[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                  THE INDIVIDUAL AND EMPLOYER MANDATES
                   IN THE PRESIDENT'S HEALTH CARE LAW

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

                                 HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE
                                 
                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 14, 2015

                               __________

                          Serial No. 114-HL01

                               __________

         Printed for the use of the Committee on Ways and Means
         
         
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                           U.S. GOVERNMENT PUBLISHING OFFICE
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                     COMMITTEE ON WAYS AND MEANS

                     PAUL RYAN, Wisconsin, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
DEVIN NUNES, California              JIM MCDERMOTT, Washington
PATRICK J. TIBERI, Ohio              JOHN LEWIS, Georgia
DAVID G. REICHERT, Washington        RICHARD E. NEAL, Massachusetts
CHARLES W. BOUSTANY, JR., Louisiana  XAVIER BECERRA, California
PETER J. ROSKAM, Illinois            LLOYD DOGGETT, Texas
TOM PRICE, Georgia                   MIKE THOMPSON, California
VERN BUCHANAN, Florida               JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska               EARL BLUMENAUER, Oregon
LYNN JENKINS, Kansas                 RON KIND, Wisconsin
ERIK PAULSEN, Minnesota              BILL PASCRELL, JR., New Jersey
KENNY MARCHANT, Texas                JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee               DANNY DAVIS, Illinois
TOM REED, New York                   LINDA SANCHEZ, California
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
JIM RENACCI, Ohio
PAT MEEHAN, Pennsylvania
KRISTI NOEM, South Dakota
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri

                       Joyce Myer, Staff Director

         Janice Mays, Minority Chief Counsel and Staff Director

                                 ______

                         SUBCOMMITTEE ON HEALTH

                      KEVIN BRADY, Texas, Chairman

SAM JOHNSON, Texas                   JIM MCDERMOTT, Washington
DEVIN NUNES, California              MIKE THOMPSON, California
PETER J. ROSKAM, Illinois            RON KIND, Wisconsin
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               BILL PASCRELL, JR., New Jersey
ADRIAN SMITH, Nebraska               DANNY DAVIS, Illinois
LYNN JENKINS, Kansas
KENNY MARCHANT, Texas
DIANE BLACK, Tennessee


                            C O N T E N T S

                               __________

                                                                   Page

Advisory of April 14, 2015 announcing the hearing................     2

                               WITNESSES

Sabrina Corlette, Senior Research Fellow, Georgetown University 
  Health Policy Institute, Center on Health Insurance Reforms....    35
Douglas Holtz-Eakin, President, American Action Forum............    19
Scott Womack, President, Womack Restaurants, Incorporated........    29

                       SUBMISSIONS FOR THE RECORD

American Academy of Actuaries....................................    78
Associated Builders and Contractors (ABC), Inc...................    83

 
                  THE INDIVIDUAL AND EMPLOYER MANDATES
                   IN THE PRESIDENT'S HEALTH CARE LAW
                   
                                ----------                              


                        TUESDAY, APRIL 14, 2015

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                    Subcommittee on Health,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:08 a.m., in 
Room B-318, Rayburn House Office Building, Hon. Kevin Brady 
[Chairman of the Subcommittee] presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

                  FROM THE COMMITTEE ON WAYS AND MEANS

                         SUBCOMMITTEE ON HEALTH

                                                CONTACT: (202) 225-3943
FOR IMMEDIATE RELEASE
Tuesday, April 7, 2015
No. HL-01

                  Chairman Brady Announces Hearing on

                  the Individual and Employer Mandates

                   in the President's Health Care Law

    Congressman Kevin Brady (R-TX), Chairman of the Subcommittee on 
Health, today announced that the Subcommittee will hold a hearing on 
the individual and employer mandates and associated penalties in the 
President's health care law. The hearing will take place immediately 
following a brief Subcommittee organizational meeting on Tuesday, April 
14, 2015, in Room B-318 of the Rayburn House Office Building, beginning 
at 10:00 a.m.

      
    Oral testimony at this hearing will be from the invited witnesses 
only. However, any individual or organization may submit a written 
statement for consideration by the Committee and for inclusion in the 
printed record of the hearing.

      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
written comments for the hearing record must follow the appropriate 
link on the hearing page of the Committee website and complete the 
informational forms. From the Committee homepage, http://
waysandmeans.house.gov, select ``Hearings.'' Select the hearing for 
which you would like to make a submission, and click on the link 
entitled, ``Click here to provide a submission for the record.'' Once 
you have followed the online instructions, submit all requested 
information. ATTACH your submission as a Word document, in compliance 
with the formatting requirements listed below, by the close of business 
on Tuesday, April 28, 2015. For questions, or if you encounter 
technical problems, please call (202) 225-3625 or (202) 225-2610.

      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any materials submitted for the printed record, 
and any written comments in response to a request for written comments 
must conform to the guidelines listed below. Any submission not in 
compliance with these guidelines will not be printed, but will be 
maintained in the Committee files for review and use by the Committee.

      
    1. All submissions and supplementary materials must be submitted in 
a single document via email, provided in Word format and must not 
exceed a total of 10 pages. Witnesses and submitters are advised that 
the Committee relies on electronic submissions for printing the 
official hearing record.

      
    2. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. The name, 
company, address, telephone, and fax numbers of each witness must be 
included in the body of the email. Please exclude any personal 
identifiable information in the attached submission.

      
    3. Failure to follow the formatting requirements may result in the 
exclusion of a submission. All submissions for the record are final.
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 -------

    Chairman BRADY. The hearing is called to order.
    With the successful replacement of the flawed formula for 
paying local doctors under Medicare nearly complete, I want to 
welcome everyone to the first hearing of the Health 
Subcommittee in the 114th Congress.
    I would like to offer especially a warm welcome to the new 
Members of our Subcommittee: Ms. Jenkins, Mr. Marchant, Ms. 
Black, and Mr. Davis.
    Joining us today are three qualified witnesses: Doug Holtz-
Eakin of the American Action Forum; Scott Womack of Womack 
Restaurants; and Sabrina Corlette, a Senior Research Fellow, 
Project Director, and Adjunct Professor at Georgetown 
University.
    Welcome, as well.
    Tomorrow marks the end of the tax season and, with it, the 
annual ritual of navigating a needlessly complicated maze of 
IRS forms and regulations.
    New this year is the controversial mandate within the 
President's Affordable Care Act that requires all Americans to 
buy government-approved health care or pay the Internal Revenue 
Service. Also, this year, local businesses with more than 100 
full-time workers will be forced to comply with an ACA mandate 
to offer qualified health care or pay the IRS.
    Now, we have been told that these mandates are an essential 
part of President Obama's health care law, that they are 
absolutely necessary to control costs and keep everyone 
insured. Without these mandates, we are warned, health 
insurance markets would not be able to function properly.
    Here is the irony: Before the ACA, too many Americans 
couldn't afford to buy insurance because it was too expensive. 
Now the President's law makes insurance even more expensive, 
then forces people to buy it.
    What ObamaCare does is force people to pay for healthcare 
plans they don't want, can't afford, and, for some, this meant 
losing the coverage they already had. This should come as no 
surprise. The Affordable Care Act doesn't let people pick a 
plan that fits their needs. Instead, the law forces Americans 
to choose from a list of plans that Washington picks for them 
and forces them to buy.
    This is not how affordable healthcare reform should work. 
Washington should not be in the business of telling Americans 
how much health care they need and then penalizing them if they 
decide to go their own way.
    Even the President at one point was against this mandate, 
stating, ``A mandate means that in some fashion everyone will 
be forced to buy health insurance. But I believe the problem is 
not the folks trying to avoid getting health care; the problem 
is they can't afford it.''
    We should empower families and patients and put them at the 
center of the healthcare system, not government bureaucrats. So 
I believe we can do better. I think we can both lower the cost 
of health care and encourage people to buy coverage, all 
without taxes or mandates or penalties.
    One idea is to give people a portable, advanceable tax 
credit that you could use to help pay for any healthcare plan 
you buy regardless of where you buy it. Another is to give 
people more choices. Let them choose plans that work for them, 
like high-deductible healthcare plans and health savings 
accounts. These are just some ideas that would lower costs and 
encourage more people to buy coverage, and nobody would have to 
buy something they don't want.
    I know Members on both sides of the Committee have strong 
feelings about the law's individual and employer mandates, so I 
look forward to our discussion today.
    Before I recognize Ranking Member McDermott for the 
purposes of an opening statement, I ask unanimous consent that 
all Members' written statements be included in the record.
    I now recognize the Ranking Member, Dr. McDermott, for his 
opening statement.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    I feel like it is springtime. And farmers plow their field; 
they have to plow the dirt before they go to work. And we are 
out with our plow today. It is the same plow we had in January 
of 2011. We have the same cast of characters here, and we will 
probably have the same hearing, I suspect.
    I would like to ask unanimous consent to enter into the 
record an article from Atlantic Monthly, October 2000, called, 
``Health Care: A Bolt of Civic Hope.''
    Chairman BRADY. Without objection.
    [The submission of The Honorable Jim McDermott follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
         
                                 -------
                                 
    Mr. MCDERMOTT. This is an article that was written by 
Matthew Miller after an interview he had with Jim McCrery, who 
was then the Chairman of the Ways and Means Committee, and me 
about what the healthcare plan would look like when it 
happened. This is now 15 years ago.
    Everything, practically speaking, that we discussed in that 
article is in the bill. And all of it Jim agreed to because he 
knew that you had to make some compromises on a whole bunch of 
things, one of which was, if you are not going to have a single 
payer system, then you had to have everybody in. And that meant 
that employers had to be in and all the people of the United 
States had to be in.
    So this issue is--we have been over it before. If this were 
an honest discussion, my Republican colleagues would tell you 
how the individual mandate has balanced risk pools and reduced 
adverse selection in the health insurance market, or they would 
tell you how the employer mandate has forced big corporations 
to pull their weight and cover every employee who works a full 
workweek, or they might mention how both requirements have 
taken this country closer than ever to universal coverage.
    But we are not going to talk about those things today, and 
there is a reason for that: Because the hearing isn't about the 
individual mandate or the employer mandate. What this hearing 
is about is scoring political points at the expense of the 
Affordable Care Act. We did it in 2011. We have done it a 
number of times. It is about continuing a tired, baseless line 
of attack that will generate no new ideas whatsoever about how 
to make the law better.
    We have been through this before. The House has staged 56 
votes to repeal or undermine the law. The Ways and Means 
Committee has held no less than a dozen hearings to attack the 
shared-responsibility requirement. In fact, in the 2011 
committee hearing, Republicans invited the same two witnesses. 
Mr. Holtz-Eakin and Mr. Womack were here at that time.
    Unfortunately, not one of those hearings has generated a 
productive discussion of what should be done to improve the 
law. Not one has led to a meaningful proposal that would ensure 
greater health security for the American people. I do know that 
Ms. Black has a bill in that would improve the employers' 
reporting. So I know that some people are thinking about it, 
but we haven't had a hearing about it.
    And not one has resulted in an alternative plan if my 
Republican colleagues succeed in dismantling the law. If the 
Court takes it down, there is nothing on the table. Years of 
attacks through hearings, lawsuits, press conferences, 
television ads, op-eds, speeches, and repeal votes, but still 
no plan to replace it.
    Now, while my Republican colleagues have focused on 
destroying healthcare reform, we have focused on trying to make 
it work. And, over the past 5 years, the law has been an 
indisputable success.
    Middle-class families now enjoy greater health security 
than ever before. More than 16 million Americans have gained 
coverage, thanks to the law. The uninsured rate is at the 
lowest in history in this country. And 129 million Americans 
with preexisting conditions can no longer be discriminated 
against by insurance companies.
    The economy is looking better and better, much to the 
distress of the Republicans. Since the law was enacted, over 12 
million jobs have been added to the economy. Now, we were told 
it was going to cut jobs and there weren't to be any jobs in 
this country and everything. We have 12 million new jobs since 
this all happened. Healthcare spending has grown at the lowest 
rate in five decades, shrinking as a share of GDP for the first 
time since the 1990s.
    But we all know there is more work to be done. I have never 
said this was a perfect bill. I never thought it was. It wasn't 
my bill. I didn't like some parts of it. But no legislation is 
perfect when it is first passed, and it is the duty of Congress 
to refine and improve the laws it has implemented. Our success 
in finding a permanent solution to the SGR could be a reminder 
that it is possible to solve problems and pass legislation 
through regular order.
    And I encourage my Republican colleagues to move beyond the 
cynical attacks on this law and join me in working to make the 
law better. It is the law of the land. Until the Supreme Court 
rules in May or June or whatever they do, it is the law of the 
land, and we will see what happens then. But that is what the 
American people expect from us. They expect compromise, and 
they deserve the Congress to do that.
    And I yield back my time.
    Chairman BRADY. Mr. Holtz-Eakin, you are recognized for 5 
minutes. Thanks for joining us today.

               STATEMENT OF DOUGLAS HOLTZ-EAKIN, 
                PRESIDENT, AMERICAN ACTION FORUM

    Mr. HOLTZ-EAKIN. Chairman Brady, Ranking Member McDermott, 
Members of the Committee, thank you for the chance to be here 
today.
    I have a written statement for the record. Let me just make 
a few points about that, focusing on the individual mandate.
    Taken at face value, the individual mandate is a policy to 
eliminate the uninsured. Everyone must have insurance. And if 
you evaluate it from that perspective, it is clear the 
individual mandate is not working. We have over 6 million 
people paying a penalty rather than having insurance, and tens 
of millions more remain uninsured. So I don't think it really 
should be even evaluated on that standard. It is simply not 
going to work.
    Instead, it is best viewed as a complement to the rating 
rules in the Affordable Care Act--in particular, the guaranteed 
issue rule and the community rating of the insurance policies. 
Without it, a mandate, those rules combine to guarantee that 
someone can wait until they are sick, apply, and get insurance. 
Those who are healthy stay out, those who are sick are in. The 
risk pools are not balanced, we get very high premiums, and the 
system is unworkable.
    So the individual mandate is intended to offset the impact 
of those particular rating rules. And for that to work, you 
have to have an individual mandate that is effective and tight 
and with people complying with it. And I don't think you can 
make that case with the ACA's individual mandate, certainly not 
so far.
    In looking at alternatives to the individual mandate, there 
is a table in my written statement, Table 1, and I would just 
walk through it real quickly and show you some of the 
implications.
    You could repeal the individual mandate, and our estimates 
are that this would lead to 7 million fewer people being 
covered with insurance. And, as a result of the 7 million 
fewer, there would be less in the way of exchange subsidies. 
Somewhere around $200 billion in subsidies would be saved.
    This is quite simply the impact of higher premiums. If you 
repeal the mandate, the young and healthy leave the risk pools, 
premiums go up, fewer people are covered with insurance, and 
you get the impact.
    Now, the trick is to get rid of both the mandate and the 
rating rules. And, in the table, we have two different ways of 
doing that. One way is to repeal the individual mandate along 
with the community--the rating restrictions, so relax the age 
bans and allow the young, in particular, to have relatively low 
premiums. Or the alternative way to do it is to simply allow 
people to buy the insurance they want outside the exchanges in 
nonqualified health plans, something that has been done 
temporarily by the Administration.
    Both of those have roughly the same effect, right? You have 
the ability to buy a policy at a lower price. That offsets some 
of the insurance loss. The real big difference between those 
two is that, if you do it the first way and rely on the 
exchanges, you still have to pay the exchange subsidies. On the 
other hand, if you allow people to buy policies that they want 
outside, they are not subsidized. You get about the same 
coverage implications and very different budgetary 
implications.
    And then the final row in the table basically says, suppose 
you just do all of this, you allow the relaxation in the 
community rating, you drop the individual mandate, you allow 
people to buy policies that they want outside the exchanges, 
and, essentially, the message there is: You can achieve the 
same coverage that the Affordable Care Act is achieving, and 
you can do it at roughly the same budget cost without forcing 
people into the exchanges and with the individual mandate.
    So it is clear that there are alternatives that are 
workable that can get the same end result that we are seeing 
right now. And I would be happy to answer questions about 
alternatives in what follows.
    Thank you.
    [The prepared statement of Mr. Holtz-Eakin follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
                                 ---------
                                 
    Chairman BRADY. Thank you, Doctor, very much.
    Mr. Womack, you are welcome, and you are recognized for 5 
minutes, as well.

                  STATEMENT OF SCOTT WOMACK, 
          PRESIDENT, WOMACK RESTAURANTS, INCORPORATED

    Mr. WOMACK. Chairman Brady and Mr. McDermott, thank you for 
the invitation to testify at this hearing.
    My name is Scott Womack, owner and president of Womack 
Restaurants, an 11-unit IHOP--or, excuse me, Popeyes franchisee 
in Kansas City. I am pleased to be here today to testify on 
behalf of the U.S. Chamber of Commerce. I also come before you 
today as a restaurant industry veteran with over 25 years of 
experience to represent my company, my industry, and small-
business entrepreneurs.
    My first jobs were as a busboy and cook, and, after 
college, I joined the grocery industry. After 5 years, I got 
fired, and I found myself starting over. I was very lucky to 
land a job with IHOP as a manager, and, with a $15,000 loan 
from my parents, I bought my first IHOP franchise.
    Over the following 20 years, I built an additional 15 IHOP 
restaurants. In 2013, we purchased a group of Popeyes 
restaurants in Kansas City. And, last fall, we sold our IHOP 
restaurants.
    Now, I frequently say that the restaurant industry is a 
story of first opportunities and second chances. First jobs, 
first careers, and a first shot at small-business ownership. 
And second chances for people starting over--a forced career 
change, reentering society after incarceration, or a second job 
for those digging out of a financial hole.
    That story is my story. I am very thankful for the 
opportunities I have been given and the opportunities that our 
company has been able to provide. No other industry can tell 
this story of turning lives around.
    It has been 5 years since the Affordable Care Act was 
passed, and I want to provide you a real-world update from the 
front lines of the restaurant industry.
    First, I have to note an important point of context. Small-
business restaurant owners and franchisees, we sign leases, 
mortgages, and franchise agreements with terms of 15 to 20 
years. We personally guarantee those agreements. A lease for a 
single restaurant is usually an obligation for at least a 
million dollars over its lifetime. There is no escape clause in 
these agreements for Federal legislation. So when costs go up, 
if you can't adjust, you default and likely go bankrupt. There 
is no agency to bail us out. Please keep these numbers in mind 
as you consider future legislation, because we have put it all 
on the line.
    Now, like most of you, I didn't get a chance to read the 
ACA before it was passed, but I heard the promise of lower 
insurance premiums and lower actual costs, improved insurance 
coverage, and affordable access for everyone.
    At the time, my company offered generous health coverage to 
our salaried management and office staff. Our fears were that 
the cost of offering coverage to our entire workforce would 
bankrupt us. After careful consideration, we chose to offer 
coverage to everyone.
    Now, our reality today under the ACA is very different than 
what was promised. Over the last 4 years, our insurance 
premiums have risen 60 percent. Our single coverage now costs 
$6,400 annually. Family coverage costs $19,200 annually. 
However, we have also had to double our deductibles to $2,500 
and raise the out-of-pocket limits by two-thirds.
    While our insurance offering complies with the ACA as 
affordable, only 4 percent of our hourly staff have enrolled. 
And as I sampled fellow franchisees, I found that 3 to 4 
percent enrollment is the rule across the industry.
    Now, we are required to offer the same benefit to all our 
staff. We had been paying a portion of our managers' dependent 
coverage, but now we are unable to do so due to the potential 
cost across the entire company. This is a big loss for our 
management and office staff. As you may be aware, my offering 
of coverage to employees in many cases makes them ineligible 
for subsidies for their dependents.
    The reporting required is costly, complex, and confusing. 
All employers have had to either write new software or buy new 
software or contract with a service to do so. And, as I write 
this, it is still unclear as to whether the Federal Government 
can actually use the data in these systems.
    It is clear that the assumptions inherent to the ACA were 
wrong. Five years later, our costs have gone up significantly. 
The controls and mandates did not help. Hourly employees do not 
want to buy policies that they were not buying before, even at 
a generous price. When a single surgery can still leave them 
with several thousands of dollars in bills, they do not want to 
get in the game. And the result of expanding coverage to all of 
our staff is a reduced benefit to our managers and office 
staff.
    While our industry was initially alarmed at the potential 
cost of covering everyone, we at least hoped the costs would 
indeed come down. It was clear to me then that the promises of 
the ACA were in conflict with each other--expanding coverage, 
improving health care, while lowering cost--but, sadly, it is 
clear to me now that the law has not delivered.
    Thank you.
    [The prepared statement of Mr. Womack follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
                                 -----------
                                 
    Chairman BRADY. Thank you, sir.
    Ms. Corlette, you are recognized for 5 minutes.

    STATEMENT OF SABRINA CORLETTE, SENIOR RESEARCH FELLOW, 
GEORGETOWN UNIVERSITY HEALTH POLICY INSTITUTE, CENTER ON HEALTH 
                       INSURANCE REFORMS

    Ms. CORLETTE. Good morning. Thank you, Mr. Chairman, 
Ranking Member McDermott, Members of the Committee. My name is 
Sabrina Corlette, and I am a Senior Research Fellow at 
Georgetown University's Center on Health Insurance Reforms. 
Thank you for the opportunity to testify here today and for the 
leadership of this Subcommittee in conducting oversight of the 
Affordable Care Act.
    This hearing today is a timely one, just a few weeks after 
the 5-year anniversary of the law. It is important, thus, I 
think, to spend some time taking stock of how the law's reforms 
have affected people's access to affordable, adequate health 
coverage. And to understand how the ACA has affected health 
coverage, I think it is important to understand what the world 
looked like before the law was passed.
    On the eve of the law's passage, approximately 50 million 
Americans were uninsured and approximately 10 million got their 
health insurance through the individual market. And that market 
was an extremely inhospitable place, particularly for people in 
less than perfect health, and that is about 129 million of us. 
Before the reforms in the ACA, in most States, applicants for 
health insurance could be denied a policy because of their 
health status or charged more in premiums because of their 
health or gender.
    Health insurance was and remains a very expensive product, 
and it is particularly expensive for people buying on their 
own. Before the Affordable Care Act, roughly 70 percent of 
people with health problems reported it very difficult or 
impossible to find an affordable plan.
    In addition to being unaffordable, coverage prior to the 
ACA could be inadequate because of preexisting-condition 
exclusions in which insurers were allowed to permanently 
exclude from coverage any health problem that you might have. 
And insurers also were able to sell stripped-down policies that 
didn't cover critical services such as maternity, prescription 
drugs, and mental health.
    And, before the ACA, policies often came with extremely 
high deductibles; $10,000 or more was not uncommon.
    The failures of the individual market also resulted in job 
lock, in which people were tied to jobs they would otherwise 
leave in order to maintain access to health coverage.
    The ACA included numerous reforms to address the rising 
number of uninsured and the shortcomings of the individual 
market, including a requirement to provide coverage to people 
who apply for it regardless of their health condition. Because 
the law prohibits insurers from discriminating against people 
with preexisting conditions, a mechanism is needed to prevent 
people from waiting until they get sick to sign up for 
insurance. This is known as the individual mandate.
    The Congressional Budget Office has estimated that just a 
5-year delay in the mandate would result in 13 million more 
people being uninsured and premium increases of up to 20 
percent.
    The ACA's employer mandate is in place because all 
stakeholders should contribute to a sustainable and equitable 
health system. Those employers that don't offer coverage are 
acting as free-riders, and they should be required to pay a 
little something when their workers receive taxpayer subsidies 
to get coverage. And this is something the American people 
understand. According to polls, 60 percent support the employer 
mandate.
    And the evidence now is in that the ACA's reforms are 
working. Just yesterday, Gallup reported that the uninsured 
rate continues to fall. It is now at 11.9 percent, down from 18 
percent in 2013. Approximately 16.4 million Americans have 
gained coverage, which means that 16.4 million people are more 
likely to receive necessary medical services and gain financial 
security.
    There is also strong evidence that coverage under the ACA 
is providing better financial protection. A recent national 
survey found significant declines in the number of people 
reporting cost-related access problems.
    At the same time, in spite of dire predictions that the law 
would cause premium growth to explode, since the ACA was 
passed, we have seen the slowest growth in healthcare prices in 
50 years.
    There have also been dire predictions about the ACA's 
impacts on job growth, yet here, too, the data undermines the 
rhetoric. Unemployment rates will largely be unaffected by the 
ACA, and, if you look at job data starting with the months that 
the ACA became law, the economy has generated 12 million new 
jobs. And there is no evidence of a rise in involuntary part-
time work. The bottom line: The idea that the ACA is a job-
killer has been thoroughly debunked.
    Thank you for inviting me to testify today about the market 
reforms in the ACA. And while there remains uncertainty about 
the law's long-term impact, early data suggests that it is 
meeting its objectives and that concerns about people losing 
coverage, rising premiums, and job losses are and have been 
unfounded.
    I look forward to your questions. Thank you.
    [The prepared statement of Ms. Corlette follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    

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    Chairman BRADY. Thank you.
    Mr. Womack, thank you for bringing your real-life 
perspective to this issue. We have a lot of experts in 
Washington who have never had to actually live under this law, 
other than those who were forced into it, who are now paying 
higher premiums and much higher deductibles.
    Like you, I have a local restauranteur who, you know, has 
instructed his four store managers they will never again hire a 
full-time worker. He has been advised by his accountants that 
he, because of the ACA, would actually be more profitable by 
closing three of the stores and going with one, which is 
exactly what he doesn't want to do. He wants to grow. And I 
have a small pizza business in Willis, Texas, who would like to 
expand to two neighboring communities but, primarily because of 
this, simply can't afford to do so.
    So thank you for bringing this and this may be one of the 
reasons this is the most disappointing economic recovery in 50 
years. We actually have fewer adults in the workforce today 
than we did when the recovery began 5 years ago. We have 
actually gone a little backward in that area. So it has an 
impact. Thank you for bringing that to us.
    Dr. Holtz-Eakin, thanks for bringing some of these 
thoughtful alternatives to the table. You know, your numbers 
are so different from other models we have seen. Can you expand 
a little on why these alternatives would work and why others 
place such a high priority on the coercive model?
    But it seems to me there is a dramatic difference between 
forcing someone into a plan they can't afford and don't want or 
pay the IRS, or providing incentives--for example, a lower 
deductible--if you maintain continuous coverage, which actually 
is an incentive financially to be actually doing what we hope 
to do, which is to keep people insured.
    Mr. HOLTZ-EAKIN. Well, our estimates are built off, you 
know, a computer micro-simulation model. But the real reason we 
get results that are different from others is that the data 
underneath that are based on the actual choices made by 
employees when offered a wide variety of health insurance plans 
at different premiums, deductibles, and copays. And the 
evidence is people respond to those incentives.
    And so what you find in looking at these results is that we 
are tracking the impact of changes in premiums and people's 
response to them much more carefully than many of the 
alternatives do.
    Chairman BRADY. And so one of your points, too, if I get it 
correct, is that, in addition to the mandates on workers to buy 
government-approved health insurance and businesses to offer 
government-approved, there are mandates within the ACA itself 
that drive up the cost of health care.
    And if you thoughtfully rethink some of those mandates and 
offer plans that are more tailored to patients, to people, 
rather than Washington, that you can actually lower the cost of 
those, attract more into buying those plans, and provide 
incentives so that they have a reason to stay on the plan 
rather than, frankly, go without, pay the IRS, and then when 
they get sick they go to a plan, which drives up, what, costs 
for everyone else?
    Is that sort of the overall thought?
    Mr. HOLTZ-EAKIN. Yeah. That is the message.
    So there are three important mandates and rating rules. One 
is the essential health benefits. And the, sort of, generosity 
of that is going to peg the base premium that people are going 
to pay.
    Then the second is the guaranteed issue, that people must 
be able to buy a policy.
    And the third is the community rating rules, which say that 
you can't, you know, have big differences in premiums across 
ages. And that raises premiums for the young and healthy as a 
transfer to the older and sicker.
    Chairman BRADY. Can you talk a little about community 
rating restrictions and repealing that helps provide incentive 
for people to buy plans without the coercive mandate?
    Mr. HOLTZ-EAKIN. The big impact is on the younger and 
healthier, who saw dramatic increases, double digits, in their 
premium costs because of the community rating, right? Because 
we are really forcing them into the pool--that is the mandate--
forcing them to pay higher premiums--that is the community 
rating--so as to cover the cost of the older and sicker and the 
poor.
    Chairman BRADY. And, prior to the ACA, younger workers who 
were healthier had a greater band of prices versus those who 
were older and sicker. The ACA restricted those, in effect, 
shifting costs from those who are older and usually had more 
healthcare costs to those who are younger and who don't. Is 
that correct?
    Mr. HOLTZ-EAKIN. Absolutely. Yes.
    Chairman BRADY. All right. Thank you.
    The Urban Institute just issued a paper claiming that 
continuous-coverage provisions supported by Republicans is 
tantamount to the individual mandate in the law.
    And, in your opinion, is that the case? Is forcing all 
Americans to buy coverage the equivalent of providing 
incentives to maintain coverage?
    Mr. HOLTZ-EAKIN. So the continuous-coverage notion is one 
where you would say, okay, if you buy health insurance--say, at 
26, you leave your parent's policy--if you buy health insurance 
and you maintain continuous coverage of any form--individual, 
small group, employer--at no point may you be medically 
underwritten, right, we can't go back and underwrite that 
person for any health problem they develop, that is a powerful 
incentive to get in when you are young and cheap.
    Chairman BRADY. Yeah.
    Mr. HOLTZ-EAKIN. The pool is, as a result, balanced. And 
the actuaries can figure out the likelihood of developing any 
sort of health problem over the course of that person's life, 
and you can price policies pretty clearly.
    So that is a pretty simple idea, but it is not a mandate to 
buy health insurance. It is a set of rating rules. And we have 
rating rules all the time. Every State insurance commissioner 
has to worry about rating rules, and there are things you can 
and cannot rate on. And it is no more than that.
    Chairman BRADY. So the world-will-end-without-an-
individual-mandate claim, if you structure incentives right, we 
know that they can work.
    Mr. HOLTZ-EAKIN. You can get balanced pools, you can get a 
lot more options for people in the variety of insurance 
products, and, as a result, they can get both the kinds of 
coverage they need and the prices they want to pay, much more 
tailored to their tastes.
    Chairman BRADY. Right. Thank you, Dr. Holtz-Eakin.
    I now recognize Dr. McDermott for his 5 minutes.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    I would like to explore a concept with you. We have 
probably 20 million people presently without health insurance 
coverage. Is that about what you think it is?
    Mr. HOLTZ-EAKIN. It is somewhere in that vicinity, yeah.
    Mr. MCDERMOTT. Now, none of them are going to get sick this 
year. We all know that. They are all healthy. And none of them 
are going to get sick. There is not going to be automobile 
accidents or skiing accidents or leukemia or anything. Nothing 
is going to happen to them.
    Is that a premise on which you are basing this?
    Mr. HOLTZ-EAKIN. No. Why do you----
    Mr. MCDERMOTT. Who, then, pays for their health insurance?
    Mr. HOLTZ-EAKIN. They don't have health insurance.
    Mr. MCDERMOTT. Well, excuse me, for their health care. Or 
are we going to let them die in the street?
    You don't assume they are going to die in the street. They 
are going to come into the healthcare system. Who pays for it?
    Mr. HOLTZ-EAKIN. Those costs are spread broadly through the 
system----
    Mr. MCDERMOTT. So they are free-riders.
    Mr. HOLTZ-EAKIN. They are spread broadly through the system 
in terms of, you know, uncompensated care.
    Mr. MCDERMOTT. Now, you are setting forth the concept that 
free-riding is okay in America, that people ought to sit and 
say, ``I am not going to pay.'' You would have that concept in 
your neighborhood? ``I am not going to pay my property taxes 
because my house never caught on fire. So why do I have to pay 
for the fire department?'' You wouldn't accept that, would you?
    Mr. HOLTZ-EAKIN. So the question is, what is the nature of 
these costs? Is this essential medical? They will essential 
medical here at a hospital; that is the law of the land. But 
they won't be able to undertake any sort of discretionary 
health care unless they pay for it out of their pockets.
    So they aren't going to shift all their costs. They can't 
do that uniformly. It is only for the key, core, medically 
necessary, you show up at the emergency room and great treated.
    Mr. MCDERMOTT. But you are telling----
    Mr. HOLTZ-EAKIN. How big is that? So the next question is, 
how big is that? And if you look seriously at the numbers, this 
is a small number. So there may be some free-riding going on, 
but this is $10 billion, $15 billion in a several-trillion-
dollar healthcare system.
    It is not the driving force behind premiums. And it is 
certainly, in my view, not such a big problem that it is worth 
a wholesale rewrite of the healthcare system and an individual 
mandate to force people in. It strikes me as a 
disproportionate----
    Mr. MCDERMOTT. Let me interrupt you. Because you are saying 
that in America it is okay for me to expect everybody else to 
pay for stuff and I get it for free. That is what you are 
basically saying. Because the healthcare industry is going to 
have to take care of me. If I get sick and they haul me down to 
George Washington Hospital, if I don't have health insurance, 
they by law must take care of me, right?
    Mr. HOLTZ-EAKIN. That is true. That is fine.
    Mr. MCDERMOTT. And that cost will be paid to you, and that 
is okay with you?
    Mr. HOLTZ-EAKIN. I view that as a problem. No world is 
perfect. But that problem is not a big problem in our 
healthcare system.
    Mr. MCDERMOTT. It is estimated that it is about $1,000 a 
year on your healthcare premiums----
    Mr. HOLTZ-EAKIN. That is too high.
    Mr. MCDERMOTT [continuing]. Going for uncompensated care.
    Mr. HOLTZ-EAKIN. I would be happy to get back to you for 
the record, but we did a lot of work prior to filing an amicus 
brief with the Supreme Court cases, and I believe those numbers 
are just too large.
    Mr. MCDERMOTT. They are what?
    Mr. HOLTZ-EAKIN. Too large. A thousand dollars, no.
    Mr. MCDERMOTT. You don't think it is nearly that much.
    Mr. HOLTZ-EAKIN. No, I do not.
    Mr. MCDERMOTT. So the penalties that we are charging people 
for not insuring themselves you don't think are too--I mean, 
what was it this year? Ninety-eight dollars or----
    Mr. HOLTZ-EAKIN. Look, the vast majority of people are 
exempted. So, I mean, this individual mandate----
    Mr. MCDERMOTT. Okay.
    Mr. HOLTZ-EAKIN [continuing]. I mean, there are 20 million 
people, as an estimate, who have been exempted. So it is not 
much of a mandate, sir.
    Mr. MCDERMOTT. So you are saying that we should just let 
that continue out there. They don't have any kind of healthcare 
coverage in advance----
    Mr. HOLTZ-EAKIN. No.
    Mr. MCDERMOTT [continuing]. So they don't have any 
preventive care. So we want to wait until they have had----
    Mr. HOLTZ-EAKIN. No.
    Mr. MCDERMOTT [continuing]. The stroke. You don't do 
anything about their----
    Mr. HOLTZ-EAKIN. That is not what I am saying, sir.
    Mr. MCDERMOTT [continuing]. Blood pressure before.
    Mr. HOLTZ-EAKIN. No one disagreed at the beginning of this 
debate, going back to 2007, 2008, 2009, that we needed better 
insurance options and higher quality care at lower cost. There 
was no dispute about that. The question is, how do you get 
there?
    I believe we could harness market incentives to produce a 
much better insurance system than we saw circa that time and 
probably better than the one we have right now, and people 
would want to buy insurance then.
    Insurance is a valuable product. It is something that gives 
them a financial security against the costs of both inpatient 
and outpatient care. And people buy insurance for that reason.
    Mr. MCDERMOTT. How about the people who are not in now? How 
do they get into the system you are talking about? They have to 
pay, the first year, some high price to get----
    Mr. HOLTZ-EAKIN. People have to buy products in America, 
yes. I mean----
    Mr. MCDERMOTT. But if it covers the cost, you don't care 
what the coverage is as long as they have a piece of paper that 
says, ``I have insurance''; is that right?
    Mr. HOLTZ-EAKIN. No. I am not sure what you are saying.
    Mr. MCDERMOTT. Well, we have mandatory insurance on 
automobiles. You have to have a certificate for your insurance 
before you can get your license plate in most progressive 
States.
    Mr. HOLTZ-EAKIN. Sure.
    Mr. MCDERMOTT. And that means that you have to pay for it 
up front.
    Mr. HOLTZ-EAKIN. Certainly, there will always be some sort 
of standard that qualifies as insurance, because most plans 
that I have seen include a subsidy for people who cannot afford 
to get insurance. And, prior to the ACA, that standard was the 
standard option FEHB in most States. And so there will always 
be something that satisfies the requirement of being insurance.
    Chairman BRADY. Thank you.
    Mr. Johnson is recognized.
    Mr. JOHNSON. Thank you, Mr. Chairman. I appreciate you 
holding this important hearing.
    You know, just about half of Americans receive health 
insurance through employer-sponsored health plans. 
Unfortunately, due to ObamaCare, it is actually becoming harder 
for employers to provide their employees with affordable 
coverage. Out-of-pocket costs and premiums are skyrocketing, 
and employers face piles of paperwork to try to, you know, 
comply with the burdensome employer mandate.
    If we want to promote affordable employer-sponsored health 
insurance, it certainly isn't through an employer mandate. 
Rather, what employers should have is the ability to provide 
coverage that best meets the needs of their business and their 
employees.
    Mr. Holtz-Eakin, it is good to see you again. Thank you for 
being here.
    I want to ask you about two proposals I think can play an 
important role toward achieving that goal.
    First off, last week, I met with a constituent by the name 
of Jeff Scheumack from Plano, Texas, who is president of 
Bioautomation Corporation. We talked about an issue that I have 
worked over a decade to try to fix. That issue is association 
health plans.
    You see, Jeff's company only has 14 employees and, 
therefore, doesn't face the employer mandate, but Jeff wants to 
do the right thing and offer insurance. However, because the 
company is a small business, the group insurance plan for his 
business would be more expensive than for a large business. 
Jeff would like to have an association health plan so he and 
other small businesses can join together to purchase more 
affordable health insurance.
    What are your thoughts about association health plans as 
one of the ways to help employers, particularly small business, 
get affordable health insurance?
    Mr. HOLTZ-EAKIN. The goal is always to broaden the pools. 
And small pools, 14 employees, are going to run into this 
problem. So an association health plan is one way to get a 
bigger pool and, as a result, have better purchasing power and 
a better spreading of risks and would certainly be of some 
assistance to him.
    Mr. JOHNSON. Well, I would like to talk to you about 
another constituent of mine by the name of Scott Burday, who is 
owner of Trinity Integrated Solutions in Frisco, Texas.
    Also a small business, Trinity Integrated Solutions is not 
required to provide health insurance, but, for over 16 years, 
employees have been able to purchase their own insurance plans 
that best meet their needs in the individual market. Trinity 
Integrated Solutions then reimbursed workers for 100 percent of 
their premiums on a tax-free basis, just like the tax benefit 
for employees covered under a group health plan.
    But now Mr. Burday faces a fine of $100 a day if he 
continues to do this. Why? Because ObamaCare deemed these 
health reimbursement accounts inadequate coverage. So now Scott 
is forced to stop doing what has worked for his business and 
workers for the last 16 years. Instead, he will have to choose 
between offering no coverage to offering a group health plan 
that is 15 percent more expensive.
    I am going to ask you, shouldn't we give small businesses, 
such as Trinity Integrated, the flexibility to reimburse its 
employees' health insurance premiums even if the employee 
purchases that coverage under the individual market?
    Mr. HOLTZ-EAKIN. The health reimbursement accounts were a 
great tool for small businesses. Their employees could get the 
coverage they wanted. There was a lot of flexibility involved. 
And, with the ACA, the IRS has deemed them to be illegal, 
essentially, that you cannot verify they are buying quality 
coverage that meets the essential health benefits standard. And 
it is $36,000 fine for everyone.
    It strikes me as a real step backwards from the point of 
view of offering small businesses the tools to manage their 
costs.
    Mr. JOHNSON. It is supposed to be a free country, isn't it?
    Thank you, sir. I appreciate your testimony.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you.
    Mr. Thompson, you are recognized.
    Mr. THOMPSON. Thank you, Mr. Chairman.
    Mr. Johnson, you can call Scott Burday and tell him help is 
on the way. Mr. Boustany and I have a bill--we would love to 
have you as a coauthor--that fixes the problem that you just 
outlined. So if you want to have your staff talk to either my 
staff or Charles' staff, we will get you on board.
    Mr. JOHNSON. Thank you.
    Mr. THOMPSON. I was interested, Dr. Holtz-Eakin, in your 
comment about the small number of people, to Mr. McDermott's 
question.
    You know, in my district, at the time--districts have 
changed, but, at the time, the uncompensated-care costs in my 
congressional district were running about $50 million a year. 
And I suspect they are about the same in every congressional 
district across the country. And, you know, you start adding 
that up, and pretty soon you are talking about real money. It 
is, I think, about $22 billion a year based just on those 
numbers.
    But your comment reminded me of the guy that called my 
office to tell my staff that we didn't need to do healthcare 
reform and he was living testimony. He was in a car accident, 
he spent 3 months in a hospital, 7 months in recovery after 
that, and he didn't have any insurance, and he was perfectly 
fine today. And my staff asked him, they said, ``Well, how did 
you pay for it?'' He said, ``I didn't pay for it. I told you, I 
didn't have the insurance. I don't have any money. But I am 
fine today.'' And I don't understand how you could think that 
that type of model wears well with the American public. Folks 
believe that everybody should, in fact, pay their fair share.
    But my----
    Mr. HOLTZ-EAKIN. So----
    Mr. THOMPSON [continuing]. Question is to Ms. Corlette. 
And, based on current data, it appears that more than 95 
percent of employers have fewer than 50 full-time employees 
and, therefore, are not subject to the employer mandate.
    So would it be accurate to say that, in reality, the 
employer mandate only affects a small number of employers?
    Ms. CORLETTE. Yes, I think that is accurate. Not only that, 
sir, but roughly 98 percent of employers with 200 or more 
workers already provide health insurance. And I think that 
number is about 94 percent for employers between 50 and 199 
workers. So we are talking about a fairly small number of free-
riders who are not currently providing health insurance who 
we----
    Mr. THOMPSON. What?
    Ms. CORLETTE. Ninety-eight percent of employers with more 
than 200 workers do provide health insurance. And I think it is 
about 94 percent in that 50-to-199-worker category. So we are 
really talking about a small number of employers that would 
actually have to pay a mandate.
    Mr. THOMPSON. So, in your opinion, notwithstanding the 
mandate, what drives employers to offer their employees health 
insurance?
    Ms. CORLETTE. Well, you know, employers, for a long time, 
have been offering health insurance to maintain and recruit a 
healthy, productive workforce. And they have been doing that 
voluntarily because it makes good business sense.
    And I think one of the ironies here, of course, is that the 
Affordable Care Act was designed to build on our employer-based 
system, and there was a deliberate intention not to disrupt or 
overturn that employer-based system but, rather, to build on 
it. But if you are going to build on it, then everybody needs 
to contribute.
    Mr. THOMPSON. Based on your work, do you think that the 
mandate would deter employers from offering coverage?
    Ms. CORLETTE. I do not.
    Mr. THOMPSON. Do you think that employers will continue to 
offer coverage with or without a mandate?
    Ms. CORLETTE. I do. Yes. And, in fact----
    Mr. THOMPSON. Why?
    Ms. CORLETTE [continuing]. Ninety-nine percent of employers 
report in national surveys that the Affordable Care Act is 
really not changing any of their decisions regarding employee 
benefits.
    Mr. THOMPSON. So, on January 1, the employer mandate kicked 
in for employers with at least 100 workers. Have we seen any 
evidence to date that suggests that most employers stopped or 
will stop offering coverage based on that mandate?
    Ms. CORLETTE. We have not, sir.
    Mr. THOMPSON. Thank you.
    I have no further questions. Yield back.
    Chairman BRADY. Thank you.
    Mr. Roskam, you are recognized for 5 minutes.
    Mr. ROSKAM. Thanks, Mr. Chairman.
    Serving in the House of Representatives I think is some of 
the most interesting work I have ever done in my life, because 
there is this very unusual juxtaposition that a Member of 
Congress experiences almost on a weekly basis. And I am having 
one of those moments right now, and I want to explain it to 
you.
    Saturday morning, I am in front of 200 people at the 
Wheaton bowling alley in Wheaton, Illinois, talking to them 
about what is going on here. And they were not a happy group, 
shall we say. A lot of concerns about the direction of the 
government and all that sort of stuff I hear all the time from 
people like Mr. Womack--do you pronounce it ``Womack'' or 
``Womack''?
    Mr. WOMACK. ``Womack.''
    Mr. ROSKAM. ``Womack.'' We have a ``Womack'' here, so you 
will be hearing this all day long. Mr. ``Womack.''
    I hear from a lot of people like Mr. Womack who describe 
this situation as it relates to this new health care law, and 
it is very jarring and it is unsettling.
    And yet your testimony, Ms. Corlette, was very disconnected 
from what he said. And so I am wanting to hear from you how you 
reconcile the testimony of somebody--and let me reread two of 
the paragraphs in his testimony and then juxtapose that with 
what you said. And help me square it up, because it just 
doesn't make sense to me.
    So this is the guy on the front line that says this: ``Our 
reality today under the ACA is very different than what was 
promised. Over the last 4 years, our insurance premiums have 
risen 60 percent.'' This is his company. ``Our single coverage 
now costs $6,400 annually, and family coverage costs $19,200 
annually. However, we have also had to double our deductibles 
to $2,500 and raise the out-of-pocket limits by two-thirds.''
    Okay. Pause on that. Enter your testimony.
    And, at the conclusion of your testimony, you say, 
``Concerns about''--you said a lot of things that were pretty 
declarative. In fact, of all the speakers so far, you have been 
the most enthusiastic about the Affordable Care Act. You are 
more enthusiastic than Mr. McDermott, who basically said, 
``Hey, I didn't write that thing. I voted for it, but I want to 
improve it.'' But you are a cheerleader for this.
    And your cheerleading I find a little unsettling, because 
you said this: ``Concerns about rising premiums''--and I am 
using ellipses here--``have been totally unfounded.'' ``Totally 
unfounded.'' That means it is a false claim. That means there 
is no foundation. That means it is almost insincere or naive or 
just plain foolish for him to assert that the Affordable Care 
Act is having an impact on these costs.
    So is that true? Is everything that he said that I 
characterized, is that just not true? How do you square up what 
you said with what he said?
    Ms. CORLETTE. Thank you, Congressman Roskam, for the 
question.
    So, first of all, I give Mr. Womack credit for trying to 
offer comprehensive decent health insurance to his workers. It 
is the right thing to do.
    Second of all, Mr. Womack is, I think, an example of 
employers struggling with rising costs, which employers have 
been doing for a long, long time. And, in fact, their costs 
have been rising for a couple of decades now.
    And the overall--and, again, I am looking at overall data, 
right? And what I can tell you is, in the 5 years since the 
Affordable Care Act was passed, the overall growth in 
healthcare prices has been at the slowest rate in history.
    Mr. ROSKAM. So you are arguing--just in the interest of 
time----
    Ms. CORLETTE. Uh-huh.
    Mr. ROSKAM [continuing]. You are arguing that his costs 
would have gone up, and you are saying, don't focus in on what 
the Affordable Care Act promised. You are saying, focus in on 
what was happening before the Affordable Care Act.
    I mean, the first half of your testimony was a reflection 
in looking back. It was not talking about the claims of the 
Affordable Care Act.
    So you are making the argument, hey, Mr. Womack, this 
problem is going to be your problem no matter what, and it has 
been mitigated and made better?
    Ms. CORLETTE. I think the evidence is pretty indisputable 
that the growth in healthcare costs and premiums has slowed 
since the----
    Mr. ROSKAM. I know, but----
    Ms. CORLETTE [continuing]. Passage of the Affordable Care 
Act. Now, that may be----
    Mr. ROSKAM [continuing]. Go back to him now.
    Ms. CORLETTE [continuing]. Cold comfort to somebody like 
Mr. Womack, who every year gets a little bit of a percentage 
increase in his premiums. But what the Affordable Care Act 
promised----
    Mr. ROSKAM. Right.
    Ms. CORLETTE [continuing]. To do----
    Mr. ROSKAM. So my friend----
    Ms. CORLETTE [continuing]. Was to----
    Mr. ROSKAM [continuing]. Going back to my friend, who just 
said 60 percent. Sixty percent. Come on.
    Ms. CORLETTE. But that is not in 1 year, correct? That is 
over 4 years. The Affordable Care Act reforms did not go into 
effect until last year. So----
    Mr. ROSKAM. Okay.
    Ms. CORLETTE [continuing]. A lot of that growth----
    Mr. ROSKAM. God bless you. You are what a true believer 
looks like.
    So let me reclaim--oh, my time is gone. It went so fast. It 
was so interesting.
    Thank you for taking the time.
    Chairman BRADY. Thank you.
    Mr. Pascrell, you are recognized for 5 minutes.
    Mr. PASCRELL. Thank you, Mr. Chairman.
    Mr. Chairman, thank you for your introductory remarks on 
the bipartisanship we saw in passing SGR repeal. However, I am 
very disappointed to learn, Mr. Brady, that the Senate, in 
considering SGR, will vote on an amendment repealing the 
individual mandate--the only nongermane amendment. We worked to 
keep politics out of the SGR. This is very, very disappointing. 
I think it is going to go down the tubes, but that is what they 
are introducing.
    You would think that my colleagues--cobble together all of 
the time they have spent together trying to undermine the 
Affordable Care Act--and not make it better. How different, 9, 
10 years ago, with part D, what we did compared to what they 
did. After we voted against it, we cooperated. But that is 
immaterial to you--they would have been able to come up with an 
alternative. They haven't come up with an alternative.
    In this Committee alone, we have had over a dozen hearings 
just on issues related to the individual and the employer 
mandates, not to mention nearly 64 votes to repeal or 
undermine. And how many have we had on this elusive alternative 
I keep hearing about? Zero.
    The reality is that this Act is working. It is not perfect, 
as Mr. McDermott said. We have never passed perfect 
legislation, now that I think of it.
    More than 11 million Americans have health insurance 
coverage through the marketplaces. It is startling that only a 
little more than 11 percent still don't have insurance when you 
compare it to 1 year ago, 2 years ago, 10 years ago.
    We have to end the day of the freeloader, because 
healthcare costs affect the economy. That is what we set out to 
do, and we are on our path here. Not perfect. Better than zero, 
though.
    Additionally, 6 million young adults, half of whom might 
have otherwise been uninsured, have been able to stay on their 
parents' health care.
    Mandating that everyone must be covered is counter to a 
free lunch. The individual and the employer responsibility 
provisions have been key to the success of the law in keeping 
premiums steady.
    How many times have I been through hearings on social 
issues since I have come to the Congress and heard many people 
on the other side question whether the real people or the right 
people are getting the benefit? ``Do they really need it?'' All 
of a sudden, we have changed our attitude and our altitude.
    The individual responsibility provision keeps free-riders 
who could afford to purchase health insurance from forcing 
everyone else to ultimately pay for the health. You saw the 
problems we had when major corporations started to part-time 
their workforce. And then we discovered where those folks got 
their health care and who was paying for it, and you are 
looking at him.
    Let us all remember that the individual mandate was a 
bipartisan idea. Challenge me on that. I will tell you chapter 
and verse. It is interesting that only when Democrats enacted 
comprehensive health reform that the other side became opposed 
to the idea of individual responsibility.
    I have a letter here, Mr. Chairman, from one of my local 
newspapers. Since we have had anecdotal stories today, let me 
introduce it. JoAnn Lucchetti of Wallington, New Jersey, in my 
district, discusses her decision to retire after 30 years in 
advertising sales. She put off retirement because, before the 
ACA, she could not afford to buy insurance on the individual 
market and she was not yet old enough to enroll in Medicare. 
Got the picture.
    She writes, ``That all changed on January 1, 2014. 
ObamaCare allowed me the freedom to walk away and explore other 
options on a part-time basis. And, by the way, my resignation 
resulted in the hiring of two recent college graduates.''
    I ask unanimous consent that her letter be entered into the 
record, Mr. Chairman.
    Chairman BRADY. Without objection.
    [The submission of The Honorable Bill Pascrell follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
                                 --------
                                 
Mr. PASCRELL. Ms. Corlette, can you talk a little bit about 
the challenges that people like Ms. Lucchetti, who are wanting 
to retire before they are eligible for Medicare, or those who 
leave jobs to start their own businesses or attend to family 
matters--many of us are in that situation--were facing in the 
individual insurance market before the Affordable Care Act?
    Chairman BRADY. Ms. Corlette, I am afraid time has expired.
    Mr. PASCRELL. If you have a couple of seconds.
    Chairman BRADY. I think if you could answer that by letter 
or perhaps when another Member questions you.
    Ms. CORLETTE. Certainly.
    Chairman BRADY. Time has expired.
    Dr. Price, you are recognized.
    Mr. PRICE. Thank you, Mr. Chairman. I want to thank you, as 
well, for holding this hearing on this important topic.
    And we have heard our friends on the other side talk about 
this isn't a perfect law. And we would agree, it is not. What 
we are trying to get to here is how to address the law and make 
the policy at the Federal level consistent with patient-
centered health care. As a physician, formerly practicing 
physician, I can tell you that right now we are moving down the 
path of government-centered health care. And your constituents, 
our constituents, the American people aren't fond of 
government-centered health care, because the decisions are 
removed from them, the choices are removed from them.
    We have heard that the growth of healthcare prices has been 
the slowest for a significant period of time. And I would ask 
the American people to ask themselves, for whom? For whom is 
the cost less? And the answer to that question is the 
government. Prices are down for the government. But if you are 
an individual out there making $30,000 or $40,000 a year and 
you have health coverage and the deductible is $6,000 or 
$12,000, which some of them are, let me suggest to you that you 
don't have health coverage, because you aren't able to afford 
the deductible.
    And we see that in my former practice. I have my former 
colleagues call me and talk to me about the challenges that 
they have because of the coverage that they currently have, and 
they are not able to make any arrangements to make payment. 
They turn around and walk out of the office because they can't 
afford the services that they need. So the quality of health 
care is actually diminishing because of this law.
    I want to talk a little bit about the consequences of the 
employer mandate on workers and full-time work.
    Mr. Womack, you mentioned that your costs have gone up 60 
percent for health coverage. Now, that money that is now going 
to provide health coverage that is oftentimes more lavish than 
people even desire, and you are being dictated, mandated to do 
so, how many folks could you have hired if you had been able to 
push that money back into your business to be able to provide 
more jobs?
    Mr. WOMACK. Oh, it would be hard for me to give you a 
number, but, you know, without a doubt, that is the one area of 
our business that, you know, we would spend more money on, is 
hiring more people.
    Mr. PRICE. So we hear from Ms. Corlette that there is, ``no 
evidence of involuntary part-time work.'' And I know that she 
would likely say that there is no evidence of any decrease in 
jobs created by the ACA.
    Would you agree with that?
    Ms. CORLETTE. Job growth has actually been at its fastest 
pace in the last year since 1998.
    Mr. PRICE. So you would agree that there has been no effect 
on jobs.
    Now, Dr. Holtz-Eakin, I have in my hand here--in fact, I 
ask unanimous consent to insert into the record an article from 
Investor's Business Daily----
    Chairman BRADY. Without objection.
    Mr. PRICE [continuing]. On the employer mandate effects of 
ObamaCare.
    Here is an article with a list of cuts to work hours and 
jobs due to the employer mandate, 18 pages long. And I will 
just site a couple of them on the first two pages from the 
State of Georgia.
    Southern Polytech State University limited students to 20 
hours per week. Georgia Tech capped hours for students and temp 
workers at 25 hours a week. Chatham County reduced hours of 
part-time and seasonal workers to lower than 30 hours a week. 
The city of Gainesville began limiting part-time work hours, 
Kennesaw State limiting teacher loads, et cetera, on and on and 
on.
    That is 18 pages, 18 pages, small type, of job after job 
after job, person after person, American after American, who 
are having their hours cut, their job limited, because of the 
employer mandate. So I would respectfully suggest that you edit 
your talking points because they are simply not accurate.
    From an anecdotal standpoint, I have a car dealership in my 
community; 168 full-time workers before the law, now 2. Now 2. 
One hundred sixty-six individuals were moved to part-time work. 
That is real stuff. That is real consequences for people out 
there.
    Let's talk about a little money consequence. Dr. Holtz-
Eakin, the President's spokesperson, recently said that he 
didn't think it was accurate that millions of individuals--
``millions of individuals were going to get a tax bill as a 
result of the ACA.''
    I know that you have done some work on this. What is your 
estimate on the number of folks who will have to pay more taxes 
because of the ACA, the Affordable Care Act?
    Mr. HOLTZ-EAKIN. Our estimate is there are 6.3 million who 
will pay the penalty this tax year.
    Mr. PRICE. And how much money is that, do you recall?
    Mr. HOLTZ-EAKIN. I don't, but I can certainly get that 
number to you.
    Mr. PRICE. My understanding is----
    Mr. HOLTZ-EAKIN. There is also the additional piece, which 
is mistaken subsidy payments which they have to repay.
    Mr. PRICE. And so what we are doing is taking more money 
out of the pockets of American people to do not what they want 
but what the government is forcing them to do. And so, in the 
area of health care, choices are being significantly limited 
not just for individuals but for physicians as well.
    And I yield back.
    Chairman BRADY. Thank you.
    Mr. Davis, you are recognized.
    Mr. DAVIS. Thank you very much, Mr. Chairman.
    Can I ask each one of our witnesses, if you would just take 
about 30 seconds and describe what you would consider to be the 
purpose of the Affordable Care Act.
    Mr. HOLTZ-EAKIN. I believe its intent was to cover more 
Americans with quality health insurance and to provide higher 
quality care at lower cost. The intent I don't think there is 
any dispute about.
    Mr. DAVIS. Thank you.
    Mr. Womack.
    Mr. WOMACK. I would agree with that.
    Ms. CORLETTE. I would also agree with that.
    Mr. DAVIS. Mr. Womack, let me ask you--and let me commend 
you on your efforts to provide coverage for your employees. How 
many employees do you have?
    Mr. WOMACK. We have about 200 employees right now.
    Mr. DAVIS. And do you go on the open market to get the 
coverage? Or have you tried any of the alternatives, such as 
exchanges or----
    Mr. WOMACK. I don't think we are eligible for exchange 
coverage. That is a good question. I don't think we are. But we 
have been on the open market.
    And just for the record, we did not cut hours for our 
employees either. So I just wanted to get that out there.
    Mr. DAVIS. I really commend you, again, for that effort, 
because it seems that you are doing what some people say can't 
be done, but you are doing it.
    Listening to this discussion just sort of reminds me of 
something my father used to always say, and that is, ``Where 
one sits will often determine where they stand,'' when it comes 
to issues and decisions and rationale that is used.
    Ms. Corlette, I mean, there are many of us who feel that 
the Affordable Care Act has done exceptionally well, especially 
when you consider where we started or where we have come from. 
How do we improve it? Can we? What do we do?
    Ms. CORLETTE. Thank you, Congressman, for that question.
    And while I do believe the Affordable Care Act was an 
important step forward and has led to an unprecedented 
expansion in coverage and is meeting its goals, I am not a 
completely unadulterated cheerleader, in the sense that I 
believe there are areas for improvement.
    And, actually, I think it was Congressman Price, perhaps, 
or maybe it was Congressman Roskam who mentioned one of them, 
and that is around the area of consumer deductibles or cost-
sharing. While the ACA did take an important step forward in 
terms of limiting people's out-of-pocket costs so that there is 
a maximum in any year that somebody would have to pay if they 
had a car accident or cancer or something like that, many 
people are finding the deductibles in the new health plans to 
be a significant barrier to accessing services.
    So I think that is something that we need to look at and 
provide some more financial protection, particularly for folks 
at the lower end of the income scale.
    Mr. DAVIS. Dr. Holtz-Eakin, I am intrigued by this notion 
that somehow payment occurs for health care that individuals 
will receive, even if they are not insured, if they are not 
covered, that somehow or another the cost just filters back 
into the delivery system. But somehow it has to get paid for, 
because there is no such thing as a free lunch or free health 
care or free anything.
    How does that reconcile with the idea of individuals paying 
as opposed to the general public paying?
    Mr. HOLTZ-EAKIN. So let me try to be clear about this. 
Let's take an upper-bound estimate of the uncompensated care, 
$100 billion. That is probably too high. It is probably 
somewhere in the $70 billion to $80 billion range at most. We 
spend $3 trillion on health care in the United States. And 
insurance is a product designed to cover that healthcare bill 
by moving it from people who can't afford it to people who can.
    But there is a $3 trillion bill. The uncompensated care is 
only 3 percent of that bill. That means that insurance policies 
are 3 percentage points higher than they would be otherwise, at 
most. And so that is what the individual mandate is trying to 
solve, this one-time 3-percentage-point cost in the health 
insurance.
    Okay. Does it solve it? No. It is not a very strong 
mandate. There are tens of millions of people who are either 
not going to obey it or have been exempted from it. So we are 
not getting people in the pool. We are still probably making 
the free-riding worse because they can always come back later. 
We guaranteed that they can get in.
    So there is no consequence to free-riding for a lot of 
these folks. And so we have a very elaborate system that 
infringes on people's liberty and doesn't really solve a small 
problem. That is it.
    Mr. DAVIS. But if we are going to reduce the cost of health 
care overall----
    Mr. HOLTZ-EAKIN. That has nothing to do with free-riding. 
That is the cost of health care. That is the delivery system.
    Mr. DAVIS. I yield back.
    Chairman BRADY. Thank you. Time has expired.
    Mr. Buchanan, you are recognized.
    Mr. BUCHANAN. Thank you, Mr. Chairman.
    And I want to thank our witnesses for the opportunity 
today.
    I want to pick up on Mr. Roskam, his point. Everybody 
brings a different background when they come here to Congress, 
but I have been in business 30 years. Before that, I was a 
franchise owner. I was a franchisee, then a franchise owner. 
And then I was a dealer, franchise again. So I appreciate the 
fact that so many franchise owners throughout the country and 
franchisors put it all on the line.
    I would love to have you come to my district to talk to a 
lot of people. I was chairman of our local chamber in Sarasota, 
Florida, maybe 15 years ago. The number-one issue was available 
and affordable health care and the rising cost. And those costs 
are still today continuing to rise.
    It is not unusual, I go to townhall meetings, I meet with 
different people; it is $2,000 a month. I had one woman in 
Bradenton, another community I represent. She said that she has 
six employees. She is paying $2,000 a month. She said, I can 
get it for $1,000, but I have a $10,000 deductible. That is the 
reality that is going on out there every day.
    And I would tell you that cost--he mentioned 15. It is 15 
percent, 20 percent every year, including now. And, yeah, the 
employers are somewhat paying a little bit less, but guess 
what? It is getting pushed to the employees. It used to be 
where the employer, myself, over the years, you paid 100 
percent for the family and everybody. Then it got down where 
you paid 75 percent of the family. Then you are just paying for 
the employee and the family is on their own. That is what is 
happening in America.
    I have some people that are in town today, who have 300 
employees. They are in the restaurant business in our area. A 
lot of their employees were working 40, 45 hours a week. You 
have 300. Now they are working 29. He said, not only do they 
not have health insurance, but their wages got cut 30, 40 
percent. That is the reality.
    I had another employer come to me. He had 80 employees. Now 
he is trying to find a way he can get under 50.
    So you don't have the subsidy--some people get the subsidy, 
but if there are no subsidies, people are being buried with 
healthcare costs. To think the fact that someone is paying--he 
mentioned, was it $17,000 a year for health care for a family? 
How much did you mention?
    Mr. WOMACK. Nineteen thousand dollars.
    Mr. BUCHANAN. Nineteen thousand dollars a year. That is 
insane. Who can afford to pay that? That is why this system is 
still broken today. It didn't work back 10 years ago, and it 
still doesn't work today.
    But I guess I would be interested in getting your comments 
in terms of--you mentioned how many employees? You have 300 
employees. I want to deal with reality, because your story is 
the reality I hear back home. So, maybe, why don't you frame 
that again? How many employees? And what has happened to your 
employees in terms of their healthcare coverage?
    Mr. WOMACK. Well, it was 200 employees. And we made the 
offer--and before we made the offer of coverage, you know, we 
spoke with our staff just to get a feel for what the appetite 
was. And it was very clear to us that, without throwing my 
employees under the bus, they basically said, ``I wasn't paying 
before, and I am not paying now.'' And that has been our 
experience.
    Mr. BUCHANAN. So how many people have full coverage for a 
family that you are paying or they are paying partly $19,000 
out of the 200?
    Mr. WOMACK. Oh, very few. I don't know the number of family 
enrollees that----
    Mr. BUCHANAN. So, really, there is no coverage, or there is 
not much coverage. Or if it is minimal coverage, maybe it is 
for the employee. But if they want it for the family, they have 
to pay the difference.
    Mr. WOMACK. Correct.
    Mr. BUCHANAN. So, as a result of that, nobody has much 
insurance.
    Mr. WOMACK. Correct.
    Mr. BUCHANAN. And that is the reality with a lot of 
businesses across the country.
    That is why I would ask you, Ms. Corlette, to come to 
Sarasota, Florida, come to Bradenton, come to some of our 
townhalls, meet with some of our business chambers. It was the 
number-one issue. I chaired the Florida chamber. It was the 
number-one issue, was rising cost.
    It is not unusual today to pay--I hear it every day--
$1,700, $2,000 a month. And that is the reality. And it keeps 
going up 15, 20 percent a month.
    With that, I yield back.
    Chairman BRADY. Thank you.
    Mr. Smith, you are recognized.
    Mr. SMITH. Thank you, Mr. Chairman.
    Thank you to our witnesses here today.
    Obviously, this is a complex issue, and the American people 
are very frustrated. I hear a lot of folks back home, and it is 
anecdotal, but there is a pattern. And I think it is very 
important, just like it was very important prior to this whole 
thing, that we listen to the American people.
    Ms. Corlette, you referenced that 70 percent, I think it 
was 70 percent, of Americans thought their health care was 
expensive or extremely costly. I can't remember the exact 
words. Is that accurate?
    Ms. CORLETTE. I believe that was from a survey that found 
that 70 percent of people with health conditions could not find 
an affordable health plan.
    Mr. SMITH. Okay. And yet we understood prior to the passage 
of ObamaCare that roughly 70 percent of the American people 
were happy with the coverage they had. Of course, they were 
told they could keep that, and that certainly has not been the 
case.
    But I want to speak more specifically, in terms of our 
meeting here today, about the employer mandate and the various 
coverage. CoOportunity Health was a program in Nebraska and 
Iowa that left 120,000 Nebraskans and Iowans without coverage, 
some of whom were, you know, on that plan, having lost the 
previous plan that they were told they could keep but they lost 
anyway.
    Should there be, in your opinion, an opportunity for those 
folks to be waived from the individual mandate while they 
continue to shop because they were removed from the plan that, 
while I guess it no longer existed--should they be able to take 
more time or have the waiver to find coverage?
    Ms. CORLETTE. Well, as I understand it, the insurance 
departments in Nebraska and Iowa are working very closely with 
other health carriers in the State to make sure there is a 
seamless transition for folks who were enrolled with 
CoOportunity Health. So, ideally, there would be very, very few 
people who would experience a gap in coverage of any 
significant length.
    I will also say that the mandate----
    Mr. SMITH. Should they be required to pay a penalty?
    Ms. CORLETTE. Well, the mandate penalty only kicks in if 
you have been uninsured for 3 months. So for folks who are able 
to move into another plan--and I think the goal for both States 
is to really ensure a seamless transition for folks--they 
really should not be without coverage for as much as 3 months. 
That would be----
    Mr. SMITH. I can't suggest anyone would be without coverage 
as a good idea. I mean----
    Ms. CORLETTE. Right.
    Mr. SMITH [continuing]. Notwithstanding any mandate, I 
think it is a good idea to have health insurance. But the 
pattern that I have observed among Nebraskans is that the plans 
are more expensive, the premiums are higher, the copays are 
higher. In fact, the copays are so much higher that some 
providers are seeing people walk away from those high copays, 
still leaving uncompensated care. These patterns are there.
    And I suppose some numbers--you know, we can extrapolate 
from some numbers and say, well, it could be a lot worse. I 
have a hard time standing in front of Nebraskans and telling 
them that, especially when they have experienced what I would 
say are pretty extreme situations relating to their finances 
and the increasing cost of health care.
    Mr. Holtz-Eakin, can you reflect a little bit on overall 
choices in health care? Do consumers have more plans from which 
to choose today than prior to this ObamaCare debate?
    Mr. HOLTZ-EAKIN. I don't have any numbers on that, but, 
certainly, the individual market in the exchanges, you are 
limited to four actuarial choices. And that is considerably 
different than many people had experienced, because we know 
they had plans that were essentially declared illegal, and that 
made them unhappy; they would have preferred to have them. So 
that limited their choices.
    Mr. SMITH. Uh-huh.
    Ms. Corlette, back to choices, if patients and providers 
could come up with something that they found amongst themselves 
as a good situation but did not comply with what planners in 
Washington, D.C., had in mind, do you see a path for 
accommodating those concerns?
    Ms. CORLETTE. Well, first of all, I find it kind of funny 
that people talk about this Washington-designed benefit--oh, 
pardon me.
    Chairman BRADY. I apologize.
    Ms. CORLETTE. That is all right.
    Chairman BRADY. Time has expired. Again, I would encourage 
you to be able to answer that, perhaps, in a future question 
or----
    Ms. CORLETTE. I can submit it in writing.
    Chairman BRADY. Yeah, that would be perfect. Thank you.
    Mr. Kind, you are recognized.
    Mr. KIND. Thank you, Mr. Chairman.
    I want to thank our witnesses for the testimony here today.
    And, Mr. Holtz-Eakin, let me start with you, because I 
think you were understating the significance as far as the 
individual-responsibility component of what this is at. Of 
course, there is the free-rider problem that we were trying to 
address. We were also trying to get at the guaranteed-issue 
problem, and that currently is a major problem in the 
healthcare system, but also the preexisting condition issue, as 
well, which would make it very difficult to make sure that 
people with preexisting conditions could get the coverage they 
need unless everyone is in. I mean, that is what makes Medicare 
so popular. Virtually every senior in Medicare has some form of 
preexisting condition, yet none of them are denied coverage.
    And I don't see how we can make that work unless you 
prohibited insurance companies from denying people who had a 
preexisting condition. Otherwise, if you do away with that 
requirement, the individual mandate, I think people are just 
going to sit around and wait until they do get sick or injured 
and then decide to go out and get healthcare coverage in their 
life. And there is no way any healthcare system could sustain 
that. There is no insurance pool that could sustain that.
    So, yeah, the free-rider and 3 percent issue is important 
to address, but I have a lot of rural hospitals, a lot of 
hospitals in Wisconsin who were complaining for years about the 
uncompensated care that they had to swallow or the cost-
shifting that had to occur because of the number of uninsured. 
And that uninsured rate has come down tremendously.
    But I also think Mr. Buchanan raised a very important 
issue. And, Mr. Chairman, I would suggest as an appropriate 
topic at a future hearing is for us to have another hearing on 
why there is cost-shifting going on within the healthcare 
system. Because, clearly, there is. And I think there are a lot 
of market forces and dynamics that are at play there.
    I think, Ms. Corlette, you are right. I think per-person 
spending on health care is at a 60-year low.
    The Congressional Budget Office, Mr. Holtz-Eakin, that you 
came from is consistently revising down their forecast on 
Medicare and Medicaid spending over the next 10 years. In fact, 
in the last year alone, over a trillion dollars' worth of 
savings since passage of the Affordable Care Act. And from 
January to March of this year, an additional $146 billion of 
less spending in Medicare and Medicaid over the next 10 years. 
That is moving the dial.
    When you look at the long-term unfunded financial 
obligations we face, most of it was being driven in the 
healthcare system. For those numbers to be coming back right 
now is a great untold story as far as our longer-term budget 
implications.
    But there is tremendous cost-shifting, and the average 
worker probably is seeing higher premiums, higher out-of-
pocket, higher copays. And I think some of that is unrelated to 
the actual expense within the healthcare system.
    And as long as we remain the only developed Nation in the 
world that relies on employer-based healthcare coverage for 
their workers, we will always get businesses complaining about 
healthcare costs, and we will always have employees complaining 
about the additional premiums and copays and out-of-pockets, 
that they are expensive. And so we have to make a decision as a 
Nation, whether we want to continue with this type of system or 
whether the rest of the developed world has figured something 
out that we haven't yet.
    But I am also getting tired, Mr. Chairman, of just having 
these hearings where you have one side that uses the Affordable 
Care Act as a convenient whipping post to score political 
points, the other side doing their best to defend it and 
highlight and accentuate the positive things that are 
happening. And I have to believe there is a lot of bipartisan 
overlap on issues that both parties can agree to, that we can 
work on together, some common ground.
    So let me end with that question, with you, Mr. Holtz-
Eakin, and then Ms. Corlette too. Do you see some areas of 
overlap that Republicans and Democrats share on changes that 
still have to be made within the healthcare system that we can 
start coming together on and working in a more positive 
fashion, rather than having these weekly hearings beating up 
ACA or defending ACA, which gets us very little traction as far 
as what we ultimately need to see happen in the healthcare 
system?
    So, Mr. Holtz-Eakin, let me start with you, and maybe you 
can take a crack at that. What are some areas of common ground 
here?
    Mr. HOLTZ-EAKIN. I think you just saw one of them, and that 
is the SGR repeal, which is just the leading edge of 
transforming Medicare into a social safety net program that is 
financially sustainable into the future and delivers better 
care.
    That involves, in my view, changing payment models not just 
to doctors but to providers broadly, getting much more 
coordinated care to our seniors, delivering care in what is a 
care-appropriate and cost-efficient setting, often in the home, 
using a variety of modern technologies. I mean, it is a 21st-
century Medicare system.
    That, to me, is the most potent force for genuine delivery 
system reform. The Medicare system is a big payer, and if we--
--
    Mr. KIND. I would agree with you on that. I think there has 
been a lot of bipartisan agreement, getting to a value- or 
quality-based reimbursement system. If you align the financial 
incentives right, I think you are going to see a lot of 
innovation, a lot of creativity in how to deliver those results 
at a much better price.
    Ms. Corlette, do you have----
    Ms. CORLETTE. Yeah, no, I actually completely agree. I 
think the Affordable Care Act, the idea was to get everybody in 
the tent. But the next big effort for policymakers is going to 
be healthcare costs.
    And we have been able to take a little bit of a breather 
because cost growth has been slower than anybody expected the 
last few years, but we can't, you know, be sure that that will 
be the case forever. So I think the next big challenge on both 
sides of the aisle will be tackling those healthcare costs.
    Chairman BRADY. Thank you.
    And, Dr. Holtz-Eakin, just for the record, were you 
proposing eliminating the preexisting-condition provision?
    Mr. HOLTZ-EAKIN. No. The----
    Chairman BRADY. You were talking about how to get to 
continuous coverage----
    Mr. HOLTZ-EAKIN. We are talking about alternatives, yes.
    Chairman BRADY. Alternatives. Possibly bipartisan 
alternatives.
    Mr. HOLTZ-EAKIN. Yes. I think, for example, if you did the 
continuous coverage, there is an incentive for people to get 
into the pool before they develop a condition, and they can be 
medically underwritten. And if there are still people who need 
to get covered, high-risk pools are a good alternative.
    Chairman BRADY. Got it. Thank you very much.
    Mr. Marchant, you are recognized.
    Mr. MARCHANT. Thank you, Mr. Chairman.
    Back in the 24th District in Texas, the Affordable 
Healthcare Act is not working. People in my district view it as 
a government intervention into their private and their business 
lives. And the number-one failure that they talk to me about is 
it has actually driven up the cost of their health care, which 
they were perfectly happy with before the Affordable Healthcare 
Act was passed into law.
    The biggest problem I hear from people is that it is 
costing them hours. Now, I have a very upper-middle-class 
district, but we have thousands and thousands of people that 
have had their hours cut back so that their employer no longer 
had to provide coverage for them.
    And now what we are finding out, once they have their hours 
cut, they have a loss of income. Then they are going to the 
exchange to try to struggle to find some kind of coverage, and 
they are finding that the coverage that is available to them, 
which is usually the bronze coverage, is actually a piece of 
paper that, de facto, doesn't provide them very much health 
care.
    In fact, they show up at the doctor's office or some of 
them are thoughtful enough to call ahead and say, I am coming 
in, here is the insurance I have, and, you know, what is the 
expectation, how much money should I bring. And what is 
actually happening is that people are finding out how much 
money they are having to pay and they are not coming, they are 
not going to the doctor. And if they go, they go in a 
catastrophic--they find themselves, they are in catastrophic 
situations where the $6,000 deductible actually is meaningful. 
And then the doctors and the hospitals are absorbing a fairly 
inordinate amount of uninsured cost, because they are actually 
having to pick up that first $6,000, because the people, they 
are basically indigent at that point.
    Yes, they have signed up for the Affordable Healthcare Act. 
They have signed up at the level that the subsidy is given to 
them. I think that the record will show, after the first couple 
of years, that people are not upgrading to the next plan up or 
the next plan up and they are just taking whatever is given to 
them.
    The other concern that I am beginning to hear from my 
constituents is that the penalties are about to ramp up. Now, 
$95, admittedly, was not much of a penalty at all to move 
people from point A to point B. And many of them weren't 
paying--they are not paying any income tax anyway, so $95 out 
of their tax return is not going to matter that much. But the 
next level we go to, I believe, is $325, and that is 2016. At 
that point, it is going to really begin to challenge people. 
And then, in 2017, it goes to $695 per adult.
    Mr. Holtz-Eakin, when we go to those kind of levels, what 
will be the effect on the participation in the affordable 
healthcare plan?
    Mr. HOLTZ-EAKIN. It remains to be seen. But, you know, 
those are all numbers that would suggest people have a greater 
incentive to get some sort of coverage, whatever it may be, 
and, you know, we should see the exchange numbers go up or the 
Medicaid participation increase, other things being the same.
    Mr. MARCHANT. And that increased participation, will it 
drive the costs up, or will it bring costs down?
    Mr. HOLTZ-EAKIN. When people are covered, they consume more 
health services, and it will drive up the national healthcare 
bill somewhat.
    Mr. MARCHANT. Okay. Thank you very much.
    Chairman BRADY. Thank you.
    Ms. Jenkins, you are recognized.
    Ms. JENKINS. Thank you, Mr. Chairman.
    And thank all of you for your testimony.
    I think this hearing is especially well-timed given that 
tomorrow is tax day. This is the first year that the taxpayers 
are facing the ObamaCare reckoning, if you will.
    Mr. Holtz-Eakin, after the President's unilateral delay of 
the employer mandate last year, I introduced legislation to 
offer the same tax and regulatory relief to individuals by 
delaying the individual mandate penalty, as well. 
Unfortunately, the President threatened to veto the 
legislation.
    When I introduced the bill, I was concerned that this 
confusing law was still misunderstood by many Americans and 
that, in addition to failing to enroll millions, it would also 
be a liability for millions more on tax day. And I think our 
experience shows this to be correct. I think you said 6-
million-plus Americans will pay the individual mandate tax 
because they did not enroll, while another 15 million to 30 
million will receive a hardship exemption.
    Mr. HOLTZ-EAKIN. Right.
    Ms. JENKINS. And, of those who did enroll, many are facing 
the reality of repaying Uncle Sam out of their tax refund to 
cover excessive subsidies given out by the exchange.
    HHS found that, of those selecting a health plan over the 
exchange last year, 87 percent were eligible for subsidies 
because of the high cost of the plans. H&R Block reported in 
February that 52 percent of folks who received a subsidy would 
be paying back at least a portion of that money to the 
government when they paid their taxes. People may have to pay 
back their subsidy for any number of reasons--they switched 
jobs, they got married, or incorrectly reported information in 
the first place. The Kaiser Family Foundation estimates that 
the average repayment will be $794.
    So, Mr. Holtz-Eakin, I was wondering, this tax scheme does 
seem expensive and burdensome, so I would just like you to give 
us some advice and counsel and reiterate, if you will, what are 
the key guideposts that this Committee should keep in mind as 
we work toward an alternative system.
    And I know one fellow Member asked about bipartisan 
solutions, and I am not particularly concerned about that. I 
want to know what the right thing to do is that focuses us on 
patient-centered coverage, to make it affordable, to get 
everyone covered, that still maintains our freedoms and our 
liberties without the harmful effects to the pocketbooks for 
individuals, families, businesses, or the American economy.
    Mr. HOLTZ-EAKIN. Well, I certainly believe that greater 
flexibility in the insurance offerings is step number one. And 
I think the large number of insurance regulations that were 
imposed overdid it and harmed the choices people would have at 
premiums they could afford. And so reexamining the essential 
health benefits, the community rating provisions, I think, is 
the place to go.
    In the end, you will have to have a system that is also 
much simpler. I did testimony in front of a Ways and Means 
Subcommittee last year on how complex the subsidy verification 
system is in the Affordable Care Act. It requires an enormous 
amount of information from individuals, their families, from 
employers and, you know, in my view, is probably four times as 
complicated as the EITC, which already has an error payment 
rate of something like 20 to 25 percent. And I am skeptical 
that even with the best functioning software we will ever 
really get this right.
    So a simpler way to deliver to the American people 
subsidies that many of them will in fact need and which, you 
know, people agree should be made available so they can afford 
insurance, that is an important thing for this Committee to 
look at, better ways to implement the subsidy systems.
    And then the most important thing is to be much more, I 
think, interested in healthcare reform, delivery system reform, 
allowing innovative delivery models to sprout across the land. 
Because that is where the cost is, in the end. Insurance just 
covers the cost of the care. The care costs too much; that is 
the problem. My concern with the Affordable Care Act is it is 
very much a top-down, let's pick a delivery system model and 
enforce it. That is a risky strategy.
    I would prefer to see, for example, a big reliance on 
Medicare Advantage, where there are lots of plans that cover 
lots of different geography and have real incentives to really 
coordinate care--that is where the accountable care 
organizations learned about care coordination--and to make 
those plans better and to, in the process, develop delivery 
systems that are cheaper and deliver higher quality care.
    Chairman BRADY. Thank you.
    Mr. Renacci, you are recognized.
    Mr. RENACCI. Thank you, Mr. Chairman. I want to really 
thank you for allowing me to be part of today's hearing.
    Many of the mandates contained within ObamaCare continue to 
concern many Members of Congress, business owners, and 
individuals, with good reason. These mandates are not only 
onerous, the rules surrounding them are opaque and sometimes 
contradictory.
    I am especially concerned about provisions of the law 
dealing with the calculation small businesses must perform in 
order to determine whether or not they are required to offer 
insurance to their employees and to which employees they must 
offer insurance.
    For instance, due to a misaligned statute in regulation, an 
employee for a business may be considered a seasonal worker 
while not at the same time considered a seasonal employee. This 
creates confusion for employers that are trying to obey the law 
but can't afford an expensive team of HR and tax professionals 
in order to ensure they are in compliance.
    This mismatch of policy also creates strange practical 
effects, in which an employer may be unable to rehire a 
seasonal worker to fill a temporary, short-term position 
without triggering a penalty.
    This issue, in particular, led me to introduce a bipartisan 
bill, Simplifying Technical Aspects Regarding Seasonality Act, 
or the STARS Act, H.R. 863. This legislation would provide one 
clear definition of ``seasonal employment'' rather than 
multiple definitions applied to different aspects of the ACA's 
employer provisions. This is just one example of a flawed 
mandate approach taken by ObamaCare.
    Mr. Holtz-Eakin, the contradictory definitions of 
``seasonal employment'' I mentioned could lead to individuals 
gaining and losing employer-sponsored coverage several times 
over the course of a year, a process known as ``churn.''
    Are you concerned that this could lead these individuals, 
through no fault of their own, to face either subsidy claw-
backs or penalties under the individual mandate? And are there 
negative effects caused by the churn?
    Mr. HOLTZ-EAKIN. Congressman, I think this is a very 
important issue. I am not going to pretend to have mastered all 
the rules on seasonality. We had a little quiz before the 
hearing to see if we knew the answer. Suppose I have 51 
employees, they only work for 119 days, so they are under the 
120, but they worked 13 hours every day. Are we obligated to 
offer them insurance? We think the answer is yes, but we would 
love to talk to you about it, as well.
    So I endorse, really, the effort to clarify this. It has 
bad business implications if you are churning your employees. 
You can't run a business if you have to turn everyone over. It 
is also bad for the employee's health care, because every time 
they churn through their insurance policy, they are likely 
getting a different set of providers and a different network. 
That is not good for their care. So this isn't a good situation 
for anyone.
    Mr. RENACCI. Yeah. Well, this is exactly one of the issues 
I think Mr. Kind talked about earlier. This is a bipartisan 
issue, a fix that we need to really make.
    Mr. Womack, you mentioned an example of uncertainty caused 
by these complex mandates. Do you have any idea of what that 
costs you as an employer?
    I mean, I was an employer also for 30 years before I came 
here. I actually had seasonal businesses, car dealerships. You 
name them, I seemed to be a part of them, including a CPA firm. 
And I still have a lot of contacts back home that are telling 
me the ability to try and justify and come up with these costs 
of time and whether you are full-time, part-time--can you tell 
us a little bit about some of the issues that you are running 
into?
    Mr. WOMACK. Well, you know, we struggled with the decision 
whether to offer coverage or not. I mean, we spent a lot of 
time looking at that. A lot of people in our industry have 
decided to not offer coverage or, as some have indicated, to 
cut back hours in their workplace, and we decided not to do 
that. But it was really a calculated risk on our part as to 
whether employees were going to sign up or not.
    As far as putting a dollar amount on it, I can't begin to 
tell you. I can tell you it did have an impact on my decision 
to sell my IHOP restaurants last year. Because, you know, when 
we had the opportunity to sell, quite frankly, it was something 
I jumped at. Because, you know, that part of the industry was a 
lot more labor-intensive, a lot more employees per dollar, and, 
you know, our concern was where this was all going to go.
    Mr. RENACCI. Thank you.
    Mr. Chairman, I yield back.
    Chairman BRADY. Thank you.
    Mr. Young, you are recognized.
    Mr. YOUNG. Well, thank you, Mr. Chairman, for allowing me 
to be part of this Subcommittee hearing. I don't typically sit 
on this Subcommittee.
    I want to thank all our witnesses, including Mr. Womack, a 
fellow Hoosier.
    I want to ask questions along the lines of the new 30-hour-
workweek definition of full-time employment under the 
Affordable Care Act. You are all familiar with the fact that 
the ACA redefines a full-time workweek from the traditionally 
understood standard of 40 hours down to 30 hours.
    And I have heard, as have all my colleagues, from 
employers, restaurants, you know, school, corporations, and 
others about the adverse impact of this, and not just on 
operations of an enterprise but on the workers themselves. 
Thirty-nine school districts in the State of Indiana have 
actually sued the Federal Government on account of this 
provision. Industries that employ low-skilled workers are 
particularly adversely impacted. Eighty-nine percent of workers 
impacted don't have a college degree.
    And just to give some sense of the hourly impact on wages, 
an employee going from 35 hours down to 29 hours is effectively 
receiving a 17 percent pay cut courtesy of this health care 
law. An employee going from 39 hours down to 29 hours is losing 
an entire workweek's worth of wages.
    So, Mr. Womack, as a restaurant owner, as someone who has 
owned businesses for a number of years, could you share with us 
the real-world impact of this new 30-hour standard on your 
business and perhaps speak to those who indicate that the 30-
hour threshold is having no impact on business?
    Mr. WOMACK. Well, as I just indicated, I have seen numerous 
other people in the industry, you know, seek to meet that 
threshold.
    It is interesting, my industry, in particular, you know, we 
have a lot of flexibility, and we can adjust to a lot of 
things, and we have done that. But, as you indicated, there are 
numerous organizations out there--school systems are a great 
example, universities and so on--where, you know, they have 
fixed budgets coming from their States and they don't have any 
flexibility. And so, you know, looking at this cost, they have 
had to make that cut. And we haven't done that.
    I have a bigger concern, you know, that by offering 
coverage to our pool of employees, we have gotten numerous 
comments from our staff saying, hey, the fact that you have 
offered me coverage now makes me ineligible for exchange plans, 
ineligible for subsidies for my dependents, and so on. That is 
a big gap there. And, you know, there are just a lot of people 
at the lower end of the income scale who cannot play in this 
healthcare economy----
    Mr. YOUNG. Yeah.
    Mr. WOMACK [continuing]. Even if they had the healthcare 
coverage.
    Mr. YOUNG. So there is a related burden on employers that 
we have heard much about, as well, and that is the reporting 
requirements associated with the ACA.
    And, perhaps, Mr. Womack, you could indicate any resources 
you have had to invest in on account of the reporting 
requirements and maybe even tell us how much time and money 
have been involved in these investments.
    Mr. WOMACK. Well, a tremendous amount of time.
    We have spent the last several years looking at how we were 
going to report. And when the requirement first came out, we 
kind of thought, okay, we think we can do that. And then what 
we found was the data was not readily available. We do our own 
payroll. We do our own accounting. You know, we have our own 
bookkeepers in house. And what we realized was the data wasn't 
sitting there in our system; we had to create it.
    And because of the requirement, the way it was written, it 
is literally something that has to be done on a monthly basis 
even though we are not doing it.
    Mr. YOUNG. So I come from a small-business family, and I 
know there is a limited pot of resources. And if they are 
diverted to do one thing as opposed to another, that has real-
world consequences.
    Where might you have otherwise spent these resources 
invested in compliance?
    Mr. WOMACK. Well, absolutely into additional payroll, into 
more people.
    Mr. YOUNG. More people.
    Mr. WOMACK. We are in a business where the more people we 
can put into our restaurants, the better we can perform. So we 
are constantly having to choose between, you know, the service 
that we give and other things in our budget.
    Mr. YOUNG. Thank you.
    I yield back.
    Chairman BRADY. Thank you, Mr. Young.
    I know some lawmakers in Congress, probably on both sides 
of the aisle, are tired of these hearings. But my guess is, Mr. 
Womack, you are probably tired of struggling with higher 
healthcare costs and trying to juggle the impact of this law on 
your business. And you are like so many others who are trying 
to do this.
    There may be only a few, frankly, businesses percentage-
wise that the mandate may hit directly, but I think it is 
probably 100 percent that are impacted by this law in some way 
and that they are making business decisions to that effect. 
Would you agree?
    Mr. WOMACK. Absolutely. Yeah.
    Chairman BRADY. Mr. Holtz-Eakin, I think we are looking for 
bipartisan solutions. You brought together today ideas on how 
we can continue important provisions like preexisting 
conditions but encourage continuous coverage in a way that is 
smarter, more tailored to what the worker or those who wish to 
be covered--would work better for them and lower the cost.
    Any words of advice as we wrap up the hearing?
    Mr. HOLTZ-EAKIN. Well, I would certainly encourage the 
Committee to look at those alternatives. I think we are 
increasingly finding that this system, whatever its intentions, 
is not working in a way that is best for the consumers of the 
health insurance products but also for the other participants 
in the healthcare system.
    And so I really think it is important to not stop here and 
to actually push forward to a much more efficient healthcare 
system that is really built from the ground up and allows a lot 
of choice on the ground.
    Chairman BRADY. Absolutely. Thank you.
    Ms. Corlette, I think, like Dr. McDermott, there are a wide 
range of opinions about why healthcare costs have slowed. There 
is no consensus that this is due primarily to the ACA. Most 
cite a combination of a pretty poor economic recovery so people 
are reluctant to spend, higher out-of-pocket costs for people, 
again, that drives down those healthcare costs, better or 
worse. And so I still think there is a great deal more to be 
seen before drawing the conclusion that 5 years of declining 
healthcare costs are due to the ACA. I just don't see that.
    And I had breakfast with some of our local hospitals over 
the break, and they told me that the fastest growing part of 
uncompensated care for them is not the uninsured, it is the 
underinsured. It is people who, frankly, have an ACA exchange 
plan but they simply can't afford the copays and deductibles. 
And I think that is a reality we have to deal with.
    Mrs. Black somehow raced back to the Capitol and made it in 
time for the hearing. As a new Member of our Committee and a 
valued leader in health care, Dr. McDermott and I are proud to 
give you the last question here today.
    Mrs. BLACK. Well, thank you.
    Mr. MCDERMOTT. He did a magnificent filibuster while he 
waited.
    Mrs. BLACK. And I am so grateful to both of you and to the 
panelists for giving me the opportunity to ask my question, 
because it is a little bit different than some the others have 
asked.
    And, Mr. Womack--and please excuse me if I am winded, but I 
ran that entire hall. It was pretty good for me.
    I wanted to ask you about the employer reporting piece. 
Because I am now hearing more and more about this and how it is 
affecting the employers in my district--in particular, the fact 
that the IRS was not very timely in getting the instructions 
out on even how to do this employer reporting. But my 
understanding is that these instructions are going to require 
pretty significant amounts of information about your employees 
on a monthly basis.
    Have you had any experience at this point in time with 
being able to make sure you are meeting that mandate? What is 
it taking? Have you had to hire additional people on, maybe in 
HR, to help you do that? Can you speak to that?
    Mr. WOMACK. Sure.
    We spent the last several years looking at this, and the 
disturbing thing to us was that the data didn't exist in our 
systems for that. And so we had to get with our accounting 
software firm that provides us the software, and they were 
doing this for several clients, but they had to build a new 
report for us that actually does calculations every month.
    You know, one of the wrinkles in this whole thing is, when 
someone comes on board in the middle of the year, it is an 
entirely different process than someone who worked the prior 
year. And that calculation just occurs over and over and over, 
to the extent that you are doing this monthly and then setting 
that data aside and accumulating it throughout the year.
    And it doesn't sound like a big deal until you realize that 
it is not, and I would have to illustrate this some other time, 
but it is not data that you already have. And, you know, we 
have our own accounting system, our own payroll system. So you 
would think that it would have been simpler if we had simply 
been able to say, this person is eligible and this person is 
not. But, instead, we had to do a whole host of other 
calculations.
    And, you know, basically, no one had this. All of the big 
payroll companies had to create it.
    And, you know, as I shared in my testimony, you know, the 
other concern I have is whether the Federal Government is ever 
actually going to be able to do anything with the data I am 
creating. It has to go to the IRS and then go to the exchange, 
and then someone has to connect the dots later on to see if it 
actually applies.
    Mrs. BLACK. So can you estimate or have you done any 
numbers to see what the cost of this was to you, in setting 
this up?
    Mr. WOMACK. I know we spent about $8,000 on the software, 
but it is literally hundreds of hours that we spent. And part 
of the problem, as someone else shared, was that we really 
didn't know what we were doing until recently. We spent a bunch 
of time trying to figure it out, and then we got conflicting 
information later. And it has been hundreds of hours.
    Mrs. BLACK. So the fact that the IRS didn't give guidance 
until February, and then you were responsible for starting to 
collect this information in January----
    Mr. WOMACK. In all fairness to the IRS, and I know it is 
hard to believe I would say that, but it is really the 
legislation, the big soup that was created in the legislation, 
that put the IRS in a very difficult position.
    Mrs. BLACK. And so it might be helpful if Congress were 
looking at that and listening to employers to figure out how it 
is that we might be able to help you out to be able to abide by 
the law, I would say.
    And I thank my colleague from Washington in mentioning that 
I am working on something that would really help to give some 
relief to our employers on that.
    And I think it is also interesting, as you related, that we 
are not even sure how this information is really going to be 
used, if the IRS or even if HHS has the ability to be able to 
use this information in a way that would say it was worth the 
money and the time that we are asking from our employers.
    Since you are an industry where, I would imagine, you have 
a number of part-time employees and a lot of turnover, is this 
going to affect you and those employees that you are giving 
insurance to? In trying to keep the records on people leaving 
and people coming, I would think that would cause an additional 
complication.
    Mr. WOMACK. Yeah. We have rolled with it, and we have 
figured out how to work it. It has taken a few years to do 
that. But it is definitely more of a burden.
    Mrs. BLACK. Well, I appreciate what you do for the 
employees that you have employed in your company. You are 
providing jobs for them. You are certainly someone who cares 
about them, obviously. You are providing insurance.
    And I think I am going to take away one thing that you said 
that I am going to keep in my mind and repeat when I am back in 
the district as I meet with the employers, that no agencies are 
going to bail you out when these additional costs are put on 
you, these mandates that you don't have a funding mechanism 
for.
    So thank you so much.
    Thank you again, Mr. Chairman.
    Chairman BRADY. Thank you.
    And, Dr. McDermott, would like to ask a followup question?
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    You suggest that there is too much detail, and it is not 
the usual HR kind of detail that you had to provide for the 
IRS.
    My assumption is that their rules and regulations were put 
in for you to give data so that they could pick up fraud, if 
people were trying to cheat. Is that correct?
    Mr. WOMACK. Absolutely.
    Mr. MCDERMOTT. Do you think that you could give data that 
would help them be able to do that?
    Because we all care about wasting money. We don't want 
money to be wasted on these subsidies. So if the subsidies are 
going to be there, we have to construct a system. Do you think 
that it is possible to make a system that would give them the 
data they need and make it possible for a business to fill it 
out?
    Mr. WOMACK. Yeah, I do. I think the issue is, if you do it 
on a monthly basis and then turn that data in literally 15, 16 
months later, you have really defeated the purpose. If we could 
have an annual-type eligibility and then rework the rules 
around that annual eligibility so that everybody knows, you 
know, January 1 what the status of a person is, that would just 
be wonderful.
    Mr. MCDERMOTT. And the correction would be done at the end 
of the year, whenever whatever happens.
    Mr. WOMACK. Correct. I mean, we are already in a situation 
where people are going to get to the end of the year and may 
have received subsidies that they shouldn't have gotten. That 
situation already exists. The difference is we are collecting 
all this information that is not useful, at least in my 
opinion, and then turning it in late.
    Mr. MCDERMOTT. Okay. Thank you.
    I hope, Mr. Chairman, we could have a hearing on Ms. Black's
 bill.
    Chairman BRADY. Thank you.
    I would like to thank the witnesses for their testimony 
today. There is a reason you have been asked back through the 
years; it is you are knowledgeable on a complicated issue. And 
we appreciate the insight very much.
    And we appreciate your continued assistance in getting 
answers to the questions that were asked where time may have 
run out.
    As a reminder, any Member wishing to submit a question for 
the record has 14 days to do so.
    If any Member submits a question to you, we ask for your 
timely response to that.
    With that, thank you for a good hearing.
    The meeting is adjourned.
    [Whereupon, at 12:01 p.m., the Subcommittee was adjourned.]
    [Submissions for the Record follow:]
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