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



 
  THE CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT AND THE 
    IMPLEMENTATION OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT

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



                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 24, 2013

                               __________

                           Serial No. 113-34


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov




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                    COMMITTEE ON ENERGY AND COMMERCE

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

                        TIM MURPHY, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
  Vice Chairman                        Ranking Member
MARSHA BLACKBURN, Tennessee          BRUCE L. BRALEY, Iowa
PHIL GINGREY, Georgia                BEN RAY LUJAN, New Mexico
STEVE SCALISE, Louisiana             EDWARD J. MARKEY, Massachusetts
GREGG HARPER, Mississippi            JANICE D. SCHAKOWSKY, Illinois
PETE OLSON, Texas                    G.K. BUTTERFIELD, North Carolina
CORY GARDNER, Colorado               KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         PETER WELCH, Vermont
BILL JOHNSON, Ohio                   PAUL TONKO, New York
BILLY LONG, Missouri                 GENE GREEN, Texas
RENEE L. ELLMERS, North Carolina     JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California (ex 
FRED UPTON, Michigan (ex officio)        officio)



                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Tim Murphy, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     3
Hon. Diana DeGette, a Representative in Congress from the state 
  of Colorado, opening statement.................................     4
Hon. Fred Upton, a Representative in Congress from the state of 
  Michigan, prepared statement...................................     6
    Prepared statement...........................................     7
Hon. Henry A. Waxman, a Representative in Congress from the state 
  of California, opening statement...............................     8

                               Witnesses

Gary Cohen, Director, Center for Consumer Information and 
  Insurance Oversight............................................    10
    Prepared statement...........................................    13
    Answers to submitted questions...............................    61


  THE CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT AND THE
    IMPLEMENTATION OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT

                              ----------                              


                       WEDNESDAY, APRIL 24, 2013

                  House of Representatives,
      Subcommittee on Oversight and Investigations,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Tim Murphy 
(chairman of the subcommittee) presiding.
    Members present: Representatives Murphy, Burgess, 
Blackburn, Scalise, Harper, Olson, Gardner, Griffith, Johnson, 
Long, Ellmers, Upton (ex officio), DeGette, Braley, Lujan, 
Schakowsky, Butterfield, Castor, Tonko, Green, and Waxman (ex 
officio).
    Staff present: Mike Bloomquist, General Counsel; Sean 
Bonyun, Communications Director; Matt Bravo, Professional Staff 
Member; Karen Christian, Chief Counsel, Oversight; Andy 
Duberstein, Deputy Press Secretary; Brad Grantz, Policy 
Coordinator, O&I Sydne Harwick, Legislative Clerk; Brittany 
Havens, Legislative Clerk; Sean Hayes, Counsel, O&I Robert 
Horne, Professional Staff Member, Health; Alexa Marrero, Deputy 
Staff Director; Andrew Powaleny, Deputy Press Secretary; Brian 
Cohen, Democratic Staff Director, Oversight & Investigations, 
and Senior Policy Advisor; Karen Nelson, Democratic Deputy 
Committee Staff Director for Health; Stephen Salsbury, 
Democratic Special Assistant; and Matt Siegler, Democratic 
Counsel.

   OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Murphy. Good morning. I convene this hearing of the 
Subcommittee on Oversight and Investigations to examine the 
Department of Health and Human Services' management of the 
Affordable Care Act as we approach the January 1, 2014, 
deadline for full implementation.
    Mr. Gary Cohen, Deputy Administrator and Director of the 
Center for Consumer Information and Insurance Oversight, or 
CCIIO--by the way, it is known as CCIIO--is here to testify on 
behalf of HHS. Good morning.
    CCIIO was responsible for implementing the Patient 
Protection and Affordable Care Act's many changes to the 
private health insurance market. Mr. Cohen and those at CCIIO 
certainly have their work cut out for them. At the beginning of 
the next year, full implementation of the PPACA will finally 
take place. And on that day, Americans have been promised the 
ability to purchase health insurance plans through new 
exchanges. The American people have been promised good coverage 
that is also affordable.
    We all remember the many promises that were made in the 
rush to pass the bill by any means necessary, that if you liked 
your coverage, you could keep it. Yet, we see many stories 
about impending doctor shortages and companies faced with tough 
decisions on whether to continue providing coverage. The 
decision of whether to provide that coverage is related to 
another promise that will surely be broken--that the law will 
lower costs. One large health insurance company's CEO has 
already noted that Americans should get ready for premium rate 
shock. A school district in my district has said that they are 
going to see their premiums go up by something like $1 million 
in cost.
    Yet, there is yet another promise that we are hearing more 
recently from the law's defenders: that the health insurance 
exchange will be ready for enrollment on October 1 and full 
implementation on January 1. Since only 18 States elected to 
establish their own exchanges, CCIIO is currently preparing the 
federally facilitated exchanges that will cover 26 additional 
States, along with the partnership exchanges CCIIO will operate 
with 7 other States. I hope we will be able to hear today about 
the progress being made in building those exchanges.
    Recent news reports have indicated--and even President 
Obama's budget has confirmed--that the Administration is 
seeking additional funding to operate the exchanges. This is 
troubling considering that a substantial amount of funding has 
already been expended building those exchanges and they have 
yet to even begin.
    Today, I expect the witnesses to provide a full accounting 
of where CCIIO stands with regard to building the federally 
operated exchanges and those that will be run in partnership 
with States, including where CCIIO is obtaining funding for 
these programs and will they ask for more.
    Since passage of PPACA this committee has had many 
questions about the funding being used to implement the law. 
Most recently, we have heard many stories about the healthcare 
law's Prevention and Public Health Fund. Most notably, that 
money from this fund is being utilized to hire thousands of 
healthcare navigators who will assist the public in signing up 
for Obamacare.
    Considering that we have also heard that funding from the 
Prevention Fund is being used on many different projects, we 
are concerned that it is being rated as an ever-ready piggy 
bank, or slush fund, to throw money at and hide the many 
problems inherent with implementing Obamacare. I hope that Mr. 
Cohen will be able to address the potential overutilization 
that has become so common that the Washington Post has dubbed 
it ``the incredible shrinking Prevention Fund.''
    We have many concerns about those navigators, including how 
they will be trained and supervised. CCIIO is actively 
soliciting navigators from the community and consumer groups, 
yet those that receive any compensation from insurance 
companies are prohibited from becoming navigators. We recognize 
the need to have impartial navigators, but the realities of the 
insurance market also indicate that those who have been selling 
insurance for many years may have some expertise of value.
    Furthermore, we have questions about what standards will be 
put into place to ensure that we are not simply paying groups 
chosen to be navigators to pad their membership rolls or 
funding drives. In other words, someone with experience and 
training is not qualified and is excluded, whereas someone 
without any experience stands in front of the line for hiring.
    But this only scratches the surface of many activities and 
responsibilities of CCIIO. Today, I hope we will also be able 
to discuss CCIIO's ability to determine whether health 
insurance premiums' increases are legitimate. As I mentioned 
before, one large health insurance company has already warned 
of rate shock, and this is an obvious concern for many 
Americans.
    Obamacare has consistently promised lower costs and now we 
all hear from supporters of the law that there are tax credits 
and subsidies available, but a recent study showed that only 8 
percent of the public will qualify for those subsidies. I hope 
we can hear from the witnesses today what the other 92 percent 
of us can expect.
    Thank you again, Mr. Cohen, for joining us today. And now I 
would like to recognize the ranking member, Ms. DeGette, for an 
opening statement.
    [The prepared statement of Mr. Murphy follows:]

                 Prepared statement of Hon. Tim Murphy

    I convene this hearing of the Subcommittee on Oversight and 
Investigations to examine the Department of Health and Human 
Services' management of the Affordable Care Act as we approach 
the January 1, 2014, deadline for full implementation. Mr. Gary 
Cohen, Deputy Administrator and Director of the Center for 
Consumer Information and Insurance Oversight, or CCIIO, is here 
to testify on behalf of HHS. CCIIO is responsible for 
implementing the Patient Protection and Affordable Care Act's 
many changes to the private health insurance market.
    Mr. Cohen and those at CCIIO certainly have their work cut 
out for them: At the beginning of next year full implementation 
of the PPACA will finally take place. On that day Americans 
have been promised the ability to purchase health insurance 
plans through new exchanges. The American people have been 
promised good coverage that is also affordable.
    We all remember the many promises that were made in the 
rush to pass the PPACA by any means necessary. That if you 
liked your coverage you could keep it. Yet, we see many stories 
about impending doctor shortages, and companies faced with the 
tough decision of whether to continue providing coverage. The 
decision on whether to provide that coverage is related to 
another promise that will surely be broken: that the law will 
lower costs. One large health insurance company's CEO has 
already noted that Americans should get ready for premium 
``rate shock.''
    There is yet another promise that we are hearing more 
recently from the law's defenders: that the health insurance 
exchanges will be ready for enrollment on October 1 and full 
implementation on January 1. Since only 18 states elected to 
establish their own exchanges, CCIIO is currently preparing the 
federally facilitated exchanges that will cover the other 26 
states, along with the partnership exchanges CCIIO will operate 
with seven other states. I hope we will be able to hear today 
about the progress being made in building those exchanges.
    Recently news reports have indicated-and even President 
Obama's budget has confirmed-that the administration is seeking 
additional funding to operate the exchanges. This is troubling 
considering that a substantial amount of funding has already 
been expended building those exchanges and they have yet to 
even to begin. Today I expect the witness to provide a full 
accounting of where CCIIO stands with regards to building the 
federally operated exchanges and those that will be run in 
partnership with states, including where CCIIO is obtaining 
funding for these programs.
    Since passage of the PPACA this committee has had many 
questions about the funding being used to implement the law. 
Most recently we have heard many stories about the health care 
law's Prevention and Public Health Fund--most notably that 
money from this fund is being utilized to hire thousands of 
health care ``navigators'' who will assist the public in 
signing up for Obamacare. Considering that we have also heard 
that funding from the Prevention fund is being used on many 
different projects, we are concerned that it is being raided as 
an ever-ready piggy bank to throw money at and hide the many 
problems inherent with implementing Obamacare. I hope that Mr. 
Cohen will be able to address the potential overutilization 
that has become so common the Washington Post has dubbed it 
``The incredible shrinking prevention fund.''
    We have many concerns about those Navigators, including how 
they will be trained and supervised. CCIIO is actively 
soliciting Navigators from community and consumer groups, yet 
those that receive any compensation from insurance companies 
are prohibited from becoming Navigators. We recognize the need 
to have impartial Navigators, but the realities of the 
insurance market also indicate that those who have been selling 
insurance for years may have some expertise. Furthermore, we 
have questions about what standards will be put in place to 
ensure that we are not simply paying groups chosen to be 
Navigators to pad their membership roles or funding drives.
    Yet, this only scratches the surface of the many activities 
and responsibilities of CCIIO. Today I hope we will also be 
able to discuss CCIIO's ability to determine whether health 
insurance premium increases are legitimate. As I mentioned 
before, one large health insurer has already warned of ``rate 
shock'', and this is obviously a concern considering how 
supporters of Obamacare have consistently promised lower costs. 
Now, we all hear from supporters of the law that there are tax 
credits and subsidies available, but a recent study showed that 
only eight percent of the public will qualify for those 
subsidies. I hope we can hear from the witness today what the 
other 92 percent of us can expect.

                                #  #  #

 OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Ms. DeGette. Thank you very much, Mr. Chairman, and welcome 
to you, Mr. Cohen.
    Thanks to the Affordable Care Act, tens of millions of 
Americans who would otherwise be uninsured will receive health 
insurance for the first time. Americans will enjoy protections 
from the worst abuses of the insurance industry: rescissions, 
coverage denials, and annual and lifetime limits that cruelly 
cut off coverage for folks when it is needed most. These are 
all big changes and the time to implement them is coming up 
very, very fast.
    In just over 5 months, citizens will be able to sign up for 
health insurance through the federal or state marketplaces. 
Now, while signing up for coverage should be easy come October, 
implementation is going to be a complicated process over these 
next few months, not because of any flaws in the law, but 
because this is a new approach to providing coverage 
nationwide, and these things are always difficult to implement.
    And by the way, this CBO has predicted that overall 
consumer costs will go down once these marketplaces are 
implemented. There is no reason to think it won't work. It 
worked great in Massachusetts under Mitt Romney. But we have to 
educate millions of people about the marketplaces in advance. 
CCIIO and the States have set up complex data systems to manage 
the process.
    So, Mr. Chairman, I am super glad that you are doing this 
oversight, and I think we need to hear from Mr. Cohen, probably 
not just today, but as we go through the summer, about how 
CCIIO was doing, where there are challenges, and how the agency 
expects to address those challenges. I do think, though, that 
we should conduct this oversight with an appropriate 
perspective.
    I wish, for example, that when the naysayers raise the 
specter of a potential increase in premiums for some young 
healthy people, particularly young men, that they can also put 
this into perspective by understanding that the tax credits and 
caps on out-of-pocket costs will sharply lower overall costs 
for these individuals and millions of other Americans.
    And I wish that folks raising the specter of high premiums 
for young men in particular could add to that perspective the 
millions of women of all ages who will pay lower premiums and 
who won't be discriminated against by insurers simply because 
they are female or the millions of Americans who will receive 
dramatically better and more dependable insurance coverage.
    When people complain about the fact that the Obama 
Administration is, heaven forbid, spending money to make sure 
that citizens understand the new law, I wish they would take 
the perspective to remember that the Bush Administration did 
the same thing, even hiring blimps to spread the word about 
Medicare and spending $300 million on a public relations 
campaign for Medicare Part D.
    And Mr. Chairman, I will say, I voted against the Medicare 
Part D Bill because it didn't allow negotiation by the 
Secretary of HHS to lower prescription drug costs. But even 
though I voted against it, I had town hall meetings all 
throughout my district and I had internet training to help my 
constituents figure out how to sign up for it. And I think we 
need to have that kind of bipartisan cooperation as we 
implement these exchanges at the national and state level. And 
so I hope that we take that appropriate perspective and I hope 
that we can develop that perspective as the Affordable Care Act 
is implemented over the coming months.
    In January 2006, when we implemented the Medicare Part D 
program, Time magazine described a ``initial nightmares of 
implementation,'' noting snafus that have resulted in many low-
income seniors being turned away by the compounding new 
prescription drug program. In Vermont, the implementation of 
the law was described as a ``public health emergency.'' Now, 
those problems are almost forgotten until today. Ultimately, 
the Part D program got off the ground and even those who 
initially voted against the bill, like me, took a stake in it 
and worked to fix the problems. The biggest problem, the donut 
hole, was eliminated by the Affordable Care Act.
    So I think, Mr. Chairman, as usual, there is a lesson to be 
learned in this history. I hope that the implementation of the 
Affordable Care Act goes smoothly. I certainly hope it goes 
more smoothly than the implementation of the Medicare Part D. 
But I am not naive enough, and no one should be, to think it 
will be completely wrinkle-free. What I do hope is, as problems 
arise, we can work together to identify and fix them instead of 
using them to simply score political points, because we all 
have a stake in providing quality, affordable health insurance 
coverage for all Americans.
    I hope this hearing and our future work on this subject 
represents an effort by everybody to truly work together to 
implement this law. I thank you for having the hearing and I 
yield back.
    Mr. Murphy. The gentlelady yields back. I now recognize the 
chairman of the full committee for 5 minutes, Mr. Upton of 
Michigan.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you, Mr. Chairman.
    Today's hearing continues this committee's rigorous 
oversight of the Obama Administration's implementation of the 
healthcare law. Since the law's passage, we have had CCIIO 
before this subcommittee three times, and during previous 
hearings, we uncovered that the promises made about the 
Affordable Care Act didn't quite match up with reality.
    In 2011, we learned that CCIIO was granting waivers from 
the law to individuals and companies that would face large 
premium increases or the loss of coverage because of Obamacare. 
We also found that, through its implementation of the Early 
Retiree Reinsurance Plan, CCIIO had handed out millions of 
dollars to certain corporations, unions, and state governments. 
Even more troubling was the fact that the Early Retiree Plan 
burned through the $5 billion allocated to it so quickly that 
it actually stopped accepting applications in May of 2011, more 
than 2 years before the program was supposed to and. Yet, this 
is the same amount of money that was given to the Preexisting 
Condition Insurance Plan.
    This bill has been the law of the land now for over some 3 
years and we are just 8 months away from the full 
implementation, and by all accounts, the Administration still 
doesn't have its act together. It doesn't bode well when just 
last week a top supporter of the President and leading Senate 
architect of the law publicly warned the HHS Secretary that he 
sees a train wreck coming. Will the exchanges be ready? How 
will families be able to prepare for it? Will they be able to 
rely on the promises that if you like your coverage you can 
keep it? Will young adults be able to afford higher costs?
    The alarm bells over how Obamacare will unfold are getting 
louder by the day. Costs are going up, insurers are warning 
about premium increases, and small businesses are indeed 
struggling with the choices about whether they can provide 
employees with coverage. Patients need certainty. Employers 
need certainty. And I hope that HHS and CCIIO will always show 
us what they are doing to implement the law by the deadline.
    Finally, last week, this committee marked up a bill that 
targets the Prevention and Public Health Fund to give that 
money to those who need it most: Americans with preexisting 
conditions who were promised coverage by supporters of 
Obamacare, only to find that the program was closed to new 
applicants a few weeks ago. The Preexisting Condition Insurance 
Plan has been an unfortunate example of the problems of 
Obamacare. The promises don't match reality, and I think that 
it is unacceptable that this is going to happen, and I look 
forward to the vote this afternoon to fix it. And I yield the 
balance of my time to Dr. Burgess.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    Today's hearing continues this committee's rigorous 
oversight of the Obama administration's implementation of the 
health care law.
    Since the law's passage, we have had CCIIO this 
subcommittee three times. During previous hearings, we 
uncovered that the promises made about the Affordable Care Act 
didn't match up with reality.
    In 2011, we learned that CCIIO was granting waivers from 
the law to individuals and companies that would face large 
premium increases, or the loss of coverage, because of 
Obamacare.
    We also found that, through its implementation of the Early 
Retiree Reinsurance Plan, CCIIO had handed out millions of 
dollars to certain corporations, unions, and state governments. 
Even more troubling was the fact that the Early Retiree plan 
burned through the $5 billion allocated to it so quickly that 
it stopped accepting applications in May 2011-more than 2 years 
before the program was supposed to end. Yet, this is the same 
amount of money that was given to the Pre-Existing Condition 
Insurance Plan.
    This bill has been the law of the land for over three 
years. We are just eight months from the full implementation 
and by all accounts the Obama administration does not have its 
act together. It does not bode well when, just last week, a top 
supporter of the president and leading Senate architect of the 
law publicly warned the HHS Secretary that he sees a ``train 
wreck'' coming. Will the exchanges be ready? How will families 
be able to prepare for this? Will they be able to rely on the 
promise that if you like your coverage you can keep it? Will 
young adults be able to afford higher costs? The alarm bells 
over how Obamacare will unfold are getting louder by the day: 
costs are going up, insurers are warning about premium 
increases, and small businesses are struggling with the choice 
about whether they can provide employees with coverage.
    Patients need certainty. Employers need certainty. And I 
hope HHS and CCIIO will always show us what they are doing to 
implement the law by the deadline.
    Finally, last week this committee marked up a bill that 
targets the Prevention and Public Health Fund to give that 
money to those who need it most: Americans with pre-existing 
conditions who were promised coverage by supporters of 
Obamacare, only to find that the program was closed to new 
applicants a few weeks ago. The Pre-Existing Condition 
Insurance Plan has been an unfortunate example of the problems 
of Obamacare: the promises don't match reality. I think it's 
unacceptable that this is going to happen, and I look forward 
to voting to fix it today.

                                #  #  #

    Mr. Burgess. I thank the gentleman for yielding.
    Mr. Cohen, thank you for coming back to our humble little 
subcommittee.
    Of course, my interest in CCIIO actually predated CCIIO 
when you were OCIIO, right after the Affordable Care Act passed 
and Mr. Angoff was good enough--I didn't get a hearing on that. 
We were in the minority but Mr. Angoff was good enough to come 
to my office and talk to me at least. Mr. Larson has been in a 
couple of times, and you have been in before us at least one 
time before. But I have got to tell you, it has been very, very 
difficult to get information out of the Center for Consumer 
Information and Insurance Oversight, the basic budgetary 
information.
    Now, the ranking member says that we all ought to be in a 
posture of working together. It is difficult to do that when 
the most basic questions remain unanswered. So we got October 
1, it is coming fast, 5 months away, and it seems like there 
are more and more questions about the readiness of your office, 
and indeed, the Administration to get the answers that people 
want. I mean, you yourself went to AHIP, the American Health 
Insurance Plans conference this month and, ``it is only prudent 
to not assume everything is going to work perfectly on day 
one.'' I agree with that, but I think we at this committee need 
to hear from you, where are the concerns? Where do you see the 
lights blinking on the dashboard? What are you doing to prepare 
yourself and your agency and your center for that day in 
October that dawns and everyone goes online on the federal hub 
that may or may not exist to be able to sign up for these 
programs? Senator Rockefeller actually said it pretty well the 
other day. People are going to get a bad impression and it is 
going to stay with them.
    I think the references to Part D are reasonable to make. 
But remember, that they happened after 2 years of preparation. 
You have had 3 years of preparation. The 6 weeks of turmoil 
with Part D could likely turn into many more weeks and/or 
months, or even years of turmoil when this program is unfolded 
next year.
    So the application process is lengthy and complex. People 
are asked to estimate whether or not they think their employer 
will provide insurance next year, what their earnings are going 
to be next year. I mean, these are tough questions that need 
answers and we hope we get some today, and certainly, we will 
be adding additional questions in writing in the period that 
they are allowed.
    So I thank you for being here today and look forward to 
your answering questions.
    Mr. Murphy. The gentleman's time has expired. I now 
recognize the ranking member of the full committee, Mr. Waxman, 
for 5 minutes.

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

    Mr. Waxman. Thank you very much, Mr. Chairman.
    The Republicans on this committee and our Health 
Subcommittee have held 5 hearings since December on the 
Affordable Care Act, and each of these 5 hearings repeats the 
themes that they expressed when they opposed the bill. And they 
certainly never expected this to become law. Republican members 
can't accept the health reform is working and it is now the law 
of the land. They opposed it from the beginning, and until the 
day the President signed the bill into law, they insisted it 
had no chance of passing. Until the Supreme Court ruled it 
constitutional, the Republican said, oh, it is not 
constitutional. Until the day President Obama was reelected, 
they insisted the American people would vote him out of office 
so they could overturn this law. None of that happened.
    And now, they call this an oversight hearing because they 
predict all these terrible things to happen. They are not 
predicting; they are wishing bad things to happen. This is not 
a hearing to be constructive; it is a hearing to attack the law 
and hope that it doesn't work. Well, the Affordable Care Act 
will go fully into effect and Americans will never again have 
to worry about their ability to get affordable, high-quality 
health insurance. So the Republicans are saying, well, the 
implementation is not going to go smoothly. Well, 
implementation of any new big program has its kinks.
    But the Affordable Care Act is proceeding on schedule and 
it has done a remarkable amount of good for people. Over 3 
million young adults now have health insurance. Over 100 
million Americans have received free preventive health 
benefits. More than 6 million seniors have saved $6.1 billion 
in the Medicare Part D drug program. And beginning next year, 
tens of millions of Americans, who would otherwise be without 
health coverage, will have dependable, quality health 
insurance.
    My Republican colleagues said people want certainty. Well, 
the certainty they would have if there was no Affordable Care 
Act is that millions of people would be discriminated against 
because they had preexisting health conditions, because they 
offer a risk to the insurance companies. They have to pay more 
money for their care. They would have the certainty of knowing 
that insurance companies would do everything they could to keep 
them from getting coverage if it is going to cost the insurance 
companies money. And that is what we wanted to change.
    Republicans still oppose the Affordable Care Act. They are 
not taking a constructive approach. They are not saying, what 
can we do to make this law and its implementation work more 
smoothly? They are saying, what can we blame people who 
supported this law about the problems that may come up?
    While I am pleased that we have at this hearing today again 
Gary Cohen, who was here in December answering many of the same 
questions I am sure he will be addressed today. The Center for 
Consumer Information and Insurance Oversight has made huge 
progress in implementing the Affordable Care Act. Success 
doesn't change the opinions of my colleagues on the Republican 
side of the aisle. It makes them even more determined to look 
for something they can criticize. And today on the House Floor, 
we are going to vote on a bill that they produced, because 
under the Affordable Care Act, we had a high-risk pool for 
people with preexisting conditions who are waiting until 
January to be able to buy health insurance without being 
discriminated against, without being charged more money because 
of those preexisting conditions.
    We have spent $5 billion on a program to precede that to 
help people with preexisting conditions to be in a high-risk 
pool and we ran out of money. Republicans don't mind that we 
run out of money for everything that the government does 
because they supported the idea of sequestration happening. And 
we are running out of money in all sorts of places where the 
government has an obligation. But we have run out of money for 
that preexisting medical problems pool until the last few 
months of this year.
    So the Republicans are suddenly concerned about people with 
preexisting conditions decided to make sure that fund has 
enough money to go on for the rest of this year. But they 
funded by taking away the Public Health Prevention Funds until 
2016. It makes no sense whatsoever. We are happy to support the 
continuation of that preexisting pool to the end of this year, 
but certainly, we could have found a better funding source and 
the Republicans have denied the opportunity for any other 
source to be offered on the House Floor today.
    You have to question how sincere they are about wanting to 
help people with preexisting conditions, how sincere they are 
for wanting to see a smooth implementation of the bill now that 
it is law. They want this bill to fail. They want to go back to 
the time when millions of people had no chance for insurance. 
That is the certainty they want to offer and it is a certainty 
that led us to have the Affordable Care Act passed into law.
    I congratulate Mr. Cohen and his agency for doing all that 
they are doing. It is an important service to make sure the law 
succeeds. And that is what we should all want to see happen now 
that it is the law and they lost the last election and their 
last chance to repeal it.
    Mr. Murphy. The gentleman yields back. All right.
    For our witness, Mr. Cohen, you are aware that this 
committee is holding an investigative hearing, and when doing 
so, has the practice of taking testimony under oath. Do you 
have any objections to testifying under oath?
    Mr. Cohen. No, sir.
    Mr. Murphy. The chair then advises you that under the rules 
of the House and the rules of the committee you are entitled to 
be advised by counsel. Do you desired to be advised by counsel 
during your testimony today?
    Mr. Cohen. No, sir.
    Mr. Murphy. In that case, if you would please rise and 
raise your right hand; I will swear you in.
    [Witness sworn.]
    Mr. Murphy. Thank you. You are now under oath and subject 
to the penalties set forth in Title XVIII, Section 1001, of the 
United States Code. You may now give a 5-minute summary of your 
written statement, Mr. Cohen.

    TESTIMONY OF GARY COHEN, DIRECTOR, CENTER FOR CONSUMER 
              INFORMATION AND INSURANCE OVERSIGHT

    Mr. Cohen. Thank you and good morning, Chairman Murphy, 
Ranking Member DeGette, and members of the committee. I 
appreciate the opportunity to tell you about CCIIO's 
accomplishments over the past year. A lot has happened since 
your last hearing on implementation of the Affordable Care Act, 
and I would like to describe to you some of the progress we 
have made and explain how I know that we are on track for open 
enrollment this October.
    We achieved a major milestone earlier this month when we 
opened the window for issuers to begin submitting plans to be 
sold through the federally facilitated marketplace. We said 
that would happen on April 1 and it did, right on schedule. We 
have had a very encouraging response and we expect to see 
robust competition for the business of millions of Americans 
who will be shopping for health insurance in this new 
marketplace. States that are operating their own marketplaces 
had begun accepting submissions from issuers as well.
    It is also important to understand the ways in which we 
have continued to improve our process since the window opened 
on April 1. We have gotten feedback from States and issuers as 
they have accessed the system, and we have addressed whatever 
issues have come up. We have a helpdesk that responds by email 
to anyone with questions about how to submit information to us. 
We hold regular phone calls and we regularly publish answers to 
frequently asked questions. At last count, there were over 200 
answers to frequently asked questions in connection with this 
process that have been provided to issuers and States. I am 
extremely proud of the work that the team is doing to make sure 
that we will have products on the shelves by October 1.
    Another key element of this process is the federal data 
hub. As you know, consumers will be providing certain 
information in order to determine whether they are eligible for 
tax credits to help pay their premiums for the commercial 
health insurance that will be offered in the marketplaces. This 
data will be transmitted to the data hub in real time to be 
checked against information that is available regarding income, 
citizenship, incarceration, and so forth. The hub will not 
store any individual's data. It is a conduit from the agencies 
where this data is kept such as the IRS, Social Security, and 
Department of Homeland Security. This will enable real-time 
electronic verification of information needed to determine 
eligibility and will reduce, to the greatest extent possible, 
the need for people to submit paper documentation.
    States that are operating their own marketplaces will also 
have access to the data hub. We have recently begun testing the 
connection between state systems and the hub and have succeeded 
in transferring data back and forth. This is another major 
milestone that has been achieved on schedule. Testing will 
continue and the hub will be fully operational in time for open 
enrollment this fall.
    Another key element is the single streamlined application 
the consumers will use in order to find out whether they are 
eligible for Medicaid or CHIP on the one hand or tax credits to 
purchase commercial insurance plans through the marketplace on 
the other. We have gone through an extensive consumer testing 
process since the draft of the application was published and we 
have continued to work to make it as simple as possible. The 
results have been encouraging. Highlighted messaging will help 
answer questions, alleviate concerns, and direct consumers to 
where they can get additional help. We found that most 
applicants will need to complete less than \1/3\ of the total 
number of items included in the entire physical form.
    Now, no matter how simple and straightforward we are able 
to make the application process, we know that buying health 
insurance is not like buying a book on Amazon or shoes from 
Zappos. Many of the people coming to the marketplace will never 
have had commercial health insurance before and will need help 
in choosing the plan that is right for them and their family.
    During the past year, we have been putting in place a 
variety of ways for people to get that help. On healthcare.gov, 
people can learn about the Affordable Care Act, review health 
insurance basics in order to understand what their coverage 
costs, and interact with a checklist on how to prepare for 
shopping for coverage in the new marketplace. There are several 
short videos explaining how shopping for Qualified Health Plans 
in the federally facilitated marketplace will work.
    In addition, healthcare.gov will have a chat capability so 
that people can get their questions answered quickly as they 
use the site. The call center will begin operating in June, and 
during open enrollment, it will be answering questions 24 hours 
a day, 7 days a week.
    On April 9, we announced a funding opportunity for 
recipients to operate as navigators for the federally 
facilitated and partnership marketplaces. Navigators will 
provide fair, accurate, and impartial information to help 
consumers use the marketplace and select a Qualified Health 
Plan. Meanwhile, licensed agents and brokers, compensated by 
the issuer and regulated under state law, may enroll consumers 
in coverage through the marketplace in every State.
    As you can see, CMS has been hard at work over the past 
year improving the health insurance market for all Americans. 
This work and these achievements make me confident and excited 
for the future health insurance market. Soon, consumers will 
have better access to health coverage that best fits their 
needs.
    So I thank you for holding this hearing and I would be 
happy to answer your questions.
    [The prepared statement of Mr. Cohen follows:]


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    Mr. Murphy. I thank you very much, Mr. Cohen. Let me 
recognize myself for 5 minutes here.
    Regarding the navigators, I believe the law says that if 
they have received compensation from an insurance company, they 
are not eligible to be employed as a navigator. Is that 
correct?
    Mr. Cohen. That is what we have said in our regulations. If 
they have received compensation from an insurance company in 
connection with enrolling people in health coverage, they are 
not eligible to be navigators.
    Mr. Murphy. So let's say Mary Smith is an insurance agent 
in Pennsylvania, 20 years in the field. Now, she has received a 
license to sell insurance in the State of Pennsylvania. In 
order to do that, she had to have 24 credit hours of training. 
Then, she takes a test. She passed the test, must continue to 
take 24 credit hours of training every 2 years to maintain her 
license. Let's say she has sold a wide range of insurance for 
multiple companies for profit and nonprofits to perhaps 
thousands of individuals. She would like to apply for a job as 
a navigator. There is also John Doe who is applying for a job 
as a navigator with a high school degree and zero experience 
selling insurance. Who is eligible to be hired?
    Mr. Cohen. So I think it is important to understand that 
there really is a difference between what a navigator does and 
what an insurance agent does.
    Mr. Murphy. I understand.
    Mr. Cohen. Mary Smith----
    Mr. Murphy. But I just want----
    Mr. Cohen. Mary Smith----
    Mr. Murphy [continuing]. To make sure I understand. Mary 
Smith is not qualified? Or she is----
    Mr. Cohen. Mary Smith is qualified to offer insurance in 
the marketplace as----
    Mr. Murphy. But not as a navigator. She is prohibited----
    Mr. Cohen. She is not eligible for a navigator----
    Mr. Murphy. But she is discriminated from being a navigator 
because she has experience in the field that is paid. Am I 
correct?
    Mr. Cohen. But she is welcome to help clients obtain 
coverage in the marketplace as an agent.
    Mr. Murphy. I understand. But someone who has actually done 
this for a living is prohibited from being hired to advise 
people to buy insurance under the exchanges or to be advised on 
how to buy insurance in the States. Am I correct?
    Mr. Cohen. Well, she could choose no longer to be selling 
insurance----
    Mr. Murphy. But if----
    Mr. Cohen [continuing]. Like half of issuers, and be a 
navigator. That is her choice.
    Mr. Murphy. So as long as she is no longer taking any money 
from insurance companies----
    Mr. Cohen. She is eligible. Correct.
    Mr. Murphy. Now, let me ask you this because some of this 
still I am still puzzled about. In terms of the time frame 
here--because a lot of employers are saying to me I have got to 
make decisions now. They are not going to start budgeting, or 
having budget decisions on December 31st but want to make 
decisions now. How soon will the information be available to 
them in terms of what is going to be in these exchanges? Do you 
have some date of that?
    Mr. Cohen. Yes. The plans are being submitted now. They 
will be reviewed both by us and by the state insurance 
regulators that have to approve the plans. And then issuers 
will have an opportunity to make any changes----
    Mr. Murphy. Just give a date in terms of when those will be 
available.
    Mr. Cohen. September.
    Mr. Murphy. In September. Now, the navigators are going to 
have complete final training in August, so that seems a bit odd 
according to your calendar. They can't really get final 
training before they see the exchanges, so I hope you would 
adjust that date.
    Mr. Cohen. Well, the primary function of the navigators in 
the early period will be outreach and enrollment. And then once 
open enrollment starts in October, then that is when they will 
be helping people----
    Mr. Murphy. So these things will be available to look at in 
September, but then sales of these plans will start in October, 
a month later?
    Mr. Cohen. Correct, for coverage in January.
    Mr. Murphy. And you feel you will be ready with everybody 
fully trained and people fully informed of what is available in 
that month?
    Mr. Cohen. Yes.
    Mr. Murphy. All right. Now, I want to ask you also another 
thing with regard to navigators because there are some concerns 
I have heard that people who--are people who are involved in 
some community groups or political groups, they can apply for 
jobs as navigators?
    Mr. Cohen. So the requirements for applying for a grant are 
set forth in the funding opportunity, not to mention----
    Mr. Murphy. But I am just wondering if there are 
prohibitions in terms of involvement in other activities that 
they would not be----
    Mr. Cohen. We are hoping that groups that have a 
demonstrated history of serving their community and serving the 
people in their community that we are trying to reach will 
apply for navigator grants.
    Mr. Murphy. So ACORN members could?
    Mr. Cohen. I can't speak to any particular group----
    Mr. Murphy. Well, but they wouldn't prohibit them, right?
    Mr. Cohen. They can apply----
    Mr. Murphy. OK.
    Mr. Cohen [continuing]. And their application will be 
reviewed and we will be making decisions----
    Mr. Murphy. Well, given that they are community groups, I 
am concerned about data confidentiality and HIPAA laws, et 
cetera, certainly, if they are discussing their own health with 
navigators. What assurance do you have in place and what 
penalties will there be to make sure they do not keep that 
data, it is only, for example, on government computer systems, 
they cannot use it for any other purpose? Could you address 
that issue?
    Mr. Cohen. Certainly, thank you. So navigators will be 
trained on the importance of privacy and security and will be 
subject to all of the laws and regulations that protect 
people----
    Mr. Murphy. Are there other specific criminal penalties if 
they use this data for their own purpose?
    Mr. Cohen. There are.
    Mr. Murphy. And are they allowed, as community groups, to 
accept donations from insurance companies and other private 
groups?
    Mr. Cohen. The prohibition is against receiving 
compensation for enrolling people in coverage.
    Mr. Murphy. I understand. But if they get donations in a 
general sense, are they permitted to do that?
    Mr. Cohen. I think----
    Mr. Murphy. You are not sure?
    Mr. Cohen [continuing]. I would need to understand better 
what the--what type of donation and what the purpose of it 
would be----
    Mr. Murphy. Could you look into that, please, and get back 
to us?
    Mr. Cohen. I would be happy to.
    Mr. Murphy. I understand your concern. That is an important 
concern for all of us on those things, too.
    I also have a final question with regard to do you think 
you have enough funding at this point, not future budgetary 
things, to take care of your enrollment of people in these 
exchanges?
    Mr. Cohen. For fiscal year 2013 we have enough funding and 
we have--the President's budget requests additional funding for 
fiscal year 2014.
    Mr. Murphy. Thank you. My time has expired.
    I will now recognize Ms. DeGette for 5 minutes.
    Ms. DeGette. Thank you very much, Mr. Chairman.
    Mr. Cohen, the chairman talked to you about this 
hypothetical person, Mary Smith, who is a registered insurance 
broker or something. And she can't be a navigator while she is 
selling insurance. That is because it would be a conflict of 
interest, correct?
    Mr. Cohen. That is right.
    Ms. DeGette. But if she, with all her qualifications, 
decided not to represent any insurance companies and not to do 
that, she could become a navigator, correct?
    Mr. Cohen. She could.
    Mr. DeGette. Because then she wouldn't have a conflict of 
interest, right?
    Mr. Cohen. That is right.
    Ms. DeGette. Now, what about these community groups? On the 
community groups, as I recall when we did the Medicare Part D 
prescription drug benefit, we also had a number of community 
groups helping sign seniors up for that. Is that right?
    Mr. Cohen. Correct.
    Ms. DeGette. And that was kind of a similar situation 
because it involved asking citizens--in this case, senior 
citizens--to sort out a number of plans and then apply online, 
right?
    Mr. Cohen. That is true.
    Ms. DeGette. And so really you did have to have trained 
individuals, whether from community groups or other places, 
helping folks do this, right?
    Mr. Cohen. You did.
    Ms. DeGette. OK. Now, I am glad that you have a lot of 
confidence that on October 1, 2013, consumers are going to be 
able to sign up for these exchanges. I want to ask you about 
the States, including my State of Colorado, which are going to 
either run their own marketplaces or their marketplace in 
partnership with the Federal Government. There are 24 of them. 
What is your view about the state marketplaces, how are they 
coming along?
    Mr. Cohen. So I am very encouraged by the progress the 
States have been making. We work with them on literally, you 
know, a daily and weekly basis. We are in close contact with 
the people at the exchanges and also at the state Medicaid 
agencies because that is a very important part of this as well. 
I think it is fair to say that there are some States that 
started earlier in the process and some States that started a 
little bit later. So we are looking very carefully at the 
progress that each of the States are making and our commitment 
is that there will be a functioning marketplace in every State 
on October 1. So we have been working with the States to make 
sure that we provide the support that is needed to make that 
happen.
    Ms. DeGette. And what about the States that got a late 
start? Are you giving them extra effort to help them get their 
exchanges up and going?
    Mr. Cohen. That is correct.
    Ms. DeGette. OK. Now, can you give us a sense--the Chairman 
and I have talked a lot about the importance of doing this 
oversight--what are the milestones and benchmarks we should be 
looking at to measure CCIIO's progress over the next few 
months?
    Mr. Cohen. So I think--and we provided you, I think, with a 
timeline for what is supposed to be happening and what will be 
happening over the next several months. I think the keys are 
that we are on schedule and on track with the IT build that 
were doing, which is clearly an important part of this. And as 
I mentioned, we have achieved a big milestone earlier this 
month with the QHP Submission process. The federal data hub is 
going to be moving--is in testing now but will be continuing 
testing through the summer. And so I think it is just important 
to take a look at each of the steps along the path and make 
sure that we are on track. But I am very optimistic and 
confident of where we are at this point.
    Ms. DeGette. Now, Mr. Cohen, a couple of months ago at a 
conference you said, ``it is only prudent to not assume 
everything is going to work perfectly on day one and to make 
sure that we have got plans in place to address things that may 
happen.'' You also said that as we get closer to October 1, 
``we will be in a position to better know which contingency 
plans we actually have to implement.'' That seems a little in 
contrast to what you are saying this morning. Can you explain 
what that comment meant and if that means that HHS is not going 
to be ready to implement the law?
    Mr. Cohen. I would be happy to, and I think, you know, 
sometimes when things get reported, the context gets a little 
lost. So----
    Ms. DeGette. I have never noticed that before.
    Mr. Cohen. I was speaking specifically not about whether we 
would be ready and in operation October 1; I was speaking 
really, Congresswoman, to some of the comments that you made in 
your opening statement, that we know that when big programs 
begin, sometimes things aren't perfect on day one and you have 
to make improvements. And it is only prudent to be prepared for 
the things that might happen that you could do better. And we 
are, like all federal agencies, subject to guidelines that are 
published by the National Institute of Standards and Technology 
for when you do an IT project. And so you have to be prepared 
with mitigation strategies in case something doesn't work 
exactly the way you expected. But we will be up and operational 
October 1. I don't have any question about that.
    Ms. DeGette. Could you tell us about how you are developing 
those mitigation strategies and are those coming along?
    Mr. Cohen. Yes. So it is really a constant process of you--
as you do the build--and I am not the expert on IT--but as you 
do the build, you do testing, you see how things are going, you 
come up with strategies for how you are going to deal with--for 
example, suppose we get a lot more applications that come in on 
day one than we planned for. So you have to have redundancy; 
you have to be prepared for that eventuality.
    Ms. DeGette. Right.
    Mr. Cohen. So those are the types of things that we are 
doing.
    Ms. DeGette. Thank you.
    Mr. Murphy. OK. The gentlelady's time has expired.
    I now recognize the gentleman from Texas for 5 minutes, Dr. 
Burgess.
    Mr. Burgess. Thank you, Mr. Chairman.
    So Mr. Cohen, let's go back to AHIP quote about which 
contingency plans you actually have to implement now. The 
Secretary was here last week and I asked her about contingency 
plans and she said there are no contingency plans. Everything 
will be ready. So which is it? Everything will be ready or you 
are planning for contingencies?
    Mr. Cohen. Everything will be ready but we are also 
planning for anything that, when we go into operation, if the 
situations come up that we need to address, we will be ready to 
address those situations and make sure that the experience for 
American consumers is as seamless and as good as it can be.
    Mr. Burgess. Well, the Committee would benefit, actually, 
from seeing some of those contingencies. Let me just ask you 
this: would it be fair to say that closing the enrollment on 
the Pre-Existing Condition Insurance Plan, was that a 
contingency?
    Mr. Cohen. Closing enrollment on the Pre-Existing Condition 
Plan was something that we did because it was the prudent thing 
to do in light of the fact that we had a certain amount of 
money, $5 billion, to spend on that program----
    Mr. Burgess. So that was a contingency plan to close 
enrollment in PCIP that this committee was unaware of last 
year?
    Mr. Cohen. I think we were looking very carefully at the 
expenditures of the program and we were committed as careful 
stewards of the money that had been appropriated us to do 
whatever was needed to live within the money----
    Mr. Burgess. Yes, but here is the point: I mean the 
Secretary comes in and says there are no contingency plans; you 
are telling me that a year ago there was a contingency plan to 
deal with the Pre-Existing Conditions program. We need to know.
    Mr. Cohen. Well, I didn't say that. I didn't say that. I 
said----
    Mr. Burgess. Well, it sounded like you said that. And if we 
take a context, which we will, that is how it will be reported 
by your friends in the press over here.
    Look, we have got to level with each other. I mean people 
are going to be counting on you to do your job on January 1. 
And you have raised questions; your main health IT guy at the 
same AHIP conference where you spoke, he raised questions about 
whether that federal hub will be ready. And then you look at 
what happened in the Pre-Existing Condition Plan, there is a 
word that goes around. I learn new words in this town all the 
time. Some of them I can say here in committee; some of them I 
can't. But the word that keeps coming up is de-scoping. So are 
you actively discussing de-scoping, reducing the scope of the 
Affordable Care Act when the rollout occurs?
    Mr. Cohen. No.
    Mr. Burgess. I mean I am reminding you, you are under oath 
so----
    Mr. Cohen. Yes.
    Mr. Burgess [continuing]. When we call you back in here 
next year to talk about this, there is no plan to narrow the 
scope of the Affordable Care Act?
    Mr. Cohen. We intend to implement fully the Affordable Care 
Act. We have announced already some portions that will be put 
off to 2015. But at this point, I don't anticipate any de-
scoping of the Affordable Care Act now.
    Mr. Burgess. And yet, you look at the people who wanted to 
sign up for the preexisting program and in their parlance they 
have been de-scoped out the availability of that program, have 
they not?
    Mr. Cohen. Well, the Preexisting Condition program was 
always meant to be temporary. And the circumstances of those 
people really point to exactly why we needed the Affordable 
Care Act----
    Mr. Burgess. Yes, but you know what----
    Mr. Cohen [continuing]. Because those people were not able 
to get health insurance coverage at all----
    Mr. Burgess. Building a bridge doesn't do you any good if 
it doesn't get to the other side, and these people now fall 
into this 8-month chasm and that is a problem.
    Now, the SHOP exchanges that were much extolled as a virtue 
of the Affordable Care Act and now those are going to be 
delayed--well, not really delayed but you will only have one 
choice because the competition that was advertised amongst 
these plans.
    Mr. Cohen. Well----
    Mr. Burgess. And I think that is what Senator Rockefeller 
was talking about. Wait a minute. This was a serious missed-at 
fire.
    Mr. Cohen. Let's be clear. Employers will have a choice. 
They can choose among the plans that are available in the SHOP. 
And we believe that employers will have more choice under the 
Affordable Care Act than they did before. The 1-year transition 
to--affects only employees' choice and whether employers can 
offer more than one plan to their employees in the federally 
facilitated marketplace.
    Mr. Burgess. Again, I would just offer the observation that 
sounds like a narrowing in scope to at least to me. Maybe it 
doesn't to other people, but it does to me.
    So let me ask you a question about taking the money from 
the Prevention Fund. Did someone in your department make the 
decision to take the money from the Prevention Fund to fund 
these navigators?
    Mr. Cohen. Within CCIIO, no.
    Mr. Burgess. So who made the decision?
    Mr. Cohen. The Secretary.
    Mr. Burgess. So can you perhaps talk a little bit about how 
your department has been using the money that the Secretary 
moved from the Prevention Fund?
    Mr. Cohen. The portion of the Prevention Fund money that 
CCIIO is using goes to the $54 million funding opportunity 
announcement for navigator grants.
    Mr. Burgess. So are you going to take other money from the 
Prevention Fund?
    Mr. Cohen. I am not aware of that at this point, no.
    Mr. Burgess. But it is the Secretary who has the transfer 
authority under the law, so unless she were to level with us--
and I promise you, she didn't last week--unless she were to 
level with us about what the future plans are, you would have 
no way of knowing; we would have no way of knowing. That secret 
is locked up with the Secretary.
    Thank you, Mr. Chairman. I will yield back.
    Mr. Murphy. The gentleman's time has expired.
    I will now recognize Mr. Waxman for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    It is so amazing to me that the Republicans are complaining 
that money was taken from the prevention program to help pay 
for the implementation of the Affordable Care Act after the 
Republicans denied the Administration funds to implement the 
Affordable Care Act. It is like the kid who killed his mother 
and father and then said you have to care for me because I am 
an orphan. They are the ones who are impeding this legislation 
from being implemented and forcing the Administration to make 
these kinds of choices. But they are now making a conscious 
choice to take the Prevention Public Health Fund to pay for a 
short period of time for this Preexisting Condition Insurance 
Program that is supposed to go out of existence at the end of 
this year.
    This Preexisting Condition Insurance Program, or PCIP, was 
part of the Affordable Care Act. It isn't something the 
Republicans authored into law; it was part of the Affordable 
Care Act that they voted against. And in February of this year, 
CCIIO, your agency, announced that enrollment would be 
suspended to ensure that the program's funds, which were 
capped, would be able to pay the claims of existing enrollees. 
This is what happens when you cap a program. They want to cap 
Medicare; they want to cap Medicaid. That means if you run out 
of money, you run of services. Well, why was this decision 
made?
    Mr. Cohen. Well, you stated it, Congressman. When we had a 
certain amount of money that was authorized for the program, 
our number one priority, obviously, was to make sure that those 
people who were already enrolled in the program got continuity 
of care until the end of the year.
    Mr. Waxman. So we are talking about 107,000 enrollees. 
Isn't that correct?
    Mr. Cohen. It is at least that many, yes.
    Mr. Waxman. OK. These individuals will be able to receive 
their benefits until the end of this year. Is that correct?
    Mr. Cohen. Correct.
    Mr. Waxman. OK. And am I correct that the PCIP program was 
always meant to be a temporary bridge to full ACA 
implementation in 2014 when insurers would be barred from 
discriminating against people with preexisting conditions?
    Mr. Cohen. That is right.
    Mr. Waxman. OK. And will those uninsured individuals who 
cannot get access to the PCIP program now be able to get access 
to affordable quality healthcare coverage when the ACA goes 
fully into effect in January?
    Mr. Cohen. That is right. Insurers won't be able to turn 
them away and they won't be able to charge them more just 
because they are sick.
    Mr. Waxman. It is to be quite amazing that the Republican 
suddenly want to champion a program for a few months which is a 
bridge until people get to what is a much more sane way to 
handle the matter. People in this preexisting program until the 
end of the year, we don't pay all their expenses, do we? They 
have to buy their insurance?
    Mr. Cohen. That is right.
    Mr. Waxman. And is that going to be the same price as other 
people's insurance, or that----
    Mr. Cohen. Under the PCIP program, it is about the price of 
other people's insurance today, unlike state high-risk pools 
where the cost to enrollees is typically much higher.
    Mr. Waxman. We talked about the Affordable Care Act being 
fully implemented in 2014, but many key benefits and 
protections from the law are already in place. And I want to 
ask you how Americans are already benefiting from the law. The 
ACA prohibits insurers from denying coverage for children with 
preexisting conditions right now, isn't that correct?
    Mr. Cohen. That is right.
    Mr. Waxman. And how many children are there with 
preexisting health conditions?
    Mr. Cohen. As many as 17 million.
    Mr. Waxman. Seventeen million people. We didn't have to 
create a fund for them; we just said they have to be covered 
right now; the others will be covered in January.
    Mr. Cohen. That is right.
    Mr. Waxman. Covered without being discriminated against. 
The law also bans annual lifetime coverage limits, isn't that 
correct?
    Mr. Cohen. It did.
    Mr. Waxman. And when did this ban going to affect?
    Mr. Cohen. In September of 2010.
    Mr. Waxman. And how many Americans are benefiting from this 
provision of the Affordable Care Act?
    Mr. Cohen. Approximately 105 million.
    Mr. Waxman. The ACL also ends some of the insurance 
industry's most harmful abuses, including policy rescissions. 
Mr. Cohen, for folks who aren't experts in the insurance 
industry, tell us: what are these rescissions?
    Mr. Cohen. So insurance--before the Affordable Care Act, 
insurers often had a policy of what is called post-claim 
underwriting. So they would wait to see if someone got sick and 
started having a lot of health claims, and then they would go 
back to look at their application and see if they could find 
something in the application that maybe was mistakenly entered 
that was incorrect. And then they would say we are going to 
take way your policy retroactively so that we don't have to pay 
for any of those claims.
    Mr. Waxman. So when Republicans voted against the 
Affordable Care Act, they were voting to let the insurance 
companies do this rescission, which is taking away your 
insurance coverage when you needed even though you paid for it.
    Mr. Cohen. That is correct.
    Mr. Waxman. Thank you.
    Mr. Murphy. The gentleman's time has expired.
    I now recognize Mr. Scalise for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
having in this hearing.
    Thank you, Mr. Cohen, for coming. Yesterday, I was in my 
district before I flew back here to D.C. and there was a panel 
on the healthcare law that was held at a local hospital in my 
district. And, you know, I was one of the people that was 
speaking on that panel. And there were a number of people in 
the healthcare industry, people that have insurance. And it 
just seemed to be an underlying theme that continued to go 
through that room that nobody is ready for this law. Nobody 
knows how it is going to work for them, and most people are 
really concerned that the good healthcare they have they are in 
jeopardy of losing. And again, this is something I hear all the 
time when I am back in my district talking to small businesses, 
talking to families who have healthcare that they are now 
having real concerns about whether or not they are going to be 
able keep that. I mean are you out of touch with this or do you 
hear these real concerns? And I talked to my colleagues from 
other States and they are hearing the same things. I mean are 
you hearing these things?
    Mr. Cohen. I mean I think it is important to keep in mind 
that for the many millions of Americans who have healthcare 
through their employer who--that employs more than 50 people, 
they are largely unaffected by the Affordable Care Act.
    Mr. Scalise. Well, I will give you an example. I met 
recently with the owner of Whole Foods. They have something 
like 30,000 employees. This is a very large company, a very 
well-respected company nationally. They have healthcare that 
their employees really like. Their employees actually get to 
vote on the benefits. It is a very highly successful plan. They 
have managed to control costs, they beat the industry average, 
and yet they still provide a plan that their employees like. 
And under the current law, from what they see, their plan is 
not even eligible. Their 30,000 plus employees that have good 
healthcare they like our right now at risk of losing that 
coverage. You know the old promise if you like what you have, 
you can keep it? It was broken to those 30,000. That was one 
example. I mean, are you even aware of that?
    Mr. Cohen. Well, I can't speak to--specifically to----
    Mr. Scalise. You ought to find out about it.
    Mr. Cohen [continuing]. That example. What I can----
    Mr. Scalise. A real-life example of a real company that is 
a well-respected company that has good healthcare their 
employees really like and they are right now at risk of losing 
it because of this law.
    Mr. Cohen. But I can't----
    Mr. Scalise. Well, I want to walk you through some specific 
things that we have been seeing, you know, and start with the 
Pre-Existing Condition Insurance program. You all did actually 
stop taking new enrollees in that program, right, because it 
ran out of money?
    Mr. Cohen. We stopped taking new enrollees to make sure we 
wouldn't run out of money.
    Mr. Scalise. All right. So the Early Retiree Reinsurance 
Program, that was supposed to last until 2014. I think it was 
discontinued in 2011, is that right?
    Mr. Cohen. Well, I think the success of that program showed 
the great need for it and----
    Mr. Scalise. So enrollments closed on it? It was so 
successful that somebody can't get in it right now?
    Mr. Cohen. We are paying out claims now only based on money 
that is coming back to us.
    Mr. Scalise. So can someone enroll in it today?
    Mr. Cohen. Enroll in it today, no.
    Mr. Scalise. No. So they can't enroll in it. Some 
requirements for Small Business Health Options Program were 
delayed, is that correct?
    Mr. Cohen. The SHOP will be operating in October. The one 
provision that is put off----
    Mr. Scalise. But did you delay some of those provisions?
    Mr. Cohen. One aspect of the SHOP, which is the employee 
choice we had----
    Mr. Scalise. That has been delayed. The CLASS program--that 
was supposed to be Obamacare's long-term care program--that was 
actually repealed by Congress, wasn't it?
    Mr. Cohen. That is not one of mine so----
    Mr. Scalise. No, it is not one of anybody's anymore because 
it got repealed by Congress it was so bad. And hopefully, none 
of this is yours anymore because we could repeal the whole 
thing.
    But I want to hit one more of them. The 1099 requirement 
that we were hearing horror stories about that was getting 
ready take effect, again, part of Obamacare. The horror stories 
were so bad that Congress, Republican and Democrat alike, 
agreed to repeal that, too, right?
    Mr. Cohen. That is my understanding. Well, again that is 
the----
    Mr. Scalise. But it is not your problem anymore either 
because we repealed that. So there are five examples right 
there, five examples, some fairly small components, but then 
you are here telling us that probably the largest component 
that you are going to have to deal with, and that is these 
exchanges, they are going to be ready. You think they are going 
to be fine in a couple of months when it is time for them to 
come online, yet I just gave you five examples of programs that 
were either delayed, closed enrollment because they weren't 
ready for primetime, or just outright repealed because they 
were so bad. But then you are going to tell us that the biggest 
part is going to be oK?
    Mr. Cohen. We are on track and I can just point to the 
successes that we have had so far in developing systems----
    Mr. Scalise. I just highlighted five examples of failures. 
In fact, I don't know if you know this, one of the lead 
architects of Obamacare, Senator Baucus just last week said, 
``I just see a huge train wreck coming down,'' and he is not 
even running for reelection. But, I mean, he just said that 
last week. I mean, do you dispute what he said last week about 
the healthcare law being a huge train wreck coming down?
    Mr. Cohen. We are on track and on schedule----
    Mr. Scalise. On track. The problem is there is a train 
coming at you on that track----
    Mr. Cohen. We----
    Mr. Scalise. According to one of the architects--that is 
what I mean. I voted against it. Somebody that actually was 
helping push this thing through said it is about to be huge 
train wreck----
    Mr. Cohen. We will be ready to help millions of Americans 
enroll in quality affordable health----
    Mr. Scalise. I hope you are ready to help the millions of 
Americans that are about to be dealing with this train wreck 
that is coming because again, when you talk to real people out 
there in the real world--big and small--they don't know how 
they are going to be able to keep the healthcare they like for 
their employees. And that is a big concern of mine.
    I yield back.
    Mr. Murphy. The gentleman's time has expired.
    I now recognize Mr. Tonko for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair. Mr. Cohen, thank you for 
appearing before the subcommittee today. And the Affordable 
Care Act's Prevention and Public Health Fund have been subject 
to ongoing attacks since their inception under the Affordable 
Care Act. The Republicans have repeatedly sought to repeal or 
drain those funds. They argue that it is a slush fund and that 
the resources are being used inappropriately to pay for public 
health lobbying efforts.
    Let's take the opportunity to set the record straight on 
exactly how the Prevention Fund is or isn't being used. I know 
the Prevention Fund isn't under your supervision but can you 
give us a general overview of the HHS agencies and public 
health programs and activities that have been and will be 
supported through the fund?
    Mr. Cohen. So I would be happy to try, Congressman. That is 
not directly my area and I would be happy to get back to you 
with information on that. But I do know that the Prevention 
Fund has been used extensively in tobacco cessation and 
wellness programs and in other programs designed to get 
preventive care to people. And with respect to the work that we 
are doing, we know that when people have health insurance, they 
get preventive care and they get care for the illnesses that 
they do have earlier and they get better treatment and it is 
more cost-effective.
    So I think that the use of the Prevention and Public Health 
Fund to help stand up these exchanges and make sure that people 
know about them and take advantage of the benefits they have to 
offer is really, you know, right within the scope of what the 
fund is intended to do.
    Mr. Tonko. Thank you. And do state and local governments 
receive any of the dollars?
    Mr. Cohen. I don't know the answer to that. I am sorry.
    Mr. Tonko. Is there a way you can check and get back to us, 
please?
    Mr. Cohen. Absolutely. Be happy to, yes.
    Mr. Tonko. And is any of the Prevention Fund being used by 
its grantees to support local lobbying efforts?
    Mr. Cohen. No, not that I am aware of. But again, I can 
check into that and get back to you.
    Mr. Tonko. And what is the Department's policy on the use 
of federal grant dollars for lobbying activities?
    Mr. Cohen. It is not permitted.
    Mr. Tonko. OK. With respect to using this fund to help 
implement the Affordable Care Act and implement the health 
insurance marketplaces, I understand that you and the rest of 
the Administration are in a very difficult position. Because 
Republicans in Congress have refused to provide any funding to 
support this critical program and help the implementation work 
smoothly, HHS was forced to leverage and reallocate existing 
resources to provide short-term and immediate funding. So my 
question is, can you please explain to us how the Secretary has 
used her transfer authority to help implement the Affordable 
Care Act?
    Mr. Cohen. The Secretary has used the statutory authority 
that she has to transfer funds within HHS. She has used some 
funding from the Prevention Fund, as you mentioned, and she has 
used some funding from a nonrecurring expense fund particularly 
for IT projects. And those are the sources that she has used in 
addition to the implementation fund that was contained in the 
Affordable Care Act.
    Mr. Tonko. And the IT projects that you are talking about 
would----
    Mr. Cohen. That is the work that we are doing to get the 
marketplaces ready for October.
    Mr. Tonko. For October 1. And how will HHS ensure that 
programs supported by the Prevention Fund won't be negatively 
impacted due to the reallocation, if you will, of the funds?
    Mr. Cohen. Well, I mean, obviously the President's budget 
for 2014 requests additional funding for the work that we are 
doing. So the hope is that going forward we will get that 
funding and will be able to rely on that rather than having to 
use any funding under the Prevention Fund.
    Mr. Tonko. I thank you for your response. The Prevention 
Fund is a significant, smart, and worthwhile investment 
obviously in improving health situations for customers and 
reducing costs. It is unfortunate that you had to reallocate 
some of these funds to pay for implementation. I think is 
unfortunate that my Republican colleagues have been so 
unwilling to provide the basic funding requested by the 
Administration to implement the healthcare laws.
    So, you know, I appreciate the insight that you have 
provided today. If you can get back to us with some of those 
other concerns, that would be appreciated. But, you know, this 
down payment is the effort to provide for a better outcome and 
to achieve the ultimate goals of the Affordable Care Act.
    So with all of that, I thank you----
    Mr. Cohen. Thank you.
    Mr. Tonko [continuing]. For your response here.
    And with that, Mr. Chair, I will yield back.
    Mr. Murphy. Thank you. The gentleman yields back.
    I now recognize Mr. Harper for 5 minutes.
    Mr. Harper. Thank you, Mr. Chairman.
    Mr. Cohen, thank you for allowing us this opportunity on 
very important issues that we need to discuss.
    And I want to follow up a little bit on what the gentleman 
from Louisiana just asked you about the Pre-Existing Condition 
Insurance program, the fund, where you had to stop enrollment. 
I was under the impression that it was stopped because the 
money was exhausted, but you said that you stopped so you 
wouldn't run out of money. Would you explain that in a little 
more detail?
    Mr. Cohen. Sure. As with any program like this, claims come 
in and have to get paid out over a period of time, so we have 
to project forward for the people that we have enrolled in the 
program now. We need to make sure that we can cover their 
costs.
    Mr. Harper. Your anticipated or projected or expected 
costs----
    Mr. Cohen. For the rest of the year. So we look at how much 
we are spending and how much we have, and obviously, we know 
that we can't go beyond what has been appropriated. So that was 
the basis for the decision.
    Mr. Harper. Right. How much money was left when it was 
closed when enrollment was stopped?
    Mr. Cohen. I would have to go back and get you those 
precise numbers. I don't----
    Mr. Harper. Can you provide that information to us?
    Mr. Cohen. Yes, I would be happy to. I don't want to 
misstate it so I would like--I would prefer to go back and get 
you that information.
    Mr. Harper. Preexisting, I think everybody here is always 
concerned about preexisting. But even before the implementation 
of this, the largest insurer in my home State already provided 
preexisting coverage for dependent children up to age 25, not 
quite 26, but 25.
    Mr. Cohen. Yes.
    Mr. Harper. And those things were there and available. But 
what I want to know is you said there was not enough money left 
so you had to stop, but isn't this money that we are talking 
about today that Ms. Sebelius has available to her under the 
Preventive Care, could not some of that have been--instead of 
used for navigators or something else? Didn't she have the 
authority to transfer some of that money that was available to 
her, the billions of dollars available to her to help prop this 
program up for preexisting?
    Mr. Cohen. That is not something that we have looked at, 
Congressman, but I am sure we can----
    Mr. Harper. Well, I don't know that I need you to provide 
an answer. We know that is the truth. She has the ability; that 
money is available. I mean the money is almost like a slush 
fund for her to use. And so we are going to do what should have 
been done, which is to take this money that is there available 
to use to help these people that are sick and to help those 
with preexisting. I mean some of this money has been used for a 
pet neutering project. And some others we used for lobbying 
efforts regarding soda taxes. I mean that is unconscionable 
that we would use money for something like that but yet deny 
care to those that are in most need.
     So I would encourage you to, even now, as this is going 
on, there are funds available within the program that could be 
shifted over to preexisting but we are going to take care of it 
with legislation today. It is interesting that even though some 
on the other side have been very critical, there are many 
health advocacy groups, patient advocacy groups that support 
this bill that is going to come up for a vote later today.
    Now, I would like to talk now for a minute about the 
sequester impact if we could. We have had this Administration 
cancel White House tours but yet have concerts that cost over 
$400,000 of taxpayer money. We have had an Easter egg roll. We 
are going to have, I guess, another congressional White House 
Christmas Ball. All these things are done. TSA talking about 
long waits at the airport even though they ordered $50 million 
worth of new uniforms before the sequester kicked in.
    So I think the public realizes the political gamesmanship 
that is taking place in this. So I want to know what you have 
done, as far as the sequester, how that has impacted you and if 
there is anything there that we should expect as far as 
furloughs or impact on patient care?
    Mr. Cohen. Within CMS, we have been working very hard to 
avoid the necessity for furloughs. We are under a hiring freeze 
so I can't hire. I can't replace people who leave, which is a 
serious issue for me in terms of trying to run a program. If 
people move on to other jobs, I can't hire to replace them. And 
there have been--we have applied the sequester according to the 
advice that we have been given across the board, as we are 
required to do.
    Mr. Harper. OK. I am almost out of time. But are you 
telling me, then, that this Administration is furloughing air-
traffic controllers vital to public safety in this country but 
yet you are not furloughing anybody in your agency?
    Mr. Cohen. Well, in effect we are because we can't replace 
people who leave. So we are----
    Mr. Harper. But that is not the same. I mean we are talking 
about at least a 15 percent furlough of current air-traffic 
controllers resulting in delays and perhaps safety concerns, 
but yet this has been a selective political item by the 
Administration.
    I yield back.
    Mr. Murphy. The gentleman yields back. I now recognize the 
gentleman from Texas, Mr. Green, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    And I share my colleagues' concern, but when that sequester 
was passed, it was passed by a huge bipartisan vote. And, you 
can't vote for something and the say, oh, I wish it weren't 
happening because it is happening whether it be at CMS or TSA 
or anywhere else.
    But let me get to the health exchanges. I have a question 
related to exchanges' important goal and I think we both share 
in sharing that part of the successful implementation of the 
Affordable Care Act, people have access to the care they need. 
Your agency has released a series of letters to issues relating 
to Qualified Health Plans, QHPs and the insurance exchanges and 
the essential community partners. In your letter, you state CMS 
urges issuers to offer provider networks with robust ECP 
participation. Do you agree that is important that ECPs such as 
community health centers be considered as an integral part of 
the Qualified Health Plans networks?
    Mr. Cohen. Yes. Yes.
    Mr. Green. And is CMS encouraging that?
    Mr. Cohen. We are.
    Mr. Green. I have another related question but I will 
submit that for the record.
    And on the topic of premiums we heard repeatedly last month 
concerns about the potential rate increases under the 
Affordable Care Act, the concern that there will be some 
people, mainly healthier young men, who will pay higher 
premiums under the Affordable Care Act than they pay in an 
individual market. I would like to understand more detail. 
First, can you tell us a bit about how rates are structured for 
different groups in the individual market now based on factors 
such as age, sex, and health status?
    Mr. Cohen. Yes. So in the market today, issuers are allowed 
to vary rates depending on the health status of a person, 
whether they are sick and they were expected to have higher 
costs. They are allowed to charge women more than men and treat 
being a woman as a preexisting condition.
    Mr. Green. OK. So older and sicker people pay more and 
women pay more for healthcare right now?
    Mr. Cohen. That is right.
    Mr. Green. How would the rates be structured under the 
Affordable Care Act go into effect?
    Mr. Cohen. Health status won't be able to be used as a 
factor. Gender won't be able to be used as a factor. Age still 
can be used as a factor but the impact is limited compared to 
what it is today. And where you live is--can be used as a 
factor.
    Mr. Green. So under the Affordable Care Act, the risk will 
be pooled insurance cannot charge more for women and those with 
underlying health conditions. They are limited on how they can 
charge older people more than younger people, is that correct?
    Mr. Cohen. That is correct.
    Mr. Green. And I know there are groups like young healthy 
males that look like they might pay higher premiums. My 
understanding is a number of factors that mitigate these 
premium increases. First, many of these individuals may qualify 
for Medicaid, so they will be able to receive coverage without 
paying premium, is that correct?
    Mr. Cohen. Yes.
    Mr. Green. In addition, the Affordable Care Act now allows 
young adults to remain on their parents' healthcare until 26?
    Mr. Cohen. Correct.
    Mr. Green. And that was part of the Affordable Care Act?
    Mr. Cohen. It was.
    Mr. Green. And as I recall, being here in 2009, there was 
not a Republican vote for moving that to 26 years old. But 
anyway, let me go on.
    What about those who are not on Medicaid or their parents' 
health plan? Am I correct that they qualify for tax credits or 
premium assistance that will reduce their insurance costs?
    Mr. Cohen. Correct, up to 400 percent of the federal 
poverty level.
    Mr. Green. OK. And to what extent will this mitigate the 
impact of premium increases?
    Mr. Cohen. It will be significant.
    Mr. Green. OK. Finally, individuals under the age of 30 may 
purchase so-called young and invincible plans on health 
insurance and exchanges. I know I used to think that way when I 
was in my 20s but since I joined Medicare last year, I know I 
am not. Can you tell me how these plans will work and how they 
will reduce cost?
    Mr. Cohen. Absolutely. So that is a high-deductible plan 
which means that for your typical doctor's visit, it won't 
cover it, but if something serious were to happen to you--you 
become ill or in an accident--it will cover you. And those 
plans, we expect, will be very affordable for younger people.
    Mr. Green. OK. The Affordable Care Act contains a lot of 
new tools like rate review and the medical loss ratios. I come 
from the State of Texas and we typically don't regulate 
anything in health insurance except policies, and to be one of 
the best reforms in the Affordable Care Act was the 80 percent 
loss ratio. Because as an employer of small business years ago, 
I was not sure that the premiums we were paying were coming 
back into medical benefits. But we only had 13 employees and we 
didn't have a choice. But now, that small employer will know 
that 80 percent of their premiums will come back into medical 
benefits.
    Mr. Cohen. That is exactly right. And insurers have to pay 
back over $1 billion in rebates to consumers and businesses in 
2012 because of that program.
    Mr. Green. Well, and again, like I said, that seemed like 
one of the best reforms, although there a lot of things in 
there. And again, you don't need to say this but I also know 
that we tried to work on that bill in our committee and we did 
have a markup. And again, I didn't expect many Republicans to 
vote for it and none of them did. But there were a lot of good 
things in the Affordable Care Act that people have talked about 
on a bipartisan basis for decades.
    And I realize I am out of time. Mr. Chairman, thank you.
    Mr. Murphy. The gentleman's time has expired. I will now go 
to the gentleman from Texas, Mr. Olson, for 5 minutes.
    Mr. Olson. I thank the chair.
    And good morning, Mr. Cohen.
    Mr. Cohen. Good morning.
    Mr. Olson. And I know I don't have to say this but I am 
going to say it anyway. I have been elected three times by the 
people of southeast Texas, my home--Texas 22--to be the Member 
here in Congress, their Representative. And quite frankly, they 
are frightened, and I don't use that word lightly. But they are 
frightened about Obamacare and what it is going to do to their 
healthcare. Will it become more expensive? Will they have 
access? Will they keep it? Many promises have been made and 
many have already been broken. They want and deserve answers to 
my questions. So I ask you to respect them and directly answer 
the questions I ask.
    In a prior life, I spent 9 years as a staffer in the United 
States Senate. I know what a filibuster looks like. And I 
haven't seen one today, so thank you for that. But if I smell a 
filibuster I will abruptly interrupt and ask the questions. So 
thank you for that.
    But I am confused. I mean last week right here in this room 
the Secretary said that there are no contingency plans for the 
state-based exchanges changes. And yet, Mr. Cohen, you today 
are saying there are some plans. So are there plans, 
contingency plans, or aren't there plans? Yes or no.
    Mr. Cohen. We will be ready to operate October 1 of 2013. 
We are preparing for the eventuality that different parts of 
the system that we are building may not work perfectly and may 
need to be improved, and those are the kinds of plans that we 
are working on. We are doing testing and we are doing 
everything that we can to make sure that everything works as 
well as possible. But we know that in any large project----
    Mr. Olson. OK. That is great, sir. It sounds like you are 
preparing for the worst and planning for the best--hoping for 
the best. Is that correct, yes or no?
    Mr. Cohen. We are----
    Mr. Olson. Preparing for the worst but hoping for the best.
    Mr. Cohen [continuing]. We are realistic in our planning 
and we will be ready.
    Mr. Olson. OK. One further question, sir. I have talked to 
many family businesses back home about Obamacare and its impact 
on their businesses. These guys provide health insurance to 
their employees, and every single one of them that I have 
talked to, every single one has told me, Congressman, I provide 
healthcare for my employees because it is good for my business, 
it is a recruiting tool, retention tool, but I have to compete 
in the market. If this thing goes down, it will cost me 
anywhere between, I have heard, $5,000 to $9,000 per employee 
per year. If the healthcare bill comes to pass and the 
exchanges don't work out, I will dump my people in the 
exchanges, because I will pay a $2,000 or $3,000 fine that is 
more beneficial for business. They are not going to be the 
first one to pull the trigger. They are waiting because they 
want to do it for their employees. But they will have to 
because the market will demand them to. Are you prepared? Have 
you gotten out in American heard this complaint or concern from 
small businesses?
    Mr. Cohen. Yes, I have spoken to small business owners and 
representatives of small business associations. I think it is 
important to keep in mind that the offer rate for small 
businesses of health insurance has been declining dramatically 
over the past decade and more because it is not affordable. And 
that was before there ever was an Affordable Care Act. I think 
there are a number of very important provisions in the law that 
will make coverage more affordable for small businesses, one of 
which certainly is the tax credit that is for eligible 
employers that can pay up to 50 percent of the cost of 
providing healthcare to their employees.
    Mr. Olson. Again, sir, every business I have talked to in 
this situation has said they are planning to drop their 
healthcare insurance. that is in stark contrast to what you are 
saying here. I know what you are saying, but again, the bottom 
line on Americans' minds is there are going to be changes. 
People will lose their healthcare because of Obamacare.
    And one final question. My State of Texas is going to go on 
the federal exchange, and so obviously enrollment on October 1, 
full on go on January 1. One of the problems with D.C. is our 
eagerness is to impose a one-size-fits-all solution to all of 
our problems. It won't work, the state exchanges. My parents 
live in Vermont; they retired up there. And I can assure you 
that Vermont's challenges are much different than Texas' 
challenges. Heck, Texas has a one-size-fits-all problem within 
the State.
    I mean, the Rio Grande Valley there has a high epidemic of 
diabetes. West Texas has a high epidemic of skin cancer 
compared to the rest of the State. Urban environments have more 
asthma, more issues in that area. So how do you address these 
differences? Will the federal exchanges address the differences 
between States?
    Mr. Cohen. Congressman, I think you know that Texas has one 
of the highest uninsured rates in the entire country. And the 
Affordable Care Act and Medicaid expansion and the exchanges 
offers an opportunity to Texas to get a lot of those people 
enrolled in coverage. And we welcome Texas' involvement with us 
and a partnership with us as many, many, many states have to 
develop a marketplace that is best suited to the needs of the 
people in Texas.
    Mr. Murphy. The gentleman's time has expired.
    Mr. Olson. And I yield back. Thank you, sir.
    Mr. Murphy. Thank you.
    I now turn to the gentlelady from Florida, Ms. Castor, for 
5 minutes.
    Ms. Castor. Well, thank you, Chairman Murphy and Ranking 
Member DeGette, for calling this hearing because I think it is 
very important that we have substantial oversight of the 
implementation of the Affordable Care Act. The good news is 
that, so far, families across America have seen vast 
improvements already even before the marketplaces are set up 
and people are enrolling in health insurance. You know, some of 
the ones that are popular in my community, young people aged 26 
now can stay on their parents' insurance. That has meant a 
meaningful change to over 3 million young people across 
America.
    Medicare has gotten better; it has gotten stronger. Whether 
it is your prescription drugs that are more affordable or those 
new preventive services when you go in for checkups, that is a 
very meaningful change for our parents and grandparents.
    And then the one that doesn't get as much attention but 
should are the rebates that have come back from insurance 
companies. In the State of Florida alone, 1.2 million Florida 
families have gotten an insurance rebate because of the terms 
of the Affordable Care Act that say, you know, when you pay 
your premiums and your copay, that money should go to actual 
healthcare and health insurance rather than profits and 
marketing and CEO salaries. That has brought back to the State 
of Florida $123 million right back into the pockets of Florida 
families at a time when they could really use those extra 
couple hundred dollars. So thank you for that.
    And now we are on the cusp of such a positive change for 
families across America, so many that have not had access to 
those important doctor visits or being able to call the nurse 
and get the checkups that they need or, with a chronic 
condition, get the significant health services that they need.
    So, Mr. Cohen, I want to ask you about the outreach 
efforts, especially the navigators. We have talked little bit 
about that already today. This is going to be a very 
substantial effort as HHS begins the outreach rollout, how you 
inform families about signing up, how you educate families and 
small businesses about their insurance options. I know that 
some are concerned that some of the Affordable Care Act dollars 
are going to fund these outreach efforts, but how else are we 
going to educate everyone? I think it is all hands on deck. We 
need the insurance companies here. We need community groups, 
community health centers, doctors, nurses, and what I hear at 
home is everyone is ready to join in this effort.
    But could you talk about--kind of set the stage for this? 
We have 50 million uninsured in this country. People are hungry 
for information, wouldn't you agree? Could you talk about, 
right here at the outset, what you are going to be doing in the 
coming months?
    Mr. Cohen. Thank you. I would be happy to. First of all, as 
you mentioned, the $54 million for grants to community 
organizations and church groups and Indian tribes and other 
groups to serve as navigators, we are allocating that money 
based on the number of uninsured in each State. So we are going 
to try to put that money where we need it the most.
    In addition to that, there is going to be sort of a media 
campaign, just sort of to get people to understand more about 
the law and the benefits that it can bring to them. And we will 
be directing people to go online to healthcare.gov where, 
beginning in June, the call center will be up and 
healthcare.gov will have changed its focus to really be a 
consumer site that will be there to provide information to 
consumers and help them get ready for the steps that they will 
need to take beginning in October for enrollment.
    And as you mentioned, I am hearing a tremendous amount of 
excitement out there in the community from foundations, from 
the insurance companies that, obviously, have a real incentive 
to get people to come buy their products. So I think there is 
going to be a--really a multifaceted effort to make sure that 
people know what is in store for them.
    Ms. Castor. And looking at the States that have such high 
numbers of uninsured--California, Texas, New Mexico, Florida--
in Florida we have between 20 and 25 percent are uninsured, do 
not have health insurance. So these are going to be critical 
areas. In many of those areas, English is not the first 
language. Could you talk about American citizens that don't--
your outreach in bilingual and diverse communities?
    And then, I do think it is important to have insurance 
agents and brokers involved. If I have a large outreach event 
with the community health centers, doctors, nurses, and I have 
the brokers there, they are not a navigator----
    Mr. Cohen. Right.
    Ms. Castor [continuing]. But can they participate in those 
kinds of outreach efforts?
    Mr. Cohen. So thank you. So on the language side, one of 
the qualifications for being a navigator is that you be able to 
serve people, you know, in cultural and appropriate ways. And 
we definitely are expecting to get applications from groups 
that are specifically going to target specific groups that are 
not English-language proficient.
    We are working very closely with the agent broker 
community. I have had a number of meetings with their trade 
associations and with the agents and brokers directly, and we 
have come up with a way for agents and brokers to easily be 
able to enroll people through the marketplaces, and we are 
definitely expecting that they will play a very significant 
role, particularly with regard to small business where--as they 
do today.
    Ms. Castor. Thank you very much.
    Mr. Murphy. The gentleman's time has expired.
    I am curious, are you asking for perhaps a written 
statement on that? Because I think the chair would like to know 
that as well to help our people who may be in other groups.
    Ms. Castor. Yes, Mr. Chairman. I think it is very 
important. All hands on deck here for enrollment.
    Mr. Murphy. So you will get back a written response to the 
committee on that?
    Mr. Cohen. Sure.
    Mr. Murphy. Brief one? Thank you very much.
    I now recognize the gentleman from Virginia, Mr. Griffith, 
for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman. I was a little bit 
surprised that you said people that you talked to, there is 
excitement out there. The excitement that I am finding in my 
district is kind of like the excitement that Mr. Olson found in 
his district in Texas, is that people are scared and they are 
concerned. And I have got businessmen who come to me and say I 
don't know what I am going to do. Do I lay off some of my 
employees in order to get down under 50? What do I do?
    Of course, the Commonwealth of Virginia, which I represent, 
has indicated that they are going to have all of their part-
time employees go under 29 hours so that they won't have to 
cover them on insurance. And it is becoming kind of interesting 
to see because you have people who were promised if you like 
your insurance, you can keep it. But just recently, I think 
within the last 48 hours, a proposal passed in the State of 
Washington out of the Senate--it is probably not going to pass 
the House--but it passed out of the State of Washington where 
they currently cover employees down to 20 hours, but they are 
going to take their state employees and move them into the 
exchanges is the proposal. Under the plan, they would give them 
$2 per hour bonus and pay that would help defray the premium 
cost but they won't be able to keep the insurance they had. And 
I wonder what your thoughts are on that, that folks are being 
forced out of the plans they like because the States--and look, 
let's face it. If the States can't afford it, a lot of 
businesses can afford either. The States are doing things that 
are pushing people away from either the number of hours they 
work or the insurance that they like and that they had.
    Mr. Cohen. Well, first of all, the law does provide that 
grandfathered plans are not subject to most of the provisions 
of the Affordable Care Act. So it is possible for employers to 
keep the plan that they like. If they had a plan in place 
before and it is not changed significantly, they can keep the 
insurance that they have.
    Mr. Griffith. Well, the employer can keep it, but in this 
case, they are looking at moving the employees off of that plan 
and into the exchanges because it will save the State of 
Washington $120 million.
    Mr. Cohen. Well, obviously I don't know specifically what 
is happening in Washington. I think there are a great number of 
factors that go into employers' decisions about how many hours 
their employees work and how many employees they employ. 
Healthcare is certainly one of those. But we know that under 
the existing system, which has been broken, employers have 
found it difficult or impossible to get affordable coverage, 
particularly with a small employer. Just one employee who has a 
serious illness can drive the cost for that employer to the 
point where the employer can no longer afford to provide that 
coverage. That can no longer happen under the Affordable Care 
Act.
    Mr. Griffith. Well, let me tell you what is going on. I 
will tell you the excitement that you reference is excitement 
of the negative, not excitement of the positive. And I am going 
to quote now from the Olympian--their .com or their online 
publication--because they go on to cite ``worker-friendly 
lawmakers''--and talk about that same bill, but this person was 
opposed to that bill--``worker-friendly lawmakers such as 
Democratic Senator Karen Fraser of Thurston County called the 
bill ``premature.'' Why you ask? Again quoting Senator Fraser, 
``because the precise benefits available under the exchanges 
are still unknown.'' She said there is a chance that some 
workers could not afford coverage and plunge their families 
into poverty.
    Now, that is a Democratic State Senator in the State of 
Washington who fears putting state workers into the exchanges 
because they won't be able to afford the coverage. How can you 
tell the American people and how can you tell Senator Fraser 
that she is wrong and that she has no reason to be fearing. Is 
that the kind of excitement that your hearing? Because that is 
the kind of excitement I am hearing in my district, and, 
obviously, Senator Karen Fraser of the State of Washington, a 
member of the Democratic Party, has that same fear coming to 
her from her constituents. How do you respond to that, sir?
    Mr. Cohen. Well, I don't know about her particular 
concerns, but what I do know is that under the Affordable Care 
Act, tax credits will be available to people that will make 
insurance coverage more affordable beginning in 2014 than it is 
today.
    Mr. Griffith. And that argument was made on the floor in 
the State of Washington and Ms. Fraser wasn't convinced.
    Thank you, sir. I yield back my time.
    Mr. Murphy. The gentleman yields back. I now recognize the 
gentleman from North Carolina, Mr. Butterfield, for 5 minutes.
    Mr. Butterfield. Thank you very much, Mr. Chairman.
    Thank you, Mr. Cohen, for coming to be with us today. 
Hopefully, you have brought with you some very important 
information that we can all benefit from.
    As you may know, I represent a very low-income district in 
North Carolina. In my whole State we have about 1 \1/2\ million 
people who are uninsured. About \1/3\ of those, 500,000 of 
those, are poor people. And about 10 percent of those live in 
my congressional district. And so I have listened to the 
questions and answers here today and I can tell you that in my 
district--I can't speak for other districts--but in my district 
there is a lot of excitement about the Affordable Care Act. The 
people that I represent are looking forward to it, including 
businesspeople. Those who are rational, those have taken the 
time out to study the benefits of the Affordable Care Act for 
their business, once they understand it, most if not all of 
them are ready to embrace it.
    But I want to just take a few minutes to drill down on the 
navigator program, because you know and I know that that is so 
critically important. I see the navigator program as community-
based individuals who will go out into the community and go to 
untraditional places: barbershops, and beauty salons, and even 
knock on doors to find people who would qualify for the 
exchange. Is that correct?
    Mr. Cohen. That is exactly right.
    Mr. Butterfield. These are not elitist, these are not 
people who will sit behind a desk and push some buttons. These 
are people who will actually beat the pavement and go out and 
find people, first of all, to inform them about the benefits of 
the program.
    Mr. Cohen. That is right. And ideally, people who already 
have a track record and a history of helping people in those 
communities.
    Mr. Butterfield. Will this include knocking on doors, 
canvassing neighborhoods?
    Mr. Cohen. Absolutely.
    Mr. Butterfield. All right. And when a door is knocked on 
and an individual is found who would potentially qualify for 
the program, what happens next? I guess there is an 
informational session with the individual. But once the 
navigator determines that this individual qualifies for 
assistance for the tax credits, what happens next? Do you take 
them by the hand and take them to some central location and 
process a claim?
    Mr. Cohen. I mean, ideally, the easiest way to get people 
signed up is online. So ideally, navigators would help folks 
who may not have access to a computer at home, you know, go to 
the community organizations location and help them through an 
online process which could be done----
    Mr. Butterfield. Well, let's divide into two pieces. Let's 
say the citizen has a computer in their home. Will the 
navigator actually stay in the home, assist the individual with 
the application online?
    Mr. Cohen. They can help them walk through the application, 
exactly.
    Mr. Butterfield. At the request of the individual?
    Mr. Cohen. Of the person, of course.
    Mr. Butterfield. Yes. And if the citizen does not have 
access to a computer, then the navigator will enable the 
individual to go to an office?
    Mr. Cohen. Ideally, or people can apply--there is a paper 
application and people can apply with a paper application. So a 
navigator could sit down with someone across the kitchen table 
and go through the application and do it that way as well.
    Mr. Butterfield. Then will the navigators see it through to 
completion? Is there a procedure for making sure that the 
individual follows through?
    Mr. Cohen. There can be a procedure for the navigator 
finding out whether--what the result of it has been.
    Mr. Butterfield. All right. Now, from what I can gather, if 
an individual--let's say a single, healthy, childless adult who 
makes $20,000 a year--and that individual would qualify for tax 
credits through the exchange. But an individual who makes 
$10,000 year who is single and childless and healthy would 
qualify for Medicaid. But if a State has declined the expansion 
of Medicaid, the 10,000 individual will have no access to 
insurance. Is that correct?
    Mr. Cohen. They can still go into the exchange.
    Mr. Butterfield. Even if they are under 100 percent of the 
federal poverty line?
    Mr. Cohen. They could then--those people won't be getting a 
tax credit. You are correct.
    Mr. Butterfield. But can anyone under 100 percent of 
poverty go into exchange?
    Mr. Cohen. Yes.
    Mr. Butterfield. So if makes $50 a year in income, if they 
have the capacity to pay for the exchange, they can go into it?
    Mr. Cohen. Correct.
    Mr. Butterfield. So if a family member wanted to assist 
that low-income individual, they could do that?
    Mr. Cohen. They could do that.
    Mr. Butterfield. All right. All right. Thank you very much. 
I yield back.
    Mr. Murphy. The gentleman yields back.
    I will now go to the gentleman from Ohio, Mr. Johnson, for 
5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman. Mr. Cohen, has your 
office done any analysis of the healthcare law, Obamacare's 
impact on premiums?
    Mr. Cohen. No.
    Mr. Johnson. You haven't?
    Mr. Cohen. No analysis in the sense that----
    Mr. Johnson. That is great. We are going to have a fun 
session here then. So are premiums going up or down for the 
average consumer? You testified earlier that millions of 
Americans that don't currently have insurance are going to have 
insurance in October under the law.
    Mr. Cohen. Right.
    Mr. Johnson. For the average consumer that has healthcare 
today, are their premiums going up or down?
    Mr. Cohen. I think we have to wait and see when the plans 
submit their rates----
    Mr. Johnson. But that is not what the President promised. 
The President promised that supporters would see lower costs. 
So are people going to see increases or decreases in their 
premiums?
    Mr. Cohen. I think at this point we have to wait and see 
what--how the rates come in for 2014. Over time, people 
absolutely will see lower costs. As we see more competition in 
the system, a broader risk pool, and if you look at the overall 
healthcare costs that people have to absorb, giving tax 
credits, lower cost-sharing, they will see lower costs.
    Mr. Johnson. Well, who is going to see lower cost? What 
demographics are going to see lower costs? Is it going to be 
the young? Is it going to men? Is it going to be women? Is it 
going to be seniors? Who is going to see lower costs?
    Mr. Cohen. Well, we know that women today can be charged up 
to 50 percent more than men just because they are women. So 
yes, women will see lower costs. And we know that older people 
can be charged often 5 or 6 times as much because of their age, 
and that is going to be limited. So they will see lower costs.
    Mr. Johnson. Are anybody's premiums going up?
    Mr. Cohen. I think we have to wait and see what the rates 
look like when they come in.
    Mr. Johnson. That is a theme that has persisted in this 
law. Wait and see. Pass it, and then let's see what happens 
down the road. Well, I tell you what, that is a dangerous way 
to navigate a ship like America's economy.
    You know, you also write that these programs will keep 
premiums in the individual and small group markets reasonably 
priced. What is a reasonable price? Surely, you have got some 
idea what a reasonable price is?
    Mr. Cohen. You know, sitting here today, I don't have an 
answer to the question. We can certainly come back. I think 
what I can say is that we know that over the last couple of 
years, health insurance premiums have been going up at a lower 
rate than they have been for decades before. I mean, health 
insurance premiums are going up by double digits year after 
year after year. And that hasn't been the case----
    Mr. Johnson. But the American people were promised two 
things.
    Mr. Cohen [continuing]. Over the past couple of years.
    Mr. Johnson. They were promised that if they like their 
current coverage, they could keep it, and that cost would be 
lowered. You have just confirmed to me that you don't know that 
to be true anymore. You don't know. You are having to wait and 
see.
    Mr. Cohen. For 2014. Over time, you know----
    Mr. Johnson. Well, I just asked you that. Were premiums 
going up or down and you said you don't know.
    Mr. Cohen. For 2014 we have to wait and see----
    Mr. Johnson. OK. Let's look out longer than that. Are 
premiums going up or down?
    Mr. Cohen. I expect that premiums will go down relative to 
what they would have been----
    Mr. Johnson. For who?
    Mr. Cohen [continuing]. Without the Affordable Care Act.
    Mr. Johnson. For who?
    Mr. Cohen. For everyone.
    Mr. Johnson. For everyone?
    Mr. Cohen. If not for the Affordable Care Act, they will be 
going up higher.
    Mr. Johnson. OK. So then you must know then what defines 
some reasonable cost. If you know they are going down or you 
think they are going down, you have got some idea of what that 
range is. What is reasonable?
    Mr. Cohen. The primary factor that goes into what a 
healthcare premium is is the cost of medical care, and we all 
know that. That is the primary driver of healthcare costs. So 
in order to have premiums go--truly go down, we need to address 
the cost of medical care. And the Affordable Care Act and the 
Administration have a number of different ways of----
    Mr. Johnson. Well, we have a very different----
    Mr. Cohen [continuing]. Doing that. As far as my program is 
concerned----
    Mr. Johnson. We have a very different understanding of what 
is driving the cost of healthcare, because in my opinion, what 
is driving that cost of healthcare up is the bureaucracy that 
has now set itself up in Washington to oversee \1/6\ of our 
economy. I have only got a little bit of time left.
    On the application, one of the questions that the 
applicants are asked is, do you think the employer's coverage 
is affordable? Do you think the employer's coverage is 
affordable? Why do you ask this?
    Mr. Cohen. It is----
    Mr. Johnson. What is affordable healthcare in your opinion?
    Mr. Cohen. It is defined in the statute. The question is 
asked because it is one of the eligibility requirements and it 
is defined in the statute as up to--depending on what your 
income level is, up to 9.5 percent of your income.
    Mr. Johnson. So affordable in your opinion is 9.5, which is 
almost 10 percent of a person's income for healthcare.
    Mr. Cohen. It is not my opinion. It is what is in the law.
    Mr. Johnson. But what is your opinion of what is 
affordable?
    Mr. Cohen. I don't have an opinion.
    Mr. Johnson. Well, that is good. Got you. I yield back.
    Mr. Murphy. The gentleman's time has expired.
    I now go to the gentlelady from Illinois, Ms. Schakowsky, 
who is recognized for 5 minutes.
    Ms. Schakowsky. Well, Mr. Cohen, it is not surprising that 
from the Republican side of the aisle the relentless drumbeat 
of opposition to the Affordable Care Act, or Obamacare as I 
proudly say, goes on after 33 efforts to repeal the entire 
bill.
    But I would challenge my colleagues on the other side to go 
out and explain to at least some of their constituents--for 
example, the parents of children with preexisting conditions--
that they want to take away insurance to them, that annual and 
lifetime coverage limits should be reinstated, that the 
rescissions of policies should, once again, go into place, that 
all the preventive health services without cost-sharing ought 
to go back into effect, that the young people that are on their 
parents' policies, forget it, they are off. You explain that to 
them, that the medical loss ratio requiring insurance companies 
to actually pay for health coverage should be changed, and tell 
women that we think you should be discriminated against. That 
is a good idea, that about, I don't know how many billions of 
dollars we collectively pay more in health insurance.
    And so, you can list 5 problems with the program and we can 
list many, many more good things. And we would like to work 
with each other to try and correct them rather than just 
complain. No, the program is not perfect.
    I wanted to ask you. We are just months away now from full 
implementation of Obamacare's coverage, and the Administration 
has requested additional resources to implement the law and 
those requests have been ignored. And it seems to me the 
refusal of my Republican colleagues to appropriate HHS adequate 
resources to help implement the law is limiting our efforts to 
inform Americans about Obamacare's exciting new coverage 
options.
    And let me just say that when the Part D was put into 
effect, $600,000 was spent by the Bush Administration for 
blimps to talk about--just for blimps alone. So could you 
explain how CCIIO would use additional resources that the 
Administration has requested to implement the law, and how 
might the refusal to appropriate adequate resources hinder the 
ability of consumers to know about October 1?
    Mr. Cohen. Thank you, Congresswoman. We certainly would 
welcome the ability to provide more grants to navigators out 
there in the community. We welcome the ability to do more 
outreach ourselves to--as you know, there has been a lot of 
misinformation about this law. People, you know, really do need 
to understand the benefits of it and what it can do for them. 
And so with the President's budget request, we certainly could 
use that money to do more outreach into the community and make 
sure that people understand what the law is and how it can 
benefit them.
    Ms. Schakowsky. You know, and I would just like to say to 
my colleagues, you talk about the fear in the districts. And to 
the extent that there are some problems with the bill, if we 
could sit down and work together and figure out how to make it 
better, but a lot of that fear is the misinformation that has 
been quite deliberately sent out. You watch Fox; it is hard not 
to be scared about Obamacare and what it might do to you. So I 
would suggest that the fear-mongering that is going on about 
this law, which has now been upheld by the United States 
Constitution that will bring up to 30 million people of the 
United States of America to be able to have healthcare, that 
will help us join the community of nations in the world that 
declare that healthcare is a right of the citizens of their 
countries. You know, we could use the help. All of us could use 
the help. All Americans could use the help to perfect this 
legislation.
    And I yield back.
    Mr. Murphy. Thank you. The gentlelady yields back the 
balance of her time.
    I now recognize the gentleman from Colorado, Mr. Gardner, 
for 5 minutes.
    Mr. Gardner. Thank you, Mr. Chairman.
    Thank you, Mr. Cohen, for your time with us this morning. 
And my colleagues said that there is fear-mongering on this 
bill but I would just like to point out that I read an article 
the other day that the roofers union backtracks on Obamacare 
and wants repeal or reform of the bill. So I don't think this 
is right wing fear-mongering. I think when you have a union 
that is very concerned about Obamacare and wants its repeal or 
reform, I think that is where we have significant concerns that 
must be addressed.
    Mr. Cohen, are you familiar with Richard Foster, the 
actuary of Medicare?
    Mr. Cohen. I know who Richard Foster is, sure.
    Mr. Gardner. Are you familiar with testimony that he gave 
before the House of Representatives Budget Committee a year ago 
or so?
    Mr. Cohen. Generally, but not specifically, no.
    Mr. Gardner. In that testimony he talked about the two 
central promises of the healthcare law that were unlikely to be 
fulfilled: one, that the bill will not hold costs down; and 
two, that it won't let everybody keep the current insurance if 
they like it. Would you agree with that assessment?
    Mr. Cohen. Well, I think, as I said, I do believe that 
costs will be down relative to where they would have been 
without the Affordable Care Act----
    Mr. Gardner. So that is an increase then.
    Mr. Cohen. Well, if medical costs increase, then the cost 
of insurance is going to increase. But at least----
    Mr. Gardner. So that the promise----
    Mr. Cohen [continuing]. People will have----
    Mr. Gardner [continuing]. Was made that it would keep costs 
down.
    Mr. Cohen. Well, it will keep costs down relative to what 
they would have been without the law and at least people will 
have the security----
    Mr. Gardner. So what you are saying is that we will expect, 
then, costs to increase?
    Mr. Cohen. At least people will have the security of 
knowing that if they have a serious illness, their care will be 
paid for, which they don't have today.
    Mr. Gardner. We are talking about cost increases.
    Mr. Cohen. Well, for someone who has never been able to 
have health insurance before, to talk about an increase----
    Mr. Gardner. What about the person who has health 
insurance. Are they going to experience cost increases?
    Mr. Cohen. I think it is going to depend on the individual 
situation. There are factors that will cause costs to go down; 
there are tax credits that are available.
    Mr. Gardner. Are you insured through the federal system or 
do you have outside insurance?
    Mr. Cohen. I am insured through the federal system.
    Mr. Gardner. Has your insurance gone down or gone up?
    Mr. Cohen. You know, I don't even remember what happened. I 
think we had a small increase this year.
    Mr. Gardner. So----
    Mr. Cohen. But we have had lower increases in the last 2 
years than we have had for a long time before that.
    Mr. Gardner. So what kind of----
    Mr. Cohen. The fact that health insurance goes up is not 
new. I mean, that is--health insurance has been----
    Mr. Gardner. But I think the promise that was----
    Mr. Cohen [continuing]. Going up year after year after year 
after year.
    Mr. Gardner [continuing]. Made in the healthcare bill, if I 
am not mistaken, the promise was made that this would lower the 
cost of healthcare.
    Mr. Cohen. Well, I think it will relative to where it would 
have been without the law.
    Mr. Gardner. So this is kind of like the Washington two-
step when we say we are cutting budgets but you are actually 
decreasing the rate of an increase. Is that what you are saying 
Obamacare has done?
    Mr. Cohen. I am saying that I believe that healthcare 
insurance--and if you look at the total out-of-pocket costs 
that people have to absorb--will be lower than it would have 
been without the law, yes.
    Mr. Gardner. So that is an increase in costs because if it 
is going to be----
    Mr. Cohen. It may or it may not be, depending on----
    Mr. Gardner. What is an acceptable increase? I mean----
    Mr. Cohen. I mean for----
    Mr. Gardner [continuing]. What are you anticipating under 
this healthcare bill?
    Mr. Cohen. For women who have had to pay 50 percent more 
than men, you know, the effect will be to reduce their costs. 
For people who have had to pay out-of-pocket for all that 
medical care----
    Mr. Gardner. But reduce their cost, even though their costs 
increase from year to year? It is just what you are saying is 
that, oh, it might not increase as much.
    Mr. Cohen. I think it is going to depend on a number of 
factors, including the underlying costs of medical care.
    Mr. Gardner. Well, let me ask you this then: will Obamacare 
reduce the cost of healthcare?
    Mr. Cohen. It will relative to what it would have been 
without the law, yes.
    Mr. Gardner. But you are saying then that healthcare will 
increase?
    Mr. Cohen. That will depend on factors that are external to 
the Affordable Care Act. It will depend on----
    Mr. Gardner. Well, maybe----
    Mr. Cohen [continuing]. The costs of healthcare.
    Mr. Gardner [continuing]. I am not asking my question very 
clear.
    Mr. Cohen. Yes.
    Mr. Gardner. Will healthcare costs be less next year after 
the implementation of this bill?
    Mr. Cohen. I think that will depend on----
    Mr. Gardner. Yes or no.
    Mr. Cohen. I can't answer the question. I don't know what 
is going to happen next year.
    Mr. Gardner. So we don't know whether or not the----
    Mr. Cohen. I don't know what is going to happen to the 
underlying cost of medical care.
    Mr. Gardner. Well, what about insurance----
    Mr. Cohen. What doctors charge----
    Mr. Gardner [continuing]. That people----
    Mr. Cohen [continuing]. What hospitals charge, what----
    Mr. Gardner. Well, what about insurance that people like? 
If they have their insurance and they want to keep it, are they 
going to be able to?
    Mr. Cohen. They can if they are in a grandfathered plan and 
the plan doesn't change significantly, they can keep that 
coverage and it is not affected by the Affordable Care Act.
    Mr. Gardner. So you are saying that, right now, people 
across this country who have been told they are not going to be 
able to keep their insurance, they are being misinformed?
    Mr. Cohen. They are misinformed if they don't understand 
that if they are in a plan that was grandfathered, as many 
people are, that they could keep that coverage, then yes, they 
are misinformed.
    Mr. Gardner. So if the employer switches the plan because 
of this healthcare bill, then they get to keep their old 
healthcare?
    Mr. Cohen. Employers can keep their employees in a 
grandfathered plan and not be affected by the provisions of the 
Affordable Care Act, yes.
    Mr. Gardner. Do you know which plans were grandfathered? 
And if the healthcare bill requires them to change the plans, 
though, doesn't that mean that they are going to lose the 
healthcare?
    Mr. Cohen. No, no, no, the healthcare law doesn't require 
them to change the plans. That is the whole point of being 
grandfathered. You don't have to change it if you are in a 
grandfathered plan.
    Mr. Gardner. So these employers will never have to change 
their healthcare plan that they are offering?
    Mr. Cohen. As long as the plan does not change 
significantly in terms of the benefits that they offer. If they 
keep the benefits the same----
    Mr. Gardner. Or what is required by the healthcare bill.
    Mr. Murphy. Time is expired.
    Mr. Cohen. Then, they can keep a grandfathered plan and 
they don't have to comply with the provisions of the Affordable 
Care Act. That is what grandfathering means.
    Mr. Murphy. Thank you. The gentleman's time is expired.
    Now, I will recognize the gentleman from Missouri, Mr. 
Long, for 5 minutes.
    Mr. Long. Thank you, Mr. Chairman.
    And Mr. Cohen, thank you for being here today. But I have 
got to say that if Rod Serling walked through that door right 
there, I wouldn't be surprised because he could walk in here 
and say you have now entered the Twilight Zone. There cannot be 
so much difference in interpretation, I don't think, other than 
it is inexplicable. It is Twilight Zonish if that is a word. We 
have friends of mine on the other side of the aisle, a good 
friend that just spoke a minute ago, Ms. Schakowsky. She, to 
paraphrase her, said on the Republican side of the aisle, there 
is relentless drumbeat of opposition to the President's 
healthcare plan. And my other very good friend over there, Gene 
Green, said something to the effect of people across America 
have seen vast improvements in their healthcare. And I think 
from the questions you have seen today, that is not what some 
of us are hearing.
    So I want to start with a couple of yes-or-no answers if I 
may on some things some Democrats have said, see if you agree 
with them. Democratic Senator Max Baucus said, ``I just see a 
huge train wreck coming down because of bumbling 
implementation.'' Yes or no, do you agree with that?
    Mr. Cohen. I do not agree with that.
    Mr. Long. Let's move to another Democrat Senator. Let's 
move to Tom Harkin. Senator Tom Harkin--and Mr. Cohen, yes or 
no--do you agree with Senator Harkin that this Administration 
should not be raiding the Prevention Fund for funding exchange 
expenditures?
    Mr. Cohen. Congressman, I really am not going to express a 
view on that. That is not a decision I made. It is not----
    Mr. Long. You can't answer a yes-or-no question----
    Mr. Cohen. I can't answer----
    Mr. Long [continuing]. Whether you agree with a statement--
--
    Mr. Cohen. I can't answer that----
    Mr. Long [continuing]. That a Democrat Senator made?
    Mr. Cohen. I can't.
    Mr. Long. You can't----
    Mr. Cohen. I don't have----
    Mr. Long [continuing]. Or you don't want to----
    Mr. Cohen. I----
    Mr. Long [continuing]. Or you don't know if you agree----
    Mr. Cohen. I don't have a view.
    Mr. Long. You don't have a view whether you agree with a 
statement that a Senator made?
    Mr. Cohen. I don't.
    Mr. Long. I really don't know what to say. I guess I will 
wait for Rod Serling to come through the door.
    Mr. Cohen. That would be the second coming of Rod Serling I 
think. I think he passed away----
    Mr. Long. The way things have been going here, I wouldn't 
doubt it. I mean I could see it happening.
    This morning, according to POLITICO Pro's whiteboard, 
Senator Tom Harkin blasted HHS Secretary Kathleen Sebelius at a 
hearing this morning. It was after we had started this 
hearing--blasted Sebelius for using Prevention Fund money to 
pay for insurance navigators saying the Obama Administration is 
treating preventive care as an afterthought. To quote the 
Senator, ``I am sorry to say this Administration just doesn't 
get it.'' And this is a Democrat. This is not the Republican's 
drumbeat. First of all, it was a $5 billion raid last year on 
Prevention Funds, Harkin said, referring to the payroll tax 
extension Barack Obama signed into law last year that cut $5 
billion from the Prevention Fund. This year, it is another $332 
million raid. It is sort of like the Prevention Fund is sort of 
an afterthought.
    I am going to ask you one more time. Do you agree with 
Senator Harkin that this Administration should not be raiding 
the Prevention Fund for funding exchange expenditures, yes or 
no?
    Mr. Cohen. You know, I would have been happy if Congress 
had appropriated funding for us to do the work that we need to 
do and, you know, that didn't happen. And so the Secretary made 
decisions under her authority. And I don't have an opinion one 
way or the other as to those decisions, no.
    Mr. Long. Who would you direct me to? Let's say for a 
minute that I have staff that come to me and say we are a 
little confused. What is our healthcare going to cost starting 
2014? What government agency would you direct me to to get 
their questions answered, what they are going to be paying for 
their healthcare next year, my staff?
    Mr. Cohen. Well, if your staff is covered by the federal 
program, then I think the information that they would want to 
get would be from the program that administers their 
healthcare.
    Mr. Long. What government agency?
    Mr. Cohen. FEHB or whoever--whatever coverage they have.
    Mr. Long. OPM maybe?
    Mr. Cohen. Could be.
    Mr. Long. Well, we have tried relentlessly because I have--
well, you laugh at it but----
    Mr. Cohen. No, no----
    Mr. Long [continuing]. My staff is not laughing and it is a 
very serious concern for me. When you have staffers on this 
Hill that have got college educations, some of them have law 
degrees, and they are living two and three people to an 
apartment because the cost of living up here to get by, and 
they come to me with a legitimate question on what they are 
going to be paying next year. They are thinking about leaving 
government service. They are thinking about taking jobs other 
places. It is a very serious thing so we have tried and tried 
and tried to get the answer on what they are going to be 
paying. OPM cannot tell us.
    Mr. Cohen. No, and I don't mean to minimize that, 
Congressman. I was only smiling because I can't help with OPM 
obviously. I wish I could but I can't.
    Mr. Long. I gave Rod Serling 5 minutes and he didn't make 
it, so I yield back.
    Mr. Murphy. The gentleman's time is expired.
    And I recognize the gentlewoman from North Carolina, Mrs. 
Ellmers, for 5 minutes.
    Mrs. Ellmers. Thank you, Mr. Chairman.
    And thank you, Mr. Cohen, for being with us today. I do 
have to go back and just reiterate some of the points that have 
already been made and get some clarification from you. Going 
back to the closing of the Pre-Existing Insurance program. When 
was that closed?
    Mr. Cohen. It was closed for the federal program in 
February and for the state programs in March.
    Mrs. Ellmers. OK. And so those individuals who would be 
utilizing those dollars for their preexisting condition 
coverage will not be able to do so until January 1?
    Mr. Cohen. The existing enrollees are unaffected but new 
people who would be coming into the program will not be able to 
come into the federal--into the PCIP program unless we are able 
to--yes, until January.
    Mrs. Ellmers. After January----
    Mr. Cohen. January they can----
    Mrs. Ellmers [continuing]. As it is right now.
    Mr. Cohen. As it is right now, correct.
    Mrs. Ellmers. OK. You know, this is the confusing part 
about it because especially my colleagues across the aisle 
continuously try to paint us--us meaning Republicans here on 
the other side--as the ones who are interfering with anyone 
getting preexisting coverage and looking at it from an 
unsympathetic standpoint. However, this program has been cut 
off and they support that, and here we are attempting to pass 
legislation to actually help those individuals. I am just----
    Ms. Schakowsky. So are we. Will the gentlewoman yield?
    Mrs. Ellmers. This is my time. You had your time.
    You know, I am perplexed by that and you clarified that for 
me. I just want to make sure that we have clarified that we are 
talking about months of time that individuals will go without 
that care.
    Also, for clarification purposes, in the discussion that 
you were having with Mr. Johnson and then also with Mr. 
Gardner, you stated that as of January 1, 2014, that healthcare 
premiums will go down. Is that correct?
    Mr. Cohen. No, what I think I said--what I believe is that, 
first of all, we don't know yet what premiums are going to be 
for coverage in January of '14 because plans are just now 
submitting those rates to their state insurance departments for 
approval to the exchanges of--with respect to----
    Mrs. Ellmers. OK. But, sir, that was not the promise. The 
promise that was made continuously when this was being 
implemented, that healthcare premium costs would go down. And 
so I am asking you under oath today, as you see it--you are no 
longer standing behind that statement? You are now saying that 
we do not know and probably more than likely we wil see 
healthcare insurance premiums going up. Is that correct?
    Mr. Cohen. No, that is not correct. What I think I said was 
that for 2014 we need to wait to see how the rates come in, and 
over time, I believe that the Affordable Care Act will result 
in lower overall cost of----
    Mrs. Ellmers. And what----
    Mr. Cohen [continuing]. Healthcare for people----
    Mrs. Ellmers. OK. Sir, what do you base that on? Because 
CBO has done a culmination of studies, which showed--and I will 
just cite North Carolina--that North Carolina healthcare 
premium rates will go up by 61 percent. So what are you basing 
your data on? And if you do have studies that show this, I 
would like for you to submit them to the Subcommittee.
    Mr. Cohen. I am basing it on the increased competition that 
will exist in the new marketplace compared to what we have 
today where, in many States----
    Mrs. Ellmers. But that could exist----
    Mr. Cohen [continuing]. There----
    Mrs. Ellmers [continuing]. With or without the Affordable 
Care Act going into effect. You know, we in Congress could 
enact many pieces of legislation and are working on just that, 
to help increase competition----
    Mr. Cohen. Well----
    Mrs. Ellmers [continuing]. Among the healthcare providers.
    Mr. Cohen. Well, it could, Congresswoman, but in most 
States today--in many States today, the individual and small 
group markets are dominated by one carrier that has 60, 70, 80, 
even 90 percent of the market. That is the reality today.
    Mrs. Ellmers. And that could be----
    Mr. Cohen. And that is what we are----
    Mrs. Ellmers [continuing]. Easily remedied.
    Mr. Cohen [continuing]. Going to change.
    Mrs. Ellmers. That could be easily remedied with 
legislation. We don't need this massive takeover of healthcare, 
increasing rates by 61 percent for those who I represent in 
North Carolina. There again, I would really hope that you would 
be able to gather some data, because again under oath you are 
saying, `I am incredibly unclear as to what will happen with 
healthcare rates as of 2014.'
    Mr. Cohen. For most Americans, the millions of Americans 
who are covered by insurance through their employer that is in 
a large group, they are not going to see an effect from the 
Affordable Care Act one way or another----
    Mrs. Ellmers. OK. Well, my time is up----
    Mr. Cohen [continuing]. So that their----
    Mrs. Ellmers [continuing]. And I don't understand even what 
you base that on.
    Mr. Murphy. If I could ask the gentleman, you asked a 
question about while he was under oath about prices going up or 
not going up and you didn't get a chance to answer that 
question, so I am going to give you a moment to answer that 
question with regard to you previously stated about prices not 
going up, you said you couldn't guarantee that and you were 
going to elaborate on that statement.
    Mr. Cohen. I think----
    Mr. Murphy. Do you recall?
    Mr. Cohen [continuing]. We have lost the thread.
    Mr. Murphy. All right.
    Ms. DeGette. Mr. Chairman, let me ask.
    Mr. Cohen, did you ever say that----
    Mrs. Blackburn. Mr. Chairman, I think I am next in the 
queue----
    Mr. Murphy. It is.
    Mrs. Blackburn [continuing]. If you don't mind before you 
go to a second round.
    Ms. DeGette. I would ask unanimous consent to--listen, the 
previous questioner advised the witness he was under oath and 
then asked him a question and refused to let him finish 
answering that question, and I think that is inappropriate for 
this hearing.
    Mr. Murphy. No, I just asked if he would like----
    Ms. DeGette. And so, Mr. Chairman, I think that the witness 
should be allowed to complete his answer.
    Mr. Murphy. I just did that and----
    Mr. Cohen. Well, I am not sure what the question was----
    Ms. DeGette. Right.
    Mr. Cohen [continuing]. That is my problem.
    Mrs. Ellmers. I will be more than happy to restate my 
question if that will help.
    Mr. Murphy. Can I ask if you could submit that question----
    Ms. DeGette. I think it is----
    Mr. Murphy [continuing]. For the record and----
    Ms. DeGette [continuing]. Wrong for members of this 
committee to try to put the witnesses in a perjury trap----
    Mr. Murphy. That is why I am----
    Ms. DeGette [continuing]. When they come in here----
    Mrs. Ellmers. No, ma'am.
    Ms. DeGette [continuing]. And they are trying to help this 
committee----
    Mrs. Ellmers. No, ma'am.
    Ms. DeGette [continuing]. Understand.
    Mrs. Ellmers. I am clearly restating that the gentleman is 
under oath and that he was not answering the question was----
    Ms. DeGette. Well, get him----
    Mr. Murphy. Order here. What I would like to ask is if the 
gentlelady would submit that question and we will ask Mr. 
Cohen----
    Mr. Cohen. I would be happy----
    Mr. Murphy [continuing]. To submit it for the record.
    Mr. Cohen [continuing]. To answer for the record. Thank 
you.
    Mr. Murphy. That way we will be sure what exactly what you 
were asking, Ms. Ellmers, and sure of your answer.
    Mr. Cohen. Thank you.
    Mr. Murphy. Thank you so much.
    Recognize the gentlelady from Tennessee for 5 minutes.
    Mrs. Blackburn. Thank you, Mr. Chairman.
    And sir, you have been patient with us and we do appreciate 
it.
    I want to go to your statement you made I think in response 
to Mr. Harper's question about over time you thought the 
insurance cost would come down. And this is something that I 
always watch very closely because I am out of Tennessee, and 
you are probably familiar with the program TennCare, and I know 
I have worn out all of my committee members here talking about 
TennCare and asked Secretary Sebelius about it repeatedly. And 
I just want to let you know that it seems from what we have 
found, what I have found in my research--and I have been 
working on this since we got TennCare--as a test case for 
Hillarycare in 1995. And bear in mind, it quadrupled in cost 
over a 5-year period of time.
    But sir, what we found is there is no example where these 
near-term expenses are going to yield a long-term savings in 
healthcare. And if you do have those examples, I would love to 
see them because through all of this debate of Obamacare, 
nobody has been able to show one, not with public option care, 
not with guaranteed issue, not with community rating, not with 
any of this in New Jersey or Tennessee or Hawaii or anywhere 
else, not with any of these CMS waiver programs. There is no 
example where you decrease cost, you increase access, and you 
get better outcomes. So if you can prove us wrong on that, 
then, you know, feel free to bring forward an example. Do you 
have an example?
    Mr. Cohen. Congresswoman, I think for the person today who 
doesn't have health insurance coverage and doesn't know how 
they are going to pay their medical bills and worries about 
going into bankruptcy because their child is sick, I think for 
that person, a lot of this discussion is really irrelevant. And 
we--and that is what we are going to change.
    Mrs. Blackburn. OK. Let me ask you this. I want to ask you 
a question about the navigators. Is it true that the navigators 
cannot have healthcare or health insurance experience?
    Mr. Cohen. No.
    Mrs. Blackburn. That is not true?
    Mr. Cohen. That is not true.
    Mrs. Blackburn. OK. Because that has been part of the 
understanding that is out there.
    Also, on your increased competition theory, I have got to 
tell you, what we have seen in Tennessee when you have 
government control, when it is government control, that is what 
runs people out of the marketplace.
    Mr. Cohen. Well, this isn't government control. This is a 
commercial marketplace with----
    Mrs. Blackburn. I beg to differ----
    Mr. Cohen [continuing]. Private insurance carriers----
    Mrs. Blackburn [continuing]. With you. Let me----
    Mr. Cohen [continuing]. Providing coverage to people.
    Mrs. Blackburn [continuing]. Give you a few examples of 
what is happening in Tennessee. Yesterday, of course, the rate 
filings in Maryland shows that small group coverage increases 
are going to go up 145 percent. And we have got examples in 
Tennessee that we have been polling our companies for this year 
and next year. This year, they are going up anywhere from 26 
percent to 132 percent. We are seeing 40 and 50 percent 
increases expected for next year. In the young adult 
population, the survey we have here at Energy and Commerce 
Committee is looking at 145 to 185 percent. Families have 
already seen their insurance go up $3,000 per family since this 
law was passed. So what do I tell people that are coming to my 
town halls and saying but the President promised my premium was 
going to go down $2,500 a year. What do we tell these people?
    Mr. Cohen. I think you tell them that they should shop on 
the marketplace to find the plan that is best for their family 
and is the most affordable for them. And that is what we expect 
to be able to provide for people.
    Mrs. Blackburn. But it is going to cost them more.
    Mr. Cohen. I think healthcare costs have been going up year 
after year after year long before we ever had Obamacare, so it 
has nothing to do with--the fact that the costs go up----
    Mrs. Blackburn. The percentage is----
    Mr. Cohen [continuing]. Isn't----
    Mrs. Blackburn [continuing]. Greater, and I think that you 
probably are aware of that. Do you believe that the increases 
are tied to the taxes and the mandates in Obamacare? Do you 
believe that that is any of the driver?
    Mr. Cohen. The impact of the taxes on healthcare premiums 
is very small by all accounts.
    Mrs. Blackburn. $165 billion is small?
    Mr. Cohen. The impact on premiums of the taxes is very 
small.
    Mrs. Blackburn. You think that $165 billion of new taxes 
has a small impact on premiums. What do you call----
    Mr. Cohen. And----
    Mrs. Blackburn [continuing]. Large?
    Mr. Cohen. And we are going to have----
    Mrs. Blackburn. How would you classify small and large?
    Mr. Cohen. We have a reinsurance program that is going into 
effect that is estimated to reduce premiums from what they 
otherwise would have been by 10 or 15 percent.
    Mrs. Blackburn. Let me ask you a little bit about that. I 
would like to know if you find it odd or ironic that we are now 
subsidizing insurance purchase while at the same time we are 
making insurance more expensive by the mandates and taxes that 
are being piled on this? Thus, we have got increasing subsidies 
and we are putting taxpayers on the hook for even higher 
federal spending. Do you find that odd or ironic?
    Mr. Cohen. I think that Americans are paying for the cost 
of uncompensated care today. When people show up at the 
emergency room and they don't have coverage and they get 
treatment, those costs have to be passed on to all----
    Mrs. Blackburn. So you are comfortable----
    Mr. Cohen [continuing]. Businesses----
    Mrs. Blackburn [continuing]. With the costs going up?
    Mr. Cohen [continuing]. So we are going to----
    Mrs. Blackburn. I yield back.
    Mr. Cohen. We are going to move to a system where we have 
much more insurance coverage. We are going to spread the cost 
over more people, and that will be to the benefit of all 
Americans.
    Mr. Murphy. I thank the gentlelady from Tennessee. I might 
also add on that issue of uncompensated care, I hope that is an 
area you will submit more questions for the record so we will 
have those.
    I ask unanimous consent that the written opening statements 
of members be introduced into the record of those who wish 
that. And without objection, the documents will be entered in 
the record.
    And in conclusion, I would like to thank all the witnesses 
and members that participated in today's hearing, which would 
be you, Mr. Cohen. I remind members they have 10 business days 
to submit those other questions for the record, and I ask that 
Mr. Cohen will respond promptly to our questions.
    I appreciate you being here today. I am sure we will be 
seeing you again soon. Thank you very much.
    Mr. Cohen. Thank you.
    Mr. Murphy. The committee is adjourned.
    [Whereupon, at 12:05 p.m., the subcommittee was adjourned.]
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