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



 
           OBAMACARE IMPLEMENTATION: WHO ARE THE NAVIGATORS? 

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

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 16, 2013

                               __________

                           Serial No. 113-82

                               __________

Printed for the use of the Committee on Oversight and Government Reform

         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

87-014 PDF                       WASHINGTON : 2014 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Printing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001


              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        Vacancy
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on December 16, 2013................................     1

                               WITNESSES

Ms. Carolyn Goodwin, President-Elect, Dallas Chapter, Texas 
  Association of Health Underwriters
    Oral Statement...............................................     9
    Written Statement............................................    11
Mr. Randy Farris, M.D., Regional Administrator, Centers for 
  Medicare and Medicaid Services
    Oral Statement...............................................    19
    Written Statement............................................    21
Mr. Kevin Brady, Deputy Chief of Staff, Texas Department of 
  Insurance
    Oral Statement...............................................    28
    Written Statement............................................    30

                                APPENDIX

Obamacare Navigator and Assister Staff Report No. 2, submitted by 
  Mr. Issa.......................................................    88
Letters from Texas Elected Officials Regarding Navigators, 
  submitted by Mr. Veasey........................................    95
Letters from Community Healthcare Centers and other groups, 
  submitted by Mr. Veasey........................................   105
Letter to Ms. Julin Rathgeber signed by 54 Legislators, submitted 
  by Mr. Veasey..................................................   108


           OBAMACARE IMPLEMENTATION: WHO ARE THE NAVIGATORS?

                              ----------                              


                       Monday, December 16, 2013

                   House of Representatives
       Committee on Oversight and Government Reform
                                           Washington, D.C.
    The committee met, pursuant to call, at 1:30 p.m., in the 
Eisemann Center/Hill Performance Hall, 2351 Performance Drive, 
Richardson, Texas, Hon. Darrell E. Issa [chairman of the 
committee] presiding.
    Present: Representatives Issa and Farenthold.
    Also Present: Representatives Sessions, Burgess, 
Neugebauer, and Veasey.
    Staff Present: Brian Blase, Senior Professional Staff 
Member; Will L. Boyington, Press Assistant; Adam P. Fromm, 
Director of Member Services and Committee Operations; Emily 
Martin, Counsel; Sarah Vance, Assistant Clerk.
    Chairman Issa. Good afternoon. Before I begin, I want 
everyone to understand this is a hearing of the U.S. Congress. 
It is not a town hall meeting. And I say that because we are 
bound by rules of the House of Representatives, and we will 
adhere to those rules. The only exception that we do during 
field hearings is anyone who has any letters or other 
information that they want the committee to consider on this or 
other issues, our staff will take them back. Additionally, we 
will give you a card in order to contact us if you want to send 
additional information. But please understand that we are bound 
by the rules of the House for this hearing, and we will 
strictly adhere to them.
    With that, the hearing will come to order.
    The Oversight Committee's mission statement simply is we 
exist to secure two fundamental principles. First, Americans 
have a right to know that the money Washington takes from them 
is well spent. And second, Americans deserve an efficient, 
effective government that works for them.
    Our duty on the Oversight and Government Reform Committee 
is to protect these rights. Our solemn responsibility is to 
hold government accountable to taxpayers, because taxpayers 
have a right to know what they get from their government. It is 
our job to work tirelessly in partnership with citizen 
watchdogs to deliver the facts to the American people and bring 
genuine reform to the Federal bureaucracy.
    I now ask unanimous consent that the following 
individuals--the gentleman from Texas, Mr. Sessions; the 
gentleman from Texas, Mr. Burgess; the gentleman from Texas, 
Mr. Neugebauer; and the gentleman from Texas, Mr. Veasey--be 
allowed to participate in today's hearing even though they are 
not members of the committee but are members in good standing 
of the U.S. House of Representatives.
    Without objection, so ordered.
    I will now recognize myself for a short opening statement.
    We come to Dallas today, or more specifically to 
Richardson, Texas, to hold a field hearing on the Affordable 
Care Act, Obamacare Implementation: Who are the Navigators?
    Over the past several months, as we have begun to and now 
rolled out the President's signature legislation, the law has 
faced one after another problem. First and most notably 
publicly, over $600 million was spent on a website that simply 
didn't work. But that is but the tip of the iceberg. We now 
know there are fundamental unanswered questions, complications 
and, quite frankly, flaws in the Affordable Care Act that need 
to be addressed.
    The question of administering the website and patching the 
security holes that existed on launch date and may still 
threaten the American people's private information is, of 
course, paramount. But long after the website is fixed, we will 
still have the question of millions of people who have lost 
their health insurance even though the President promised if 
you like your healthcare, you can keep it; if you like your 
doctor, you can keep him, period.
    We know that that, in fact, is not going to happen. Many 
times more people have lost their healthcare than have gained 
an opportunity under the Affordable Care Act. That is not to 
mean that it isn't the law of the land. It means we must fix 
it.
    A number of other areas have been explored by this 
committee, and today we are going to explore a major portion of 
the Affordable Care Act rollout. Today's hearing focuses 
specifically on the administration's Navigator program. The 
purpose of Navigators is to explain Obamacare to people and 
facilitate enrollment into coverage. This was approved in the 
law and is anticipated in every sense. However, what has not 
been anticipated is such failures as defined that somebody who 
has a history of identity fraud, healthcare fraud, or some 
other felony conviction might very well receive the job of 
being a Navigator.
    This and other areas we will hear about today represent 
areas in which government must do better. The expectation of 
the American people is that people who represent the power of a 
mandated law and a service that the taxpayers pay for will, in 
fact, receive a trained individual with an acceptably clean 
record and an expectation of their privacy.
    The HHS training program for Navigators will only provide 5 
to 20 hours of training, and in some cases online-only 
training. The Navigators' exams are conducted online and 
individuals may attempt to take these exams an unlimited amount 
of times. As we all know, an online exam also can be taken by 
somebody else pretending to be the Navigator.
    Despite these expected lack of experiences and lack of 
training, HHS officials testified that it would be logical for 
Navigators and Assisters to conduct outreach activities prior 
to completing their training. I repeat, even with the short 
amount of training, even with the training being online, even 
with the possibility that the person taking the test one, two, 
10 or 100 times, finally getting someone else to take the test 
for them, even though that low standard is there, HHS has said 
that it may be necessary or reasonable for them to go out in 
the field prior to this testing and training.
    One CMS whistleblower warned that because it is not 
possible to track every computer and hard drive used by 
Navigators to gather applicants' personal identifiable 
information, the fact is sensitive information may be 
vulnerable to, among other things, viruses on their individual 
computers.
    Top HHS officials acknowledge concerns that con artists and 
identity thieves will pose as Navigators, and testified that 
the problems will only increase as the Affordable Care Act is 
fully implemented.
    We are now 2-and-a-half months into the rollout. We 
certainly want to hear about things that were wrong at the 
launch. We, more importantly, want to know have they been fixed 
or are they to be fixed.
    In Dallas, Navigators have been caught on camera advising 
individuals to commit tax fraud by under-reporting income in 
order to gain higher subsidies. Our committee more than two 
years ago dealt with a similar situation with fraud in the 
housing market that helped contribute to people having homes 
they could not afford. We cannot have a repeat of the Acorn-
like activities that led to too many people believing that 
there was something for nothing and ultimately ending up with 
nothing when they started with something.
    Finally, this hearing is titled ``Who are the Navigators?'' 
We invited Dr. Beverly Mitchell-Brooks, the CEO of the Dallas 
Urban League, to testify today. The Dallas Urban League 
received $376,800 in Federal taxpayer dollars to fund its 
Navigator program. Unfortunately, despite repeated requests, 
Dr. Brooks would not make herself available to testify today.
    We are anticipating a Democratic member of the U.S. House 
being here, and I would like to publicly express that that is a 
good thing. We need to have a diversity of opinions. We need to 
have people who are working and believe that this program has 
sufficient merit to go forward with, and hopefully would 
contribute positively to the dialogue of those items which can 
be fixed on a cooperative basis. Notwithstanding that, we will 
go forward with the hearing and allow additional information, 
including Dr. Brooks' testimony be placed in the record if she 
so wishes to submit one.
    I now with great pleasure recognize my colleague and fellow 
member of the committee, Subcommittee Chairman Farenthold. And 
I will give you the mic.
    Mr. Farenthold. Thank you, Chairman Issa. It is an honor 
and a privilege to be here in Richardson, Texas to be a part of 
this very important hearing. My wife grew up in Richardson, so 
it is great to be back.
    Unfortunately, this area is also ground zero of some of the 
problems that are beginning to appear with the Navigators. We 
have the tape that the chairman referred to, and what we are 
doing here today as government watchdogs and in partnership 
with various outside organizations, we are looking to find ways 
to make the system better. We are looking for ways to protect 
taxpayers.
    Unfortunately, under the Affordable Care Act and the way it 
is being implemented, it really appears that folks' private 
information is going to be in jeopardy, be it through problems 
with the website or be it through Navigators. Even the most 
conscientious Navigator may not have the tools necessary to 
keep the data private.
    So we have a real problem here that we need to look for a 
solution for and look for a way to protect folks' information. 
Unfortunately, we are losing trust in the government. We have 
had such a plethora of scandals in recent months that the 
American people are losing confidence in their government, and 
that is a bad thing. I mean, we can look to Fast and Furious. 
We can look to Benghazi. We can look to the IRS scandal. We can 
look to the broken promises of if you like your health 
insurance, you can keep it, period. And Americans are losing 
faith with their government.
    We have to make efforts to regain that faith, the faith of 
the American people, and we have to work towards good 
government and transparency. That is part of what this 
committee does, and it is my honor and privilege to be a part 
of it.
    And I will yield back the remainder of my time.
    Chairman Issa. The gentleman yields back. Thank you.
    And we now go to the chairman of the Rules Committee of the 
U.S. House, and the reason that we are here today was an 
invitation to hold this hearing in the Dallas/Fort Worth area, 
Mr. Sessions.
    Mr. Sessions. Mr. Chairman, thank you very much, and good 
afternoon. And I do want to begin by thanking you, Chairman 
Darrell Issa, the chairman of the Government Reform and 
Oversight Committee.
    This is one of a series of field hearings held across the 
country that Chairman Issa and other members of Congress have 
participated in which lead the investigative shortcomings of 
what is known as the Affordable Care Act or Obamacare. And I 
appreciate your leadership on this and so many issues that are 
important to the American people.
    I would also like to thank today the City of Richardson, 
Mayor Laura Maczka, the City Council members, as well as the 
people here at the Eisemann Center in Richardson who have made 
this not only a great place to be but their hard work that was 
included also.
    Additionally, I would like to thank my fellow members of 
Congress who are in attendance today: as you have heard, 
Congressman Blake Farenthold from Corpus Christi, who is a 
member of this Government Reform Committee, here to lend his 
expertise and ideas to this hearing; Congressman Michael 
Burgess, a member of the Energy and Commerce Committee and the 
Rules Committee. I also want to thank the gentleman Randy 
Neugebauer from Lubbock, Texas who is here, who has graciously 
agreed to be here as part of this panel. We also recognize that 
Congressman Marc Veasey, a brand new member of Congress who 
responded that he would be here today, and I fully expect that 
he will in a few minutes.
    I would also like to thank our witnesses who are in 
attendance today. We have the gentleman, Mr. Kevin Brady, 
Deputy Chief of Staff of the Department of Insurance for the 
State of Texas; Dr. Randy Farris, my friend from Centers for 
Medicare and Medicaid Services; and Carolyn Goodwin, President-
Elect of the Texas Association of Health Underwriters.
    Signing up for healthcare is one of the most important and 
daunting tasks that Americans do today. Unfortunately, over the 
last few months, what is known as Obamacare has made an already 
difficult process even more confusing and daunting for 
America's families.
    Initially, President Obama promised that if you liked your 
healthcare plan, you could keep it. Since then, millions of 
Americans have received cancellation letters informing them 
that they can no longer keep their preferred health insurance 
plan.
    President Obama also promised the American people that if 
they liked their own doctor, they could keep their own doctor. 
In reality, many people all across America are losing access to 
their existing and preferred doctor under Obamacare.
    But the confusion does not end with the administration's 
broken promises. As Americans are forced to choose new 
healthcare plans, they are facing higher premiums, as I do as a 
member of Congress for my healthcare. Exactly as I had it 
before is doubling in price, and I have a new $2,000 
deductible, higher out-of-pocket costs, and changing networks. 
The American people are frustrated with these changes, and it 
is simply adding to the confusion surrounding their healthcare.
    And then we heard this, and I would have you look at the 
screen.
    [Video shown.]
    Mr. Sessions. Mr. Chairman, after learning that Navigators 
here in North Texas were actively encouraging applicants to lie 
on their applications, I asked you to hold a field hearing of 
the Government Reform and Oversight Committee to help us to 
better understand who are these Navigators and what is their 
role.
    I look forward to the testimony that we hear today to help 
us not only to better understand this program but to hold 
accountable the people who are hired with Federal money and who 
really represent the American people.
    Mr. Chairman, I yield back my time.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from Texas, Mr. Burgess.
    Mr. Burgess. I want to thank the chairman of the Oversight 
and Government Reform Committee, the chairman of the Rules 
Committee for calling this important hearing and allowing the 
committee to hear how the Affordable Care Act is specifically 
affecting Texas.
    I have heard from a lot of constituents about how the 
Affordable Care Act is having employers drop health coverage 
for their employees, raising premiums and preventing 
individuals from keeping their doctor and their health plan.
    The President promised if you like your plan, you can keep 
it; if you like your doctor, you can keep your doctor; and that 
the law would cut annual health insurance costs for a family by 
$2,500. We now all know that that was not true.
    In the midst of these broken promises, even more concerning 
is the issue that Federal officials have assigned much of the 
responsibility for education and outreach to Federally funded 
Navigators. Sixty-seven million dollars, $13 million more than 
originally budgeted, has been given out to Navigators across 
the nation, all at taxpayers' expense. So it begs the question: 
Who are the Navigators?
    And as your representative for the people in Denton County, 
I am responsible to ensure that my constituents are protected 
and that their money is well spent. I am concerned that the 
Navigators are not properly vetted or trained. The Federal 
requirements to become a Navigator are inconsistent, opening 
individuals up to possible abuse of personal information.
    In an effort to address this issue further, several members 
of the Texas delegation--in fact, I think most of the 
Republican members of the Texas delegation--wrote a letter to 
Governor Perry, encouraging that the governor use his authority 
to ensure that the Navigators that operate in Texas are 
properly vetted, trained and certified.
    So I certainly welcome our witnesses today.
    Dr. Farris, it is always good to be with you. We have had 
an opportunity to visit several times over the past 11 years, 
and I always enjoy the time that we get to spend together.
    But I welcome our witnesses to Richardson, and I will yield 
back my time.
    Chairman Issa. Thank you.
    We now go to Mr. Neugebauer.
    By the way, my chief of staff is Neugebauer, and I 
apologize. I have been doing that to you for a decade. Thanks, 
Randy.
    Mr. Neugebauer. Thank you, Chairman Issa.
    It is good to be here in Richardson, Texas, and also in the 
home district of my good friend, Pete Sessions. I appreciate 
the Chairman taking these hearings out to the American people. 
There is probably no greater responsibility that members of 
Congress have, and that is to do oversight, making sure that 
the government is doing what it is supposed to be doing, and 
doing it in a way that is effective, and doing it in a way that 
is in the benefit of our country.
    You know, we have had a lot of hearings, a lot of 
discussions in a number of our committees about the Affordable 
Care Act, or Obamacare, as it is referred to. I just recently 
am on the Science Committee as well, and we had a hearing about 
the website. As you know, the website has had a number of 
problems, obviously people still having a difficult time 
getting into the website.
    But I think one of the more troubling things to me was to 
learn that this website may be vulnerable to attacks, cyber 
attacks. And why is that important to you and the American 
people and families all across the country? Because some very 
sensitive information is being put into this system. So 
basically, if people can hack into these systems, then they can 
get access to personal information on families and basically 
possibly have their identities stolen.
    The other thing that is going on and that won't be a part 
of this hearing today is the discussion that we are hearing 
from hundreds of letters that I know I am getting in my office 
and I think other members are, too, and that is that we are 
learning that all of the promises that were made about 
Obamacare aren't coming true.
    We are hearing stories about families losing access to the 
health insurance policy, for example, that has been taking care 
of their little girl that has cancer.
    We are learning that the premiums that were affordable to 
some families in the past now are not going to be affordable in 
the future.
    We are also hearing, unfortunately, about families that are 
going to lose access to maybe a family physician that has been 
serving that family for 20 or 30 years and now that physician 
will no longer be a part of their plan.
    These are very unfortunate things, and affecting a very 
sensitive and a very important part of American families, and 
that is their healthcare. So I think this is an appropriate 
hearing today.
    One of the things that concerns me about the Navigators--
and we want to learn more about this program today--is that 
basically we have people that aren't being really vetted that 
are going to be accessing very sensitive information about 
families, about their Social Security number, about their 
income. So what happens when they have access to this 
information? If they wanted to use it in an inappropriate way, 
they could basically steal someone's identity, basically 
impacting their credit and their future.
    So I think it is important that we know what is going on, 
what is being done. I want to applaud the governor and the 
state legislature for the things and the steps that they have 
taken to make sure that people that are doing this basically 
have some standard.
    What we are also, I think, going to hear today is that, you 
know, the people as a profession that advise people on 
healthcare have to have a tremendous--a lot more training than 
these Navigators are. And why is that important? Because this 
is a very important decision, and one of the things we want to 
make sure is that families have the information necessary to 
make the very best decision on their behalf.
    I thought it was interesting when some of the people in my 
district began to learn that their identity could be stolen, 
and one of my constituents wrote me a letter and said, ``You 
mean this is going to be another promise, if you like your 
identity, you can keep it?'' Well, let's hope that the 
President, this is a promise that he can keep, because that is 
a very important part.
    So, Chairman Issa, I want to commend you for the oversight 
that you and your committee have done, as well as some of the 
other committees, because the American people deserve this kind 
of oversight. This is in their best interest.
    And with that, I yield back.
    Chairman Issa. I thank you for your kind comments.
    The gentleman yields back.
    We now go to the gentleman from Texas, Mr. Veasey.
    Mr. Veasey. Thank you, Mr. Chairman, members and witnesses. 
I also want to extend a warm welcome to the members of the 
committee, particularly from out of town, for coming all the 
way to Texas for this very important field hearing.
    I am glad to be here today because I would like to tell you 
a little bit about how the Affordable Care Act is helping 
constituents in the district that I represent, the 33rd 
Congressional District of Texas.
    I represent the congressional district that has the highest 
number of uninsured in the entire country, or the highest rate 
of uninsured in the entire country. Some of the insurance 
companies have discriminated against them because they had 
preexisting conditions. They have been allowed to charge women 
more than men in many cases, and they have been allowed to sell 
junk policies that collect premiums up-front but then don't pay 
for individuals' hospital bills when they get sick.
    But now that the Affordable Care Act is the law of the 
land, it has already begun helping them in many ways, and it 
will help them even more in the weeks and months and years to 
come. Here in Texas and all across the country, millions of 
adults now have health insurance on their parents' plans. They 
can stay on it until they are 26. Millions of children with 
preexisting conditions will no longer be denied coverage. Tens 
of millions of seniors have already received free preventive 
services, including new annual wellness visits, and consumers 
have received rebates from their insurance companies which are 
now required to spend at least 80 percent of premiums on 
healthcare.
    I understand that today's topic is specifically about the 
Navigator program, and I know that the purpose of this program 
is simple. It is to educate and enroll citizens in health 
insurance. Reducing healthcare costs requires that everyone be 
covered and that everyone be in the insurance pools. So 
Navigators help people get healthcare coverage, some of them 
for the very first time in their lives, and that helps them to 
lower healthcare costs for everyone in the country. The model 
for this enrollment effort is well established.
    A very similar model was used here more than two decades 
ago to implement the state's Children's Health Insurance 
Program. The Texas Navigators are trusted. They are community 
organizations and non-profits such as the United Way and the 
Council on the Aging. They are also the churches in our 
neighborhoods and the Chambers of Commerce.
    Last month, when CMS was made aware that some employees of 
the Urban League of Greater Dallas encouraged applicants to 
provide false information on applications, they immediately 
decertified the two individuals from participating in the 
Navigator program. Of course, everyone here agrees that no one 
should ever tell applicants to lie on their forms, and that is 
why I was encouraged that the Urban League and CMS took swift 
action in firing those who engaged in that activity. They give 
this program a bad name. But make no mistake, they are the 
exception. They are not the rule.
    So while I am happy that the committee came to Texas today 
to talk about these individuals, now that you are here, I hope 
that we can talk about a much more significant problem, and 
that is why our governor, Rick Perry, is refusing to expand the 
state's Medicaid program.
    [Applause.]
    Mr. Veasey. We desperately need Medicaid expansion in this 
state. The governor is refusing to accept billions of dollars 
in Federal assistance that we so desperately need, and why he 
is doing that, I can only imagine that it is for purely 
political reasons. Governor Perry has denied those constituents 
that I talked about earlier, where I have the highest rate in 
the entire country. He has denied them coverage. Under the 
Affordable Care Act, the Federal Government would pay states 
100 percent of the cost of this expansion the first three years 
and 90 percent after that, and yet the governor would rather 
leave $9 billion on the table for our healthcare that our state 
desperately needs.
    So, Mr. Chairman, thank you for coming all the way to 
Richardson, Texas to hold this hearing about a handful of 
people that we agree absolutely have no place in this program, 
but it is high time we started talking about the millions of 
people right here in this state who absolutely have no 
insurance at all and they are being denied coverage under the 
Affordable Care Act.
    Thank you.
    [Applause.]
    Chairman Issa. Thank you.
    I would caution the audience that neither positive nor 
negative is encouraged during an official hearing.
    Members may have seven days to submit additional opening 
statements and extraneous material for the record.
    We now recognize our first panel of witnesses.
    Mr. Kevin Brady is the Deputy Chief of Staff at the Texas 
Department of Insurance. Welcome.
    Dr. Randy Farris is the Regional Administrator for the 
Centers for Medicare and Medicaid Services. Thank you again for 
being here.
    And Ms. Carolyn Goodwin is the President-Elect of the Texas 
Association of Health Underwriters. Thank you also.
    And if you would all, pursuant to the rules, please rise to 
take the oath and raise your right hands.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    Please be seated.
    Let the record reflect that all witnesses answered in the 
affirmative.
    In order to allow time, we have given you the universal 
red, yellow and green that we all drive by. Green, of course, 
means go. Yellow means go even faster. And red means you didn't 
make it through the light. So if you would try to stay within 
that 5 minutes, we would appreciate it. It would leave more 
time for answers. I won't cut anyone off mid-sentence, but bear 
in mind that your entire opening statements will be placed in 
the record whether you stick to those or not.
    So, with that, I will recognize ladies first, Ms. Carolyn 
Goodwin.

                       WITNESS STATEMENTS

                  STATEMENT OF CAROLYN GOODWIN

    Ms. Goodwin. Thank you very much, Mr. Chairman. I 
appreciate the honor of being ladies first. And I need to 
correct your record. I am not the President-Elect of the Texas 
Association. I have already been there, done that. I am the 
President-Elect of the ----
    Chairman Issa. Of the national ----
    Ms. Goodwin.--Dallas chapter.
    Chairman Issa. The record is hereby corrected.
    Ms. Goodwin. You have my written testimony, and I don't 
want to take the time to read it, but I do want to add some 
additional comments to that testimony for those in the 
audience.
    I have been in the insurance business for slightly over 20 
years, and my job is to help small groups and individuals 
uncover the maladies and the benefits of health insurance, and 
help them meet their objectives.
    There are a couple of things that I would like to talk 
about with regard to what is the difference between a Navigator 
and an agent and broker, which is what I am. A Navigator is 
hired by one of the agencies. They are an employee who has a 
job. They work with people either on the phone or help guide 
them through the website.
    Agents and brokers do the very same thing. We do it in the 
private marketplace, except that there are 70,000 agents who 
are now certified to work on the marketplace itself.
    Now, the difference between me and a Navigator, I have to 
have 40 hours of education. That is to get my license. And then 
I have to take 30 hours of continuing education every two 
years, including professional ethics, to keep my license, and I 
must promise the carriers that I will be forever honest and 
true. I also have to carry a professional liability policy that 
is probably $1 million in face value, and if I do something 
dishonestly, I don't lose my job, I lose my livelihood. I lose 
my license. I can't do what I do today.
    If I disclose PHI--that is the protected health 
information--and I do it for profit, I can go to jail. If one 
of my client employers does the same thing, they too could go 
to jail. So there is a significant amount of risk to us to act 
the way we do.
    Now, do we just sell insurance? No. Much happens after the 
sale of the policy, and I am going to give you an example of 
what happened to me last week. I have a very dear friend who 
has an individual policy, and for some reason the systems in 
that policy said she had no prescription coverage. She was on 
hold with the carrier for over two hours without result. She 
came to me. I called the company. I got it corrected, and she 
had her prescriptions within 30 minutes. That is what agents do 
on a daily basis.
    I don't think Navigators have that ability. They can't talk 
to the carrier. They can't solve the problem that the insured 
has.
    If I could make one political statement, the Affordable 
Care Act is not the promised healthcare reform. It is health 
insurance reform. The cost of care and the increasing mandates, 
both at state and Federal levels, continue to drive the cost of 
insurance, and until those items are addressed, we are going to 
have those escalated premiums over and over and over again.
    Nothing has been done to control the cost of care. 
Everything has been done to tell insurance companies how to run 
their business.
    I think I am done.
    [Prepared statement of Ms. Goodwin follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Issa. I thank you.
    We now go to Dr. Farris.

                STATEMENT OF RANDY FARRIS, M.D.

    Dr. Farris. Thank you, Mr. Chairman, and good afternoon, 
Mr. Chairman and members of the Texas delegation. Thank you for 
the opportunity to discuss CMS Affordable Care Act outreach 
efforts, including the Navigator program. The Dallas Regional 
Office plays an important role in working with community and 
consumer groups, providers and other stakeholders throughout 
the region to ensure that people understand the Affordable Care 
Act and their new coverage options.
    Over my 15 years at CMS, I have very much appreciated the 
opportunities to work closely with many of you, as well as your 
staff, on critical public health issues like emergency 
preparedness, nursing home safety, quality improvement and Part 
D enrollment and outreach efforts. During the Medicare Part D 
rollout, we worked extensively with bipartisan congressional 
offices to help seniors understand their new options and sign 
up for prescription drug coverage. These efforts included 
participating in congressional town halls, meeting with medical 
societies and editorial boards, and helping with constituent 
casework issues.
    The Affordable Care Act requires similar types of outreach. 
CMS is pursuing a variety of ways to provide outreach, 
education, and enrollment assistance to the uninsured and 
others seeking coverage through the marketplace. The Navigator 
program enables qualified and well-trained individuals and 
organizations to help consumers find and enroll in healthcare 
coverage while adhering to standards and requirements designed 
to ensure that taxpayer money is used appropriately on these 
programs.
    Navigators are helping consumers prepare electronic and 
paper applications to establish eligibility, to find out if 
they are eligible for affordability programs like premium tax 
credits, cost-sharing reductions and Medicaid, and enroll in 
coverage through the marketplace. Navigators also provide 
outreach and education to consumers to raise awareness about 
the marketplace.
    As Texas has one of the highest numbers of eligible 
uninsured residents in the country, eight grantees received 
nearly $10.9 million in Federal Navigator grants for work in 
the state. These grantees are groups and organizations with a 
proven ability to reach out to likely marketplace consumers in 
their local communities, many of which are located in the 
Dallas-Fort Worth area.
    For example, the United Way of Metropolitan Tarrant County 
has served the people in the Fort Worth and Arlington areas of 
Texas for over 90 years and is working across the state to 
promote enrollment in the marketplace. The Navigator grant 
program, its application process, its terms and conditions and 
program oversight are informed by the Department of Health and 
Human Services experience with grants management.
    Navigators are trained on providing consumers with fair, 
accurate, and impartial information, along with training on 
standards to keep consumers' personal information private and 
secure. Marketplace Navigators have regular refresher 
opportunities where they can share updates, receive 
information, and address issues as they are in the process of 
helping people in their communities.
    CMS takes allegations of suspicious activity and fraud 
seriously and actively monitors complaints about potential 
wrongdoing. Last month, CMS was made aware of incidents in 
which employees of one Navigator grantee, the Urban League of 
Greater Dallas, instructed consumers to falsify information on 
their marketplace applications. CMS took immediate action to 
officially decertify the Navigators identified in the videos 
and to inform the National Urban League and its sub-grantee in 
Dallas that they were non-compliant with Navigator regulations. 
CMS issued a detailed corrective action plan outlining the 
remedial actions that the National Urban League must take to 
continue as a Federal Navigator grantee.
    The National Urban League responded by suspending the 
employees involved and has fully complied with the new 
requirements. CMS also quickly issued a corrective action plan 
to Houston-based Navigator Change Happens when a second 
incident of improper conduct by an individual Navigator was 
brought to our attention. CMS has alerted all Navigators 
operating in the Federally-facilitated marketplace to emphasize 
that encouraging consumers to provide inaccurate information is 
against the rules of their agreements and could potentially 
subject the Navigator and consumer to prosecution.
    CMS will continue to vigorously monitor Navigator grantees 
and the Federally-facilitated marketplace to ensure that 
funding goes to the applicants who are most qualified to serve 
their communities in this capacity and to ensure that they are 
well-trained in meeting objectives and using grant funding 
appropriately.
    Thank you for the opportunity to speak today on this 
important topic, and I will be happy to answer any questions 
that you have.
    [Prepared statement of Dr. Farris follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Issa. Thank you, Dr. Farris.
    We now to go to Mr. Kevin Brady.

                    STATEMENT OF KEVIN BRADY

    Mr. Brady. Chairman Issa, members of the Committee and 
members of the Texas Delegation, my name is Kevin Brady and I 
am here today on behalf of the Texas Department of Insurance. 
Commissioner Julia Rathgeber wanted to be here today but 
unfortunately she had a prior engagement. She sends her 
apologies and included a letter to each of you, which is 
included in the packet of information that we provided.
    I would like to thank you for this opportunity to be here 
today to talk about some proposed rules that my agency has 
published for public comment on Navigators.
    I would like to take just a moment to talk about TDI by way 
of background. The Texas Department of Insurance is known as 
the acronym TDI. We are charged with being the primary 
regulator of the Texas insurance market. We are charged with 
insuring fair competition, and we are charged by law with 
protecting consumers.
    In 2012, Texas consumers and businesses bought over $121 
billion in insurance premiums. We believe that makes Texas the 
12th largest insurance market in the world. To help put that 
into context, it is about the same size as the entire Canadian 
market.
    We have over 1,900 insurance companies licensed in Texas. 
That number increases to over 2,200 when all insurers with any 
type of eligibility are included. The market also includes over 
400,000 agents and other licensed entities.
    During the 83rd Texas legislative session, lawmakers passed 
and Governor Perry signed Senate Bill 1795, which requires the 
Commissioner of Insurance to set standards ensuring that 
Navigators can perform their required duties if the Federal 
standards are deemed to be insufficient.
    TDI has worked diligently to ensure a deliberate and 
transparent process throughout the implementation of this bill. 
We held an initial stakeholders meeting in September. We 
followed that with numerous teleconferences with Navigator 
groups, consumer groups, healthcare providers, and also the 
Department of Health and Human Services. We also posted a 
proposed outline of potential solutions on our website for 
potential insufficiencies that were identified by agency staff. 
The resulting rule proposal was published in the Texas Register 
on December 6th.
    The proposed TDI rules are necessary to provide a state 
solution to help and protect Texas consumers by ensuring the 
security of their private information and ensuring that they 
are able to find health coverage from the Federally-facilitated 
exchanges with the assistance of qualified Navigators. Under 
the proposed rules, entities and individuals providing 
enrollment services in the exchange would be required to 
register with TDI.
    The requirement for registration would include proof of 
U.S. citizenship or other legal status to gain employment in 
the U.S.; documentation of compliance with educational 
requirements, including privacy and ethics training; 
fingerprinting and background checks; and evidence of financial 
responsibility to protect individuals from wrongful acts.
    Navigators would be prohibited from certain functions, 
including charging consumers for providing information about 
health coverage; selling, soliciting, or negotiating health 
insurance coverage; or recommending a specific health benefit 
plan.
    While in the course of performing Navigator duties, they 
would be prohibited from electioneering activities or otherwise 
supporting the candidacy of an individual for government 
office.
    Additionally, Texas insurance code provisions related to 
privacy and the protection of personal information would apply 
to Navigators.
    TDI is going to hold two public hearings to receive public 
comment. The first public hearing will be Friday of this week, 
December 20th at 9:00 a.m. in Austin. A second public hearing 
will be on January 6th. That coincides with the closing of the 
public comment period. We would invite all parties to submit 
comment either at the hearing or in writing to TDI, and the 
proposals can change as a result of the comment received.
    Mr. Chairman, I am going to close with that but would note 
that we have additional information in the packages of 
information that we have provided, including instructions for 
providing public comment and the actual substantive 
requirements of our proposed rules.
    Mr. Chairman, thank you again for this opportunity to 
testify on our efforts of both the state and the Texas 
Department of Insurance that we are taking to protect 
consumers. I would be happy to answer any questions.
    [Prepared statement of Mr. Brady follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Issa. Thank you.
    On September 18th, this committee issued a preliminary 
staff report entitled ``Risk of Fraud and Misinformation with 
Obamacare Outreach Campaign: How Navigators and Assisters 
Program Mismanagement Endangers Consumers.'' I now ask 
unanimous consent that the update of the staff report released 
today be included in the record and used for comment during 
this hearing.
    Without objection, so ordered.
    Chairman Issa. Mr. Brady, I am a Californian and an Ohioan 
by birth, so if I miss one of these in the insurance questions, 
feel free to shame me as much as you want. But you oversee car 
insurance in this state?
    Mr. Brady. Yes, sir.
    Chairman Issa. The Federal Government tell you that you 
have to have unlimited coverage on car insurance?
    Mr. Brady. No, sir.
    Chairman Issa. Do they provide people to sign up car 
insurance at Federal expense?
    Mr. Brady. No, sir.
    Chairman Issa. Do you have worker's comp insurance in this 
state?
    Mr. Brady. Yes, sir.
    Chairman Issa. Does it provide healthcare benefits for 
people injured at work, in addition to lost wages?
    Mr. Brady. Yes, sir.
    Chairman Issa. Do they have Federal Navigators to make sure 
that people know about this and get all the benefits?
    Mr. Brady. No, sir.
    Chairman Issa. Do you have title insurance, renters 
insurance, home insurance? As a matter of fact, do you have D&O 
insurance for public companies doing business in the State of 
Texas?
    Mr. Brady. Yes to all those questions.
    Chairman Issa. Are there Navigators for any of these? Is 
there Federal funding for any of these, or are there mandates 
as to what these all have to be under Federal law?
    Mr. Brady. Not to my knowledge.
    Chairman Issa. So Obamacare is the only time, to your 
knowledge, that the Federal Government has come in and mandated 
with incredible detail what you must have and how you must have 
it for insurance in this state. Is that correct?
    Mr. Brady. Certainly on that scale. Yes, sir.
    Chairman Issa. But you still get to be responsible for any 
failures of your insurance companies. They are still state 
insurance company licenses, right?
    Mr. Brady. Yes, sir. If a company fails, we are charged 
with basically taking it over.
    Chairman Issa. This does kind of get me sometimes.
    Dr. Farris, we wrote to Secretary Sebelius asking her why 
there were no background checks for individuals who are 
Navigators and assisters and suggesting strongly that there 
needed to be. Do you know why to this day there is still no 
background checks here in Texas and around the country for 
Navigators?
    Dr. Farris. Well, as we mentioned, there are a number of 
different agencies with which we work, agencies like the 
Community Council of Greater Dallas ----
    Chairman Issa. No, I understand who you work with. What I 
want to know is when people are taking individual information, 
information that could be directly used to do identity theft, 
why is there no background check for these individuals as part 
of it?
    Dr. Farris. These individuals that work for these umbrella 
organizations like the Urban League or like the Community 
Council of Greater Dallas, these are institutions that 
traditionally provide help to people in the community who need 
it. It would not be in their best interest to hire people who 
would be felons or people who would participate in the sorts of 
activities you describe.
    Chairman Issa. Well, Dr. Farris, let me follow up on that 
quickly. You say it wouldn't be in their interest, but in that 
one video, it is in the individual's best interest to pay less, 
and if they simply lie and say they don't smoke when they do, 
that is in their best interest. If you have individuals who 
only care about getting the highest subsidy for people and the 
lowest cost, and you don't check them for whether or not they 
are con men, how is it that the interest of protecting the 
interest of the taxpayer is going to align with their best 
interest?
    And with all due respect to charity organizations, non-
profits, if they bring people in, brand new people to do this--
this is a new job--and they don't do background checks and you 
don't require background checks, how do we know that the 
taxpayer dollars are being well spent?
    Dr. Farris. Well, we acknowledge that what happened with 
regard to the Navigators in the film that you played was 
absolutely wrong. There is absolutely no reason for people to 
be encouraged to lie. That is not in anyone's best interest.
    Chairman Issa. It is in the best interest of the person who 
pays less because he lies about smoking.
    Dr. Farris. But it is not in their best interest to lie 
about a program like this. It is totally wrong, and we 
acknowledge that.
    Chairman Issa. You said in your opening statement that, in 
fact, you had gone into detail and had all these things. What 
is it that you have insisted on these organizations doing that 
will prevent this in the future?
    Dr. Farris. We work very closely with all of the Navigators 
to make certain that they receive training on the protection of 
personally identifiable information. We make certain that ----
    Chairman Issa. You work closely. You just said that you 
shop this out to other individuals and they get to do it 
online.
    Dr. Farris. CMS provides training that is ----
    Chairman Issa. In-person training?
    Dr. Farris. Weekly training that we do online and that we 
do with webinars to train the Navigators on what their 
responsibilities are with regard to protecting information with 
regard to what they need to impart to people who would like to 
sign up. These take place weekly.
    Chairman Issa. Doctor, I said in my opening statement that 
anybody could sit at the computer screen and take the test for 
somebody else. Anybody could be at the webinar or, quite 
frankly, be in the kitchen making breakfast. How is it you know 
that you are working closely when, in fact, they are not in the 
room is actually occurring?
    Dr. Farris. We know because of the organizations that serve 
as the umbrella organizations for the Navigators, which are 
institutions which have great reputations and work with the 
community and have traditionally provided good help and good 
care. As I said, it would not be in their best interest to hire 
people who would not represent them well.
    Chairman Issa. Well, you know, I am in the ``trust but 
verify'' business, and so far the trust has not been verified.
    [Applause.]
    Chairman Issa. Ms. Goodwin, I am just going to close with a 
quick question to you. You mentioned it, but I think it is 
worth asking one more time.
    Ms. Goodwin. Yes, sir.
    Chairman Issa. Anyone in your state, in the State of Texas, 
who sells insurance or, in fact, even participates in that 
process ----
    Ms. Goodwin. Correct.
    Chairman Issa. The assistant that takes phone calls and 
provides follow-up information, if you will, your assistants, 
aren't they all in this state covered by the requirement that 
you know who they are and that they have tangible training and, 
in fact, they be bonded?
    Ms. Goodwin. Yes, sir. They are, and in our state, to 
perform any duties described as the business of insurance, you 
must have a license through TDI, go through the training and go 
through the continuing education. If you are going to conduct 
the business of insurance, you must be licensed.
    Chairman Issa. Well, that would have served us well, I am 
sure, here in Texas.
    Mr. Farenthold?
    Oh. Oh, I am sorry. I apologize.
    Mr. Veasey, it is tradition to go to the members of the 
committee and then the non-members of the committee. So I don't 
want it to be a slight, but we will go to you right after Mr. 
Farenthold.
    Mr. Veasey. Absolutely.
    Chairman Issa. Mr. Farenthold?
    Mr. Farenthold. Thank you, Chairman Issa.
    I will start with a question for Mr. Brady.
    You listed out a number of requirements that Texas is 
trying to put on Navigators, and they all seem like commonsense 
requirements that would make a lot of sense, including some 
background checks and such.
    But do you think knowledge of all the information and rules 
within the Texas law is something that can be imparted in a 20-
hour-or-less training session for a Navigator, along with all 
the information necessary to be a Navigator?
    Mr. Brady. I guess the best benchmark that I have is the 
requirements that we have for insurance agents. They vary 
somewhat. We have a lot of different types of agent licenses, 
and the requirements are a little different from license to 
license. But one thing that is required is a pre-licensing 
examination, and the applicant has to pass the exam with a test 
----
    Mr. Farenthold. Do you have to appear in person to do that?
    Mr. Brady. Yes, sir. It is a proctored examination.
    Mr. Farenthold. So unlike a Navigator who can sit 
anonymously behind a computer and do it, you show up and prove 
who you are to take the test.
    Mr. Brady. Yes, sir.
    Mr. Farenthold. All right. Let me ask you another question. 
If I were to go to a private insurance agent in Texas, is there 
a way for me to verify that that person is properly licensed 
with the State of Texas and has passed these exams?
    Mr. Brady. The Department licenses agents. They issue 
licenses that agents can show the license.
    Mr. Farenthold. All right. Great. Now, let me ask Mr. 
Farris, is there a way for somebody to tell whether someone is 
a certified Navigator or is just posing as a Navigator? I read 
some reports of some scam artists offering to get people 
Obamacare cards and things like that. What mechanism is in 
place that I can ensure that someone I am talking to or one of 
my constituents is talking to for help with Obamacare has 
actually gone through this extensive 20-hour training course?
    Dr. Farris. Yes. The Navigators who complete the training, 
pass the test, do receive certification that they are certified 
Navigators. If you would like to know if the Navigator that you 
would like to deal with has achieved that certification, they 
do have the certification with them.
    However, you can look on the ``Finding Local Help'' on the 
website and they can tell you where the umbrella organizations 
are in your community that are responsible for the Navigators, 
and then working through that way, you can find out a 
particular Navigator and be assured that that Navigator has 
received a certification.
    Mr. Farenthold. Okay. Does that part of the website work?
    Dr. Farris. That part of the website works.
    Mr. Farenthold. All right. Let me go now to Ms. Goodwin.
    We have this extensive Navigator system that we have 
created. Was this even necessary, or is this something that 
could have fallen within the purview of normal insurance 
agents? Could you guys have taken this on, and would it have 
been economical for you all to take it on, or were we forced to 
go to this more community organization type of system?
    Ms. Goodwin. In my personal opinion, I think agents could 
have taken care of it much better than it has been taken care 
of so far.
    [Applause.]
    Mr. Farenthold. All right. Well, those were the bulk of my 
questions. I don't know if we are going to have a second round 
of questions or not. I know we are tight on time, so I want to 
go ahead and let the other members get their questions in. As a 
member of the Oversight Committee, we have had, and I am sure 
will continue to have, numerous hearings on this topic, and I 
will have plenty of opportunity to do questions, while some of 
the members that we have brought in under unanimous consent 
don't necessarily have the privilege of participating in this 
committee's hearings. So I will yield back.
    Chairman Issa. I thank the gentleman.
    We now go over to the gentleman from Texas, Mr. Veasey.
    Mr. Veasey. Thank you, Mr. Chairman.
    Before I begin, I wanted to ask if I could request 
unanimous consent to enter the letters from the following 
elected officials on Navigators and the critical need for the 
Affordable Care Act.
    Chairman Issa. Without objection, so ordered.
    Mr. Veasey. And also, Mr. Chairman, I request unanimous 
consent to submit the following statements, letters from seven 
community healthcare centers, clinic Navigators and other 
groups, into the record.
    Chairman Issa. Without objection, so ordered.
    [The information follows:]
    Mr. Veasey. Thank you, Mr. Chairman.
    I wanted to talk specifically and ask questions about 
expanding Medicaid. As most of us know, one of the most 
critical features of the Affordable Care Act is its expansion 
of Medicaid eligibility to millions of low-income adults. Prior 
to the ACA, Medicaid eligibility was restricted primarily to 
low-income children, their parents, people with disabilities, 
and seniors. In most states, adults without dependent children 
are not eligible.
    Under the ACA, Medicaid eligibility can be expanded to 
cover all non-elderly adults with incomes below 138 percent of 
the Federal poverty level. The Federal Government would pay 
states 100 percent of the cost for the first three years, and 
then phase that down to about 90 percent in 2020, like I stated 
earlier in my opening comments. Are those numbers correct, Dr. 
Farris?
    Dr. Farris. Those numbers are correct, to my knowledge.
    Mr. Veasey. Okay. Dr. Farris, by not participating, the 
governor is leaving significant resources on the table that 
could be used for citizens here in the Dallas-Fort Worth 
metroplex and across the state. Is that correct?
    Dr. Farris. I can only state that every state has the 
ability to either accept or reject the Medicaid expansion. In 
the case of the State of Texas, the decision was made not to.
    Mr. Veasey. And we talk a lot about this, obviously, the 
expansion of Medicaid, but can you tell us why the expansion of 
Medicaid specifically is a very important component of the 
Affordable Care Act?
    Dr. Farris. Well, part of the reasoning behind the 
Affordable Care Act is to make certain that people who have 
traditionally been uninsured are able to have insurance 
coverage such that they can receive things like preventive 
care, such that they can get care from physicians rather than 
going to an emergency room when they are in extremis.
    When you have some sort of insurance, regardless of the 
type of insurance, you do have the ability to seek ongoing care 
as opposed to care that is rendered once a person becomes ill, 
which will make the cost of care, as we have heard earlier 
today, much lower if people have the ability to stay healthy, 
as opposed to try to get diseases treated. That was part of the 
premise of the whole Affordable Care Act, and also the premise 
of ensuring that people get health insurance.
    Mr. Veasey. One of the things that we have talked a lot 
about is the Medicaid expansion and individuals that are being 
covered or are not being covered. But I think one of the myths, 
or maybe even illusions out there, is that people are not being 
covered, and I wanted to ask Mr. Brady a question.
    As you know, Mr. Brady, under the Emergency Medical 
Treatment and Labor Act, people cannot be denied treatment when 
they arrive at emergency rooms. Is that correct?
    Mr. Brady. Sir, I am not familiar with the Act. I have a 
general impression that people that go to hospital districts 
with taxing authority generally will have their emergency needs 
met. But it is a very rough impression.
    Mr. Veasey. Dr. Farris, when people go to the medical 
emergency room and they are treated, these uncompensated costs, 
are they passed along to taxpayers? Where do these 
uncompensated costs go?
    Dr. Farris. They are passed along. And with regard to 
EMTALA, that is part of my responsibility at CMS, and my role 
as Consortium Administrator for Quality Improvement and Survey 
and Certification Operations, we ensure that people who do show 
up in emergency rooms receive a screening exam and 
stabilization through EMTALA, as you have said, and that is 
something that we are concerned about, to make certain that 
people have those screening exams.
    But part of what we hope to do is to make certain that 
people don't have to wind up in emergency rooms as a result of 
things like pneumonia or diabetes or situations that could be 
prevented by proper ongoing care.
    Mr. Veasey. Mr. Brady, I don't know if you saw this study. 
I know that you obviously see a lot of different studies come 
across your desk, but one that our staff found was that the 
Texas Health and Human Services Commission said that 
uncompensated claims for the State of Texas in 2006 were more 
than $11 billion.
    Doesn't it make fiscal sense to expand Medicaid in our 
state, which would not only provide needed care for millions 
who don't have it, but likely keep the same population from 
seeking emergency visits where they cannot pay their bills?
    Mr. Brady. Sir, I work for the Texas Department of 
Insurance in the State of Texas. The administration of that 
program is done by a completely different state agency. I am 
not familiar with the policy of that agency.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from Texas, Mr. Burgess.
    Mr. Burgess. Thank you, Chairman.
    Dr. Farris, let me just ask you for a moment about the 
issue of preexisting conditions. Texas has had a risk pool for 
some time, has it not?
    Dr. Farris. It has.
    Mr. Burgess. How does that work?
    Dr. Farris. Well, the risk pool provides monies for the 
treatment of people who have some preexisting condition to be 
able to be seen. It is not as comprehensive as what we have 
tried to achieve with doing away with the preexisting 
conditions clauses.
    Mr. Burgess. Let me ask you a question. I don't mean to 
interrupt, but my time is limited.
    Dr. Farris. Yes.
    Mr. Burgess. Is that risk pool coming to an end?
    Dr. Farris. I am not certain.
    Mr. Burgess. Well, I talked to Ms. Rathgeber at the Texas 
Department of Insurance a little earlier this fall and I 
suggested that, I think from a statutory standpoint, yes, the 
risk pool was sunsetted on December 31st, the concept being 
that the Affordable Care Act will now pick up that slack, 
except that there is now a growing concern the Affordable Care 
Act is not ready. So Commissioner Rathgeber, I think quite 
wisely, found a way to extend that for a period of time for 
those people who are in the Texas risk pool. Is that correct, 
Mr. Brady?
    Mr. Brady. Was that question directed at me?
    Mr. Burgess. Yes. The extension of the Texas risk pool?
    Mr. Brady. Yes, sir. There were emergency rules that were 
adopted to extend the Texas risk pool, I believe for three 
months, to the end of March.
    Mr. Burgess. So I would just submit here, we labor under 
this illusion that the Affordable Care Act is going to save us 
from the conundrum of preexisting conditions. But look what has 
happened to the Federal preexisting program. Since February of 
2013, no new patient has been able to enroll in the preexisting 
program.
    Now, for whatever reason, the press has chosen to ignore 
that, but we heard testimony in our committee in Washington 
last April from a woman with lymphoma who had been trying to 
wait out the waiting period to get into the Federal preexisting 
program, had waited her required six months. When she showed up 
on February 1st she was told sorry, sister, this window is 
closed, you can't get into this program, we are full up. And 
this is the notion there that we sell stuff, but we never 
intend to do the follow-through. I am truly bothered by that.
    Every time I hear someone bring up the issue that, oh, the 
Affordable Care Act is great, we are covering people with 
preexisting conditions--no, we are not. No, we are not. And we 
are not going to. I don't know when that coverage will kick in.
    Now, look, I will just tell you, I have had my own 
experience with healthcare.gov. I chose, for whatever reason, 
not to go through the congressional insurance. I am just going 
to the website. It is tough.
    Have you done it, Dr. Farris? Have you gone to 
healthcare.gov and tried to buy insurance for yourself, for 
your family?
    Dr. Farris. I have.
    Mr. Burgess. And what has been your result?
    Dr. Farris. Well, I have been able to get through.
    Mr. Burgess. Did you pay the money?
    Dr. Farris. I haven't yet because my son is graduating from 
law school. I am hoping he will get a job and I won't have to 
do that for him.
    Mr. Burgess. Here is the problem. The fundamental unit of a 
business transaction is when a man pulls out his billfold and 
pays the money.
    Dr. Farris. Right.
    Mr. Burgess. I have not been able to pay my money. Now here 
we are, a week away from December 23rd, and I am wondering if I 
am going to get in under the wire.
    Oh, by the way, we just extended that wire to January 31st. 
If the insurance companies happen to agree, and even if I don't 
get signed up by January 31st, maybe we can coerce the 
insurance companies to cover me retroactively. I am sorry, that 
doesn't give me a feeling of confidence in the way this program 
is going to work.
    Dr. Farris, you and I are both physicians. You and I know 
how difficult it is to run a practice, how your accounts 
payable every month is something you sweat because you don't 
know whether you are going to get the cash in to keep your 
business open. What is going to happen to doctors' offices, 
hospitals, nurse practitioners after the first of the year if 
there cannot be assurance that this enrollment has, in fact, 
occurred because someone has paid the man the money and the 
coverage is in effect? Who covers that? Is HHS going to cover 
that?
    Now, you remember when Part D came online. The pharmacists 
kind of got--they were worried. They were filling prescriptions 
they didn't know if they were going to get paid or not. 
Secretary Levitt, to his credit, Dr. Martin Cullen, to his 
credit, said we will make good on all of those prescriptions 
that are filled.
    Is the Secretary going to make good on all the care that is 
delivered after January 1st for which someone, it turns out, in 
fact, was not covered when they thought they were covered?
    Dr. Farris. Well, Congressman, I can't answer that. I am 
not involved in those policy decisions at my regional level.
    Mr. Burgess. Well, let me just address one other issue. You 
talk about people winding up in the emergency room, expansion 
of Medicaid. I would stress that expansion of Medicaid was not 
statutory the way Medicaid is now structured. That was a court 
opinion, not statutory. The statutory was the states had to do 
it. The court said you can't coerce the states, so now it is 
voluntary.
    So a state like Texas, there is no time limit on it, like 
there was with the exchanges. The exchanges said you have to 
tell us by whatever it was, January 7th of this year, that you 
are going to be in the exchange. But with Medicaid, there is no 
time limit because it was a court opinion.
    So another session of the state legislature, it is quite 
possible they could look around the country and say, you know 
what, we like what they did in Arkansas, we like what they did 
in Iowa, we would like to modify that for Texas. So that is 
still a possibility, is it not?
    Dr. Farris. It is.
    Mr. Burgess. Now, let me just stress there is also the 
possibility, we have another debt limit coming up. I don't know 
whether it is May or August or October, but there will be a 
point where another debt limit breach is threatened in the 
United States Congress, and if Congress doesn't raise the 
statutory debt limit, there could be big trouble. Sometimes 
there are things that are bargained away, as you saw with the 
White House and with Congress during the sequester in August of 
2011.
    What if there is a sequester that affects entitlement 
spending? Who protects those states that have expanded their 
Medicaid? What protection do they have that those Federal 
dollars, in fact, don't flow? Because you and I both know they 
don't exist.
    Dr. Farris. Again, that is not a policy question that I can 
answer. That is something that is done in Washington and 
Baltimore, not at my level.
    Mr. Burgess. And let me just stress, Dr. Farris, because 
you and I have known each other for a while, and we have worked 
together in both Republican and Democratic administrations, and 
you are a dedicated career civil servant, and I appreciate what 
you have done to further the issues that you are tasked with 
furthering. I will just tell you, there are so many open 
questions about this, so many things, so many questions are 
unanswered, and it really wasn't necessary. The Department, 
HHS, has had three-and-a-half years, longer than three-and-a-
half years now, billions of dollars, and to be no further along 
than we are today on December 16th is truly discouraging to me.
    I yield back, Chairman.
    Chairman Issa. I thank you.
    Mr. Neugebauer?
    Mr. Neugebauer. Thank you, Mr. Chairman.
    Ms. Goodwin, I think in your testimony you mentioned that 
you are required to carry liability insurance?
    Ms. Goodwin. Errors and omissions. Yes, sir.
    Mr. Neugebauer. And why is that?
    Ms. Goodwin. To protect my clients if I should do something 
that causes them financial harm.
    Mr. Neugebauer. Would you classify advising someone on 
their health insurance is a fairly complex transaction?
    Ms. Goodwin. Absolutely, it is.
    Mr. Neugebauer. Is it an important one?
    Ms. Goodwin. It is a very important one.
    Mr. Neugebauer. So what protections do the people that are 
using Navigators to basically navigate through this process, if 
they cause that person to make a decision that is not in their 
best interest?
    Ms. Goodwin. I am not certain of the existing regulations 
with regard to that coverage. I do know that the Texas rules 
call for a minimum of, I think, $100,000 in liability. Maybe it 
is $50,000. I can't remember, but a much lower amount than 
agents are generally required to cover.
    Mr. Neugebauer. But the real damage is if someone makes a 
healthcare decision that causes them to have some kind of a 
catastrophic loss because they didn't have the coverage that 
they thought they had. That is the bigger issue, is it not?
    Ms. Goodwin. That is.
    Mr. Neugebauer. Mr. Brady, I think you mentioned that Texas 
requires 40 hours of education, background checks, 
fingerprints. You listed a litany there. Why does Texas require 
that?
    Mr. Brady. Sir, if I could ask for a clarification. Are you 
asking about our proposed rules, or are you asking about the 
requirements that apply to licensed insurance agents?
    Mr. Neugebauer. Just licensed and brokers, yes.
    Mr. Brady. Two primary thoughts come to mind. One is there 
is a desire to make sure that the applicant for the license has 
the minimal educational requirement necessary to know about the 
business of insurance. But also there are requirements to know 
about the Texas regulatory environment. So that is one broad 
category.
    The other important pre-licensing function that we perform 
is the background check, and we obtain fingerprints, we do the 
criminal background checks, tapping into databases with the 
Texas Department of Public Safety, and also the Federal FBI to 
see if there are bad apples out there.
    Mr. Neugebauer. When someone takes an insurance 
application, I guess they give their name, their address, their 
date of birth. They give a lot of very personal information, 
and that is very sensitive information, is it not?
    Mr. Brady. Yes, sir. I will note that there are a number of 
laws in the Texas insurance code regarding the privacy of 
personal information, all designed to protect that information.
    Mr. Neugebauer. Thank you.
    Dr. Farris, one of the things that I think I mentioned in 
my opening testimony that you may have heard is that we had a 
hearing in the Science Committee, and one of the things that we 
learned is that the website has got a lot of vulnerabilities to 
potential people hacking into that system. So the system itself 
is somewhat suspect as to whether people's personal information 
is, in fact, safe with the website.
    But even with the Navigator, is the preference still for 
people to sign up for Obamacare through the website?
    Dr. Farris. Well, there are actually four ways that a 
person can sign up. One would be through the website. One would 
be through a 1-800 number that we have that operates 24 hours a 
day, seven days a week, and operates in over 150 different 
languages. Then people can also sign up using Navigators or 
other application assisters, as you have heard.
    We have trained about 70,000 agents and brokers to help 
people to sign up for care, for insurance. And then the fourth 
way would be through a paper application. There are some people 
who are comfortable with paper. There are some people who are 
comfortable with computers. There are some people who would 
rather deal with a live person such as a Navigator or an 
insurance agent or broker, or some certified application 
counselor. We have trained about 19,000 of those.
    Mr. Neugebauer. I want to go back to something you said 
earlier. I want a clarification. You said that you give 
Navigators a certificate once they have completed the course. 
So do you send them an identification card that says I am a 
Navigator?
    Dr. Farris. Well, the certification that they receive 
states that they have completed the Navigator training and have 
successfully passed the examination.
    Mr. Neugebauer. So if I wanted to go online and see, for 
example, Dr. Burgess, if he is a certified Navigator, could I 
ascertain that?
    Dr. Farris. Could you do what?
    Mr. Neugebauer. In other words, is there a website where 
somebody identifies themselves as a Navigator and I wanted to 
verify that, is there a place where I could go say ----
    Dr. Farris. In order for a person to actually sign up with 
a Navigator, they have to do it in-person. They don't actually 
do that over the phone. When you deal with a Navigator, you sit 
and you deal with them face to face. So that way, the person 
can show you their certification that says that they have 
actually--and you can set up an appointment to go in and see 
them so you can be certain that you are dealing with who you 
think you are.
    Mr. Neugebauer. But I couldn't verify that. In other words, 
unfortunately, there are people in this country who know how to 
counterfeit things. So there is not a way for me to go and 
ascertain whether someone is actually who they say they are?
    Dr. Farris. I will have to check on that. I can get back 
with you on it just to make certain that there is a way to 
verify.
    Mr. Neugebauer. So is there a way for me to go to someplace 
on a Texas website and determine whether someone is a licensed 
broker or agent in the State of Texas?
    Mr. Brady. As I commented earlier, one of our jobs is to 
protect consumers, and one of the services that we provide is 
an opportunity for members of the public to access our website 
to see if insurance companies are licensed, if insurance agents 
are licensed. We try to put that out as a check to make sure 
that the public knows that they are dealing with trustworthy 
individuals.
    Mr. Neugebauer. And so what we are learning is that that 
same protection is not afforded to people that are dealing with 
Navigators, I guess, because there is really not a way to 
verify those folks.
    Thank you, Mr. Chairman. Appreciate that.
    Chairman Issa. Thank you.
    Dr. Farris, do you have pictures of all the Navigators?
    Dr. Farris. I do not.
    Chairman Issa. Do you have fingerprints of all the 
Navigators?
    Dr. Farris. Not that ----
    Chairman Issa. Do you have Xeroxed copies of their driver's 
licenses?
    Dr. Farris. I would have to check on that. I don't know.
    Chairman Issa. So my understanding is if somebody is just a 
plain fraud and they walk in and say, ``I am Joe Smith,'' but, 
in fact, they are Sam Jones, and Sam Jones is a felon, and they 
just come in with a false name, they can go through this 
process, and they can take the test and get certified. Now they 
have a certificate.
    Is that certificate something that I can go online and see 
what it looks like to verify that the one they are showing me 
is the same, or do they just print it out when they graduate?
    Dr. Farris. I would need to check on that, as well.
    Chairman Issa. I am pretty sure they just print it out when 
they graduate.
    Let me go through a couple of questions. You are a long-
time career Federal employee. Are you CSRS or FIRS?
    Dr. Farris. FIRS.
    Chairman Issa. So you are FIRS. So you are covered by 
FEHBP?
    Dr. Farris. Yes.
    Chairman Issa. So why would you go on the website when you 
are covered by the Federal Employee Healthcare Benefit Plan, 
and how would you buy under Obamacare when the only healthcare 
plan you have is the FEHBP?
    Dr. Farris. I wouldn't buy it for me. I was looking at it 
for my son, who is ----
    Chairman Issa. Okay. So you went on the website pretending 
you were your son.
    Dr. Farris. No. I did not go on the website ----
    Chairman Issa. You went on the website, and you had to put 
a name in. You didn't put your name in, did you?
    Dr. Farris. I did. We have the same name.
    Chairman Issa. Okay. So you are a person covered by the 
Federal Employee Healthcare Benefit, and you went on the site 
and said I am checking this out. What did you put in for your 
salary?
    Dr. Farris. My son has no salary. He is a law student.
    Chairman Issa. Okay. So you put in your name but no salary.
    Dr. Farris. Right.
    Chairman Issa. Okay, and I appreciate your candor. These 
are some of the things we have been looking at. Apparently you 
had no trouble getting into something. I notably tweeted out 
the error I got trying to go on. But you can go on, you can say 
you have no salary, you can say you are somebody, and had you 
gone through and completed it, you would have had healthcare. 
At least you would have had the coverage.
    Dr. Farris. No. But I didn't.
    Chairman Issa. Okay. Well, thank you for your honesty of 
not doing it.
    Sometimes you just can't make these things up.
    [Laughter.]
    [Applause.]
    Chairman Issa. Now, we do a Census every year, every 10 
years, but we don't use subcontractors to ask people about 
where they live and so on. We actually hire you through the 
Census system. Isn't that right?
    Dr. Farris. Yes.
    Chairman Issa. And because my committee oversees that, we 
are well aware that we do take that identifiable information, 
we do have specific records, and we do attempt to run 
background on people who work for the Census, even though all 
they are really doing is going to a door and asking Census 
information.
    Does it concern you that today anybody can, in fact, become 
a Navigator, and they could be somebody with a felony, somebody 
who is in the business of identity theft, and you don't have a 
picture of them, you don't have their fingerprints? So if later 
on, sort of like that video they showed us, if later on you 
discover that, in fact, they are crooks, and then they simply 
disappear, you are not going to be able to go fire them or ask 
that they be suspended. Is that right?
    Dr. Farris. Well, I go back to what we originally said in 
terms of the organizations that we work with who hire these 
people, that they would do the necessary checks to make certain 
that they are not hiring felons, which they usually don't.
    Chairman Issa. Okay. Right. And I have one last question, 
doctor. You used the word ``suspend'' for these individuals. I 
am kind of a funny guy. The people that screwed up Benghazi, 
they got suspended, except they didn't lose a day's pay and 
they are back on the job today because their suspension ended.
    When you say ``suspend,'' do you mean they were fired, or 
do you mean that they were suspended, that nebulous state in 
which they are not currently out there advising people to do 
crooked things?
    Dr. Farris. I am aware that one of the persons in training 
was fired, and I know that they were all decertified so that 
they can never be Navigators or any type of in-person 
assisters. But I think the term ``suspend'' was correct, except 
for the one that I know was fired.
    Chairman Issa. Okay. So one was fired. The other may still 
be being paid to do something, including they could be 
administering this information, and I will be brief.
    There are four ways to get to your insurance, but they all 
go to the website, right? Ultimately, if you call up, the 
person you talk to is on the website. If you work with a 
Navigator, they turn the paper in to the website. Ultimately, 
everything goes through the website. So if there is a security 
vulnerability or corrupt information in any way, shape or form, 
it is all the website, right? I just want people to understand 
that.
    Dr. Farris. Except that the website does not store any 
information. It certainly does not store any personally 
identifiable information. The data services hub is used to test 
information that a person puts in, but it does not store it. So 
it doesn't leave it vulnerable.
    Chairman Issa. You are aware that people have received 
other people's information. One person signs up in one state, 
and somebody else gets a confirmation in another state.
    Dr. Farris. No, I was not aware of that.
    Chairman Issa. You need to watch a little more Fox, I am 
afraid.
    [Laughter.]
    Chairman Issa. With that, we now go to Mr. Sessions.
    Mr. Sessions. Mr. Chairman, thank you very much.
    Ms. Goodwin, you and other of your Texas certified agents, 
as they perform their duties, are they asked specific 
information before there is an offer or a sell, things like 
whether a policy has specific coverage, a specific doctor, or a 
specific hospital for coverage?
    Ms. Goodwin. Part of our process as an agent or broker is 
to evaluate all of the carriers that we represent to our 
clients, to gather the information about the contract coverage, 
how it is covered, how prescription drugs are covered and what 
those levels are, and a particular doctor or series of 
physicians, are those physicians and hospitals in the network 
for that carrier. That is part of our job.
    Mr. Sessions. Are you aware of something that might be 
known as a deceptive trade or sales practice?
    Ms. Goodwin. Uh-huh.
    Mr. Sessions. Thank you very much.
    Dr. Farris, thank you for being here today. I have worked 
with you in my years of service as a member of Congress and I 
found every time that you have not only been available to me 
but you have promptly tried to assist me or explain to me any 
impediment that was placed in its way, and I want to thank you 
very much for being here today.
    Dr. Farris, how long have you worked for the Federal 
Government?
    Dr. Farris. Seventeen years.
    Mr. Sessions. Some 17 years. And during that time, you have 
been a valuable asset, I know, to your organization. Did they 
in any way approach you as they were putting together the 
Navigator program and ask your feedback, or were you pre-
trained in any way?
    Dr. Farris. No.
    Mr. Sessions. No. Did anyone from Washington, D.C. ever 
tell you this is part of the plan about how we are going to go 
and roll this plan out?
    Dr. Farris. No.
    Mr. Sessions. Have you taken part in the training or seen 
the specific training that the Navigators were given?
    Dr. Farris. I have, yes. I have not taken it myself, but I 
have seen it.
    Mr. Sessions. You are aware of that training?
    Dr. Farris. Yes.
    Mr. Sessions. And do you consider it leading-edge and, in 
your professional opinion, on par with the ability for people 
to offer insurance plans and to be able to discuss this that 
was part of what is known as Obamacare? Do you believe that 
they were well trained?
    Dr. Farris. Well, what we want people to be able to do 
through the Navigator program, number one, is explain health 
care insurance to people who may have never been insured and 
who may not understand what health insurance is all about; to 
explain what could be available to them in terms of various 
affordability options, the various tax credits, as well as just 
general information about insurance, health insurance in 
general, and to get them signed up.
    So there are a number of different facets that are involved 
in the Navigator training that involve not just enrollment but 
also education and outreach to people such that they are aware 
of the existence, of the ability to have some health insurance.
    Mr. Sessions. Yes, sir. You used the word ``general,'' and 
I used the word ``specific'' when addressing the questions to 
Mrs. Goodwin. Can you tell me that the Navigators, then, as 
opposed to the term ``general,'' were they specific in their 
ability to provide information about doctors, about coverage, 
about hospitals, about how things would happen?
    Dr. Farris. No. The answer to that would be no.
    Mr. Sessions. No. So, in other words, we have Navigators 
who are out and, in essence, selling, offering a product or 
service in the State of Texas, and they cannot offer a specific 
but rather a general idea about what this insurance might 
include. Is that your testimony?
    Dr. Farris. It is designed to be an impartial program where 
they are not directing anyone to a specific product, but to 
help them to make choices and to understand that there are 
choices that are available to them, and to understand the whole 
insurance market, not to put them into a specific plan. The 
Navigators cannot make that choice for them.
    Mr. Sessions. As a professional for 17 years, are you aware 
of and would you consider yourself as the Federal 
representative on behalf of CMS that you have a specific 
understanding of how coverage would work here in Texas 
specifically?
    Dr. Farris. I don't think I--well, clarify the question a 
little bit better for me.
    Mr. Sessions. Well, the word ``specific'' is the word that 
I used for Mrs. Goodwin, and it is specific coverage, specific 
doctors, specific hospitals, not that you would know them off 
your head but that you could accurately go and look these items 
up and issues up as the professional on behalf of CMS in the 
State of Texas.
    Dr. Farris. No, I don't believe I could.
    Mr. Sessions. So, in other words, your testimony is here 
today, as the professional on behalf of CMS, you could not 
provide that information, yet Mrs. Goodwin would be required by 
the law to offer very specific information.
    Dr. Farris. I think that would be true.
    Mr. Sessions. That would be a fair statement. Do you 
believe that we provided you ample opportunity as we announced 
this hearing today, that we properly and professionally 
approached you?
    Dr. Farris. Yes.
    Mr. Sessions. Okay.
    I would like to ask, if I can, Mr. Brady a question.
    Chairman Issa. Without objection.
    Mr. Sessions. And that is, Mr. Brady, as you find people 
who are selling products and services that are within your area 
that might be health and other insurance matters, does it 
disturb you that here we are, even at the backside of this 
process, that professionals in the State of Texas that 
represent the Federal Government are incapable in testimony 
today of providing specific information about products and 
services that would be offered in the State of Texas that is 
within your purview?
    Mr. Brady. Sir, I think it would be best to answer that by 
saying that if someone wants to act like an insurance agent, 
there is a rigorous pre-licensing examination process and pre-
educational process that they have to go through. The 
Navigators are actually, pursuant to our proposed rules, 
prohibited from acting like an insurance agent unless they 
obtain a license. And then if they obtain a license, then these 
proposed Navigator rules would not apply.
    The reason I note that is that I think it hits to the heart 
of the issue that I believe you are raising, the differences 
between specific knowledge and more general knowledge. If we 
want someone to be giving specific advice, we under the 
proposed rules would say they are going to be held to a higher 
standard and are going to be licensed as an agent.
    Mr. Sessions. Mr. Brady, are you aware of a letter that was 
sent by some 13 attorneys general to Secretary Sebelius on or 
about August the 4th that related to questions about 
Navigators?
    Mr. Brady. Yes, sir. I was provided a copy of the letter.
    Mr. Sessions. Would you be surprised if I told you that 
three months later these attorneys general have not been 
replied to by the Secretary?
    Mr. Brady. It is difficult to respond to, sir.
    Mr. Sessions. Mr. Brady, if you were asked by an attorney 
general to provide information back by 13 attorneys general, 
would you believe you would have a diligence placed upon you to 
respond back to legal authorities in their own states?
    Mr. Brady. Yes, sir.
    Mr. Sessions. Mr. Brady, I have one last question, and that 
is for you and Dr. Farris, and perhaps it relates to me and 
perhaps it does not. But there are many, many families who have 
disabled children who count on specialty hospitals, children's 
hospitals that have special tools, special doctors, special 
beds, special equipment.
    Would it surprise you if I told you that many of these 
children's hospitals are not covered, nor will they be included 
in the proposals for the Affordable Care Act, that they were 
intentionally excluded? Would that surprise you?
    Mr. Brady. Sir, was that directed to me?
    Mr. Sessions. Mr. Brady, would that surprise you?
    Mr. Brady. I think the best way for me to answer that is we 
are hopeful that the public can get their healthcare needs met 
and would be concerned if there are gaps in network coverage.
    Mr. Sessions. Mr. Brady, would that surprise you--yes or 
no?--if a children's hospital to a large measure was not 
included?
    Mr. Brady. It would tend to surprise me, sir.
    Mr. Sessions. Thank you, sir.
    Dr. Farris, would it also surprise you?
    Dr. Farris. It would surprise me, yes.
    Mr. Sessions. It would surprise you. Thank you very much.
    Mr. Chairman, thank you very much.
    Chairman Issa. I thank the gentleman.
    I would note that we had a previous hearing in which 
doctors, including a major facility in Florida and another one 
in New York, testified to exactly that, that they were 
excluded, specialties were excluded by the exchange insurance 
quotes in order to drive down the price, and we will send you a 
copy for the record.
    Mr. Veasey, do you have additional questions?
    Mr. Veasey. Yes, yes. Thank you, Mr. Chairman. I did want 
to ask some Navigator questions.
    Dr. Farris, I know that it has been suggested that the 
Navigator program is somehow unprecedented and that a parade of 
horribles could result from community organizations and non-
profits from providing consumers with information on how they 
can get enrolled. But, Dr. Farris, I wanted to ask you 
specifically what types of Texas organizations applied for 
Navigator grants under the funding announcement that CMS has 
released.
    Dr. Farris. Well, a number of organizations like the United 
Way of Tarrant County, the Community Council of Greater Dallas, 
the United Way of Central Texas, the Brazos Valley Council of 
Governments, the City of Houston Department of Health and Human 
Services. I can tell you that in Arkansas, the University of 
Arkansas.
    Mr. Veasey. All large, national, reputable organizations --
--
    Dr. Farris. Yes.
    Mr. Veasey.--that have a very broad experience in helping 
individuals ----
    Dr. Farris. Yes.
    Mr. Veasey.--in a bipartisan, non-profit type manner that 
has a very good reputation, particularly the United Way in the 
metroplex here. Did these organizations have to submit 
information regarding their experience and history?
    Dr. Farris. They did, and they were all vetted by a panel 
of experts. Their applications were screened. The proposals 
that they submitted were evaluated to make certain that they 
could provide these services in a cost-effective manner, and 
their track records in terms of being able to deal with the 
community and all facets of the community were looked at to 
make certain that they had that ability as well.
    Mr. Veasey. I know that one of the things, again, that has 
been suggested is that this is unprecedented for the Federal 
Government to use Navigators and what-have-you to help people 
sign up for insurance, but let me ask you a question. Didn't 
the Federal Government use assisters in the enrollment of the 
Children's Health Insurance Program, or CHIP, back in the late 
1990s in the state?
    Dr. Farris. It is my understanding that they did.
    Mr. Veasey. Okay. I think that we all can agree that the 
Affordable Care Act is a heavy lift as far as getting people 
enrolled and what-have-you, because you are talking about 
enrolling millions of people at once, many of whom have never 
had insurance in their lives. We should obviously encourage 
data security, Navigator training, but we should also not 
attempt to impede implementation.
    Dr. Farris, are the recent actions of the state 
unprecedented in seeking to limit public access to the Federal 
program?
    Dr. Farris. Well, all states have the ability to look at 
the program and to make a determination as to whether or not 
they think that the procedures and the parameters should be 
more stringent than the ones that have been proposed, and I 
know the State of Texas has taken a look. They have reached out 
to CMS, as well as to CQISCO, for some discussions, and it is 
actually probable that as we are speaking today, the State of 
Texas is sitting down with people at CQISCO looking at ways 
that they can work together with regard to the Texas proposals.
    Mr. Veasey. I know that many state elected officials have 
expressed concern about the recent actions of Texas Insurance 
Commissioner Julia Rathgeber, and I would like to submit into 
the hearing record a letter signed by 54 members of the Texas 
House of Representatives requesting an extension of a December 
the 20th deadline for public comment on Navigators.
    Chairman Issa. Without objection, so ordered.
    Mr. Veasey. Mr. Brady, have you seen that letter signed by 
the 54 Texas legislators?
    Mr. Brady. Very briefly, sir.
    Mr. Veasey. Okay.
    That is all I have, Mr. Chairman. Thank you.
    Chairman Issa. I thank you.
    We now go to the gentleman, Mr. Farenthold.
    Mr. Farenthold. I just have a couple of quick follow-ups.
    Mr. Farris, you have testified that you can become a 
Navigator by taking an online webinar with no fingerprints, you 
all don't even keep a copy of the driver's license, there is no 
photo. Is there even a description of the person on the 
Navigator certificates?
    Dr. Farris. I am not aware. I will be happy to check to 
find out exactly what we do keep.
    Mr. Farenthold. Okay. And it is my understanding that a 
member of our staff with the Oversight and Government Reform 
Committee, in under three hours, was able to complete the 
Navigator course, and his certificate was simply printed out on 
a laser printer. Now, I am no expert forger, but I know how to 
use Photoshop. This one sounds like you might be able to do it 
with a pair of scissors, scotch tape, and a photo copier. Don't 
you think we need to know who the Navigator is that we are 
trusting with our personal information and discussions about 
our healthcare needs?
    Dr. Farris. I am really intrigued by the fact that you say 
they were able to do that in three hours and print it out 
themselves. I would like to get some more information on that, 
if I could, and share that with our folks in CQISCO.
    Mr. Farenthold. I will have the committee get in touch with 
your office and share that information with you.
    Dr. Farris. Yes. Thank you.
    Mr. Farenthold. Now, are you familiar with the Office of 
Personnel Management within the government?
    Dr. Farris. I am.
    Mr. Farenthold. You know, they have a nice little side 
business where they run background checks. Now, we have had 
some issues with how well they do it, but there is a pretty 
sophisticated procedure that runs background checks very 
frequently. Is there any reason HHS didn't decide to avail 
themselves of that for checking out folks? Again, it would be 
required to have access to your personally identifiable 
information.
    Dr. Farris. Those sorts of policy decisions are made at 
CQISCO and they don't ----
    Mr. Farenthold. I understand. Not all good decisions--okay, 
most decisions that come out of Washington may not be--anyway, 
we won't go into that.
    Let me ask one other quick question, and I will ask this 
one to Mr. Brady. What are the remedies now that you are aware 
of that a consumer has against a Navigator who either gives him 
bad advice or appropriates information? I notice Ms. Goodwin 
has to carry insurance. I think she says she has tens of 
thousands of dollars, or more, worth of insurance. What are our 
remedies against Navigators, and what is the guarantee that 
they have the resources to pay those damages should someone 
prevail in pursuing them?
    Mr. Brady. Sir, earlier I mentioned that Senate bill 1795 
from the last Texas legislative session charged us with looking 
at the Federal requirements.
    Mr. Farenthold. But that hasn't been enacted yet. So if you 
go to a Navigator now, you don't have that protection.
    Mr. Brady. Yes, sir. What I am leading to is that one of 
the insufficiencies that we identified was what I am going to 
call a lack of recourse. Because of that, the proposed rules 
that I briefed earlier would require financial responsibility. 
It could be in the form of a $100,000 errors and omissions 
policy--I am sorry, a professional liability policy that 
includes errors and omissions coverage. There are a couple of 
other options. But it was because of this gap, if you would, 
that we have decided that we would propose a rule that would 
put some financial safety net programs in place.
    Mr. Farenthold. Unfortunately, under the law, I have to go 
into the D.C. exchange or I think I would probably be availing 
myself of a professional agent instead. But, of course, I am 
complying with the law.
    And I will yield back.
    Chairman Issa. I thank the gentleman.
    Mr. Sessions, you had one more, quickly?
    Mr. Sessions. I did, Mr. Chairman, and they are really more 
comments related to some feedback that I have heard today.
    Chairman Issa. Could I ----
    Mr. Sessions. Yes.
    Chairman Issa. I will finish with the questions and I will 
let you close, because this is really something you helped put 
together.
    Dr. Burgess?
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Farenthold brought up the concept that, through the 
Office of Personnel Management, that background checks are done 
and could be done. Gary Cohen, who is the head of the Center 
for Consumer Information and Insurance Oversight, earlier this 
year testified that he didn't think that they had the authority 
to require Navigator organizations to conduct background checks 
of individuals, and they didn't know whether they had the funds 
to do this.
    Now, this is interesting because on July 4th of this year, 
Robert Pear, writing in the New York Times, talked about a 
British company called Serco. Serco we had into our committee, 
the Committee on Energy and Commerce, that was talking to the 
contractors who were involved in the rollout of the Affordable 
Care Act, and Serco, their only job is to take paper 
applications and put them in for people.
    It turns out that is a pretty expensive process because we 
are paying Serco a lot of money to do that. On a per-
application basis, it is in the thousands of dollars. But 
nevertheless, every Serco employee has to have a background 
check. They have to be fingerprinted, and they have to have a 
background check.
    So I would just submit that although Mr. Cohen didn't think 
it was reasonable or feasible to do that with Navigators, 
certainly the Department of Health and Human Services required 
that of Serco.
    Ms. Goodwin, let me just ask you a question, because Dr. 
Farris mentioned dealing with people who have not had a lot of 
experience with insurance policies, so I guess we might use the 
term ``insurance literacy.'' Part of the job of the Navigator 
is to explain what the policy contains and what it covers. This 
is what a broker does as well, the concept of being able to 
explain, oh, say, what a 60 percent actuarial value policy 
really means to the person who is buying it. Would that be your 
experience?
    Dr. Farris. To whom are you addressing that?
    Mr. Burgess. I was addressing it to Ms. Goodwin, but anyone 
is free to answer it.
    If you have a policy that is 60 percent actuarial value, 
and that is what you are buying because it is the cheapest one 
on the block, somebody needs to tell that purchaser what that 
60 percent actuarial value means, correct?
    Ms. Goodwin. Yes.
    Mr. Burgess. And what it means is that that person may have 
a significant deductible, I mean more than significant, I mean 
astonishingly high as far as a deductible, $6,800 on an 
individual policy, and they also may be required to spend a 
significant amount of money on co-insurance in addition to 
their deductible. Is that not correct? The answer to the 
question is yes.
    Ms. Goodwin. That is correct.
    Mr. Burgess. Now, the President, because he loves us, said 
he was going to put a cap on out-of-pocket expenses, except 
that the President suspended the cap on out-of-pocket expenses 
for the first year. So those people buying a 60 percent 
actuarial value policy in the Bronze metal level may be in for 
a significant amount of sticker shock when they actually go to 
the doctor. They have been making their premiums or they get 
their subsidy for their premiums, and then they get a kidney 
stone at 2 o'clock in the morning, they shop up in the ER, and 
they get a bill for $3,500 or $4,500 that they have to pay. 
They may have difficulty understanding that concept, may they 
not? Are the Navigators going to explain to them that this is a 
possibility? Would a broker explain that, Ms. Goodwin?
    Ms. Goodwin. Absolutely.
    Mr. Burgess. Dr. Farris, would a Navigator explain that?
    Dr. Farris. I am not certain that a Navigator would.
    Mr. Burgess. So what is likely to happen to that $4,500 
bill from the doctor or the hospital that comes to that patient 
if they don't know that it is coming?
    I will tell you what. They are going to walk the check. It 
happens all the time. So the uncompensated care that was talked 
about earlier in this discussion, there is nothing in the 
Affordable Care Act that is going to make that go away. In many 
ways, it may get worse if we are not doing an adequate job of 
explaining. The brokers and agents I feel comfortable will. I 
am not sure that the Navigators themselves understand that or 
are given enough instruction to be able to impart that to their 
customers.
    Thank you, Mr. Chairman, for the additional time. I will 
yield back.
    Chairman Issa. Thank you.
    Mr. Neugebauer?
    Mr. Neugebauer. Thank you, Mr. Chairman.
    Dr. Farris, when did you first hear about the news where 
people at this Dallas Navigators were telling people to lie on 
their applications? How did you come to have that knowledge?
    Dr. Farris. I actually saw it on the news.
    Mr. Neugebauer. You saw it on the news.
    Dr. Farris. Yes.
    Mr. Neugebauer. So I think you issued a letter asking them 
to take corrective actions. Have you followed up to see if they 
have taken those actions?
    Dr. Farris. Yes. They have taken those actions. Again, they 
have decertified the people who were involved. There are weekly 
reports that they have to submit to us to let us know about the 
specific training that they are providing now on an ongoing 
basis to make certain that they understand what their 
responsibilities are with regard to personally identifiable 
information. We also have pretty much weekly check-ins with 
them, and we reserve the right to do site visits.
    Mr. Neugebauer. That was my next question. Are you doing 
audits to follow up and make sure that these actions are 
actually being taken?
    Dr. Farris. Yes.
    Mr. Neugebauer. Just with this agency, or with all of the 
----
    Dr. Farris. With all of the Navigators. In fact, there was 
a program on Friday that was a webinar where we talked about, 
with all of the Navigators in the country, what had happened at 
the National Urban League to make certain that this is never 
repeated again. So they understand that ----
    Mr. Neugebauer. So are those site visits of people from CMS 
traveling around the country doing that, or how does that work?
    Dr. Farris. That will actually be managed out of CQISCO, 
and they will determine who goes and when. But the site visits 
will need to be unannounced visits in order for them to have 
any validity at all.
    Mr. Neugebauer. So when you find those actions, then what 
is the step? I mean, is there a process to revoke if you find 
an agency is not properly following those? Can they revoke 
those?
    Dr. Farris. There are a number of different remedies that 
are in place, starting with the corrective action plan. But if 
we find really egregious problems, we can certainly revoke the 
licenses that they have in order to provide these services.
    Mr. Neugebauer. Off the top of your head, can you tell me 
approximately how many site visits have been done?
    Dr. Farris. I can't. I would have to get that information 
from CQISCO. I don't know.
    Mr. Neugebauer. Could you get that for me?
    Dr. Farris. We will be happy to get back with you on that.
    Mr. Neugebauer. I thank you.
    Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    Mr. Sessions?
    Mr. Sessions. Mr. Chairman, thank you very much.
    I want to thank all three of you for being here today. I 
would like to say that there have been a couple of things said 
here that I would take issue with, and one of them is 
statements that were made that critics--perhaps they were in 
reference to members of Congress--are attempting to make it 
more difficult for the American people to sign up for 
Obamacare.
    And I would like to plainly state that as a result of the 
testimony, Mr. Chairman, that we have had here today, I find 
that the Navigators, which is why we are here today, are 
incapable of properly and professionally selling a product that 
people can count on, that they can understand, and I find it is 
non-specific. It cannot provide a person information about a 
physician, about coverage, or about a hospital.
    And I am deeply disappointed and want to make sure that no 
one would draw the conclusion that it is someone else other 
than the Federal Government and the President and the Secretary 
themselves who are making things far more difficult and who I 
believe are impeding progress. They are selling a product, and 
in the State of Texas I believe it would be deceptive for them 
to do this. A deceptive trade practice would be against the 
law, and that is what is happening.
    Secondly, a viewpoint that these Navigators are non-
partisan and simply representative of just regular, everyday 
groups in America that are non-partisan and non-political. But, 
in fact, Planned Parenthood is receiving millions of dollars 
across the country, and for us to try and sell the idea that 
all this is just a good neighbor type of reaching out and 
talking with people I find is not only deceptive, it is not 
true.
    I yield back my time.
    Chairman Issa. I thank the gentleman.
    I would like to thank our witnesses today. You have been 
asked tough questions. We have stretched your roles in many of 
those questions, and I appreciate your attempting to answer.
    There are many problems with the Affordable Care Act. We 
knew it would be hard. I don't think any of us knew it would be 
this hard.
    We are less informed than we would like to be on a lot of 
areas, but we are more informed because of your testimony here 
today.
    As we continue to look at the Navigators, as the State of 
Texas and other responsible insurance commissioners and agents 
begin to look at what the proper role is for a Navigator, I 
don't envy you your job. To the extent that they are simply 
taking information and having it forwarded to a computer to see 
if you can get cheap or free insurance subsidized, or Medicaid, 
I think it is not insurance.
    To the extent that they have any level of competency in 
advising people on whether to go with the Bronze plan or Gold 
plan, whether or not something would be covered, whether or not 
a particular hospital or specialty would be covered, whether it 
is right for you and your family, I do share with the State of 
Texas and the insurance commission that this is a serious 
question that falls under the state's responsibility and 
historic knowledge, and I would hope that Texas would find a 
way to make sure that what they can do they are allowed to do, 
and what they cannot do without further training, 
identification, bonding and the like, that Texas asserts its 
full authority.
    Dr. Farris, I want to particularly thank you. This was not 
easy. You came here to answer tough questions at a time in 
which a program is new, but it is a program that I think we all 
understand affects countless millions of people, and although 
it has promise for some, it has peril for many.
    And with that, I would also like to thank the Texas 
delegation. I found myself saying ``the gentleman from Texas, 
the gentleman from Texas, the gentleman from Texas,'' and I 
think back to when I interviewed with Johnson & Johnson in 
Sherman, Texas, and I am saying there but for getting hired by 
Johnson & Johnson, one of you could be my congressman.
    [Laughter.]
    Chairman Issa. I thank you.
    We stand adjourned.
    [Applause.]
    [Whereupon, at 3:24 p.m., the committee was adjourned.]



                                APPENDIX

                              ----------                              


               Material Submitted for the Hearing Record

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 
