[Senate Hearing 113-347]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-347
 
                  AFFORDABLE CARE ACT IMPLEMENTATION: 
  EXAMINING HOW TO ACHIEVE A SUCCESSFUL ROLLOUT OF THE SMALL BUSINESS 
                               EXCHANGES 

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 20, 2013

                               __________

    Printed for the Committee on Small Business and Entrepreneurship

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

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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                    ONE HUNDRED THIRTEENTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                 JAMES E. RISCH, Idaho, Ranking Member
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     MARCO RUBIO, Florida
MARIA CANTWELL, Washington           RAND PAUL, Kentucky
MARK L. PRYOR, Arkansas              TIM SCOTT, South Caarolina
BENJAMIN L. CARDIN, Maryland         DEB FISCHER, Nebraska
JEANNE SHAHEEN, New Hampshire        MICHAEL B. ENZI, Wyoming
KAY R. HAGAN, North Carolina         RON JOHNSON, Wisconsin
HEIDI HEITKAMP, North Dakota
WILLIAM M. COWAN, Massachusetts
                Jane Campbell, Democratic Staff Director
           Skiffington Holderness, Republican Staff Director



                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Landrieu, Hon. Mary L., Chair, and a U.S. Senator from Louisiana.     1
Risch, Hon. James E., Ranking Member, and a U.S. Senator from 
  Idaho..........................................................     8
Heinrich, Hon. Martin, a U.S. Senator from New Mexico............    18

                           Witness Testimony

Nold, William, Deputy Executive Director, Office of The Kentucky 
  Health Benefit Exchange, Frankfort, KY.........................    11
Hickey, Martin, M.D., CEO, New Mexico Health Connections, 
  Albuquerque, NM................................................    18
Allen, David, President and CEO, David Allen Enterprises, LLC, 
  Boulder, CO....................................................    24
Greenblatt, Drew, Owner, Marlin Steel Wire Products, Baltimore, 
  MD.............................................................    31
Salter, Sheila A., Founder and CEO, EARLY2SURG, Chapel Hill, NC..    43
Evans, Connie, President and CEO, Association for Enterprise 
  Opportunity, Arlington, VA.....................................    50
Kofman, Mila, Executive Director, D.C. Health Benefit Exchange 
  Authority, Washington, DC......................................    58
Borzi, Hon. Phyllis C., Assistant Secretary, Employee Benefits 
  Security Administration, U.S. Department of Labor, Washington, 
  DC.............................................................    79
Cohen, Gary, Deputy Administrator and Director, Center for 
  Consumer Information and Insurance Oversight, Centers for 
  Medicare and Medicaid Services, U.S. Department of Health and 
  Human Services, Baltimore, MD..................................    87
O'Brien Markowitz, Marianne, Regional Administrator, Region V, 
  U.S. Small Business Administration, Chicago, IL................    98
.................................................................

          Alphabetical Listing and Appendix Material Submitted

Allen, David
    Testimony....................................................    24
    Prepared statement...........................................    27
Barker, Andy
    Letter dated November 15, 2013, to Senator McConnell.........   253
Borzi, Hon. Phyllis C.
    Testimony....................................................    79
    Prepared statement...........................................    81
    Additional comment for the record............................   205
Cohen, Gary
    Testimony....................................................    87
    Prepared statement...........................................    89
Dayton, Mark
    Letter dated November 20, 2013, to Chair Landrieu............   239
Department of Health & Human Services
    ASPE Issue Brief.............................................   259
Enzi, Hon. Michael B.
    Prepared statement...........................................   112
Evans, Connie
    Testimony....................................................    50
    Prepared statement...........................................    52
Greenblatt, Drew
    Testimony....................................................    31
    Prepared statement...........................................    33
Heinrich, Hon. Martin
    Opening statement............................................    18
Hickey, Martin
    Testimony....................................................    18
    Prepared statement...........................................    21
Kaiser Family Foundation
    List of Total Health Insurance Exchange Grants...............   256
Kofman, Mila
    Testimony....................................................    58
    Prepared statement...........................................    60
Landrieu, Hon. Mary L.
    Opening statement............................................     1
Meredith, Griffin L.
    Letter dated November 19, 2013, to Senator McConnell.........   252
Nold, William
    Testimony....................................................    11
    Prepared statement...........................................    13
    Documents submitted for the record...........................   133
O'Brien Markowitz, Marianne
    Testimony....................................................    98
    Prepared statement...........................................   100
Pickering, Kathy
    Letter and report titled ``Understanding the Implications of 
      the Affordable Care Act: Enrollment, Education and Taxes''.   206
Politico
    Article titled ``Only 5 Enrollments Completed in D.C. 
      Obamacare Exchange''.......................................   255
Risch, Hon. James E.
    Opening statement............................................     8
    Responses to post-hearing questions from:
        Mila Kofman..............................................   118
        Hon. Phyllis C. Borzi....................................   120
        Gary Cohen...............................................   122
        William Nold.............................................   127
        Marianne O'Brien Markowitz...............................   131
Rubio, Hon. Marco
    Prepared statement...........................................   116
Salter, Sheila A.
    Testimony....................................................    43
    Prepared statement...........................................    45
State by State Enrollments, Cancellations, and Premium Increases 
  November 20, 2013..............................................   241


    AFFORDABLE CARE ACT IMPLEMENTATION: EXAMINING HOW TO ACHIEVE A 
           SUCCESSFUL ROLLOUT OF THE SMALL BUSINESS EXCHANGES

                              ----------                              


                      WEDNESDAY, NOVEMBER 20, 2013

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:00 a.m., in 
Room 428-A, Russell Senate Office Building, Hon. Mary L. 
Landrieu (Chair of the Committee) presiding.
    Present: Senators Landrieu, Shaheen, Heinrich, Booker, 
Risch, Vitter, Scott, Fischer, Enzi, and Ron Johnson of 
Wisconsin.

 OPENING STATEMENT OF HON. MARY L. LANDRIEU, CHAIR, AND A U.S. 
                     SENATOR FROM LOUISIANA

    Chair Landrieu. Good morning, everyone, and if we could 
take our seats and welcome to this important hearing this 
morning.
    The purpose of today's hearing is to explore the success 
stories of the rollout of the Affordable Care Act in states 
throughout the country where teamwork and cooperation has 
proven to be exceedingly effective.
    We will also hear from a federal panel that will talk about 
the federal rollout and some of the challenges that have 
presented themselves. Normally, we have the federal panel first 
and the state panel second. But at the discretion of the Chair, 
I reversed it but required the federal leaders to be here to 
hear from the state exchanges and from individual business 
owners about how the situation could be improved.
    I would like to begin by quoting, I think it was Mark Twain 
who said, ``A lie can get halfway around the world before truth 
gets out of bed in the morning and puts its boots on.''
    So, this morning we are going to try to give truth a 
chance.
    Thank you for joining us for this hearing. The Affordable 
Care Act passed, as we all know, in March of 2010 and was 
signed into law by the President three days later. That was 
over three and a half years ago.
    Last year, the Supreme Court upheld one of the essential 
components of this law, including the no free rider provision, 
requiring full participation through private and public health 
insurance marketplaces.
    The goals of the Affordable Care Act at the time we passed 
the law were implemented for creating a workforce that was 
healthy because only a healthy workforce can be a strong 
workforce and America needs the strongest workforce we can get 
so we can continue to have the strongest economy in the world.
    Those were the goals three and a half years ago. That is 
the hope and promise today.
    There were four specific goals of the Affordable Care Act. 
One, to slow skyrocketing health care costs and reduce what 
America spends on health care as a share of our GDP. It was 
rising from 15 percent to 16.5 and headed very soon to 19. That 
trend has been reversed.
    To use the power, not of the government but of the private 
sector competition, the proven power of private sector 
competition to rein in costs and improve quality care and 
coverage.
    To provide the first opportunity in the history of our 
country, whether union or nonunion, middle, high, or low income 
wage earner, whether self-employed, small or large business to 
access affordable quality health care.
    And one of the most exciting and under appreciated features 
of the Affordable Care Act and one that this Committee has 
focused a great deal of work is that it provided for the first 
time a key to Americans to unlock them from job-lock which 
prevents individuals in every state, including my own, from 
starting a new business because the risk associated with 
leaving full and good employment with full and good health care 
coverage causes them to stay sometimes in companies where they 
themselves might even do a better job starting their own 
providing disruptive technology or good services.
    I am proud to hand many of our entrepreneurs that key and 
intend to do so.
    According to the Robert Wood Johnson Foundation, nearly 1.5 
million Americans, including 25,000 Louisianians, will become 
self-employed thanks to this bill, allowing them to fulfill 
their dream of becoming entrepreneurs, to pursue their dreams, 
to create the product or the system or service that they have 
dreamed about and have health insurance which was not possible 
before the Affordable Care Act.
    Fourth, to provide coverage to millions of low income and 
working-class families that work 40, 50, and 60 hours a week 
and worked for decades and yet could not afford health care in 
the United States of America.
    The way that this bill has been crafted, they will, if the 
governors would expand Medicaid, to be able to choose their 
hospitals, doctors, and have health care. Unfortunately, many 
of our governors are standing in the way.
    This is the hope and vision that we fought for. It is still 
worth fighting for now.
    The focus of today's hearing will be specifically, though, 
on coverage options and access to our small businesses or 
businesses regardless of size, and I want to be clear. This is 
about the self-employed, about the growing percentage of our 
population that call themselves contractors because of the way 
our economy is structured to be very flexible and independent, 
small businesses below 50 and small businesses above.
    Now, we all know the rollout of the federal marketplace for 
individuals as not worked as well as we had hoped. We know that 
there are many challenges. We will hear about those today.
    But thank goodness there are bright examples throughout the 
United States where the ACA's vision is working and we are 
going to hear from those states today.
    Specifically, we are going to hear from representatives 
leading the implementation of the SHOP marketplaces now open at 
the state level to understand both the challenges and the 
successes experienced by those states who accepted the 
responsibility to build their own exchanges, who accepted the 
challenge of the Federal Government to say we cannot always do 
things right. Here, we will give you the option to do it.
    Some of our governors were brave enough to do so; others 
were not.
    Usually, this Committee hears from federal officials, as I 
said, but I have asked them specifically to be in the room 
because they need to hear the best practices about what is 
going on around the country so they can get a better 
understanding of what we are trying to do. We will also be 
hearing from representatives of federal agencies, et cetera.
    Now, let me go into a few more things and the time that I 
take will be given equally to the minority.
    Before we begin, I would like to take a moment to put 
today's discussion into context. As we were debating the Health 
Reform Act in 2009 and I was here and robustly engaged in that 
debate and helped to design the system that we have now which 
was a compromised system between a government-run, single-payer 
system and a medical savings account system with no floor or no 
safety net, we designed this.
    It was particularly for 96 percent of all businesses that 
employ fewer than 50 people who were struggling to remain 
competitive and we were focused on helping them.
    Small businesses were paying an average of 18 percent more 
than big business for health insurance that was not the same 
quality and they saw their health care costs increase faster 
than the prices of products and services they were selling. The 
record says four times faster than the rate of inflation 
between 2001 and 2009.
    After the number of employers offering coverage remained 
relatively flat in the 1990s, average annual family premiums 
for workers at small businesses increased by 123 percent, from 
5700 in 1999 to 12,700 in 2009.
    So, in the rate of increase was going up substantially 
before the Affordable Care Act which is one of the reasons it 
was passed to try to taper down those rates and get them lower.
    The percentage of small firms offering coverage started 
falling from 65 percent to 59 percent, and it was spiraling 
downward. It is no wonder that since 1986 one concern for every 
small business every year has been access to affordable care 
and this is not from a liberal think tank. This is the finding 
of the National Federation of Independent Business. They have 
testified before our Committee on many occasions.
    This made reform, in my mind, imperative and the small 
business health care marketplace an important tool towards 
increasing choice and competition, reducing costs for small 
business and providing coverage to their employees that serve 
as the backbone of this American economy and a model for the 
world.
    A SHOP is an online marketplace where small businesses with 
50 or fewer employees can purchase health insurance for their 
employees voluntarily because under the Affordable Care Act 
they are not required, the businesses are not required, 
employees can. Functioning SHOP marketplaces will give small 
business owners the tools they need to be smart consumers as 
they choose affordable options for their businesses without 
damaging their bottom line and leveling the playing field with 
large businesses through improved access to affordable health 
benefit options for their employees.
    Many are like family. I cannot tell you how many small 
business owners have come up to me over the course of the last 
several years and said, Senator, I would love to offer my 
people insurance but I cannot find it anywhere; and because my 
best friend to help me start this businesses wife has cancer, 
we are now completely priced out.
    How am I going to keep my business because I feel badly 
because I do not want to ask him to leave? If he would leave, I 
could get insurance for my businesses.
    That is a choice I do not think Americans should be making 
and I do not want anyone in Louisiana to make that choice or 
have to make that choice.
    At the end of this month, small businesses with 50 or fewer 
full-time equivalents will be eligible, but not required, to 
purchase and provide coverage to their employees. Beginning in 
2006 (sic), all SHOPs will be open to employees with up to 100 
individuals.
    Pooling these eligible, or FTEs, pooling these eligible 
small businesses and larger groups will spread risk, allowing 
insurers to stop charging higher premiums that accompany the 
greater uncertainty about the likely health care costs of small 
groups.
    The new SHOP marketplaces will allow small businesses to 
compare plans easily which was never, hardly ever possible 
before, taking the administrative burden off employers and 
allowing them to get back to running their businesses which 
they do best, not filing paperwork to get health insurance.
    It was a broken market. We intend to fix it.
    According to a 2009 Business Roundtable Report, the 
administrative costs to small businesses through the exchanges 
would be reduced by as much as 22 percent.
    I would like my staff to put up what is happening around 
the states, and I would like people's eyes to focus on what is 
happening in a good way and still challenging ways.
    This is the United States of America. You will recognize 
it. Declared state-based exchanges are in red. Planning for 
partnership exchanges are in the gray area, and those states 
that defaulted to the Federal Government, and I want to 
underscore this because mine is one of them, states that had a 
chance to set up an exchange for their small businesses that 
were given every opportunity, and in the case of my State was 
also attached with a check for $16 billion to help make it 
work, was rejected by my governor and by many governors.
    And instead they defaulted, at their own choice, not my 
choice, at their own choice, not at President Obama's choice, 
to let the Federal Government set up their exchanges and then 
did nothing of virtually to help. It is no wonder some of them 
are not working.
    But today we are going to have the opportunity to talk to 
those governors and those states, both Republican and Democrat, 
that did step up and lead, that did take what was offered to 
them and set up exchanges that could work for their small 
businesses.
    Each state has the flexibility to decide how they want to 
operate their health insurance marketplaces. As you can see on 
this map, there are four different categories that each of the 
50 states and the District of Columbia fit into.
    Some states have what they call federally-facilitated 
exchanges which means that they are not choosing to set up 
their own market and leaving it to the Federal Government. 
Unfortunately, that would be mine. I wish I had been given that 
choice but unfortunately that was one mistake in the bill, 
leaving it up to governors, maybe not a mistake but in some 
cases it was it seems.
    Other states are operating partnership exchanges where the 
Federal Government operates the marketplace in conjunction with 
the state. Some states chose a partnership with the Federal 
Government. We will see how that is working.
    And another group of states have split exchanges where the 
Federal Government runs the individual marketplace and the 
state runs the SHOP marketplace.
    The final category is made up of states that run both, 
their own individual and small business marketplaces. These 
states cover approximately one third of the population of the 
United States.
    This is a big country, and it goes way beyond the Beltway 
of Washington D.C. You are going to hear today about one third 
of the population that is either working really, really well or 
it is working to some degree and with some changes could work 
better and a few places where they are having some serious 
challenges. But you are going to hear from people that are at 
least trying.
    Kentucky and the District of Columbia are included in this 
category. We will be hearing from representatives of these 
exchanges during our first panel this morning. In total, there 
are 18 states plus the District of Columbia running their own 
SHOP exchanges.
    And for the record, since this is so important, I want to 
put these states in the record. California, Colorado, 
Connecticut, the District of Columbia--not a state yet, maybe 
one day--Hawaii, Idaho, Kentucky, Maryland, Massachusetts, 
Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, 
Utah, Vermont, and Washington State.
    In all parts of our country, some with Republican 
governors, some with Democratic governors, some with Republican 
legislators, some with Democratic legislators, but all with 
people who need leadership to help them find health care that 
they can afford.
    Nearly 40 percent of all the Nation's small employers are 
in these states. That is who we are focused on today.
    We all know that the rollout of the individual insurance 
exchange website has been disappointing to say the least, but 
today's hearing is focused on implementing the rollout of the 
SHOP exchanges which is the focus of our Committee where we had 
a lot of input into how this bill was designed to emphasize the 
need for a better rollout, not just for individuals but for 
small businesses.
    Today, as I said, we are joined by states who accepted this 
challenge and responsibility to create state-based exchanges 
and did it well, as well as those who are having difficulty.
    For those states that have made the decision to operate 
their own SHOP marketplaces, we are already seeing evidence. I 
am not going to repeat everything that is in the testimony but 
I will say that for Kentucky, I was completely happy to see and 
I spoke to Governor Beshear, Kentucky did what I thought we 
should do and I have a bill to correct this, to use their 
licensed health agents to sell the policies which is a 
brilliant idea. We did not do that unfortunately.
    And so, they hit the ground running because their agents 
were already licensed and understood the market well and were 
able to sell. We will hear more about that. That is Kentucky, 
and you will hear more about Kentucky.
    In D.C., between October 1 and 13, they had more than 
84,000 visitors to their website. What I loved about the 
testimony from D.C., and you will hear more about it, is that 
instead of the Chamber of Commerce dragging its feet, he says, 
the D.C. Chamber of Commerce, the Greater Washington Area 
Hispanic Chamber, and the Restaurant Association partnered to 
build this exchange and put their muscle and their brainpower 
behind it, and it is probably one of the most successful in the 
country. Nearly 700 employer accounts have been created using 
their site.
    Finally, in New Mexico, and our senator is here, has seen 
similar success as well. They accepted the leadership 
challenge, and today 1,143 small businesses with 3,192 
employees have been registered, required information with the 
New Mexico exchange.
    If they all fully enroll with the average number of 
dependents, that would be a potential total of 8,000 members, 
and it has just been opened for a very short period. We will 
hear more about that.
    Making the ACA work the way it was intended is what I 
intend to try to do. There are others that have different 
goals. Ensuring that these marketplaces work the way they were 
intended when we passed the Act is vital to helping the 
businesses in our country and families that depend on these 
businesses to get the help that they need to stay healthy.
    And most importantly for me as a mother, not just to stay 
healthy physically but to be mentally free of the worry that 
any day your business is one day away from bankruptcy or your 
family is one accident away from bankruptcy.
    There is no price that you can put, in my view, on peace of 
mind. I do not know any economist in the world that could price 
it but I could tell you as a mother that it is very costly.
    The SHOP marketplaces need to work so that small-business 
owners can easily and efficiently compare the different plans 
available for themselves which they were never able to do, and 
their employees can pick the plan that makes the most sense.
    Now, opponents of the law, and there are many, are fixated, 
fixated on the problems of the law as opposed to the promise 
that it holds. I believe this is wrong.
    These problems, while challenging, are fixable. We have 
fixed many things in the United States, big things, bold 
things, and great things. This is something we can fix.
    And regardless of how we voted for the ACA, whether we 
liked it or not, it is the law of the land; and in my view, it 
deserves to be fixed, not repealed. We have the responsibility 
to make the Affordable Care Act work, not because of politics 
but because of the people.
    This is not about President Obama. It is about the people 
of the United States of America. It is about the millions of 
small business owners who want desperately to provide quality, 
affordable health care to their employees who dreamed about 
building a business, who love the people that they work with, 
and they were never able to find something that they could 
afford or count on.
    And if they did, they had to compromise below their 
standards because I know Americans pretty well and they are 
very generous people. And it is about people like Kiwi 
Armstrong from Baton Rouge, and independent construction 
worker. He works on big projects in both oil and gas onshore 
and off. We have a lot of those people.
    Because of the nature of his employment, he works on 
several different projects throughout the course of his year 
and he is not a member of a labor union. In 2012, he got nine 
different W-2s. He works hard every day.
    But the shifting nature of his employment means he cannot 
get coverage through his employers. When he tried to get Blue 
Cross Blue Shield through his last steady job, they denied him 
because of type II diabetes.
    Because of the Affordable Care Act, he can get coverage on 
the health insurance marketplace. It will be there when he 
needs it, and give him flexibility to work any project he wants 
without worrying about whether it will provide coverage or not.
    This is why we are having this hearing today. We are having 
this hearing to make sure we are doing everything possible to 
make sure that this Act works for small business owners and 
their employees.
    My goal for this hearing is it will not be occasion for 
grandstanding but rather an opportunity to focus on the work 
before which is fixing what is broken.
    And to do that, we have to be honest with each other and 
open to hear testimony about what is working, what is not 
working; and when we find something that is not working, how it 
can be fixed.
    Some of our witnesses today are also small business owners 
that have yet to realize the benefits that their colleagues in 
states where these exchanges are working. Some of these 
businesses are in states where the governor has basically said, 
no, we are sorry, we do not want to help you. I am sorry that 
you all are in those states but that is the situation.
    I am going to add one thing for the record and turn it over 
to my Ranking Member. There was a study that came out yesterday 
that I want to put into the record, a tax study, I have it 
here.
    This study came out this week. The Supreme Court's ACA 
decision and its hidden surprise for employers. This report is 
about Medicaid expansion, and the key finding is, states that 
do not expand Medicaid leave employers exposed to higher shared 
responsibility of payments under the Affordable Care Act. The 
associated cost to employers could total $876 million to $1.3 
billion each year in the 22 states that have opposed or leaning 
against or remain undecided. By way of example, the decision in 
Texas to forgo Medicaid expansion may increase federal tax 
penalties on Texas employers by $299 to $448.
    Now, this is from a completely nonpartisan Jackson Hewitt, 
I think they prepared tax returns. I do not think they are a 
stakeholder group to anyone.
    So, because of the decision that Governor Perry made, his 
decision, not President Obama's, is going to cost his 
businesses more.
    Now, I am going to turn this over to Senator Risch. He can 
have as much time as I did which I think is probably about 20 
minutes, 25 minutes, and then we will go to, your statements 
will be submitted to the record and then we are going to go 
directly to our testimony. I thank all of my colleagues for 
coming this morning.

OPENING STATEMENT OF HON. JAMES E. RISCH, RANKING MEMBER, AND A 
                    U.S. SENATOR FROM IDAHO

    Senator Risch. Well, thank you very much, Madam Chairman.
    First of all, I commend you for holding this hearing, but 
probably not for the reasons that you think. Certainly, when 
you throw hundreds of billions of dollars against the wall, 
something is going to stick; and to try to use the handful of 
things that actually have worked in this 3,000 pages of 
legislation and nobody knows how many pages of regulations and 
say, okay, well, it is working because this small part is, 
really is to ignore the overall problem.
    Again, I commend you for your courage in holding this 
hearing; and more importantly, Madam Chairman, I commend you 
for your statement that you helped to design this system that 
we have today.
    I suspect that as we go forward trying to find people who 
will admit to having had some part in this is going to be like 
trying to find somebody that admitted voting for Richard Nixon.
    This has been a catastrophic failure across America. And 
you talked about the truth and you know, the American people, 
they do not understand all the niceties and all the 
complexities of health care and health care insurance and what 
have you.
    But they know when they have been lied to, and the polling 
is incredibly strong, indicating that they believe that they 
have been lied to. And once the American people believe they 
have been intentionally lied to, it really causes difficulties 
in trying to solve problems. This does not bode well as we go 
forward.
    You provided your list of successes and one of them was 
Idaho. When I was Governor, I appointed the gentleman who now 
sits as the Director of the Department of Health and Welfare. 
My successor kept him on and he is a really good guy. He came 
out of the insurance industry.
    I am not exactly sure if you were boasting that Idaho is 
one place where Obamacare is working. But I can tell you that 
it is a disaster in Idaho. Perhaps it is not in Louisiana, but 
it is a disaster in Idaho.
    I know that you brought in some people from Kentucky to 
talk about some of the good things. I believe that Kentucky is 
working better than other places, although that is not a very 
high bar.
    I have got a couple of letters I want to put into the 
record from insurers who are working in this area in Kentucky, 
and I am just going to read parts of them as an indication of 
what is actually happening in Kentucky.
    This is from Houchens Insurance Group from Bowling Green, 
Kentucky. This is written by their Executive Vice President.
    He says, ``We are writing to you to explain what we are 
seeing here in Kentucky and throughout other parts of the 
country that Houchens Industries, Incorporated, and the 
Houchens Insurance Group serves regarding our clients' 
implementation of the Affordable Care Act.''
    ``While Houchens, with over 18,000 employees, is not a 
small company, our insurance group, HIG, serves over 1000 small 
businesses with their insurance needs throughout Kentucky and 
the United States. The remainder of this letter lays out what 
we are seeing. For an agency to represent its' customers 
responsibly, we need to be able to share all options available. 
At this point, Kentucky's Healthcare Connection, Kynect, 
presents us with more challenges than solutions. To date we 
have not enrolled any groups in the Small Business Health 
Options Program, SHOP, primarily because of the confusion the 
system has created. Business owners are anxious and frustrated 
as to what they have to do in order to get pricing. Creating an 
account within Kynect and then assigning an agent takes a 
considerable amount of time and is not something they should 
have to do while managing their business.''
    He then goes on to list many more of the problems with 
Kentucky's system.
    The other letter comes from The Benefits Firm, another 
company in Kentucky. And again, their Senior Vice President 
writes, ``Kentucky has been viewed by other states and people 
in Washington, D.C., as a state that most things have gone 
correctly with the Health Insurance Market place. While it is 
true that Kynect has been operating properly, especially 
compared to the Federally Facilitated Marketplace, there are 
still many unresolved problems. In particular, I would like to 
address the SHOP exchange. Logistically and technologically, we 
are not having the same success with the SHOP exchange as we 
are with individuals in Kynect in Kentucky. This week, I have 
reached out to numerous employee benefit brokers in Kentucky, 
none of which have finished a SHOP exchange application. While 
I do believe that the technical hindrance is part of the 
problem, it is not the primary obstacle to the success of the 
SHOP exchange. I firmly believe there are flaws to this system 
that the current law cannot overcome. Numerous businesses that 
I have worked with decided that with PPACA there are advantages 
to their business through Kynect. However, the advantage to 
their business is to drop their employer-sponsored health plan 
and allow each of the individuals and families to enroll in 
Kynect.''
    And then he goes on and explains why that is a very good 
financial decision for small businesses.
    So, there is no doubt you are going to find some things 
that happened here that are good. But, like I say, when you 
throw these kinds of hundreds of billions of dollars at 
something, you are bound to find that.
    Lastly, I would like to focus on what has been something 
that has really undermined the confidence of the people of 
America in this. When the President stood up as many times as 
he did, and particularly Democrat senators stood up as many 
times as they did, looked in the camera and said, if you liked 
your health care plan, you can keep it, those of us who 
listened to that the first time said that that is impossible. 
Where the government was going to lay out all of these new 
requirements in the new health care plans, no plan would exist.
    So, I do not know how the President of the United States 
could stand up and say that, and then repeat it over and over 
and over again, when his people had to tell him that the 
policies no longer existed. Somebody should have said, ``Mr. 
President, stop saying that. You are going to get hit over the 
head with this.'' And of course now, the chickens have come 
home to roost.
    And that is where we are. You know, we tried to change 
this. My good colleague, Senator Enzi, introduced Senate Joint 
Resolution Number 39, and we had a vote on the Senate floor on 
September 21, 2010.
    And that resolution which, if passed, would have become the 
law of the United States said, if you like your plan, you can 
keep it. But we were not able to pass that were we, Senator 
Enzi? There was a straight partyline vote with all Republicans 
voting for Senator Enzi's bill saying just like the President 
had promised and every Democrat voting against that promise.
    It is really unfortunate that it has come to that. Well, 
here we are again trying to apply lipstick to this pig; and no 
matter how many times it is said, the American people are not 
buying it.
    The numbers are deteriorating every day as far as the 
confidence of the American people--not only in what has 
happened here, but particularly in going forward--what we are 
going to do about this catastrophe.
    And that is a problem that I think you and your colleagues 
are going to have a very, very difficult time wrestling with. 
But the good news is we are Americans and we are free.
    We are going to have an election next November and the 
Americans again are going to have a say in this. And everybody 
is going to be able to stand up and say, look, I did this, I 
helped design this system, I had my hands involved in this. So, 
put me back there and see if I cannot do a little bit better 
next time, and the American people are going to decide whether 
or not that is enough.
    And that is exactly as it should be in America. And, as 
with all other issues we have had in America, even though this 
is what someone would call a man-made disaster, we will get 
through this. We are Americans. We know how to fix these 
problems and we will do it.
    With that, I yield back, Madam Chair.
    Chair Landrieu. Thank you very much, Senator.
    Let us begin on the panel with our first panelist, and then 
I am going to call on Senator Heinrich to introduce the 
gentleman from his State.
    But let me start with Mr. William Nold, Deputy Executive 
Director of the Office of Kentucky Health Benefit Exchange. 
Then we have Mr. David Allen, President and CEO of David Allen 
Enterprises. I am sorry. We are going to go in the order of Mr. 
Nold, go ahead. I will come back and introduce everyone else.
    Go ahead. Thank you.

STATEMENT OF WILLIAM NOLD, DEPUTY EXECUTIVE DIRECTOR, OFFICE OF 
      THE KENTUCKY HEALTH BENEFIT EXCHANGE, FRANKFORT, KY

    Mr. Nold. Chairman Landrieu, Ranking Member Risch, and 
members of the Committee, we really appreciate the 
opportunity----
    Chair Landrieu. You are going to have to speak into your 
mic. Just lean into it. Thank you.
    Mr. Nold. We appreciate the opportunity to come over here 
to D.C. this morning and to share Kentucky's experience with 
our exchange which we call, as Senator Risch said, we call it 
kynect. It is a combined exchange in the sense that both our 
SHOP and our individual, for administrative purposes, operates 
under one name.
    My name is William Nold, and as the Senator said, I am the 
Deputy Executive Director of the Office of the Kentucky Health 
Benefit Exchange. It is a long title and we have got a lot of 
responsibilities. I have submitted a written statement and also 
some other documents that I assume will be made part of the 
record.
    Chair Landrieu. We do. That will be part of the record and 
you have four minutes and 10 seconds.
    Mr. Nold. Yes, ma'am. My next note was time is limited. But 
I think a little time should be spent to talk about the 
landscape in Kentucky as it has existed for a number of years.
    Our population is about 4.4 million. 640,000 of those 
individuals are uninsured. Of grave concern to our governor, 
however, is the health status of our State.
    We are 44th in overall health status, 50th in smoking, 40th 
in obesity, 41st in diabetes, 50th in cancer deaths, 49th in 
heart disease, 43rd in cholesterol counts, 48th in heart 
attacks.
    You know, we began our implementation of this law 
immediately after it was passed. But as you know, many of the 
provisions in the law were related to insurance matters early 
on and the exchange seemed like it was far off, year 2010, and 
the exchanges really do not have to be operational until 2014.
    But we began immediately to try to bring consensus among 
all the stakeholders in Kentucky about what we were wanting to 
do with this exchange when the time came. Everyone in our State 
wanted us to do a state-based exchange, everyone.
    I think Deb Moessner, who is the President of Anthem in 
Kentucky, probably said it best. She said, ``If I am going to 
be regulated, I want to be regulated across the Kentucky River, 
not the Potomac River.''
    And that kind of said it all, I think. Although a lot of 
the stakeholders were opposed to this law, they realized that, 
you know, at least until the Supreme Court would make its 
decision that we were stuck with it. And it is a good thing 
that we are stuck with it. That is the way we found it anyway.
    So, of course, we continued to meet with Governor Beshear 
along the way, making decisions about what we were going to do, 
and so he wanted to wait until after the Supreme Court had 
ruled to really dig into this and get moving on it and that is 
what he did.
    And so, we presented all the pros and cons to our governor 
about what we should do or what we should not do, and he kind 
of stopped us. He said look, he said, and he is a lawyer, he 
had read the bill.
    He said this bill provides a unique opportunity for 
Kentucky to improve these health statistics. I want you to do 
everything that you can do to use this bill, not let this bill 
use me, but to use this bill to improve our health. And that 
has been the charge that we have accepted and have gone with 
ever since.
    You know, my time is getting short here. I do want to share 
with you, you know, we went live on October 1, down for a few 
hours, not down, slowed up for a few hours. Got that all 
straightened out and we have been running ever since and 
helping people get enrolled, not only in our SHOP but also in 
the individual market.
    So, I guess the message from our governor is that he was 
very strong in his opinion that the best way we could improve 
the health of our State was to go the state-based exchange 
route. And then also what we have done is that we have gotten 
agents involved. Right now, 94 percent of the small insurance 
policies in our State, small employer insurance policies, are 
offered through agents.
    Chair Landrieu. Try to wrap up please.
    Mr. Nold. Yes, ma'am.
    Well, to summarize, and again this is in particular with 
regard to the SHOP, since we went live on October 1, we have 
had 193 small businesses that have started applications to be 
eligible for an employer coverage.
    [The prepared statement of Mr. Nold follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. I am sorry. I am going to have to stop you 
there. We have so many people to testify, and I really 
appreciate and you have a wonderful statement. We have put it 
in the record. Thank you, Mr. Nold, but we are going to have to 
go to our second panelist.
    Senator.

OPENING STATEMENT OF HON. MARTIN HEINRICH, A U.S. SENATOR FROM 
                           NEW MEXICO

    Senator Heinrich. Thank you, Chair Landrieu for holding 
this hearing on the rollout of the Affordable Care Act small 
business exchanges.
    With attention squarely focused on implementation 
challenges at the national level, a deep understanding of how 
our small businesses are fairing in securing meaningful, 
affordable health insurance coverage for their employees is 
timely and essential to the economic well-being of Americans.
    Just an introduction, okay. Well, I am delighted and 
honored to be here today to introduce one of our invited 
panelists, Dr. Martin Hickey. He will describe to you in detail 
the success of the New Mexico SHOP.
    Dr. Hickey is not only a member New Mexico Health Insurance 
Exchange Board but he is also the CEO of the New Mexico Health 
Connections, a co-op, not-for-profit plan formed under the 
Affordable Care Act to provide health insurance to small groups 
and individuals in New Mexico.
    He is also a general internist who first practiced on the 
Navajo Nation, and he has dedicated himself to developing rural 
health programs.
    Over the past three decades, he built a distinguished 
career in health systems administration and delivery system 
reform across the country and we are fortunate to have him in 
New Mexico.
    I give you, Dr. Hickey.
    Chair Landrieu. Thank you.
    Dr. Hickey, please and you have five minutes.

   STATEMENT OF MARTIN HICKEY, M.D., CEO, NEW MEXICO HEALTH 
                  CONNECTIONS, ALBUQUERQUE, NM

    Dr. Hickey. Chairman Landrieu, Ranking Member Risch, and 
distinguished Senators, thank you for the opportunity to 
testify today about the early success of the New Mexico small 
business exchange.
    New Mexico legislated a state-based exchange board in March 
of just this year. The board consists of 13 highly 
representative members of groups including small business, 
consumers, Native Americans, Hispanics, physicians, hospitals, 
health insurers.
    Within five months, the board and it's very capable CEO and 
team selected an experienced private exchange vendor, developed 
a statewide plan for marketing, trained over 500 health care 
guides, set the rules for an open market exchange, and 
succeeded in launching a fully operational enrollment website, 
Be Well New Mexico, on October 1.
    In this time of national glitches and confusing rhetoric, 
the board, our very supportive governor, Susanna Martinez, the 
exchange health insurers, and all New Mexicans are very proud 
of the early enrollment successes that I will detail.
    You got a background on myself. I have been CEO and a 
senior manager in insurance companies, medical groups, 
hospitals. I have seen this business from every single side. 
And what I am so proud of is that I have always dwelt to on 
fixing access to care, and I can tell you that this board that 
has come together from literally both sides of the aisle in New 
Mexico, has come together passionately to assure access to 
care.
    New Mexico is 23 percent uninsured, second only to Texas, 
has 200,000 uninsured and 118,000 of them are eligible for 
financial assistance.
    And the Board gets this. Only 47 percent of the population 
has employer-sponsored insurance, the lowest in the Nation 
which has an average of 58 percent.
    Our State exchange is unique from most others and we call 
it a hybrid. Because the exchange formed so late, we did not 
have time to implement an individual exchange this year. We 
were, however, able to procure a competitive contract with Get 
Insured, an information technology company with seven years of 
experience in building private exchanges.
    Next month, they will begin work on implementing the 
technology for an individual exchange which will be ready to 
rollout for enrollment in October of 2014.
    In the meantime, we have had to depend upon the federal 
exchange, but Be Well New Mexico has a calculator, is 
educational; and when the federal exchange becomes fully 
operational, people will be informed.
    The small business exchange is also unique in that it not 
only offers employers a choice of plan but offers choice to 
each of their employees as well.
    The employer enters the site, selects a metal level and a 
reference plan. The employer designates a percentage of 
premiums that will be covered. That then creates a dollar 
amount made available to the employee for premium support in 
whatever plan the employee chooses.
    Thus, the employees have a choice of any plan of any 
carrier at that metal level at whatever cost. That is what is 
so great about New Mexico health insurance exchange for small 
businesses and their employees. Choice, choice, and choice.
    You know what? Even better it works, and it is easy. I did 
it for my family last week and it was like going down a water 
slide. There is even a calculator to help an employee choose 
the right plan based upon generalized use of health care in the 
past.
    I think the following quote from a small business in 
Albuquerque, an attorney with four employees, sums it up best.
    ``I was very pleasantly surprised. I thought it was going 
to be an administrative nightmare and it literally took me 15 
minutes. They gave me a quote that would save me $1,000 over 
what I was paying. I thought this was going to be an all-day 
thing so I had a Diet Coke handy, was well rested and had a 
good lunch, and it was almost disappointing that it was so 
easy. I was blown away.''
    So, to date, as you said, Senator, 1,143 small businesses 
in our little State with a number of employees is essentially 
propelled us to a potential, once all the enrollment finishes 
up by the end of the month, of over 8,000 members which already 
meets the goal that the board had set for the State, and we 
still have got the rest of the year and all next year to go.
    So, as I said, about 500 personal assistors and brokers are 
very heavily involved as well.
    The other thing you emphasized was cost, and basically I 
will tell you that our superintendent estimates that the rates 
for next year will be no more than five percent of what they 
were this year, when the American Society of actuaries said it 
would be a 34 percent increase. He also set up a very 
competitive process. I know. I had to go through it.
    So, New Mexico small employers now have a great opportunity 
to cover their employees and do so with a sense of choice and 
low rates and a system that works.
    [The prepared statement of Dr. Hickey follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you, Dr. Hickey. My only question is 
are you available to come to Washington?
    [Laughter.]
    Chair Landrieu. All right. We will go now to Mr. David 
Allen.

   STATEMENT OF DAVID ALLEN, PRESIDENT AND CEO, DAVID ALLEN 
                 ENTERPRISES, LLC, BOULDER, CO

    Mr. Allen. Madam Chairperson, members of the Committee, 
thank you for the opportunity to speak with you today about the 
affects of the Affordable Care Act on my small business and our 
experience with the Colorado State insurance exchange.
    I am the owner and operator of Flatirons Practice 
Management. We are an independent medical billing company in 
Boulder, Colorado. We provide medical billing and practice 
management services to several hundred health care providers in 
eight states.
    I currently employ 33 full-time personnel. Obviously, we 
are well below the employer mandate threshold of 50 FTEs yet we 
provide company-paid health insurance to our employees anyway 
under a small-group plan and have for many years.
    We do so because we can and we feel that it is the right 
thing to do. I myself worked as an employee for other companies 
before choosing self-employment and I relied on my employers 
for access to health insurance.
    Unfortunately, it has been increasingly hard for me to 
continue to provide health insurance for my employees. Second 
only to payroll, health insurance is our next largest expense. 
Even with annual inflation rates in the one to two percent 
range, our premiums have increased every year by 20 percent or 
more.
    As much as I wish I could simply pass this along to my 
customers, they too are experiencing the same pressures to 
manage rising expenses in their small businesses.
    We have done some creative things over the years to reduce 
the magnitude of the premium increases while maintaining the 
integrity of our coverage and have been successful in 
continuing to pay for 100 percent of the cost of the premiums 
for our employees.
    One such tactic was to select an insurance policy that 
covers only generic pharmaceuticals. Anyone who requires a 
pharmaceutical that is only available as a brand name product 
has to purchase it out-of-pocket. As a result of the Affordable 
Care Act, our carrier has discontinued this policy as it does 
not meet the minimum standards as stipulated under the law. Due 
to this one change, our premiums are now scheduled to increase 
by 52.3 percent in January 2014.
    Clearly, absorbing this expense in order to continue to 
provide the same benefit to my employees is entirely 
unrealistic. I will have no choice but to require my employees 
to contribute substantially to the cost of their premiums. The 
irony is that none of my employees currently take any brand 
name prescriptions or expect to in the foreseeable future.
    This law has turned what was a potential expense for my 
employees into a guaranteed expense for my employees for 
something they neither need nor want.
    Since the Affordable Care Act is what caused this problem 
for me, I decided to embrace it and turned to the state SHOP 
insurance exchange in hopes that it would provide me with more 
affordable and appealing options.
    The first obstacle I encountered was that the website would 
not allow me to create an account. After my fourth failed 
attempt, I initiated an on-line chat with one of the exchange 
support personnel and was told after close to an hour of 
waiting that they were having technical difficulties with 
creating accounts and I should try again later.
    I did eventually create an account and download the census 
template. I then began the frustrating experience of attempting 
to upload the census. I tried unsuccessfully several times and 
received nonsensical errors such as ``wrong file type'' when 
the file I was attempting to upload was the very template that 
I downloaded from the website.
    After initiating my second on-line chat, it eventually came 
out that my web-browser might be at fault. I find it 
unfortunate that the website did not disclose any browser 
limitations before I wasted yet another hour spinning my 
wheels.
    Upon switching browsers, I was able to get the website to 
acknowledge the file that I was attempted to upload but it 
ultimately rejected the file on the basis that the date of hire 
field was not formatted correctly.
    My third on-line chat resulted in validation that my data 
was, in fact, formatted correctly and the website was again 
experiencing technical difficulties.
    Growing increasingly impatient, I resorted to having my 
assistant manually type the information into the website. What 
should have taken us minutes to complete instead took us hours.
    Having finally uploaded our census, I received 34 insurance 
plan options from which to choose. I found it challenging to 
objectively compare and contrast them with our current plan and 
its 2014 equivalent because we currently offer a tolerable $750 
annual deductible to our employees and the lowest annual 
deductible available to us under the state exchange is $1,500.
    In short, the only way we can markedly reduce the cost of 
our health insurance through the state exchange is to select a 
policy with a dramatically higher deductible thus shifting the 
financial burden from me to my employees.
    Frankly, I could do this on my own without the assistance 
of the exchange and have consciously chosen not to pursue high 
deductible plans in the past because of the financial strain 
that it would create for my employees. Instead, we opted to 
make concessions that did not cause a financial strain such as 
forgoing brand name pharmaceuticals.
    On the surface, my company stands to benefit from the 
Affordable Care Act on the basis that more people will consume 
health care services provided by my clients thus resulting in 
more business for me. But this theory hinges on the 
affordability of the insurance available to the populace.
    If my experience is any indication of the unintended 
consequences of this law, it would appear that the Affordable 
Care Act accomplished the polar opposite of what the law was 
designed to do.
    Thank you for your attention.
    [The prepared statement of Mr. Allen follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you. Our next witness is Mr. Drew 
Greenblatt. Please identify your state and the kind of exchange 
you have.
    And Mr. Allen, just for the record, you are in Colorado 
with a state-run exchange that is obviously, according to your 
testimony, has some difficulties.
    Mr. Greenblatt, what is your state and what kind of 
exchange do you have?
    Mr. Greenblatt. Maryland state and we have the SHOP 
exchange but it is starting in April.
    Chair Landrieu. And is it a federal exchange?
    Mr. Greenblatt. I believe Maryland State is trying to do it 
on its own but I am not positive.
    Chair Landrieu. A state-run exchange?
    Mr. Greenblatt. State run.
    Chair Landrieu. Okay.

    STATEMENT OF DREW GREENBLATT, OWNER, MARLIN STEEL WIRE 
                    PRODUCTS, BALTIMORE, MD

    Chair Landrieu. Chairwoman Landrieu, Ranking Member Risch, 
and members of the U.S. Senate Committee on Small Business and 
Entrepreneurship, thank you for the opportunity to testify 
before you today.
    I am Drew Greenblatt, and I am president and owner of 
Marlin Steel Wire Products, based in Baltimore, Maryland. 
Marlin is a manufacturer of wire baskets, wire forms and 
precision sheet metal fabrications. We make it 100 percent in 
the USA. We make it here and we ship it to 36 countries, and my 
favorite is we export to China.
    I am pleased to testify on behalf of the National 
Association of Manufacturers. I am on the Executive Committee 
of National Association of Manufacturers.
    Since you are the Small Business Committee, I thought you 
would be interested to know that our average member has 35 
employees. 97 percent of us provide health insurance for our 
employees. I mention this because the health and safety of our 
workers is critical to manufacturers.
    As a matter of fact, at Marlin, my company, we hit a huge 
milestone two weeks ago. We have gone 1800 days without a lost 
time accident, the thing that I am most proud of in running 
this company.
    This commitment to a safe workplace and the overall health 
of our employees is critical. To me, offering high-quality 
health care coverage is part of that mix. Finding this good 
coverage is personally important to me because my family is in 
the same plan as all of my employees. So, we are all in this 
together.
    Generally, I have come to expect my health insurance costs 
to go up about 8 to 12 percent a year. I was startled, I was 
shocked when our health insurance went up 49 percent this year.
    I want to provide health insurance for my employees and 
their families. We have been doing it for 15 years since I 
bought the company. But now because it is so high, our plan, in 
effect, is not viable because it is not affordable.
    Ultimately, we were able to secure an alternative coverage 
plan for my employees because our term ended December 1. My 
premium, however, is still going up 10 percent. The plan I 
purchased includes benefits I do not really need nor do my 
employees want. This is key. The affordability, it has gone up. 
The cost has gone up despite all the promises our costs would 
go down.
    If I told my clients we are raising your prices 49 percent, 
they would laugh at me. 49 percent is out of control. Even if I 
sat down and explained to them, listen you are going to have 
some new features, they do not want to hear about it; and this 
is the environment we are in.
    I recently discovered the SHOP exchange of Maryland was 
delayed until April. I am not sure what products it offers. 
This is the kind of instability that is harmful to our economy.
    See, we do not know how much our employees are going to 
cost this year. We do not know how much they are going to cost 
next year. How do I quote jobs against my competitors in China? 
How can I win jobs that are three-year and five-year contracts 
when I do not know how much my costs are going to be?
    I know that the ACA law is not going away and any change is 
going to have to happen through bipartisan legislation. I urge 
legislators on both sides of the aisle to look at all the 
health care laws that are not working and please fix them.
    This will not get better with finger-pointing. This is not 
going to get better with rhetoric or regrets over broken 
promises. We need practical approaches right now.
    Cost was and is and remains our main issue. Reducing the 
cost of care makes a health care delivery system more efficient 
and directly impacts the access to coverage.
    Chair Landrieu. Please wrap up. I am sorry. You have 56 
seconds.
    Mr. Greenblatt. 56 seconds. Driving up the cost of coverage 
and then providing subsidies to some just camouflages the 
underlying problem. I may not be a supporter of the current 
system but I would support changes that allow me to continue to 
provide high quality health care to my employees at a 
reasonable price.
    Thank you for the opportunity to testify today.
    [The prepared statement of Mr. Greenblatt follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you, Mr. Greenblatt, for your 
excellent testimony, and I am not seeing well with my cold but 
you did a very good job and I thank you for focusing on fixing 
it as opposed to the rhetoric associated with another proposal.
    All right. Ms. Salter.

  STATEMENT OF SHEILA A. SALTER, FOUNDER AND CEO, EARLY2SURG, 
                        CHAPEL HILL, NC

    Ms. Salter. Good morning, Madam Chair Landrieu, Ranking 
Member Risch, and other distinguished members of the Committee. 
I am honored to be here today and to share my negative impact 
Obamacare has had on my small business and me.
    My name is Sheila A. Salter and I am the sole proprietor of 
early2surg. I reside in North Carolina and that is a state that 
has defaulted to the federal exchange.
    My company is a marketing/consulting business and the 
mission is to improve or accelerate the development and 
commercialization of surgical devices. My primary customers are 
startup device companies.
    I have been in health care for over 35 years. I am well 
aware of the weaknesses and strengths within our health care 
system. I do not think there is a person in this great country 
of ours who does not wish for every individual to have 
affordable health care.
    Obamacare has negatively impacted my business and filled me 
with uncertainty. I am my business. I planned for many years to 
have my own business. I invested my time and my money to begin 
early2surg this past February.
    Now, because I have no employees, I am not eligible for 
SHOP at this time but it would be a reality if and when I could 
afford to expand. That is in my business plan.
    Now, I would like to direct you to either the screen or you 
have in front of you a chart that I submitted. You know, I was 
shocked back in September when I received notice from Blue 
Cross Blue Shield that my health care plan was going to be 
canceled and it was going to be replaced by one that had been 
chosen for me at the tune of $584 a month.
    Now, if you look at the chart, we all need to be clear on 
this. There is one health care plan. When I hear people talk 
about, oh, you know, go to the exchanges, shop, shop, shop. You 
have one plan. Okay. That plan includes the benefits listed in 
the left-hand column.
    Now, you can see Sheila's plan. Sheila's plan was the one 
that I chose. I chose my services. I have done that all these 
years. I chose those services, chose that deductible for $202 a 
month.
    Now, with Obamacare, I have to have those 10 essential 
benefits. Now, I challenge anybody in this room to look at the 
services that I selected for myself, noting that I am 61. I 
know I do not look it and I have no children or history of 
alcohol or drug abuse yet. Okay.
    [Laughter.]
    But does anybody here really think that I need all these 
services on the left-hand column? I do not think so. To have 
those choices removed from me, to have the government tell me, 
Sheila, this is what is best for you, I really, I mean shocked 
is not the word. It is unacceptable.
    It is unacceptable now. It is going to be unacceptable 12 
months from now and I am going to never accept for someone to 
make my health care choice for me.
    The only thing that exchanges do, and I have gone on the 
exchanges, you have the selection of what is your deductible, 
what is your co-pay, what you are going to do for prescription, 
are you going to be in network or out of network.
    But I do not care if you are a man or a woman, you are 
going to have maternity and newborn care, you are going to have 
pediatric services, and you are going to have services that you 
may or may not need.
    You know, that I think there should be a fix to it. I am 
open to work with anyone to fix that.
    So, how has it affected my business? Well, it has impacted 
how am I going to establish my business, grow my business, 
expand my business. All of that is going to be delayed.
    And as you know, the website is not working exactly up to 
par but I am concerned with the security of the website. You 
know, if I have identity theft, if any of us have identity 
theft, we all know what the consequence of that is. You know, 
it could wipe me out to the point I would never recover.
    So, you know, in our health care business we have a motto, 
first do no harm. I want to see everybody have affordable 
health care. That is a given but, you know, there are some 
fixes that need to be made and I am happy to help with that.
    Thank you again.
    [The prepared statement of Ms. Salter follows:]

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    Chair Landrieu. Thank you very much.
    Ms. Evans.

 STATEMENT OF CONNIE EVANS, PRESIDENT AND CEO, ASSOCIATION FOR 
             ENTERPRISE OPPORTUNITY, ARLINGTON, VA

    Ms. Evans. Good morning, Chair Landrieu, Ranking Member----
    Chair Landrieu. Welcome back.
    Ms. Evans. Thank you very much for having me back. Ranking 
Member Risch and members of the Committee, my name is Connie 
Evans and I am the president and CEO of the Association for 
Enterprise Opportunity, AEO, the national member organization 
and the voice of micro-business in the United States.
    For more than 21 years, AEO and its more than 450 member 
and partner network of non-profit lenders and business 
development organizations have provided critical services, 
access to capital and business counseling to under served 
entrepreneurs in micro-businesses all across the country.
    The importance of our topic today, health insurance and its 
value to micro-businesses can not be overstated. Similarly, our 
discussion of how certain elements of the Affordable Care Act 
are changing the health care landscape could not be timelier.
    Before we proceed to the topic, however, I would like to 
give the Committee some statistics about micro-businesses, 
those businesses with under five employees, that AEO released 
just last week.
    The report, Bigger Than You Think, the Economic Impact of 
Micro-Business in the United States, tells a powerful story of 
how the Nation's smallest businesses make an outsized 
contribution to our economy.
    There are 26 million micro-businesses in the United States 
or about 92 percent of all businesses. The ripple effect of 
direct, indirect, and induced economic activities of these 
firms is quite impressive.
    Total employment of more than 41 million Americans, total 
economic impact of nearly $5 trillion, and total revenue 
contributions of $135 billion to federal, state, and local 
governments just in 2011.
    In other words, although these main street businesses are 
small, their combined impact is quite significant. Despite 
advantages, however, many would-be entrepreneurs are reticent 
to leave their jobs due to concerns about health care access.
    For decades the inability to obtain health insurance has 
been a barrier for those who are interested in starting a 
business. It is well documented that access to health insurance 
drives employee decisions.
    Before the ACA removed pre-existing conditions as a barrier 
to obtaining health insurance, employees often chose to stay 
with employers even though they were unhappy with their 
employment. The inability to access health insurance prevented 
those who might have otherwise left their jobs and start 
businesses.
    As the Chair expressed this morning, indeed, the Robert 
Wood Johnson Foundation does project that nearly 1.5 million 
Americans, including 25,000 just in the Chair's home State of 
Louisiana, will become self-employed thanks to insurance 
reforms of the Affordable Care Act.
    The entrepreneurs and micro-businesses that AEO members 
serve have had the unfortunate choice of hamstringing their 
revenues by providing health insurance to their employees or 
losing their employees to larger companies who can provide that 
insurance.
    The ACA he reforms to the health insurance market, in our 
opinion, were necessary and we hoped that these changes would 
lead to better prices and more choices.
    Our optimism is based largely on the exchanges, also 
referred to as new marketplaces, which allow individuals or 
small businesses to pool together statewide to obtain 
insurance.
    It is with profound disappointment that the federal rollout 
of this program is in complete disarray. While most of the 
government's attention has been focused on fixing the 
individual exchange, and the small business exchange or SHOP 
has been treated as a secondary concern.
    We fear that implementation of the federally facilitated 
SHOP will continue to suffer delays. Even though the law 
requires individuals to obtain health insurance by March 2014, 
many plans for individuals and businesses end at the end of 
2013.
    Decisions about coverage have to be made whether or not the 
Federal Government can successfully rollout the exchanges. We 
note that many individuals have received notices saying that 
their coverage will be discontinued because that plan does not 
comply with the ACA and the insurance companies have advised 
these customers to shop in the exchanges but, of course, the 
exchanges are not up and running so there is much frustration 
over what to do in the meantime.
    Do they just go without insurance and allow a gap in 
coverage? What do they tell their employees?
    In closing, our message is not based on any political 
leaning or philosophical notion regarding health insurance. We 
just want it to work. We urge the Congress and the 
Administration to come together to make it work for the 26 
million micro-businesses on the front lines of our economy.
    Thank you for the opportunity to appear before you today 
and I look forward to answering any questions the Committee may 
have.
    [The prepared statement of Ms. Evans follows:]

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    Chair Landrieu. Thank you very much and all of you for your 
testimony. It was all helpful to helping us work forward to try 
to fix this bill for the benefit of our small businesses and 
individual contractors and self-employed.
    I am going to take five minutes for questions. We will do a 
five-minute round alternating--I am sorry, Mila. I am so sorry 
to miss you. I will tell you this cold is really knocking me 
for a loop.
    Ms. Mila, go right ahead, Ms. Mila Kofman.

   STATEMENT OF MILA KOFMAN, EXECUTIVE DIRECTOR, D.C. HEALTH 
           BENEFIT EXCHANGE AUTHORITY, WASHINGTON, DC

    Ms. Kofman. Thank you. Thank you very much, Madam 
Chairwoman Landrieu and thank you Ranking Member Senator Risch, 
and members of the Committee.
    My name is Mila Kofman and I am the Executive Director of 
the District of Columbia's Health Benefit Exchange Authority, 
otherwise known as DC Health Link.
    Senator Landrieu, thank you so much for your leadership and 
advocacy on behalf of the Nation's small businesses, both for 
your home State and nationwide. It is truly I appreciated all 
the work that you have done through the years for the small 
business community.
    It is my honor to be here today to share with you what we 
have done here in the District of Columbia. The District was an 
early leader with the Affordable Care Act implementation.
    In March of 2012, Mayor Gray signed legislation creating 
the DC Health Benefit Exchange Authority. We are a private-
public partnership with seven voting members who are small 
business owners and experts in health insurance and health care 
financing. We also have four government members who serve as 
nonvoting.
    In the District, it really did take a village to bring 
success to date. We had a very strong partnership with all of 
our agents, government agencies. We also had a very strong 
partnership early on in our policy decisions. We had policy 
workgroups, stakeholders who helped us make our policies and 
set our priorities.
    We had strong support from Mayor Gray and his entire 
administration as well as the City Council and Congresswoman 
Norton. We had the political support we needed to move forward.
    We also had strong relationships in collaboration with the 
business community here in the District, business associations 
who represent the small business owners here. We also had 
strong support from the Federal Government and especially Gary 
Cohen and his entire team.
    On October 1, we opened for business; and as you know, it 
was reported that we were one of four states that opened on 
time and did not go down and we have not gone down. We are 
fully open for business and we welcome everyone, every 
individual who lives in the District, every small business that 
is in the District, and now I look forward to serving many of 
you and your staff. It was a great pleasure to be designated as 
a provider of health benefits to all of you.
    I want to know that we had very strong partnerships with 
our insurance industry. We have four major insurance companies 
selling to small businesses through DC Health Link and I think 
the best insurance companies in the Nation, Aetna, United, 
CareFirst Blue Cross Blue Shield, and Kaiser Permanente.
    They offer 267 different products to small businesses, 
something for everyone. If you want zero deductible plan, it is 
there. If you want an HSA high deductible health plan, it is 
there, and everything in between at all price points.
    Our carriers offer nationwide physician and provider 
networks as well as very robust local and regional networks, 
and we are very proud to offer full employer and employee 
choice.
    So, when a small business comes in, it is very easy to 
create an account. DCHealthLink.com is our web address. When a 
small business comes in, the small business decides how much to 
contribute and what options to offer to employees.
    For the first time, a small business can offer the types of 
options that only in the past have existed for the large 
employers. A small business can pick what to contribute and 
pick a level of benefits like the gold level and employees have 
112 different products to choose from.
    The small business gets one invoice and we clearly say how 
much the small business has to contribute and how much to 
withhold from the paychecks of employees.
    We also did not, we decided to take advantage of the 
private market innovations so we did not negotiate rates or 
benefits. We let the insurance companies compete and, boy, did 
they compete.
    After we made all of their premiums public, one company 
came back in lowering their rates twice. Another company came 
in and lowered their rates once and a third company came in and 
lowered their rates and offered additional product.
    So, we have seen real private market competition work. When 
insurance companies compete, small businesses and individuals 
benefit from that competition.
    Chair Landrieu. Please try to wrap up please.
    Ms. Kofman. Thank you, Madam Chair.
    I just want to note and thank the D.C. Chamber of Commerce, 
the Greater Washington Area Hispanic Chamber of Commerce, and 
the Restaurant Association of the Metropolitan Washington area. 
They had been our strong partners, and they are part of our 
success.
    I also want to note that the insurance brokers especially 
of the National Association of Health Underwriters has also 
been a critical part to our success.
    I look forward to answering any questions you may have.
    [The prepared statement of Ms. Kofman follows:]

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    Chair Landrieu. Thank you very much.
    Before I start my line of questioning, I would like to 
submit for the record a letter from the State of Minnesota, the 
governor, Mark Dayton, who was a member of the Senate, and he 
quotes, and I will put the rest in the record, Mnsure, which 
is--sure's focus on small business as a result of our State's 
decision to create a Minnesota-made exchange that best provides 
for the needs of Minnesotans. Virtually every health care 
organization, business organization or respected expert 
strongly supported our state exchange in designing something 
that would work for us.
    And he could not be here. Minnesota could not testify, but 
they have some excellent information. I would like to submit 
that to the record with no objection.
    Let me respond in my time first to my good friend and 
Ranking Member's reference to my not supporting Senator Enzi's 
amendment. Senator Enzi is here. He can most certainly explain 
his amendment.
    But I want to say for the record the reason that I voted 
against it, and I remember the Democratic caucus, is because it 
would have eliminate the cap on lifetime limits.
    So, people could basically exceed their limits and I 
thought that was wrong and it would also have knocked young 
adults off their parents plans which is one of the strongest 
features of the Affordable Care Act.
    So, I would say Senator Enzi, of course, can defend himself 
in his rebuttal. His bill which I voted against and many 
Democrats did not keep the promise. It gutted in the bill.
    Now, I have a bill that will actually keep the promise and 
happily last week in the House of Representatives both 
Republicans and Democrats overwhelmingly voted to support some 
version of the Keep Your Promise Bill that would extend that 
for a year. That would help you, Ms. Salter, because you could 
actually keep your plan.
    So, I wanted to put that in the record.
    My first question would be to you, Ms. Salter. When did you 
start your current business?
    Ms. Salter. I just started my business this past February.
    Chair Landrieu. Okay. So, you have been in business about 
nine months.
    Ms. Salter. Uh-huh.
    Chair Landrieu. And you are just starting.
    Now, I want to put into the record that not only if my bill 
could pass, and I hope that you could support it or a version 
of it, you could keep the plan that you want. But if you chose 
to go to another plan, I want to put in the record, if you make 
$27,500 a year in your business, assuming you have no 
additional income, you will actually save $4,986 because of the 
premium that you and your business will receive.
    If you make $32,000 a year, your annual cost of your 
premium, even in North Carolina where the State itself chose 
not to help you by setting up their own exchange--they let it 
be set up by the Federal Government--so, your State made that 
decision, not to us--you would save, you would pay every year 
$919 and you would save $4,257.
    If your business makes $35,000 in your first year and it 
goes up to 40 or 45,000, your premium, you would still save 
$2,823. So, I am sorry that your exchange is not working as 
well. That is what we are here to do. But there are some 
benefits that hopefully you can come to appreciate as we move 
forward.
    Ms. Kofman, let me ask you. The D.C. exchange has gotten 
some very good feedback, and as you said, both bipartisan, 
Republican and Democrat. It is understood.
    What would you say are the two most important features that 
caused your exchange to be so beneficial to your small 
businesses? Was it the way it was designed, was it the 
cooperative nature, what was it and what would you recommend to 
others trying honestly to fix this and to make it work for 
their small businesses?
    Ms. Kofman. Thank you, Madam Chair.
    There were several elements that were critical to us. We 
wanted to build the exchange from the ground up, community-
based effort, priorities, policies that we adopted were very 
much stakeholder driven. The decisions we made reflect the 
stakeholders who were involved in helping us build DC Health 
Link.
    The other critical part to us is the huge choices that are 
available to small businesses, 267 different products, 
everything, HMOs, PPOs, no deductible, high deductible, 
everything from all of the major insurance companies.
    And our value proposition is we want to make it as easy as 
possible to small businesses to be able to offer coverage and 
offer small businesses the kind of clout they never had in the 
past, the clout that large employers have enjoyed for many, 
many years.
    That as well as the business community in the District 
stepping up to the plate, putting politics aside and helping us 
make hard decisions and helping us to build this DC Health Link 
to provide services that small businesses need and want and are 
desperate for in terms of affordability and predictability and 
an opportunity to offer great options to their workers.
    So, it took a village and the small business community was 
definitely a strong part of it.
    Chair Landrieu. Thank you so much.
    Senator Risch.
    Senator Risch. Madam Chairman, back to the Enzi proposal 
again. I heard your explanation. You voted against it because 
it eliminated lifetime caps that were required under Obamacare 
and it eliminated the 26-year-old coverage which was required 
under Obamacare. But this is exactly the point.
    You did not promise us that if we politicians like your 
policy, we are going to let you keep it. You said, if you like 
your policy, you can keep it. There were a lot of people that 
wanted to buy policies that cost less and that did not have 
lifetime caps lifted, and there were a lot who wanted to buy 
plans that did not cover their 26-year-old.
    But you did not let us do that and that is the problem. The 
American people want to be free. We are smart people. We can 
make our own decisions. We do not need the Government telling 
us what we have to have. And that is the biggest complaint I 
get from Idahoans, from Americans, saying why are the 
politicians in Washington, D.C., constantly telling us what we 
should do for ourselves.
    And that is the basic problem with all of this. Whenever 
you try to socialize an industry or nationalize an industry 
like has been done here, it has never worked. It has been tried 
in every communist country in the world. It has been tried in 
all kinds of socialist countries, and it never works, and it is 
not going to work here.
    Well, let me ask a couple of questions. First of all, Mr. 
Nold, I am told that there have been 150,000 small group plans 
that have been canceled in your state. Is that true?
    Mr. Nold. Sir, I am not familiar with the number there. At 
the Department of Insurance is the agency that handles the 
mechanisms for that. I will be glad to provide that information 
to you.
    Senator Risch. Well, I have got it. They said there are 
150,000 small group plans that have been canceled. On the other 
side of the ledger through November 8th, 309 have signed up 
again. That is a big problem it seems to me. We have 150,000 
canceled and 309 signed up.
    Mr. Nold. Certainly with the small group, it is to note 
that the open enrollment period that affects individuals is not 
the same with small groups. There is a continuous open 
enrollment period available to small groups. They can sign up 
anytime during the year.
    Senator Risch. Got it.
    Ms. Kofman, first of all, let me say that it is really 
encouraging to hear that you were one of five, did you say, 
that made the rollout work October 1. Is that what you said?
    Ms. Kofman. In the morning of October 1, Bloomberg news was 
reporting we were one of four jurisdictions----
    Senator Risch. Four.
    Ms. Kofman [continuing]. That went live without a glitch 
that morning.
    Senator Risch. That is really good to hear that they were 
working. People were able to sign up. They were able to get on 
and do what they wanted to do. That is a really, really good 
thing.
    What is the population of the District?
    Ms. Kofman. We are a small population jurisdiction, about 
640,000.
    Senator Risch. I am told that in the first month with you 
up and running, no glitches, everything is working well and 
with that kind of a population, that you had only five 
enrollees in the first month. Is that true?
    Ms. Kofman. No, that is not true.
    Senator Risch. What is the number?
    Ms. Kofman. I can provide your office with the exact 
numbers. We did issue the most recent numbers as of November 
13. We had close to 700 employer accounts created. In terms of 
individuals who completed their applications both for premium 
reductions and full premiums, we were at about 1350 for full-
price applications and close to 2000 for reduced price. Each 
application could be a family of 10. We only count 
applications.
    In terms of account holders who selected a plan, over 1100 
account holders selected a health plan and 565 account holders 
said they wanted to be invoiced to pay.
    Now, they are not required to pay until December 15. So, I 
just want to make sure that people who are residents of the 
District are reminded of that. We are not asking for people to 
pay early. If they want coverage to be effective January 1, 
they do have to make their payment by December 15.
    Senator Risch. So, by my calculation then, a little under 
one percent of the population in the District signed up. Would 
that be fair?
    Ms. Kofman. I can provide you better numbers. Right now 
folks who are shopping and making decisions, there is a lot of 
activity through DCHealthLink.com.
    I am encouraging both small businesses and individual 
shoppers to take their time. Selecting health insurance is not 
an easy decision and if you are not working with a broker who 
can help you through it, you really do have to take your time.
    I can tell you as a former insurance regulator myself, 
insurance is very complicated. Consumers who get a 150-page 
document which is their insurance contract which has the 
exclusions and what is included is very complicated. So, 
although we have made it much easier through our webpage to 
shop and compare apples to apples, we provide four-page 
coverage summaries that make it much easier than before to 
shop. It is still not a quick decision and we encourage 
everyone to take their time.
    Chair Landrieu. Thank you, Ms. Kofman.
    Senator Booker, and let me welcome you to this Committee 
and welcome you to the United States Senate. I look forward to 
your leadership. You have already been a champion of small 
business and you are just a perfect person to join us in our 
effort to help them.
    Senator Booker. Thank you very much, Chairwoman. I want to 
thank you and I want to thank the Ranking Member.
    These are the things you need to teach the new guy, how to 
turn on your microphone.
    But I want to thank the Chair and I want to thank the 
Ranking Member both who took times out of your busy schedule to 
sit and meet with me and help me get along my way.
    This is such an important issue for the State of New Jersey 
that I am very grateful to have the opportunity. I want to 
thank all the panelists. They have been informative. I wish we 
had more time and I look forward to reading more of your 
testimony that was submitted into the record.
    Mr. Greenblatt, first of all, I appreciate your Jersey 
connection, a guy who vacations in Jersey, and you have some 
Jersey boy aura sp to you.
    [Laughter.]
    I want to say to you, first and foremost, as the geologists 
say, you rock. And you rock not because of your Jersey 
connection because I feel one of a kinship with you, both you 
and I in the last month have come down to Washington. You get 
to go home I think; I am going to stick it out here and battle 
it out.
    But you deal with pragmatism and I have had to deal with 
it. I cut 25 percent of my employees as a mayor. One of the 
reasons I had to cut so much is because health costs were going 
up so much, my taxpayers could not afford it.
    I had to balance the budget for every year. So do you. And 
the challenge that you have which I have seen working with 
local manufacturers in my city that I wanted to expand is that 
you said you export products to China. Right?
    Mr. Greenblatt. Yes.
    Senator Booker. You are competing globally, right?
    Mr. Greenblatt. Absolutely.
    Senator Booker. I would like you a lot and when you compete 
globally, you are competing against countries in Europe and 
Asia and across the globe, right?
    Mr. Greenblatt. Absolutely. Right.
    Senator Booker. And many of those countries have different 
health care systems and most of those countries, most of our 
competitor Nation's have much lower health care costs, right?
    Mr. Greenblatt. Absolutely. This is a challenge for us. 
Take Canada, their health insurance is included, is part of the 
system but their taxes are 15 percent. Our taxes are 40 
something percent.
    Senator Booker. God bless you.
    Mr. Greenblatt. This makes it challenging to compete with 
Canada.
    Senator Booker. I want to compete with Canada in every way 
except for Toronto, their Mayor, they have challenges there.
    [Laughter.]
    So, my point to you is that your pragmatism I love because 
this is not about politics, it is not about the pugilism that 
is profoundly prodigious sp in Washington. It is about solving 
problems, lowering costs, giving access; and small business 
people like you want to compete with the big boys. Right?
    Mr. Greenblatt. Absolutely.
    Senator Booker. And what I see in my city is many folks 
have a hard time keeping employees who could easily go to other 
companies who have better health insurance plans.
    In fact, you probably know people that will go to a company 
and get less salary for better health insurance. Is that not 
correct?
    Mr. Greenblatt. I think that is one of our positive 
attributes that we have such a good plan.
    Senator Booker. Right. And so the key here, and the goal 
here, is to make sure that we take this variable which has made 
small businesses get so crushed in the past that it helps them 
be more competitive, not only in keeping employees locally but 
also competing against other countries that have lower health 
care costs, call it socialism or whatever you want, they have 
lower health care costs and you are competing against them 
because you internalize those costs and many of those companies 
do not. Right?
    Mr. Greenblatt. You are right.
    Senator Booker. So, that is the pragmatism. We are not here 
to score political points. I do not care about in the next 
election. I care about solving the problems. And when you look 
at polls, they might not like politicians but most people are 
saying right now, fix the dagnab thing which you are saying. 
Right?
    Mr. Greenblatt. Absolutely.
    Senator Booker. And so, Mr. Hickey, who has no New Jersey 
connection.
    Dr. Hickey. Actually I do.
    [Laughter.]
    Senator Booker. You do. In my last 90 seconds, sir, would 
you please, you are well down the field. You have a functioning 
exchange. You heard the good Jersey boy, Mr. Greenblatt, and 
Mr. Allen's problems.
    Could you please tell us what the future could look like 
for them and how to solve the very real problems they brought 
up?
    Dr. Hickey. Number one, put together an exchange board that 
is from both sides of the aisle but, as you say, they care 
about the people of New Jersey. Our board has people----
    Senator Booker. I am sorry to interrupt you, sir. I do not 
know if you know about my governor. He is a very quiet, soft-
spoken not to many people know who he is.
    [Laughter.]
    But he did not participate in the exchanges. We have one of 
the best local insurance-based knowledge there is and we did 
not engage in that in New Jersey. We left it up to the Federal 
Government. So we are way behind you in Kentucky, not a place 
that we like to be in New Jersey. But continue. Or New Mexico.
    Dr. Hickey. Yes. And that board being made up of people 
even though they were vitriolic against the ACA. Once they got 
on that board, they said we have an obligation, a fiduciary 
duty to the people of New Mexico, and we are going to make this 
work.
    Senator Booker. Right and left coming together.
    Dr. Hickey. Right. And we all came together. We have a 
great Chairman. He is also a doctor. We all came together and 
we met and we met and we met and resolved the issues. We hired 
an excellent CEO and we hired a company, a previous private 
exchange vendor, a SHOP in a box is what we call it, and it 
already worked and we knew it would work.
    Senator Booker. My time has expired but we do not have 
time. People are hurting right now. We have got to fix this 
before the next election and I appreciate you showing us the 
way forward.
    Chair Landrieu. Thank you very much, Dr. Hickey.
    Senator Enzi.
    Senator Enzi. Thank you, Madam Chairman.
    I had not anticipated getting into my Congressional Review 
Act. But since it has been brought up several times, I will.
    One of the reason that it included some things that you 
would prefer not to have in it is that when the Federal 
Register is published and says that there is going to be this 
huge cost of people losing their insurance even though the 
President has promised that if they like their insurance they 
can keep it, your choice is not to pick from the things that 
are in there.
    You have to reverse the whole regulation. The whole 
regulation would have made it possible for people to keep their 
insurance if they liked it.
    So, you also have a very limited time to be able to bring 
up a Congressional Review Act and have that kind of a forced 
eight-hour debate and then up or down vote on a regulation. And 
I took advantage of that window.
    After that window closes, the only people that can make a 
difference would be through the majority leader which means 
that the majority side could have brought up things that would 
have left out the one or two things that were in that 
regulation that they did not like and they could have made it 
so that people could keep their insurance if they liked it 
provided it did not have those two things.
    That is not how it works and there has not been any effort 
in the meantime to do that. Now that it has been exposed, there 
is a tremendous effort and interest, and Senator Johnson has a 
bill that would comply with what I think the Chairman said 
would be acceptable to go ahead and fix it so that people who 
like their insurance can keep it, although it should have been 
done three years ago so that the insurance companies would have 
had the opportunity to adjust to the time, to have their 
actuarial stuff together for this particular time and I think 
it would have helped out businesses.
    There are actually three changes that I would like to make 
in Obamacare; and if we made those three changes, it would make 
more of a difference in jobs and the economy than the stimulus 
package did.
    One of those would be to change those hours for part-time 
from 30 to 40, and that is kind of the standard by the Small 
Business Administration, and this is the Small Business 
Committee. So, I would hope that we would do that.
    I had a 10-step plan for fixing health insurance before the 
President ever became a Senator, and one of the things in that 
was small business health plans, and we had an opportunity to 
do that that would allow small businesses to group together 
through their association, any association, across state lines, 
nationwide, so they would have a big enough group that they 
could effectively negotiate with any insurance company.
    There is another proposal that would have allowed them to 
self-insure on those big groups. Those would have provided a 
lot of advantages for small business. Those are not available.
    Small business owners in Wyoming are asking me what can be 
done. Wyoming did not do an exchange. It is the least populated 
state in the Nation. It is less populated than the District of 
Columbia, and we have a lot of miles between places, and we 
have extremely small towns, and we only have two insurance 
companies that are interested in serving there.
    Under prescription part D, we only had two companies 
providing prescriptions until we did prescription part D. And 
one of the things that surprised us, suddenly 48 companies 
wanted the business in Wyoming even though it was a small 
populated state.
    What was the effect? Before the law even went into effect, 
it dropped prices by 25 percent and gave people choices. We 
could have had that same thing here but we do not.
    So, I want to thank you all for the testimony that you had. 
I had some pretty specific questions that I would ask just 
quickly.
    Mr. Allen, you mentioned that drugs cost 52 percent more 
because of the name brand requirement. Could you expand on that 
just a little more?
    Mr. Allen. Yes. So, the plan that we have presently covers 
only generic drugs, and the difference in premiums to go to the 
new policy that includes the brand-name drugs, the difference 
in the premium is 52.3 percent.
    Senator Enzi. I think you said that none of your employees 
were using brand-name drugs?
    Mr. Allen. That is correct. In preparation for my testimony 
today, I did a poll among my employees and not one single 
person is presently taking or has any plans to take any 
pharmaceuticals that are only available as a brand-name 
product.
    Senator Enzi. Thank you.
    I think there are a number of great examples there, and I 
appreciated Mr. Greenblatt's comments about his sales to China 
and how he bids those three or five years in advance, and 
sometimes he could not use a little bit of stability in what 
his prices are going to be, and he is not getting that under 
the exchange.
    I thank the Chair.
    Chair Landrieu. And I thank the Senator from Wyoming.
    Senator Shaheen, who also comes from a small State, just to 
put for the record as the Senator knows, there are 576,000 
people in Wyoming less than in the District of Columbia. One 
chose the exchange, one chose not.
    Senator.
    Senator Shaheen. Thank you very much, Chair Landrieu and 
Ranking Member Risch for holding the hearing. Thank you all for 
being here. I am sorry I missed your spoken testimony this 
morning but I do think it is very important for all of us to 
hear from small businesses.
    In New Hampshire, 96 percent of our employers are small 
businesses. It is a brilliant foundation of our economy, and 
the frustrations that you have shared are ones that I think 
everybody on this panel appreciates and shares in terms of how 
to make this law work and what we can do better.
    You know, one of the biggest concerns that I have heard 
from New Hampshire small businesses is about the cost of health 
care, and Mr. Greenblatt, you and Senator Booker engaged in a 
back and forth on that this morning.
    But small businesses currently in New Hampshire are paying 
18 percent more than large businesses because of administrative 
costs. So, finding a way to address the challenges that you 
face is going to be critical.
    And you know, looking at what we can do to fix this 
legislation I think is very important. In that vein, I have all 
offered a bill that would delay open enrollment in the 
individual market because that is the immediate problem that we 
are facing in New Hampshire, and I did that because we want to 
make sure that people have time to enroll.
    Now, fortunately with the SHOP exchanges, that is an 
ongoing opportunity. But New Hampshire like Wyoming, like a 
number of other states, also has not chosen to do a state to 
exchange; and so we are very much struggling with what is 
happening at the federal level.
    I wonder for Mr. Nold and Ms. Kofman as you have 
participated in state exchanges that are working, if you could 
talk about the reaction of those businesses that are enrolled 
in the SHOP exchanges in the District of Columbia and in 
Kentucky and how they are feeling at this point about the 
product that they are getting.
    Mr. Nold, maybe you would go first.
    Mr. Nold. Sure. As you are aware, the enrollment process 
will in the small-group exchange, the SHOP exchange, is really 
a two-step process.
    The first step is the employer themselves will come to the 
exchange and shop and try to determine which plans they want to 
offer to their employees. Once they go through that process and 
pick the plans that they want to offer, then the employees are 
given a 30-day open enrollment opportunity to go on line and 
pick the one they want.
    So, it takes a little longer in the SHOP to really get to 
the point where you actually are enrolling. So, that process 
has to be completed. That is, the open enrollment period for 
the employees has to be completed.
    We have a participation requirements in Kentucky that says 
that 75 percent of the employees have to participate. If they 
do not, then the employer, so that takes time.
    We have gotten to the point where now employers have 
selected plans and the open enrollment period is ongoing where 
employees can come in and choose.
    So, what I am trying to say is that it is difficult to say 
how that is all going to happen. It is again predicting the 
future. So, but we are very, very encouraged about the numbers. 
I mean, we have had over 93 employers that have gotten to the 
point where their employees are now picking plans.
    Senator Shaheen. Great. Thank you. Ms. Kofman.
    Ms. Kofman. Thank you. I will just share with you a theme 
small businesses have shared with me of their experience. So, 
one small business is growing and they never offered coverage 
in the past. So, this is the first time they can offer coverage 
to their workers and themselves because if the workers are not 
covered it is likely the owner is not covered either. So, one 
small business was very excited about that.
    Another small business I spoke to on October 1 said, the 
owners said, based on his quick review of all the products he 
will save 12 percent, at least 12 percent. At that point in 
time he has not made a decision of the products he wanted to 
offer.
    And another small business I spoke to said they were very 
happy not to be paternalistic any longer. They can just decide 
how much to contribute and let their employees decide which HMO 
or PPO or insurance company to select.
    So, anecdotally, small businesses that I have talked to 
have been very, very pleased with the product offerings, the 
range of offerings, and the price is.
    Senator Shaheen. Thank you.
    Thank you, Madam Chair.
    Chair Landrieu. Thank you very much.
    Senator Johnson, thank you for joining us.
    Senator Johnson. Thank you, Madam Chair.
    In solving any problem, in negotiation, the first thing you 
want to do is figure out what you can agree on. There are a 
couple of things I can agree right off the bat with you, Madam 
Chair.
    You know, we need to fix this bill, and there is a lot to 
fix. Secondly, it sounds certainly in your opening statement 
that you are giving states a lot of credit and we are having 
real problems on the federal level.
    I agree. The federal level I do not think has any 
capability of doing this. The states are far better, a far 
better place to start solving these problems.
    So, I want to start my first question with Mr. Nold. Did 
Kentucky need a 1600-page bill with 20,000 plus pages of 
regulations to do this small business exchange?
    Mr. Nold. Uh----
    Senator Johnson. Quickly.
    [Laughter.]
    You could have done it on your own. Could you not?
    Mr. Nold. We tried to do it back in 1990, the early 1990s 
and it----
    Senator Johnson. You did not need a federal bill. Did you?
    Doctor Hickey, did you really need a 1600-page bill and 
30,000 pages, 20 or 30,000 pages of regulations, to do this in 
New Mexico?
    Dr. Hickey. That set up some of the rules and regulations, 
Senator, but we had a 60-page bill creating the exchange.
    Senator Johnson. So, you could have done it far easier. We 
did not need a federal solution. We did not need to take over 
one sixth of our economy to start doing these things.
    So, again I will stipulate. Another thing we agree on. I 
think a small business exchange is a good idea. It is a sharing 
of the risk pool.
    Dr. Hickey. Right.
    Senator Johnson. It is a good idea.
    Dr. Hickey. Right, right. And we had a very supportive 
Republican governor doing it and a Democratic legislature and 
they compromised on this bill and we moved right out of the 
gate. I think states are a great place to start.
    Senator Johnson. To paraphrase Senator Booker, this is not 
about politics. It should not be. It is really about solutions. 
I would say it is really about recognizing reality. It is about 
telling the truth.
    In fact, the matter is the American people have not been 
told the truth. Let us talk about cost. You know, we were 
guaranteed that if you pass this law, the cost for an average 
family plan would be reduced by $2500 per year.
    Ms. Salter, by the way, did a great job here. I want to ask 
you, because you have the exact experience, if you have a 
health care plan and that add, we will say, ambulatory patient 
services, is that going to increase the cost or decrease it?
    Ms. Salter. If I have one now?
    Senator Johnson. Yeah.
    Ms. Salter. It will increase.
    Senator Johnson. Doctor Hickey, if you add emergency 
hospital services to that, is that going to increase the cost 
or decrease it?
    Dr. Hickey. They are automatically covered.
    Senator Johnson. But again, in other words, if you add 
coverages to a health insurance plan, is that going to increase 
the cost or decrease the cost?
    Dr. Hickey. That generally will increase the cost but the 
state, again coming back to the state, the state had the 
authority under the federal bill to decide what essential 
benefits were going to be covered.
    Senator Johnson. But again, I am just talking about the 
truth of what promises were made here and we were promised that 
the health care law would actually decrease costs but all of 
the added costs, all the added coverages, all the added 
mandates have increased costs. Correct?
    Dr. Hickey. Sir, if I could point out to you that 25 
percent of the premiums that you pay today goes to cover the 
uninsured and the services they get from wherever they get them 
from.
    So, in fact, I think, is where the opportunity, once those 
people get covered, the insurance companies will have a major 
opportunity----
    Senator Johnson. Right, that is ----
    Dr. Hickey [continuing]. To lower the cost.
    Chair Landrieu. Please let him answer.
    Senator Johnson. But that is really not----
    Chair Landrieu. Please let him answer.
    Senator Johnson [continuing]. What the business people are 
experiencing.
    Chair Landrieu. Senator Johnson, please let him answer.
    Go ahead.
    Senator Johnson. Well, I have such limited time here so I 
have got to move quickly.
    I do want to talk about the other totally broken promise. 
Fraud, and it is massive fraud. It was a political deception 
that if you like your health care plan you could keep it. While 
I do appreciate that Senator Enzi pointed that out if you like 
your health plan you can keep it which again I appreciate Madam 
Chair's, her attempt, but her bill only covers those 
individuals who participate in the individual market where we 
are going to see, I believe, because of those increase in cost, 
49 percent, 52 percent increase in insurance premiums, we are 
going to see a massive loss of employer-sponsored coverage 
coming next year.
    So, I guess I would certainly encourage Madam Chair to take 
a look at my bill which actually is all inclusive, and it is 
not quite so onerous on forcing insurance companies to do what 
they may not be able to do because of state regulators.
    So, I would really like you to take a look at your law 
versus my law and I would like to start working with you folks 
to actually start giving Americans in the freedom, allow them 
to keep their ability to choose the types of health care plans 
that they can afford, that they actually want.
    So, thank you, Madam Chairman.
    Chair Landrieu. Thank you. I will look forward to doing 
that. Your bill, of course, guts be Affordable Care Act. Mine 
fixes it. We will talk about that later.
    Senator Vitter.
    Senator Vitter. Thank you, Madam Chairman.
    First of all, I wanted to give a quick update. At one of 
our last hearings about Obamacare and small business, we had a 
very compelling witness from Louisiana, Larry Katz, the owner 
of Dot's Diner. And unfortunately--I have followed up with him 
in response to his testimony, and unfortunately, it has gone 
from bad to worse due to he was forced to cancel policies he 
provided before in particular so that many of his employees 
could still be eligible for a subsidy on the exchange.
    Now, he followed the law by giving 90-day notice and he 
also asked and hired a consultant to come in to help his 
employees with the Obamacare exchange application.
    However, all the website problems have pretty much shut 
down their ability to purchase insurance on the federal 
exchange for now. The consultant next coming in December 1st 
which gives them two weeks to enroll.
    If his employees go to the individual market, they will see 
an average premium increase of 54 percent; and if they cannot 
get plans there on the exchange, there will be 30 individuals 
who were previously happy with their employer-based coverage 
who will not have any coverage. So, that is a very real-world 
but unfortunate update.
    In terms of questions, Ms. Kofman, I wanted to ask you a 
few particularly based on Congress and congressional staff 
going to the D.C. SHOP exchange under the special carveout rule 
for Congress.
    Are there more than 50 members of Congress or employees 
that will procure insurance on this D.C. SHOP exchange?
    Ms. Kofman. I am sorry. All of the enrollment for employers 
is protected information, and I am not able to share with you 
any specific details about the Congressional enrollment.
    Senator Vitter. Based on the size of Congress, 535 members 
and the size of their employee base, would you expect that 
number to be more than 50?
    Ms. Kofman. More than 50 people enrolling?
    Senator Vitter. Yes.
    Ms. Kofman. Oh, yes, I am sorry. I did not understand your 
question. That is correct. The provision under the Affordable 
Care Act that speaks about Congressional enrollment essentially 
overrides the small business size and that is how you are able 
to avail yourself of the same choices that small businesses 
have in the District.
    Senator Vitter. Correct. Is there any other large employer, 
meaning over 50, who gets the same treatment and gets to go to 
that exchange?
    Ms. Kofman. So, At this time, the Congressional provision--
the Congressional prevision only applies to Congress. In 2016--
--
    Senator Vitter. Forget about the Congressional provision.
    Right now, for 2013, 2014, going into 2014 is there any 
other large employer who has the opportunity to go to the D.C. 
SHOP exchange or whose employees can?
    Ms. Kofman. In the city, we made a decision to limit the 
size of the small business market to up to 50 workers.
    Senator Vitter. So, Congress is the only large employer who 
gets that special treatment?
    Ms. Kofman. It is a function of one of the provisions in 
the Affordable Care Act.
    Senator Vitter. Okay. And is there any large employer who 
gets this huge subsidy well above the normal income-based 
subsidies of Obamacare in that exchange?
    Ms. Kofman. So, small businesses in the District, they 
also, many contribute 100 percent to the premium just as you 
have heard from other witnesses. Small businesses, especially 
nonprofits, in the District provide platinum plus level of 
coverage to their workers and contribute 100 percent. Many 
contribute 100 percent toward the premiums so they do better 
than Congress.
    Senator Vitter. But again, Obamacare has a clear 
distinction between under 50 and over 50. So, my question was. 
Are there any other large employers, which means over 50, who 
go to an exchange, go to the D.C. SHOP exchange at all or go 
there and contribute this big subsidy?
    Ms. Kofman. So, in the District, we do not allow larger 
employers to come in. In 2016, larger employers up to 100 can 
come in starting in 2016, and then it will be a policy decision 
for the District whether or not to expand the DC Health Link to 
larger-sized employers.
    Senator Vitter. What, in your opinion, justifies this 
completely different and better treatment for Congress?
    Ms. Kofman. Congress gets the same treatment as all small 
businesses in the District. You have the same----
    Senator Vitter. Congress is not a small business. It is not 
under 50 employees.
    Ms. Kofman. So, by going through DC Health Link, you get 
access to everything that small businesses in the District get. 
By choice----
    Senator Vitter. I understand.
    Chair Landrieu. Your time is up.
    Senator Vitter. But my question is. What in your opinion 
justifies this completely different----
    Chair Landrieu. Senator Vitter, I am very sorry. Your time 
is up so let me answer that question.
    The Federal Government is not a small business. The Federal 
Government is a large business and the Federal Government, 
Congress, employees, postal workers as you know very well 
because you have studied this issue very well is under the same 
as large businesses in America; and that insurance premium is 
shared between the worker and the government, their employer.
    Now, that is not the subject of this hearing. We can talk 
about it. We have debated it. You have had ample time to debate 
that on the floor. So, if you do not mind that, let us take 
that debate to the floor.
    Senator Vitter. Madam Chair, can I briefly the respond?
    Chair Landrieu. No, you may not and your time----
    Senator Vitter. Can I briefly respond?
    Chair Landrieu. I will give you 20 seconds to respond 
because you have a lot of time on the floor on this issue and 
Ms. Kofman does not.
    Senator Vitter. Well, I certainly did not have a 25-minute 
opening statement here so I would just like to briefly respond.
    Chair Landrieu. You have plenty time on the floor. You can 
respond. Ms. Kofman does not have the time.
    Senator Vitter. You are right that Congress is not a small 
business. It is a large employer and it is treated completely 
differently than any other large employer and far better by 
being able to go to this exchange, the only large employer that 
is allowed to do that. And by being able to get a huge subsidy, 
only large employer that is able to do that for this period or 
any time soon.
    Chair Landrieu. And if your bill passes, the only large 
employer that will not be able to get insurance would be you 
and your staff.
    Thank you all very, very much. I really appreciate it. It 
has been an excellent hearing. We are going to go to the second 
panel.
    [Pause.]
    Excuse me. Welcome back. Thank you all so much and let us 
begin with our second panel. If you will just briefly introduce 
yourself.
    In light of the time, we would like to extend this for 
another 30 minutes. It is very, very important.
    Most of the members have left accept Senator Vitter and 
myself. So, we will stay here and debate this or get testimony 
on the record.
    If you would proceed please--I am sorry. Senator Booker is 
also here.
    If you would introduce yourself briefly and begin. Ms. 
Borzi.

   STATEMENT OF HON. PHYLLIS C. BORZI, ASSISTANT SECRETARY, 
 EMPLOYEE BENEFITS SECURITY ADMINISTRATION, U.S. DEPARTMENT OF 
                     LABOR, WASHINGTON, DC

    Ms. Borzi. Thank you, Madam Chair. Good morning, or I guess 
it is afternoon by now, to you, Chair Landrieu.
    Chair Landrieu. Can you speak into your mic please? You 
have got to lean and I am very sorry. It is uncomfortable but 
you have to lean forward.
    Ms. Borzi. Thank you very much for inviting me here this 
morning. I am Phyllis Borzi. I am the Assistant Secretary of 
Labor for the Employee Benefits Security Administration and I 
am here today to discuss the Department of Labor's activities 
related to communicating with small business about the 
opportunities and requirements that exist under the Affordable 
Care Act.
    The department's Employee Benefits Security Administration 
or EBSA is committed to helping small businesses and employees 
understand and benefit from the law.
    The health insurance market place premium tax credits and 
notices to employees of coverage options available through the 
marketplace are all designed to expand access to affordable 
health coverage.
    For small businesses, the small business health options 
program, the SHOP exchange, offers one-stop shopping to enable 
small businesses to find and compare private health insurance 
options. The SHOP is administered by HHS and the states.
    The marketplaces will help individuals and small businesses 
evaluate their private health insurance options for coverage 
effective January 1, 2014. The new Fair Labor Standards Act 
Section 18B notice gives employees information about coverage 
options available through the marketplace and, if applicable, 
information about their employer-offered coverage.
    Employers covered by the FLSA are required to provide this 
key notice of coverage options to each employee no later than 
October 1, 2013. For all new employees hired after that date, 
employers have to provide the notice within 14 days of the 
employee's start date.
    Now, although there is a statutory duty on employers to 
provide this notice, there is no fine or penalty under the 
statute for failing to do so.
    On May 2, the department issued Technical Release 2013-2 
providing guidance on the coverage options notice, as well as 
model notices. We are increasingly using model notices in an 
effort to be helpful to small businesses because a model notice 
makes the notice requirement far less burdensome.
    Without a model notice, employers need to figure out for 
themselves how to comply with statutory requirements or hire 
somebody to help them.
    EBSA worked with HHS and our other sister agencies to 
develop the model notices. We also received feedback from 
employers. The model notice serves as a compliance assistance 
tool for employers but employers are not compelled to use these 
notices.
    There is one model notice for employers who offer health 
plans to their employees and a second one for employers who do 
not offer health plans. These notices are posted on our website 
in multiple formats for easier use by employers and are also 
available in Spanish.
    The two model notices make the process for shopping for 
health care coverage easier for both employers and employees. 
For example, the model notice for employers who offer health 
care coverage deliberately contains more information than the 
minimum statutory requirements for this notice. Why? Because 
then employees will have more information about their coverage 
options inside and outside of the marketplace.
    This also creates efficiencies for employers because the 
extra information in the model notices matches exactly the 
marketplace employer coverage tool designed by HHS which is 
part of the single streamlined application for the coverage in 
the marketplace.
    This means that an employer who uses our model notice will 
not face additional requests for information from the 
marketplace about coverage with respect to the employee because 
the model notices satisfy both the FLSA and the HHS 
requirements.
    Outreach and compliance assistance are very high priorities 
for EBSA. We partner with HHS, Treasury, IRS, and the Small 
Business Administration using a multifaceted approach that----
    Chair Landrieu. Please try to wrap up.
    Ms. Borzi. Certainly--coordinated online information linked 
to other agencies, webinar trainings and compliance and 
participant assistance.
    In addition, we have benefit advisors that are available to 
assist small employers with compliance both through our website 
and through our toll-free hotline.
    I think I will stop there and be happy to take any 
questions.
    [The prepared statement of Ms. Borzi follows:]

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    Chair Landrieu. Thank you very much.
    Mr. Cohen, please introduce yourself briefly and get into 
your testimony. Thank you.

  STATEMENT OF GARY COHEN, DEPUTY ADMINISTRATOR AND DIRECTOR, 
   CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT, 
 CENTERS FOR MEDICARE AND MEDICAID SERVICE, U.S. DEPARTMENT OF 
            HEALTH AND HUMAN SERVICES, BALTIMORE, MD

    Mr. Cohen. Thank you, Chair Landrieu and members of the 
Committee. I am Gary Cohen. I am privileged to serve as 
Director of the Center for Consumer Information and Insurance 
Oversight within the Centers for Medicare and Medicaid 
Services, and thank you for the opportunity to discuss the many 
benefits the Affordable Care Act provides for small businesses.
    I was very pleased, as I know you were Madam Chair, to hear 
from our state partners from Kentucky and New Mexico and the 
District of Columbia about their successes in building small 
business marketplaces at the state level.
    From the very beginning we encouraged every state to set up 
their own marketplaces because we believe that states were in 
the best position to create those marketplaces in hallway that 
would best serve the residents of their states.
    We have worked very closely and, indeed, every day with our 
state partners to help them stand up those exchanges, and we 
take great pride in the success that they have had.
    But I think it is also important to remember that the 
reforms of the Affordable Care Act are not just about the 
exchanges. They go beyond the exchanges to the entire small 
business market.
    As you know did in your opening statement, Madam Chair, 
many small businesses that would like to offer health benefits 
to their employees have faced significant challenges in the 
market as it exists today.
    Premiums have been going up, double digit, 20 plus percent 
every year. Small businesses have been charged 18 percent more 
for the same type of coverage that the larger employers pay; 
and most importantly, they were subject to wide variations and 
high volatility in premiums based on the type of work that the 
business did, based on the health status and demographic 
characteristics of their employees. So, a small construction 
company would pay more than an accounting firm of the same size 
for the same coverage.
    Small employers often face significantly higher rates if 
they had older workers or more women in their workforce than 
others. Because of the small risk pool, if even one employee 
became sick, rates for the entire company would skyrocket.
    The Affordable Care Act is changing all of that and 
transforming this market. Most importantly, we are expanding 
the risk pool to all of the small business enrollees in an 
entire state. We are spreading the risk among all of those 
employers.
    We are saying that you cannot charge more just because some 
people get sick or are women, and there are limits to how much 
more you can charge people because of their age.
    So, the whole point of this is for the small business 
market to function more like the large group market has 
functioned and, as you noted, Madam Chair, where premiums have 
been significantly lower.
    In addition, what we have said is that insurance should be 
real insurance. It should not run out just as soon as you have 
an illness that requires a hospital visit. It should provide 
the essential benefits that were determined by states and were 
pegged in most cases to what was prevalent in the small group 
market today.
    So, these are not a bunch of new benefits that nobody ever 
thought about or wanted to have. This is what small businesses 
had today and what we said is that it is the type of coverage 
that is real coverage so that people do not find that if they 
become sick and they all of sudden have to go to the doctor or 
go to the hospital, oh, you do not have that coverage. You do 
not have hospital coverage. You do not have prescription drug 
coverage. It is real coverage.
    Now in addition, the Affordable Care Act created the small 
business health care tax credit to help small employers of 25 
or fewer employees who earn an average of less than $50,000 a 
year, and if the employer pays at least 50 percent of the 
premium cost of their employees, they qualify for a tax credit.
    That tax credit has been in effect and hundreds of 
thousands of small businesses have already benefitted from it. 
Beginning in 2014, the tax credit increases to up to 50 percent 
of the employers contribution to their employees health care 
costs.
    I just want to touch very briefly on some of the things 
that we have done to make sure that small businesses are aware 
of these benefits and options, and in particular I want to say 
that we have worked very closely with the agent-broker 
community.
    We understand that most small businesses do obtain coverage 
from an agent, using an agent or a broker. We have done a 
series of many webinars and trainings for literally tens of 
thousands of agents and brokers who participated in those so 
they can understand how to participate in the SHOP exchange.
    In addition, our regional offices have conducted many, many 
workshops and programs across the country to inform small 
business about the benefits of the Affordable Care Act.
    Thank you very much.
    [The prepared statement of Mr. Cohen follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you very much.
    Ms. Markowitz.

       STATEMENT OF MARIANNE O'BRIEN MARKOWITZ, REGIONAL 
 ADMINISTRATOR, REGION V, U.S. SMALL BUSINESS ADMINISTRATION, 
                          CHICAGO, IL

    Ms. Markowitz. Chair Landrieu and members of the Committee, 
thank you for having me here today to discuss SBA's efforts to 
educate small businesses about the Affordable Care Act.
    As SBA's Regional Administrator for Region V, I serve as 
the agency's principal representative for Illinois, Indiana, 
Michigan, Minnesota, Ohio, and Wisconsin. In this role, I 
oversee SBA's Affordable Care Act outreach through our seven 
district offices in the Midwest.
    America's 28 million small businesses are the backbone of 
our economy, creating two out of every three net new jobs and 
employing half of America's work force.
    At SBA, we are committed to providing entrepreneurs with 
the tools and the resources they need to start and grow 
businesses. This includes an aggressive outreach effort around 
the Affordable Care Act to ensure that small business owners 
have the facts that they need to make sound business decisions 
for their businesses and their employees.
    With a nationwide network of 68 district offices, SBA is 
uniquely positioned to provide outreach and education on the 
Affordable Care Act. Since February 2013, we have participated 
in more than 1200 Affordable Care Act outreach events reaching 
over 68,000 small business owners and stakeholders across the 
country.
    I have personally presented at over 20 health care forums, 
and my team in Region V has participated in an additional 100 
plus events throughout the Midwest.
    These events are often hosted in partnership with local 
chambers and other community organizations and enable SBA to 
connect with a wide range of entrepreneurs.
    In conjunction with our federal partners at the Department 
of Health and Human Services, the Department of Labor, and 
other agencies, SBA provides small business owners with the 
most updated information on the Affordable Care Act.
    We continue to educate entrepreneurs on issues such as the 
impact of the law based on a businesses size, the tax credits 
available for small companies, and the eligibility and 
enrollment details relevant to the individual marketplace.
    I cannot emphasize enough that there is a great deal of 
misinformation about the health care law and the small business 
community. In my travels, I frequently meet with small business 
owners who are anxious and apprehensive about how the 
Affordable Care Act may impact their business.
    When I speak at outreach events, many entrepreneurs, 
regardless of the size of their business, often mistakenly 
believe that they will be affected by the employer shared 
responsibility rules. I am able to reassure them that this is 
not the case.
    In fact, 96 percent of all businesses and most of the 
businesses that I encounter in these sessions are too small to 
be impacted. Of the remaining four percent, the vast majority 
already provide health care that meets these standards required 
by the law.
    When entrepreneurs have access to accurate information, 
they are able to have their questions answered. They can leave 
better equipped to make educated decisions about what is best 
for their unique business.
    SBA also promotes the benefits available to small 
businesses through the SHOP marketplace. Whether it is a state-
run exchange or a federal program, these new marketplaces are 
designed to give small businesses with generally up to 50 full-
time employees the same purchasing power and options enjoyed by 
larger companies.
    While there is no requirement for employers to participate, 
the marketplaces provide a tremendous opportunity for many 
small business owners who want to purchase quality, affordable 
health insurance for their employees.
    In addition to these efforts, SBA has developed a robust 
online and digital toolkit that complements our in-person 
counseling activities and provides business owners with on-
demand access to the latest information about the Affordable 
Care Act.
    We have created extensive online content at both SBA.gov 
and businessUSA.gov. These sites together receive more than 2 
million visitors per month. We also launched a direct 
enewsletter which reaches more than 1 million subscribers.
    In participation with the Small Business Majority since 
July, we have held more than 35 Affordable Care Act one-on-one 
webinars for small businesses across the country. These popular 
online sessions which take place every Thursday have reached 
more than 16,000 entrepreneurs and have been very well 
received.
    SBA leverages our extensive resource partner network to 
help educate small businesses on the Affordable Care Act. 
Earlier this year, we held a series of apprehensive webinar 
trainings for our Small Business Development Centers, our 
Women's Business Centers and our SCORE counselors.
    Working with over 1 million entrepreneurs annually, these 
partners are able to expand our Affordable Care Act outreach 
efforts and serve as a resource on the law in their 
communities.
    As the Affordable Care Act continues to be implemented, SBA 
is committed to collaborating with our federal partners in 
ensuring that small business owners have the facts and 
resources they need to understand and benefit from the law.
    Thank you again for the opportunity to testify today. I 
look forward to your questions.
    [The prepared statement of Ms. Markowitz follows:]

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    Chair Landrieu. Thank you. Our hearing has gone 15 minutes 
over time but this is so important I want to continue the 
questioning. I think we have gotten a lot of valuable testimony 
on the record as we continue to try to fix and improve the 
Affordable Care Act.
    But let me ask all three of you briefly my first question. 
We have the Department of Labor represented here, Ms. Borzi. We 
had the Center for Medicaid and Medicare, CMMS. We have Small 
Business Administration.
    The three of you all are primarily responsible to helping 
implement the Affordable Care Act at the federal level, and 
there has been undoubtedly justified criticism of what has 
happened so far at the federal level and in those states where 
governors, mostly Republican but some Democrats, have refused 
to set up their own exchange and ask you to come in and do it. 
There has been some difficulty.
    So, my question is. What are you going to promise to do 
better, what are you working on specifically? And I want 30 
seconds each of you starting with you, Ms. Markowitz. And what 
did you learn this morning that could help you do a better job? 
Starting with you.
    Ms. Markowitz. Sure. Thank you, Chairman Landrieu.
    Chair Landrieu. Speak into the mic. You have to press your 
back button.
    Ms. Markowitz. Sorry. What the SBA is focused on is 
outreach and we continue more than ever to get the word out to 
small businesses. One of the biggest problems that we run into 
is the misinformation in the small business community.
    Chair Landrieu. Which is purposefully I think in large 
measure but go ahead.
    Ms. Markowitz. It is very prevalent. Most of the rooms that 
I walk into are filled with small businesses. They are nowhere 
near the size that would be impacted by the employer shared 
responsibility provision and yet they are positive that they 
will be impacted by this. So, we cleared that up.
    Chair Landrieu. Just for the record, could you clear that 
up now that when you walk into a room it is mostly filled with 
businesses that are of what size?
    Ms. Markowitz. Well under 50 employees.
    Chair Landrieu. And are they affected by it at all?
    Ms. Markowitz. Not at all.
    Chair Landrieu. So, no business in America that is under 50 
employees are affected at all by the employer shared 
responsibility.
    Ms. Markowitz. No. In fact, that represents 96 percent of 
all overall businesses. In addition to not being impacted by 
the employer shared responsibility, those 96 percent of 
businesses have, you know, access to new benefits and 
protections that they never had before.
    So, often I walk into a room and there can be a very 
negative perceptions of this Act and they have not begun to 
explore the benefits that are available to them because they 
are so confused by the misinformation.
    Chair Landrieu. Okay. Mr. Cohen.
    Mr. Cohen. Thank you. What we are doing and I will not 
surprise you, we are working very hard to improve the online 
experience. I am pleased to say that we actually have made 
significant improvements, and I keep hearing every day that 
more and more people are able to get through the application in 
a reasonable period of time and get enrolled in coverage.
    There is actually a story on NBC news today is the story 
about the healthcare.gov roll out outdated, and I think it is. 
I think we have moved on significantly from where we were 
before.
    In terms of what I learned today, I was really impressed by 
all the three states talking about the involvement of their 
stakeholder communities, and I think we have done that.
    But it is different at the federal level frankly than it is 
at the state level but I think we need to work really hard to 
make sure that we are working with the agent-broker community, 
the issuer community, the consumer community, the small 
business community, and so forth to make sure that everybody 
gets to the benefits of this law.
    Chair Landrieu. Ms. Borzi.
    Ms. Borzi. I have had the same experience that my 
colleagues had. I do a lot of small business roundtables. There 
is a lot of misinformation. People, not only do they not 
understand that the employer responsibility penalty does not 
apply to them, what I found remarkable is that they do not 
understand that the small business tax credit is already 
available, has been available since the law was signed, and 
these are small businesses who are trying to do the right thing 
by their employees which is providing coverage.
    I know, Madam Chair, that you are very interested in the 
notice requirement that we administer. We are trying very hard 
to make sure that people understand that this can be an 
opportunity for small businesses to understand a little bit 
better about their responsibilities and I certainly will 
promise you that we will work closely with your staff and the 
others, the staff of the other members of the Committee, to try 
to make the experience of having to fill out these forms 
clearer and easier.
    Chair Landrieu. I appreciate that. In my last few minutes, 
I want to submit the forms that the Department of Labor put out 
that I found very, very confusing, new health care insurance 
marketplace coverage.
    First of all, it should have said that if you receive this 
as an employer and you are under 50 people, disregard it. It is 
not appropriate for you. Over 50, this is what, and so I am 
going to submit something that we have come up with that might 
be a more clear form, and I hope that you all will work on 
that.
    Once the website gets up, people can have a better walk-
through experience because the consumer experience with this is 
extremely important.
    So, thank you all very much and I will come back a few. I 
think it is Senator Johnson and then Senator Booker.
    Senator Johnson. Thank you, Madam Chair.
    Mr. Cohen, in general what is happening to the insurance 
premiums, the gross premiums now, not after taxpayer subsidy, 
what is happening to the insurance premiums of young, healthy 
individuals under the Affordable Care Act?
    Mr. Cohen. I think they vary a lot from state to state and 
even within a state, region to region. I do not think it is 
possible to make a, you know, broad, general statement about 
that.
    Senator Johnson. I would like to enter into the record, I 
guess it is the Republican staff Committee has put together a 
summary sheet of what is happening, and I can say, for example, 
in the State of Illinois somebody 27 years old, a male is going 
to an experienced a 104 percent increase, a female about a 42 
percent----
    Chair Landrieu. Could you clarify, though, is that with 
subsidies or without?
    Senator Johnson. That would be the gross premium.
    Chair Landrieu. That is without subsidy.
    Senator Johnson. Yes.
    Chair Landrieu. But the bill has subsidies in it so let the 
record----
    Senator Johnson. I understand that.
    Chair Landrieu [continuing]. Reflect that so we will not be 
confused.
    Senator Johnson. The point being is the only way that 
anybody is going to, not the only way, but one of the prevalent 
ways that people actually see their share of health premiums 
reduced is because taxpayers are going to subsidize their care.
    In Wisconsin--let me finish, Madam Chair--in Wisconsin, the 
cost of a male 27 years old will increase about 125 percent, a 
female about 77 percent.
    While that has to do really with the fact that we are a 
community rating, we are limiting the insurance premium rate on 
older, sicker individuals and we are increasing the premiums, 
making the younger, healthier people pick up that burden, 
right? Is that not correct? Is that not redistribution?
    Mr. Cohen. Well, what I think we are hoping to do is 
increase the number of younger people who are actually covered 
because the rate of coverage is----
    Senator Johnson. Right. So, they can get in the pool and 
pay a lot more than they were currently paying in the 
individual marketplace. Correct?
    Mr. Cohen. Well, what----
    Senator Johnson. I mean----
    Mr. Cohen. We are expanding the risk pool so we can spread 
the risk across the whole population. That is the idea behind 
the law.
    Senator Johnson. Mr. Cohen, let me ask you as the expert in 
the CMMS. When did you realize that what the President was 
saying that if you like your health care plan you can keep your 
health care plan, if you like your doctor you can keep your 
doctor period, when did you--did you believe that ever?
    Mr. Cohen. The law provides that issuers could continue 
plans as grandfathered plans as long as they wanted to into the 
future. So that the law----
    Senator Johnson. Well----
    Mr. Cohen [continuing]. The law was designed to enable that 
what the President said.
    Senator Johnson. Yes, but my----
    Mr. Cohen [continuing]. To be true and it was really up to 
the insurance industry to make decisions as they have in the 
past.
    Senator Johnson. Let me explore that. My bill, If You Like 
Your Health Plan You Can Keep It Act uses the President's exact 
same language in the bill. The problem with the President's, 
the grandfather clause in the Affordable Care Act, yeah, you 
can keep your plan as long as you totally change it.
    What we did is we took out these as long as you totally 
change it, we did not force some of those initial essential 
health benefits on to those plans.
    So, the fact of the matter is you could not keep your plan 
unless you changed it.
    Mr. Cohen. Grandfathered plans are not subject to the 
essential health benefit requirements.
    Senator Johnson. But there are other things they are 
subject to, guaranteed issue, maximum, over the lifetime 
maximum.
    Mr. Cohen. No. They are not subject to guaranteed issue. In 
fact, it is quite the opposite you cannot add more people onto 
a grandfathered plan under the law.
    Senator Johnson. I am not asking to add more people.
    Mr. Cohen. Well, guaranteed issue, that is what you are 
talking about.
    Senator Johnson. Well, okay. Lifetime maximums. We will get 
you the list of the changes required in that grandfather clause 
because we extract that in my bill.
    But anyway getting back to my question. Did you believe 
that if people like their health care plan they would be able 
to keep it, across-the-board that nobody would lose their 
health care plan if they wanted it?
    Mr. Cohen. I believe that the law provided an opportunity 
for insurance companies to have grandfathered plans which would 
make President's----
    Senator Johnson. What about----
    Mr. Cohen [continuing]. Promise to be true and it was also 
true that the large majority of Americans who have employer-
sponsored coverage through large employers were also able to 
keep their plans.
    Senator Johnson. But every American? I mean, for example, 
did you realize that state high risk pools like in Wisconsin 
which covers 22,000 Wisconsinites, did you believe those things 
would still be available after implementation of Obamacare?
    Mr. Cohen. Well, before the Affordable Care Act, every 
American was not able to keep his or her health plan. You could 
lose it----
    Senator Johnson. That is not what we are talking about.
    Mr. Cohen [continuing]. Because you could lose it if you 
got sick----
    Senator Johnson. Listen. We are talking about the promise 
made that if you like your health care plan you can keep it. I 
have got a couple in Wisconsin, both cancer victims, that have 
been dropped, will be dropped from the high risk pool because 
it becomes obsolete January 1.
    You knew that as a health care expert, correct?
    Mr. Cohen. The law did not require states to drop their 
high risk pools. The law allows states to continue the high 
risk pools. So, I do not think that is a requirement of the 
law. That was a decision made by the State of Wisconsin.
    Senator Johnson. But you knew those things would be gone?
    Mr. Cohen. No.
    Senator Johnson. You really believed, did you really 
believe that every American would be able to keep their health 
care plan and their doctor? You believe that to be a true 
statement?
    Mr. Cohen. Well, there is nothing in the law that requires 
anybody to lose their doctor.
    Senator Johnson. I am just asking you whether you believe 
that.
    Mr. Cohen. I believe that the law contained provisions that 
would enable that to be true but it also is a private market 
solution. So, it is not government mandated health care. It is 
up to insurance companies what products they offer in the 
marketplace. Insurance companies were given the option, the 
ability to maintain the existing plans as grandfathered plans, 
and if they do that, people are able to keep those plans.
    Senator Johnson. Are you surprised----
    Mr. Cohen. That is the choice----
    Chair Landrieu. I am sorry. Time.
    Senator Johnson. Are you surprised millions of Americans 
are losing their health care plan? Are you surprised by that?
    Mr. Cohen. Well----
    Senator Johnson. Are you surprised? Just yes or no. Are you 
surprised that millions of Americans are losing health care 
plans?
    Mr. Cohen. I am not surprised or unsurprised. I did not 
have an opinion as to what the market would do. I knew what the 
law provided.
    Chair Landrieu. Senator Johnson, thank you for sharing such 
clarifying comments.
    Senator Booker.
    Senator Booker. First of all, I want to thank the Chair. 
You held this hearing at a difficult time with a lot of 
political noise and nonsense and rancor.
    You know, it reminds me of a great President who once said, 
it is not the critic counts, it is not the man who points out 
that the strong man stumbles or the doer of deeds could have 
done better, it is the person actually in the arena whose face 
is marred with blood and sweat. It is not the man in the arena 
this time; it is the woman. Thank you for holding this hearing 
and bringing right and left together to discuss practically 
what is going to help Americans.
    And so, I have a very simple question which is fueled by my 
frustration. I want to form a new caucus already and I have 
only been here 20 days, and it is the what is going to grow 
American businesses, what is going to help small businesses 
which, as you rightfully pointed out, are the job creators 
right now that are driving our economy right now.
    And what was before, I do not want to go back. I am not 
putting this country in reverse to go back to a time where 
small businesses were getting crushed because they were losing 
good employees because they did not have health insurance.
    Small businesses were getting crushed because those who 
tried to step up to the plate and provided insurance in a 
globally competitive market who were competing as countries who 
fixed this problem with lower health care costs, forcing small 
businesses to either internalized this or put their workers in 
the corner.
    We have got to figure out a way to fix this in a way that 
is going to grow and strengthen small businesses. The idea in 
itself is very good, that we can find a way to create a 
competitive business environment for small businesses so they 
do not have to worry about this fear.
    I agree with the Ranking Member. This is about freedom from 
fear. I know tons of businesses that lived in that fear. So, 
the one thing that has already been discussed that you forget 
rhetoric, practically you are seeing what I am seeing, is that 
when you go around the State of New Jersey there is so much 
confusion fueled by politicians and media of folks about the 
facts.
    96 percent of businesses are not affected here, and yet I 
have small businesses in New Jersey who think somehow it is 
going to shake them and are not even aware that there are 
federal subsidies to help them.
    And so, in this state of mass confusion, fueled by media 
and politicians, please tell me from your experience what is 
the best way to cut through all this mishegoss--that is a 
Jersey term--all this mishegoss and get to what the facts are?
    How can we get the truth to small businesses who need to be 
freed, liberated from fear and know how this actually could 
help them? Anybody?
    Ms. Markowitz. Well, thank you, Senator.
    Senator Booker. With a name like O'Brien Markowitz, you are 
about bringing things together, building bridges.
    [Laughter.]
    Ms. Markowitz. This is true.
    You know, it is really about outreach and education and 
bringing the focus onto the benefits that are available for the 
96 percent of small businesses that are not only not affected 
by the employer shared responsibility provision but that have 
all of these benefits that they cannot focus on because of the 
misinformation, and that is what we as an agency are entirely 
focused on.
    We work with our federal partners. HHS has been a great 
partner in this outreach as have some of our state partners.
    Once a business gets rid of that fear that you allude to 
which is very real, they can focus on the fact that there are 
these tax credits, be very excited about focusing on and 
exploiting those for their business.
    They understand more about the broader reform and that they 
cannot be discriminated for having a diverse workforce, for 
employing women, for employing sicker or older employees. I 
mean, these are things that once a business find out about the 
80-20 rule and they understand that all of these benefits are 
available to them because of this important reform, they are 
very excited about it and that is what we are out there doing, 
creating more outreach and creating more educational 
opportunities.
    Senator Booker. So if you witness the relief, even the 
excitement from real companies, who you do not ask them if they 
are Republican or Democrat, you just ask how can we help the 
company and you see it which I have seen with my eyes, the 
relief many businesses feel.
    Can I ask you very pragmatically, when you are explaining 
things, is there anyone change or anything practically that we 
could do here in Washington, besides listen to ourselves speak, 
to actually help this bill get a little better than it is now? 
Practically is there anything that you might want to suggest 
that could help this Committee?
    Ms. Markowitz. I mean, honestly, what you are doing today 
is very helpful, bringing the focus on to the truth, you know, 
and the benefits that are available for small businesses.
    I think as the exchanges move forward and I know HHS is 
working around the clock. For instance, in my outreach before 
the launch, the focus on these businesses is really on the 
broader reform once they get through the misinformation.
    After the launch, it really is surprisingly it remained on 
that. They were not so focused on the website issues. They are 
really focused on this broader reform and how it impacts their 
business.
    The elephant in the room was the pricing, and now that the 
launch has happened for the SHOP exchanges, even though they 
may not be fully functional, and HHS is working on that, there 
is pricing information.
    So, with this information, it is just more information. The 
businesses can go away, do the analysis and figure how SHOP can 
eventually be a resource for their business.
    It is really all about information, education, outreach, 
and getting the truth out and cutting through all of the 
misinformation.
    Mr. Cohen. Very quickly I would just add, you know, one of 
the reasons why the states' exchanges have been so successful 
is frankly they had had resources available to them to do a lot 
of this outreach because under 1311 we were able to give them 
grants and we have been limited in terms of what we were able 
to do.
    Chair Landrieu. And why were you limited?
    Mr. Cohen. Just because of the appropriation. We do not 
have funding under the appropriation process to do as much. We 
do outreach but to do as much as we would like to do so that is 
one area if we could work together in a bipartisan way just to 
get in the facts out, that would be wonderful.
    Chair Landrieu. Ms. Borzi, your last word.
    Ms. Borzi. Just one quick thing. The thing that troubles 
all businesses regardless of size, but it is particularly 
important for small businesses, is uncertainty.
    So, there is lots of misinformation but there is also lots 
of uncertainty because they keep hearing that it is going to be 
repealed, it is going to be changed, this is going to happen, 
that is going to be happening.
    It is very important as all of us go out to be able to say 
to small businesses, this is what is going to happen when, 
because it is not just 96 percent of them are not affected. It 
is that this Act can actually give you positive benefits like 
more choice, the ability to get coverage which you were not 
able to get for your employees before.
    Chair Landrieu. Thank you very much. This has been an 
excellent hearing and let me particularly thank Senator Booker. 
This has been an extraordinary first full hearing for you 
attend.
    Senator Booker. You always remember your first.
    Chair Landrieu. Yes, and you will remember this one, and it 
has been an extraordinary privilege to be here with you. And 
Senator Johnson thank you for participating all the way to the 
end.
    I started this morning by saying, and I knew this hearing 
would be full of a lot of strong opinions, but I started this 
morning by saying, as Mark Twain said, that a lie can go half 
way around the world before truth gets out of bed and puts its 
boots on in the morning.
    This hearing was held to get the truth out about the 
benefits of the Affordable Care Act to small business and the 
challenges that are presented to us.
    As Americans, I think if we work together, we could meet 
those challenges.
    The meeting is adjourned.
    [Whereupon, at 12:34 p.m., the Committee was adjourned.]



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