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






   THE PRESIDENT'S HEALTH CARE LAW DOES NOT EQUAL HEALTH CARE ACCESS

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 12, 2014

                               __________

                           Serial No. 113-153

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


      Printed for the use of the Committee on Energy and Commerce
                        energycommerce.house.gov
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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

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

                                 _____

                         Subcommittee on Health

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

                                  (ii)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     3
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     5
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     5
Hon. David B. McKinley, a Representative in Congress from the 
  State of West Virginia, opening statement......................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   104

                               Witnesses

Scott Gottlieb, Resident Fellow, American Enterprise Institute...    35
    Prepared statement...........................................    38
    Answers to submitted questions...............................   106
William F. Harvey, Chair, Government Affairs Committee, American 
  College of Rheumatology........................................    46
    Prepared statement...........................................    48
    Answers to submitted questions...............................   111
Monica Lindeen, Commissioner, Securities and Insurance, Office of 
  the Montana State Auditor......................................    56
    Prepared statement...........................................    58
    Answers to submitted questions...............................   118

                           Submitted Material

Letter of June 12, 2014, from Dan Weber, President and Founder, 
  Association of Mature American Citizens, to Mr. Pitts and Mr. 
  Pallone, submitted by Mr. Pitts................................     9
Statement, ``Health Insurance Reform Reality Check,'' 
  WhiteHouse.gov, submitted by Mr. Pitts.........................    10
Report of May 6, 2014, ``Private Health Insurance Market Reforms 
  in the Affordable Care Act (ACA),'' Congressional Research 
  Service, submitted by Mr. Pitts................................    11
Statement of June 12, 2014, by Claire McAndrew, Families USA, 
  submitted by Mr. Pallone.......................................    77
Article, undated, ``Mikulski Postpones Vote on Health Spending 
  Bill,'' by Andrew Taylor, Associated Press, submitted by Mr. 
  Gingrey........................................................    96

 
   THE PRESIDENT'S HEALTH CARE LAW DOES NOT EQUAL HEALTH CARE ACCESS

                              ----------                              


                        THURSDAY, JUNE 12, 2014

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:59 a.m., in 
room 2123, Rayburn House Office Building, Hon. Joseph R. Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Burgess, Shimkus, 
Murphy, Blackburn, Gingrey, Griffith, Bilirakis, Ellmers, 
Pallone, Capps, Schakowsky, Green, Barrow, Christensen, Castor, 
Sarbanes, and Waxman (ex officio).
    Also present: Representative McKinley.
    Staff present: Clay Alspach, Chief Counsel, Health; Gary 
Andres, Staff Director; Sean Bonyun, Communications Director; 
Noelle Clemente, Press Secretary; Paul Edattel, Professional 
Staff Member, Health; Brad Grantz, Policy Coordinator, 
Oversight and Investigations; Sydne Harwick, Legislative Clerk; 
Sean Hayes, Deputy Chief Counsel, Oversight and Investigations; 
Robert Horne, Professional Staff Member, Health; Katie Novaria, 
Professional Staff Member, Health; Chris Pope, Fellow, Health; 
Chris Sarley, Policy Coordinator, Environment and the Economy; 
Heidi Stirrup, Policy Coordinator, Health; Ziky Ababiya, 
Democratic Staff Assistant; Debbie Letter, Democratic Staff 
Assistant; Karen Nelson, Democratic Deputy Committee Staff 
Director, Health; and Matt Siegler, Democratic Counsel.
    Mr. Pitts. Ladies and gentlemen, if you will take your 
seats. The subcommittee will come to order.
    We are going to have votes shortly, so we are going to run 
a tight gavel this morning.
    The Chair will recognize himself for an opening statement.

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

    The President's health care law was sold to the American 
people with a number of promises: If you like your plan, you 
will be able to keep it; if you like your doctor, you will be 
able to continue seeing him or her. Advocates of the law made 
this promise again and again. In fact, President Obama, 
according to one count, made this promise nearly 37 times.
    Yet, as we now know, this promise was simply not true. Last 
year, millions of Americans had their health plans canceled, 
were forced to enroll in exchange plans. Americans are also 
learning another sad truth: Health plans offered in the 
exchanges are often not providing access--access to doctors, 
hospitals, and drugs they need.
    Why is this occurring? As we will hear today, many of these 
problems lie at the feet of the Affordable Care Act. The 
Affordable Care Act includes a number of benefits--mandates--
imposed on the plans consumers can buy. The law also adds 
hundreds of billions of dollars in new taxes that are being 
passed on to patients. And this leaves insurers with only a few 
tools to control and manage cost.
    As a result, many plans are turning to narrower provider 
networks and skimpier prescription drug coverage to keep 
premiums and deductibles in check. Studies show that, compared 
with typical employer-sponsored plans, Bronze and Silver 
exchange plans include far fewer doctors, specialists, and 
hospitals.
    One of our witnesses today, Dr. Scott Gottlieb, in an 
analysis comparing an exchange plan to a comparable private 
health plan across several States found dramatically narrower 
networks for critical specialties, such as cardiologists, 
oncologists, and OB-GYNs, among others.
    As CNN Money reported last October, quote, ``Many insurers 
have opted to limit their selection of doctors in some exchange 
plans to keep premiums and other costs down. And they are also 
excluding large academic medical centers, which are often 
pricier because they tackle sicker patients and more complex 
cases,'' end quote.
    This trend is particularly dangerous for those dealing with 
serious diseases that may have to go out of network and, 
therefore, bear significant cost to find a provider to meet 
their unique needs.
    Even those without serious illnesses have found that their 
doctors they know and like are no longer participating in their 
new exchange plans. A constituent from Conestoga, Pennsylvania, 
wrote to me that, after her policy of nearly 30 years was 
canceled last fall because it was not fully ACA-compliant, she 
was unable to find a new exchange plan which included her 
doctors in the network. Her OB-GYN, whom she had been seeing 
since 1989, and her gastroenterologist are now out of network.
    Narrower networks are not the only access problem consumers 
are running into. And, again, in order to manage cost, some 
plans are simply not covering the most cutting-edge, expensive 
treatments and drugs in their formularies. Analysis shows that 
even when expensive drugs are covered, patients in exchange 
plans pay much higher cost-sharing for them than their 
counterparts in traditional employer-sponsored plans.
    It is this committee's job to understand the negative 
consequences patients are facing under the Affordable Care Act. 
And it is also incumbent for us to begin to examine this 
problem and develop solutions to protect Americans being hurt 
by the health care law.
    I thank all of our witnesses for being here today. I look 
forward to getting your perspective on the challenges patients 
have and will face under the Affordable Care Act.
    I will yield to Dr. Burgess.
    Mr. Burgess. No, I think----
    Mr. Pitts. OK. I yield back and now recognize the ranking 
member of the subcommittee, Mr. Pallone, for 5 minutes.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    The President's health care law was sold to the American 
people with a number of promises. If you like your plan, you 
will be able to keep it; if you like your doctor, you will be 
able to continuing seeing him or her.
    Advocates of the law made this promise again and again. In 
fact, President Obama, according to one count, made this 
promise nearly 37 times.
    Yet as we now know, this promise was simply not true. Last 
year, millions of Americans had their health plans cancelled 
and were forced to enroll in exchange plans.
    Americans are also learning another sad truth. Health plans 
offered in the exchanges are often not providing access--access 
to the doctors, hospitals, and drugs they need.
    Why is this occurring? As we will hear today, many of these 
problems lie at the feet of the Affordable Care Act.
    The ACA includes a number of benefits mandates imposed on 
the plans consumers can buy. The law also adds hundreds of 
billions of dollars in new taxes that are being passed on to 
patients. This leaves insurers with only a few tools to control 
and manage costs. As a result, many plans are turning to narrow 
provider networks and skimpier prescription drug coverage to 
keep premiums and deductibles in check.
    Studies show that, compared with typical employer-sponsored 
plans, bronze and silver exchange plans include far fewer 
doctors, specialists, and hospitals.
    One of our witnesses today, Dr. Scott Gottlieb, in an 
analysis comparing an exchange plan to a comparable private 
health plan across several States, found dramatically narrower 
networks for critical specialties, such as cardiologists, 
oncologists, and OB/GYNs, among others.
    As CNN Money reported last October: ``Many insurers have 
opted to limit their selection of doctors in some exchange 
plans to keep premiums and other costs down. And they are also 
excluding large academic medical centers, which are often 
pricier because they tackle sicker patient and more complex 
cases.''
    This trend is particularly dangerous for those dealing with 
serious diseases that may have to go out-of-network--and, 
therefore bear significant cost--to find a provider to meet 
their unique needs.
    Even those without serious illnesses have found that the 
doctors they know and like are no longer participating in their 
new exchange plans.
    A constituent from Conestoga, PA wrote to me that after her 
policy of nearly 30 years was cancelled last fall because it 
was not fully ACA-compliant, she was unable to find a new 
exchange plan which included her doctors in its network. Her 
OB-GYN, whom she had been seeing since 1989, and her 
gastroenterologist are now out-of-network.
    Narrower networks are not the only access problem consumers 
are running into. Again, in order to manage costs, some plans 
are simply not covering the most cutting-edge, expensive 
treatments and drugs in their formularies.
    Analysis shows that even when expensive drugs are covered, 
patients in exchange plans pay much higher cost-sharing for 
them than their counterparts in traditional employer-sponsored 
plans.
    It is this committee's job to understand the negative 
consequences patients are facing under the Affordable Care Act. 
It is also incumbent for us to begin to examine this problem 
and develop solutions to protect Americans being hurt by the 
President's health care law. I thank our witnesses for being 
here today and look forward to getting your perspective on the 
challenges patients have and will face under the ACA.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. As we prepare to have this conversation today, 
there has to be some perspective. Republicans again will hammer 
over and over again the same smears against the Affordable Care 
Act that they have said year after year, and they will say the 
President and the law have done no good for the country, but 
the facts beg to differ.
    So let's talk about how the law has led to the largest 
expansion of health insurance coverage in decades. And I am not 
just saying that; multiple independent surveys and analysis 
have shown that, because of the ACA, millions more Americans 
have health insurance coverage this year than they had last 
year.
    Here are some numbers: 8 million have private health 
insurance through the ACA's new marketplace; 6 million more now 
have Medicaid coverage; and millions more have purchased health 
care outside the exchanges.
    Mr. Chairman, Massachusetts' uninsured rate is down to 
essentially zero percent because of the ACA. Minnesota's is 
down by 40 percent. And my home State New Jersey's rate of 
uninsured adults has dropped by nearly 40 percent, its lowest 
level in nearly 25 years. And these are real numbers that 
matter.
    So if Republicans want to talk about how to ensure that 
this coverage equates to better access, let's have that debate. 
Let's talk about the ways in which we can strengthen the new 
marketplaces. Let's talk about real solutions. Unfortunately, 
the Republicans don't have any. They have no alternative plan 
that can be put in place through the ACA that would result in 
the same level of coverage for the millions of people who want 
health insurance.
    If you want to improve upon the law, that is fine. The 
insurance industry just released a paper yesterday offering 
ideas to improve the law. But where are the Republicans' 
solutions? Do you want to guarantee broader doctor networks? 
Great. Let's discuss the ways in which we can do that. Do you 
want to mandate broader drug coverage? Wonderful. Let's talk 
about the best approach to address that.
    The law sets key basic standards and then gives States 
flexibility to address these issues. In fact, we will hear from 
one of the witnesses today about the flexibility. And so I ask 
my Republican colleagues, do you want to preempt States?
    Meanwhile, insurers, providers, and drug companies engage 
in private contract negotiations every year to create benefit 
packages. So are my Republican colleagues saying they would 
like to interfere in those negotiations?
    The truth is, the Republicans aren't saying anything except 
let's go back to a system that gives companies free range 
charge to whatever they want without any requirements to 
actually take care of sick people or help them stay healthy.
    We cannot and should not lose sight of the great strides 
that this law has taken to get health insurance coverage to 
people who never had it, who couldn't afford it, who were 
denied it because they had preexisting conditions. Now, 
millions of Americans have a health plan that ensures quality 
coverage with guaranteed benefits and a premium placed on 
prevention. This is a significant improvement in Americans' 
access to health care.
    So, Mr. Chairman, I am waiting to hear what is the 
Republican plan to improve access, because the only so-called 
solution I have seen out of the Grand Old Party is an effort to 
repeal the law and leave 25 million more Americans uninsured. 
If we want to improve the new insurance market, let's do so. 
But, so far, I have not seen any serious effort by the 
Republicans to improve health coverage for anyone.
    I yield the remainder of my time to Mr. Green of Texas.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. I thank Mr. Pallone for yielding.
    The landmark health reform law has enabled 8 million 
Americans to enroll in exchanges, 6 million to gain coverage 
through Medicaid and CHIP, and Americans who already have 
insurance can feel more secure in their coverage, ending some 
of the worst abuses of insurance companies, providing key new 
consumer protections and cost savings.
    If you want something perfect, don't come to Congress. This 
law is a result of compromise, and there are so many ways to 
improve it. If the 24 States that so far refused to expand 
Medicaid at very modest cost to the States and which was 
largely offset by savings in cost of services for the 
uninsured, millions more would be able to access health care.
    The Affordable Care Act is so important to pivot from the 
health-sick system to the true health care system. The law has 
allowed the uninsured rate for Americans to drop to the lowest 
level since Gallup and Healthways started tracking this data. 
And I look forward to seeing it decline further and working 
toward making improvements in this landmark law.
    And, again, I thank my colleague for yielding.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the vice chairman of the subcommittee, Dr. 
Burgess, 5 minutes for an opening statement.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman.
    And thanks to our witnesses for being here with us today.
    Thank you for holding this hearing.
    Already been pointed out, we heard it time and time again 
from the President: If you like your doctor, you can keep your 
doctor, period; if you like your health plan, you can keep your 
health plan, period. It sounded great on the stump but is 
operationally not possible.
    The Affordable Care Act cancels the policy that patients 
wanted, mandates what they must buy instead, and this comes at 
a cost. The Affordable Care Act overly constricts the health 
insurance marketplace. It limits choice by imposing hundreds of 
benefit mandates, leading to higher costs. States like 
California have imposed even greater restrictions on choice. As 
a result, they are facing some of the most limited networks and 
highest out-of-pocket costs for prescription drugs in the 
country.
    Plans have been canceled. Plans sold on the health care 
exchanges are leaving people functionally uninsured. Patients 
are being subjected to higher and higher deductibles and other 
out-of-pocket costs. They now lack critical access to their 
doctors and vital prescription medication.
    I am very familiar with these problems. I did not accept 
the deal that was offered to Members of Congress in buying 
health insurance. None of my constituents could do that. So 
what I did was went into healthcare.gov and bought on the 
individual market. My current plan now has a $6,000 deductible. 
It does not cover medications that I had previously been 
taking. And I am pretty lucky, I don't have to take many 
things, but even with that narrow requirement, it could not be 
met.
    This law also negatively impacts those most in need of 
care. For individuals who do have severe medical needs, 
pediatric oncology patients, many of the Nation's leading 
cancer centers and pediatric hospitals are not included in the 
provider networks or the exchange plans, and access to 
necessary specialty drugs often comes at a tremendous cost. 
Analysts have found that the cost of just one dose of some 
specialty medications could eat up to a third of an enrollee's 
monthly income, even for so-called high-value plans with lower 
cost-sharing.
    Texas is home to some of the world's best medical centers. 
The State's cancer centers and transplant centers--M.D. 
Anderson, Baylor University Medical Center, Texas Children's 
Hospital--treat patients from all over the country. Yet these 
centers are generally included in less than half of the plans 
that are offered in the Texas health insurance exchange.
    There is also widespread physician uncertainty about 
whether having existing contracts with insurers means that they 
are already included in an exchange plan network. As a doctor, 
I know this could lead to confusion both for the physician and 
their patient. So another example of how the Affordable Care 
Act hurts patients, hurts doctors, and is a strain on our 
economy.
    This committee should continue to hold the President to his 
word and ensure that patients have the ability to keep their 
doctor and their choice of insurance. The only way to do this 
is to rescind or modify burdensome laws and regulations.
    I yield the balance of the time to the gentleman from West 
Virginia, Mr. McKinley.

 OPENING STATEMENT OF HON. DAVID B. MCKINLEY, A REPRESENTATIVE 
          IN CONGRESS FROM THE STATE OF WEST VIRGINIA

    Mr. McKinley. Thank you.
    And thank you, Mr. Chairman, for holding this hearing on 
the access to drugs and doctors under Obamacare and allowing me 
to join the subcommittee today.
    The issue of access to good medical care has become a 
passion of mine. Since introducing the Patients' Access to 
Treatments Act, I have heard from people all around the 
country, about people that are not able to afford medication 
that they need, even with private insurance, because of a 
specialty tier.
    Now we hear that under the Obama exchanges some plans are 
not covering specialty and biologic medicines at all. This 
loophole is blocking Americans with disabling diseases from 
getting the necessary care that they need. This is 
unacceptable.
    I am looking forward to hearing from the witnesses this 
morning on this issue that is extremely vital to the most 
vulnerable citizens in our Nation.
    And I yield back my time. Thank you.
    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes the ranking member of the full committee, Mr. 
Waxman, 5 minutes for an opening statement.

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

    Mr. Waxman. Thank you, Mr. Chairman.
    Today's hearing is about access to health care services in 
the new health insurance marketplaces. The Affordable Care Act 
is the single most important step forward on this issue in the 
last 50 years. It will expand insurance coverage by over 25 
million people, it ensures all plans offer real benefits, and 
it bans discrimination on the basis of preexisting conditions.
    Now, I know my Republican colleagues are in a constant 
struggle to see who can be the most misleading and most opposed 
to the ACA, but the premise of this hearing is a stretch even 
for them.
    Republicans are trying to claim that the benefit packages 
and provider networks in ACA plans are actually limiting access 
to care. But at the same time, they want to take us back to a 
world where health plans are free to offer policies that do not 
cover prescription drugs or hospitalization. They want to go 
back to a world where a child with asthma can be turned down by 
a health insurance company because of his or her preexisting 
condition. Do they really think that would improve access?
    If a father has a policy that doesn't cover prescription 
drugs, what type of access does he have? If a mother has a 
policy that does not cover hospitalizations, what type of 
access does she have? And if a young girl is barred from 
insurance because of a preexisting condition, what type of 
access does she have? And if a working family is denied 
Medicaid because their State won't take 100 percent Federal 
dollars and expand coverage, what type of access do they have? 
The answer is obvious: They have next to no access.
    So I really can't take Republicans' criticism too seriously 
today. What I do take seriously is the need for good provider 
networks and robust benefit packages in the health insurance 
marketplaces. That is why we wrote the first nationwide network 
adequacy standard for the private insurance into the law. It is 
why we ensured that prescription drugs were 1 of the 10 
essential health benefits. And it is why we barred 
discriminatory insurance benefit designs and included essential 
community providers in all insurance networks.
    Insurers' and providers' and drug companies' private 
contractual negotiations have always been contentious, and 
regulators have an important balance to strike between broad 
access and affordability. These challenges are nothing new. As 
enrollment and competition in the new marketplaces increase, I 
am confident that we will see more choice and broader range of 
benefit packages.
    For example, in my own district, one of the most expensive 
and best-regarded health systems in the Nation was not a major 
participant in the marketplace last year, but after our State's 
enrollment dramatically exceeded expectations, they announced 
they will be in-network next year. That is private competition 
at work.
    As the law moves forward, Democrats will continue to work 
to step up enforcement of plans that discriminate or improperly 
limit access and will continue to work to expand choice and 
improve the benefit packages offered in the marketplaces. And 
we would welcome the Republicans joining us in trying to 
accomplish that.
    But if Republicans truly share these goals, while we are 
eager to work with them, Mr. Chairman, what we will not do is 
go back to the rampant discrimination and dangerous lack of 
access that we had before reform. And that is what we would 
have had if any of those votes that passed the House were taken 
up and passed by the Senate and signed by the President to 
repeal the Affordable Care Act.
    This is a hearing that is all politics and very little 
substance.
    I yield back my time.
    Mr. Pitts. The Chair thanks the gentleman.
    That concludes the opening statements of the Members. The 
written statements of all Members will be made part of the 
record.
    I would like to have a UC, seek unanimous consent, to 
submit three items for the record: a letter from the 
Association of Mature American Citizens; a sheet of the White 
House Web site listing ``You Can Keep Your Own Insurance;'' and 
a study by the Congressional Research Service entitled, 
``Private Health Insurance Market Reforms in the Affordable 
Care Act.''
    [The information follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Mr. Pitts. We have one panel with three members today. I 
will introduce them in the order they speak. First, Dr. Scott 
Gottlieb, resident fellow of the American Enterprise Institute; 
second, Dr. William Harvey, chair of the Government Affairs 
Committee, American College of Rheumatology; and, finally, the 
Honorable Monica Lindeen, commissioner of the Montana Office of 
the Commissioner of Securities and Insurance.
    Thank you for coming. Your written testimony will be made a 
part of the record. You will each be given 5 minutes to 
summarize. There is a little box of lights on the table, so 
when you see the red light appear, we ask that you please 
conclude.
    At this point, Dr. Gottlieb, you are recognized for 5 
minutes for your opening statement.

    STATEMENTS OF SCOTT GOTTLIEB, RESIDENT FELLOW, AMERICAN 
  ENTERPRISE INSTITUTE; WILLIAM F. HARVEY, CHAIR, GOVERNMENT 
AFFAIRS COMMITTEE, AMERICAN COLLEGE OF RHEUMATOLOGY; AND MONICA 
LINDEEN, COMMISSIONER, SECURITIES AND INSURANCE, OFFICE OF THE 
                     MONTANA STATE AUDITOR

                  STATEMENT OF SCOTT GOTTLIEB

    Mr. Gottlieb. Chairman Pitts, Ranking Member Pallone, thank 
you for the opportunity to testify today before the committee. 
My name the Scott Gottlieb. I am a physician and resident 
fellow at the American Enterprise Institute, and I previously 
served at positions at the FDA and CMS.
    Americans who sign up for insurance under the ACA are 
finding many of these plans offer very narrow options when it 
comes to their choice of doctors and drugs. Some argue these 
narrow benefit designs aren't unique to the ACA, but this isn't 
entirely true. The construction of the exchanges preordained 
the wider adoption of these restrictive networks and 
formularies and certainly made these constructs politically 
suitable.
    Since many plans have little or no coinsurance outside of 
their networks and formularies, patients seeking care outside 
of these arrangements can be saddled with the full cost of 
these choices. Under many plans, when patients are out of their 
networks or off their formularies, these costs don't count 
against deductibles or out-of-pocket maximums.
    To get a sense of how restrictive the formularies are and 
its impact on patients, we looked at drugs used to treat two 
chronic diseases: rheumatoid arthritis and multiple sclerosis. 
We examined the drug coverage offered by the lowest-cost Silver 
plan offered in the most populated county in 10 different 
States and focused on disease-modifying drugs that are widely 
prescribed for these patients.
    We found that none of the plans provided coverage for all 
the drugs or covered any of them without significant cost-
sharing that would tap out most people's annual deductibles and 
out-of-pocket limits on spending. The challenge for consumers 
is that most of the plans have closed formularies where 
nonformulary drugs aren't covered at all. Moreover, the cap on 
out-of-pocket spending only applies to costs incurred on drugs 
included in a plan's formulary.
    Among some of our findings, the multiple sclerosis drug 
Aubagio is left off the formularies of 2 of 10 plans, so 
patients on these plans could have to pay the full $4,400 
monthly retail cost of the medicine, translating to about 
$53,000 annually. The drug Avonex was left off the formularies 
of 2 of the 10 plans, potentially saddling patients with the 
drug's $4,800 monthly cost. That is $57,000 annually. Extavia 
wasn't included on 2 of the 10 formularies, at a monthly cost 
of $4,600 or $55,000 annually. Tecfidera was left off 6 of the 
10 plans, at a monthly cost to patients of $5,200.
    We found similar results when it came to drugs targeted to 
rheumatoid arthritis. For example, the RA drug Xeljanz was left 
off the formularies of 4 of the 10 plans, at a monthly cost to 
patients of $2,400 or about $30,000 annually. Orencia was left 
off two plans, at $2,600 a month or $32,000 annually. The RA 
drug Remicade was left off the formulary of three plans, at 
about $3,500 for a 2-month supply or $21,000 annually.
    The high cost of developing innovative medicines translates 
into high retail prices. This is a challenge for our health 
care system. But the cost of disease progression and the 
ensuing disability can far outweigh the cost of effective 
management with some of these drugs. Many newer medicines are 
more targeted to these diseases and far more effective.
    These findings have been replicated by other analyses. One 
study by Avalere Health of 22 carriers in 6 States found the 
number of drugs available in formularies ranged from a low of 
about 480 to nearly 1,100.
    Even if your drug makes it onto the plan's formulary, 
getting access can still be a costly affair. Another analysis 
looked at 123 formularies from different Silver plans. More 
than 20 percent required coinsurance of 40 percent or more for 
the drugs for one of seven different chronic diseases, and 
about 30 percent of plans provided no coverage for at least one 
key drug for multiple sclerosis.
    The same challenges are being seen when it comes to 
networks of doctors that the health plans offer. More than two-
thirds of exchange plans have provider networks considered 
narrow or ultra-narrow in which as many as 70 percent of local 
health providers aren't included.
    Earlier this year, we released our own analysis that 
consistently found that exchange plans offer just a fraction of 
the specialists available in the PPO plan offered by the same 
carrier in the same region.
    In the 1990s, consumers firmly rejected the idea of very 
restrictive health plans and drug formularies when they spurned 
HMOs in favor of preferred provider organizations. Yet, the ACA 
seems premised on a view that consumers were making a bad trade 
when they chose PPOs over HMOs. Each scheme has tradeoffs, but 
the ACA all but codifies the HMO model into law, forcing 
consumers into these restrictive arrangements as a way to pay 
for the ACA's other rules and mandates.
    Congress could reform the ACA by permitting any health plan 
that previously met State eligibility prior to passage of the 
law to be offered on the exchanges. This would allow for a much 
wider selection of plans that make different tradeoffs between 
benefit design and networks. These restricted schemes are an 
unfortunate consequence of the way the ACA structured the State 
exchanges. It is within Congress' power to fix these rules.
    Thank you.
    Mr. Pitts. The Chair thanks the gentleman.
    [The prepared statement of Mr. Gottlieb follows:]
    
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    Mr. Pitts. Dr. Harvey, you are recognized for 5 minutes for 
an opening statement.

                 STATEMENT OF WILLIAM F. HARVEY

    Mr. Harvey. Chairman Pitts, Ranking Member Pallone, thank 
you for allowing me to speak before you today. My name is Dr. 
Will Harvey, and I am a practicing rheumatologist at Tufts 
Medical Center in Boston, Massachusetts.
    In addition to my daily duties caring for patients with 
rheumatic and musculoskeletal disease, I am privileged to chair 
the Government Affairs Committee of the American College of 
Rheumatology. As a member of the Coalition for Accessible 
Treatments, the ACR advocates for, among other things, 
affordable access to treatments for chronic conditions, 
including rheumatoid arthritis, multiple sclerosis, lupus, 
hemophilia, certain cancers, and many more. With these 
treatments, much of the disability of these diseases may be 
averted.
    But a great tragedy is emerging in our country involving 
increasing barriers accessing these treatments. Some of these 
barriers include cuts to provider networks, step and fail-first 
therapies, co-pay assistance problems, and specialty tiers. I 
appreciate the opportunity to discuss some of those barriers in 
more detail with you today.
    The first barrier I wish to bring before the committee 
relates to the practice of co-pays. I have no doubt every 
member of this committee is familiar with co-pays and their 
typical structure of generic tiers, name-brand preferred, and 
name-brand nonpreferred, or Tiers 1 through 3.
    Unfortunately, however, we are seeing more and more 
insurers in plans and exchanges creating a fourth tier for 
expensive specialty drugs. Data released this week from Avalere 
shows that for many diseases, including rheumatoid arthritis, 
100 percent of the biologic treatments fall within these 
specialty tiers.
    What is more alarming about this fourth tier is that the 
insurers and plans in the exchanges have often assigned a 
coinsurance on a percentage basis, ranging from 20 to 50 
percent of the total cost of this drug, which, as you just 
heard, can exceed $20,000 or more a year. This results in 
patient facing thousands of dollars per year of out-of-pocket 
costs.
    Prior to the ACA, about 23 percent of plans included a 
fourth tier. Based on this data from Avalere, 91 percent of 
exchange plans use a fourth tier and 63 percent of them use a 
coinsurance for that tier.
    Because of the cost of coinsurance, many patients are 
declining treatment. And, in many cases, when patients fail to 
access these treatments, they become disabled and can no longer 
remain in the workforce, thus costing the Federal Government 
more money to cover disability. Arthritis remains one of the 
top reasons for disability in the United States, at very high 
cost to the Federal Government.
    Here is a stark example sent to me from a colleague in 
Wisconsin. ``I have a young mother,'' she tells me, ``with 
rheumatoid arthritis who cannot afford biologic treatments 
because of high co-pays. As a result, she has damage to her 
joints, and my concern is that it will affect her ability to 
remain employed. It has already limited the activities that she 
can do with her children. I have many other stories,'' she 
tells me, ``of patients who go without their medications, but 
this patient is in her 30s, and I have watched her RA erode her 
joints without being able to help her.''
    Fortunately, 127 Members of Congress have charted a path 
forward. H.R. 460, the Patients' Access to Treatments Act, 
sponsored by Representatives McKinley and Capps, limits the 
practice of Tier 4 pricing by preventing a percentage-based 
approach in favor of pegging Tier 4 co-payments to lower tiers. 
The ACR and the Coalition would like to thank Representatives 
McKinley and Capps for their heroic leadership in this regard.
    It has been noted that a potential consequence of such 
action is an increase in premiums across all beneficiaries of 
those plans. We commissioned Avalere to conduct an evidence-
based assessment of the likely impact of H.R. 460 on premiums. 
The results indicated that, if passed, H.R. 460 would only 
raise premiums in plans with specialty tiers by approximately 
$3 per year, or 25 cents per month.
    There is too much at stake for patients who might stay in 
the workforce longer, avoid costlier treatments, and remain 
productive members of our society to let this practice 
continue.
    Another issue I wish to bring before the committee relates 
to changes in provider networks where insurers have attempted 
to control costs by dramatically cutting provider networks. We 
believe this has begun with Medicare Advantage plans across the 
country, but there is great trepidation amongst all of my 
colleagues that it will expand dramatically to plans within the 
ACA.
    In conclusion, I have great faith in the institution of 
Government and that its members will do everything in their 
power to protect the people of our Nation who suffer from 
chronic diseases and are burdened with the growing expense of 
treatments, with less access to the experts who can diagnosis 
and treat their conditions.
    I cannot leave without acknowledging that the ACA has had 
successes and has been a benefit to many Americans. But the 
health care system is far from fixed, and much work is still 
necessary.
    The committee should take swift action to, first, maintain 
adequate provider networks to ensure access to care while 
ensuring truth in advertising by requiring insurers in 
exchanges and in the broader marketplace to disclose plan 
changes to provider networks during open enrollment periods; 
and, secondly, to prevent excessive cost-sharing by blameless 
patients with chronic diseases by supporting H.R. 460, the 
Patients' Access to Treatments Act, which would apply to any 
private insurer within the ACA exchange.
    Thank you again for accepting this testimony. I am happy to 
address any questions the committee may have.
    Mr. Pitts. The Chair thanks the gentleman.
    [The prepared statement of Mr. Harvey follows:]
    
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    Mr. Pitts. I now recognize Commission Lindeen, 5 minutes 
for an opening statement.

                 STATEMENT OF MONICA J. LINDEEN

    Ms. Lindeen. Good morning, Chairman Pitts, Ranking Member 
Pallone, and members of the subcommittee. My name is Monica 
Lindeen, and I am the commissioner of securities and insurance 
for the State of Montana. And I also serve as president-elect 
of the NAIC.
    I appreciate the opportunity to appear before the committee 
to discuss these two important topics that have a great 
influence over the quality of care that QHP enrollees receive.
    While I am limiting my spoken comments today to network 
adequacy, my written testimony also contains information about 
drug formularies.
    As the ACA has been implemented, insurance commissioners 
across the country have focused on protecting consumers and 
markets in their individual States. The issues we deal with are 
complex, but, through the NAIC, our national organization, we 
have worked cooperatively to address the challenges.
    Insurance companies have long used provider network 
contracts as a way of controlling costs. Providers agree to 
lower reimbursements in exchange for the increased traffic of 
patients seeking lower out-of-pocket costs within the network. 
But there can be problems. If the networks become too narrow, 
patients can't get the services they really need. If the 
regulation becomes too stiff, insurance companies can't 
organize policies in ways that truly cut health care costs.
    These concerns have been ongoing for some time, and network 
adequacy oversight has been and will continue to be a priority 
for insurance commissioners around the country.
    Given the importance of striking a balance, particularly 
with respect to tradeoffs between breadths of network and cost 
and the differences in local geography, demographics, patterns 
of care, and market conditions, it is important that 
responsibility for assessing the adequacy of networks remain 
with the States. State-based regulation works and has proven to 
effectively protect consumers. Networks are inherently local, 
and you need local expertise to effectively regulate the 
markets and preserve patient access to the care they need.
    Montana has the tools in place to adequately regulate in-
networks, and our network adequacy standards are, in general, 
more protective than what the ACA requires. My staff reviews 
the network adequacy of every health plan approved for sale 
inside the Federal exchange as well as those sold outside the 
marketplace. Because I conduct the same review inside and 
outside, I am able to ensure a level playing field in our 
market.
    In Montana, we have not witnessed the sale of private 
health insurance plans restricted to certain service areas and 
the very narrow networks do not really exist. The majority of 
the health plan products offered in Montana are a variation of 
a PPO product. However, in 2014, two of our three marketplace 
insurers did offer a narrower network option in two cities. But 
both of those companies also offered products in all parts of 
the State with access to their complete network, including the 
rural areas.
    It is very important for consumers to understand the 
network features of a plan and how those apply to care provided 
by specific providers. Most of the network adequacy complaints 
received by my office this past year were rooted in a lack of 
transparency about available providers and a lack of 
understanding about how network restrictions work. Consumers 
found it difficult to find lists of provider networks when they 
were shopping for insurance, and this made it very difficult to 
choose the correct plan. The marketplace and insurance 
companies need to do better job of providing accurate and easy-
to-access network lists.
    These are not insurmountable problems, and States are 
focused on fixing these transparency issues. Over the years, 
insurers have been experimenting with new types of plan 
designs, and the head-to-head competition on exchanges has 
accelerated this trend, as competition on prices become more 
acute.
    While I and my colleagues agree that containing cost and 
bending the curve is critically important, we must also 
remember that health care is about more than the bottom line. 
Some older State statutes may no longer fully accommodate these 
new plan designs, and so the NAIC has begun working to revise 
our network adequacy model law, which aims to fully protect 
consumers while providing regulatory flexibility.
    We have spent the last month receiving input from all 
interested stakeholders before drafting any revisions, which we 
hope to develop and consider through our open and transparent 
process and complete by the end of the year. Until that time, 
we believe CMS should not engage in further rulemaking until 
the States have time to act.
    As I conclude my remarks, let me leave you with this 
perspective from someone who has been on the ground dealing 
with implementation. I have traveled across the entire State of 
Montana in many communities, including all seven of our Indian 
reservations, a distance greater than from here in DC to 
Chicago. And even on our Indian reservations, whether they are 
Republicans or Democrats, the folks in Montana don't want to 
talk about partisan arguments; they want to talk about 
solutions that are going to help them find their correct doctor 
and their correct insurance plan and get the care they need for 
their families. Trying to help answer those questions is what 
drives my decisions as a commissioner, not what is happening 
here in DC.
    So thank you for the opportunity to testify.
    Mr. Pitts. The Chair thanks the gentlelady.
    [The prepared statement of Ms. Lindeen follows:]
    
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    Mr. Pitts. That concludes the opening statements of the 
witnesses. We will now go to questions and answers. I will 
begin the questioning and recognize myself for 5 minutes.
    At the outset, I want to point out one thing I find deeply 
troubling. It is now widely acknowledged that the President's 
promise that if you like your doctor you can keep your doctor 
under the Affordable Care Act is simply not true for many 
patients around the country. Given this fact, I think it is 
unacceptable that the administration continues to give 
Americans the false impression that this promise is somehow 
true.
    To this day, the White House Web site includes a section 
entitled ``Health Insurance Reform Reality Check.'' And on the 
Web site, the promise appears, ``If you like your doctor, you 
can keep your doctor.'' The Americans don't expect their 
elected leaders to agree with them on everything, but they do 
expect and deserve the truth. So I would urge the White House 
to either take this page down from their Web site or correct 
the record immediately.
    Dr. Gottlieb, many patients with coverage through the ACA's 
health care exchanges are sadly finding out that they may not 
have real access to their doctor or medicines that they rely on 
because of narrower networks, restrictive drug formularies, or 
a complete lack of coverage for a specific provider or drug.
    Can you further explain how these patient access issues are 
being driven by the design of the President's health care law?
    Mr. Gottlieb. Well, I think it was a combination of things. 
The first thing was the costly mandates that the law imposed on 
what the plans needed to cover, things like mental-health 
parity, first-dollar coverage for a lot of preventative 
services. There is no question there are going to be consumers 
who benefit from those mandated benefits, and I am not debating 
the merits of that, but they are expensive.
    Coupled with that, the law outlawed or restricted a lot of 
the traditional tools that insurance companies used to control 
costs. And things like underwriting risk, things like using co-
pays to steer patients aggressively, adjusting premiums--and so 
what they were left with was the ability to go after the 
networks and go after the formularies. And since that was the 
only tool they had left to try to adjust the plans to meet the 
cost requirements in an environment where they had a lot of 
mandates imposed on them, they went after them very 
aggressively.
    There were a lot of folks, prior to passage of ACA, in this 
town, smart folks on both the right and left, who knew that the 
networks were going to be narrow in these plans and anticipated 
that and saw it as a--you know, proponents of the law saw it as 
a necessary compromise to accommodate the mandates. But I think 
that, in fact, was the reality of what happened.
    Mr. Pitts. Dr. Harvey, in your testimony, you note a study 
from Avalere showing a dramatic expansion in the use of 
specialty tiers for prescription drugs in exchange plans 
relative to coverage before the ACA.
    Can you elaborate a little more on how this trend has grown 
and what it means for the patients you serve?
    Mr. Harvey. Certainly.
    It has grown dramatically. It seems to have started, to 
some extent, in the Medicare Advantage plans but has, as you 
noted, become much more common in the ACA exchange plans.
    The impact on patients is profound. Every day, in my 
practice, I see patients who tell me they cannot afford their 
medications because of this expensive co-pay. And it is a 
tragedy, as Congressman McKinley said, unacceptable, that in 
this country we can have the tools to prevent disability 
without them being affordable to patients.
    Mr. Pitts. Commissioner Lindeen, at the beginning of your 
written testimony, you state that the President's health care 
law, quote, ``has probably accelerated the trend,'' end quote, 
toward narrower networks for patients in the individual and 
small-group market because the law limits underwriting by 
insurers.
    Are there other benefit requirements in the ACA that you 
believe could be contributing to the trend of narrow networks? 
Are there other requirements--for example, the requirement that 
consumers buy coverage that includes essential health benefits 
and that meet minimum actuarial value?
    Ms. Lindeen. Thank you for the question.
    You know, network adequacies and the narrowing of those 
networks is really nothing new. This has been going on for 
years, and I think that, obviously, the ACA has accelerated 
that process.
    And it is market competition at work that is occurring, 
literally. And while the head-to-head competition in the 
exchanges are accelerating that trend of narrow networks, it 
can also be a very effective way of actually reducing the cost 
of health care. But that doesn't have to, you know, reduce the 
amount of quality also. And that is why it is really important 
that we are regulating these networks and making sure that we 
are not compromising quality.
    We also know that, you know, as they are working on these 
contracts, that they are actually going to--just to the 
marketplace. We have already gotten a lot of companies who have 
talked about the fact that they are getting more contracts in 
place for this coming year. And so I think that we are going 
to--they are responding to what they are hearing from patients 
and responding to what they are hearing from you folks, as 
well. So we are going to see this continue to change and 
improve for the consumer.
    Mr. Pitts. The Chair thanks the gentlelady.
    I now recognize the ranking member, Mr. Pallone, 5 minutes 
for questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    I do have this--I ask unanimous consent to include this 
written statement for the record from Claire McAndrew from 
Families USA.
    Mr. Pitts. Without objection, so ordered.
    [The information follows:]
    
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    Mr. Pallone. Thank you.
    As I said in my opening statement, if Republicans were 
serious about improving health care access, I would be very 
pleased that we are having this hearing. The ACA takes 
unprecedented steps to expand access to health care services, 
but I agree that if any American lacks access to the care they 
need, we have more work to do.
    But I can't sit idly by and listen to Republicans claim 
they want to expand health care access and then in the same 
breath claim that they want to repeal the ACA. I think that is 
just ridiculous.
    So, Commissioner Lindeen, the ACA has led to dramatic 
increases in health insurance coverage. It has opened up 
affordable coverage to millions who were previously priced out 
because of preexisting conditions. Over the next few years, it 
is projected to reduce the number of uninsured Americans by 26 
million.
    Can you help us get some clarity on a simple point? Does 
having health insurance increase people's access to health care 
services? Or put another way, would the 25 million Americans 
getting covered because of the ACA have better access if the 
Republicans got their way and they became uninsured?
    Ms. Lindeen. Congressman, thank you.
    Let me just say this, that in my experience as the 
insurance commissioner in Montana and having had the 
conversations that I have had with thousands and thousands of 
folks across my State, there has been an increase in coverage 
for Montanans. And I am certain that that probably is happening 
in every State.
    And I can also guarantee you that there are folks who 
didn't have coverage previously that have it now. There was one 
woman I know of, for instance, in Montana who was born with 
this heart condition and so she had never had insurance in her 
life because, number one, she couldn't afford it and because of 
the preexisting condition. She had incredible expenses 
throughout her life as a result, and then her husband passed 
away, and she had more of a burden on her in terms of finances. 
And then she was diagnosed with uterine cancer. She made the 
decision to actually forego any treatment because she knew that 
it was going to bankrupt her and her family. I mean, that is a 
tough decision to make.
    Well, as it turned out, the ACA passed about the same time 
that this occurred, and, as a result, she was actually able to 
get for the first time in her life access to care that she 
could afford and is alive today.
    And I think that is what we need to remember, is that this 
is really life and death to many, many people across this 
country. This is about making sure that they are taking care of 
themselves and their families.
    And really, frankly, the public is tired of hearing the 
arguments in Congress. What they want is for us, and for all of 
us, to solve the issues. And I can tell you that insurance 
commissioners across this country in every single State, who 
are Republicans and Democrats, put aside their partisan beliefs 
every day to try to do what is best for their consumers. And 
all we ask is that you folks do the same.
    Mr. Pallone. I appreciate that. Thank you. And as I have 
said, if Republicans are serious about improving the ACA to 
expand access, then I am eager to work with them.
    But the ACA includes unprecedented nationwide network 
adequacy requirements; it requires plans contract with 
essential community providers that work in underserved 
communities and offer key services; it bars plans from imposing 
extra cost-sharing on out-of-network emergency care; and it 
requires plans to cover essential health benefits, which means 
that they must have a range of providers in-network.
    So I just wanted to ask you, Commissioner, States have a 
great deal of flexibility in setting their own standards and 
enforcing those requirements; isn't that correct?
    Ms. Lindeen. Yes, they do. We in our States have always had 
a great deal of ability to set standards. Obviously, we feel 
like the ACA, in many cases, set a floor and then we can then 
go above that floor if necessary.
    You know, in terms of--and if I could, in terms of the 
essential health benefits, you know, insurance is really about 
spreading risk. OK? And it is important for things like 
maternity coverage to be included in order to help spread that 
risk. Because if you don't, what happens then is you have folks 
who can't even afford to get coverage for maternity care, which 
was happening in some States prior to the Affordable Care Act.
    Montana is an exception to the rule. We have had unisex 
insurance law on our books for over 20 years, and so we have 
been spreading the cost all this time. And, as a result, every 
woman in the State of Montana has had the ability to have that 
kind of care, and affordable care, in order to have coverage 
for pregnancy.
    Mr. Pallone. All right. Thanks so much.
    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes the vice chair of the full committee, Ms. Blackburn, 
5 minutes for questions.
    Mrs. Blackburn. Thank you, Mr. Chairman. And I am delighted 
we are having the hearing today and having this discussion.
    I find it so interesting that my colleagues across the 
aisle continue to say we have no options to replace Obamacare 
because, indeed, we do. Indeed, Mr. Scalise and Dr. Roe and I 
wrote the President on December 10th of last year asking if we 
could come and discuss with him the American Health Care Reform 
Act, which would be a replacement. It includes such popular 
ideas as across-State-line purchase of health insurance, 
portability, equalizing tax treatment, looking at tort reform.
    So we have plenty of options. What we need is people who 
are willing to listen that there just might be a better way to 
administer health care than going through a Government-run 
program.
    Now, when we talk about repealing Obamacare, we are talking 
about getting rid of Government control of health care. The 
reason we do this is because history tells us and what we see 
playing out in front of us shows us it does not work. Look at 
what is happening with the VA.
    And, of course, we all know from some of the Democrat 
leadership that the stated goal of Obamacare is to have it push 
us to a single-payer system.
    So, with that in mind, I would just say--and, Commissioner, 
to you, thank you for joining us, but I have to tell you, in 
Tennessee, we had an experiment with Hillarycare, the test case 
for Hillarycare, which became the template for Obamacare. Now, 
ours was called TennCare. And what we saw is it was an 
expensive--far too expensive to afford. It was consuming every 
new dollar that came into our State.
    So what did a Democrat Governor do? And putting aside his 
partisanship, what he did was to take the program down to--took 
several hundred thousand people off the program because we 
could not afford this. It became 35.3 percent of the State 
budget.
    We know it does not work. Access to the queue and access to 
the care is not the same thing.
    I heard from a woman who had Obamacare. She was excited to 
get it. She went to her primary care physician, thought she had 
all these essential benefits. Needs a test, goes over to the 
medical lab. Guess what? Doesn't pay for the test. Guess what? 
She didn't have $1,200 to pay for it. So, see, access to the 
queue and access to the care are a couple of different things.
    I have heard from an eye surgeon over at Vanderbilt, and he 
has a surgery that deals with blindness for those that have 
diabetes. He is looking at narrowing networks for Medicare and 
incredibly narrow networks, the process not even covered 
through Obamacare. And so we are seeing this problem with 
access to the care that is needed.
    And I have to tell you, after living through the issues 
with TennCare in my State, I think it is just awful that we 
would give false hopes and false promise to people that really 
want to access health care and have that available for their 
families.
    And that is what we are seeing play out with Obamacare. 
That is why you continue to have waivers. It is why you 
continue to have people seeking to opt out. It is why the 
administration continues to go around Congress and give 
different parts of the law different treatment. Not supposed to 
do that, but they do it anyway because they are dealing with 
the program that doesn't work.
    Dr. Gottlieb, let me come to you. I am so concerned about 
these narrowing networks and what we saw in TennCare, what we 
have seen in Medicare with the narrowing network, such as what 
I mentioned with the eye surgeon there in my district. And I 
would like to know your thoughts on if you believe that the 
same central cost-controlling behaviors are going to happen as 
we move forward with Obamacare and why you think that is going 
to happen and the effect that is going to have on access to 
specialty care.
    Mr. Gottlieb. Well, it is happening, and it is happening 
because I think it is one of the primary cost-control tools 
that the insurance companies have left to them under the 
existing rules.
    I also think that the compromises that were made in the 
Affordable Care Act made this politically palatable, if not 
fashionable, to have these kinds of networks. If we think back 
to the 1990s, the last time there was a broad movement towards 
more restrictive kinds of plans, the HMO-style plans, we saw 
introduction of the patients' bill of rights and a real 
political backlash. I think that the environment now prevents 
that backlash from happening, and so you are going to see more 
insurance companies take advantage of these tools.
    And I fully expect that you are going to see these narrow 
networks start to roll out into other aspects of the market--
the commercial market, the Medicare Advantage market. This 
isn't going to just be confined to the Affordable Care Act 
marketplace.
    Mrs. Blackburn. I yield back.
    Mr. Pitts. The gentlelady's time has expired.
    The Chair recognizes the gentlelady from Virgin Islands, 
Dr. Christensen, 5 minutes.
    Mrs. Christensen. Thank you, Mr. Chair.
    And I have to agree with Dr. Lindeen that it is time to 
stop arguing and just, you know, move ahead. Too many people 
are benefiting right now from the Affordable Care Act, and, 
yes, there might be things that we could tweak a little bit, 
and we have always been willing to do that, but it is time to 
stop the arguing and take care of the needs of the American 
people.
    The Affordable Care Act is a very important step towards 
eliminating health disparities. Minorities are far more likely 
to lack insurance, far more likely to lack access to a regular 
source of care, less likely to receive key preventative 
benefits. The ACA's coverage expansion and its focus on 
prevention is already having a huge impact, positive impact, on 
minority communities.
    Provider networks and prescription drug coverage are key to 
this impact. The law's requirement that all health plans 
contract with essential community providers that work with the 
underserved population is critically important. And I am hoping 
that, you know, some of the doctors that I have worked with in 
the National Medical Association and the Hispanic Medical 
Association are being seen as essential community providers in 
these networks.
    The essential health benefits and cost-sharing protections 
are huge steps forward to make sure necessary treatments are 
available and affordable to the newly insured. Commissioner 
Lindeen, how do these provisions and other aspects of the ACA 
help the underserved communities in your State?
    Ms. Lindeen. I appreciate the question.
    You know, we have a very rural State, as you can imagine, 
and a large proportion of the population actually falls in that 
area of low-income, including seven Indian reservations, where 
there is, you know----
    Mrs. Christensen. Yes.
    Ms. Lindeen [continuing]. Obviously, limited employment 
opportunities.
    And I can tell you that I had a study commissioned by an 
independent group with, actually, one of the grants as a result 
of the ACA. I guess it has been almost 4 years ago now. And we, 
through that process, were able to come up with a number of 
about 170,000 Montanans who were not only uninsured but 
actually fell into, in many cases, these--the same type of--
were the same type of people that you are talking about.
    As a result of the ACA and the new marketplace, I can tell 
you that, in this first enrollment period, we have been able to 
get coverage for a good number of them, tens of thousands of 
that 170,000.
    Unfortunately, about 70,000 of those individuals still fall 
into that Medicaid gap. We have not expanded Medicaid in the 
State of Montana. And so it is kind of a difficult situation we 
find ourselves in, where, you know, these 70,000 folks, at 
least in my State, really have no option--affordable option. I 
mean, they are the working poor.
    Mrs. Christensen. Yes.
    Ms. Lindeen. But we have seen, definitely, thousands of 
folks who have been able to get access as a result.
    Mrs. Christensen. Yes. If we could have all of the States 
expand Medicaid, we would cover probably 95 percent of the 
people--of minorities and the poor. So we continue to work and 
hope that the States will accept Medicaid expansion that have 
not thus far.
    But these are important steps forward. We all need to 
remain vigilant to make sure that the law is implemented so 
that it achieves the goals of eliminating health disparities. 
For example, the law bans insurers from designing their health 
plans in a discriminatory manner. They cannot set up drug 
formularies or choose their providers in a way that 
discriminates against any group or individual with serious 
health needs.
    Commissioner, how are you looking at potential 
discrimination in the marketplace? And how should we think 
about this issue going forward?
    Ms. Lindeen. Well, I would say that, I mean, I think it is 
a really important issue that I think every one of the 
commissioners is very concerned about.
    Obviously--let's just talk about the tiered drug 
formularies for a second. I mean, it has really proven to be 
effective in terms of helping to bring down costs and really 
steer consumers toward generic drugs. But, at the same time, we 
are also, you know, wary of the fact that we want to ensure 
that these are being structured in a way that do not keep 
patients that have these certain medical conditions from 
actually accessing their drugs. That is in violation of the 
ACA, it is in violation of State laws.
    And so, if there are any nondiscrimination--or any 
discrimination occurring, I mean, we will actually investigate 
that and take measures to make sure that that doesn't occur in 
the future.
    Mrs. Christensen. Thank you.
    Mr. Pitts. The gentlelady's time has expired.
    The Chair recognizes the vice chair of the subcommittee, 
Dr. Burgess, for 5 minutes of questioning.
    Mr. Burgess. Thank you, Mr. Chairman.
    Dr. Gottlieb, again, thank you for being at our committee. 
You are always good to respond when we request, and we 
appreciate it.
    An article that was published in Forbes in December, it's 
titled, ``No, you can't keep your drugs either,'' are you 
familiar with that article?
    Mr. Gottlieb. Yes.
    Mr. Burgess. Well, in the article--I mean, I have got to 
tell you a lot of people are not familiar with what a formulary 
is or what a formulary does, but I suspect even more are not 
familiar with what a closed formulary is or does.
    Could you tell us in a few words what that is?
    Mr. Gottlieb. Well, a lot of these formularies are closed 
formularies, particularly when you look at the Bronze and the 
Silver Plans.
    And what it basically means in most cases is that, if a 
drug isn't on the list of the plan's formulary, it is not 
covered at all, there is no co-insurance, and whatever you 
would spend on purchasing the drug wouldn't count against your 
out-of-pocket limits or your deductible.
    Mr. Burgess. And that, you know, is such a key point. 
Again, as I referenced in my opening statement, I bumped up 
against this myself, not with something that was terribly 
esoteric.
    But at the same time I thought, ``Well, I am a free 
American. I will just buy the darn drug myself, but I will 
charge it against my deductible.'' And I was informed that 
that--you know, ``You are just spending your money. You are not 
covering your deductible.''
    Now, of course, the out-of-pocket limits were suspended the 
first year in the individual market for individuals under one 
of the President's unilateral decisions on enforcement activity 
under the Affordable Care Act. So that really doesn't even 
play.
    But the concept of a closed formulary is one that I don't 
think people are aware of. They need to become aware of it. 
And, again, like me, they may bump up against it without 
knowing that that restriction actually exists.
    Mr. Gottlieb. I will just add it is very hard to figure 
out. When we looked at these plans, we had a very difficult 
time figuring out if these were closed formularies or not. We 
spent days on it. And I had a very talented research assistant 
working with me and we had to actually call the plan and even 
then it was difficult to get that information. So consumers 
might not know until it is too late whether they are in one of 
these.
    Mr. Burgess. Correct. It is too late because they are 
already into their coverage year. Presumably, they could change 
plans next year.
    But, unfortunately, we don't know whether there will be 
access to plans that will not--I mean, I think closed 
formularies are here to stay. I mean, I think it is just one of 
those things.
    I practiced in the 1990s. I remember what it was like with 
HMOs. But a lot of those practices, even though they have been 
modified and mitigated with time, they are still with us.
    You are still calling a 1-800 number to get approval for 
your patient who doesn't--if you don't follow the step therapy 
for asthma, for example. You have got to do it exactly the way 
the insurance company says or the product is not covered.
    Another piece that I have here of yours is also from 
Forbes, and this one was published in March, so just a few 
weeks ago: Hard Data on Trouble You Will Have Finding Doctors 
in the Affordable Care Act. And then you have a table.
    That is some pretty striking information that you revealed 
there as well. I mean, again, we go back to, if you like your 
doctor, you can keep your doctor, unless your doctor happens to 
be a cardiologist in Connecticut, for example, where 177 of the 
400 cardiologists are no longer available to you.
    Have I interpreted that correctly?
    Mr. Gottlieb. You have. And the other thing--you know, we 
talk about the sort of popularization of the closed 
formularies.
    The other thing that I think is going to be popularized is 
something called the exclusive provider organization, which 
might be a new acronym for a lot of folks, where you are 
dealing with a network of physicians that literally are 
countywide.
    And once you go outside your network, again, if you are in 
a closed network, whatever you spend with a physician outside 
that network won't count against your out-of-pocket limits, 
potentially
    Mr. Burgess. And, you know, I am just like anybody else. 
When I went and priced this stuff on healthcare.gov--or when I 
went and shopped on healthcare.gov, I was only shopping on 
price.
    I think that is what most people do, not anticipating they 
are ever really going to need their health insurance. But the 
reality is you can get some serious restrictions and some 
boundaries on the type of medical care you are able to get 
under these policies.
    Ms. Lindeen, let me ask you a question, and this is a 
little bit off topic. But since you are the insurance 
commissioner on the panel, we are all familiar with medical 
loss ratio and the fact that any insurance company can only 
have 15 percent of its expenses on the administrative side.
    What happens when an insurance company buys a doctor group? 
Do those administrative costs then just get automatically 
transferred to the clinical side because a doctor group has 
been purchased now by a health plan?
    Ms. Lindeen. I have to tell you that I am not an expert on 
how that works, but I would be definitely willing to go back 
and get you that information.
    Mr. Burgess. I think that is something we are likely to see 
more and more of. I think it is a loophole, if you will, in the 
way the--one of the many loopholes in the way the law was 
drafted. But I would appreciate your researching that and 
getting back to the committee on that issue.
    Ms. Lindeen. Absolutely. It is my pleasure.
    Mr. Burgess. Thank you.
    I yield back, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    Now recognize the gentleman from Texas, Mr. Green, for 5 
minutes of questions.
    Mr. Green. Thank you, Mr. Chairman, Ranking Member. I 
appreciate you having the hearing today.
    I want to start by saying, while health insurance does not 
necessarily equal health care access, having coverage, whether 
it is through the employer, Medicare, Medicaid, CHIP, or 
exchanges, the essential first step is to have access to health 
care.
    And I was a State legislator for 20 years--I tell people 
before I lost my mind and came to Congress--in Texas and worked 
on access and worked on expansion of Medicaid when we had to 
come up with a third of the money for Medicaid in Texas. Under 
the Affordable Care Act, it would be 100 percent for a few 
years and no more than 10 percent.
    So I understand--but my first question is if the witnesses 
could give us some specific changes or reforms in the 
Affordable Care Act, or Obamacare, if you will send them to the 
committee, things that you would see that--something we could 
do, because, hopefully, we will get to that point some day in 
our committee, saying, ``What can we do to make it better?''
    My frustration is that, in Texas, we didn't expand 
Medicaid. If we had, 92 percent of all eligible uninsured 
Texans, or 4.5 million, would qualify for premium tax credits, 
Medicaid or the CHIP program.
    Commissioner Lindeen, some of my colleagues make the 
argument that having Medicaid coverage is worse than being 
uninsured. What do you say to that? Have you heard that having 
Medicaid coverage is worse than being uninsured?
    Ms. Lindeen. No. I have not heard that. I am just being 
honest. Honestly, I have not.
    Mr. Green. OK. What would be your response to it? You know, 
granted, Medicaid is not a major plan, but it still gives 
access to a health care system.
    Ms. Lindeen. Yes. I mean, I would argue that, if you talk 
to somebody who actually is uninsured and does not have access 
to Medicaid, who is in that gap and who has some serious health 
needs, I would definitely ask them that question.
    Mr. Green. It is estimated that States' unwillingness to--
or inability to expand Medicaid is leaving 5 million uninsured 
who could otherwise have coverage.
    What would Medicaid expansion mean to families and the 
uninsured in your State?
    Ms. Lindeen. Well, it would mean the world. I mean, 
obviously, medical bills are one of the number one reasons for 
bankruptcy.
    And I can tell you that those folks who fall in that gap, 
if they find themselves in the situation where they are going 
to have to try to get care and it is going to be expenses that 
they can't afford, I mean, that is where they are going to end 
up. They are going to end up bankrupt.
    Mr. Green. Well, I don't have a wealthy district.
    Ms. Lindeen. I don't either.
    Mr. Green. In study after study, Medicaid has been shown to 
improve access, increase individuals' reported health, and 
provide significant financial security.
    A recent study even demonstrated that Medicaid coverage can 
improve educational advancement in helping lift people up the 
economic ladder.
    And I have to admit, even in Houston, Texas, the Greater 
Houston Partnership was our main chamber of commerce. They 
encouraged our State legislature during the last session to 
expand Medicaid.
    Hopefully, when the legislature goes in session in January, 
they will realize that, you know, that is the cheapest way we 
can cover folks in Texas.
    Because in Texas--in the military, they would call it a 
target-rich environment. We have the highest percentage of 
uninsured. We also have the highest number of uninsured.
    So Medicaid expansion would help for those qualified for 
Medicaid, but it would also allow, like you said, for those 
near-poor Medicaid to be qualified under the Affordable Care 
Act for the subsidies.
    And, of course, Medicaid expansion is funded by the Federal 
Government and, like you said, most Medicaid is two-thirds 
Federal funding, a third State funding, although each State has 
a different percentage, as I found out. Many States are seeing 
a big influx in funds and are likely to save money over the 
long term.
    Commissioner, when you look at the total picture, is 
Medicaid expansion worthwhile for States like yours?
    Ms. Lindeen. I can tell you that we also commissioned an 
independent study to look at the effect of Medicaid expansion 
on the State of Montana, and the positive economic impact to 
the State was incredible in terms of the hundreds of millions 
of dollars that it would bring into the State, as well as the 
thousands of jobs it would create, not only just any kind of 
job, but good-paying jobs, mostly in the medical community.
    We, too, had obviously legislation that came before our 
legislature this past year, and I was amazed at the folks who 
came and testified in favor. It wasn't just the hospitals and 
the providers, but it was business people.
    We had one gentleman who works for an investment company 
who came in front of the legislature and said, ``Listen, if I 
was a Fortune 500 company standing before you today and saying 
that, if you were to accept these Federal dollars and it was 
going to help create all these jobs for my company and my 
company would come to your State as a result, you would fall 
all over yourselves to pass it.'' But because it is not a 
Fortune 500 company, they refused.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman and now recognize 
the gentleman from Illinois, Mr. Shimkus, for 5 minutes of 
questions.
    Mr. Shimkus. Thank you very much.
    Great to have the panel.
    And, Commissioner, just--it is our job to do oversight. So 
preaching the partisan aspects of Washington, DC, we need to 
continue to do oversight on this law, and that is our job. So I 
just put that on the table because I have a problem with your 
tone.
    Having said that, what is the population of the State of 
Montana?
    Ms. Lindeen. First of all, let me apologize if my tone----
    Mr. Shimkus. No. That's fine. I am running out of time. I 
only have 5 minutes. So----
    Ms. Lindeen. About a million people.
    Mr. Shimkus. And in your testimony you mentioned that the 
ACA is sharpening the competition between insurers.
    Can you tell us how many insurers are in the State of 
Montana.
    Ms. Lindeen. Well, we have hundreds of insurers licensed to 
do business. But in terms of the numbers that are in the 
marketplace--the new Federal marketplace, we had three this 
year.
    Mr. Shimkus. Three.
    Ms. Lindeen. I know we had one more----
    Mr. Shimkus. So some of us would question whether that is 
vibrant competition. Three is better than two. Two is better 
than one. We would rather have more versus less and a vibrant 
market that has a lot of choices for the consumer.
    Let me go to another question to the panel as a whole.
    Recent stories indicate that emergency room access is 
increasing. Why do we think that is?
    If we pass a national health care law which is supposed to 
provide people health care coverage to access primary care 
doctors, internists, and to make sure that hospitals aren't--ER 
rooms are not being overutilized, why is there an increase in 
emergency room usage?
    Mr. Harvey. So my wife is an emergency room physician. So 
we have a lot of dinner table conversations about this.
    I think a couple of issues. One is that people who are now 
covered--or who believe they have coverage don't necessarily 
understand the fact that treatment in an emergency room comes 
at much greater cost than treatment in other settings.
    Secondly----
    Mr. Shimkus. But if they have got care, why are they going 
to the emergency room?
    Mr. Harvey. Well, I think the second point is that there 
are access issues to physicians not because of any coverage, 
per se, but because there is a shortage of primary care in 
particular, but many specialty physicians as well, that has 
been uncovered by the fact that there are many more people now 
with coverage demanding the services.
    Mr. Shimkus. Could the--Dr. Gottlieb?
    Mr. Gottlieb. I was just going to say I practice at a 
hospital. So I admit from the emergency room. I think a couple 
of things that I would just point out.
    The first is that coverage doesn't necessarily equal access 
and coverage doesn't change whether or not a person is a good 
consumer of health care services.
    And what you typically see--or often see is someone will 
get coverage. They will be newly on Medicaid or Medicare or 
private coverage and their patterns won't change at all as a 
result of the coverage. So just giving someone health care 
coverage really doesn't guarantee that they are going to get 
care.
    And the other thing is that a lot of folks end up in 
schemes where they are underinsured. And so they still don't 
have access to doctors who return phone calls after hours, the 
ability to schedule appointments the day of when a problem 
arises. And so they still end up in the emergency room.
    That is typically what I see when I see newly insured 
people who are ending up in the emergency room even though they 
have insurance for the first time.
    Mr. Shimkus. Is there a co-pay with a lot of these plans, a 
high co-pay----
    Mr. Gottlieb. A deductible issue.
    Mr. Shimkus. The deductible. That is what I mean. The 
deductible is at. They can't afford the deductible.
    Let me ask another question. Is emergency room care more 
expensive or less expensive than going to a urgent care or a 
primary care doctor?
    Mr. Gottlieb. Well, it is far more expensive and it is far 
less efficient.
    Mr. Shimkus. And everybody would agree that. Right?
    Even, Commissioner, you would agree with that.
    Is this driving up the cost of health care or lowering the 
cost of health care, this issue about emergency room usage?
    Mr. Gottlieb. Well, we are going to see health care costs 
go up if we see more people end up in emergency rooms. There is 
no question about that. We need to do more to try to make care 
accessible to people and not just hand them an insurance card.
    Mr. Shimkus. Thank you.
    And my time is expiring. And I will just end on this.
    My friends tout 8 million have signed up, actually, 
Medicaid expansion. I always say there is a sliver of people 
that have been helped, but I will tell you there have been more 
people harmed by paying more in their health insurance and 
getting less coverage.
    The Wall Street Journal has said 10 million people have 
lost their insurance. Part of that 8 million or 10 million who 
have lost their insurance and--have to buy new insurance, just 
like us. We had insurance coverage.
    So when you count how many have been added to the insurance 
roles, you better make sure you are counting the people that 
have lost their insurance under this new law.
    And I yield back my time.
    Mrs. Ellmers [presiding]. The gentleman yields back.
    The Chair now recognizes Ms. Castor from Florida.
    Ms. Castor. Well, thank you very much.
    I want to thank the chairman and the ranking member for 
organizing this hearing on access to health care.
    I don't think anyone can ignore the fact now that the 
Affordable Care Act has been the largest expansion for families 
across America and their access to the doctor's office in our 
lifetime.
    And in the State of Florida, it was very surprising. We had 
a very high rate of uninsured, and we thought, gosh, we are 
going through all these political fights with what the ACA 
means. And, in the end, I think these families spoke very 
loudly.
    We thought we would maybe have 500,000 sign up on the 
Federal exchange or 600,000 would be really great. We had about 
a million Floridians sign up on the Federal exchange. That is 
the population of Montana. They are breathing easier now 
because they have access to the doctor's office.
    Is it going to be perfect? No. Part of the problem was they 
had so many choices. They had the Bronze Plan, the Silver Plan, 
the Gold Plan, with all sorts of different networks where they 
might want to go with a more affordable option.
    And I think this is going to change over time, but we have 
empowered the consumer to make that choice by going online and 
examining all of the networks. And their health needs are going 
to change over time; so, their choices are going to evolve.
    I think one of the most fundamental of changes in the law 
is now no one can be discriminated against in America from 
getting health insurance. Think about your family members, your 
neighbors, that had a preexisting condition, cancer, diabetes. 
They can't be barred from coverage anymore.
    So when we are talking about access, that is really a 
fundamental--it is the fundamental change of the ACA, along 
with affordability and a meaningful policy. A lot of people 
wouldn't pay for an insurance policy because it wasn't worth 
very much, but now the law requires these essential health 
benefits.
    And what hasn't been talked about a lot, it requires that 
networks in these plans have to be adequate. Now, it is not 
going to be perfect for everyone.
    And I really appreciate it, Commissioner, that the State 
insurance commissioners are going to have great responsibility 
in ensuring the adequacy of networks and that there aren't any 
discriminatory issues.
    We had one issue in Florida that has always confounded me, 
though. Last year during all the political fights the Florida 
legislature and Governor actually passed a law that said the 
Florida insurance commissioners no longer have the ability to 
negotiate rates--health insurance rates.
    Have you heard of that being done anywhere else across the 
country, that they restricted the power of the insurance 
commissioners?
    Ms. Lindeen. Yes. Actually, there are all sorts of levels 
of authority for insurance commissioners across this country in 
terms of the ability to review or even approve rates.
    I in Montana, in fact, have never had--this office never 
had the ability to review rates until this past year. We 
finally convinced the legislature to allow me to review them.
    I can't, like, deny the rate increase, but what I can do 
over the course of that 60-day time period while I am reviewing 
the rate is actually look at whether or not it is an 
appropriate rate and reasonable.
    And if I find issues, I can go back to the company and I 
can negotiate it down. And it has already been working.
    Ms. Castor. So is that a benefit to the consumer?
    Ms. Lindeen. Oh. It is a huge benefit. We----
    Ms. Castor. That is why I can't understand why a State 
would take the action to actually say, ``Oh, don't go and 
review the health insurance rates.'' That is going to be an 
access problem.
    And I appreciate your emphasis on solving the issues 
together. We have had the Medicaid discussion. In Florida, they 
haven't expanded Medicaid. That is about the population of 
Montana, again.
    So when you are talking about what is an important way to 
expand access, we have got to bring our tax dollars back home 
to put them to work covering people, helping the hospitals.
    I think another one is the ACA also had provisions to 
improve the health care workforce. And I know a number of us 
are very concerned about primary care: Are we going to have the 
providers out there?
    HHS has not done a good job with following through and, 
frankly, the Congress hasn't given them the money to go and 
look at the workforce issues.
    My Republican friend and colleague Joe Heck and I have a 
bill called the CARE Act, the Creating Access to Residency 
Education--I know a number of members here have been concerned 
about that--that would allow States, insurance companies, local 
communities, hospitals to put up matching funds for residency 
positions.
    But do you see the primary care situation as one of the 
problems going forward with access?
    Mr. Gottlieb. Look, I think that we are going to face a 
relative shortage of doctors in certain insurance schemes. I 
have written that I don't think we are going to face a shortage 
of doctors overall in this country.
    I think, depending on what insurance scheme you are in, it 
could very much feel like you are facing a doctor shortage.
    I see a future where I think physician productivity will 
continue to increase. I think we are going to see more--greater 
access to non-physician providers, like nurse practitioners, 
and that is going to alleviate some of the burden.
    So I am not a believer that we are going to see a physician 
shortage as a result of Affordable Care Act or for anything. I 
think that we will see relative shortages in certain insurance 
schemes.
    Mrs. Ellmers. The gentlelady's time has expired.
    The Chair now recognizes Dr. Gingrey from Georgia for 5 
minutes.
    Mr. Gingrey. I thank the Chair.
    And I just wanted to comment on what the gentlewoman from 
Florida just said in regard to access. But at what cost? And I 
think that is the most important thing for us to keep in mind. 
You improve access by the Affordable Care Act.
    In his opening remarks, the ranking member said that it's 
counterintuitive--and I am paraphrasing here--but 
counterintuitive for Republicans to say that they want to 
expand access and coverage for the uninsured, yet remain 
opposed to the Affordable Care Act, suggesting that there is 
nothing out there except the--no way to do this except the 
Affordable Care Act.
    And that is categorically untrue. In fact, the vice 
chairman of the committee, the gentlewoman from Tennessee, 
pointed that out earlier in a bill that came out of the 
Republican Study Committee that is a fantastic way to approach 
this. So we definitely have ideas and have plans.
    Commissioner Lindeen, I want to make sure. I may have 
misunderstood you in your opening statement. Did you say that, 
even before the Affordable Care Act, that in Montana you had 
mandated coverage for OB/GYN for all policies that were sold in 
your State?
    Ms. Lindeen. Yes.
    Mr. Gingrey. Would that be mandated for a 55-uear-old 
bachelor who had had a vasectomy? If he wanted to get a health 
insurance policy in the State of Montana, it would have to 
include obstetrical coverage?
    Ms. Lindeen. As I said, insurance is about spreading the 
risk. And in Montana we have a constitutional law that says 
that you cannot discriminate based on gender. And so that is 
applied as well to our insurance and health insurance.
    Mr. Gingrey. Well, that may be spreading the risk, but I 
will tell you that that is insane. And that is what the problem 
here is in regards to the Affordable Care Act.
    All of these mandates, all this mandated coverage, comes at 
a tremendous price, at a tremendous price. And this is only 
going to get worse. It is only going to get worse.
    Chairman Pitts said at the outset--and I am going to repeat 
this because I think people need to understand and listen.
    He was talking about the suggestion that, if you like your 
doctor, you can keep your doctor; if you like your hospital, 
you can keep your hospital; if you like your medication, you 
can keep your medication; and, gee, you know, the price is--it 
couldn't be better.
    And this is just not true; yet, some of my Democratic 
colleagues have decided in perpetration of this falsehood to 
keep this information on their Web site. In fact, he talked 
about the--I think the ranking member's Web site.
    It is time to speak the truth so the American people know. 
It is time for Washington Democrats to take these statements 
down because we know that they are patently false, and the 
American people deserve better.
    Now, let me go to Dr. Gottlieb and specifically ask you a 
question, Doctor.
    In Forbes recently, you provided data by physician 
specialty on the number of providers included in ACA exchange 
plans versus a typical private health insurance plan.
    Can you tell this committee about your findings, 
particularly as they relate to women's lack of access to OB/
GYNs in exchange plans relative to any other private form of 
coverage.
    Mr. Gottlieb. So we looked at PPO plans--preferred provider 
organizations--offered by the same category in the same market 
relative to what they were offering on the exchange. And, on 
average, I think the statistic was we found that they had about 
50 percent fewer physicians in their exchange-based plans.
    It varied across market, but we found some plans with real 
inadequacies where, you know, a plan didn't include a single 
Mohs surgeon.
    We found a plan in a county in Florida of about a quarter 
of a million people that had about a dozen pediatricians on the 
network.
    And we found a plan in San Diego that had fewer than 10 
urologists for a very big--the whole of San Diego County.
    So we found some plans that had some significant 
deficiencies with certain kinds of physicians. And the Mohs 
surgeon is relevant because the plans----
    Mr. Gingrey. Dr. Gottlieb, I am going to stop you on that. 
I want to get one last point in.
    And, Madam Chairman, I would like to submit for the record 
an ABC News article of just yesterday where the chairman of the 
Senate Appropriations Committee cancelled a hearing because of 
a fear that Republicans would have amendments to the Affordable 
Care Act that would bring down costs that Democratic members 
didn't want to vote on.
    So I would like to ask unanimous consent to submit this 
article from ABC News yesterday.
    Mr. Pitts. Without objection.
    [The information follows:]
    
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    Mr. Gingrey. I yield back.
    Mrs. Ellmers. Thank you. The gentleman yields back.
    And I will say they are going to call votes soon; so, we 
are going to try to get as many questions in as possible within 
this time frame.
    So, with that, I would like to recognize Ms. Capps for 5 
minutes.
    Mrs. Capps. Thank you very much.
    And thank you to the panelists for your testimony today.
    I have a question for the Commissioner from Montana. I went 
to high school in Kalispell; so, what you had to say about 
health care in Montana is important to me.
    The Affordable Care Act rollout, in my opinion, was even 
more impactful than expected. Over 8 million Americans signed 
up for health insurance, many of whom had been living for years 
without the security of coverage.
    But, as you noted--and rightly so--the law is not perfect. 
It is not perfect in California, where I live, either. It is 
clear that more could be done to ensure robust provider 
networks and broader access.
    To be clear, in many cases, the insurance companies, not 
the ACA, have been making these decisions. But this is 
something I have been working on in my district, an issue that 
I think does deserve more attention.
    There are some tools available through the ACA that would 
address this issue right now.
    Commissioner Lindeen, what enforcement authorities do you 
use within the ACA in order to ensure that networks stay wide 
and people stay covered?
    Ms. Lindeen. All right. Well, let me tell you that what we 
like to do is we really like to look at ensuring access, 
affordability and transparency, making sure that there are 
enough providers available based on all sorts of different 
types of factors.
    And those include everything from looking at general 
provider availability, medical referral patterns, hospital-
based providers and whether or not--and, of course, that can be 
affected by their willingness to actually contract----
    Mrs. Capps. Right.
    Ms. Lindeen [continuing]. The geography that exists within 
the State, ECPs, and, also, making sure that there is, you 
know, just reasonable access to all these specialists. And we 
want to make sure that there is good transparency for consumers 
to make informed decisions as well.
    Mrs. Capps. That is great.
    Have you done anything that has been working to broaden the 
networks that you could share with us, to just expand the 
networks that you do have?
    Ms. Lindeen. I can't think of anything really specific off 
the top of my head, but I will go back and look and get back to 
you.
    Mrs. Capps. It seems to be an area that now could use some 
additional support. And I want to put on record that I hope 
there is ways that we can give you more tools or work with you 
in our individual States to make those networks more available.
    But, additionally, as you mentioned, there have been 
allegations of excessive co-insurance in the specialty drug 
tier. We know that specialty tiers are a real problem for the 
patients who need those treatments.
    They may not only save lives, they can improve the quality 
of life of the patient, often helping them to stay off 
disability rolls and remain engaged in work, with their 
families and in their communities.
    But specialty tiers are not a function of the ACA. They 
have existed for many years, so much so that some States banned 
them long before the ACA became law.
    That is why I have been pleased to join with my colleague, 
Mr. McKinley, to introduce legislation to address this and put 
these specialty drugs back in line with other prescription drug 
costs, putting these treatments back in research for those who 
need it most.
    And a similar problem exists in Medicare and for cancer 
patients who are prescribed orally administered chemotherapy 
drugs, but only have coverage for traditional chemotherapy. 
These issues are real, but they were not created by the ACA, I 
believe, and to insinuate them as such is disingenuous.
    But if we all now agree that this is a problem, I hope we 
can also agree that we should fix it. I want us to be able to 
vote on H.R. 460, the Patients' Access to Treatment Act. I 
believe we should have a hearing on H.R. 1801, the Cancer Drug 
Coverage Parity Act.
    We can address these issues right now by passing these 
pieces of legislation. So I hope there is a time when we can 
have you back and we can tackle these and other pressing health 
issues that we face without getting into the political 
gamesmanship like we are seeing much of this hearing focused on 
today in kind of a biased way.
    Strengthening this law, which we know we need to do, will 
not be accomplished while we continue a kind of drumbeat for 
repeal or going back to the broken system of the past. I know 
you are in positions where you see these real needs and that we 
need to address on a regular basis.
    Thank you. And I appreciate again.
    I am going to yield back.
    Mrs. Ellmers. Thank you to the gentlelady for yielding 
back.
    I now recognize Mr. Griffith for 5 minutes. If you might be 
able to squeeze----
    Mr. Griffith. I will squeeze as quick as I can.
    Mrs. Ellmers. OK. Thank you.
    Mr. Griffith. Let me just say that, when you are talking 
about things like rheumatoid arthritis--and I have a family 
member who has that--and you are talking about access to care, 
particularly in my region, we are being limited. There is no 
gamesmanship being played. The real concern is about what is 
happening with the Affordable Care Act.
    And I bring this up because--and if we can pull that map up 
of my district--I was recently told by not one, but two, of the 
folks who are in this business--and if you can look--they are 
getting it up there--I am the green part down there.
    And you can see why this is a particular problem. Because 
what happened in rural Virginia and my part of the State is 
that, in many of these areas, we only have one company that is 
under the shop plan or one company under the individual plan. 
Some places have two. There are not a lot of opportunities.
    And what my brokers are telling me is that they are having 
to go to their small customers in the shop plan--those are 
people with small businesses--and all that is available is an 
HMO and that HMO limits them--look at that map--it limits those 
people from going to health care providers within the 
Commonwealth of Virginia or one county out.
    Now, if you are in the Galax or Martinsville area and even 
some folks in the Roanoke Valley, up a little bit further on 
the border with North Carolina, you are used to going to either 
Duke or Bowman Gray. Can't do it with the new plans. You are 
outside.
    Bristol, Virginia-Tennessee, for those of you who don't 
know, it's a wonderful city. The main street of the town is the 
State line. If you live on the Virginia side of the line, you 
can't go to the Children's Hospital in Johnson City under these 
new plans--under the Affordable Care Act's shop plan. You can't 
do it.
    That happens to be the tri-cities area. Bristol, Kingsport, 
Johnson City have worked really hard so that they have the 
availability in a relatively rural area to have one of 
everything.
    And while you can certainly get your children treated at 
other hospitals, the hospital where the money has been spent to 
have for those high-risk people is in Johnson City.
    So if you are living in Bristol, Virginia, on the wrong 
side of main street--State Street, but the main side of the 
main commercial area, you can't go to that hospital. This is 
not games. We are not playing any games.
    Are you seeing that that's a problem in other States or is 
it just because my district borders so many other States and 
you can actually get to other States' teaching hospitals 
quicker than you can get to UVA for many of my constituents?
    Is that just a problem because I have an oddly shaped 
district or is that a problem for other States, Dr. Gottlieb?
    Mr. Gottlieb. Well, it seems like a particular problem 
there, but this is not that uncommon. The Affordable Care Act 
allows county-level bidding by the health plans. So sometimes 
you are seeing only countywide networks as a result.
    Mr. Griffith. So it is a problem not only from State to 
State, but also within counties. I can see where that would be 
a serious problem.
    Are we seeing, also, a narrowing on the ages? I need to ask 
that question. Are we seeing that they are narrowing services?
    For example, if you are an 84-year-old woman whose father 
died of colon cancer--yes, I am speaking of a constituent--you 
normally would be getting your inspection--your colonoscopy 
again, are there any limitations because of the age? Are you 
seeing any of that?
    Mr. Gottlieb. I haven't seen age-based restrictions that go 
outside of normal medicine convention in terms of when things 
are recommended in these plans. Certainly that would be a 
Medicare--more of a Medicare scenario, too.
    Mr. Griffith. Yes. I appreciate that.
    That being said and because they have already called for 
votes and some others want to ask questions, Madam Chair, I 
will yield back.
    Mrs. Ellmers. Thank you to the gentleman.
    The Chair now recognizes Mr. Bilirakis from Florida for 5 
minutes. But if I could--if you could, I would love to be able 
to--oh. I take that back. I am sorry to Mr. Sarbanes. I 
apologize.
    Mr. Sarbanes. Thank you, Madam Chair. I will try to keep my 
questions under 5 minutes.
    There is no question that the Affordable Care Act 
represents disruptive change--OK?--but disruptive, I think, in 
a very positive way, on balance.
    It disrupts the situation where there were millions of 
people who were discriminated against based on preexisting 
conditions.
    It disrupts the situation where millions of young people 
were having problems affording the coverage--health care 
coverage.
    It disrupts the situation where millions of seniors were 
falling into the donut hole and not being able to cover that 
with the out-of-pocket expenses that it represented; so, we are 
beginning to close that donut hole.
    And it disrupts most significantly a situation where one 
out of seven Americans were being left out of health insurance 
coverage to the detriment of those individuals and their 
families but, really, to the detriment of the productivity of 
our country.
    So it is disruptive change and, whenever you have 
disruptive change, it is going to take a while to sort of get 
everything in place, get it all rationalized, get the system 
working as well as the expectations are that we bring to bear.
    So, you know, we need to be vigilant, but we also need to 
understand that it is going to take some time to get all of 
these pieces in place.
    And, frankly, if you look at what the Affordable Care Act 
itself says about its expectations of the way provider networks 
will function, you know, it has provisions that require plans 
to create networks that are, quote, sufficient in numbers and 
types of providers, including providers that specialize in 
mental health and substance abuse services, to assure that all 
services will be accessible without unreasonable delay.
    It requires plans to contract with, quote, essential 
community providers, as that term is understood, that primarily 
serve low-income and medically underserved individuals. It 
requires plans to equalize cost-sharing for emergency services, 
et cetera.
    These are requirements that are baked into the law, and it 
is going to have the effect over time of addressing this--sort 
of the startup bumps that we have in terms of restructuring 
these provider networks.
    I mean, it used to be the case that you could keep your 
cost down. You could say, ``Hey, you can go to any provider you 
want,'' but the benefits that were available to cover that were 
pretty minimal in certain situations.
    So was that really a good insurance plan? Just looking at 
the provider network and the expanse of it, you might have 
said, ``That is terrific,'' but you look at other features of 
it, not so much.
    So I just wanted to ask the Commissioner: Do you have 
confidence that the tools that you possess, as an insurance 
commissioner, are going to be adequate, particularly given 
these requirements of the Affordable Care Act that you can cite 
and use and enforce to ensure over time that you will be able 
to put in place provider networks that can provide the coverage 
and the access that people deserve?
    Ms. Lindeen. I think that, as long as commissioners at the 
State level are given the flexibility to do that and do their 
job and be able to enforce those provisions as well--I think 
that is going to be a huge help.
    But one of the biggest issues that we face is the 
transparency issue in making sure that consumers really are 
informed about what is actually in these networks and making 
good informed decisions for themselves. Because the more 
informed they are, the more that they are going to impress upon 
the companies in terms of competition and forcing them to make 
good decisions that are in the best interests of the patients 
as well so that they will get them what they need, so to speak.
    But at the same time, the other thing that is really 
frustrating, I think, not only for the regulator and for the 
consumer and even for the company, is sometimes, with all due 
respect, this unwillingness to contract by providers. And I 
think that that is an issue that we are all going to have to 
deal with.
    But, overall, I think that giving States the flexibility to 
actually do our job and do it based on the fact that we know 
our market's better than anyone else is really going to be 
helpful.
    Mr. Sarbanes. Thank you.
    I yield back.
    Mrs. Ellmers. Thank you to the gentleman.
    And now I yield time to Mr. Bilirakis. I do want to say 
that there are less than 4 minutes left in the vote on the 
floor.
    Mr. Bilirakis. I will be as quick as I possibly can. I will 
ask just one question.
    Mrs. Ellmers. Thank you.
    Mr. Bilirakis. I won't make any comments on the ACA. I will 
go directly into my questions.
    Mr. Gottlieb, you have written extensively about the narrow 
networks. The Leukemia & Lymphoma Society commissioned a report 
about the narrow networks in the ACA.
    According to their data, for the State of Florida, my home 
State, only 1 of 12 had coverage at the Moffitt Cancer Center 
in Tampa, Florida, the only NCI-designated cancer center in the 
State.
    All Children's Florida hospital, Jackson Memorial, Mayo 
Clinic, Miami Children's Hospital, Moffitt, Nemours in 
Jacksonville, Sylvester in Miami, and Shands in Gainesville--
only 4 ACA plans out of 12 covered any one of these hospitals, 
any one of these hospitals.
    Mr. Gottlieb, it doesn't seem like it is very accessible. 
It seems to me that the people most disadvantaged by the law 
are the sick, the patients with serious, chronic, and complex 
medical conditions.
    Are these narrow networks and closed formularies 
disadvantaging the sick and the most vulnerable, in your 
opinion?
    Mr. Gottlieb. Well, I think, unfortunately, they will. You 
are absolutely right. I am on the policy board of the Leukemia 
& Lymphoma Society. You are absolutely right.
    The academic cancer centers have been actively excluded 
from these plans largely because they are more expensive. And 
people who have rare cancers will not be able to get care 
there, and other people who might have more common cancers, but 
just want a second opinion, won't be able to get it.
    Mr. Bilirakis. Extremely unfortunate.
    I yield back.
    Mrs. Ellmers. Thank you to the gentleman.
    I now yield time to Mr. McKinley. And, if you can, try to 
keep it close. Thank you.
    Mr. McKinley. Thank you, Madam Chairman.
    Dr. Harvey, if I can direct this to you in the very short 
time period--I have got a question as to how you would handle 
this scenario that we are facing in West Virginia.
    Recently I met a 15-year-old girl from West Virginia. She 
is suffering the early symptoms of juvenile arthritis--
rheumatoid arthritis. But thanks to biologic medicine and the 
drug she has been on, she has been able to participate and 
actually has become a track star.
    I am curious. If her family is ever faced with a scenario 
that they have to go into an exchange--and in West Virginia we 
only have one compared to--in Montana you have three. We have 
one.
    But her family's income is $50,000. So it is probable and 
likely that they can afford to go to the cheapest plan within 
that exchange. So they are either going to be faced with not 
having biologic coverage or being forced to go to something 
that is more expensive that they can't afford, either.
    So in either case, she is either out $12,000--by paying a 
higher premium--or the family has to pay maybe $75,000 to 
$100,000 a year. What would you advise?
    Mr. Harvey. Well, it is a very difficult problem. I think 
the main option, actually, is to provide cheaper medications, 
which are usually far more toxic, actually, and there are 
attendant costs associated with that. There aren't very many 
other solutions.
    The main solution that presents itself is your bill, sir. 
And I think--you know, I wear a fork on my lapel that has bent 
tines, and it is meant to symbolize the deformities that people 
with arthritis can develop, but, also, the simple tasks that 
they are prevented from doing.
    And you all can help us unbend those tines by providing 
support for people so they can afford their co-pays.
    Mr. McKinley. Thank you. I appreciate your support for 460. 
I think we do have to move on that. Thank you very much.
    I yield back the time.
    Mrs. Ellmers. Thank you to the gentleman.
    In the interest of time, I will submit my questions for a 
written response.
    I would like to remind the Members that they have 10 
business days just to submit questions for the record.
    And I ask the witnesses to respond to the questions 
promptly.
    Members should submit their questions by the close of 
business Thursday, June 26.
    Without objection, this subcommittee is adjourned.
    [Whereupon, at 11:41 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
   
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