don't look for great
results in those neighborhoods or those schools. And I just
want to put that point on the record because I think we are
getting way off track here in terms of what benefits children.
If you would like to have a second to respond you are more
than welcome to, or whatever the yellow light----
Secretary Sebelius. Well, Mr. Miller, I certainly agree
that even though there are some indication that in some
instances benefits of Head Start may fade in first grade or
third grade, it is once they have left the Head Start. There is
absolutely unequivocal evidence that Head Start makes a huge
difference in school readiness, in catching kids up to their
peers, in making sure that they are able to enter school ready
to learn.
And there is a lot of evidence that over time many of the
payoffs are actually at 18 and 20 and 25, that early childhood
education is one of the single most positive indicators of less
drug abuse, less prison time, higher graduation rates, higher
job acquisition--things that don't show up in the third grade
but actually follow a child through his or her life. And so I
think there is a lot of evidence that these are enormously
important investments, particularly for children who don't have
those benefits in their home setting.
Chairman Kline. Gentleman's time has expired.
Dr. Price?
Mr. Price. Thank you, Mr. Chairman.
And I want to welcome you, Madam Secretary, to the
Education and Workforce Committee. As a physician I like to try
to focus on patients, as you well know. I want to focus on one
specific patient. Occasionally we have the opportunity to truly
affect in a singular and specific way somebody's life and,
Madam Secretary, I would suggest that you have that opportunity
with Sarah Murnaghan.
Sarah Murnaghan, as you know, is a 10-year-old young lady
in Pennsylvania who has cystic fibrosis. The physicians and
scientists have all agreed that if she does not receive a lung
transplant within weeks, she will die. Doctors all agree that
it is indicated.
The reason she is unable to receive that right now is
because of an arbitrary rule that says if you are not 12 years
old you aren't eligible to receive an adolescent or an adult
lung.
Madam Secretary, under Section 121.4(d) you have the
opportunity. It says, ``Unless the secretary directs otherwise
based on possible risk to the health of patients or public
safety.'' Madam Secretary, I would urge you this week to allow
that lung transplant to move forward.
Secretary Sebelius. Well, Dr. Price, I appreciate your
input. First, as a mother and a grandmother I can't imagine
anything more agonizing than what the Murnaghans are going
through, and I talked to Janet Murnaghan, the mother of Sarah,
about this case. What I have also done is look very carefully
at the history of the rules around lung transplant and organ
transplant----
Mr. Price. With all due respect, Madam Secretary, it
simply----
Secretary Sebelius. Dr. Price----
Mr. Price. I am going to reclaim my time. It simply takes
your signature. It simply takes your signature.
A study I know you have ordered and I appreciate that, but
a study will take over a year. This young lady will be dead.
I want to move on to a concern that many----
Secretary Sebelius. Others will----
Mr. Price. Madam Secretary, I want to move on to a concern
that many folks across this country have about this
administration and about the things that are being done outside
the norm and certainly some believe outside legal limits. The
Washington Post and the New York Times reported last month that
you were soliciting funds from the health industry officials to
support the implementation and enrollment in the Affordable
Care Act. Is that true?
Secretary Sebelius. No, sir. That is not true.
Mr. Price. So you didn't communicate--have any discussions
with folks at the Robert Wood Johnson Foundation or H&R Block
about donating----
Secretary Sebelius. You asked me if I solicited funds from
anyone in the health industry and I said no, that is not true.
Mr. Price. Did you have any discussions or conversations
with anyone about providing resources to anybody about
enrollment or implementation of ACA?
Secretary Sebelius. Sir, I have had conversations with
people all across this country including insurance companies,
pharmaceutical companies, and others using the statutory
authority that is clearly given to the secretary of health in
the Public Health Service Act and has been used by my
predecessors, Republican and Democratic, for every health
innovation that has gone on. Secretary Thompson and Leavitt
made public-private partnership outreach efforts to make sure
Medicare Part D enrollment went well----
Mr. Price. So you did ask individuals to assist in
providing contributions for the implementation and enrollment
of the ACA?
Secretary Sebelius. I have made two calls involving funding
with----
Mr. Price. To whom?
Secretary Sebelius. To Robert Wood Johnson and H&R Block,
neither of whom are under the regulatory authority of our
office. But I would suggest that the Public Health Service Act
does not limit my authority to entities that are not regulated.
I chose to do that----
Mr. Price. What did you request of Robert Wood Johnson
Foundation and H&R Block?
Secretary Sebelius. I talked to them both about how
important this outreach effort was going to be and the fact
that always we anticipated having public-private partnerships
on the ground, as has been done in CHIP enrollment and it
Medicare Part D enrollment----
Mr. Price. Did you ask them to provide any resources?
Secretary Sebelius [continuing]. And that they consider----
Mr. Price. Madam Secretary?
Secretary Sebelius [continuing]. Making contributions to
our partner in Enroll America, which is a private, not-for-
profit, nonpartisan organization incorporated in 2012 under the
umbrella of----
Mr. Price. Did you ask them to provide resources----
Secretary Sebelius [continuing]. Families USA.
Mr. Price. Did you ask them to provide resources for any
other group at all?
Secretary Sebelius. I did not, because at that point I did
not know that there were other groups soliciting funds. I
talked to them specifically about Enroll America.
Mr. Price. Did you have any conversation with employees or
representatives or designees of the pharmaceutical industry?
Secretary Sebelius. Pardon me?
Mr. Price. Have any conversations with employees or
representatives or designees of the pharmaceutical industry to
contribute resources to Enroll America?
Secretary Sebelius. Those are the only two conversations I
have had about contributing resources to Enroll America. I have
certainly promoted the partnership roll that Enroll America
will play in an operation on the ground, much similar to--I
would suggest that you look at the ABC--the coalition that was
put together for Medicare Part D that Secretary Thompson and
Secretary Leavitt avidly supported and traveled around with and
suggested that they were very important public-private
partners. It is the same kind of effort.
We are also talking to businesses and pharmaceutical
companies and hospitals and insurers and faith groups about
using whatever resources they have to help fulfill what I
consider to be an incredible opportunity for up to 30 million
Americans to have affordable, available health----
Mr. Price. Did you direct any of those other entities to
Enroll America?
Chairman Kline. The gentleman's time has expired.
Mr. Andrews?
Mr. Andrews. Secretary Sebelius, I want to talk a little
bit more about the Medicare Part D enrollment process the Bush
administration used.
In 2003 the Congress passed, the President signed extension
of drug benefits for seniors under Medicare. It is my
understanding that your predecessor, Secretary Thompson,
actively solicited contributions from groups that would be used
to encourage Americans to sign up in Medicare Part D. Is that
correct?
Secretary Sebelius. That is my understanding, yes. The
Access to Benefits Coalition was the major on-the-ground
partner that both Secretary and----
Mr. Andrews. And the coalition consisted of organizations
outside the federal government, private, nonprofit, and
otherwise?
Secretary Sebelius. Absolutely. And those partnerships have
been traditionally part of what public health--we have the--
through the Centers for Disease Control and Prevention solicit
assistance from pharmaceutical companies in----
Mr. Andrews. So you are doing----
Secretary Sebelius [continuing]. Global and national health
issues. We----
Mr. Andrews. So you and perhaps others under your
supervision are doing exactly what Secretary Thompson did for
Medicare Part D, it is my understanding.
Secretary Sebelius. Well, that is correct, sir. And the, I
think, secretary of health has very specific statutory
authority that has existed since 1976 in the Public Health
Service Act.
Mr. Andrews. I was here in 2003 when that passed and 2004
and 2005 was implemented. I can't remember one word from anyone
on either side of this committee or any other committee
questioning the propriety of that activity. I think your
present activity is entirely proper and desirable.
I would hope that you would--the accusation would turn out
to be true. I hope the accusation that you are using every
legal resource at your disposal to get health care for
Americans who need it is something you are doing. Matter of
fact, if you are not doing that I would take you to task. I
think you are doing the right thing.
The tragedy for the Murnaghan family is heartbreaking on
every level, and I know you wanted to say more about that
before you were cut off a few minutes ago. If you would like to
add to your answer on that I would give you this opportunity.
Secretary Sebelius. Well, Congressman, what I was just
going to say is I can't imagine anything more difficult. We
have far too few donors and far too many desperately ill
people. That is the national snapshot. That is true in the
pediatric arena and it is true in the adults arena.
Unfortunately, there are about 40 very seriously ill
Pennsylvanians over the age of 12 also waiting for a lung
transplant, and three other children in the Philadelphia
hospital at the same acuity rate as Sarah waiting for a lung
transplant. The decisions of the OPTN, the transplant
committee, which is not bureaucrats, it is transplant surgeons
and health care providers who design the protocol, are based on
their best medical judgment of the most appropriate way to
decide allocation in an impossibly difficult situation.
So I have asked them to review the process, yes. That is
true. I know that that may take some time because it requires
public comment and it requires review. I would suggest that the
rules that are in place and reviewed on a regular basis are
there because the worst of all worlds in my mind is to have
some individual pick and choose who lives and who dies. I think
you want a process where it is guided by medical science and
medical experts.
Mr. Price. Will the gentleman yield?
Mr. Andrews. I will not. I will not. You did not give the
witness a chance to answer; I will not yield to you.
Mr. Price. Thank you, sir.
Mr. Andrews. Well, I think that you live by the rules that
you just created here.
When the Affordable Health Care was enacted we have heard
and we have heard since then there would be huge, skyrocketing
health insurance premiums that would affect millions and
millions of people. Last week California unveiled the initial
estimates of what premiums would be under the new health
insurance law. What did the result of California show us?
Secretary Sebelius. Well, the California preliminary
results, and that is before the rates--the final rates--are
negotiated, is not only will they have a very competitive
market throughout the state where people will have lots of
choices, but they are looking at the possibility of fairly
significant rate decreases--up to 25 percent in some
instances--and I think the highest rate increase that was
originally filed was in the 4 to 5 percent level. So you are
looking at both a competitive market and some preliminary rate
reviews that look very positive.
Mr. Andrews. In Maryland, when they released the list of
insurers bidding for the right to insure exchange enrollees,
did we have more or fewer bidders than expected?
Secretary Sebelius. Actually, we have more bidders, which
again is good news. I am a believer that markets work, but
markets need to be transparent and there needs to be some
competition. And what we are seeing is that opening up these
new markets for, again, individuals who were shopping in the
individual market where they often had very few choices and
small business owners are producing much more robust
competition. New insurers are entering the market in various
states across the country.
Mr. Andrews. Thank you.
I appreciate the time.
Chairman Kline. Gentleman's time has expired.
Mr. Gowdy?
Mr. Gowdy. Thank you, Mr. Chairman.
Good morning, Madam Secretary. I want to pick back up where
Dr. Price was.
You testified--conceded that you made at least two
solicitations of donations to Enroll America. Did I hear that
correctly?
Secretary Sebelius. Yes, sir. At their request I made two
phone calls, yes.
Mr. Gowdy. All right. And was there a specific dollar
amount that you solicited?
Secretary Sebelius. No.
Mr. Gowdy. Did you discuss these solicitations with anyone
that works for Enroll America before or after you made the
phone calls?
Secretary Sebelius. Yes.
Mr. Gowdy. Who?
Secretary Sebelius. I had a discussion with Anne Filipic,
who is the director-President of Enroll America.
Mr. Gowdy. Was there a specific dollar amount that you
solicited?
Secretary Sebelius. You just asked me that question and I
said no.
Mr. Gowdy. Okay. I just wanted to make sure the answer was
the same.
Was Enroll America the only entity you solicited funds for?
Secretary Sebelius. Yes, sir.
Mr. Gowdy. To the best of your knowledge, has anyone on
your staff or anyone employed by HHS solicited funds on behalf
of Enroll America or any other entity?
Secretary Sebelius. I really can't answer that question. I
don't know that.
Again, there were a very small handful of calls that I made
at the request and two involved actual fundraising
solicitations--exactly what my predecessors have done, exactly
the kind of public-private partnership that we have always
anticipated would happen, driving funds not to HHS--I am not
raising money----
Mr. Gowdy. Who were the other----
Secretary Sebelius [continuing]. For HHS; I am raising it
for enrollment and outreach activities so Americans can connect
with the benefits----
Mr. Gowdy. Who were the other phone calls to, Madam
Secretary? You said you made----
Secretary Sebelius. Pardon me?
Mr. Gowdy. Who were the other phone calls to? You said you
made other phone calls.
Secretary Sebelius. I made a total of 5 phone calls----
Mr. Gowdy. Okay.
Secretary Sebelius [continuing]. For Enroll America, and
three of them were to discuss the organization and suggest that
the entities look at the organization--to Johnson & Johnson, to
Ascension health, and to Kaiser.
Mr. Gowdy. Are any of those groups regulated by your
department?
Secretary Sebelius. Yes. All of them are.
Mr. Gowdy. So if health care officials say they felt
pressured to make donations to Enroll America your response
would be what, that they are just too easily pressured or that
they misunderstood the conversation?
Secretary Sebelius. Well, I can't answer what they felt. I
can tell you that I felt that the conversations that I had, as
I have said in the past, I made fundraising solicitations to
two groups who are not regulated; I did not discuss funding
with the other three entities. I did discuss Enroll America.
And I would tell you that the statutory authority, Section
1704 in the Public Health Service Act, would not make that
distinction. I could solicit--legally solicit funds from
anybody regulated by our office. I chose not to do that, but
promoting a public-private partnership, you bet.
Mr. Gowdy. What specific code section are you relying on?
Secretary Sebelius. Section 1704 of the Public Health
Service Act, which has been in place since 1976.
Mr. Gowdy. Is there a legal opinion that you relied upon?
Is there someone that----
Secretary Sebelius. Yes. My general counsel's opinion and
the precedent of former secretaries. I mean, this is not
something we are inventing----
Mr. Gowdy. Well, sometimes precedent is accurate and
sometimes it is not. Would you be willing to make that legal
opinion available to the committee?
Secretary Sebelius. Well, I will be able to, yes, make
whatever memos are available.
Mr. Gowdy. You would make that available to us?
Secretary Sebelius. Yes, sir.
Mr. Gowdy. Okay.
Secretary Sebelius. And I will also give you the precedent
that Secretary Thompson followed, that Secretary Leavitt
followed, that was followed during the Clinton administration
for the CHIP program. I am happy to make all of that history
available to you.
Mr. Gowdy. So if there are published reports that you
solicited funds from health care companies those would be
inaccurate?
Secretary Sebelius. That is correct.
Mr. Gowdy. And if there are published reports that you
solicited funds from pharmaceutical companies those would be
inaccurate?
Secretary Sebelius. That is correct.
Mr. Gowdy. You solicited no funds from any entity that is
regulated by HHS?
Secretary Sebelius. That is correct.
Mr. Gowdy. Whose idea was it to solicit the funds?
Secretary Sebelius. I would say it was a joint idea.
Mr. Gowdy. Joint among whom?
Secretary Sebelius. Well, in the discussions that I had
with colleagues and entities interested in actually fully
implementing the health care act, it was always recognized from
the day the President signed the bill that there would never be
enough government funding and that there would not be enough
opportunity if this is only a government-run program, so we
began 3 years ago----
Mr. Gowdy. I am looking for----
Secretary Sebelius [continuing]. To reach out for
partners--business partners, health care providers----
Mr. Gowdy. I am looking for who the ``we''----
Secretary Sebelius [continuing]. Hospitals, health
insurers----
Mr. Gowdy. I am looking for a name.
Secretary Sebelius [continuing]. Advocacy groups, disease
groups, and----
Mr. Gowdy. Can I get a name? I am looking for a name. When
you said ``we,'' who is ``we''? Did you ever discuss it with
anyone at the White House?
Secretary Sebelius. I have had discussions with people--
about Enroll America, did I discuss with the White House----
Mr. Gowdy. The solicitation of funds to Enroll America?
Secretary Sebelius. No, sir.
Mr. Gowdy. Never discussed it with anyone at the White
House?
Secretary Sebelius. No, sir.
Mr. Gowdy. Mr. Chairman, I am going to yield the remainder
of my time to Dr. Price in case he has a follow-up question
with respect to----
Chairman Kline. Unfortunately, the gentleman's time has
expired.
Mr. Holt?
Mr. Holt. Thank you, Madam Secretary, for coming.
I would like to turn to the Older Americans Act. With
10,000 Americans reaching retirement every day and longer
longevity, complexity grows in the care. And beginning in
fiscal year 2012, Congress failed to fund Title IV of the Older
Americans Act, what is known as the research and development
arm that looks at education and training and improved access
for seniors into various kinds of services, new approaches for
coordinating programs and providing aging-in-place
opportunities.
The community innovations for aging in place essentially
was shut down. It had been funded at a few million dollars. It
seems to me the need is much greater than a few million
dollars. There were 14 demonstration projects across the
country; there could easily have been hundreds of high-quality
projects across the country, but now it is zero.
Do you see any justification for the defunding of this, and
do you see any other alternative for funding these programs
that would allow Americans to age in place with the services
that they need?
Secretary Sebelius. Well, Congressman, as you know, in the
last couple of years we have actually created a new
administrative entity, the Administration for Community Living,
which seeks to address exactly what you are talking about--not
only aging in place for seniors but a fully prosperous and
engaged life for those Americans with disabilities. Because
often the services needed at the local level are the same:
transportation, additional home health care, supportive housing
in some instances, to allow people to live to the fullest
extent as independently as possible.
So one of the issues before this committee, for the first
time our budget reflects the ACL structure, and what we have
been trying to do is identify ways that those assets can be
leveraged both from the disability programs that we are running
and for the aging programs to build that robust network of
services on the ground. In some cases I think some of the
individual programs may have been unfunded because there was a
larger stream of money running to that same service and
program. I am not sure I can answer with the specificity you
are----
Mr. Holt. Well, let me just say, I hope you will work with
us to----
Secretary Sebelius. Sure.
Mr. Holt [continuing]. Find ways to fund these really very
valuable programs that will become more and more valuable as
people age.
Let me turn to the Affordable Care Act. Much has been said
about the programs of the Affordable Care Act. Actually, most
has been said about imaginary programs of the Affordable Care
Act. There is a lot of misinformation and even disinformation.
But one thing we do know that has already taken effect are
provisions of the Affordable Care Act affecting Medicare. Can
you say what those provisions--what the record is now about
those provisions that affect seniors on Medicare? What does it
say about the long-term financial stability of the program?
What did we learn about the quality of delivered care? What did
we learn about the cost of that care as modified by the
Affordable Care Act?
Secretary Sebelius. Well, in spite of the oft repeated
accusations that somehow the Affordable Care Act was going to
destroy Medicare, we, I think, have a very positive record of
achievements in the last 3 years.
Millions of seniors are benefiting from preventive health
benefits with no copays. Millions of seniors are achieving
discounts in their prescription drug plans--now a 50 percent
discount for the Part D brand name drugs if they fell into the
so-called donut hole in the past. Millions have taken advantage
of the wellness screening, which is now part of the overall
Medicare beneficial program.
In addition to that, what we know is that health costs are
down at the lowest level in the 51 years since Medicare has
been created. In fact, the four-tenths of 1 percent increase
per beneficiary this year is historically low; 3.9 percent
overall growth is historically low. And that is done with
additional benefits.
We were able, at the trustees meeting last week, to
announce that 2 additional years had been added to the Medicare
Trust Fund. The original passage of the Affordable Care Act
added additional solvency years, but the trend in the last 3
years has added additional time, which is all very----
Mr. Holt. Well, thank you.
Chairman Kline. The gentleman's----
Mr. Holt. Our time is expired but that is quite a notable
factual----
Chairman Kline. The gentleman's time has expired.
I have got an unwelcome administrative announcement. I am
looking at the list of members who want to ask 5-minute
questions. The secretary has a hard stop time at 12. I have got
at least 2 hours worth of questions here, so we are going to--I
am going to limit the members' time to 3 minutes. I will not be
inclined to support the ``ask the question at 2 minutes and 59
seconds and then give the secretary another 3 minutes.''
Madam Secretary, if you could help us just a little bit by
abbreviating your answers.
And with that, Mr. Wilson, you are recognized for 3
minutes?
Mr. Wilson of South Carolina. Thank you, Mr. Chairman.
And, Madam Secretary, thank you for being here today.
The National Federation of Independent Business, NFIB,
Research Foundation recently released a study on the impact of
the new health insurance tax created by the health care law.
The law created a new tax on health insurance policies that
most small businesses purchase. It is structured as a fee on
insurers but it is expected to be passed onto consumers.
This new tax will increase the cost of insurance for small
businesses and their employees. The NFIB study indicates this
tax will result in a reduction in private sector employment of
262,000 jobs. Do you believe increasing the cost of health
insurance by taxing the policies that small businesses purchase
make it more or less likely a small business will offer
insurance to their employees?
Secretary Sebelius. Well, the tax helps to support setting
up some new markets which will be hugely beneficial to small
business owners, including the shop option, which will exist in
every state in the country. Small business owners currently pay
18 to 20 percent more for their health coverage and I think
that the tax to insurers who will have millions of new
customers is an appropriate way to help set up these new market
options.
Mr. Wilson of South Carolina. But the net result will be a
reduction in private sector jobs.
Secretary Sebelius. I haven't seen the NFIB study and I
have no idea how they are--because the tax isn't even in place
yet so I have no idea what they are extrapolating.
Mr. Wilson of South Carolina. And as America's largest
association of small businesses it has extraordinary
credibility.
Secretary Sebelius. As you know, they also sued to strike
down the law and that was not successful, so they haven't been
huge fans from the outset.
Mr. Wilson of South Carolina. And I am so grateful for
their courage.
Next we have the costs associated with the regulatory
compliance are particularly high for small businesses since
they may not have a department to handle benefit issues. Are
you considering any transition period or relief for employers
who are acting in good faith to comply with the law but simply
are unable to comply with the reporting requirements and
regulations of the health care law, given the lack of
instruction from the administration?
Secretary Sebelius. Well again, sir, we are trying to be as
flexible as possible within our administrative authority. I
would be happy to take a look at what specifically the
complaints are. They are not filing anything now so I am not
quite sure what they are anticipating being burdensome but we
will sure take a look at it.
Mr. Wilson of South Carolina. Well, I think that it would
be great to consider a waiver for small businesses, and I
appreciate your positive response to that inquiry.
Secretary Sebelius. Well, I don't know what they want a
waiver from; if it is a waiver from the law that is not within
our administrative authority.
Mr. Wilson of South Carolina. And it may not be a waiver,
but it is certainly, during the transition period, a level of
relief so that small businesses who do not have compliance
offices can not be subject to penalty so that they can continue
to conduct their business.
Chairman Kline. The gentleman's time has expired.
Mr. Grijalva?
Mr. Grijalva. Thank you, Mr. Chairman.
And, Madam Secretary, thank you very much. I do appreciate
the efforts to partner with community allies in promoting
understanding and enrollment in the health plans, and also
because all we see, at least in the community, is the private
carriers promoting their specific product. I think there is a
need for unbiased, general information that the public can
understand, and I applaud you for that effort.
The Supreme Court decision reinforced the ability of ACA to
move forward with the exception of the state Medicaid
expansion; that made that optional for states. Some individuals
decided the federal deficit is a reason not to accept Medicaid
expansion.
Madam Secretary, can you talk to us a bit about the impact
of states choosing not to expand and what would that do to the
federal deficit?
Secretary Sebelius. Well, I think that the fear that at
least has been cited was somehow that either the Congress would
renege on the funding arrangement or that expanding Medicaid
would add to the federal deficit, and first of all, the
Medicaid expansion was contained in the funding for the
Affordable Care Act, and as you know, at the end of the day the
Congressional Budget Office indicated that passing the
Affordable Care Act reduced the deficit by $100 billion over
the first 10 years and projected an additional reduction of $1
trillion over the next 10 years. So passing the act that was
fully funded actually reduced the deficit.
We do have a new RAND study that came out, I think in the
last 2 days, that looked at the fiscal impact of 14 states who
may choose not to expand Medicaid found that the states
themselves would be bypassing about $8.4 billion of federal
funding and incurring about $1 billion a year in uncompensated
health care costs, so I think the return on investment analysis
that has been done in states across the country indicates that
Medicaid expansion is not only good for potential beneficiaries
but could be very financially beneficial for states.
Mr. Grijalva. Thank you.
Yield back.
Chairman Kline. Gentleman yields back.
Dr. Foxx?
Ms. Foxx. Thank you, Mr. Chairman.
Thank you, Secretary Sebelius, for being with us today.
I want to do one quick follow up on the questions that my
colleagues asked earlier on Enroll America: You keep saying
that the Robert Wood Johnson and H&R Block are not regulated by
HHS. Are you saying they have no interest in the decisions you
make as secretary?
Secretary Sebelius. Oh, I am sure that virtually everyone
has decisions that we make as secretary. They don't have any
products or entities that come under our jurisdiction.
But again, Ms. Foxx, I want to make it very clear that this
is not a statutory line; this was a chosen line that I made. I
have promoted and discussed outreach and education activities
not only around partnership with Enroll America but with dozens
of organizations for a very long time. I made two specific
fundraising calls.
Ms. Foxx. Okay. H&R Block is a tax preparation company.
Isn't it true the tax credits available under the law go
directly from the government to the insurance company? Is that
correct?
Secretary Sebelius. No. They would credit to the
individual, not to the insurance company.
Ms. Foxx. Okay.
Secretary Sebelius. An individual would qualify based on
his or her income for an accelerated tax credit to purchase
health insurance.
Ms. Foxx. Now I would like to switch and ask this question,
Madam Secretary----
Secretary Sebelius. Oh, I apologize. They do accrue to the
individual but they go to the chosen plan. I am sorry. It goes,
then, to pay for the coverage.
Ms. Foxx. In July 2012 HHS issued an information memorandum
to states inviting them to apply for waivers to the work
requirements under the Temporary Assistance for Needy Families,
or TANF. At the time HHS claimed it was responding to requests
from states that wanted more flexibility, but to my knowledge
no states have applied for the waivers.
Recently it is been revealed that in late 2009, 2-1/2 years
earlier, senior officials at HHS had requested a legal opinion
to a series of questions they put forth on how much authority
the department had in terms of waiving certain requirements
even though governors didn't ask for these provisions. It seems
that the department has had a plan to gut the welfare reform
law from the beginning.
Considering that there seems to be little or no support
from states for your memorandum, shouldn't the administration
withdraw it and work with Congress to reauthorize TANF?
Secretary Sebelius. Well, Congresswoman, the discussions
among governors--and I was one and had these discussions about
the rules around TANF--have gone on for a very long time,
during the Bush administration and certainly into this
administration--a lot of reporting requirements that didn't
seem to add jobs. What we learned during the Recovery Act was
that states actually had very innovative programs that could
put people to work when we could give them some flexibility
around the use of their funds, so we did have conversations
based on input from Republican and Democratic governors about
what might be the authority that we had, not to waive work
requirements, frankly, but to waive some of the reporting
requirements that directed people to spend a lot of time
counting boxes and not putting people to work.
Chairman Kline. The gentlelady's time has expired.
Mr. Courtney?
Mr. Courtney. Thank you, Mr. Chairman.
Madam Secretary, going back to the small business colloquy
a few minutes ago, actually something that is about to also
happen in January is that the small business tax credit is
actually going to get bigger, isn't that correct?
Secretary Sebelius. That is correct.
Mr. Courtney. And it is for firms 25 or less and it is up
to 50 percent of the----
Secretary Sebelius. That is correct.
Mr. Courtney [continuing]. Cost of the premium. And as a
former small employer, I mean, that is nothing to sneeze at,
and unfortunately, isn't included in some of these analyses
that are getting thrown around out there.
The trustees report which just came out a few days ago,
which again, was a very powerful document in my opinion in
terms of the positive trend lines, and particularly in terms of
the Medicare health spending rates that are out there--again,
it explicitly identified the Medicare advantage program costs
that are coming in lower than were projected, isn't that
correct?
Secretary Sebelius. That is correct, and that is directly
part of the structure of the Affordable Care Act.
Mr. Courtney. And enrollment has gone up, I mean, despite
all the----
Secretary Sebelius. Enrollment has gone up, rates have gone
down, and so beneficiaries also are--not just the Medicare
program, which pays the government side of the puzzle, but
beneficiaries themselves who pay a copay are paying less out of
pocket.
Mr. Courtney. And again, it seemed like the trustees were
being kind of careful not to overreach, in terms of ascribing
too much to the ACA, but as you point out, I mean, between the
preventive behavior that is now, I think, infusing through the
system, the ACO incentives that are out there that promote
collaboration, the hospital readmission incentives--I mean, the
fact is is that there is real change going on out there in
delivery reform.
Secretary Sebelius. Well, I think the first year or two
people were very cautious about how to attribute that change
and a lot of it was seen as potentially just a part of the
recession. We have had four or 5 recent health economists--not
connected with HHS in any way, but health economists--who say
while a portion of the downturn in health spending--Medicare,
Medicaid, and private sector health spending are all down--can
be attributed to the recession, they think the large part is
that there is an enormous change underway as part of the
delivery system, led by the fact that for the first time
Medicare is beginning to move away from the fee-for-service
payment and into more of a quality outcome payment, into
accountable care organizations, into preventing hospital
readmissions, preventing hospital infections, and those are all
having a very positive effect on health spending.
Mr. Courtney. And in fact, they have calculated almost $700
billion in unexpected savings if you go back in time to 2010 in
terms of--I mean, if anyone had predicted that at the time the
President signed it into law they would have called you a
raving lunatic, but the fact is is that it has consistently
surpassed----
Secretary Sebelius. I have been called worse.
Mr. Courtney. Well, and I know you didn't--you know, you
were not being that reckless to try and sort of claim that, but
the fact is is that it is surpassed all the expectations, and
the fact is if we can continue to, you know, nurture that sort
of change in the fee-for-service there is more money on the
table there for the program without butchering benefits.
Secretary Sebelius. Well, I think one of the big
differences is to move Medicare, which has a huge--you know, 51
million beneficiaries, has contracts with every doctor, every
hospital, every drug company, every medical device company, to
begin to move Medicare from a fee-for-service, the more you do
the more you get paid, into really a quality provider begins to
really transform the market.
Chairman Kline. The gentleman's time has expired.
Dr. Roe?
Mr. Roe. Thank the chairman.
Thank you, Madam Secretary.
A couple things that we totally agree on is the cost is the
biggest issue, I think, in health care. If we could lower the
cost more people would have access. I think there is no
question about that, and that has been a concern of mine
through my career as a physician and one of the reasons I ran
for Congress.
I chair the Subcommittee on Health, Employment, Labor, and
Pensions, so we look at individual markets and small group
markets, and our state insurance commissioner in Tennessee--I
spoke with her 2 weeks ago and then reconfirmed these numbers:
The small group market in Tennessee will see an average
increase of 50 to 55 percent and the individual market,
depending on your age and gender, will be 45 to 70 percent
increase. And I asked how many plans we had from mountains to
Memphis now in our state and we have about eight plans that
individuals and small groups can go to; and we will have, after
the first of the year, two and maybe one plan.
So that didn't expand the number of options. And one of the
reasons our governor, Governor Haslam, in Tennessee, didn't
expand Medicaid in the state and didn't--and chose not to
expand the exchange was because he couldn't get answers from
HHS so that he felt comfortable in doing this because we have
had a 20-year history of health care reform--it is called
TennCare in our state--hasn't worked out all that well.
So when we held a subcommittee hearing couple of--well, I
guess a month or so ago, I am going to submit some questions
that I got there from the businesses, if you don't mind, so we
won't take the time. But one of them was Mr. Silver, who said:
I would like to challenge the secretary to make a good program,
to implement changes that would not have a negative impact they
have now. It is beyond belief how complex--needlessly and how
complex this program has become, and that is my question.
I think what he is saying as a businessman--I will give you
another example: Mr. Horn has a business over there at 350
employees. He is self-insured. He provides total preventative
services. If you need a mammogram, whatever, he pays for it
all.
Guess what he gets for this? He gets a $63 per person fee
to--that is charged to him plus an increase in his taxes. He
did everything right in his business--in the textile business,
which is a tough business. So how do you answer his question?
What do you say to Mr. Horn?
Secretary Sebelius. And his question is, ``Why do I pay
this''----
Mr. Roe. He is paying for everything--preventive. He has
got the gold plan and yet what he gets are increased taxes and
increased costs to his business.
Secretary Sebelius. Well I think that the way that the law
is put together there are fees and taxes that pay for the
program to move ahead. I think in the long run----
Mr. Roe. How do you answer him? He is a guy doing
everything right.
Secretary Sebelius. He also is paying a hidden tax, I would
say, at this point, because his hospital rates are higher----
Mr. Roe [continuing]. Isn't hidden. I can tell you that. It
is out there for him; he has got to write a check for it.
Secretary Sebelius. I understand.
Mr. Roe. One other question I have got----
Chairman Kline. The gentleman's time has expired.
Ms. Bonamici?
Ms. Bonamici. Thank you very much, Mr. Chairman.
Thank you, Madam Secretary.
This is the Education and Workforce Committee where we all
share the goal of student success in our nation's public
schools. I frequently hear comparisons of our students with
students in countries like Finland, for example, but they have
a near absence of poverty in Finland. So I want to recognize
the importance in the fical year 2014 budget of the anti-
poverty programs and policies--not only expansion of health
care but also LIHEAP and TANF, so thank you for that.
I have two questions. I will ask them together.
First, I am from Oregon, where we are ahead of the curve in
implementation of the Affordable Care Act, and just last month
when our proposed health premiums for plans went public on the
exchange, after seeing their competitors' proposals two
insurers actually requested to lower their rates. So my first
question is, how can we ensure that other state exchanges and
the federal exchange sufficiently foster this type of
competition to make health care more affordable?
The second question is about sequestration. My district is
very concerned about how sequestration is affecting medical
research. Oregon Health Sciences University, for example, where
they are making groundbreaking advances, is concerned because
you can't put research on hold and the cuts are going to be
affecting the junior researchers, which are exactly the type of
workforce we need to be training.
So the second question is, how do HHS and NIH plan to
continue making research progress and how will sequestration
impact medical research?
Secretary Sebelius. Well, in terms of the competition in
the market, Oregon is not only doing some great things now but
has been for years, and we are trying to use your doctor
governor's expertise to actually talk to a lot of colleagues
across the country about what sorts of things can be done to
improve the quality of care and lower costs because Oregon is
proving that. And what we are seeing in these early marketplace
entrants is some very positive signs about competition--new
plans entering the market in states across the country and
opening up what was a monopoly to competition for the first
time, so I think that is going on and creating a market in many
cases.
In terms of the research question and sequestration, you
are absolutely right. Sequestration is a blunt instrument that
slashed about $15.5 billion from the HHS budget and a big hit
was taken by NIH, who is our second-biggest agency.
That will have a very significant impact on new grants
going out the door. They don't have the money; they will not be
able to accelerate the kind of scientific cures that are
possible and have those grants, which actually return about $7
to every dollar put out is the return on investment.
So it is a program that, at the time that we should be
making increased scientific investments, that took a cut
through sequestration that really can't be made up.
Chairman Kline. Gentlelady's time has expired.
Mr. Walberg?
Mr. Walberg. Thank you, Mr. Chairman.
Madam Secretary, as you are probably aware, yesterday the
IRS published a final regulation on the shared responsibility
payment for not maintaining minimum essential coverage, where
they estimated that $20,000 would be the cost for yearly
premium for a family of four or five that want to purchase the
cheapest, or the bronze, type plan. Is the IRS totally off base
with that $20,000 figure as the cheapest possible plan that a
family of four or five could purchase?
Secretary Sebelius. Sir, I haven't seen the IRS estimates,
and as you know, we don't have any final rates. What I am
seeing is some very positive rate information that compares
favorably to what is available right now but I can't respond. I
would be happy to in writing but I don't--I haven't seen the
IRS report.
Mr. Walberg. So you can't confirm to me that there would be
cheaper plans available than $20,000?
Secretary Sebelius. Well, I know there are cheaper plans
available depending on the circumstances and how high the
deductible is but I can't give you exact amounts because the
rates aren't set. So anyone who is telling you this is the
final rates is just not accurate.
Mr. Walberg. Well, of course the IRS may have done this
after a line dance, but they certainly have some responsibility
of determining what estimates at the very least these costs
will be----
Secretary Sebelius. As I say, I would be happy to look at
what they gave you and respond to it. I can't do that off the
top of my head.
Mr. Walberg. I would appreciate that----
Secretary Sebelius. Every state is also going to be a
little different, so I have no idea what they are capturing.
Mr. Walberg. Let me go on. And I will look forward to that
response on it because definitely the IRS is intimately
involved with the cost factor and what they will be assessing.
Madam Secretary, as you know, the Affordable Care Act
defines full-time position as consisting of 30 hours per week.
Do you know of any other federal law that defines full-time
status as 30 hours?
Secretary Sebelius. It is my understanding, sir, that when
Congress was writing the Affordable Care Act that they took a
snapshot of the marketplace and 30 hours--actually it was 28
hours is what I am told--was the amount of time that business
owners used as a calculation of who got benefits and who didn't
get benefits.
Mr. Walberg. Well, as I walk through my district I hear
constant reports that businesses--small businesses
specifically--are cutting back on hours, going away from the
40-hour and less as being a part time, and going down to 28
hours now. That is costing jobs.
Has the department considered talking with the Department
of Labor to find out better information on how this is
affecting jobs and the economy and growth and--as we know, the
best way to have insurance is to have a job. Is there any
effort from your department working with the Department of
Labor to remedy this problem?
Secretary Sebelius. Well actually, sir, since these
benefits don't kick in until January 1st we are really not at
all confident that some of the speculation of what may or may
not happen will actually happen.
Mr. Walberg. They are doing it already.
Chairman Kline. The gentleman's time has expired.
Mr. Tierney?
Mr. Tierney. Thank you, Mr. Chairman.
Madam Secretary, thank you for the difficult job that you
have of enforcing and implementing a law that basically was
passed democratically but is facing an unrelenting effort to
delegitimize that law day in and day out, so I appreciate how
difficult it must be.
There is a lot of cost involved with repealing the
Affordable Care Act, and just some of the larger points on that
would be, of course, young adults would no longer be allowed to
stay on their parents' health insurance until they are 26;
insurers would be able to deny coverage because of preexisting
conditions; seniors wouldn't have already gotten $6 billion in
savings on prescription drugs.
But also, one larger aspect on that is there is provision
in this law that says insurance companies actually have to
spend the larger portion of the premiums they receive on health
care--on health services. And if they don't do that they have
to give a rebate--so-called 80-20 rule--or have to lower their
premiums going forward. How is that working out?
Secretary Sebelius. Well, about $2 billion was sent back to
consumers at the end of 2011 based on that law--or 2012, I am
sorry. The data was collected in 2011; it was sent in 2012. So
consumers got checks back from their insurance companies, I
would say for the first time ever. And what we have seen is a
lot of rate reformulation, so administrative costs are
definitely coming down. More bang for their buck, more of the
dollars collected are being spent on health outcomes.
Mr. Tierney. Well, you know, I hear from folks at home that
they certainly appreciate having the money spent on health
services as opposed to lobbyists or CEO bonuses and other
things, so thank you for implementing that.
Thought I would switch gears a little bit to education in
early childhood. I had an opportunity yesterday to be in
Billerica, Massachusetts, where they are closing out 85 seats
in a daycare--in a child care Head Start program; 85 seats and
seven employees are going to be gone because of sequestration.
And that is 85 students whose parents will now have to find a
way to--either to quit their job and stay home with the child
or find some other way to do it, and seven families that won't
be earning money, paying taxes, and paying their bills and
supporting small businesses in their district.
Can you tell us how that plays out across the country if
this sequestration isn't resolved?
Secretary Sebelius. Well, in terms of a per unit cost,
about 70,000 Head Start children could lose their slots based
on sequestration, and probably 14,000 teachers, guidance
counselors, others who are employed. And as you say, that has a
ripple effect because if the kids don't have a place to go and
some place for their parents to be confident they are safe and
secure and learning, the parents have a much more difficult
time going to work every day. So it has an effect on the
workplace, also.
Mr. Tierney. Thank you very much.
I yield back.
Chairman Kline. Gentleman's time is expired.
Mr. Guthrie?
Mr. Guthrie. Thank you, Madam Secretary. Nice to see you
here today.
In another committee we talked about the prevention funds
and the anti-lobbying restrictions----
Secretary Sebelius. Yes.
Mr. Guthrie [continuing]. And we had some questions before.
Attorney General Holder sent to Lamar Smith clearly saying that
state--federal funds can't be used to lobby federal, state,
local. A letter from Mr. Esquea, I think your assistant
secretary for legislation----
Secretary Sebelius. Jim Esquea.
Mr. Guthrie. Esquea, I am sorry--said basically the same,
acknowledging you can't use federal funds for federal, state,
local, and went through the different corrections or things
that you put in place to deal with some of the things from last
year.
There is one paragraph in that letter, though, that he
sent--it is in the letter--on April 1st. He said, ``When
concerns about any grantee are brought to our attention CDC
contacts the grantee and reviews the allegations, and we have
determined through this process that specific grantee activity
referenced in your letter and highlighted by Mr. Whitfield and
Guthrie did not violate lobbying restrictions.'' And it does
say that, ``applicable lobbying restrictions do not prohibit
awardees from all interaction with policymakers.''
I know I am--because of time I am quoting, but it is
accurate what I am quoting. It says, ``However, it would not be
permissible for awardees to use federal funds to influence a
specific piece of legislation or pending legislation through
the direct lobbying with legislators.''
And just a couple of examples--I have several that--the
ones that he referred to didn't that--what Mr. Whitfield and I
highlighted, and a couple of them--and there is more, and I am
reading directly from the Web site: executive office of the
governor of Delaware 1 million, seeks sponsorship of bill that
increases excise tax on other tobacco products; meeting with
policymakers, stakeholders, and developed to introduce bill for
tax equity on OTP products. This bill was tabled.
Another Nevada Department of Health, 560,000 CDC.
Legislation is proposed to increase tax on all tobacco products
working with Nevada state legislator on the proposed
legislation.
So my question is, I know we are trying to address the
lobbying and you have got things in place, but why did this not
violate the lobbying restrictions? And if you say this doesn't
violate the lobbying restrictions there--it appears to me there
aren't really restrictions on lobbying.
Secretary Sebelius. Well, I can guarantee you, Congressman,
that we are trying to do everything we can to enforce the law,
to retrain grantees, to remind them. There are certainly
instances where grantees are invited to present testimony at
committees. That is not lobbying. To be involved in policy
discussions, that is not lobbying. So there are specific state
and local definitions of what lobbying constitutes, when you
have to register as a lobbyist----
Mr. Guthrie. I agree. But when you are getting specific
sponsorship for specific bills, I mean, that appears that
that----
Secretary Sebelius. And again, I think that the
conversation--all I can tell you is I believe that the
conversation resulted in one of those other categories, so yes,
the grantee was involved, but not in a lobbying activity that
would have constituted registering at the local level or
declaring themselves as a lobbyist.
Mr. Guthrie. Okay. Well thank you.
I will yield back.
Chairman Kline. Thank the gentleman.
Mrs. Davis?
Mrs. Davis. Thank you, Mr. Chairman.
Thank you, Madam Secretary, for being here today.
I wanted to go back for a second to some of the questioning
that we have heard, and having been here when Medicare Part D
was passed, my understanding is that there was no paid-for for
Medicare Part D. Is that correct?
Secretary Sebelius. That is correct.
Mrs. Davis. So it had some impact on our deficit,
substantially.
Secretary Sebelius. It was definitely added to the deficit,
yes.
Mrs. Davis. And in terms of implementation, did the
secretary at that time under the Bush administration--did he
have the ability to pay for implementation and the concerns and
questions? I know we held a number of meetings out in our
community and we were provided with individuals that could come
and explain to seniors what Medicare Part D looks like.
Secretary Sebelius. I can't tell you how the budget was
constructed or how much additional funding was put in through
Part D. I do know that there were certainly HHS resources--call
center, outreach efforts, contracts. In fact, one of the
public-private partnerships was with the Benefit Coalition,
where HHS money paid for an entity very similar to Enroll
America to have them conduct various outreach and education
activities.
So there were resources. How much of that was designated by
Congress and how much was within the discretion of the
secretary I can't tell you.
Mrs. Davis. Okay. Thank you. Because I know you had
suggested that things weren't so different right now and I
wanted to just remind myself, as well, about how that was done
because I don't remember any of this discussion at that time.
Secretary Sebelius. Well, at every point, I think, in
recent history where there has been a significant expansion of
health benefits--and the Children's Health Insurance Program
during the Clinton administration, Medicare Part D during the
Bush administration--there has been a very extensive outreach
effort from the secretary to private groups, to business
entities, to health care providers, to disease groups, to
foundations, to whole insurers, drug companies, involving and
engaging them in outreach efforts, knowing that the federal
government could not possibly take on the entire task, that
this was an all-hands-on-deck effort.
Mrs. Davis. Well, thank you, Madam Secretary.
I think that the issue of the NIH grants has been raised.
It certainly impacts the community, the larger community of San
Diego, as well. And how do you think the you can make up some
of the difference, where we take away all those research
dollars?
Secretary Sebelius. Well, I think that the President has
proposed in the 2014 budget an increase in NIH funding, but if
you look at that increase compared to what they lost in the
sequestration, only getting rid of sequestration would indeed
restore that full budget. The increase that the President has
suggested would not cover the deficit that has been created by
sequestration.
Mrs. Davis. So American research jobs could be lost.
Chairman Kline. The gentlelady's time has expired.
Dr. Bucshon?
Mr. Bucshon. Thank you, Mr. Chairman.
Madam Secretary, Indiana is home to over 300 medical device
companies with an economic impact of over $10 billion a year,
and the medical device tax in the Affordable Care Act is
damaging the industry. Cook Medical has decided not to expand
within the state; Orthopediatrics in Warsaw, Indiana has
shelved two products for children.
The medical device tax repeal passed recently 79 to 20 in
the Senate during their budget process, as you know, and last
Congress it passed in the House 270 to 146 with 37 Democrats
voting in the affirmative to repeal the tax. Does the
administration support repealing the medical device tax?
Secretary Sebelius. No, sir.
Mr. Bucshon. And if not, why would that be in the face of
overwhelming support from Congress?
Secretary Sebelius. Well, at least Congress has not yet
fully passed legislation to do that. I would say also, Congress
voted to put the medical device tax in place. That was signed
into law. And the medical device companies are looking for
millions of new customers; as they get enrolled they will be
able to purchase and have services that include medical
devices.
Mr. Bucshon. You know, Stryker up in Michigan has already
laid off 1,000 in their--company-wide. Something like that. So
from what we are hearing from the medical device industry is
just the opposite. They don't expect more patients, so to
speak, to make up the difference. And I would urge the
administration and yourself to relook at the medical device tax
as a way to fund the Affordable Care Act and look for other
options.
Secondly, Healthy Indiana Plan, as you may know, is an HSA-
based plan that--to manage the state's Medicaid dollars, which
has been shown to save the state about 3 to 4 percent in a way
it manages Medicaid patients. Currently covers over 40,000
Hoosiers.
Our waiver expires--this was an HHS pilot program--our
waiver expires December 31st, and the enrollees have an over a
90 percent approval rating of the program. Would you expect
that HHS would give us an answer soon on whether or not we will
be able to use Healthy Indiana Plan as a way to manage our
Medicaid dollars?
Secretary Sebelius. Sir, I know conversations are underway
with the Indiana Medicaid department on a regular basis and I
don't know the current status but I can get you an update in
writing.
Mr. Bucshon. Well, I appreciate that. And the Republican
delegation members, at least, from Indiana have sent a letter
to you requesting an answer, as well as, I know Governor
Pence's administration. I would appreciate an answer fairly
soon. Again, the waiver expires December 31st.
Secretary Sebelius. Yes, sir.
Mr. Bucshon. The last question I have is, do you support a
single-payer health care system?
Secretary Sebelius. Do I?
Mr. Bucshon. Yes.
Secretary Sebelius. No, sir. I supported the concept that
you build the gap in coverage based on private insurers.
Mr. Bucshon. Okay. Thank you.
I yield back.
Chairman Kline. Thank the gentleman.
Ms. Fudge?
Ms. Fudge. Thank you, Mr. Chairman.
And thank you, Madam Secretary, for being here today.
Madam Secretary, I have two questions for you and I will
give them both to you.
Under the Ryan fical year 2014 budget the Affordable Care
Act would be eliminated. That would leave 27 million Americans
out of any kind of plan, basically. The thought would be to
turn Medicare into a voucher program and Medicaid into a block
grant. Please discuss with us how that plan is detrimental to
the very people that this budget supposedly helps.
And the second question is, many of my Republican
colleagues were opposed to the ACA basically on grounds that it
would significantly increase costs. Please talk with us about
how the Affordable Care Act really is going to reduce costs by
approximately $1 trillion over the next 20 years.
Secretary Sebelius. Well, Congresswoman, I think that the
President put forward a plan to provide affordable health
coverage for the approximately 20 percent of Americans who
currently have no coverage, or are in and out of the market, or
are locked out of the market or priced out of the market. And
that plus the Medicaid expansion would, for the first time
ever, provide an opportunity for most Americans to have
affordable health coverage.
I would say that at least in the other budget proposals
there is no similar plan. The high-risk pool seems to be the
only alternative that was put forward during the debate around
the Affordable Care Act and continues to be an alternative put
forward. Just put people in a high-risk pool, allow insurance
companies to continue to pick and choose who gets coverage and
who doesn't, and a little unclear what happens to folks who
can't afford either the high-risk pool or the health coverage.
In terms of Medicare and Medicaid, in cost stories, again,
there is, I think, a very positive story to tell about how you
increase benefits, how you increase quality and lower costs at
the same time. It was said as we talked about that originally
that that could never happen. It actually is happening. It has
happened for 3 years in a row.
And the trend is much faster than the CBO ever anticipated
or suggested, so that what we are seeing is a transformation in
the delivery system and an opportunity in the marketplace for
the first time to create competitive markets and to have people
who don't have affordable employee coverage to have access to
health insurance, health security for themselves and their
families.
Ms. Fudge. Thank you.
Mr. Chairman, I yield back.
Chairman Kline. Thank the gentlelady.
Mrs. Roby?
Mrs. Roby. Thank you, Mr. Chairman.
Thank you, Madam Secretary. In anticipation of your
testimony here before us today I reached out to my constituents
on Twitter and Facebook and said, ``If you had an opportunity
to ask the secretary a question what would you ask?''
And I just want to share with this committee and with you,
Madam Secretary, how just unbelievable it was to hear from so
many individuals and business owners that were afraid to give
their names in light of the current IRS scandal because of the
role that the IRS will play in implementing this law, that by
asking you a question and revealing who they are that they may
receive retribution from that agency. And of course, this is in
light of everything that we are hearing in the news and that
our majority is providing oversight right now. But I am going
to submit their questions to you in writing since we have
limited time, but I am going to redact their names, as
requested.
And one constituent of mine, Mr. Jason Misseldon, of
Prattville, Alabama, asked the following question that I would
like to ask to you: He says, ``My employer has provided
excellent insurance coverage for over 30 years. It would
definitely be classified a Cadillac plan. This year we were
forced to change coverage. Please tell me--Jason--how
penalizing or taxing companies that provide excellent coverage
has anything to do with ensuring everyone has access to
affordable health care.''
What would you say to Mr. Misseldon?
Secretary Sebelius. Well, Congresswoman, I have no idea why
he would change plans this year because nothing has impacted
his health plan this year. But I would just say that insurance
companies who are by and large in enormously profitable
condition will be paying taxes to help support a new
infrastructure that in return brings them potentially 30
million new customers, and that is a part of the funding of the
Affordable Care Act moving forward.
Mrs. Roby. One other question, because I know my time is
about to run out, but how are we going to count employees? For
example, I have got one business that reached out to us and
said, ``Tell me how it is going to affect my business when we
have 52 employees but three of those are owners of the
business?'' When it comes to the exemption, how does that work
out?
Secretary Sebelius. Well, there are some pretty specific
rules and regs how to count part-time employees, how to count
full-time employees. Again, we would be happy to answer that
question if we get some specifics about who exactly----
Mrs. Roby. I am going to give you all of these questions--
--
Secretary Sebelius. That is great.
Mrs. Roby [continuing]. In writing and we will look forward
to your in-depth answers.
Thank you. I yield back.
Chairman Kline. Thank the gentlelady.
Mr. Yarmuth?
Mr. Yarmuth. Thank you, Mr. Chairman.
Madam Secretary, it is nice to see you. We talked a little
bit earlier about the effect of, or the potential effect of the
expansion of Medicaid on different states, and in my state
Governor Beshear recently announced that he was going to accept
the expansion, and he did that after a very rigorous analysis
of the costs and benefits to both the state budget and also to
the state economy. And they found that over 7 years, expanding
Medicaid is expected to provide a cumulative economic boost of
$15.6 billion through new health spending, the addition of
17,000 jobs averaging $43,000 a year, local and state taxes
generated by those workers.
The governor also found that expansion would have a
positive impact of more than $800 billion on the state budget
over that same 7-year period, and that is all in addition to
providing coverage for more than 300,000 Kentuckians who do not
have access to insurance at this point. So as you move forward
and people ask questions about that I certainly would offer
that evidence as proof that the Affordable Care Act, the
expansion of Medicaid is going to be a positive for at least
many states.
I have one question I am going to ask and that is in
respect to my former colleague, Steve Kagen, from Wisconsin,
who spent the entire debate about the Affordable Care Act
talking about the need for transparency. And a couple months
ago an incredible piece of journalism, ``The Bitter Pill,''
appeared in Time Magazine, Steven Brill, talking about the
disparity in costs throughout the system, particularly at
hospitals. Is HHS doing anything to promote transparency both
at the hospital and throughout the provider network in the
country?
Secretary Sebelius. Yes, sir. We have published, a couple
months after the Steve Brill article, a snapshot of inpatient
hospital costs for about 30 different procedures, comparing
them hospital to hospital, and found not only enormous
countrywide variation but enormous regional and some places
enormous local variation. But it has been published and
available.
Yesterday we released additional data, which is the
publication of some outpatient services for similar procedures,
again comparing side by side. We have had a process underway
really from the beginning of this administration to unlock
data, to make sure that the data that we are collecting
actually is put in the public domain in an easy-to-read, easy-
to-use way so that consumers can begin to ask important
questions. Why should a hip transplant cost three times as much
if I go six blocks away and have no difference in outcome? So
that information is very much available.
And yesterday we had the fourth annual--third annual
Datapalooza, which is a meeting of entrepreneurs and
application developers and others to come in and look at the
data and see what kinds of mechanisms they can put together to
help drive this data for policymakers and patients. It started
in a room with 46 people 3 years ago; yesterday there were
2,000 techies and entrepreneurs here from all over the country
and a team from the United Kingdom who is really interested in
learning what we are doing with data and how that can help
inform patients and providers.
Mr. Yarmuth. Great. Thank you very much.
Chairman Kline. Mr. Barletta?
Mr. Barletta. Thank you.
Ten-year-old Sarah Murnaghan is from my home state in
Pennsylvania. If Sarah lives she will be 11 on August 7th
coming up.
Do you think it should be legal to deny a organ transplant
based on somebody's race? Do you think we should decide because
of the color of your skin or----
Secretary Sebelius. No, sir.
Mr. Barletta. Think it should be legal to deny somebody an
organ transplant because of their gender, because of they are a
woman or a male?
Secretary Sebelius. Again, I have no idea what the medical
evidence might be. I assume that there nay not be a difference,
but there could be----
Mr. Barletta. But do you think it should be legal to do
that? Do you think we should choose between----
Secretary Sebelius. If there is a medical rationale, yes,
sir. But if there is not, no.
Mr. Barletta. Why are we going to let a little 10-year-old
girl die because she is 10 and not 12? Sarah is at the top of
the pediatric list--those who are 11 or younger. If Sarah were
12 she would be at the top of the adult list.
Now, transplants should be based, I believe, on the
severity of the illness and not the person's age, and I know
you agree with that because you have asked OPTN to please
review the policy. Sarah's parents aren't asking for special
treatment for their daughter. I am the father of four girls
myself. They are asking for an equitable organ transplant
system.
And you are the one person who has the authority to suspend
the current policy until we are confident that children have
equal access to lifesaving treatment and aren't discriminated
against because of their age. We wouldn't do it for any other
reason.
I am begging you. Sarah has 3 to 5 weeks to live. Time is
running out. Please, suspend the rules until we look at this
policy, which we all believe is flawed.
Secretary Sebelius. Well, I would suggest, sir, that,
again, this is an incredibly agonizing situation where someone
lives and someone dies.
Mr. Barletta. Based on their age.
Secretary Sebelius. Sir.
Mr. Barletta. Based on their age.
Secretary Sebelius. What I have been told by the transplant
experts--and I don't profess to have any expertise in this
area--is that the medical evidence and the transplant doctors
who are making the rule and have had the rule in place since
2005, making a delineation between pediatric and adult lungs,
it is--lungs, because lungs are different than other organs----
Mr. Barletta. But in Sarah's case----
Secretary Sebelius [continuing]. That it is based on the
survivability----
Mr. Barletta. But this is different. This is different.
Sarah's case is different. Doctors have said that she could
survive with an adult lung. It can be modified to save her
life. Why wouldn't we do it? Why, we do so much bull crap
around this place and we have the chance to save someone's
life, and because of some kind of--there is no logic to this.
Secretary Sebelius. Forty people in your home state----
Mr. Barletta. But she would be first if she was 12.
Secretary Sebelius [continuing]. Are waiting on----
Mr. Barletta. But she would be first----
Secretary Sebelius. Sir, there are 40 people in the highest
acuity list waiting for a lung in Pennsylvania.
Mr. Barletta. Sarah would be at the top of that list.
Chairman Kline. The gentleman's time has expired.
Mr. Hinojosa?
Mr. Hinojosa. Thank you, Chairman Kline.
Madam Secretary, I am concerned that despite past
bipartisan support for the Head Start programs, the sequester
threatens more than 70,000 children's access to Head Start.
Please share your thoughts on why federal investments in early
learning are needed now more than ever. And the second part to
this question: How does the President's early learning proposal
affect Head Start programs, including migrant and seasonal Head
Start families as well as our Native American children?
Secretary Sebelius. Well, I think there is a lot of
evidence, Congressman, that has been developed over decades
that early childhood education that is a quality program makes
a lifetime of difference in a young person, not just in school
readiness and school success and parental involvement, but in
less drugs, less alcohol, higher graduation rates, more
likelihood to get a job. So it is an investment early that pays
off over a lifetime.
Certainly the--in this very competitive global world we
want all of our children to be able to live up to their
potential to be a prosperous nation, to have the full advantage
of the opportunities that America can have in the 21st century,
so the President has proposed in his 2014 budget a significant
expansion of early learning opportunities aimed at lower-income
kids, but really aimed at all kids, so that you would have more
home visiting programs, which have proven to be enormously
successful in families, Early Head Start child care
partnerships, which would bring some of the parental skills and
early learning from Head Start into child care settings,
raising the quality for 100,000 more children; universal pre-K
in a partnership with states, so that more 4-year-olds would
have access to high-quality early kindergarten, and then
hopefully a successful transition into school, which would, I
think, not only improve the fate of those individual children,
but when you look at the amount of money schools now spend on
remedial work even at the very earliest age, at the dropout
rates, at the lack of success of some kids, making a dent in
that dismal outcome could save money, make more prosperous
workers, make for a more prosperous nation.
So I think the President understands this very well and has
proposed that one of the biggest investments we should make for
a 21st century economy is in early childhood education.
Mr. Hinojosa. Madam Secretary, what you have answered is
exactly what we hear from other countries that are leading----
Secretary Sebelius. Yes, sir.
Mr. Hinojosa [continuing]. The competition in
interscholastic competition, and so the rule of early reading
plus writing equals success in school is exactly what you
have----
Chairman Kline. The gentleman's time has now expired.
Mr. Hinojosa. I yield back.
Chairman Kline. Mr. Salmon?
Mr. Salmon. Thank you.
Madam Secretary, we are just about 6 months away from the
implementation of the Affordable Health Care Act and several of
the groups that have been very, very supportive of the act when
it initially passed are now raising red flags and some are
actually calling for its repeal. In fact, most recently the
United Union of Roofers, Waterproofers, and Allied Workers--
they came out and asked for its repeal. Several other unions
have expressed concerns about losing their Taft Hartley
coverage.
And so my question would be to you, given the fact that you
were integrally involved in the negotiating and putting this
act together, if you had it to do all over again would there be
any things that you would do differently? And if so, what?
And then also, why do you believe some of these groups that
were so supportive in the past are now opposed to it and are
having problems with it?
Secretary Sebelius. I would tell you, I was very involved
from April of 2009 when I got sworn in to March of 2010 when
the bill was passed, and probably every day along the way there
was some decision or some discussion that could have gone one
way or the other.
I think overall this is a law that has been long overdue in
this country. For seven decades Republican and Democratic
Presidents have been trying to pass some kind of comprehensive
reform. I think the President chose not to blow up the private
insurance market but, in fact, to build on the private
insurance market, close the gap that way, not go to a single-
payer system, which a lot of his supporters would have
preferred but felt this was far less disruptive and a way to
fill the gap.
So I think that as we go through time, after full
implementation, after we see how things are shaking out, there
are likely to be fixes along the way. But it is impossible
right now to deal with speculation and that is really what we
have: this will happen, or this won't happen, or this could
happen. Medicare doesn't look the same today as it did when my
father was here and voted for it in 1965. I am sure the
Affordable Care Act in 50 years will look very different and
there will be changes along the way based on real experience in
the marketplace.
But I think our success so far in the 3 years with
implementation of pieces of this, with the cost control issues
underway, with what has happened and not happened to Medicare
is very, very positive. And I just--I am very excited about the
next step and fully implementing this law.
Mr. Salmon. [Off mike.]
Secretary Sebelius. Sir, I really don't know and I would be
happy to--I wasn't aware that the union you cited is now saying
they are opposed, and I don't really know why, if they have a
particular issue that they were hoping to get a tax credit and
be part of an exchange at the same time, which I know has been
the case in some instances. I don't know why they are saying
that.
Mr. Salmon. [Off mike.]
Chairman Kline. The gentleman's time has expired.
Mr. Polis?
Mr. Polis. Thank you, Madam Secretary.
A lot of Coloradans in my district and across my state
still don't know how Obamacare can help them. It is a
particular concern among our many residents who don't speak
English.
In Colorado our state officials, the health exchange, the
nonprofit organizations advocacy groups are all channeling
their efforts into public awareness campaigns focusing on one-
on-one conversations with non-English speakers. We are also
doing outreach to English and non-English speakers in the
Latino community through media personalities, nurses, doctors,
friends and family, and running TV, radio, and print ads in
Spanish.
My question is, is a similar effort underway at the federal
level and what actions have you and the department taken to
ensure that non-English speakers in Colorado and across the
country are aware of and can access the new services available
to them?
Secretary Sebelius. Well, that is a great question and it
isn't, as you know, just Spanish language, but there are
multiple languages spoken across this great, diverse country.
So we are taking that very seriously. We have put together an
operation where a call center will open I think later this
month, and questions will be able to be answered in 150
languages out of that call center.
Materials on our Web site are automatically available in
both English and Spanish because Spanish is the most frequently
spoken other language here in the United States, so everything
that we are doing will always be available in English and
Spanish but we are trying also to be very sensitive to the
diversity of languages and have--I am hopeful that when we get
the proposals back for navigators who will be on-the-ground
helpers in communities, that many of those will come out of
community groups with cultural sensitivity and language skills
to reach into some of our more vulnerable populations.
We are also putting in-person assistance in the community
health centers across this country, many of whom have personnel
who speak multiple languages and come out of the neighborhood.
So we are looking at all the kind of levers that we have.
Mr. Polis. Thank you. We will look forward to our state
coordinating with your efforts and helping to publicize your
multilingual call center and I applaud you for those efforts.
We don't have much more time. I just want to applaud your
efforts on early childhood education. I recently introduced the
Continuum of Learning Act to align early childhood education
and elementary school standards and I would encourage you to
continue to work in early childhood with the areas under your
jurisdiction with the areas under the jurisdiction of Secretary
Duncan and school districts and states to make sure we have a
coordinated approach to early childhood education.
And with that, I will be happy to yield back.
Chairman Kline. Thank the gentleman.
Mr. Thompson?
Mr. Thompson. Thank you, Chairman.
Madam Secretary, thank you for joining us here today. I
need to address an issue that is very near and dear to my heart
as a--actually a couple in Pennsylvania. I just want to just
briefly weigh in and say that in terms of that little girl that
is--would reach the age of 11 by August, you are probably the
one person certainly in this chamber and maybe in this country
that has the ability to waive a rule to keep her from dying,
and I really encourage you to do that.
My remarks really is--the other side is I want to talk
about the concept behind the State Children's Health Insurance
Program. As you know, it was born in Pennsylvania. This is a
one-of-a-kind program to provide coverage to children whose
families earn too much to qualify for medical assistance but
not enough to purchase private insurance.
The federal CHIP program was signed into law in 1997,
authorized in 2009--one of the first votes I made as a new
member of Congress. Now, I voted in favor of that
reauthorization because I saw how Pennsylvania was able to
provide--excuse me--children private health insurance coverage
using a market-based approach, not Medicaid. However, I am
worried that the vote that I cast may have been in vain now
that Pennsylvania's CHIP program is under threat by the
Affordable Care Act.
Madam Secretary, in April 2013--I apologize for this cough;
I am hoping to get over it before the full implementation of
the Affordable Care Act----
Secretary Sebelius. We can find you a good doctor.
Mr. Thompson. I have got a good doctor.
April 2013 Pennsylvania's governor, Tom Corbett, met with
you to ask that you work with the commonwealth to ensure that
the children will not be affected by the implementation of the
ACA, and particularly those children enrolled in CHIP. On May
30th Governor Corbett reiterated his request, writing you and
expressing serious concern that upwards of 70,000 children will
be transferred to Medicaid off of CHIP.
Now, Mr. Chairman, I ask unanimous consent to enter that
correspondence from Governor Corbett to the secretary into the
record.
[The information follows:]
------
Chairman Kline. Without objection.
Mr. Thompson. Madam Secretary, my question is pretty
straightforward: Are you going to work with Governor Corbett to
see that kids enrolled in CHIP are not put into a position
where they can no longer use the doctor of their choice, not
dumped into Medicaid, they will continue to have viable access
to health providers?
Secretary Sebelius. Well, Congressman, what I can tell you
is I have had a number of conversations with Governor Corbett
and I will certainly continue to work with him to make sure
that the children in Pennsylvania are not disadvantaged,
certainly, by this next transition. CHIP remains an independent
program. Again, off the top of my head I can't tell you what
all the issues are around the Pennsylvania program but I will
go back and look them up.
But we have frequent conversations and I am----
Mr. Thompson. Well, Madam Secretary, the issue is 170,000
kids, 70,000 of them right now are going to move out of CHIP,
which is a program that works----
Secretary Sebelius. Right.
Mr. Thompson [continuing]. It is market-based--and be put
into Medicaid. And I would say the majority of folks on
Medicaid cannot find physicians, let alone specialists such as
pediatricians.
Thank you, Mr. Chairman.
Chairman Kline. The gentleman's time has expired.
Mr. Scott?
Mr. Scott. Thank you, Mr. Chairman.
Madam Secretary, we heard about the Cadillac plan being
taxed. Isn't it true that the taxes really affect that you only
get a deduction on the cost of a basic plan and if you spend
more than that that is just taxable income, that you pay tax
like everybody else?
Secretary Sebelius. That is correct. It is a cap on how
much you can deduct----
Mr. Scott. Okay. And----
Secretary Sebelius [continuing]. And how--the level of the
insurance deduction. And again, Congressman, as you know, it is
not to kick in until 2018 and it was an attempt to put on the
horizon the need for health plans to actually deliver some
lower-cost services.
Mr. Scott. Well, and so they are blaming something on the
Affordable Care Act. It could not have had any effect--the
Affordable Care Act couldn't have had any effect on that
because it hadn't--the tax hadn't even gone into effect. Is
that right?
Secretary Sebelius. That is correct.
Mr. Scott. You mentioned the reason that 20 percent of the
people have no insurance and would benefit with the Affordable
Care Act. Isn't it true that the 80 percent that have
insurance, for them we are closing the donut hole, we are--
those with preexisting conditions can get and keep insurance
and can switch insurances, that they get free prevention, that
is lower cost to individuals in the individual market, those--
we are eliminating insurance abuses like rescission for those
with insurance, the no limits annual or lifetime on what the
insurance company has to pay, and we extended the cost of
Medicare for 8 years--aren't those benefits that the 80 percent
will get?
Secretary Sebelius. Well, I think you are absolutely right.
You have just outlined some of the market advantages for the 80
percent. But I would say there are some additional ones.
First of all, the 80 percent right now are paying for the
cost of care for a lot of the people who don't have coverage--
--
Mr. Scott. And how much----
Secretary Sebelius [continuing]. Because their hospital
bills are higher, their doctor bills are higher----
Mr. Scott. How much is that for the average policy?
Secretary Sebelius. It is estimated by some economists that
it is about $1,000 per family on their policies extra that they
are paying for uncompensated care.
Mr. Scott. The gentleman from South Carolina raised
questions about the administration of the program. Can you say
a word about what the budget cuts and sequester has done to
your ability to properly and effectively administer the
program?
Secretary Sebelius. All of our programs?
Mr. Scott. Putting the Affordable Care Act into effect?
Secretary Sebelius. Well, I think that we certainly have
had a challenge the last couple of years in terms of resources
specifically to effectively implement the Affordable Care Act.
We did not have a budget in 2013 and then we had sequester on
top of that so that it has made, I think, it very difficult,
but we are doing a job to make sure the resources go, that the
programs are built, and that we are ready to implement on
October 1st.
Chairman Kline. The gentleman's time has expired.
Dr. DesJarlais?
Mr. DesJarlais. Thank you, Mr. Chairman.
Madam Secretary, what, in your opinion, was the biggest
reason or need for Obamacare or this health care law?
Secretary Sebelius. The biggest reason was that way too
many of our population had no coverage at all or coverage that
was unaffordable in and out of the market.
Mr. DesJarlais. How many people?
Secretary Sebelius. It is estimated that it is about a
sixth of our population.
Mr. DesJarlais. Can you put a number on that? How many
people were uninsured?
Secretary Sebelius. I can go back to 2010 and get you the
exact number. I don't----
Mr. DesJarlais. Can you give me a guess?
Secretary Sebelius. Well, a sixth of the--about 20 percent
of the population, we have about 300 million people.
Mr. DesJarlais. Okay. The President said when he
implemented the law that there was roughly 31 million uninsured
Americans. Is that right?
Secretary Sebelius. He may have said that. That is probably
a little low.
Mr. DesJarlais. Okay. According to the CBO's recent report,
44 million people will be uninsured next year and still 31
million people will be uninsured in 2023. This is despite the
federal government spending almost $2 trillion to implement
this law.
Now, would you say if the CBO--the Congressional Budget
Office's numbers are correct, that the President's signature
legislation at--to achieve universal coverage is a success or
is it looking to be maybe not so much?
Secretary Sebelius. Well, what we know right now--and I
think it is safer to deal in fact----
Mr. DesJarlais. Well, let's look at the numbers--you can
address the numbers that CBO----
Secretary Sebelius [continuing]. Is that we have got 3
million young adults who were not covered in 2010 who now have
coverage. We know that. We know that small business owners are
staying in the marketplace differently than they were in the
decade before the Affordable Care Act when they were dropping
coverage. So we start with a baseline that has added 3
million----
Mr. DesJarlais. Well, Madam Secretary, I know what you are
saying here, but what about all the concerns of the people who
have insurance that are going to lose it? Because these numbers
that CBO aren't projecting aren't the ones that you were
talking about; these are new people.
These are a bunch of people around the country--the fifth--
sixth--60 percent of Americans that didn't want this health
care law that are going to lose their insurance and have to pay
taxes. What do you say to those people? I mean, the CBO says
it. Do you agree with the CBO's numbers?
Secretary Sebelius. I don't have any idea what numbers you
are quoting but I would rather deal with what is happening on
the ground and I will be glad to come back next year, sir,
and----
Mr. DesJarlais [continuing]. 30 million to 40 million
people are not going to have insurance with this new signature
Obamacare and you have to----
Secretary Sebelius. I have no idea where those numbers come
from and where the CBO has got them. No idea.
Mr. DesJarlais. Well, we will get you the numbers. Thank
you.
Secretary Sebelius. Yes.
Chairman Kline. Gentleman yields back.
Dr. Heck?
Mr. Heck. Thank you, Mr. Chairman.
Thank you, Madam Secretary.
You know, there has obviously, as expected, been a lot of
discussion about the Affordable Care Act today and how it is
supposed to increase access to health care. And I think it is a
bit of a mischaracterization because the bill really attempts
to increase access to health insurance, and increased access to
health insurance doesn't necessarily increase access to health
care.
With that in mind, I would like to ask you a question about
a bipartisan concern, and that is the looming physician
shortage. The Association of American Medical Colleges projects
that by 2020 the U.S. will be facing a 91,500-physician
shortage that is evenly split between specialists and primary
care physicians.
And so I am concerned that at a time when we need to grow
the physician workforce the administration continues to propose
cutting Medicare support for physician training and the
critical services provided by teaching hospitals. It is
estimated that the President's proposal to cut Medicare IME by
10 percent could cost America's teaching hospitals over $700
million annually, including about $1.6 million in my home state
of Nevada, and would severely impact their ability to train the
next generation of physicians.
As you know, IME is not an overhead payment. In fact,
teaching hospitals receive IME funding to help compensate them
for the higher costs because they take care of sicker, more
complex patients and provide services that other hospitals
cannot, such as trauma centers, burn units, and standby
capacity.
Can you tell me, has the administration even considered the
impact of this cut on teaching hospitals' ability to maintain
these critical services and thus actually increase access to
quality health care?
Secretary Sebelius. Yes, sir. I know that the reduction in
medical education is potentially difficult for a number of
teaching hospitals. The cost reduction is estimated based on
how much it costs to actually provide the residency slots and
how much is administrative costs, and the administrative costs
are reduced and the costs to provide the residential slots are
in the President's budget--were in the President's budget last
year.
In addition, there are a whole variety of additional
workforce initiatives that have been underway since the
beginning of this administration to provide more health care
providers, I mean, more--tripling the size--or doubling the
size, I am sorry, of the national health service corps, which
not only is doctors but nurses, mental health practitioners,
dentists, and others--increasing nurse and nurse training
programs, looking at moving medical slots from specialty care
to primary and geriatric care, knowing that is where the
providers are going to be needed.
So there is a constant and, I think, continued look at
workforce issues, which really have nothing to do with the
Affordable Care Act but have to do with our aging population
and the demographics of what we are going to need in terms of
health care providers.
Mr. Heck. Well, I would agree but I would be concerned when
the Association of Medical Colleges is saying there is not
enough training slots and we are trying to look at cutting
dollars to training slots, that we are going to continue to
compound this shortage. And I have always said that the
greatest single threat to Medicare, in my opinion, is SGR----
Secretary Sebelius. I would agree.
Mr. Heck [continuing]. And the second-greatest threat is
GME. And we can have a great program but if there is nobody to
take care of the seniors then the program really doesn't do
much good.
Thank you, Mr. Chair. I yield back.
Chairman Kline. Gentleman's time has expired.
My apologies to those members of the committee who didn't
get a chance to answer questions. We have hit the hard stop of
12 o'clock.
I would like to yield briefly to my colleague for his
closing comments?
Mr. Miller. I won't take time because there are members who
didn't get questions because of the secretary's schedule.
And I just want to thank you, Madam Secretary, for your
presentation here today. I think that, you know this list of
successes that mount every day, the studies that are done every
day that point to the positive impacts of the Affordable Care
Act is very exciting, and I thank you again for the tremendous
work you have done in implementation of this act.
Chairman Kline. I thank the gentleman.
Of course, I have a different view. It seems to me we are
seeing an awful lot of bad news that is coming out of the
impending implementation of the Affordable Health Care Act and
so the debate will continue.
I ask unanimous consent that an article from the Wall
Street Journal called ``Obamacare Bait and Switch'' be included
in the record. Again, I thank the secretary----
[The information follows:]
[From the Wall Street Journal, June 3, 2013]
ObamaCare Bait and Switch
The truth about those rate increases in Oregon and California
Liberals have spent years claiming that ``rate shock'' under the
Affordable Care Act--the 20% to 30% average spike in insurance premiums
that every independent analyst projects--is merely the political
imagination of Republicans and the insurance industry. So they
immediately claimed victory when California reported last month that
the plans that will be available on the state's new insurance exchange
next year would be cheaper than they are today.
Except now it emerges that California goosed the data to make it
appear as if ObamaCare won't send costs aloft as the law's regulations
and mandates kick in. It will, by a lot. And now liberals have suddenly
switched to arguing that, sure, insurance will be more expensive but
the new costs are justified. Needless to say that was not how Democrats
sold health-care reform.
California reported that the rates would range from 2% above to 29%
below the current market. ``This is a home run for consumers in every
region of California,'' said Peter Lee, the director of the state
exchange. ``These rates are way below the worst-case gloom-and-doom
scenarios we have heard.''
But Mr. Lee and his fellow regulators were making a false
comparison. They weren't looking at California's lightly regulated
individual insurance market that functions surprisingly well. They were
comparing ObamaCare insurance to the state's current small-business
market where regulations similar to ObamaCare have already been
imposed.
In other words, California wasn't comparing apples to apples. It
wasn't even comparing apples to oranges. It was comparing apples to
ostriches. The conservative analyst Avik Roy consulted current rates on
the eHealthInsurance website and discovered that the cheapest ObamaCare
plan for a typical 25-year-old man is roughly 64% to 117% more
expensive than the five cheapest policies sold today. For a 40 year
old, it's 73% to 146%. Stanford economist Dan Kessler adds his
observations nearby.
We wouldn't be shocked if California deliberately abused statistics
in the hopes that no one would notice that in some cases premiums would
more than double. In any case, the turn among the liberals who touted
the fake results has been educational.
They now concede that individual costs will rise but claim that it
is unfair to compare today's market to ObamaCare because ObamaCare
mandates much richer benefits. Another liberal rationalization is that
the cost-increasing regulations are meant to help people with pre-
existing conditions, so they're worth it.
So they're finally admitting what some of us predicted from the
start, but that's also the policy point. Americans are being forced to
buy more expensive coverage than what they willingly buy today.
Liberals also argue that some of the new costs will be offset by
subsidies, which is great news unless you happen to be a taxpayer or
aren't eligible for ObamaCare dollars and wake up to find your current
coverage is illegal.
The Affordable Care Act was sold as a tool to lower health costs.
In case you missed it, the claim is right there in the law's title. The
new Democratic position is that the entitlement will do the opposite
but never mind, which is at least more honest.
But we wonder how long this new candor will last. If the public
reacts badly to these higher premiums, the authors of ObamaCare will
soon be back to blaming insurance companies and Republicans.
______
Mr. Miller. I ask unanimous consent that an article from
the New York Times talking about the rise of entrepreneurship
and----
[The information follows:]
[From the New York Times, May 31, 2013]
Affordable Care Act Could Be Good for Entrepreneurship
By Catherine Rampell
The Affordable Care Act is expected to produce a sharp increase in
entrepreneurship next year, according to a new report from the Robert
Wood Johnson Foundation, the Urban Institute and Georgetown
University's Health Policy Institute. The number of self-employed
people is expected to rise by 1.5 million--a relative increase of more
than 11 percent--as a direct result of the health care overhaul.
One major barrier to entrepreneurship in the United States--beside
the usual risks involved with starting a company--is that it has been
difficult to get health insurance on the individual market. Those who
do end up founding or joining a start-up are often able to do so
because they have a spouse with employer-sponsored insurance, or
because they are keeping a day job with a bigger company. (This was the
case, for example, for most of the people involved with Leap2, a Kansas
City start-up that I profiled last fall.)
Economists have looked at whether this insurance-related job lock
is deterring self-employment and the formation of new businesses, and
the data suggest it is. A Journal of Health Economics paper, for
example, found that business ownership rates jumped sharply from just
under age 65 to just over age 65, when people become newly eligible for
Medicare. Using Current Population Survey data, the same paper also
found that wage and salary workers are more likely to start businesses
from one year to the next if they have a spouse with employer-based
insurance.
A working paper from the Upjohn Institute looked at a change in the
law in New Jersey that expanded access to individual health insurance.
It found that the law seemed to increase self-employment, particularly
among ``unmarried, older, and observably less-healthy individuals.''
The report released Friday applies those findings to a model of
what will happen in 2014, based on the Affordable Care Act's provisions
for ``universal availability of non-group coverage, the financial
assistance available for it, and other related market reforms.'' The
authors also adjusted their numbers depending on the access that
residents of various states already have to individual health
insurance. (Vermont, for example, already has a statute that allows the
self-employed to obtain small group coverage.) Over all, they found,
the ranks of the self-employed are likely to rise 11.5 percent, from
about 13.1 million to 14.6 million. A table with their state-by-state
estimates is below.
By the way, the paper does not mention this, but the same forces
that will make it easier for workers to become self-employed may also
make it easier for workers to retire early. I have heard anecdotally
about people in their late 50s or early 60s who would like to retire
but can't do so because they're basically uninsurable (for now) on the
individual market; I wonder if we'll notice a wave of retirements in
this age group come 2014.
----------------------------------------------------------------------------------------------------------------
Self-employment
State Self-employment post-A.C.A. Increase due to % Increase due
absent A.C.A. changes A.C.A. to A.C.A.
----------------------------------------------------------------------------------------------------------------
Alabama................................. 118,000 134,000 16,000 13.60%
Alaska.................................. 31,000 35,000 4,000 12.90%
Arizona................................. 301,000 340,000 39,000 13.00%
Arkansas................................ 99,000 112,000 13,000 13.10%
California.............................. 1,901,000 2,149,000 248,000 13.00%
Colorado................................ 304,000 331,000 27,000 8.90%
Connecticut............................. 185,000 202,000 17,000 9.20%
Delaware................................ 31,000 33,000 2,000 6.50%
District of Columbia.................... 21,000 24,000 3,000 14.30%
Florida................................. 819,000 891,000 72,000 8.80%
Georgia................................. 432,000 488,000 56,000 13.00%
Hawaii.................................. 58,000 63,000 5,000 8.60%
Idaho................................... 83,000 94,000 11,000 13.30%
Illinois................................ 475,000 537,000 62,000 13.10%
Indiana................................. 224,000 253,000 29,000 12.90%
Iowa.................................... 148,000 167,000 19,000 12.80%
Kansas.................................. 116,000 131,000 15,000 12.90%
Kentucky................................ 150,000 170,000 20,000 13.30%
Louisiana............................... 179,000 203,000 24,000 13.40%
Maine................................... 73,000 79,000 6,000 8.20%
Maryland................................ 231,000 261,000 30,000 13.00%
Massachusetts........................... 281,000 281,000 0 0.00%
Michigan................................ 317,000 344,000 27,000 8.50%
Minnesota............................... 258,000 292,000 34,000 13.20%
Mississippi............................. 102,000 110,000 8,000 7.80%
Missouri................................ 242,000 273,000 31,000 12.80%
Montana................................. 72,000 81,000 9,000 12.50%
Nebraska................................ 104,000 117,000 13,000 12.50%
Nevada.................................. 104,000 117,000 13,000 12.50%
New Hampshire........................... 74,000 81,000 7,000 9.50%
New Jersey.............................. 304,000 330,000 26,000 8.60%
New Mexico.............................. 94,000 106,000 12,000 12.80%
New York................................ 743,000 808,000 65,000 8.70%
North Carolina.......................... 378,000 411,000 33,000 8.70%
North Dakota............................ 52,000 58,000 6,000 11.50%
Ohio.................................... 514,000 581,000 67,000 13.00%
Oklahoma................................ 173,000 196,000 23,000 13.30%
Oregon.................................. 212,000 240,000 28,000 13.20%
Pennsylvania............................ 464,000 524,000 60,000 12.90%
Rhode Island............................ 43,000 46,000 3,000 7.00%
South Carolina.......................... 155,000 176,000 21,000 13.50%
South Dakota............................ 57,000 65,000 8,000 14.00%
Tennessee............................... 258,000 292,000 34,000 13.20%
Texas................................... 955,000 1,079,000 124,000 13.00%
Utah.................................... 99,000 112,000 13,000 13.10%
Vermont................................. 41,000 41,000 0 0.00%
Virgina................................. 333,000 376,000 43,000 12.90%
Washington.............................. 346,000 376,000 30,000 8.70%
West Virginia........................... 46,000 52,000 6,000 13.00%
Wisconsin............................... 256,000 290,000 34,000 13.30%
Wyoming................................. 32,000 36,000 4,000 12.50%
----------------------------------------------------------------------------------------------------------------
Copyright 2013 The New York Times Company.
______
Chairman Kline. Without objection, they will both be
included in the record.
I thank the secretary for your testimony, for your
answering questions, and for your presence here today.
And with that, we are adjourned.
[Questions submitted for the record follows:]
chairman kline
Head Start
The president's proposed Preschool for All program would be housed
at the Department of Education while HHS plans to continue to operate
Head Start and the Child Care and Development Block Grant, programs
that provide education and care services primarily targeted to children
ages zero to five. In fact, a 2012 Government Accountability Office
(GAO) report found 45 such programs scattered across multiple agencies
(including yours) costing taxpayers at least $13.3 billion annually.
Why is the administration proposing to further fragment the federal
government's early childhood education and care system?
Child abuse
How many HHS programs exist to help states protect children from
abuse and neglect? How is HHS coordinating these efforts to ensure the
best investment of taxpayer funds?
Now that HHS has completed all four reports as required by the
CAPTA Reauthorization Act of 2010 on important aspects of state and
local child abuse prevention systems, how do you plan to address some
of your findings?
Older Americans
1. How is the Administration for Community Living meeting the needs
of both the disability and aging communities? How have the
constituencies of both groups responded to the consolidation of the
Administration on Aging, the Office of Disability, and the
Administration on Intellectual and Developmental Disabilities?
2. How is the Assistant Secretary on Aging managing the new
responsibilities related to the disability community, as well as the
existing responsibilities to the aging community?
3. In the president's 2014 budget request, HHS calls for funding
new programs and projects at the expense of its current obligations,
specifically in nutrition programs for seniors. The budget requests
$816 million for Older Americans Act nutrition programs, a reduction
from 2013 levels, which is estimated to support meals for 2.3 million
seniors. These cuts come on top of: (1) state and local budget cuts;
(2) rising costs for food and transportation; (3) smaller or fewer
donations due to a slow economy; (4) increased demand for services, as
Baby Boomers turn 65 at a rate of 10,000 a day (about 12,000
individuals turn 60 everyday); and (5) increased need for services. How
do you justify the call for funding new programs when current
obligations are not being met?
4. While the committee continues to gather information to inform
the reauthorization of the Older Americans Act, when can we expect to
see your recommendations, if any, for the reauthorization?
congressman thomas petri (wi)
1. I have been contacted by several Wisconsin Medicaid-dependent
home care providers with over 1,000 employees each. As you know, the
ACA requires that these entities provide insurance to their employees
or pay a fine. While most normal businesses would raise their prices in
the face of rising costs, unfortunately these providers are in the
unique position of only having one customer--the Medicaid program. As
has been well documented, the Medicaid program significantly underpays
providers relative to their costs, leaving these operators with very
little margin. Therefore, the ACA puts them in an impossible position
as they cannot afford to provide the required insurance or pay the
fine, but also cannot raise their rates.
It is my understanding that they have sought relief from your
department as well as from the Department of the Treasury. While
sympathy is expressed, no solution has been offered. These personal
care providers are vital to our nation's health care infrastructure as
they allow individuals to receive care in their homes, rather than an
institution. What alternative can you offer to these providers besides
bankruptcy?
congressman phil roe (tn)
1. Several hospitals in East Tennessee recently brought to my
attention the wide disparity in Medicare payments among different
regions of the country as a result of the wage index. The low payments
that hospitals in my state are receiving as a result of the wage index
are threatening their viability and could lead to diminished access to
care. Does your department have any recommendations on how Congress
could address this inequity and provide adequate payment to hospitals
in states like Tennessee?
2. At a recent committee field hearing in North Carolina, Mr. Chuck
Horne, the president of a textile company with 350 employees, testified
as to the impact that the Affordable Care Act will have on his
business. Mr. Horne currently offers outstanding insurance benefits--at
great cost to the company--because he believes it is the right thing to
do. Mr. Horne, however, will be punished by the transitional
reinsurance fee of $63 per covered life even though his company will
not benefit from it. What would you say to Mr. Horne, who will pay
$32,000 to provide a backstop to large insurance companies instead of
having that money to reinvest in his business? Do you believe this is
fair?
congressman todd rokita (in)
1. Over 5 million people in the United States have Alzheimer's
disease. Getting a timely and accurate diagnosis is an important part
of addressing this disease. Leading experts & even the Health and Human
Services own web site stress the value of early diagnosis.
Early diagnosis allows families to better plan for the course of
this disease and it allows patients and medical experts to explore
various treatments available that can help possibly delay or mitigate
symptoms common with this disease.
Far too many people with Alzheimer's are not diagnosed until their
symptoms have become severe, making it much more difficult and complex
for them and their loved ones to plan for the future. What is HHS doing
to ensure timely access and coverage to new technologies for
Alzheimer's disease as they become available, particularly diagnostic
tools that can help individuals to get the care they need before it's
too late?
2. CMS currently reimburses for countless medications and
procedures to treat patients with Alzheimer's disease or other forms of
cognitive impairment. Given that 1 in 5 patients who are diagnosed with
Alzheimer's actually have something else, can you comment on why the
agency is considering not covering a diagnostic agent for this disease
state that was approved by the FDA over a year ago?
congressman larry bucshon (in)
1. Secretary Sebelius, the Association of American Medical Colleges
and the US Health Resources and Services Administration--an agency
within HHS--project that by 2020 the US will be facing a large
physician shortage that is evenly split between specialists and primary
care physicians. I'm very concerned that at a time when there is
general agreement that we need to grow the physician workforce because
of the aging of the baby boomers, the Administration is actually
proposing cutting Medicare's support for teaching hospitals and the
critical services they provide.
The President's proposal to cut Medicare indirect medical education
payments by 10 percent would cost America's teaching hospitals millions
annually as they try to train physicians and would jeopardize these
hospitals' ability to provide care for the sickest in their
communities, especially seniors and the underserved. Make no mistake,
in addition to hindering the training of doctors, cuts to providers
will wind up leading to cuts to patient services.
Can you help me understand the rationale behind this cut?
congressman trey gowdy (sc)
1. What section of the Public Health Service Act do you derive your
authority to solicit funds from private groups in order to fund the
implementation of the Patient Protection and Affordable Care Act?
congressman lou barletta (pa)
As you know, Pennsylvania recently requested that HHS provide
flexibility to the state to continue the Pennsylvania Children's Health
Insurance Program (CHIP) and to exempt the state from having to
transfer a significant portion of its enrollees into the Medicaid
system. Under Obamacare, PA's CHIP kids would have to be added to that
population. Because of the law, the state has calculated that of the
187,000 current enrollees in PA CHIP, they will have to involuntarily
transfer approximately 70,000 enrollees onto the Medicaid rolls.
1. Do you think it is better for those kids to remain in a program
that has better provider capacity?
2. How are you going to explain that they can no longer get prompt
service because they have been moved to a program that reimburses
providers so poorly that there aren't enough providers to take care of
everyone in the program?
congresswoman martha roby (al)
1. Prior to the House Committee on Education and the Workforce
hearing on June 4, 2013, I reached out to my constituents on Twitter
and Facebook to see what questions they might ask you if they had the
opportunity to do so. I compiled their questions and would like
responses to share with each individual. Per their request, personal
information has been redacted.
a. My employer has provided excellent insurance coverage for over
30 years. It would definitely be classified as a 'Cadillac Plan.' This
year we were forced to change coverage. Please tell me how penalizing
or taxing companies that provide excellent coverage has anything to do
with ensuring everyone has access to affordable healthcare.
b. The President said if we liked our current plan we could keep
it. This has turned out to be false. What changes to Obama Care is the
administration doing to ensure that this statement does not turn out to
be a lie?
c. The plan [PPACA] was touted as a cost saver, but as the details
become available we're seeing the opposite. My question is: if the plan
is evolving into something it was never intended to be, what is the
Secretary intended to do to impose cost controls?
d. Now that we see so many companies reducing work hours of
employees to preclude having to pay the higher cost /coverage of
insurance for people working over 30 hrs, what are you going to do to
help those people make up the difference in lost pay and lost benefits?
e. Why is the IRS involved in anything having to do with
healthcare?
f. Why are healthcare costs already rising when the whole goal was
to reduce costs?
2. As you know, beginning in 2014, businesses with 50 or more full-
time equivalent employees will be required to provide health insurance
coverage to full-time employees or face new tax penalties.
Many of the businesses Alabama are family owned and operated
businesses, passed down generation after generation. One specific
heating and plumbing company in Montgomery, AL is extremely confused
with the current mandate set to go into effect in 2014.
Their business currently has a count of 52 employees; however,
three of these individuals are considered businesses owners. Per the
law's mandates, is this business required by law to provide coverage to
their employees?
Has the Department issued any specific, in-depth guidance as to how
to count each employee--including business owners and family members as
employees? For example, the State of Alabama's workers compensation
regulations do not take into account business owners as employees. Does
the health care law?
3. On a similar note, there is much ambiguity regarding coverage
for young adults who remain on their parent's insurance plans until
they are 26.
If a young adult is employed part-time at a local grocery store,
around 25-30 hours a week, they are technically be classified as a
``full-time employee'' per the Department's definition. In this
instance, who is primarily responsible to provide health care to the
young adult--the parent or the business?
If there is a lack of compliance from such business and they do not
provide the health insurance mandated by law, what is the penalty
associated to this business?
congresswoman susan brooks (in)
1. Alzheimer's disease is estimated to cost the nation $200 billion
this year alone, and about 70 percent of that--$140 billion--is
shouldered by taxpayers in Medicare and Medicaid costs. If the current
trajectory holds, this number will exceed $1 trillion annually in the
coming decades.
Experts as well as our government have stressed the value of an
early and accurate diagnosis in treating Alzheimer's to prevent costly
and time-consuming misdiagnoses, as well as begin proper care planning
earlier. At the same time, companies have been working to create
diagnostic tests that could lead to an earlier finding of Alzheimer's.
As diagnostic technologies for Alzheimer's and other diseases
continue to be developed and gain approval by the FDA, what measures be
taken to prioritize coverage of diagnostic tools, particularly when
early diagnosis of diseases like Alzheimer's and others can lead to
dramatically lower costs?
2. One of the selling points of the health care law to small
businesses was the ability to offer their employees a range of choices
in the new insurance exchanges. However, last Friday HHS announced a
delay in the implementation of the employee choice component of SHOP in
the 33 states where the federal government will run the exchange. This
delay once again shows the administration is falling behind in
implementation of this flawed law. The result is fewer choices and
higher premiums for small businesses and their employees. Are you at
all concerned this delay will push more employers to simply drop
insurance?
3. It has been three years since enactment of the health care law,
yet the administration has not issued many of the critical rules needed
for 2014. When will these much-needed rules be released? Open
enrollment is expected to begin in October 2013. Won't states,
employers, and insurers need to know the final rules before they can
invest the hundreds of millions of dollars required to implement the
law?
congressman richard hudson (nc)
1. Madam Secretary, the Congressional Budget Office estimates that
job creators will pay $140 billion in new taxes because of the employer
mandate in the health care law
Last December, Chairman Kline and Dr. Roe, sent you and Sectaries
Geithner and Solis a letter asking for information about how the
employer mandate and its penalties will impact employment, specifically
part-time workers. Treasury responded on behalf of the three agencies,
stating, quote: ``We have not conducted any specific analysis of the
effects on employment''.
In April, our health subcommittee held a hearing in my district in
North Carolina where we heard from employers struggling to figure out
how the law will affect their businesses, employees, and customers. Ed
Tubel, owner of Sonny's BBQ, testified that his company's compliance
costs may reach $200,000. Tina Hayes, Chief Human Resources Officer at
a local community college testified they will have to reduce the number
of courses they offer because of the new employer mandate.
Madam Secretary, an employer with 49 workers that cannot afford to
buy government approved insurance will face a fine of $40,000 for
hiring just one new worker. We need job growth and small businesses to
lead the way. What would you say to the small business owners that
testified in North Carolina about the crushing new taxes they face for
not providing government approved insurance? Or, to the workers who are
seeing their hours and take home pay reduced because their employer
simply cannot afford government-approved insurance?
Madam Secretary, to confirm for the record, your agency has not
conducted any specific economic analysis to determine how the new
employer mandate will impact employment?
congressman luke messer (in)
1. I have been contacted by several superintendents and part-time
school employees in my congressional district about the harmful impact
the Affordable Care Act may have on educational organizations and their
employees.
A. Are you concerned the quality of education provided to students
will suffer because schools are reducing the hours of some employees
below 30 per week due to the harsh tax penalties imposed by the
Affordable Care Act?
B. Do you believe a 30 hour work week is an appropriate amount to
be considered a full-time employee?
C. Has the Department analyzed the potential impact on school
employees that the Affordable Care Act's employer responsibility
provisions may have, particularly given Internal Revenue Service
guidance regarding the manner in which schools are required to
calculate their number of full-time employees?
2. The Administration has made early detection and clinical
diagnosis of Alzheimer's disease a priority under its National
Alzheimer's awareness campaign. What specific steps is the
Administration undertaking to further this principle?
A. For example, will you make a diagnostic test that can assess
whether a Medicare beneficiary with cognitive impairment actually has
Alzheimer's disease accessible to all the appropriate patients for such
a test?
3. Currently, a significant number of patients with cognitive
impairment, possibly Alzheimer's disease, do not receive the right
diagnosis. I appreciate that an accurate and early diagnosis is one of
the continuing goals of the National Plan to Address Alzheimer's
Disease.
Do you agree that ensuring access to accurate diagnosis through FDA
approved technologies for patients with cognitive impairment would help
achieve a major goal of the National Plan to Address Alzheimer's
Disease?
congressman bobby scott (va)
1. Is there currently data available that shows the effects of
preventive care without co-pays or deductibles? For example, due to
increased access for tests such as mammograms, are cancers being
detected at an earlier stage than before?
2. Should Members of Congress or Congressional influence affect the
policies governing organ transplants?
congressman ruben hinojosa (tx)
1. As you know the rollout of the Affordable Care Act exchanges in
January of next year is a critical time. In the coming months, my
constituents and small business need to be educated as to what they can
expect, what is expected of them, and they will look to our offices to
help guide them through the process.
With the Republican budget cuts, including the arbitrary
sequestration cuts they championed and passed into law, what resources
are available for HHS employees to travel to congressional districts
for rollout events, informational town hall meetings and constituent
outreach in the months ahead?
2. As you know in the state of Texas, Governor Parry has put
politics above the health of Texans and refused to participate in the
Medicaid expansion program which would have provided health care to
over 1.5 million Texans as well as create more than three million jobs,
according to a report generated by the Perryman Group. This is all
despite the fact that a recent poll by the Texas Hospital Association
shows a majority of Texans are in favor of Medicaid expansion.
My concern is that because of the Governors short sighted decision
hospitals will get stuck in the middle. As you know, the Affordable
Care Act calls for a reduction in Disproportionate Share Hospital (DSH)
payments based on an assumption that states are expanding Medicaid.
Since this expansion is not happening in Texas, how will you work with
hospitals in Texas to make sure they do not get financially harmed by a
DSH reduction?
congressman jared polis (co)
1. In addition to expanding access to high quality early education
programs, it is crucial that early education programs such as Head
Start work with elementary schools to ensure a strong transition.
That's why I introduced a bipartisan, no-cost bill, the Continuum of
Learning Act, which would align early childhood education and early
elementary school standards and professional development activities
through strong child development practices and policies. How would the
administration's preschool proposal strengthen connections between
existing early learning programs and the elementary grades?
______
[Secretary Sebelius' response to questions submitted for
the record follows:]
Office of the Secretary,
Department of Health & Human Services,
Washington, DC, February 7, 2014.
Hon. John Kline, Chairman,
Committee on Education and the Workforce, House of Representatives,
Washington, DC 20515.
Dear Mr. Chairman: Thank you for the opportunity to complete the
record for the June 4, 2013 hearing at which Secretary Sebelius
testified on the FY 2014 Budget for the Department of Health and Human
Services. Enclosed you will find the answers to your questions.
I hope this information is helpful. If I may be of further
assistance, please do not hesitate to contact me at 202-690-7627.
Sincerely,
Jim R. Esquea,
Assistant Secretary for Legislation.
Enclosure.
chairman john kline (mn)
1. The president's proposed Preschool for All program would be
housed at the Department of Education, but HHS plans to continue to
operate Head Start and the Child Care and Development Block Grant,
programs that provide education and care services primarily targeted to
children ages zero to five. A 2012 Government Accountability Office
(GAO) report found 45 such programs scattered across multiple agencies
(including yours) costing taxpayers at least $13.3 billion annually.
Why is the administration proposing to further fragment the federal
government's early childhood education and care system?
Answer: The Administration's proposal represents a coordinated and
comprehensive approach to strengthen and expand early childhood
education services for our nation's most vulnerable children. The
President's plan will maintain and build on current Head Start
investments to support a greater share of infants, toddlers and three
year olds in Head Start centers, while state preschool settings will
serve a greater share of four year olds using Department of Education
preschool funding. The net result will be more five year old children
entering kindergarten ready to succeed. The Preschool for All program
focuses on 3 and 4 year olds. Head Start (and Early Head Start) will
now focus on infants and toddlers. Currently, fewer than 5% of infants
and toddlers living below the poverty line receive Early Head Start
Services.
As part of the President's Early Education Plan, we would also
expand high quality early learning services to over 100,000 infants and
toddlers through Early Head Start--Child Care Partnerships. These
partnerships will build on the strengths of Early Head Start and child
care investments. Instead of duplicating efforts, HHS will purposefully
use the existing infrastructure of child care centers and homes in
partnership with Early Head Start to improve access and quality so that
more of our nation's most vulnerable infants and toddlers will receive
the high quality, comprehensive full day full year services they need.
Additionally, this proposal was developed in partnership with the U.S.
Department of Education and the U.S. Department of Health and Human
Services, to ensure that children and families experience successful
transitions and continuous high-quality early learning services from
birth through age five and into the early grades of elementary school.
2. How many HHS programs help states protect children from abuse
and neglect? How is HHS coordinating these efforts to ensure the best
investment of taxpayer funds?
Answer: Child abuse and neglect is a complex, multidimensional
problem. Research confirms that childhood trauma and maltreatment can
lead to a range of negative effects on physical and mental health that
extend into adulthood. Addressing child maltreatment cuts across many
disciplines and therefore collaborative efforts are essential to
preventing child maltreatment, promoting well-being, and improving the
lives of children and families across the United States. There are
several programs, both across HHS and other agencies that in some way
touch on the issue through prevention, intervention, treatment, and law
enforcement activities.
Within HHS, the grant programs authorized by the Child Abuse
Prevention and Treatment Act (CAPTA) and the programs authorized under
titles IV-B of the Social Security Act specifically focus on the
prevention and treatment of child abuse and neglect and the provision
of public child welfare services as part of their core mission. CAPTA
programs include the Community-Based Child Abuse Prevention Program,
Children's Justice Act, Basic State Grant, and CAPTA research and
demonstration grants.
CAPTA programs focus on collaboration and coordination for upfront
prevention and improving the investigation and response to child
maltreatment. The title IV-B programs provide funding for a wide range
of child welfare related activities, including child abuse and neglect
prevention and family preservation. Under the Title IV-B program,
states are required to develop a Child and Family Services Plan (CFSP),
a five-year strategic plan that sets forth the vision and the goals to
be accomplished to strengthen the states' overall child welfare system.
A primary purpose of the CFSP is to facilitate states' integration of
programs that serve children and families into a continuum of services
for children and their families. Programs addressed through the CFSP
include title IV-B, subparts 1 and 2 of the Social Security Act (the
Stephanie Tubbs Jones Child Welfare Services Program and the Promoting
Safe and Stables Families Program, respectively), and the Chafee Foster
Care Independence Program and Education and Training Vouchers Program
for older and/or former foster care youth. States also report on their
use of the CAPTA State grant in conjunction with their plan submission.
The CFSP consolidates plans for these programs to help states
comprehensively integrate the full array of child welfare services,
from prevention and protection through permanency.
In addition to promoting coordinating planning across several key
programs, the Obama Administration has focused significant attention on
bringing together the resources of the Administration for Children and
Families, the Substance Abuse and Mental Health Services
Administration, and the Centers for Medicare & Medicaid Services to
address trauma and promote well-being.\1\ Our Department has been
proactive in reaching out to states to let them know about federal
authority and funding streams, strategies for coordinating cross-system
efforts, and good practices for integrating evidence-based screening,
assessment, and interventions related to complex trauma, including the
trauma associated with child abuse and neglect.
---------------------------------------------------------------------------
\1\ See: http://www.medicaid.gov/Federal-Policy-Guidance/Downloads/
SMD-13-004.pdf
---------------------------------------------------------------------------
Additionally, it is important to note that HHS chairs the Federal
Interagency Workgroup on Child Abuse and Neglect, which is a
longstanding group that includes federal staff from over 40 different
agencies across the government and provides an ongoing forum for
information sharing and facilitating stronger collaboration and
coordination across various child maltreatment related programs.\2\
---------------------------------------------------------------------------
\2\ See: Report on Efforts to Coordinate Programs and Activities
Related to Child Abuse and Neglect, June 2013
3. Now that HHS has completed all four reports required by the
CAPTA Reauthorization Act of 2010 on important aspects of state and
local child abuse prevention systems, how do you plan to address some
---------------------------------------------------------------------------
of your findings?
Answer: HHS will continue to foster partnerships with other federal
agencies and other partners to address child maltreatment, trauma and
other adverse childhood experiences. HHS will continue to use the
findings from the four CAPTA Reports to Congress to support ongoing
research, training, technical assistance, and service delivery across
all our programs. The findings from the reports emphasize the need to
increase states' and grantees' capacity to collect and use data for
assessing program performance and continuous quality improvement. HHS
is also committed to investing more resources towards evidence-based
and evidence-informed programs across various funding streams. We plan
to continue developing opportunities for shared learning, knowledge
development and dissemination at the federal level. We also plan to
encourage grantees and community service providers to make similar
efforts at the state and local level. We believe that interagency
coordinated efforts throughout HHS and with other federal and non-
federal partners are critical for preventing child maltreatment and
promoting the well-being of children and families.
Given the unique demographics and cultures of all states, it was
challenging to generalize findings of states' use of the CAPTA State
grant that might be implemented across all states or to draw
conclusions about the effectiveness of states' use of the CAPTA State
Grant since the state CAPTA plans focus on state spending plans, rather
than outcomes. Through the report, we did learn that 37 percent of
states selected a CAPTA program area because it aligned with the CFSP,
and 47 percent of states selected a CAPTA program area because it
aligned with the state's Program Improvement Plan developed to address
findings from the federal Child and Family Services Review (CFSR). This
confirms that most states are already working to integrate planning for
the title IV-B and CAPTA programs to make broader program improvements
to better support the state's comprehensive child and family services
programs, including child abuse and neglect programs. It also confirms
that the CFSP is the best vehicle to ensure coordination and
integration of state child protective services with overall child
welfare services in the state.
In regard to the report on citizen review panels, we understand the
panels may play a role in improving child protective systems across the
states. The report is inconclusive on the effectiveness of citizen
review panels in examining how agencies are fulfilling their child
protective services responsibilities because of the parameters of the
study. The report was an exploratory, descriptive report based on the
analysis of annual reports submitted by citizen review panels and the
state child protection system responses to those reports. We generally
learned about citizen review panel recommendations and state responses
to those recommendations and that practices vary from state to state.
As such, states will continue to need the flexibility afforded by the
CAPTA provision that mandates the responsibilities of the citizen
review panels. We would need to conduct a future study with appropriate
funding if we are to better understand how citizen review panels might
be useful as a systems improvement in state and local child welfare
agencies. Although such a study may be informative, the study would not
directly meet the critical informational need for child protective
service agencies, and is therefore a lower priority than other agency
activities. We concluded, however, that the public may not be able to
easily access all of the citizen review panel reports as required by
CAPTA. Therefore, we plan to address this with states that do not have
their reports available on their websites.
The report on efforts to coordinate the objectives and activities
of agencies and organizations which are responsible for programs
related to child abuse and neglect demonstrates that the Administration
for Children and Families' (ACF) Children's Bureau, Office on Child
Abuse and Neglect (OCAN) has been consistently engaged in significant
efforts to meet its coordination responsibility. Through collaborative
work with federal, state and local agencies, and a network of non-
federal partners, OCAN manages efforts to share and disseminate
information, promote awareness, and implement various activities to
address child abuse and neglect. We will continue these coordination
activities by working with our federal partners on issues of child
abuse prevention through the Federal Interagency Workgroup on Child
Abuse and Neglect; interagency agreements and initiatives; conferences,
workshops and other projects. Very specifically, we will continue our
longstanding interagency agreements between ACF and other federal
agencies to co--fund child abuse and neglect prevention and treatment
activities.
In the report on immunity protections for professionals who consult
or assist on cases involving child abuse and maltreatment, we concluded
all states have universally extended civil immunity to all good faith
reporters in law in compliance with the requirements in CAPTA.
Professionals who consult or assist on child maltreatment cases may
have less fear of liability for their actions and potentially cooperate
more readily if they had immunity for their actions. Although not
required by CAPTA, states may want to consider whether to enact laws to
extend immunity for professionals who consult, cooperate, or assist on
child maltreatment cases.
4. How is the Administration for Community Living meeting the needs
of the disability and aging communities? How have the constituencies of
both groups responded to the consolidation of the Administration on
Aging, the Office of Disability, and the Administration on Intellectual
and Developmental Disabilities?
Answer: The Administration for Community Living (ACL) is meeting
the needs of the disability and aging communities primarily through
continued implementation of the Older Americans Act and the
Developmental Disabilities Assistance and Bill of Rights Act at state
and local levels. ACL is conducting ongoing assessments of the needs of
these communities and evaluating and continuously improving our
performance and seeking efficiencies. Additionally, ACL is working
closely with a number of partners within HHS, such as the Centers for
Medicare & Medicaid Services, the Substance Abuse and Mental Health
Services Administration, and others, with regard to policies that can
better coordinate the provision of long-term services and supports for
persons with intellectual and developmental disabilities and older
Americans.
The communities' response has been very positive. Since the
creation of ACL, both communities have seen the benefits of
collaboration, alignment of goals, and cooperation in order to achieve
greater results.
5. How is the Assistant Secretary on Aging managing the new
responsibilities related to the disability community, as well as the
existing responsibilities to the aging community?
Answer: The Assistant Secretary for Aging has found that the two
constituencies have so many similarities that her joint role as
Administrator for Community Living has allowed her to become a stronger
advocate for enhanced Long Term Service and Support Systems that are
critical to the communities that ACL represents.
6. The president's 2014 budget request calls for funding new
programs and projects at the expense of its current obligations,
specifically related to nutrition programs for seniors. The budget
requests $816 million for Older Americans Act nutrition programs, a
reduction from 2013 levels, which is estimated to support meals for 2.3
million seniors. These cuts come on top of: (1) state and local budget
cuts; (2) rising costs for food and transportation; (3) smaller or
fewer donations due to a slow economy; and (4) increased demand for
services, as Baby Boomers turn 65 at a rate of 10,000 a day (about
12,000 individuals turn 60 everyday). How do you justify the call for
funding new programs when current obligations are not being met?
Answer: ACL recognizes the critical need for funding for senior
nutrition programs. To this end, the President's FY 2014 budget
requests to restore funding for these programs to the FY 2012 level of
$816 million from the FY 2013 enacted level of $768 million after
sequestration. In addition to this restoration of funding for senior
nutrition and other core services programs, the FY 2014 budget request
continues to propose the transfer of three programs for greater
alignment and efficiency, continues the focus on prevention through the
Alzheimer's initiative, and continues to support Aging and Disability
Resource Centers. The President's budget also contains a modest
investment of $8 million in discretionary grant funding to test
innovative approaches to reducing and addressing elder abuse in states
and tribal settings through Adult Protective Service systems, a need
which was documented through two recent reports of the General
Accountability Office.
7. While the committee continues to gather information to inform
the reauthorization of the Older Americans Act, when can we expect to
see your recommendations, if any, for the reauthorization?
Answer: ACL continues to support the reauthorization of the Older
Americans Act, as noted in our previously-submitted statement of
principles for reauthorization. These principles were based on
listening sessions from the field as to how to best serve our
communities. ACL has no plans for specific recommendations in the form
of bill language. However, we are pleased to work with Congress to
provide technical assistance regarding any specific program area,
principle, or proposal. Our principles for reauthorization are posted
on the ACL website at: http://www.aoa.gov/AoARoot/AoA_Programs/OAA/
Reauthorization/Target_Change.aspx.
congressman thomas petri (wi)
1. I have been contacted by several Wisconsin Medicaid-dependent
home care providers with over 1,000 employees each. As you know, the
Patient Protection and Affordable Care Act (PPACA) requires that these
entities provide insurance to their employees or pay a fine. While most
normal businesses would raise their prices in the face of rising costs,
unfortunately these providers are in the unique position of only having
one customer--the Medicaid program. As has been well documented, the
Medicaid program significantly underpays providers relative to their
costs, leaving these operators with very little margin. Therefore, the
PPACA puts them in an impossible position as they cannot afford to
provide the required insurance or pay the fine, but also cannot raise
their rates.
It is my understanding that they have sought relief from your
department as well as from the Department of the Treasury. While
sympathy is expressed, no solution has been offered. These personal
care providers are vital to our nation's health care infrastructure as
they allow individuals to receive care in their homes, rather than an
institution. What alternative can you offer to these providers besides
bankruptcy?
Answer: Thank you for your question regarding payment rates to
Medicaid providers. I recognize the critical importance of Medicaid
home care providers to enable Medicaid beneficiaries to remain in the
community.
States set payment rates with approval from the Centers for
Medicare & Medicaid Services (CMS), and CMS works with states as they
set their payment rates with beneficiary access in mind. States have a
considerable amount of flexibility when it comes to setting rates and
can consider as part of that rate setting process any relevant factor,
including the cost of overhead components such as employee group health
coverage. CMS reviews state provider payment rates to ensure that such
rates are in keeping with federal statutory and regulatory guidelines,
but states have the flexibility to adjust payment rates within those
guidelines. To the extent that a state wishes to increase payment rates
to certain providers, CMS is available to work with the state to ensure
that such increase meets federal requirements. Furthermore, to the
extent that the payment increase meets CMS approval, the federal
government would provide financial participation (FFP) for the
increased payment at the appropriate matching rate.
Additionally, as you may know, the Administration has announced
that it will provide an additional year before the Affordable Care Acts
mandatory employer reporting requirements begin, which will provide
affected businesses with additional time as they move towards making
health coverage available to their employees.
congressman phil roe (tn)
1. Several hospitals in East Tennessee recently brought to my
attention the wide disparity in Medicare payments among different
regions of the country as a result of the wage index. The low payments
that hospitals in my state are receiving as a result of the wage index
are threatening their viability and could lead to diminished access to
care. Does your department have any recommendations on how Congress
could address this inequity and provide adequate payment to hospitals
in states like Tennessee?
Answer: Under the current hospital wage index system, hospitals are
classified into geographically similar labor market areas. The labor
market areas are based on the Office of Management and Budget
delineations of metropolitan statistical areas.
In April of 2012, CMS submitted a Report to Congress entitled,
``Plan to Reform the Medicare Wage Index.'' In that report, CMS
discussed a different approach to calculating the wage index that we
believe would more accurately reflect the labor costs incurred by each
hospital based on the hospital employees' commuting patterns. This
``commuting-based wage index'' would allow for the wage index to be
calculated at a more granular level, down to the individual hospital.
It could also potentially obviate the need for hospital
reclassifications to other labor market areas. In the report, we
indicated that more data on hospital employee commuting patterns may be
necessary before adopting a commuting-based wage index. Additionally,
we stated that certain special adjustments to the wage index under
current law may no longer be applicable and should be reviewed in order
to determine if they would still be relevant under the new system.
Current law is rather prescriptive with respect to the wage index;
nonetheless, we continue to evaluate whether improvements could be made
under existing authority.
2. At a recent committee field hearing in North Carolina, Mr. Chuck
Horne, the president of a textile company with 350 employees, testified
as to the impact that the Patient Protection and Affordable Care Act
will have on his business. Mr. Horne currently offers outstanding
insurance benefits--at great cost to the company--because he believes
it is the right thing to do. Mr. Horne, however, will be punished by
the transitional reinsurance fee of $63 per covered life even though
his company will not benefit from it. What would you say to Mr. Horne,
who will pay $32,000 to provide a backstop to large insurance companies
instead of having that money to reinvest in his business? Do you
believe this is fair?
Answer: The Affordable Care Act has many components that help
contain costs, hold health insurers accountable to consumers and ensure
that American families receive value for their health insurance premium
dollars. One such mechanism is the 80/20 rule, or Medical Loss Ratio
(MLR) rule. The 80/20 rule brings consumers value, increases
transparency and accountability, and promotes better business practices
and competition among insurance companies. MLR generally requires
insurance companies in the individual and small group markets to spend
at least 80 percent of the premium dollars they collect on medical care
and quality improvement activities or pay a rebate. Issuers in the
large group market also have to comply with MLR requirements by
spending 85 percent of premium dollars on medical care and quality
improvement activities, or else they must pay a rebate.
The Congressional Budget Office analyzed the net impact of the
Affordable Care Act reforms on premiums in the individual, small group,
and large group markets.\3\ CBO calculated that premiums in the large
group market (50 or more employees) will be zero to a 3 percent lower
than they would have been without the Affordable Care Act. Employers
(and their premium paying employees) will benefit from factors such as
a decrease in uncompensated care, a reduction in fees--such as state
high-risk pool assessments--associated with assisting the uninsured,
and population improvements in health.
---------------------------------------------------------------------------
\3\ http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/107xx/
doc10781/11-30-premiums.pdf
---------------------------------------------------------------------------
By combining insurance market reforms, new efficiencies created by
the Marketplaces, and programs such as reinsurance that will help
stabilize premiums in the new Marketplaces, the Affordable Care Act
increases competition between health insurance issuers and reduces
uncompensated care.
congressman todd rokita (in)
1. Over 5 million people in the United States have Alzheimer's
disease. Getting a timely and accurate diagnosis is an important part
of addressing this disease. Leading experts and even the Department of
Health and Human Services' (HHS) own web site stress the value of early
diagnosis.
Early diagnosis allows families to better plan for the course of
this disease and it allows patients and medical experts to explore
various treatments available that can help possibly delay or mitigate
symptoms common with this disease.
Far too many people with Alzheimer's are not diagnosed until their
symptoms have become severe, making it much more difficult and complex
for them and their loved ones to plan for the future. What is HHS doing
to ensure timely access and coverage to new technologies for
Alzheimer's disease as they become available, particularly diagnostic
tools that can help individuals to get the care they need before it's
too late?
Answer: We are actively engaged in reviewing new technology to
ensure timely access to innovation for our beneficiaries. For example,
in October 2012, the Centers for Medicare & Medicaid Services (CMS)
opened a National Coverage Analysis (the first step in the National
Coverage Determination (NCD) process) to reconsider a prior NCD on the
use of Positron Emission Tomography (PET) scans that allowed Medicare
coverage of PET using only specified radioisotopes for certain
indications. Reconsideration of this NCD was requested by a stakeholder
who advocated coverage of PET using a radiopharmaceutical approved by
the FDA in 2012 to image beta-amyloid plaques in adult patients with
cognitive impairment who are being evaluated for Alzheimer's disease
and other causes of cognitive decline.
To help inform this evidence review, CMS convened a meeting of the
Medicare Evidence Development and Coverage Advisory Committee (MEDCAC)
in January 2013. A proposed coverage decision is expected by July 2013,
with a final decision (including consideration of public comments)
expected by October 2013. Information on the status of this coverage
review is available on the CMS website at http://www.cms.gov/medicare-
coverage-database/details/nca-details.aspx?NCAId = 265&NcaName = Beta +
Amyloid + Positron + Emission + Tomography + in + De mentia + and +
Neurodegenerative + Disease&bc = AgBAAAAAAAAAAA%3d%3d&.
2. CMS currently reimburses for countless medications and
procedures to treat patients with Alzheimer's disease or other forms of
cognitive impairment. Given that one in five patients who are diagnosed
with Alzheimer's actually have something else, can you comment on why
the agency is considering not covering a diagnostic agent for this
disease state that was approved by the Food and Drug Administration
over a year ago?
Answer: As noted above, a National Coverage Analysis on beta-
amyloid PET scans is underway to reconsider a prior National Coverage
Determination on Medicare coverage of PET scans. CMS' evidence-based
coverage decision-making process is separate and distinct from the Food
and Drug Administration's processes for determining a product's safety
and effectiveness; CMS' coverage decision-making process is designed to
meet CMS' statutory obligation to ensure that Medicare covers only
items and services determined to be ``reasonable and necessary'' for
our beneficiaries.
congressman larry bucshon (in)
1. The Association of American Medical Colleges and the U.S. Health
Resources and Services Administration--an agency within your
department--project that by 2020 the United States will be facing a
large physician shortage, evenly split between specialists and primary
care physicians. I'm very concerned that at a time when there is
general agreement that we need to grow the physician workforce because
of the aging of the baby boomers, the administration is actually
proposing to cut Medicare's support for teaching hospitals and the
critical services they provide.
The president's proposal to cut Medicare indirect medical education
payments by 10 percent would cost America's teaching hospitals millions
annually as they try to train physicians, jeopardizing hospitals'
ability to provide care for the sickest in their communities,
especially seniors and the underserved. In addition to hindering the
training of physicians, cuts to providers will lead to a reduction in
patient services. Please explain the rationale behind the president's
proposal.
Answer: MedPAC has repeatedly found that IME payments are more than
twice as high as what is empirically justified by teaching hospitals'
actual teaching costs. The 10% reduction in IME would reduce (though
not eliminate) this disparity. We recognize the critical importance of
graduate medical education. Nonetheless, like any other category of
Medicare spending, payments to teaching hospitals must be well-
justified. We believe this proposal brings these payments closer to the
empirically justified level. By supporting the training of more and
higher quality primary care providers, this proposal also helps fill a
key long-term need of the health care system.
congressman trey gowdy (sc)
1. From what section of the Public Health Service Act do you derive
your authority to solicit funds from private groups in order to promote
the Patient Protection and Affordable Care Act?
Answer: Within HHS, we are working everyday so that uninsured
Americans will be able to sign up for healthcare coverage starting
October 1. This important mission to extend health insurance coverage
to millions of Americans for the first time can't be accomplished by
government alone. It takes the support of the business sector, non-
profits, community organizations, and others who share this vision.
Many private organizations share our mission and they are pursuing
their own efforts to get Americans covered. Because of sections of the
Public Health Service Act (42 U.S.C. Sec. Sec. 300u-2 to -3) HHS
Secretaries since 1976 have had the authority to encourage others to
support important health initiatives. For example, previous Secretaries
from both parties marshalled private-sector support efforts to enroll
eligible beneficiaries in two important programs that expand the
availability of health insurance: the Medicare prescription drug
benefit (Medicare Part D) and the Children's Health Insurance Program.
congressman lou barletta (pa)
1. As you know, Pennsylvania recently requested that the Department
of Health and Human Services provide flexibility to the state to
continue the Pennsylvania Children's Health Insurance Program (CHIP)
and to exempt the state from having to transfer a significant portion
of its enrollees into the Medicaid system. Under the Patient Protection
and Affordable Care Act, Pennsylvania's CHIP children would have to be
added to the Medicaid population. Because of the law, the state has
calculated that of the 187,000 current enrollees in Pennsylvania CHIP,
approximately 70,000 enrollees will involuntarily be transferred onto
the Medicaid rolls. Do you think it is better for those kids to remain
in a program that has better provider capacity? How are you going to
explain that these children can no longer get prompt service because
they have been moved to a program that reimburses providers so poorly
that there aren't enough providers to take care of everyone in the
program?
Answer: Thank you for your question related to the Affordable Care
Act's provision raising the minimum income eligibility level for
children in Medicaid.
Section 2001(a)(5)(B) of the Affordable Care Act increased the
minimum eligibility level for children from ages 6 through 18 in the
Medicaid program from 100 percent to 133 percent of the Federal poverty
level (FPL). This reform simplifies coverage by eliminating age-based
eligibility rules that have resulted in children in the same family
being eligible for two different programs (Medicaid and CHIP) and that
requires children to switch programs, from Medicaid to CHIP, and
potentially doctors, when they turn 6. Many states had previously
extended Medicaid coverage for these older children. The Affordable
Care Act codifies this successful approach nationwide January 1, 2014.
For some states, including Pennsylvania, this will mean that some
children will need to transfer from CHIP to Medicaid. Pennsylvania may
continue its coverage of children from 133 through 300 percent of the
FPL under CHIP. It is also important to note that there is no change in
the federal support that will be available for the children that
transfer to Medicaid--the enhanced CHIP matching rate will continue to
be available for these children even though they will be enrolled in
Medicaid.
I appreciate your concern that this transition could potentially
cause families to have to change providers. While it is my
understanding that most of the plans in Pennsylvania serve both
Medicaid and CHIP populations, thus reducing the risk of disruptions in
care, we recognize that transitions will be necessary for some
families. States can ease this transition by giving families time to
choose their new health plans and we will work directly with states to
develop transition plans that protect patient access to care.
congresswoman martha roby (al)
1. Prior to the House Committee on Education and the Workforce
hearing on June 4, 2013, I reached out to my constituents on Twitter
and Facebook to see what questions they might ask you if they had the
opportunity to do so. I compiled their questions and would like
responses to share with each individual. Per their request, personal
information has been redacted.
a. My employer has provided excellent insurance coverage for over
30 years. It would definitely be classified as a `Cadillac Plan.' This
year we were forced to change coverage. Please tell me how penalizing
or taxing companies that provide excellent coverage has anything to do
with ensuring everyone has access to affordable healthcare.
Answer: Section 4980I of the Internal Revenue Code is not effective
until 2018, five years from now, so that does not explain why your
coverage changed this year.
The costs for large employers directly associated with the
implementation of the Affordable Care Act are far outweighed by the
systemic savings of the law. These savings are due to greater market
transparency and competition and a more stable marketplace with more
covered Americans. For example, premiums for employer-sponsored
insurance increased by only 3 percent from 2011 to 2012, the lowest
rate of increase since the data series began in 1996.
b. The president said if we liked our current plan we could keep
it. This has turned out to be false. What changes to Obama Care is the
administration doing to ensure that this statement does not turn out to
be a lie?
Answer: The Affordable Care Act allows health plans that existed on
March 23, 2010, when the law was enacted, to be ``grandfathered'' and
thus be exempt from many of the new law's provisions. It allows
insurers and employers to make some routine changes without losing
grandfather status. Plans relinquish their ``grandfathered'' status if
they choose to significantly cut benefits or increase out-of-pocket
spending for consumers. Consumers in plans that make such changes and
lose their ``grandfathered'' status will gain new consumer protections.
If you are among the 80 percent of Americans who already have
health insurance through your employer, or through government programs
such as Medicare and Medicaid, the Affordable Care Act provisions that
apply to you are providing you with better consumer protections and
ensure that you get more value for each dollar you spend on your health
insurance. However for people ineligible for coverage under a
government program who do not receive their insurance from their
employer, or who are unemployed, the Affordable Care Act is making
changes to ensure that they can now find, afford, and keep a plan that
they like. Soon, the Marketplaces will provide a new way to shop for
coverage for all Americans, that will particularly benefit the
uninsured, those with pre-existing conditions, and individuals who
currently buy coverage on their own. On October 1, Americans will begin
shopping in the Marketplaces, and they'll be able to fill out one
application to purchase private insurance, qualify for premium tax
credits and reduced cost sharing, or obtain Medicaid or CHIP coverage.
c. The plan [PPACA] was touted as a cost saver, but as the details
become available we're seeing the opposite. My question is: if the plan
is evolving into something it was never intended to be, what does the
secretary intend to do to impose cost controls?
Answer: I disagree. We are already seeing reductions in the growth
of healthcare spending. From 2010 to 2012, Medicare spending per
beneficiary grew at 1.2 percent annually, more slowly than the average
rate of growth in the Consumer Price Index, and substantially more
slowly than the per capita rate of growth in the economy. This is in
sharp contrast to the 7.6% annual growth rate in per beneficiary
spending from 2000-2010, and health economists recognize that the
Affordable Care Act has contributed to the slowdown in spending growth.
From 2011 to 2012, total spending per Medicaid beneficiary actually
declined by 1.9%, resulting in substantial savings for federal and
state taxpayers.
New elements are reducing costs and saving taxpayer money in the
Medicare program. New anti-fraud programs, like the fraud prevention
system that uses predictive modeling technology, are helping deter bad
actors and saving billions for the Medicare program. We are using
market-driven solutions, like the competitive bidding program for
durable medical equipment, to save tens of billions for taxpayers and
seniors. Also, in Medicare we're promoting better coordination of care
by hospitals through penalties for excess readmissions and payment tied
to value for the first time. In 2012, readmissions for Medicare
patients dropped significantly, with an estimated 70,000 readmissions
avoided due to a variety of new incentives for hospitals to keep
patients well and avoid these costly events.
The rate of cost growth is decreasing for private insurance as
well. Premiums for employer sponsored insurance increased by only 3%
from 2011 to 2012, the lowest rate of increase since the data series
began in 1996. In addition, early evidence shows that prices for
Marketplace products are lower than expected, and, for small
businesses, lower on average than current small business rates in the
handful of states that have released data. In part, this appears to be
a result of greater transparency and competition.
d. Now that we see so many companies reducing work hours of
employees to preclude having to pay the higher cost /coverage of
insurance for people working over 30 hours, what are you going to do to
help those people make up the difference in lost pay and lost benefits?
Answer: The employer responsibility provision, which applies only
to employers with 50 or more full-time equivalent employees, will not
be enforced until 2015. Furthermore, if you look at the economic data,
the suggestion that the Affordable Care Act is reducing full-time
employment is not supported by the facts. Plus, a Minneapolis Federal
Reserve Bank study shows that the vast majority of employers are not
considering cutting hours. The Affordable Care Act should not cause a
leap in part-time jobs, since less than 1 percent of employees work 30
to 34 hours, are uninsured, and are employed by businesses affected by
the employer responsibility provision.
In fact, employers are benefitting from the Affordable Care Act,
which includes a range of cost-saving, quality-improving measures that
are contributing to a slowdown in health care cost growth, which should
help employers save money. For example, in 2012, premium growth for
employer-sponsored insurance was at its lowest rate (3 percent) since
the Medical Expenditure Panel Survey started in 1996. Additionally,
starting in October, small employers in every state will be able to
offer coverage to their employees beginning in 2014 from among a
variety of plans within the Small Business Health Options Program
(SHOP) Marketplace in their state.
SHOP Marketplaces will provide side-by-side comparisons of
Qualified Health Plans, their benefits, premiums, and quality--
expanding options and increasing competition. SHOP Marketplaces also
can save businesses money by spreading insurers' administrative costs
across more employers. In some states in 2014, and in all states in
2015, billing will be consolidated as well; employers can go to the
SHOP Marketplace as ``one stop shopping'' in order to offer multiple
insurer's options to employees without having to deal with each insurer
separately.
Businesses might be eligible for small business tax credits when
they offer health coverage to their employees through a SHOP
Marketplace. From 2014 to 2016, a tax credit of up to 50 percent of the
employer-paid premium cost of health insurance coverage will be
available, if the employer otherwise qualifies for the credit.
e. Why is the IRS involved in anything having to do with health
care?
Answer: The IRS is the U.S. government agency responsible for tax
collection and tax law enforcement. It is involved in implementing the
portions of the Affordable Care Act that contain tax provisions. For a
full list of the Affordable Care Act's tax provisions, please see:
http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions.
f. Why are healthcare costs already rising when the whole goal was
to reduce costs?
Answer: I disagree that health care costs are rising due to the
Affordable Care Act. In fact, we are already seeing reductions in
projected healthcare spending growth. From 2010 to 2012, Medicare
spending per beneficiary grew at 1.2 percent annually, more slowly than
the average rate of growth in the Consumer Price Index, and
substantially more slowly than the per capita rate of growth in the
economy. This is in sharp contrast to the 7.6% annual growth rate in
per beneficiary spending from 2000-2010, and health economists
recognize that the Affordable Care Act has contributed to the slowdown
in spending growth. From 2011 to 2012, total spending per Medicaid
beneficiary actually declined by 1.9%.
New elements are reducing costs and saving taxpayer money in the
Medicare program. New anti-fraud programs, like the fraud prevention
system that uses predictive modeling technology, are helping deter bad
actors and saving billions for the Medicare program. We are using
market-driven solutions, like the competitive bidding program for
durable medical equipment, to save tens of billions for taxpayers and
seniors. Also, in Medicare we're promoting better coordination of care
by hospitals through penalties for excess readmissions and payment tied
to value for the first time. In 2012, readmissions for Medicare
patients dropped significantly, with an estimated 70,000 readmissions
avoided due to a variety of new incentives for hospitals to keep
patients well and avoid these costly events.
The rate of cost growth is decreasing for private insurance as
well. Premiums for employer sponsored insurance increased by only 3%
from 2011 to 2012, the lowest rate of increase since the data started
in 1996. In addition, early evidence shows that prices for Marketplace
products are lower than expected, and, for small businesses, lower on
average than current small business rates in the handful of states that
have released data. While further work is needed to better understand
2014 rates, the results strongly suggest that greater competition and
transparency are leading to substantial benefits for both consumers and
employers in these markets.
2. As you know, beginning in 2015, businesses with 50 or more full-
time equivalent employees will be required to provide health insurance
coverage to full-time employees or face new tax penalties. Many of the
businesses in Alabama are family owned and operated businesses, passed
down generation after generation. One specific heating and plumbing
company in Montgomery, AL is extremely confused with the current
mandate set to go into effect in 2015. Their business currently has a
count of 52 employees; however, three of these individuals are
considered businesses owners. Per the law's mandates, is this business
required by law to provide coverage to their employees?
Has the department issued any specific, in-depth guidance as to how
to count each employee--including business owners and family members as
employees? For example, the State of Alabama's workers compensation
regulations do not take into account business owners as employees. Does
the health care law?
Answer: In December of 2012, the Department of Treasury released a
proposed rule Shared Responsibility for Employers Regarding Health
Coverage, which can be found here: http://www.irs.gov/pub/newsroom/reg-
138006-12.pdf. The regulation discusses, among other things, methods of
calculating what is considered a large employer under the law and the
definition of an ``employer'' versus an ``employee.'' For further
clarification, please refer to the Department of the Treasury.
3. On a similar note, there is much ambiguity regarding coverage
for young adults who remain on their parent's insurance plans until
they are 26. If a young adult is employed part-time at a local grocery
store, around 25-30 hours a week, they are technically being classified
as a ``full-time employee'' per the department's definition. In this
instance, who is primarily responsible to provide health care to the
young adult--the parent or the business? If there is a lack of
compliance from such business and they do not provide the health
insurance mandated by law, what is the penalty associated to this
business?
Answer: The definition of full-time employee is prescribed by
statute in section 4980H(c) (4) of the Internal Revenue Code (the Code)
of 1986. The Department of Treasury is responsible for regulations
implementing Code provisions. In December of 2012, the Department of
Treasury released a proposed rule Shared Responsibility for Employers
Regarding Health Coverage, which can be found here: http://www.irs.gov/
pub/newsroom/reg-138006-12.pdf. The regulation discusses, among other
things, methods of calculating the 30 hours of services per week for
large employers. For further information, please contact to the
Department of the Treasury.
congresswoman susan brooks (in)
1. Alzheimer's disease is estimated to cost the nation $200 billion
this year alone, and about 70 percent of that--$140 billion--is
shouldered by taxpayers in Medicare and Medicaid costs. If the current
trajectory holds, this number will exceed $1 trillion annually in the
coming decades.
Experts as well as our government have stressed the value of an
early and accurate diagnosis in treating Alzheimer's to prevent costly
and time-consuming misdiagnoses, as well as begin proper care planning
earlier. At the same time, companies have been working to create
diagnostic tests that could lead to an earlier finding of Alzheimer's.
As diagnostic technologies for Alzheimer's and other diseases
continue to be developed and gain approval by the Food and Drug
Administration, what measures are being taken to prioritize coverage of
diagnostic tools, particularly when early diagnosis of diseases like
Alzheimer's and others can lead to dramatically lower costs?
Answer: We are actively engaged in reviewing new technology to
ensure timely access to innovation for our beneficiaries. For example,
in October 2012, the Centers for Medicare & Medicaid Services (CMS)
opened a National Coverage Analysis (the first step in the National
Coverage Determination (NCD) process) to reconsider a prior NCD on the
use of Positron Emission Tomography (PET) scans that allowed Medicare
coverage of PET using only specified radioisotopes for certain
indications. Reconsideration of this NCD was requested by a stakeholder
who advocated coverage of PET using a radiopharmaceutical approved by
the FDA in 2012 to image beta-amyloid plaques in adult patients with
cognitive impairment who are being evaluated for Alzheimer's disease
and other causes of cognitive decline. To help inform this evidence
review, CMS convened a meeting of the Medicare Evidence Development and
Coverage Advisory Committee (MEDCAC) in January 2013. A proposed
coverage decision is expected by July 2013, with a final decision
(including consideration of public comments) expected by October 2013.
Information on the status of this coverage review is available on the
CMS website at http://www.cms.gov/medicare-coverage-database/details/
nca-details.aspx?NCAId = 265&NcaName = Beta + Amyloid + Positron +
Emission + Tomography + in + De mentia + and + Neurodegenerative +
Disease&bc = AgBAAAAAAAAAAA%3d%3d&.
2. One of the selling points of the health care law to small
businesses was the ability to offer their employees a range of choices
in the new insurance exchanges. However, last Friday HHS announced a
delay in the implementation of the employee choice component of the
SHOP Marketplace in the 33 states where the federal government will run
the exchange. This delay once again shows the administration is falling
behind in implementation of this flawed law. The result is fewer
choices and higher premiums for small businesses and their employees.
Are you at all concerned this delay will push more employers to simply
drop insurance?
Answer: In 2014, a SHOP Marketplace will be operational in every
state. As you know, the SHOP Marketplaces will be competitive private
health insurance marketplaces through which small businesses and their
employees will have access to affordable coverage. In the current small
group market, the smallest businesses nationwide pay about 20 percent
more than large companies.\4\
---------------------------------------------------------------------------
\4\ J. R. Gabel et al. ``Generosity and Adjusted Premiums in Job-
Based Insurance: Hawaii is Up, Wyoming is Down.'' Health Affairs, 2006,
25(3): 832-843.
---------------------------------------------------------------------------
Through the SHOP Marketplaces, small employers will benefit from
leveraging the buying power of a larger purchasing pool. They will also
have access to a transparent marketplace with online tools to help them
make meaningful comparisons among qualified health plans (QHPs).
Beginning in 2014, if they meet other eligibility requirements, small
employers who purchase coverage for their employees through a SHOP
Marketplace will also receive tax credits of up to 50 percent of the
employer-paid premium cost of coverage to offset the cost of providing
health insurance.
As we've seen in Massachusetts, employer-sponsored insurance
increased post-reform, and it makes sense to expect a similar outcome
for the rest of the United States. We expect the robust employer-
sponsored health insurance market to continue. The SHOP Marketplaces
will help more employers to offer coverage to their employers, and help
provide more American workers insurance. Additionally, the SHOP
Marketplaces will improve information for small employers and employees
and enable certain eligible employers to access small business health
insurance tax credits.
3. It has been three years since enactment of the health care law,
yet the administration has not issued many of the critical rules needed
for 2014. When will these much-needed rules be released? Open
enrollment is expected to begin in October 2013. Won't states,
employers, and insurers need to know the final rules before they can
invest the hundreds of millions of dollars required to implement the
law?
Answer: The Affordable Care Act fixes the broken insurance market
by helping consumers and employers shop for and compare affordable
health insurance plans, while knowing they won't be denied or priced
out of insurance because of their pre-existing condition, occupation,
or gender. HHS and CMS have worked diligently to release rules and
guidance for states, employers, and insurers in timely manner. States,
employers, and insurers will have the information they need to ensure
that the Marketplaces are open for business on October 1.
congressman richard hudson (nc)
1. Madam Secretary, the Congressional Budget Office estimates that
job creators will pay $140 billion in new taxes because of the employer
mandate in the health care law. Last December, Chairman John Kline (R-
MN) and Chairman Phil Roe (R-TN), sent you and Sectaries Geithner and
Solis a letter asking for information about how the employer mandate
and its penalties will impact employment, specifically part-time
workers. The Department of the Treasury responded on behalf of the
three agencies, stating, ``We have not conducted any specific analysis
of the effects on employment.''
In April, our Health, Employment, Labor, and Pensions subcommittee
held a hearing in my district in North Carolina where we heard from
employers struggling to figure out how the law will affect their
businesses, employees, and customers. Ed Tubel, owner of Sonny's BBQ,
testified that his company's compliance costs may reach $200,000.
Tina Hayes, Chief Human Resources Officer at a local community
college testified they will have to reduce the number of courses they
offer because of the new employer mandate.
Madam Secretary, an employer with 49 workers who cannot afford to
buy government approved insurance will face a fine of $40,000 for
hiring just one new worker. We need job growth and small businesses to
lead the way. What would you say to the small business owners that
testified in North Carolina about the crushing new taxes they face for
not providing government approved insurance? What would you say to the
workers who are seeing their hours and take home pay reduced because
their employer simply cannot afford government-approved insurance?
Answer: As you know, small firms (less than 50 full time
equivalents) are exempt from employer responsibility provisions in the
Affordable Care Act. Instead, small firms will gain access to the SHOP
Marketplace that provides the purchasing power of large businesses.
Additionally, businesses might be eligible for small business tax
credits when they offer health coverage to their employees through a
SHOP Marketplace. For tax years beginning in 2014 or later, a tax
credit of up to 50 percent of the employer-paid premium cost of health
insurance coverage will be available, if the employer otherwise
qualifies for the credit.
The Affordable Care Act fixes the broken insurance market of the
past by giving small businesses the tools and opportunities to control
costs and increase value. We believe that most employers want to
provide quality health insurance to their employees, because it's the
right thing to do and because it helps them attract and retain the
workers they need. A healthy workforce is a more productive workforce,
with fewer absences. We know that when people have health insurance
they are more likely to get preventive care and get better care,
earlier. A Minneapolis Federal Reserve Bank \5\ study shows that the
vast majority of employers aren't even considering cutting hours.
---------------------------------------------------------------------------
\5\ http://minneapolisfed.typepad.com/roundup/2013/03/like-it-or-
not-the-affordable-care-act-will-offer-an-interesting-economic-
experiment-on-incentives-or-punishments-dependin.html
---------------------------------------------------------------------------
Prior the Affordable Care Act, many insurers had been able to
charge more for people who are sick, one person with a serious illness
can make it impossible for small employers to afford to provide
coverage. Starting in 2014, premiums for most small employers will no
longer be based on the employees' medical history.
The lack of competition and transparency in the current small group
market, has allowed some small businesses to be locked into insurance
plans that continually provide worse benefits at higher premiums. With
the availability of the SHOP Marketplaces, small businesses will be
able to choose from many plans in a provide side-by-side comparisons of
health plans--their benefits, premiums, and quality--expanding options
and increasing competition.
2. Madam Secretary, to confirm for the record, has your agency not
conducted, or participated in, any specific economic analysis to
determine how the new employer mandate will impact employment?
Answer: While HHS has not conducted any economic analysis of its
own on the impact on employment, it is analyzing several studies of
respected independent organizations that confirm that employers will
continue to offer coverage. These include:
The Rand Corporation: \6\ ``The percentage of employees
offered insurance will not change substantially, but a small number of
employees in small firms (defined as those with under 100 employees in
2016) will obtain employer-sponsored insurance through the state
insurance exchanges.''
---------------------------------------------------------------------------
\6\ http://www.rand.org/pubs/research--briefs/RB9589/index1.html
---------------------------------------------------------------------------
Mercer: \7\ ``In a survey released today by consulting
firm Mercer, employers were asked how likely they are to get out of the
business of providing health care once state-run insurance exchanges
become operational in 2014 and make it easier for individuals to buy
coverage. For the great majority, the answer was `not likely.' ''
---------------------------------------------------------------------------
\7\ http://www.mercer.com/press-releases/survey-find-few-employers-
to-drop-health-plans-after-health-care-reform-in-place
---------------------------------------------------------------------------
International Foundation of Employee Benefit Plans Survey:
\8\ A total one percent of businesses said they are not going to
continue coverage.
---------------------------------------------------------------------------
\8\ http://www.businessinsurance.com/article/20130410/NEWS03/
130419983?template = mobileart
---------------------------------------------------------------------------
congressman luke messer (in)
1. I have been contacted by several superintendents and part-time
school employees in my congressional district about the harmful impact
the Patient Protection and Affordable Care Act (PPACA) may have on
educational organizations and their employees. Below is a series of
questions regarding these concerns:
a. Are you concerned the quality of education provided to students
will suffer because schools are reducing the hours of some employees
below 30 per week due to the harsh tax penalties imposed by PPACA?
Answer: The employer responsibility provision, which applies only
to employers with 50 or more full-time equivalent employees, will not
be enforced until 2015. Furthermore, if you look at the economic data,
the suggestion that the Affordable Care Act is reducing full-time
employment is not supported by the facts. Minneapolis Federal Reserve
Bank study shows that the vast majority of employers are not
considering cutting hours. The Affordable Care Act should not cause a
leap in part-time jobs, since less than 1 percent of employees who work
30 to 34 hours are both uninsured and employed by businesses affected
by the employer responsibility provisions. State governments and
workers are being hit by reduced budgets and the effects of the
sequester. Furloughs, reduced hours, and reduced benefits for
government employees are in response to these budget problems--not the
Affordable Care Act.
In fact, employers are benefitting from the Affordable Care Act,
which includes a range of cost-saving, quality-improving measures that
are contributing to a slowdown in health care cost growth, which should
help employers save money. For example, in 2012, premium growth for
employer-sponsored insurance was at its lowest rate (3 percent) since
the Medical Expenditure Panel Survey started in 1996. Additionally,
starting in October, small employers will be able to offer coverage to
their employees beginning in 2014 from among a variety of plans within
the SHOP Marketplace in their state. SHOP Marketplaces will provide
side-by-side comparisons of Qualified Health Plans, their benefits,
premiums, and quality--expanding options and increasing competition.
SHOP Marketplaces also can save businesses money by spreading insurers'
administrative costs across more employers. In some states in 2014, and
in all states in 2015, billing will be consolidated as well; employers
can go to the SHOP Marketplace as ``one stop shopping'' in order to
offer multiple insurer's options to employees without having to deal
with each insurer separately. Businesses might be eligible for small
business tax credits when they offer health coverage to their employees
through a SHOP Marketplace. From 2014 to 2016, a tax credit of up to 50
percent of the employer-paid premium cost of health insurance coverage
will be available, if the employer otherwise qualifies for the credit.
b. Do you believe a 30 hour work week is an appropriate amount to
be considered a full-time employee?
Answer: The definition of full-time employee is prescribed by
statute in section 4980H(c) (4) of the Internal Revenue Code (the Code)
of 1986. The Department of Treasury is responsible for regulations
implementing Code provisions. In December of 2012, the Department of
Treasury released a proposed rule Shared Responsibility for Employers
Regarding Health Coverage, which can be found here: http://www.irs.gov/
pub/newsroom/reg-138006-12.pdf. The regulation discusses, among other
things, methods of calculating the 30 hours of services per week for
large employers. For further information, please contact to the
Department of the Treasury.
c. Has the Department of Health and Human Services analyzed the
potential impact on school employees that PPACA employer responsibility
provisions may have, particularly given Internal Revenue Service
guidance regarding the manner in which schools are required to
calculate their number of full-time employees?
Answer: The definition of full-time employee is prescribed by
statute in section 4980H(c) (4) of the Internal Revenue Code (the Code)
of 1986. The Department of Treasury is responsible for regulations
implementing Code provisions. In December of 2012, the Department of
Treasury released a proposed rule Shared Responsibility for Employers
Regarding Health Coverage, which can be found here: http://www.irs.gov/
pub/newsroom/reg-138006-12.pdf. The regulation discusses, among other
things, methods of calculating the 30 hours of services per week for
large employers. For further information, please contact to the
Department of the Treasury.
2. The administration has made early detection and clinical
diagnosis of Alzheimer's disease a priority under its National
Alzheimer's awareness campaign. What specific steps is the
administration undertaking to further this principle? For example, will
you make a diagnostic test that can assess whether a Medicare
beneficiary with cognitive impairment actually has Alzheimer's disease
accessible to all the appropriate patients for such a test?
Answer: We are not aware of an FDA approved product to establish a
diagnosis of Alzheimer's disease. However, we are actively engaged in
reviewing available new technology to ensure timely access to
innovation for our beneficiaries. For example, in October 2012, the
Centers for Medicare & Medicaid Services (CMS) opened a National
Coverage Analysis (the first step in the National Coverage
Determination (NCD) process) to reconsider a prior NCD on the use of
Positron Emission Tomography (PET) scans that allowed Medicare coverage
of PET using only specified radioisotopes for certain indications.
Reconsideration of this NCD was requested by a stakeholder who
advocated coverage of PET using a radiopharmaceutical approved by the
FDA in 2012 to image beta-amyloid plaques in adult patients with
cognitive impairment who are being evaluated for Alzheimer's disease
and other causes of cognitive decline. To help inform this evidence
review, CMS convened a meeting of the Medicare Evidence Development and
Coverage Advisory Committee (MEDCAC) in January 2013. A proposed
coverage decision is expected by July 2013, with a final decision
(including consideration of public comments) expected by October 2013.
Information on the status of this coverage review is available on the
CMS website at http://www.cms.gov/medicare-coverage-database/details/
nca-details.aspx?NCAId = 265&NcaName = Beta + Amyloid + Positron +
Emission + Tomography + in + De mentia + and + Neurodegenerative +
Disease&bc = AgBAAAAAAAAAAA%3d%3d&.
3. Currently, a significant number of patients with cognitive
impairment, possibly Alzheimer's disease, do not receive the right
diagnosis. I appreciate that an accurate and early diagnosis is one of
the continuing goals of the National Plan to Address Alzheimer's
Disease. Do you agree that ensuring access to accurate diagnosis
through the Food and Drug Administration approved technologies for
patients with cognitive impairment would help achieve a major goal of
the National Plan to Address Alzheimer's Disease?
Answer: While there is value for patients and families in early
diagnosis, the evidence continues to develop. We do not currently have
a cure or definitive therapeutic treatment for Alzheimer's disease, but
individualized care planning and care coordination are essential to
maximizing the functioning of the person with the disease and to
putting family members at ease.
We are not aware of an FDA approved product to establish a
diagnosis of Alzheimer's disease (AD). For example, the label for the
imaging agent florbetapir F 18 injection (``florbetapir'') states that
although a negative florbetapir scan reduces the likelihood that a
patient's cognitive impairment is due to AD, a positive florbetapir
scan does not establish a diagnosis of AD or other cognitive disorder.
The FDA-approved label for florbetapir indicates that it was not
evaluated by the FDA as a screening tool to predict the development of
dementia or other neurologic conditions, nor to monitor the therapeutic
response to treatment of these neurological conditions.
When making coverage determinations under Medicare parts A and B,
CMS seeks evidence that the item or service is reasonable and necessary
to diagnose or treat an illness or injury or to improve the functioning
of a malformed body member. In this case we would look for evidence to
conclude that the diagnostic technology improves health outcomes for
beneficiaries by providing useful information that will be used by the
treating physician in the management of the patient's medical
condition. Such evidence is customarily sought in the results of
published reports of randomized clinical trials that compare the impact
of different management on patients' clinical outcomes. We recognize
that improvements in health outcomes may be brought about by changes in
patient management if physicians can employ effective treatments or
avoid ineffective, burdensome treatment attempts.
CMS and FDA work closely to support patient access to innovative
healthcare technologies that are supported by evidence of benefit. For
example, the agencies have implemented an FDA-CMS parallel review
pilot, which operationalizes collaboration and efficiency across the
two agencies. In addition, CMS permits Medicare payment for Category B
devices undergoing clinical investigation under an Investigational
Device Exemption (IDE) as well as Medicare payment for routine care in
FDA-approved IDE trials while collecting safety and effectiveness data.
In situations when there is not yet enough evidence for a technology or
treatment to be otherwise covered by Medicare, CMS may allow coverage
with evidence development (CED).
congressman bobby scott (va)
1. Is there currently data available that shows the effects of
preventive care without co-pays or deductibles? For example, due to
increased access for tests such as mammograms, are cancers being
detected at an earlier stage than before?
Answer: Under the Affordable Care Act (ACA), Section 2713 of the
Public Health Service Act requires non-grandfathered health plans to
cover certain recommended preventive services without cost sharing.
Preventive services to which this requirement applies must be covered,
without cost sharing, effective with the first plan or policy year that
begins on or after the date that is one year after the recommendation
is issued; section 2713 and its implementing regulations have required
that many recommended preventive services be covered, without cost
sharing, for plan or policy years beginning on or after September 23,
2010. HHS has begun efforts to monitor the trends in use of preventive
services, such as influenza immunizations, mammograms, Pap smear tests,
colonoscopy screenings, and well child checkups. However, the lag time
for processing survey data, including the National Health Interview
Survey (NHIS) and the National Ambulatory Medical Care Survey (NAMCS),
limits the ability to accurately measure the magnitude of the impact of
coverage requirements that went into effect as recently as 2011. At
this time, available data allow analyses to assess underlying trends in
the use of certain preventive services prior to the enactment of the
Affordable Care Act. HHS agencies will be monitoring rates in
utilization of recommended preventive services as new data become
available for analysis. As we continue to implement the Affordable Care
Act, HHS will also explore the availability of other non-federal data
sources that could provide information to help monitor the use of
preventive care and screenings on an ongoing basis.
2. Should Members of Congress or Congressional influence affect the
policies governing organ transplants?
Answer: The process of organ donation and allocation of deceased
donor organs to those in need of life-saving transplants is
fundamentally based in public trust and, to maintain that public trust,
the process for developing organ allocation policies must remain free
of political influence. The Organ Procurement and Transplantation
Network's (OPTN) organ allocation policies are, and should continue to
be, based on current medical and scientific evidence and developed by
experts in the field through an open and transparent process with input
from the general public and those directly affected by donation and
transplantation (e.g., transplant patients, living organ donors, and
deceased donor family members).
As stated in the preamble to the final regulations governing the
operation of the OPTN, ``decisions about who should receive a
particular organ in a particular situation involve levels of detail,
subtlety and urgency that must be judged by transplant professionals.''
64 Fed. Reg. 56650, 56652 (Oct. 20, 1999). Congress' intent was clear
with the passage of the National Organ Transplant Act of 1984, as
amended, (42 U.S.C. Sec. 273, et seq.) (NOTA) that the OPTN was
created to ``establish membership criteria and medical criteria for
allocating organs and provide to members of the public an opportunity
to comment with respect to such criteria,'' through its Board of
Directors, which includes representatives of organ procurement
organizations, transplant centers, voluntary health associations, and
the general public. 42 U.S.C. Sec. 274(b).
Consistent with statute, HHS oversees the OPTN by contract with a
non-profit entity with expertise in organ procurement and
transplantation. HHS has also further clarified the requirements of the
OPTN's policy making process and organ allocation policies in the OPTN
final rule (42 CFR part 121). HHS is tasked with ensuring that OPTN's
policies are consistent with the NOTA and our regulations.
congressman ruben hinojosa (tx)
1. As you know the rollout of the Affordable Care Act exchanges in
January of next year is a critical time. In the coming months, my
constituents and small business need to be educated as to what they can
expect, what is expected of them, and they will look to our offices to
help guide them through the process.
With the Republican budget cuts, including the arbitrary
sequestration cuts they championed and passed into law, what resources
are available for HHS employees to travel to congressional districts
for rollout events, informational town hall meetings and constituent
outreach in the months ahead?
Answer: Implementing the Affordable Care Act is a top priority of
the Department. Outreach is a vital component to the law's success--to
ensure that Americans in need of healthcare understand how to access
it. CMS is engaging a variety of different types of outreach and
managing its available funding resources in the best manner possible.
2. As you know in the state of Texas, Governor Perry has put
politics above the health of Texans and refused to participate in the
Medicaid expansion program which would have provided health care to
over 1.5 million Texans as well as create more than three million jobs,
according to a report generated by the Perryman Group. This is all
despite the fact that a recent poll by the Texas Hospital Association
shows a majority of Texans are in favor of Medicaid expansion.
My concern is that because of the Governors short sighted decision
hospitals will get stuck in the middle. As you know, the Affordable
Care Act calls for a reduction in Disproportionate Share Hospital (DSH)
payments based on an assumption that states are expanding Medicaid.
Since this expansion is not happening in Texas, how will you work with
hospitals in Texas to make sure they do not get financially harmed by a
DSH reduction?
Answer: We continue to believe that the Medicaid coverage expansion
is a good deal for states and will ensure that millions of Americans
have access to affordable, quality health coverage.
The Medicaid expansion will also help lessen the burden of
uncompensated care on hospitals throughout the nation.
As you know, the Affordable Care Act requires aggregate reductions
in Medicaid disproportionate share hospital (DSH) payments beginning in
Fiscal Year (FY) 2014. In May 2013, the Centers for Medicare & Medicaid
Services (CMS) proposed a rule to implement the statutorily required
Medicaid DSH reductions for FYs 2014 and 2015 using statutorily
required factors to allocate the reductions among states. CMS is
currently reviewing comments received during the proposed rule's
comment period and will finalize the rule in the coming months. The
proposed rule includes a reduction methodology only for FY 2014 and FY
2015. CMS plans to use state data obtained in FYs 2014 and 2015 to
inform how the reductions should be made in FY 2016 and beyond. CMS
will revisit the methodology and promulgate new rules to govern DSH
reductions in FYs 2016 and beyond.
Additionally, the President's FY 2014 Budget includes a proposal to
delay the reductions by one year, with the reductions taking effect in
FY 2015, rather than FY 2014. Should Congress not act to move the
President's proposal forward, the reductions will take effect in FY
2014 as statutorily required.
congressman jared polis (co)
1. In addition to expanding access to high quality early education
programs, it is crucial that early education programs such as Head
Start work with elementary schools to ensure a strong transition.
That's why I introduced a bipartisan, no-cost bill, the Continuum of
Learning Act, which would align early childhood education and early
elementary school standards and professional development activities
through strong child development practices and policies. How would the
administration's preschool proposal strengthen connections between
existing early learning programs and the elementary grades?
Answer: The President's Early Learning Initiative will develop a
continuum of high-quality early learning for children--from birth to
age 5. The Initiative will align standards across early learning
programs and preschool, raising the standards throughout the continuum
of early learning. The President's Initiative expands high-quality
early learning opportunities in the years before preschool, helping
children move from Home Visiting, Early Head Start-Child Care
Partnerships, and Head Start into Pre-kindergarten while maintaining
high quality care and education at each step. Congress has provided
$1.5 billion to expand home visitation to hundreds of thousands of
America's most vulnerable children and families across all 50 states,
and President Obama has called for a significant investment in a new
Early Head Start-Child Care partnership. This investment, combined with
an expansion of publicly funded preschool education for four-year olds,
will ensure a cohesive and well-aligned system of early learning for
children from birth to age five.
ACF is already working with State Advisory Councils to develop and
enhance high-quality, comprehensive systems that optimize childhood
services so children arrive at school ready to learn and prepared to
excel. For example, a number of states used grant funds to align their
Early Learning Standards with the Common Core, K-12 standards, so that
what children are expected to know is seamless across the age spectrum.
Additionally, states with Race to the
Top-Early Learning Challenge (RTT-ELC) funding are working to
connect and build on existing early learning systems statewide. RTT-ELC
states are measuring outcomes and progress to inform early learning
services whether children are entering kindergarten ready to succeed in
elementary school.
______
[Whereupon, at 12:01 p.m., the committee was adjourned.]