    [House Hearing, 115 Congress]
    [From the U.S. Government Publishing Office]

         THE FAILURES OF OBAMACARE: HARMFUL EFFECTS AND BROKEN PROMISES

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

                                    HEARING

                                   before the

                            COMMITTEE ON THE BUDGET
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                HEARING HELD IN WASHINGTON, DC, JANUARY 24, 2017

                                   __________

                                Serial No. 115-1

                                   __________

               Printed for the use of the Committee on the Budget

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                            Available on the Internet:
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                            COMMITTEE ON THE BUDGET

                    DIANE BLACK, Tennessee, Interim Chairman
    TOM PRICE, M.D., Georgia             JOHN A. YARMUTH, Kentucky,
    TODD ROKITA, Indiana                   Ranking Minority Member
    MARIO DIAZ-BALART, Florida           BARBARA LEE, California
    TOM COLE, Oklahoma                   MICHELLE LUJAN GRISHAM, New Mexico
    TOM McCLINTOCK, California           SETH MOULTON, Massachusetts
    DIANE BLACK, Tennessee               HAKEEM S. JEFFRIES, New York
    ROB WOODALL, Georgia                 BRIAN HIGGINS, New York
    MARK SANFORD, South Carolina         SUZAN K. DelBENE, Washington
    STEVE WOMACK, Arkansas               DEBBIE WASSERMAN SCHULTZ, Florida
    DAVE BRAT, Virginia                  BRENDAN F. BOYLE, Pennsylvania
    GLENN GROTHMAN, Wisconsin            RO KHANNA, California
    GARY PALMER, Alabama                 PRAMILA JAYAPAL, Washington
    BRUCE WESTERMAN, Arkansas            SALUD O. CARBAJAL, California
    JIM RENACCI, Ohio
    BILL JOHNSON, Ohio
    JASON LEWIS, Minnesota
    JACK BERGMAN, Michigan
    JOHN J. FASO, New York
    LLOYD SMUCKER, Pennsylvania
    MATT GAETZ, Florida
    JODEY C. ARRINGTON, Texas
    A. DREW FERGUSON, Georgia

                               Professional Staff

                           Richard May, Staff Director
                      Ellen Balis, Minority Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held in Washington, D.C., January 24, 2017...............     1
        Hon. Diane Black, Interim Chairman, Committee on the Budget..     1
            Prepared statement of....................................     4
        Hon. John A. Yarmuth, Ranking Member, Committee on the Budget     6
            Prepared statement of....................................     8
        Grace-Marie Turner, President, Galen Institute...............    10
            Prepared statement of....................................    12
        Robert A. Book, Ph.D., Senior Director, Health Systems
          Innovation
          Network, LLC...............................................    24
            Prepared statement of....................................    26
            Dr. Book's response to questions submitted for the record   148
        Linda J. Blumberg, Ph.D., Senior Fellow, The Urban Institute.    35
            Prepared statement of....................................    37
            Letter submitted for the record..........................    92
        Edmund F. Haislmaier, Senior Research Fellow, The Heritage
          Foundation.................................................    95
            Prepared statement of....................................    97
            Mr. Haislmaier's response to questions submitted for the
              record.................................................   150
        Hon. Todd Rokita, Vice Chairman, Committee on the Budget,
          questions submitted for the record.........................   147

         THE FAILURES OF OBAMACARE: HARMFUL EFFECTS AND BROKEN PROMISES

                                  ----------
    JANUARY 24, 2017

                           TUESDAY, JANUARY 24, 2017

                              House of Representatives,
                                       Committee on the Budget,
                                                        Washington, DC.
        The committee met, pursuant to call, at 10:00 a.m., in Room
    1334, Longworth House Office Building, Hon. Diane Black
    [interim chair of the committee] presiding.
        Present: Representatives Black, Rokita, McClintock,
    Woodall, Sanford, Grothman, Palmer, Westerman, Johnson, Lewis,
    Bergman, Faso, Smucker, Gaetz, Arrington, Ferguson, Yarmuth,
    Lujan Grisham, Moulton, Higgins, DelBene, Wasserman Schultz,
    Boyle, Khanna, Jayapal, and Carbajal.
        Interim Chair Black. Welcome panelists. This hearing will
    focus on the failures of Obamacare, its harmful effects, and
    broken promises. We are having this hearing today to discuss
    the damage that Obamacare has done to patients, medicine,
    workers, and our economy. And after 6 years, no one can dispute
    that this law has been nothing but a series of broken promises.
    Patients have lost their doctors and their insurance plans,
    premiums and deductibles have skyrocketed, and small businesses
    have been forced to reduce their benefits and wages or put off
    hiring of new workers altogether.
        Obamacare was sold as a solution that would tackle one of
    the biggest problems in our healthcare system, the rising cost
    of insurance. In fact, President Obama promised this law would
    lower premiums by $2,500 a year for an average family. In
    reality, the complete opposite has been true. Average family
    premiums have risen by $4,300 and deductibles have risen by 60
    percent in the employer-sponsored market.
        For working folks across the country, more money out of
    their paychecks just to pay for health care makes life much
    harder. And what are Americans getting in exchange for these
    higher costs? Well, not much. Twenty million Americans have
    said that Obamacare just is not worth the cost or the trouble,
    choosing to pay a fine or to file an exemption instead. And for
    those who do have insurance, access to care has not improved.
        So, while our friends on the other side of the aisle may
    claim that Obamacare is increasing the number of people
    covered, the question we would ask is what kind of care are
    they receiving? For those pushed into a broken Medicaid system
    who are having to navigate the complicated Obamacare
    bureaucracy, they are not receiving the very best health care
    our Nation has to offer. And as a nurse for over 40 years I
    know that we can do better.
        Now I am sure the Democrats will cite the CBO study from
    last week that discusses what happens to coverage numbers if we
    repeal Obamacare. But what the CBO study ignores is any
    potential Republican ideas to reform the health care and expand
    access. And access to quality care is what so many people in my
    home State of Tennessee are lacking under this law.
        Let me give you an example. In our State, 28,000 people
    lost their coverage on a single day when Access Tennessee,
    which is a program that helps those that are in the risk pool,
    lapsed after the Obama administration decreed that it ran afoul
    of the Federal Government's top down requirements. Yes, in one
    day 28,000 people lost their insurance. This happened despite
    President Obama's claim that, ``If you like your plan you can
    keep it.''
        Now, premiums in our State are rising by an average of 63
    percent, and three-fourths of our counties only have one
    coverage option to choose from on the Obamacare Exchange. In
    five other States around the county, Alabama, Alaska, Oklahoma,
    South Carolina, and Wyoming patients only have one insurer in
    the marketplace to choose from. And if you only have one
    choice, then you are probably not going to find a plan that
    best fits the unique needs of you and your family.
        And for folks not living in the city or suburbs, Obamacare
    has been especially harmful. Since 2010, eight rural hospitals
    have been forced to close, further restricting choice and
    access. But the good news is that it does not have to be this
    way. We do not have to accept Obamacare failures and broken
    promises. And that is why our House and Senate have worked
    together in this new Congress to pass a budget that begins the
    process to repeal Obamacare and stop the damage that it is
    causing.
        And in the coming weeks, we will consider legislation that
    will roll back some of the worst aspects of this law, and begin
    laying a foundation for a patient-centered healthcare system.
    And we already have great ideas to build on. My Tennessee
    colleague whom I am very proud of, Congressman Phil Roe, a
    physician, has introduced the American Health Care Reform Act.
    And Congressman Tom Price has offered the Empowering Patients
    First Act.
        And last year, our House Republicans put forward a better
    way, 37 pages of reform proposals that we will act on this
    year. So, we have got a lot of hard work ahead of us and
    today's hearing will be another critical step forward. And that
    is why I am glad that today we will welcome some witnesses and
    get their ideas for improving health care for the American
    people.
        First, we have Grace-Marie Turner who is the President of
    the Galen Institute. Next, we have Dr. Robert Book, a Senior
    Director of the Health Systems Innovation Network. We also have
    Edmund Haislmaier, a Senior Research Fellow in Health Policy
    Studies at the Heritage Foundation. And finally, we have Dr.
    Linda Blumberg, a Senior Fellow at Urban Institute's Health
    Policy Center.
        Thank you all for taking time out of your busy schedules
    today to join us for discussion. Everyone on this committee
    looks forward to your knowledge and insight on what we can do
    to improve America's healthcare system. We are committed to
    rolling back the damage caused by Obamacare to achieving true
    healthcare reform by bringing the best minds together, which we
    believe we have done today. And always remembering to put
    patients ahead of Washington's bureaucracy we will succeed.
    Thank you, and with that I yield to the ranking member, Mr.
    Yarmuth.
        [The prepared statement of Interim Chair Black follows:]

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        Mr. Yarmuth. Thank you, Chairman Black. I want to join the
    chairman in welcoming our witnesses this morning. My Democratic
    colleagues and I are confused why the majority did not hold
    this hearing before rushing through a budget to repeal the
    Affordable Care Act and defund Planned Parenthood. However, we
    will use it as an opportunity to set the record straight about
    a number of things.
        The American people have made it clear they do not support
    repealing the Affordable Care Act. They rightly fear losing
    access to quality and affordable care, and know the
    consequences would be disastrous.
        Over the weekend, millions of people across the Nation
    rallied against the dangerous policies of the new
    administration, including threats to our health care. I know
    every one of my Democratic colleagues has heard from people
    whose lives have been transformed or saved because of the ACA.
    And there are hundreds of thousands of constituents in every
    Congressional district across the country who have benefitted
    from the law.
        Let me tell you about one of them, Steve Riggert, a
    constituent who recently wrote to me. Steve's daughter, Anna,
    was diagnosed with chronic pancreatitis at the age of 12 and
    has been hospitalized more than two-dozen times over the past
    10 years for a variety of reasons. From the beginning, Steve
    knew that Anna's serious medical problems would make getting
    health insurance difficult once she transitioned out of her
    parents' policy.
        When the ACA was enacted, he was immensely relieved that
    she could always get coverage even though she had a pre-
    existing condition. But the Republican plan to repeal the ACA
    has now left Steve feeling, and these are his words,
    ``helpless,'' ``petrified,'' and ``literally losing sleep.'' At
    age 64 and recently diagnosed with pancreatic cancer himself,
    he fears that he will not be able to help his daughter. To
    quote his letter, ``Repeal of all aspects of the Affordable
    Care Act would place everything I have worked for and those I
    care about in jeopardy.''
        Steve is one of many. There are a lot more. In fact, the
    Congressional Budget Office, as Chairman Black mentioned,
    estimates repealing the major coverage provisions will cause 32
    million people to lose health insurance. In the individual
    market, eventually, three-quarters of the U.S. population will
    have no access to an insurer, and premiums will double. But
    that is just the beginning.
        Under a full repeal of the law, insurance companies will
    once again be able to deny coverage based on pre-existing
    medical conditions, people with job-based insurance will face
    annual and lifetime limits on coverage and copays for
    preventive services, and seniors in Medicare will pay more for
    prescription drugs. Hospitals caution that repeal will increase
    uncompensated care costs, likely leading to service cuts,
    layoffs, or higher prices for everyone. Outside experts say
    repeal will result in 3 million lost jobs in 2019 alone.
    Republican governors are pleading with the Republican
    Congressional leadership not to go through with this repeal.
    Despite these warnings and despite the grave consequences, here
    we are.
        I expect my Republican colleagues today, as Chairman
    Black's already done, will wave around bills and claim they
    have a plan to replace the ACA. They do not. The reality is
    that in nearly 7 years, Republicans have yet to introduce a
    single bill that has the support of the majority of their
    conference, or comes close to matching the ACA's record of
    success.
        We will hear a lot of ideas today from my colleagues on the
    other side of the aisle. And I would wager that at the end of
    the day, these ideas will also fail to garner the majority of
    their conference, or come close to a plan that matches the
    ACA's record of success. They will also not comprise a plan
    that any American citizen could infer how it will change their
    lives or affect their lives. I will keep an open mind. I will
    ask questions and I look forward to hearing more from our
    witnesses. And I yield back the balance of my time.
        [The prepared statement of Mr. Yarmuth follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Interim Chair Black. Thank you, Mr. Yarmuth. Panelists, the
    committee has received your written statements and they will be
    made part of the formal record hearing. You will each have 5
    minutes to deliver your oral remarks. And Ms. Turner, you may
    begin when you are ready.

     STATEMENTS OF GRACE-MARIE TURNER, PRESIDENT, GALEN INSTITUTE;
      ROBERT A. BOOK, SENIOR DIRECTOR, HEALTH SYSTEMS INNOVATION
       NETWORK, LLC; LINDA J. BLUMBERG, SENIOR FELLOW, THE URBAN
      INSTITUTE, HEALTH POLICY CENTER; AND EDMUND F. HAISLMAIER,
      SENIOR RESEARCH FELLOW, HEALTH POLICY STUDIES, THE HERITAGE
                               FOUNDATION

                    STATEMENT OF GRACE-MARIE TURNER

        Ms. Turner. Thank you, Chairman Black, Ranking Member
    Yarmuth, and members of the committee for the opportunity to
    testify today on the impact of the Affordable Care Act. I plan
    to focus primarily on families, small businesses, and young
    people. While numbers of people have received health coverage
    through the Affordable Care Act, many more have felt personal
    harm.
        I know that you and many members of Congress, including the
    leadership, have provided assurances that those currently
    receiving coverage through the Affordable Care Act now, will
    have that coverage maintained as a safety net lifeboat while
    you build a bridge to new coverage that will protect people
    that are currently being harmed by the law, but also provide
    new patient-centered options for care and coverage.
        The cost of health care continue to be a primary concern. I
    rode with an Uber driver last week who said that he lives in
    Maryland and he has to work this second job to pay his $1,200 a
    month premium for himself, his wife, and his child. So, he says
    this is taking time away from my family, but I have to do it in
    order to provide them coverage. Many millions more are facing a
    similar fate and really are pleading for help.
        Young people have been particularly disadvantaged. The law
    requires that insurance companies charge them only 3 times less
    than older people. And this 3-to-1 age rating has meant that
    young people are required to pay 75 percent more for their
    coverage than someone just pre-Medicare age. The savings for
    somebody on Medicare or 64 years old, so just before Medicare,
    are only 13 percent.
        So what is happening is, young people are saying this just
    is not a good value. They are not purchasing from the coverage
    and they are not entering the pools that we need them in so
    that they can help balance out the risks. The ACA's employer
    mandate also is disadvantaging them and making it much harder
    to get that first real job, because it makes hiring them so
    much more costly.
        On families, NPR's Morning Edition had a self-employed
    consultant from Portland, Oregon saying he is just not going to
    buy health insurance in 2017 because his premium had shot up to
    $930 a month. A broker said, ``I have got clients saying the
    prices are nuts and I will not pay it. I will pay the penalty
    instead.'' The Congressional Budget Office had said, as you
    said, Madam Chairman, 21 million people would be enrolled in
    the exchanges as of this time and as of June 2016, but only
    about 10.5 million were. Many millions of people just do not
    see the value in this expensive coverage, particularly in the
    exchanges where premiums increased an average of 25 percent
    last year.
        In Kansas City, Warren Jones said that his coverage was
    $318 a month when he started under Obamacare in 2014. In 2017,
    his premium is going to be $716. So, it went up 46 percent. He
    said, ``My wages have not gone up close to that.'' In addition,
    many hundreds of thousands and millions of people lost the
    coverage they had now. But particularly egregious, I think, is
    those who were on the co-ops.
        The Congress provided $2.4 billion to provide the start-up
    funds for these cooperative health insurance plans. And all but
    five of them have failed, causing 800,000 people to suddenly
    lose their coverage because the plans were not able to, for a
    number of reasons, price their premiums properly. And then many
    millions of Americans have been impacted by the taxes; nearly
    two-dozen taxes, many of which go directly to the bottom line
    in increasing health insurance costs. Small businesses thought
    that they would be able to get relief, but the shop exchanges
    and small business tax credits that were supposed to help them
    were so complicated that they drew very little interest.
        And then, finally, on Medicaid. Brian Blase of the Mercatus
    Center said that in his research, 70 percent of Medicaid
    enrollees in the expansion were eligible for the program in
    pre-ACA rules. While many unintended consequences have resulted
    from the law, I think one of the saddest is how it has impacted
    vulnerable populations.
        Charles Blahous of Mercatus said that one of the results
    was to require the most sympathetic and vulnerable Medicaid
    populations, low income enrollees, pregnant women, children, et
    cetera to face more competition for health services from a
    marginally less vulnerable population--childless adults of
    somewhat higher income. A Louisiana Medicaid recipient told the
    New York Times, ``My Medicaid card is useless for me right now.
    It is a useless piece of plastic. I cannot find an orthopedic
    surgeon or a pain management doctor who will take Medicaid.''
        President Trump's Executive Order ordered the bureaucracy
    to try to provide people some initial relief but, of course,
    only Congress can really act to change the underlying law.
    Thank you, Madam Chairman. I look forward to working with you,
    members of your committee and hopefully both sides of the aisle
    in coming up with options to solve these problems.
        [The prepared statement of Ms. Turner follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Interim Chair Black. Thank you, Ms. Turner. Dr. Book, you
    are recognized for 5 minutes.

                      STATEMENT OF ROBERT A. BOOK

        Dr. Book. Thank you, Chairman Black, Ranking Member
    Yarmuth, and members of the committee. Thank you for the
    opportunity to share my research on the failures of the
    Affordable Care Act to achieve its goals. As well as the
    harmful and presumably unintended affects it has caused some
    reforms that can be enacted to make health care truly
    affordable for all Americans who seek it.
        Proponents of the ACA, both inside Congress and outside,
    promised that it would bring about lower health insurance
    premiums, better access to health care, lower healthcare costs
    for patients, lower total national health expenditures in part
    due to savings on administrative costs and non-profit co-ops,
    and most of all fewer Americans foregoing health care because
    they cannot afford to pay for it. In fact, the opposite has
    happened.
        Health insurance premiums have increased at record rates,
    especially but not only, for those who have to pay for their
    own coverage instead of getting it at work. More health plans
    than ever have narrow networks of providers limiting access to
    care in the name of saving money. Co-payments and deductibles
    are at all-time highs. And according to Gallup more Americans
    than ever say they have avoided or delayed obtaining health
    care because they cannot afford the cost. Clearly, having
    health coverage does not mean that one can actually obtain
    health care.
        In addition to paying record high premiums, families
    earning as little as $41,000 per year may have to spend as much
    as $14,300 out of pocket before obtaining any coverage for
    treatment of diseases or injuries. And even that coverage may
    be restricted to a very small network of providers.
        Despite all these factors making it more difficult for
    patients to access health care, total national spending on
    health care has continued to increase every year, both in
    dollars and as a percent of GDP. Administrative costs of
    insurance have increased as well, as the cost of establishing
    and operating the government-run exchanges vastly exceeded the
    savings to insurers by marketing through those exchanges.
        Most of the co-ops have shut down taking their taxpayer
    financed start-up loans with them. One reason the ACA was
    passed was that we were paying too much for health care and not
    getting enough in return. Clearly, we are paying even more and
    getting even less than ever before. The problems that plagued
    the healthcare system before the ACA are still with us, and a
    new layer of problems has been added.
        Another reason the ACA was passed was to save lives.
    Proponents said that thousands of people were dying due to a
    lack of health coverage. If that were true mortality rates
    should have decreased when the full provisions of the ACA came
    into effect; however, this has not happened. The Centers for
    Disease Control and Prevention recently reported that U.S. life
    expectancy dropped in 2015 for the first time since 1993. While
    this decrease might not be the fault of the ACA, there is
    certainly no increase in life expectancy or decrease of
    mortality, for which the ACA might take credit.
        Medicare beneficiaries face a separate set of new
    obstacles. For example, the ACA mandated a Federal program
    whose express purpose is to pay doctors and hospitals bonuses
    for providing less health care to seniors and the disabled. The
    canard heralded health insurance companies for decades that
    they are denying care to patients just to save money has now
    become the official policy of the Federal Government towards
    its own beneficiaries. And worse, they are co-opting providers
    of cures by paying them bonuses to deny care and say no.
        In addition, the promise of health coverage for all, even
    just coverage not care, has still not been achieved. On
    September 9, 2009 then-President Obama told a joint session of
    Congress that, ``There are now more than 30 million American
    citizens who cannot get coverage.'' The latest figures from the
    census bureau indicate that as of 2015 there were still 29
    million uninsured. Due to a change in definitions, these
    numbers might not be directly comparable, but it is quite clear
    that the ACA's goal of achieving coverage for everyone is far
    from being achieved.
        Last week, CBO issued an alarmist report on a possible ACA
    repeal predicting, based on March 2016 data, that many people
    would lose coverage and premiums would increase if, as the
    report put it, portions of the ACA would be repealed. To get
    this result, the CBO assumed that all the ACA provisions that
    made coverage expensive and difficult to obtain, would remain
    in place, but that subsidies to pay for insurance in the
    individual mandate would be repealed. This is a straw person
    argument because it is not anyone's idea of how to reform
    health care. Furthermore, this report was based on data
    obtained before 2017 premiums and enrollment data were
    available. And, in fact, most of those premium increases they
    predicted have already occurred, even under the ACA.
        In order to make health care accessible and coverage
    affordable, it is necessary to eliminate those factors that
    artificially increase prices without improving care or
    benefitting patients. It is imperative to repeal provisions
    requiring people to purchase health plans that include costly
    coverage for services they do not want, will not need, or will
    not use. People should be permitted to purchase comprehensive
    coverage if they so choose, or basic coverage if they so
    choose. Furthermore, if subsidies are to be given, they should
    be structured in such a way to encourage health insurers to
    provide coverage for individual's pre-existing conditions by
    basing subsidies on health status rather than merely on income.
        Thank you very much and I look forward to your questions.
        [The prepared statement of Dr. Book follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Interim Chair Black. Thank you, Dr. Book. Dr. Blumberg, you
    are recognized for 5 minutes.

                      STATEMENT OF LINDA BLUMBERG

        Dr. Blumberg. Chairman Black, Ranking Member Yarmuth, and
    members of the committee thank you for inviting me to testify
    today. The views that I express are mine alone and do not
    represent the views of the Urban Institute, its funders, or its
    sponsors.
        The ACA is an imperfect law, but it has generated
    substantial benefits since its full implementation in 2014.
    Including increasing insurance coverage by over 20 million
    people, improving access to care and affordability, prohibiting
    insurer discrimination against the sick, catalyzing insurance
    market price competition in many areas for the first time,
    lowering the growth in per capita healthcare spending, and
    doing all this with virtually no evidence of negative effects
    on employment.
        Our analysis and that of the CBO indicates that repeal of
    the ACA through the reconciliation process without a
    replacement plan would leave the U.S. Healthcare System worse
    off than would have been the case if the ACA was never passed.
    It would lead to an increase of 29.8 million uninsured in 2019,
    nearly doubling the uninsurance rate from 11 percent under the
    ACA to 21 percent.
        The non-group market would virtually collapse due to the
    loss of predominantly healthy enrollees when the individual
    mandate and financial assistance were eliminated, while the
    rules that prohibit insurer discrimination against those with
    health problems remained in place. Unsubsidized premiums would
    increase dramatically and three-fourths of the population would
    not have any insurer selling non-group coverage in their area.
        Over 10 years, there would be an increase of $1.1 trillion
    in uncompensated care that would be sought from healthcare
    providers due to the large increase in the uninsured. But there
    would be no obvious source to finance this additional care.
    Likely, it would result in much greater financial pressures on
    hospitals and other healthcare providers, and much more unmet
    medical need for households.
        This scenario is realistic since opponents of the ACA have
    not coalesced around a replacement policy. And doing so would
    require raising significant new revenues, making dramatic cuts
    in existing programs, or increasing the deficit while earning
    some Democratic votes, all of which are very politically
    challenging.
        Contrary to some public statements, non-group insurance
    markets under the ACA are not in a death spiral. Market
    experiences vary a lot across the country. About 40 percent of
    the population lives in areas where low cost silver premiums
    decreased or increased only modestly in 2017. But about 40
    percent of the population does live in areas with 2017 premium
    increases of 20 percent or more; in most cases though, these
    increases represent adjustments to underpricing by insurers in
    the early years of reform. In these cases, high growth rates do
    not mean high premiums.
        In other cases though, premiums are high because of the
    market power of providers and/or insurers or adverse selection
    into the non-group market. However, policy strategies many of
    which have had bipartisan support in other context could be
    used to address these situations. And I will come back to that
    shortly.
        This evidence and still increasing enrollment show that it
    is simply not true the marketplaces are in a death spiral.
    However, a death spiral would occur under a repeal via
    reconciliation or by maintaining the ACA, but neglecting the
    important administrative tasks that are required for the system
    to continue to operate effectively.
        The replacement proposals delineated by members of Congress
    thus far fall firmly in the philosophical camp of reducing the
    sharing of healthcare risk, separating expenses of people with
    significant healthcare needs from those who are healthy. These
    approaches may well reduce premiums for those who are currently
    very healthy, but they all would reduce access to adequate and
    affordable medical care for people with greater needs.
        The proposals would also do much less for those with lower
    incomes. These strategies include such policies as expansion of
    health savings accounts, replacement of income-related tax
    credits and expanded Medicaid eligibility with age-related tax
    credits, sales of insurance across State lines, continuous
    coverage requirements, and traditional high-risk pools.
        Faced with a very challenging political reality, policy
    makers should consider fixing the major problems they have with
    the ACA rather than repealing it. The following policies would
    address critics' concerns and also strengthen the law.
        Replace the individual mandate with a modified version of
    the late enrollment penalties currently used in Medicare parts
    B and D. Eliminate the employer mandate. Replace the Cadillac
    tax with a cap on the tax exclusion for employer insurance with
    some adjustments. Improve affordability by increasing premiums
    and cost sharing assistance and extend an 8.5 percent of income
    premium cap to those with incomes above 400 percent of the
    poverty level.
        Doing this, would allow you to loosen the 3-to-1 age rating
    bans. Stabilize the marketplaces by taking steps to increase
    enrollment, including more outreach in enrollment assistance,
    and allowing states to expand Medicaid up to 100 percent of
    poverty instead of 138 percent.
        Address the effects of insurer and provider market power on
    non-group premiums by capping provider payment rates for non-
    group insurers just like the Medicare Advantage Program does.
    And create a permanent reinsurance program to protect non-group
    insurers from very high cost cases just as Medicare Part D and
    Medicare Advantage have. This approach would avoid the turmoil
    of repeal and replace for households, healthcare providers,
    insurers, and State governments, and would protect access to
    affordable adequate care for all individuals regardless of
    health status or income.
        Thank you very much. And I look forward to your questions.
        [The prepared statement of Dr. Blumberg follows:]

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        Interim Chair Black. Thank you, Dr. Blumberg. Mr.
    Haislmaier, you are recognized for 5 minutes.

                     STATEMENT OF EDMUND HAISLMAIER

        Mr. Haislmaier. Thank you, Madam Chairman and Mr. Yarmuth,
    ranking member. I have submitted, of course, testimony which I
    will briefly summarize. I am a senior research fellow in Health
    Policy at the Heritage Foundation and the testimony is my own
    and is not, and should not, be construed as an official
    position of the Heritage Foundation or anyone else.
        I am testifying in response to the committee's request to
    present the analysis of health insurance enrollment data that I
    have been conducting; basically looking at the areas that have
    been most affected by the key provisions of the Affordable Care
    Act. That would be the expansion of Medicaid and the
    introduction of subsidized coverage through the exchanges for
    the individual market and the related rules governing the
    individual and employer market, particularly the small employer
    market.
        I should note, very briefly, that this is data that I am
    using that is drawn from regulatory filings that insurers make
    in the case of the private market with State regulators. In the
    case of Medicaid, this is data reported by the states to the
    Centers for Medicare and Medicaid Services, which publishes it.
    That data is done periodically though in the case of the
    private market, quarterly in the case of the Medicaid data
    monthly though the best and most comprehensive is on an annual
    basis.
        When you look at the experience that we have seen in the
    first 2 years, 2014 and 2015, we saw a growth in the individual
    market from a base of 11.8 million people at the end of 2013,
    that was pre-ACA. We saw a growth to 17.7 million people in
    that market. In the employer coverage market, we saw two things
    fully insured, that is plans where the employer buys the
    coverage as a group policy from an insurer. Fully insured
    employer coverage declined from 60 million to 53 million. At
    the same time, self-insured employer coverage, and those tend
    to be larger employers, grew by 4 million.
        The net of those three interactions on the private market
    was a net increase over 2 years of 2.3 million people with
    private market coverage. In comparison, over the period, you
    saw an increase from 60.9 million to 72.7 million in total
    Medicaid enrollment. So what that leaves us with is a net
    growth of enrollment in those 2 years of 14 million of which
    almost 84 percent was in Medicaid.
        Now, when we turn to 2016, we do not have full year data
    yet for either of these programs. But we do have some initial
    data for the first three quarters. And what we see is a growth
    of a further 842,000 people in the individual market, a further
    decline of 1.1 million in the fully insured employer group
    market, a further increase of 776,000 roughly in the employer
    self-insured market, and a further 2 million increase in
    Medicaid enrollment.
        Again, these are preliminary figures. But it looks like by
    the end of 2015 we, 2016 sorry, we can reasonably project that
    over the course of the 3-year period, health insurance
    enrollment will have expanded by about 16.5 million
    individuals. Of which 13.8 million would be attributable to
    public coverage, Medicaid and CHIP, and the other 2.7 million
    to private coverage.
        What does all of this mean? In general, what it means is
    that the experience of the ACA appears to have had three
    significant effects. It has increased the number of people
    covered by individual market insurance. But a lot of that has
    been offset by a decline in employer provided insurance. And it
    has principally produced enrollment increases through an
    expansion of public programs, particularly Medicaid, and
    particularly in those states that adopted the ACA expansion to
    able-bodied adults.
        I will be happy, Madam Chairman, to answer any questions
    the committee may have. Thank you.
        [The prepared statement of Mr. Haislmaier follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Interim Chair Black. Thank you, Mr. Haislmaier, excuse me.
    We will now begin our question and answer session. I will start
    by, first of all, again thanking all the witnesses for being
    here and asking some questions.
        Again, by saying as a nurse for over 40 years, what I am
    really concerned about and as folks in my district call me and
    tell me the stories that are just so disheartening to me about
    their access to quality care and affordability. It really just
    bothers me terribly to know that there are some folks, as I
    said in my opening statements, that liked what they had and
    were not able to keep it. In particular, the high-risk patients
    in our State who were on a plan that the State had set up
    themselves and people were happy about it. And in one day,
    28,000 people, with some pretty serious conditions, were out of
    care.
        But let me also go to some statistics. Let me first of all
    talk about the cost, the rising cost, because we hear this
    every day in our office; 25 percent average increase in
    premiums this year for millions of Americans that are trapped
    on the exchanges. There was a lady in Tennessee who runs a
    daycare center, and she was on the exchanges, and her
    deductible went from $2,000 to $9,000 this last year. There is
    no way someone running a daycare business can afford that.
        One trillion dollars in new taxes mostly falling on
    families and job creators have really hurt people in what they
    are able to do in their life besides just their health care. It
    really has hurt them.
        How about choice? Nearly one-third of the U.S. counties
    have only one insurer offering the exchange plans. In our State
    three-fourths of our State only has one option. That is not
    choice--that is a monopoly. We also see 4.7 million Americans
    kicked off of their healthcare plans by Obamacare.
        And finally, I think you mentioned it, Ms. Turner, is the
    fact of the failed Obamacare co-ops. We had a co-op in our
    State that went belly up and this is a cost to the taxpayers of
    $1.9 billion, billion dollars not million, forcing many of
    these patients to try to find new insurance. And if I could
    have the staff pull up slide number 5, this is particularly
    disturbing to me because, let's go back to the one with the
    hospitals, yeah there.
        Hospitals who have been forced to close under the
    Obamacare, these are rural hospitals; 50 percent of my district
    is rural. If you can look at Tennessee, you will see a number
    of Hs, hospitals who have closed in my district. Now, when that
    happens if someone has an emergency, such as a heart attack,
    they are about 40 minutes from the closest hospital because
    their small rural hospital has closed.
        This is devastating to communities not just for care that
    is provided, but also for recruiting businesses, because one of
    the things that new businesses will ask is, ``Where is your
    health care?'' They want to know that there is health care in
    that community. This has really been devastating and I think
    that we cannot discount these real stories that come to our
    office and just break my heart that that is what is occurring.
        So, let me ask you, Mr. Haislmaier, Obamacare really
    focused almost exclusively on coverage--we saw that as they
    were pushing people into the computer to sign up for that--
    while neglecting the cost and the access of care. It was just,
    ``Let's get as many people signed up as we can so we can say
    that this program was successful.'' If health insurance does
    not cover the care you need, or if you cannot afford the
    deductibles that come with your plan, or you do not have
    access, then is not the number of people that are covered
    really meaningless?
        Mr. Haislmaier. Sorry, it is true that the authors of the
    legislation prioritized enrollment over cost control, which I
    think is one of the reasons the public was never sold on the
    bill, because most of the public wanted the reverse; they
    wanted cost control prioritized.
        In terms of the deductibles and the coverage, the argument
    had been made, indeed, by advocates of this law that insurance
    with high deductibles was of less value; some even called it
    junk insurance. The interesting thing is that that is what this
    law has produced. The reason for that is pretty
    straightforward. We saw that in other states that had adopted,
    in the 1990s, similar measures, and that is when the law limits
    what dials the insurers can turn, they reach for the only dials
    that are left. In this case, the only dials really left are to
    raise the deductibles as much as you can and/or to limit the
    networks, and that is what we have seen progressing in the last
    several years in plan design in the exchanges, yes.
        Interim Chair Black. Ms. Turner, you talked about some of
    young folks. I know that there are about 20 million Americans
    who have said that Obamacare just is not worth the cost; they
    have either paid the fine--which really is just almost funny to
    me where the whole idea of this is to make sure everybody has
    coverage, and what is more important is now you are paying
    fines for something you are not even going to get coverage on,
    and then there are another group of people that filed an
    exemption.
        So, we have got 20 million people out there who maybe would
    have had access to health care, potentially, insurance, but now
    the cost of it is so high that they neither have the access to
    the health care, nor do they have a dollar in their pocket
    because they are paying a fine. Could you talk a little bit
    about that?
        Ms. Turner. Well, as you say, Madam Chairman, it does
    really go against the purpose of the law and I know that many
    of the policy proposals that you and others have advocated
    would provide incentives for people to buy the coverage, and of
    course, the most important incentive is to make it more
    affordable.
        One of the reasons that the coverage is so expensive is not
    only because of the 3-to-1 age rating ban that is so
    disadvantageous as young people, but also because of the
    benefit requirements that are so much more generous than most
    people could afford. I think those are two specific things to
    look at in addition to the taxes that really go the underlying
    cost mechanism of the law. Getting the costs down would provide
    the incentive for people to purchase coverage.
        Interim Chair Black. I think it is interesting, when we
    talk about 20 million--and that number moves all over the
    place, but let's just use 20 million--that 20 million people
    have received insurance. We look at the other side; there are
    20 million people who have not received it but either are
    exempt or who have paid the penalty. I do not know that we need
    to hurt one group to help the other. I think that we probably
    can get to the place where we have a true patient-centered
    care, and that we are helping everyone. I know, Dr. Book, I am
    going to just leave you about two and one-half minutes. But as
    we prepare legislation in this area that truly is patient-
    centered reform, what is the biggest lesson from the Obamacare
    experience that we can learn? And then, if you have a second to
    tell us if there is anything that you think we ought to take
    from it that would also help us to make sure that we take out
    what is good.
        Mr. Book. Thank you. I think the biggest thing to learn is
    that when Washington tells people what they need to buy, that
    does not necessarily make those people better off. The main
    reform I would suggest, though, one thing that we all want, is
    not to exclude people, make it impossible for people with
    preexisting conditions to get coverage.
        I myself had multiple preexisting conditions when I left my
    previous employer and had to go and buy my own insurance, and
    this was before the ACA reforms took effect. I had no problem
    getting insurance. I did have to pay for it, more than the
    average person, but I had no problem getting it, and that was
    under a law that was passed at least a decade before.
        On the other hand, now that Obamacare is in effect, I am
    paying two and one-half times as much for my premium and my
    deductible has gone from $2,400 to $7,000; my out-of-pocket is
    $13,000; and I am one of those people that was supposed to be
    helped by the bill as a self-employed person who pays for his
    own insurance and has preexisting conditions. I think we need
    to adjust the way we do subsidies.
        Right now, we subsidize insurance companies for covering
    people who have low incomes. There is nothing necessarily wrong
    with that, but people with low incomes are not necessarily the
    same as people with health problems. Obviously, there is
    overlap, but they are not all that well correlated. I think we
    need to incentivize companies to cover people who actually have
    adverse health status. We do that in the Medicare Advantage
    program using something called risk adjustment.
        There is a risk adjustment provision in the ACA, but it is
    completely different; it just moves money around between
    insurance companies without any reference to the health status
    compared to the underlying eligible population. If we did a
    risk adjustment that was based on the eligible population, I
    think we could solve the preexisting condition problem without
    forcing insurers to charge more to everybody else. That would
    be my primary suggestion.
        Interim Chair Black. Thank you very much. I now recognize
    the ranking member from Kentucky, Mr. Yarmuth, for any
    questions.
        Mr. Yarmuth. Thank you, Madam Chairman. Thank you all for
    your testimony. It occurs to me that what we have basically
    just heard, in the aggregate, is our biggest complaint and
    observation about this debate in recent weeks and months, and
    that is, we spent a lot of time hearing about the problems with
    the ACA and very little hearing about the alternatives, if I am
    going to characterize all the testimony.
        Now, Dr. Blumberg gave a number of suggestions; by the way,
    I would say, Dr. Blumberg, every one of those could be
    implemented by this Congress acting. And eliminating the
    employer mandate, for instance, could be done by this Congress.
    There has been no suggestion from the Republican side of doing
    that, and that is kind of where we have been over the last 6 or
    7 years, is that while we have seen problems arise, Republicans
    have been unwilling to address problems.
        Instead, they have just said, ``Let's repeal it,'' and they
    have done that 65 times in the House. Anyway, Ms. Turner, in
    your testimony, I guess you could infer that you would
    recommend doing away with the employer mandate since you said
    that was a problem, but beyond that, you really do not offer
    any solutions.
        Dr. Book had seven pages of criticism of the ACA and
    identifying problems and then three paragraphs of solutions,
    one of which is two provisions to be repealed and then
    mentioning the question of the high-risk population which, I do
    not know, I would characterize it as just another form of a
    high-risk pool; you just change the mechanism for government
    financing of high-risk patients. And Mr. Haislmaier had no
    particular recommendations which probably makes sense since the
    Heritage Foundation was the originator of the idea of the
    Affordable Care Act, much of it. This is why we are so
    frustrated, because this Congress and this President have said,
    ``We are going to repeal it; that is first priority'' and
    really there are no ideas for replacing it.
        Now, I have my opinion about that and I have said it many
    times: There are only, in my opinion, two alternatives to the
    Affordable Care Act. One is to go back to where we were, where
    insurance companies decided who lived and died, and single-
    payer, Medicare for everyone. The other solutions that have all
    been proposed are just tweaks of the Affordable Care Act and
    that is why we keep saying there is no plan. There are ideas.
    Health savings accounts; that is an idea. Selling insurance
    across State lines is an idea. It is also allowed under the
    Affordable Care Act, but this is not a plan.
        That is, again, a lot of my frustration, but I am also
    frustrated about the way we talk about this and debate it,
    because we all have anecdotes. I mentioned an anecdote in my
    opening statement; the chairman has mentioned anecdotes. In my
    State, which has probably done the best job of expanding
    Medicaid of any State in the country, we have reduced the
    uninsured population by 60 percent; 440,000 people signed up
    for Medicaid as part of the expansion, and yes, some of them
    probably would have qualified before, but not all of them, by
    any stretch. We do not have any complaints about access to
    providers.
        As a matter of fact, if you look at virtually every
    category of care--preventive health, screenings, dental visits,
    vision visits, just about every one you can mention, we have
    had a more than 100 percent increase in that activity in our
    State, so our State is getting a lot healthier.
        It is also kind of frustrating--here where we tend to get
    in the weeds a lot--we hear the statistic all the time ``one-
    third of the counties in the United States have one provider.''
    I would say one-third of the counties in the United States do
    not have enough people to support more than one provider. I
    mean, that has to be a factor in that statistic. But again, it
    sounds pretty doom-and-gloom. The Chairman mentioned 80 rural
    hospitals closing since 2010. We passed the Affordable Care Act
    in 2010; I would be interested in knowing how many of those
    hospitals have closed in the last 2 or 3 years because in my
    State of Kentucky, what we have heard is that rural hospitals
    have been saved by the ACA.
        As a matter of fact, we had a hospital in Morehead,
    Kentucky--not in my district--which was on the verge of
    bankruptcy. Because of the ACA and because the population that
    that hospital serviced was largely a very, very poor and
    unhealthy population, now they are getting compensated for the
    care they were not getting compensated for, and they have now
    built a big professional office building, the hospital is doing
    fine, and we hear that story time after time. So, again, we can
    all cite anecdotal situations that support our point of view,
    but we need to be balanced in that.
        I have a question, Dr. Blumberg. Several of the replacement
    plans that we have heard about--Dr. Price's and several
    others--seem to be at least focused on certain common elements,
    and one of them is a tax credit. In Dr. Price's plan, for
    instance, you can go out and buy insurance that provides tax
    credits that vary only by age, and it goes from $900 to $3,000
    per person. Do you have any idea what kind of coverage in
    today's market you could buy for $900 to $3,000 a person?
        Ms. Blumberg. Well, we have recently done some estimates.
    What the goal was, was to construct a package; we assumed five-
    to-one age rating, as many of those looking for replacements
    are leaning that direction with the age rating. We tried to
    construct a package that would allow an individual of any age--
    so, any adult from 18 to 64--to buy a particular package with
    the tax credit that was offered under the Price plan by the
    different age categories.
        The most generous plan that we were able to construct that
    brought in everybody of those ages with that amount of money
    was a plan that would require the individuals to spend the
    first $25,000 in health expenses, so a $25,000 deductible for a
    single; $50,000 for a family. We found that we had to take out
    coverage for drugs that were not generic, so only generic is
    covered. That excludes chemotherapy drugs; it excludes
    insulin--those are not generics--a number of other expensive
    drugs for chronic illnesses.
        We had to exclude coverage for outpatient mental health and
    substance use disorder treatment. We had to exclude physical
    therapy, occupational therapy, speech therapy, and
    rehabilitation care. Now, you could structure this somewhat
    differently, but you are bound and constrained by the math. So,
    you could provide some coverage up front and then far less at
    the back end. You could fill a little bit with which of the
    benefits that we included or excluded, but you are quite
    constrained by the amount of money.
        Mr. Yarmuth. So, let me get you to repeat that. We would be
    talking about $25,000 per insured in deductibles, $50,000 for a
    family, and elimination of a substantial amount of the coverage
    that a policy under the Affordable Care Act would provide?
        Ms. Blumberg. That is correct.
        Mr. Yarmuth. I appreciate that. One thing, while we are on
    the subject of costs, that I think we need to mention is that
    while costs have gone up--and by the way, the year before we
    passed the Affordable Care Act, I think insurance policies
    across the country, rates were going up 38 percent; I know they
    were in California, they were in Kentucky, they were in
    Connecticut; that was a strange number, but that 38 percent
    seemed to occur in a lot of places.
        After the Affordable Care Act has now been in effect for 5
    or 6 years, we have seen the lowest rate of growth in insurance
    costs and in Medicare expenditures and in Medicaid that we have
    seen in modern history. Medicare, I think, is down to about 2
    percent annual growth. Private insurance is around the 2
    percent level. So, while, yes, costs are still going up in the
    system, the improvement has been rather dramatic. Is that your
    assessment as well, Dr. Blumberg?
        Ms. Blumberg. Yes, what we know is that per capita spending
    in national health expenditures has grown much more slowly than
    had been anticipated prior to implementation of the Affordable
    Care Act. Certainly, some of that is attributable to the Act
    itself and some of it is from other economic and structural
    changes, but that certainly is the case.
        Mr. Yarmuth. And finally, I think it is interesting that
    several of you said the ACA focused largely on coverage, which
    was certainly one of our goals, but the changes that were made,
    again, with protections for people who already have insurance,
    the changes in annual and lifetime limits, the removal of those
    limits, allowing young people to stay on their parents'
    insurance policy until 26, these had nothing to do with people
    who did not have coverage. This was people who already had
    coverage, and also the improvements we made in Medicare,
    reducing the costs of prescription drugs in Medicare, getting
    free preventive care, annual wellness visits.
        There were a lot of improvements that have been made for
    patients who already had care one way or another.
    Unfortunately, we did not talk about them, and that is the main
    reason, I think, that the Affordable Care Act has not been as
    popular over the last few years as it otherwise would be. Thank
    you very much, Madam Chairman. I yield back.
        Interim Chair Black. I thank the ranking member. I do feel
    that I do need to make a statement here. When we talk about
    these scenarios that we talk about, anecdotal scenarios, these
    are real people; 28,000 people in my State, who were sick
    people that were in a risk pool that liked it, lost their
    insurance in one day because it did not meet all the criteria
    that Washington said it needed to meet. I want to tell you,
    before I came here last week I got a call from one of my
    constituents who has lupus. She had lost her insurance when
    that day occurred. She is now on the exchanges.
        She is unable to use the doctor that she has used for years
    to control her lupus. There is only one provider of the
    insurance company in her area. So, now she lost her doctor; she
    cannot take the same medication that she was taking previously
    that helped control her condition for years; and now her costs
    have gone up to the point where she said, ``I have got to pay
    it; I cannot do anything else or I am not going to be able to
    function.''
        These are very real faces that we are talking about. These
    are not stories that are made up. These are very real lives,
    and we have got to change that so that people can have their
    lives. With that, Mr. McClintock from California, you are
    recognized for 5 minutes.
        Mr. McClintock. Thank you, Madam Chairman. The thing about
    Obamacare is you really cannot spin one way or the other. To a
    greater or lesser extent, every family in America has had an
    up-close and personal experience with it. I think any
    politician that tries to convince them that their experience is
    different than what they know is going to look downright
    foolish.
        The polls tell us most Americans do not like it. This was a
    prominent issue in the last three congressional elections in
    which the Democrats lost a net of 67 U.S. House seats. This
    Congress has a mandate to deal with it to relieve families of
    its burdens, to fix the underlying issues that spawned it, and
    restore what was once the finest healthcare system in the
    world.
        There are basically two options that we have. One is to
    repeal it in its entirety and immediately replace it with the
    patient-centered free market reforms that the Chairman
    referenced earlier; restore to people the freedom to choose a
    plan that best meets their own family's needs from a vast
    market that is competing with each other to provide better
    services at lower prices and to, through the tax system, assure
    that every family has at least a basic plan within their
    financial reach. That is one option.
        There is another option that we seem to be pursuing, and
    this is what I want to drill down on in my questions, and that
    is to repeal parts of Obamacare with reconciliation and through
    administrative action, and then rely on follow-up legislation
    to finish the job. Reconciliation would bypass the 60-vote
    closure rule in the Senate; the follow-up legislation cannot,
    and that leads me to wonder, what is the market going to look
    like if Senate Democrats decide not to cooperate on the post-
    reconciliation fix? I would like to ask a series of yes/no
    questions of Dr. Blumberg and Mr. Haislmaier to see where the
    two sides agree and where they do not.
        Can reconciliation end the Obamacare subsidies and replace
    them with tax credits? Dr. Blumberg, yes or no?
        Ms. Blumberg. I know it can repeal the subsidies. I am not
    clear on the--replacing it.
        Mr. McClintock. Okay, Mr. Haislmaier.
        Mr. Haislmaier. I believe so.
        Mr. McClintock. Okay, so we generally agree on that. Can it
    zero out the taxes and the tax penalties that are used to
    enforce the individual mandate?
        Ms. Blumberg. That is my understanding, yes.
        Mr. McClintock. Mr. Haislmaier.
        Mr. Haislmaier. Mine as well.
        Mr. McClintock. Can it end the noncompliance penalties on
    businesses, return Medicaid to its pre-Obamacare condition?
        Ms. Blumberg. I believe that is the case, yes.
        Mr. McClintock. Mr. Haislmaier.
        Mr. Haislmaier. I believe so, yes.
        Mr. McClintock. Okay, now, HHS does have some latitude in
    redefining the mandates, does it not? Dr. Blumberg.
        Ms. Blumberg. There is some latitude, yes.
        Mr. McClintock. Right. Mr. Haislmaier.
        Mr. Haislmaier. HHS does have latitude, yes.
        Mr. McClintock. Okay. Is the HHS, though, still required to
    provide guidance consistent with benefits found in a typical
    policy? Dr. Blumberg.
        Ms. Blumberg. I am not sure I understand the question. Can
    you ask again?
        Mr. McClintock. Does not the underlying bill, or underlying
    law, require that the essential benefits match those found in a
    ``typical'' policy?
        Ms. Blumberg. That is right. There is some State
    flexibility on that.
        Mr. McClintock. Okay. Mr. Haislmaier.
        Mr. Haislmaier. They have such categories of benefits and
    within that HHS would have to work.
        Mr. McClintock. Is HHS still bound by the Administrator
    Procedures Act that forbids actions that are arbitrary or
    capricious?
        Ms. Blumberg. I am not familiar with that, so I cannot
    answer.
        Mr. McClintock. Mr. Haislmaier.
        Mr. Haislmaier. Yes.
        Mr. McClintock. Can reconciliation repeal the underlying
    law? Dr. Blumberg.
        Ms. Blumberg. I do not think reconciliation can repeal all
    the components of the law, no.
        Mr. McClintock. Mr. Haislmaier.
        Mr. Haislmaier. That is my understanding of Senate
    procedure as well.
        Mr. McClintock. Okay. Will noncompliant policies then still
    be illegal? Whether it is being enforced or not, will they
    still be illegal?
        Ms. Blumberg. Noncompliant plans are not illegal today,
    sir. There are many of them being sold. That is one of the
    problems in the State of Arizona, and why their premiums have
    gone up so much, because there are lots of noncompliant plans
    being sold.
        Mr. McClintock. Mr. Haislmaier.
        Mr. Haislmaier. Yes, there are noncompliant plans that are
    legal and will remain so.
        Mr. McClintock. Okay, now, is this because state
    governments are still the principal enforcement mechanism for
    Obamacare?
        Ms. Blumberg. It is because the Affordable Care Act
    regulated a certain category of non-group insurance coverage,
    but not those that remained outside. So, plans that do not
    cover you for an entire year are noncompliant plans and are out
    there.
        Mr. McClintock. Mr. Haislmaier.
        Mr. Haislmaier. Yes, there are certain underlying types of
    coverage that are exempt from the ACA.
        Mr. McClintock. In a post-reconciliation world, do state
    governments still have to approve any new plans? Dr. Blumberg.
        Ms. Blumberg. Right. The Department of Insurance and the
    State regulates what is offered there.
        Mr. McClintock. Mr. Haislmaier.
        Mr. Haislmaier. That is a matter of state law, yes.
        Mr. McClintock. Okay, now, final question, and this you can
    elaborate on, but you have about 5 seconds each to do it, and
    that is, in this post-reconciliation market then, do we run the
    risk of adverse selection being accelerated and States refusing
    to approve noncompliant plans or insurance companies refusing
    to issue them?
        Ms. Blumberg. There is a definite risk that non-group
    markets in general, for comprehensive coverage and other types
    of coverage most people like to purchase in the non-group
    market, would utterly collapse.
        Mr. McClintock. Mr. Haislmaier.
        Mr. Haislmaier. There is a slight risk of making the
    current adverse selection in the market marginally worse. There
    are things that HHS administratively can do to marginally
    decrease the adverse selection that is already occurring, so,
    on balance, it may be about where we are right now.
        Interim Chair Black. The gentleman's time is expired. The
    gentleman from New York, Mr. Higgins, is recognized for 5
    minutes.
        Mr. Higgins. Thank you, Madam Chair. Now that the
    Affordable Care Act has been taken out of a political context,
    at least in terms of the calendar, it needs to be dealt with in
    a legislative context, and facts are very important in that
    regard.
        Medicare is where 55 million Americans get their health
    care. It costs $600 billion a year; it is 15 percent of the
    Federal budget. Before the enactment of Medicare in 1965, more
    than half of the senior citizens in this country did not have
    health insurance, the reason being is that for-profit insurance
    companies did not want to write a policy for people that were
    sick and therefore costly, so the American government had
    responded by establishing a Medicare program. We went from 56
    percent of American seniors without health care to, today, 97
    percent do have health care because of that program.
        But the cost of that program was not sustainable because
    between 1970 and 2010, Medicare per-person costs grew at an
    annual rate of 7.5 percent, about four times the rate of
    inflation. It was breaking businesses, it was breaking
    individuals, and the number of individuals that were filing for
    bankruptcy protection soared because of this. Today, because of
    the Affordable Care Act, annual per-person growth is at 1.4
    percent, fully 6 percent less than it was prior to the
    enactment of the Affordable Care Act, and Medicare costs are
    lower per person today by over $1,300 per person than they were
    in 2010.
        When we set out to do healthcare reform, there were two
    objectives. One was to increase the number of people that did
    not have insurance. Individual mandate; why? Because the
    insurance model only works in health care if you have healthy
    payers who are paying for the cost of those that need it later
    in life, analogous, some people say, to car insurance. Twenty
    million more people have health insurance today, so that is a
    success.
        The other objective was bending the cost curve, as
    economists would call it, basically trying to reduce the annual
    growth of health care so that it does not exceed the rate of
    inflation. Because if it does, eventually, businesses go broke
    and individuals go broke. That is just how it works. I think on
    those two counts the Affordable Care Act has been a very
    positive thing. Before we consider repealing it or obliterating
    it, we ought to have an alternative that is constructive and
    based on fact.
        The individual mandate; again, a hallmark of healthcare
    reform. The idea, again, is to ensure that you have healthy
    payers that are paying into the system to pay for the cost of
    those who are older and need health care. Mr. Haislmaier, how
    long have you been at Heritage?
        Mr. Haislmaier. That is a trick question, because I left
    and came back, but I have been associated with it for about 30
    years, of which I have been there about 15.
        Mr. Higgins. Thirty years? So, you were there in 1989?
        Mr. Haislmaier. Yes.
        Mr. Higgins. Did you contribute to a report that was
    sponsored by Heritage called ``A National Health System for
    America?''
        Mr. Haislmaier. Yes.
        Mr. Higgins. And you collaborated with Stewart Butler?
        Mr. Haislmaier. Yes.
        Mr. Higgins. In that report, Mr. Butler said that, ``Many
    States now require passengers in automobiles to wear seatbelts
    for their own protection; many others require anybody driving a
    car to have liability insurance. But neither the Federal
    Government nor state requires all households to protect
    themselves from the potentially catastrophic costs of serious
    illness. Under the Heritage plan there would be such a
    requirement.''
        That was the basis for the individual mandate. Do you still
    believe that the individual mandate should be a part of the
    healthcare system in America?
        Mr. Haislmaier. Well, it depends on how you define an
    individual mandate.
        Mr. Higgins. I think it is pretty clear here, sir.
        Mr. Haislmaier. Well, no, it is not, because you are
    assuming that it is a pay-or-play mandate. When we actually
    helped draft legislation, which we did in 1993 with the
    Nickles-Stearns bill, we said, look, if you did not have health
    insurance, you would lose your personal exemption on the tax
    code. Now, one might be able to characterize that as a mandate,
    but that is very different than the design in the ACA, which
    says, ``Buy a plan or we fine you.''
        Mr. Higgins. Claiming back my time, because my time is
    expired, I would just say for the record that it is pretty
    clear here the origins of the individual mandate, and the sound
    reasoning behind it. That was embraced as a major piece of the
    Affordable Care Act.
        Interim Chair Black. The gentleman's time has expired.
        Mr. Higgins. I yield back.
        Interim Chair Black. The gentleman from Georgia, Mr.
    Woodall, is recognized for 5 minutes.
        Mr. Woodall. Thank you, Madam Chair. I am pleased to be
    back on the Budget Committee with you this cycle, but I will
    tell you, if we reclaim time that has already expired, then we
    see what the problems are we are going to face.
        Interim Chair Black. That is right.
        Mr. Woodall. So, I am going to try to balance this budget
    going forward. I am glad you all are here. Dr. Blumberg, I
    particularly appreciate the solutions that you added to the end
    of your testimony because I do think there is so much that we
    can do together.
        Mr. Haislmaier, they asked you how long you had been
    associated; here I was a staffer on the Hill when it was led by
    the great bipartisan Newt Gingrich from the State of Georgia,
    and of course, in those good bipartisan times, we passed
    healthcare reform. We abolished preexisting conditions for
    every single healthcare plan that the Federal Government had
    jurisdiction over. Every single one.
        You may think that that got jammed through with
    reconciliation. I happen to have those conference report
    numbers here. There was a conference report with that bill at
    that time, abolishing preexisting conditions. The vote in the
    Senate was 98-0 and the vote in the House was 421-2, with one
    of those great opponents of healthcare reform, Pete Stark,
    voting no at that time. Of course, Pete voted no because it did
    not go far enough, not because it got that done. I contrast
    that with what is going on right here.
        You suggested, Dr. Blumberg, that if we repealed the ACA
    today that we would be worse off than if the ACA had never
    passed. I want to stipulate that I believe that to be true. I
    think we have wasted so much time fighting about this that we
    could have dedicated to real, fundamental reform. You know how
    much time we have spent arguing about repealing preexisting
    conditions in the Federal healthcare market since 1996? Zero.
    Zero, and people are benefiting from it. We are wasting time
    and money here, and a repeal would not get that back.
        I think we have also threatened some of the underlying
    economics of the plan. I want to point to Mr. Haislmaier's
    testimony; he says this--reading glasses have come about since
    we have been fighting about the Affordable Care Act, too--he
    says, ``In general, enrollment that indicates that
    implementation of the ACA appears to have had three effects on
    health insurance coverage: an increase in individual market
    enrollment, an offset and decline in the fully ensured employer
    group plan enrollment, and a significant increase in Medicaid
    enrollment.'' Does anyone dispute the--Dr. Blumberg?
        Ms. Blumberg. Yes, I dispute his findings of his study.
        Mr. Woodall. You believe that we have not seen an increase
    in Medicaid?
        Ms. Blumberg. No, I know we have had an increase in
    Medicaid.
        Mr. Woodall. Do you believe we have not seen a decrease in
    employer coverage?
        Ms. Blumberg. Absolutely not. We have not seen any
    measurable decrease in employer-sponsored insurance, and we see
    that in multiple nationally representative surveys, both of
    employers and of households. Employer-sponsored insurance has
    remained incredibly stable since the implementation of the Act.
        Mr. Woodall. But the truth is, if you are going to spend $1
    trillion on a program, it is really not surprising that we can
    tell stories of folks who have benefited, and I am glad. I say
    that sincerely; I am glad for folks who have found a benefit
    out of $1 trillion out of taxpayer money. What is shocking, is
    that we can spend $1 trillion and find folks who are worse off
    today than they would have been today before.
        The small groups that I experience in my district, those
    small family businesses that went out of their way to buy a
    more expensive plan because one secretary in that office had a
    special needs child and the entire office wanted to collaborate
    in order to get that child the plan that they needed, the care
    that they needed, and those days are behind us now. Those plans
    have gone away. That employer cannot afford to do that anymore
    because he has lost the choice in that marketplace.
        I think about the work that Ms. Turner has done. Yes, 75
    percent higher rates for young people for a corresponding 12
    percent decrease for 64-year-olds. And when those young people
    act based on their own economic self-interest--shocking that
    people still do that, but they do--then we see those elderly
    folks, those 64-and-under folks, disadvantaged in ways that
    they would not have been pre-the Affordable Care Act.
        It encourages me that I can read Ms. Turner's testimony and
    I can read Dr. Blumberg's testimony and I can see that we all
    agree that those three bands have failed. We all agree that
    that pricing structure has failed, and it can be on the short
    list of things that we begin to collaborate on. 421 to 2, 98 to
    0, Republicans in the House, Republicans in the Senate,
    Democrats in the Senate, and Bill Clinton in the White House
    got this done, and shame on us for having started down this
    road. I hope we can do better in fixing it. I yield back.
        Interim Chair Black. The gentleman's time has expired. The
    gentlelady from Washington, Ms. DelBene, is recognized for 5
    minutes.
        Ms. DelBene. Thank you, Chairman Black and thanks to all
    our witnesses for being here with us today. If you knew nothing
    else about the Affordable Care Act all you would need to do is
    read the title of today's hearing to understand that it's
    brazenly partisan. The majority wants to talk about the effects
    of the ACA, so let's talk about them.
        One effect is that people do not go bankrupt when they get
    sick anymore. That sounds like a pretty good outcome to me.
    More than 120 million Americans with pre-existing conditions
    are no longer denied coverage. Young adults can stay on their
    parents' plans until they are 26, and over 10 million seniors
    have received help with their prescription drug payments. And
    all insurance plans are required to cover preventative services
    at no cost.
        This is especially critical for women. Each year, this
    helps 55 million women save more than $1.4 billion on birth
    control. Many of my friends from across the aisle have said
    they want to keep the good parts and just get rid of the bad.
        So, what are we really doing here? For years, my colleagues
    and I have offered proposals to strengthen the ACA and were
    turned away each time. I have a bill to make it easier for
    small businesses to provide coverage for their workers, for
    instance, and yet folks do not want to talk about that. They
    just want to talk about repeal.
        So, now we know the effects of the ACA, which is the
    purpose of the hearing today. So, let's talk about the effects
    of repeal. You are going to hear a lot of numbers thrown around
    today, and it is easy to get lost in the statistics and forget
    that this is about people.
        What is important to remember is, repealing the ACA hurts
    real people across the country in profound ways. It means
    taking away health coverage for 30 million Americans, it means
    seniors will have to pay more for critical prescription drugs,
    and it means women will once again be denied coverage simply
    for being a woman.
        It also means a great deal to people like Sue Black. Sue is
    a public school teacher from my district who was diagnosed with
    stage four ovarian Cancer at the age of 47. Five years later,
    she received a short, but terrifying letter from her insurance
    company. In four sentences, it said she had exhausted three-
    quarters of her lifetime benefit limit. Thankfully, the
    Affordable Care Act banned lifetime caps on coverage. And she
    is not the only one.
        In the past few weeks, my office has been flooded with
    stories from constituents describing how the Affordable Care
    Act saved their life or the lives of their loved ones. And
    meanwhile, the Republican plan for health care in America is
    repeal the Affordable Care Act and then just trust us. I think
    our constituents deserve better than to have their health
    coverage taken away with no plan for what comes next.
        Ms. Blumberg, I wondered in your opinion, is there a
    segment of the population that would benefit from repealing the
    Affordable Care Act without a replacement plan in place?
        Ms. Blumberg. You know, folks who do not want to purchase
    health insurance coverage and are subject to a mandate penalty
    as a consequence of the Act--under that sort of repeal through
    reconciliation, they would have less penalty to pay. The
    problem is that there would be such a huge loss of insurance
    coverage for a much larger percentage of the population, the
    uncompensated care burdens would increase so much on healthcare
    providers and on state governments that I think that would be
    far outweighed. Otherwise, I cannot really come up with people
    who are going to be benefiting as a consequence.
        Ms. DelBene. And can you describe the effects on children
    if the Affordable Care Act were repealed?
        Ms. Blumberg. By our estimates, roughly 4 million children
    would lose health insurance coverage. Some of these children
    are covered with their families through the marketplaces with
    financial assistance. Others will lose their coverage, because
    what we know from a lot of experience with the Medicaid system
    and with the ACA is that when adults know that they can have
    assistance in getting coverage, they find out when they go to
    enroll that their children are eligible for CHIP as well. And
    so, if the parents know they cannot get coverage and they do
    not go seeking it, then their children will not end up getting
    insured as well.
        Ms. DelBene. Thank you. And we keep hearing from my
    colleagues on the other side of the aisle how the Affordable
    Care Act is going to collapse, but has not enrollment been
    growing, especially right now, and is not the real threat,
    right now, the promise of repeal?
        Ms. Blumberg. Absolutely. The repeal without replacement is
    a recipe for a death spiral. And right now, the Affordable Care
    Act, as I said, has some areas in which there have been high
    premiums and that we have some policy strategies that should be
    put in place to address them. But, by and large, it is being
    successful at increasing coverage, increasing access, and
    improving affordability.
        Ms. DelBene. Thank you. I yield back, Madam Chair.
        Interim Chair Black. The gentlelady's time is expired. The
    gentleman from Alabama, Mr. Palmer, is recognized for 5
    minutes.
        Ms. Palmer. Thank you, Madam Chairman. I just want to share
    some information that I have gotten from some of my
    constituents. A doctor sent me some information that he saw a
    patient last week whose deductible was $9,000. Essentially, her
    insurance is basically catastrophic insurance. She probably has
    two patients a month who cannot schedule surgery, or they
    schedule and then cancel the surgery.
        And basically, because people cannot afford the deductibles
    they are not getting the health care that they need. It is
    impacting the quality of life, impacting their health. Here is
    another family that has gone through three or four different
    plans. Their premiums went from about $1,400 for a family of
    four to $2,100. When they take the out of network, their
    deductible is $13,700. Madam Chairman, the Affordable Care Act
    is an oxymoron.
        There is still over 28 million people who do not have
    health insurance, and most of them, according to the Kaiser
    Foundation, say it is because they cannot afford it. So, you
    have basically put one group into the Affordable Care Act, most
    of them are Medicaid. You have displaced people who had
    employer-provided plans, I think there are about 8 million of
    those. You have caused companies to not expand. I have
    information here from companies where they would not hire that
    50th employee; as a matter of fact, one of these had 45
    employees, they have cut back to 32 because of the premiums
    that they have to pay to provide health insurance for their
    employees.
        And Madam Chairman, it has had a terrible impact on
    employment. I do not know if our friends across the aisle are
    aware of this, but there is over 94 million able-bodied
    Americans who are out of the workforce, the highest number, I
    think, ever for the country. Prior to 2008, there were 100,000
    more businesses starting up than were closing. These are mostly
    small businesses.
        According to a report from Gallup as of 2014, there are now
    70,000 more businesses closing than starting up. You have
    people who had full-time jobs with good wages and health
    benefits that have been cut back to part-time. They are now
    having to work two part-time jobs at lower wages with no health
    insurance.
        You know, the best thing that I can say about the
    Affordable Care Act is that we now know what does not work. And
    I am confident that we can move forward with plans to replace
    it. Ms. Turner, you have worked in this area for years. We
    know, I think goes all the way back to the 1990s, that you have
    been involved in health care reform, are you confident that we
    can repeal this and replace it with something that we do not
    put millions of people out of the insurance market, we allow
    people to actually choose their doctor, choose their health
    insurance. Do you think we can do that?
        Ms. Turner. Absolutely. I agree with you, Mr. Palmer, that
    we have learned a lot about what does not work with this law,
    and I think that is a good foundation to figure out what we can
    do. And I know that many members actually have real legislation
    on both sides of the aisle and, certainly, the House spent a
    great deal of time developing the better-way plan that the
    chairman talked about. There are good ideas out there. They
    involve putting patients at the center, returning power to the
    states, to add resources to the States, to better organize
    their health insurance markets to be more responsive. But, yes,
    I am highly confident. Everybody talks about repeal and
    replace, not just repeal.
        Mr. Palmer. Dr. Book, you brought up the fact that life
    expectancy declined this past year for the first time in over
    two decades. I think, what was it, 12 or 13 million people were
    put into Medicaid, that gets counted among the number of people
    who received health insurance. Are you aware of the studies
    that show that people who are on Medicaid have poor health
    treatment outcomes than if they had no insurance at all? Can
    you comment on that?
        Mr. Book. Yes, I am familiar with that. There are multiple
    studies showing that people on Medicaid have worse health
    outcomes than people who are uninsured. It is hard to argue
    that Medicaid actually makes people sicker, but it is possible
    that people who are uninsured are either able to pay their own
    bills, able to obtain charity care, or perhaps, are simply
    healthier to begin with. But, certainly Medicaid does not have
    a very good record in terms of restoring people to health,
    making people live longer. People with Medicaid use emergency
    rooms more than the uninsured and more than people with
    insurance, and they have worse health outcomes than any other
    group.
        Interim Chair Black. The gentleman's time is expired.
        Mr. Palmer. Thank you, Madam Chairman.
        Interim Chair Black. The gentleman from California, Mr.
    Khanna, is now recognized for 5 minutes.
        Mr. Khanna. Thank you, Madam Chair, and thank you, Ranking
    Member Yarmuth for your leadership. It is an honor to be on
    this committee. Ms. Turner, on April 8, 2016, you were quoted
    in the New York Times as describing President Trump's proposals
    as ``sketchy and inadequate.'' You went on to say and I quote,
    ``He has to flesh out his proposals with much more detail if he
    hopes to persuade voters that he has a credible plan to replace
    Obamacare.'' Do you remember saying that?
        Ms. Turner. Yes, sir.
        Mr. Khanna. Do you still believe that?
        Ms. Turner. That was a very early preliminary list of seven
    points that he issued during the primary season.
        Mr. Khanna. Do you believe he has now articulated a
    comprehensive plan?
        Ms. Turner. He is working with members of Congress as, I
    think, is really a very appropriate and looking forward to----
        Mr. Khanna. Can you point to any specific changes that he
    has offered, now different from your statement in April?
        Ms. Turner. Yes, he gave a major speech in Pennsylvania on
    November 1st, and outlined a very different and visionary kind
    of approach to health reform that would return much more power
    to the states, deregulate the market, give people many more
    choices of coverage than before----
        Mr. Khanna. I thought he has been saying that since he
    announced. Was there any specific changes he has offered since
    your statement in April?
        Ms. Turner. He is working with members of Congress. He does
    not do, as I think, the Obama administration----
        Mr. Khanna. Okay. If I can move on, President Trump also
    had called for removing barriers to imported drugs from other
    countries, same as, by the way, Senator Sanders. Now, you are
    opposed to the President's policy on that, correct?
        Ms. Turner. I believe that there is a great risk to the
    American people of imported drugs that we do not know the
    origin----
        Mr. Khanna. So, you disagree with President Trump when it
    comes to imported drugs?
        Ms. Turner. Yes.
        Mr. Khanna. And you disagree with Bernie Sanders, and you
    are on the opposite end of what President Trump is proposing on
    that? Is that correct?
        Ms. Turner. I think that there are legitimate safety
    concerns that the Federal Government, including former FDA
    Commissioner Mark McClellan--cannot provide safe terms.
        Mr. Khanna. I picture that I am--I just want to be clear
    that you are on the--you disagree with President Trump when it
    comes to that?
        Ms. Turner. Yes.
        Mr. Khanna. And your op-eds consistently, as you disclosed
    to your credit, say that your organization is funded by the
    pharmaceutical industry--is that correct?
        Ms. Turner. No, that is not correct. We received some
    funding from the pharmaceutical industry, but we have brought
    broad funding from individuals inside and outside the health
    sector.
        Mr. Khanna. I respect that, but on all the op-eds it says
    you're partly funded from pharmaceutical industries. In your
    own McClatchy editorials.
        Ms. Turner. And so as--virtually every person in the think
    tank has some funding from pharmaceutical companies because
    they believe in innovation, as we do.
        Mr. Khanna. Can you disclose to this committee which
    pharmaceutical companies fund your organization and how much
    money you receive from them?
        Ms. Turner. Those--that list is really a proprietary
    information, it is basically how we--how we have special
    relationships with all of our donors inside and outside the
    health sector.
        Mr. Khanna. Ms. Turner, with due respect, when I have to
    disclose every financial interest, I have, my spouse has,
    because if I am going to articulate a viewpoint on something,
    the public has a right to know what financial interests I have.
    I would suggest, if you are giving testimony to the United
    States Congress, the public should have a right to know what
    financial interests your organization has.
        Ms. Turner. We disclosed those on an I-90 Form that we file
    with the Internal Revenue Service every year. The Congress has
    seen fit to allow the list of donors to remain private as
    proprietary information because it is basically our
    intellectual property. How do we get our funding?
        Mr. Khanna. So, you are unwilling to disclose which
    pharmaceutical companies are funding your organization or how
    much money you received from them?
        Ms. Turner. It would be unfair to them, because they are--
    we receive funding from many other organizations, a great
    majority outside the pharmaceutical industry.
        Mr. Khanna. So the pharmaceutical funding is less than the
    majority?
        Ms. Turner. Oh, absolutely.
        Interim Chair Black. Mr. Khanna, that really is not the
    purpose of this hearing. I think the witness has already
    answered that she is following the law, if you would like to
    ask another question. I think we ought to stay on the topic of
    what we came here to do.
        Mr. Khanna. Well, Madam Chair, I think that the issue with
    the President has said that he is for the importation of drugs
    and that is an important point in this debate on health care.
    The witness is offering an opinion that is in opposition to the
    President of the United States. And I am trying to understand
    why she believes what she believes and if there are financial
    interests that may be coloring her opinion.
        Interim Chair Black. Mr. Khanna, I think the witness has,
    again, answered that she is following the law. Now, if there is
    a part of this that you would like to change the law, you
    certainly have the authority to be able to offer a bill.
        Mr. Khanna. And I think my time has expired.
        Interim Chair Black. Thank you. The gentleman from South
    Carolina, Mr. Sanford is recognized for 5 minutes.
        Mr. Sanford. Yeah, and given the last interchange, I think
    we should all be careful about judging each other's intent. I
    could list a long list of left-leaning organizations that do
    not disclose their funding sources, there are groups on the
    right. I think we need to be careful about that. And in that
    regard, I would give credit to my Democratic colleagues for
    what they have tried to do with Obamacare. I think that if you
    look at the actual intent of Obamacare, it was good. The idea
    was to help people with preexisting conditions, to look at how
    you deal with this. I remember there was a great movie years
    ago, Helen Hunt was in it and I cannot remember the name of the
    movie to save the life of me, but there was a great tag-line.
    This is back at the time that insurance companies were
    declining people, and she said something to the fact of,
    ``Well, my insurance company declined me.'' And the audience in
    the movie theater that I was in, I mean, they went nuts; I
    mean, the people literally started clapping spontaneously.
        So, I think that the intent of Obamacare was good, it was,
    ``How do we get our arms around this problem?'' The question
    has been in implementation. I think that that is was a lot of
    us struggled with from the Republican side, and I suspect many
    independents and Democrats, as well. And with that said, I
    guess I would say a couple of different things, you know, I
    think fundamentally we all recognize the fact that the
    marketplace likes a product that somebody else pays for. That
    in the history of mankind, there is almost unlimited demand for
    a product, in fact, that somebody else is paying for.
        And it has, to a degree, part of that fatal flaw built into
    it. I think that we have to recognize--the math certainly shows
    it--that sick people cost more than healthy people. And, you
    know, the fundamental problem of health care in general is, it
    is almost an 80/20 phenomenon; that wherein 20 percent of the
    folks are costing about 80 percent of what we deal with in
    health care. That is from the right or from the left.
        And as we age, we cost more. I mean, my sons are immortal,
    or pretty closely so. And as you look at large pools of
    population, those trends hold true, notwithstanding horrible
    illnesses that happen to young people. And what we have come up
    with in construct with Obamacare, is we are going to stick the
    young people with the bill. In essence, it is fundamentally
    flawed. This 3-to-1 ratio is mathematically incorrect. And
    there is some math built into this equation that just does not
    work. And so, a number of us are saying, ``Okay, the intent was
    good, but practically speaking, where do we go from here given
    the fatal flaws that are built into it mathematically?''
        To my colleague, Mr. Palmer's, point, if you look at some
    of the outcomes, and I dealt with this for 8 years when I was
    governor as we were dealing with Medicaid, that, you know,
    there is just some fundamental flaws. We have a disease-
    treatment program, but we do not have much in the way of
    prevention.
        And so, I think we are all struggling with, ``Where do we
    go from here?'' Is there a different way of dealing with
    preexisting condition and high risk pools, and all the things
    that are talked about that perhaps you have seen at a different
    country, or something that really has worked well with an
    individual county or State? I just in a minute and 35 seconds
    that are left, I would be curious to hear any of your thoughts
    in terms of best practices that we can borrow as we all
    collectively struggle with this debate before us. Yes, ma'am.
        Ms. Turner. I would say that, you know, almost all
    industrialized countries have a single payer type system
    where--I agree with you. The fundamental problem with doing
    reform is this skewness of the distribution of health expenses.
    And so how do you share those expenses? And I think, you know,
    obviously, all the foreign single payer plans spread those
    costs broadly through the tax payer system.
        And, you know, here we are not in that place to be doing
    that, but I think, you know, we do not want to criticize the 3-
    to-1 age rating without recognizing that without a different
    mechanism, the people who are older adults who have more health
    problems would not be able to afford their coverage if we went
    to--I mean, I used to see 11-to-1 rating from some insurers in
    the old says. So, yeah.
        Mr. Sanford. See, I have 30 seconds.
        Ms. Turner. Okay.
        Mr. Sanford. I am going to reclaim it. It just seems to me
    on that very point that you raise--it is a legitimate point in
    terms of industrialized countries around the globe--that you
    have got three variables within health care though. You have
    got access, you have got costs, and you have got quality. And
    in as much as many of those countries have been able to spread
    access, it has been to the detriment of quality and cost. And
    so people do not go to Britain to do certain procedures. You
    are literally on a death list in Britain. And I think that
    those kind of societal questions are part of what we are
    struggling with. I am going to hand off to your colleague--go
    in the second you have got.
        Mr. Book. In 5 seconds, a lot of those single-payer
    countries have annual and lifetime limits on the services they
    can provide to a person and they have much higher death rates
    from serious disease like cancer, because they just do not
    treat them.
        Mr. Sanford. Thank you.
        Interim Chair Black. The gentlelady from Washington, Ms.
    Jayapal is recognized for 5 minutes.
        Ms. Jayapal. Thank you, Madam Chair. As this is my first
    hearing on the House Budget Committee, I just wanted to express
    my great appreciation to you and to our ranking member, Mr.
    Yarmuth, for your leadership and guidance. And I am looking
    forward to working with everyone on the committee.
        Madam Chair, last week over 2,000 people joined me in
    Seattle in support of the Affordable Care Act and demanded that
    it not be repealed without a replacement and that we in fact
    focus on expansion. I have heard from many who are seriously
    terrified that their health care will not only be stripped
    away, but that there is no replacement.
        Sally is a single, 80-year-old woman who told me that she
    would be severely affected if her Medicare benefits were cut.
    She worked for 30 years, was healthy until 3 years ago when she
    was diagnosed with a serious cancer. Medicare benefits covered
    much of her hospital and treatment costs which she could not
    have paid for on her own.
        She said, if Medicare is cut or reduced, ``I will be
    struggling to keep up with healthcare costs.'' Madam Chair, I
    agree with you that this is about real people. And this is just
    one story, I have heard hundreds.
        I would like us to consider the big picture in the State of
    Washington, my home State, a repeal of the ACA would mean
    three-quarters of a million people would lose their health
    care, almost 3 million people in Washington State with
    preexisting conditions would not be guaranteed coverage
    anymore. And speaking of preexisting conditions, being a woman,
    would once again be one of those preexisting conditions as we
    would have to pay out-of-pocket for cancer screening, PAP
    tests, and birth control.
        Our State benefited greatly from Medicaid expansion,
    605,000 people gained coverage and would once again be without
    health care. And 55,000 young people in Washington State who
    are barely getting by, would once again be kicked off of their
    parents' health insurance. There are no winners with an
    Affordable Care Act repeal, Madam Chair. And that is why I
    hope, that forums like this can be focused on what we can do to
    make it better, but a replacement plan, which has not been
    offered, instead of nothing.
        I wanted to say, I come from the State Senate where--which
    is controlled by Republicans and the chair of the Healthcare
    Committee in the Washington State Senate, Senator Randi Becker
    recently said, ``This is not a partisan issue, this is a bi-
    partisan issue.'' She believes that any replacement should
    build or improve the reach of Medicaid expansion funds. In
    Washington, this represents about $3 billion and the majority
    of the funding received under the ACA.
        So, Dr. Blumberg, can you speak to specifically Medicaid
    expansion and the states across the country who have benefited
    from Medicaid expansion?
        Ms. Blumberg. Sure, there has been a big infusion of
    Federal dollars into the states that expanded Medicaid allowing
    them to make all individuals, regardless of their family
    situations, eligible up to 138 percent of the poverty level for
    the first time. This has done a lot to improve the financial
    situations of hospitals in those states relative to the states
    that did not expand, as my colleague Fred Blavin has shown in a
    recent JAMA article. This is big financial benefits. In
    addition, these are comprehensive benefits with no cost
    sharing, so it makes coverage and access to care incredibly
    affordable for the low-income population.
        Ms. Jayapal. Thank you. I appreciated the concern for
    fairness throughout everybody's statements and so--but I am
    trying to understand exactly what you do believe should be
    covered and some of the provisions of the Affordable Care Act.
    So, just yes or no answers, if you would for all of our
    testifiers. Do you believe that young adults should be able to
    stay on their parents' plan until they are 26?
        Ms. Turner. As long as the $1,200 costs----
        Ms. Jayapal. Just a yes or no, Ms. Turner, thank you.
        Ms. Turner [continuing]. Is visible.
        Ms. Jayapal. Was that a yes?
        Ms. Turner. If they want to pay for it?
        Ms. Jayapal. So, that is a yes?
        Ms. Turner. If they want to pay for it, I guess.
        Ms. Jayapal. Dr. Book.
        Mr. Book. I think if employers want to offer that, it
    should be perfectly legal.
        Ms. Jayapal. Dr. Blumberg.
        Ms. Blumberg. I agree, it should stay.
        Ms. Jayapal. Dr. Haislmaier.
        Mr. Haislmaier. Irrelevant.
        Ms. Jayapal. Is that a----
        Mr. Haislmaier. It is irrelevant under either ACA or the
    replacement, because they will be treated as their own
    household, anyway.
        Ms. Jayapal. Let me ask about seniors on Medicare, a
    critical part of the Affordable Care Act. Do you believe
    seniors on Medicare should be able to afford their medications
    and not fall into a prescription drug gap? Ms. Turner.
        Ms. Turner. Yes, but there are creative ways to do that.
        Ms. Jayapal. Dr. Book. Dr. Book.
        Mr. Book. Could you repeat the question?
        Ms. Jayapal. Do you believe that seniors on Medicare should
    be able to afford their medications?
        Mr. Book. I think everybody should be able to afford
    everything.
        Ms. Jayapal. Great, thank you. Dr. Blumberg.
        Ms. Blumberg. I agree.
        Ms. Jayapal. Dr. Haislmaier.
        Mr. Haislmaier. I mean, comprehensive----
        Ms. Jayapal. Yes or no, Dr. Haislmaier.
        Mr. Haislmaier [continuing]. Drugs is fine, I mean that
    is----
        Ms. Jayapal. Thank you. How about making sure that
    insurance companies cannot deny coverage because of a person's
    medical history? Ms. Turner.
        Ms. Turner. That was the case before, and will continue to
    be the case moving forward.
        Ms. Jayapal. So, that is a yes. Dr. Book.
        Mr. Book. That was the case since 1996 and the ACA should
    never be able to----
        Ms. Jayapal. Dr. Blumberg.
        Ms. Blumberg. Yes, I agree, but that has not been the case,
    universally, by a long shot.
        Ms. Jayapal. Thank you. Can you say more about that, Dr.
    Blumberg?
        Ms. Blumberg. Yes.
        Interim Chair Black. Sorry, the gentlelady's time has
    expired.
        Ms. Jayapal. I yield back.
        Interim Chair Black. I apologize, but we have so many other
    members. So, I hate to cut you off, it is great conversation
    and thank you very much. Now, the gentleman from Arkansas, Mr.
    Westerman is recognized for 5 minutes.
        Mr. Westerman. Thank you Madam Chair and thank you to the
    panel for being here today. You know, it was mentioned that a
    lot of people want to keep the Affordable Care Act in place,
    they are fearful that it might go away, but I will remind the
    committee that millions of Americans were fearful that they
    might lose their doctor or their premiums would go up, but they
    were promised they could keep their doctor.
        They were told their premiums would go down by $2,500, but
    from the testimony here today, we have heard that there has
    been increased premium costs, there has been increased taxpayer
    costs, people indeed are seeing higher deductibles, they are
    seeing fewer benefits, they are seeing reduced access.
        There has been talk about Medicare and what might happen to
    Medicare, but I would also remind the committee that when the
    ACA was passed, that there were cuts to Medicare reimbursements
    in the Affordable Care Act to pay for Medicaid expansion and
    the exchange policies as much as or over $700 billion in those
    cuts to Medicare.
        I was visiting with a neurosurgeon from my State who has
    been affected by the cuts to Medicare. He explained it like
    this, certain surgery might take five steps to the surgery and
    Medicare pays for two of them. And he assured me that if there
    is anything he knows about how the Affordable Care Act was that
    whoever wrote it knew absolutely nothing about medical care.
        We have heard about the number of people who have benefited
    from the Affordable Care Act, there is really no consensus on
    that number from the panel. I believe there is consensus that
    most of the people that have benefited from the Affordable Care
    Act are in the Medicaid population. I know that was definitely
    true in my State. There is arguments about how many people
    could have already received Medicaid who have qualified for it,
    the woodwork effect, that actually signed up for Medicaid
    because of the expansion.
        And, you know, if we just take Dr. Blumberg's number of 20
    million people who benefited from the Affordable Care Act, if
    we look at the population of our country that is 6.2 percent of
    our country. So, we could say 6.2 percent possibly got more
    because of the Affordable Care Act, but I think we failed to
    remember that 93.8 percent of Americans are getting less for
    more because of the Affordable Care Act.
        As a State legislator in Arkansas, I lived through the
    debate on Medicaid expansion, and our State did expand
    Medicaid. It was supposedly an innovative plan that did not
    expand a traditional Medicaid, but used Medicaid dollars that
    come from an apparently bottomless pit of money in D.C. to buy
    private health insurance. So, the 320,000 Arkansans that are
    now on Medicaid that were not before, have a very nice health
    insurance plan. They have got a Blue Cross plan that they pay
    nothing for, they do not have a deductible, and it pays the
    providers very well, but it comes at a tremendous cost. And now
    over a third of my State is receiving benefits through the
    Medicaid program.
        So, Mr. Haislmaier, I want to ask you a question on the
    Medicaid part, was the traditional Medicaid system for the
    aged, the blind, the disabled, was it having any problems
    before the Affordable Care Act?
        Mr. Haislmaier. Well, it depends on the State, but, yes, I
    mean, there were clearly problems in the program.
        Mr. Westerman. Yeah, I know from my experience there were
    huge problems in the Medicaid program. And the follow-up to
    that is, did the ACA do anything to address the underlying
    problems with Medicaid, or did it simply add a new layer of----
        Mr. Haislmaier. It was mainly an expansion to it; it
    expanded to a new population. They did make some other changes
    to the program, but they were largely around the areas of
    eligibility.
        Mr. Westerman. So the 324,000 in my State, take away about
    7 percent of that for the woodwork, were all able-bodied,
    working age adults that are not even part of the traditional
    Medicaid system, the aged, blind, the disabled. Do you believe
    the traditional Medicaid population across the country has
    suffered any damage because of the expansion for the able-
    bodied adults?
        Mr. Haislmaier. The problem with it is not just so much the
    expansion, that increases the caseload, but the problem is that
    there is a sort of inequity in basically the Federal Government
    paying the states more for people who need the program less,
    and paying them less for people who need the program more. I
    mean, my classic example with this----
        Mr. Westerman. Do you think States need more flexibility to
    design their own Medicaid plans?
        Mr. Haislmaier. Well, in general, but I think also in
    particular with this population. I mean, one of the things we
    have learned both in terms of the Medicaid expansion and the
    subsidies for the very low income in the ACA is that these are
    people who will show up when they need medical care, but they
    are not going to stick with it afterwards. And you have to
    really direct them away from the emergency room. And Medicaid
    is not set up to do that.
        Interim Chair Black. The gentleman's time has expired. The
    gentlelady from Florida, Ms. Wasserman Schultz is recognized
    for 5 minutes.
        Ms. Wasserman Schultz. Thank you, Madam Chair, and
    congratulations to you, as well as to our ranking member. The
    chair noted that I served on the Budget Committee in the 112th
    Congress, but it appears that I have returned to the alternate
    facts committee, because that is what we have been subjected to
    throughout this hearing.
        Madam Chair, I respectfully want to share with you in case
    you are not aware, that I know you referenced 28,000 people in
    Tennessee supposedly, you know, losing coverage from TennCare
    which existed before the Affordable Care Act, but I wonder if
    it would surprise you to learn that 28 percent more Tennesseans
    gained coverage under the Affordable Care Act, that is 266,000
    people in Tennessee who now have coverage which is a far sight
    better than the 28,000 you referenced who supposedly lost it.
        I am also confident, if you checked, you would probably see
    that most of those 28,000, if not all of them, were able to
    gain more affordable coverage under that Affordable Care Act.
        In my State, 1.3 million Floridians gained the coverage who
    did not have it before, the most in the country and I will
    note, something that we have not really talked about here--
    let's focus for a moment on the fact that people with employer-
    based insurance would be gravely harmed from the significant
    benefits that they gained under the Affordable Care Act. The
    return of annual and lifetime coverage gaps, coverage limits,
    preventative care without a co-pay or a deductible like
    mammograms, colonoscopies, well-woman care, all of which made
    health care more affordable.
        By the way, the availability of birth control for free
    without a co-pay or deductible has contributed to a precipitous
    drop in the unwanted pregnancy rate. So, the majority of people
    who already had coverage before the Affordable Care Act will be
    significantly harmed by repeal.
        I want to note, also, that Dr. Book clearly referenced in
    one of his responses that he supports returning to ``health
    underwriting'' which was extremely dangerous and harmful and
    expensive, and contributed to death spirals when we had a
    purely private market-based system. Ms. Turner is clearly
    advocating returning to strict private market practices that
    were unaffordable and harmed millions of people.
        So, let's be very clear here, there has not been a
    replacement plan proposed and, respectfully, my colleagues on
    the aisle had 7 years to do that and still have not done it. We
    have millions of people who gained access to health care who
    did not have it before; millions of people who had healthcare
    coverage and got better coverage; millions of seniors who can
    have more affordable prescription drugs and, frankly, also have
    benefits like being able to go and get a check-up every year
    without a co-pay or deductible. Representing a State who has
    the largest percentage of seniors in the entire country, I can
    tell you that most of those folks were only able to go to the
    doctor when they were sick because they could not afford copays
    and deductibles on a well care visit for them, so we are
    keeping them healthier as a result.
        In my last--under 2 minutes, I want to ask Mr. Haislmaier,
    do you believe--and I would like, in the interest of time, just
    a yes or no answer--do you believe all Americans should have
    access to quality, affordable health care--all? Yes or no.
    Given the time constraints, again, please answer with a yes or
    no and can we agree that health care is a right and not a
    privilege?
        Mr. Haislmaier. That is the wrong question because----
        Ms. Wasserman Schultz. Yes or no. You do not get to
    dictate----
        Mr. Haislmaier. No, I am not going to answer yes or no on
    that because you are----
        Ms. Wasserman Schultz. Clearly, because you probably do not
    think it is.
        Mr. Haislmaier [continuing]. Because you are--because all
    health care is not----
        Ms. Wasserman Schultz. And before the ACA--if you will not
    answer my question, I do not----
        Mr. Haislmaier. You know, facelifts are not a right.
        Ms. Wasserman Schultz. I guess, add. See, my name is on the
    door, so I get to ask the questions and decide which ones are
    right.
        Mr. Haislmaier. Okay, but you do not----
        Ms. Wasserman Schultz. You clearly do not believe that
    health care is a right, not a privilege. None of the majority
    witnesses do. And before the ACA, there was no all-out band
    prohibiting discrimination against individuals with pre-
    existing conditions until age 26, correct?
        Mr. Haislmaier. No, that is not true.
        Ms. Wasserman Schultz. No, it is true.
        Mr. Haislmaier. No, the----
        Ms. Wasserman Schultz. There is no question that you were--
    an insurance company could drop people or deny them coverage--
    --
        Mr. Haislmaier. No, that is not true.
        Ms. Wasserman Schultz. Before the----
        Mr. Haislmaier. The 19--Congresswoman, if you actually read
    the 1996 HIPAA Law, you would understand that, that is not
    true.
        Ms. Wasserman Schultz. That would be news to the thousands
    of people that I know in my district who were dropped or denied
    coverage. As a breast cancer survivor, I can tell you that I
    have spoken to many of my sister survivors who were dropped in
    the middle of their treatment by their insurance company and
    had to choose to----
        Mr. Haislmaier. And that was illegal and they had recourse.
        Ms. Wasserman Schultz [continuing]. Between--excuse me, no,
    it was not illegal. It happened every day.
        Mr. Haislmaier. It was.
        Ms. Wasserman Schultz. And they had to choose between
    either the chemo or the radiation because they could not afford
    the copays or deductibles on both. That is the nightmare that
    the majority----
        Mr. Book. The ACA does not require coverage for either.
        Ms. Wasserman Schultz. Excuse me, I have not asked you a
    question, Dr. Book. Madam Chair, if you could return a few
    seconds of my time because I keep getting interrupted, I would
    appreciate it.
        Interim Chair Black. I am proffering you 5 seconds.
        Ms. Wasserman Schultz. Thank you so much. At the end of the
    day, the majority is clearly proposing to repeal the Affordable
    Care Act without assuring us that we would have universal
    access to quality affordable coverage. That is unconscionable,
    unacceptable and we will not allow you to do it without a
    fight.
        Interim Chair Black. The lady's time is expired. I do want
    to recommend to my colleagues that keep saying there are not
    plans out there, there is a Ryan, Price, Sessions, Roe, and
    then there is the Better Way with Guiding Principles. With
    that, the gentleman from Ohio, Mr. Johnson is recognized for 5
    minutes.
        Mr. Johnson. Thank you. Madam Chairman, I appreciate the
    opportunity and I appreciate our panel being here with us
    today. You know, we are holding this hearing today for one
    simple reason. Obamacare has failed and it has caused a series
    of very serious problems for the American people. I think we
    all remember the Democrat Minority Leader famously stating,
    ``We have to pass Obamacare to find out what is in it.'' Well,
    we have done that, or they did that and it is full of broken
    promises that are harming American individuals, families and
    businesses.
        Instead of reducing healthcare costs, Obamacare has driven
    up premiums and deductibles and millions of Americans have lost
    affordable quality healthcare plans and their choice of doctors
    in many cases. The average annual family premium in the
    employer-sponsored market has soared, totaling more than 18,000
    annually, while deductibles for individual plans are up an
    average of 60 percent since 2010.
        At its core, the law did nothing to drive down the
    healthcare costs for the American people. During a time of
    economic recession and hardship, Obamacare employer mandate
    makes full-time workers more costly to hire, resulting in many
    cases in job reductions, lower wages, and reduced benefits. And
    these are just a few of Obamacare's harmful effects that we are
    exploring here during this hearing. And I have listened to some
    of the questions and comments by some of my colleagues on the
    other side of the aisle and I want to agree with one of the
    things they say.
        It is not about statistics, it is about people, but yet
    they cite statistics about coverage without acknowledging the
    fact that coverage does not necessarily mean affordable.
    Because I can tell you that in Appalachia, Ohio--along the Ohio
    River, there are thousands of people who, because of the high
    premiums and the high deductibles, they do not bother going to
    the doctor even though they might have coverage in the
    theoretical sense, or the technical sense, it is not affordable
    and it does not give them quality health care.
        So, Ms. Turner, under Obamacare, out-of-pocket costs, as I
    just mentioned for families and individuals, including the
    deductibles, are simply unaffordable and it constrains their
    budgets, so why in your view are costs so high?
        Ms. Turner. They are high primarily because the Federal
    Government decided it knew better than the American families to
    what needs to be covered in their health insurance policies. In
    addition, the Affordable Care Act included a trillion dollars
    in new and higher taxes, many of which get booked and built
    into the premiums, as well as rules and regulations that have
    discouraged the young people from entering. So, we, therefore,
    have many more young, older sick people in the pools not offset
    by the younger people who would otherwise be there to help
    lower premiums.
        Mr. Johnson. So, basically, you have got bureaucrats
    running our healthcare system instead of physicians and
    patients.
        Ms. Turner. Right, correct.
        Mr. Johnson. Dr. Book, what are the areas of spending in
    Obamacare with the greatest unforeseen cost overruns? Do you
    have some examples you can share with us quickly?
        Mr. Book. I would say the most unexpected thing from the
    standpoint of the proponents was the huge increases and
    deductibles and that was the result of a system that encourages
    sick people to sign up. It discourages healthy people to sign
    up especially if you are under 26. You know, why buy and
    exchange plan when you can get on your parents' plan. And then
    regulators try to crack down on premiums and they cannot cut
    covered services because there is a whole bunch of required
    covered services, so the only thing they have to do is increase
    deductibles.
        And what used to be a high deductible plan that qualified
    you for a tax break, if it was $2,400, it is now lower than any
    deductible you can find. Now, people are paying $9,000 for a
    deductible, which by the way, is double the statutory limit
    because the previous Administration issued a waiver allowing
    deductibles at the double the level the text of the ACA
    actually allows.
        Mr. Johnson. So, just one quick final question because I am
    out of time. So, has Obamacare successfully bent down the cost
    curve in healthcare spending?
        Mr. Book. No. In fact, during the last year that stat is
    available, costs went up 5 percent per capita. The 5-year
    average before was 2.9 percent.
        Mr. Johnson. Okay. Thank you, Madam Chair, I yield back.
        Interim Chair Black. Your time is expired. The gentleman
    from California, Mr. Carbajal, 5 minutes.
        Mr. Carbajal. Thank you, Chairman Black and thank you,
    Ranking Member Yarmuth and all my colleagues. I would like to
    thank all the witnesses that are here today, and I want to
    start by saying that, you know, the Affordable Care Act never
    purported to be perfect. So, it is important to recognize that
    as the baseline by which we are debating and discussing this.
    It did a lot of good. It continues to have some challenges, but
    it did a lot of good in attempting to fix a broken healthcare
    system that we all know we had and continue to have. We need to
    build on that.
        It has been three weeks since I was sworn in as a member of
    Congress. In this short time, I have seen the Republican
    majority take concrete action to begin dismantling the
    Affordable Care Act and I am deeply concerned about where we
    are headed. We have no substantive plans from the Republican
    majority to replace the ACA with a proposal that would match
    the benefits provided by the ACA. I would love any plans that
    have been proposed to become available so that I could see them
    first hand.
        Now, I want to be clear. I do not believe the Affordable
    Care Act is perfect. There are changes that can be made to make
    it better. I have heard from constituents who have greatly
    benefitted from the healthcare law and that is the reason I am
    here. I asked my constituents to share with me their stories
    about how a repeal would impact their lives. And I would like
    to share some of those stories with you, not statistics, but
    some of those stories.
        Jerry, a business owner in Los Osos in my district, lived
    without health insurance for years until the Affordable Care
    Act, hoping that their young son would not get sick or break a
    bone. Brian, in Santa Barbara, was uninsured for nearly 20
    years because he could not afford health care coverage. The
    Medicaid expansion under the ACA allowed him to get covered.
    Just last year, Brian was diagnosed with a degenerative disc
    disease and without surgery covered by this medical expansion,
    he would have been left severely disabled. He told me the ACA
    quite literally saved his life.
        Elle Donna in Balboa Beach, donated her kidney the same
    year the Affordable Care Act was signed into law, in 2010. If
    not for the Affordable Care Act, her life-saving act would have
    prevented her from obtaining health insurance due to a new pre-
    existing health condition as a living donor.
        These are just a few of the stories that I have heard about
    tangible life-saving impacts the Affordable Care Act has had. I
    see I am running out of time. Dr. Blumberg, can you elaborate
    more on how repealing the Affordable Care Act would impact my
    home State, California?
        Ms. Blumberg. I do not have my California specific figures
    in front of me, Congressman, but as the largest State----
        Mr. Carbajal. Let me ask you a second question then. What
    do the people losing coverage look like to you? Are they
    working families? Are they mostly poor or not?
        Ms. Blumberg. So, about over 80 percent of those who would
    lose coverage are in working families and the vast majority of
    those have at least one full-time worker in the household; 53
    percent have incomes between 100 percent and 400 percent of the
    Federal poverty level. That is about $24,300 for a family of
    four as poverty. It has spread very broadly across the age
    distribution, contrary to some of the things we have heard.
    There has been--the biggest uptake in coverage that has been
    among young adults and 80 percent are people who have not
    obtained a college degree.
        Mr. Carbajal. Thank you. I come from a working family. My
    dad was a farm worker. I have seen people back home struggle to
    pay their medical bills when a family gets sick. It is
    imperative that we continue to work together providing
    affordable health care coverage for all, especially these
    working families that stand to lose the most from repeal. I
    yield back.
        Interim Chair Black. The gentleman yields back. The
    gentleman from Minnesota, Mr. Lewis, is recognized for 5
    minutes.
        Mr. Lewis. Thank you, Madam Chair. For the record, anyone
    on the Panel can answer this, the HIPAA Law of 1996 does not
    allow or does cover by law, pre-existing conditions, employer-
    to-employer?
        Mr. Haislmaier. That is correct.
        Mr. Lewis. Oh, I just wanted to get that in for the record
    then. I do want to talk a little bit about what the ACA has
    done in Minnesota. Now, there is a lot of talk from the other
    side about how repeal would impact certain groups, but we know
    what the law has already done. In my home State of Minnesota,
    which is really at the epicenter of all this, the commerce
    commissioner there called it an emergency situation. Two years
    of back-to-back premium increases, 50 percent and 67 percent. A
    hundred thousand people being shoved into a default option.
        The governor, Governor Mark Dayton, whom we are all wishing
    well today, called the Affordable Care Act is, ``no longer
    affordable.'' It is an existential crisis in the State of
    Minnesota. So, we can talk all day long about what repeal and
    replace is going to look like, but we know what the current law
    looks like and it has been a disaster. One thousand counties in
    the United States have one insured to choose from.
        Now, I am going to focus a little bit about--on two things,
    one, employer coverage as well as what we call the age rating
    or the community rating in some circles. First of all, I
    believe Grace-Marie Turner has commented on the Affordable Act
    not just hitting the individual market, what we are hearing
    from the other side is, ``Well, gosh, you are just talking
    about 5 percent of the people in the individual market being
    hurt by all of this. It is no big deal, 95 percent of the
    people have coverage and their very healthy employer pool, but,
    in fact, the Affordable Care Act has really impacted employer
    coverage too, has it not?
        Ms. Turner. Absolutely, and as we heard earlier, the
    requirements of the law have significantly driven up costs and
    deductibles to the cost of the average family policy for
    employer is now $18,000 a year, more than the $4,000 higher
    than it was before, not the $2,500 savings that they were
    promised.
        Mr. Lewis. And Dr. Book, to your point, an acquaintance of
    mine was recently offered a plan, at work, again not the
    individual market, employer-based coverage, his deductible was
    $13,000. The family plan was well over $1,500 a month. This is
    living proof that health insurance is no longer health care.
        Mr. Book. Right, well, yes and that kind of deductible was
    unheard of before the ACA. Nobody had a $13,000 deductible
    before that.
        Mr. Lewis. It used to be in the market-based economy, it
    would work a little bit like the bond, 10-year bond. The
    interest rates go up, the bond goes down. Premiums go up, your
    co-pays and deductibles go down. Now, we are getting a massive
    hike in premiums along with massive hikes and co-pays, stricter
    drug formularies all sorts of things that were unheard of just
    a few years ago.
        Mr. Book. That is absolutely right.
        Mr. Lewis. Anybody else want to comment on that?
        Ms. Blumberg. I would like to comment. There was some
    turmoil in the early years of the ACA in Minnesota because of
    the problems with underpricing by the co-op and then the
    removal of the risk core where payments that were intended to
    pay and that was a congressional decision and that really
    financially harmed the market in Minnesota tremendously and I
    get that, but 380,000 people have gained insurance coverage
    through or at risk of losing their health insurance coverage
    through repeal. In Minnesota alone----
        Mr. Lewis. I can tell you the insurance companies are more
    than making up for that underpricing early on.
        Ms. Blumberg. No, and I understand that.
        Mr. Lewis. I mean, it is 50 percent, 67 percent the last 2
    years.
        Ms. Blumberg. And there are some strategies that we can
    discuss for stabilizing the market there and increasing
    competition within the framework of the Affordable Care Act.
        Mr. Lewis. I think it is just going to be, soon, one
    insurer left in MNsure, the State exchange. They are fleeing
    the State.
        Ms. Blumberg. But if you want to discuss it, I can give you
    some ideas of how you might increase competition.
        Mr. Lewis. I want to get one more question in for Mr.
    Haislmaier and that is, do you know of any economic model where
    freely floating prices are not a requirement for the proper
    allocation of assets?
        Mr. Haislmaier. No.
        Mr. Lewis. So, why are we putting price controls on the
    health insurance market that basically says, ``Well, gosh, the
    price has to be within a band for everybody,'' which is
    effectively jacked up premiums so high that we price young
    people out of the healthcare market.
        Mr. Haislmaier. Well, basically, that is a pricing
    convention and what you can do is you can sort of categorize
    them in bands. The problem there is, yes, you have compressed
    to the point where you have increased the costs for young
    adults----
        Mr. Lewis. And priced them out of the market.
        Mr. Haislmaier. You have reduced them for older people and
    priced them out of the market. Yeah, it was one of the things
    that really even from the perspective of a supportive of this
    law did not make a lot of sense to start with because those are
    people who are most likely to be price sensitive about
    insurance.
        Mr. Lewis. I think Milton Friedman warned us about price
    controls at one point, right, in the surpluses and charges. All
    right, thank you. Madam chair, I yield back my time.
        Mr. Rokita [presiding]. Gentleman yields. Mr. Boyle is
    recognized for 5 minutes.
        Mr. Boyle. Thank you and thank you for recognizing me and I
    very much appreciate being on this committee. Regret that this
    morning it was service on my other committee has a hearing
    meeting at exactly same time, so trying to run back and forth
    to the two. I will have questions for Dr. Blumberg, but I first
    just want to reiterate something that I said on the House floor
    last week and go into a little more detail since I have more
    than a minute.
        It is interesting that about 16 years ago, I was sitting in
    a graduate school class at Harvard's Kennedy School and there
    was a fellow from the Heritage Foundation, Stuart Butler,
    saying that he had an idea that was an alternative to what was
    then characterized as ``Hillary Care'' before it was demonized
    Obamacare, it was first demonized as Hillary Care.
        And the alternative to a government-run, single-payer
    system, essentially Medicare for all, was the pool the
    uninsured together through a series of taxes and tax credits
    combined with a mandate to purchase insurance and banning a
    discrimination against those with pre-existing conditions. Pool
    these people together and instead of having a government
    provided single payer, we would instead pool them together and
    enable them to purchase private health insurance plans.
        In fact, that was the genesis of the bill that was
    introduced by then, Republican Senate leader Bob Doyle and 17
    Republican senators in the mid-1990s. Fast forward two decades,
    we know it and the root of it is Obamacare and suddenly, it is
    an idea that is akin to socialism.
        So, if the other side really wants to repeal and replace
    what was the market solution to the Democratic plan of the
    1990s and wants to instead repeal it and maybe replace it with
    a single-payer system or some sort of Medicare for all, I would
    be someone on this side of the aisle that would be interested
    in that sort of repeal and replace conversation.
        Now, let me address some of the rhetoric we have heard
    recently in the media because I am confused about it. We keep
    hearing that Obamacare is in a ``death spiral'' and that it
    will ``collapse under its own weight,'' but then I actually
    look at the facts and I see 22 million people who are insured.
    I see that in 2010, the percentage of Americans uninsured was
    approximately 16 percent. Today, it is one half of that, 8
    percent. The lowest percentage in American history.
        So, Dr. Blumberg, could you rectify these clear
    discrepancies between the rhetoric of a ``death spiral'' and
    the actual facts?
        Ms. Blumberg. Sure. The Affordable Care Act markets are not
    in a death spiral. Coverage is increasing in them and there
    some--substantial percentage of the population lives in areas
    where there has been either modest increases in prices or
    actually, decreases and not--lowest options that are available
    there.
        So, there are some markets that have had bank percentage
    increases because they were correcting for earlier underpricing
    and then, there is a set of states that are having issues
    related to lack of competition and either their insurer or
    provider markets and adverse selection. And those are the
    markets that we should be addressing with policy, but we should
    not be presuming that this is one big market that is
    collapsing. That is absolutely not true.
        Mr. Boyle. Yeah, and I think a couple of those States are
    Minnesota, like we heard Arizona, I think is another one. They
    have their own unique challenges that are not necessarily
    representative of the Nation as a whole.
        Ms. Blumberg. That is correct.
        Mr. Boyle. I did want to--because I cited the figure of 22
    million people that are now enrolled through the exchanges,
    but, in fact, if we were to repeal the Affordable Care Act, the
    number of people that would lose their health insurance is
    upwards of 30 million. Is that not correct, and can you expand
    upon that?
        Ms. Blumberg. Our estimate is that 29.8 million would lose
    their coverage in 2019 and that would be a consequence of
    repealing all the financial assistance and the individual
    mandate that bring in the healthy population into the pool
    while leaving in place the consumer protections that prohibit
    discrimination against the sect. Those two things going
    together end up not just eliminating the coverage for people
    who gained it under the law, but collapse the market for people
    that were buying with their own funds.
        Mr. Boyle. Okay and of course, finally, since I am down to
    10 seconds, the 29.8 million figure does not even include the
    number of seniors in my districts that have gotten benefits
    such as, lower prescription drug costs because of other changes
    that came in with the Affordable Care Act.
        Ms. Blumberg. Right, because they would not become an
    insured.
        Mr. Rokita. The gentleman's time is expired. We will now
    hear from Mr. Bergman for 5 minutes.
        Mr. Bergman. First, thank you, Madam Chairman, for giving
    me the opportunity as a member of the new committee--Budget
    Committee to be here and ask questions today. As a new member,
    I came to Congress with a promise to my constituents of
    Michigan's First District to serve them and to make sure we are
    being responsible stewards of their hard-earned tax dollars.
    So, it is only fitting that we are here today to discuss the
    harmful effects of Obamacare.
        This law has raised taxes on families and small business,
    discouraged economic growth and job creation and has ultimately
    placed the government in the driver's seat for personal
    healthcare decisions. I am looking forward to working with my
    colleagues across the aisle, here in this committee, and in
    Congress in general on meaningful, real reform to our
    healthcare system.
        My first question for Ms. Turner. The authors of Obamacare
    tried to setup tools to help small business get access to
    health coverage, such as the small business tax credit, a
    special insurance exchange, known as the shop exchange. Are
    small businesses better off or worse off because of Obamacare?
        Ms. Turner. The polls that are taken by the National
    Federation of Independent Business and other organizations say
    absolutely not because their costs are still so high and they
    were very disappointed at the effect of the promise that they
    would have tax credits and relief which they have not seen and
    felt they had to jump through way too many bureaucratic hoops
    and the tax credits were far too restrictive to be of use to
    them.
        Mr. Bergman. Okay. Again, Ms. Turner, what are the lessons
    that we should take from our last 6 years of Obamacare to truly
    provide access of affordable health care for the small
    businesses? And my district has a tremendous number of small
    businesses. What are the lessons?
        Ms. Turner. The lessons are to listen to them; that they
    want to provide health insurance for their members. They cannot
    do it if the policies that they are required to offer are so
    extraordinarily full of benefits that the prices are
    prohibited. It hurts everyone to try to promise them everything
    and they cannot afford it.
        Mr. Bergman. Thank you. Dr. Book.
        Mr. Book. Yes.
        Mr. Bergman. As we prepare to legislate in this area to
    provide patient-centered healthcare reforms, what are the
    biggest lessons from the Obamacare experience that we should
    heed? Conversely, are there positive aspects of the healthcare
    law that have performed better than anticipated that we should
    be aware of? So, pros and cons.
        Mr. Book. So, I think the most important lesson is patients
    have a better idea of what type of coverage they want than
    people sitting here in Washington telling them what to want.
    People should have the right, if they wish, to buy a
    comprehensive healthcare plan that covers everything
    imaginable.
        If they wish to choose a more basic plan, that should be an
    option. If they wish to choose a more, you know, more
    catastrophic plan, which is with the $9,000 deductible, that
    should be an option as well. What they should not have to do is
    buy a comprehensive plan with a catastrophic deductible, which
    is basically the only option that people in the individual
    market have right now.
        I think the goal of allowing people to buy insurance
    without--even if they have pre-existing conditions is an
    admiral goal, is an important goal, it is an essential goal,
    however, the ACA went about this in a completely wrong way that
    left millions of people unable to afford coverage. It also left
    insurance companies not covering a lot of conditions.
        You know, in the first year of the ACA, there were actually
    fully compliant ACA health plans that did not cover cancer
    treatment at all because that was not one of the essential
    services required by law. I guess someone just forgot to list
    that.
        Mr. Bergman. Thank you.
        Mr. Book. Yeah, sorry.
        Mr. Bergman. Thank you. I want to get to--because I have
    about 30 seconds left. Mr. Haislmaier, can you explain the
    difference between subsidized and unsubsidized coverage and
    what that means for individuals who are purchasing coverage?
        Mr. Haislmaier. Well, the Affordable Care Act has a set of
    very general subsidies for people who meet income and other
    criteria and purchase through the Exchange. So, what I am
    talking about the market, those are the people I am referring
    to who are receiving subsidies, as subsidized enrollees. You
    could also refer to people who are on a public program as a
    subsidized enrollee. The other two are buying in the same
    market----
        Mr. Rokita. The gentleman's time is expired. We will now
    hear from the gentleman from Massachusetts, Mr. Moulton, for 5
    minutes.
        Mr. Moulton. Mr. Chairman, thank you. You know, there has
    been a lot of discussion here back and forth about conflicting
    ideas. Perhaps, alternative facts, but I just want to get down
    to some facts we can all agree on. Some simple things about the
    situation we find ourselves in now here in Congress.
        The first is that, Republicans have tried to repeal the ACA
    65 times; 65 times, they have voted to repeal the ACA without a
    replacement. Not on the first try; not on the fourth try; not
    on the 12th try; not on the 65th try. I heard Madam Chairman
    discuss at length, her anecdotal evidence for places where
    Obamacare has come up short. Not once did I hear her propose an
    alternative. If we want to fix this, then let's propose a plan,
    and hope is not a plan. Ideas are not a plan.
        Second, we get lectured in this committee a lot by the
    other side of the aisle about fiscal discipline; about how if
    American families and small businesses can balance their
    checkbook, then Congress ought to be able to, too. And you know
    what? I agree with that. I strongly agree with that and yet,
    here we are where repealing the ACA without a replacement as
    the Republicans have already begun to do, would cost roughly
    $350 billion through 2027.
        In fact, it will be so bad for the deficit that Republicans
    had to repeal the rule that bans reconciliation from being used
    to increase deficits. They had to repeal that rule so that they
    can increase the deficit dramatically by repealing Obamacare.
    It is going to break our bank.
        The gentleman from California said, ``Is it not shocking
    that we have a trillion dollars spent on health care and yet
    there are some people who are left out?'' What is shocking to
    me is that you want to spend even more than that and yet leave
    30 million people without health care.
        Now, the third thing that we can all agree on is that the
    Congressional Budget Office estimates that repealing the major
    coverage provisions of the Affordable Care Act will terminate
    coverage for--sorry, not 30, but 32 million people.
        I would just like to put that number in perspective. No,
    sorry, not the slide of the people who did not show up for the
    inauguration. Can you see the next slide? Yes, the Women's
    March, right. This Saturday, roughly 3 million Americans
    gathered in cities all over the country for the Women's March.
    The largest single day protest in American history. If you
    multiple that number by 10, that is how many Americans would
    lose their access to the affordable, quality care they receive
    from the ACA. We are just looking at Washington here.
        Three million Americans all over the country, multiply that
    by 10, that is now many people we are talking about losing
    their care. I am a veteran myself. I am particularly proud of
    the fact that between 2013 and 2015, the un-insurance rates for
    non-elderly veterans fell by an estimated 42 percent--42
    percent and we are going to put a lot of those vets out in the
    street without health care if we follow through on this. Two
    leading doctors at Harvard Medical School have concluded that
    43,000 people will be killed annually if the ACA is repealed
    without a replacement. And not just a replacement, but a
    comparable replacement, a comparable replacement.
        Madam Chairman lectured us on how we should govern by
    anecdote because she cited some people who are not happy with
    their current care. Those 43,000 people are not just anecdotes.
    They are people too, who will lose their care if this is
    repealed. For your Congressional district, that is about 1 in
    17 people in your Congressional districts, that is what that
    will mean; who will die if this is gone. Thank you, Mr. Chair.
    I yield back.
        Mr. Rokita. Gentleman yields back. I will remind the
    gentleman that in 2015, when the Obamacare appeal got to the
    President's desk, had he signed it, the deficit could have
    nearly been erased because CBO scored that as a $500 billion
    savings. Gentleman from New York, Mr. Faso, is recognized for 5
    minutes.
        Mr. Faso. Thank you, Mr. Chairman. A number of the
    witnesses have discussed the age banding, and we know that
    there are approximately 8 million people have chosen to not buy
    coverage either because they cannot afford it; they do not know
    enough about it; or, they have just simply decided it is a
    better deal for them to pay the penalty. I am wondering if--I
    know Ms. Turner and Dr. Blumberg have both referenced in their
    testimony the 3-to-1 ratio which is in statute as I understand
    it. What should--if the panel could each offer us--what should
    that ratio be if we are to amend that portion of the law?
        Ms. Turner. This would be a decision best left up to the
    States, but a 5-to-1 age band was previously considered a good
    standard, but it is something that is very difficult for the
    Federal Government to make one standard.
        Ms. Blumberg. From my perspective, you cannot change the--
    you should not change the 3-to-1 age band to something broader
    unless we provide more financial protection for older adults
    because the point of putting those tighter age bands in was to
    make it so coverage was not excessively unaffordable for older
    adults paying for their full premium.
        So, if you can put in where consumer protections, financial
    protections, everyone over 400 percent of poverty pays only--no
    more than eight and one-half percent of their income for a
    standard policy. Then you can loosen to 5-to-1 because what you
    are doing is you are redistributing these very high costs that
    we accrue as we get older by income instead of by age--but for
    now I would not move up----
        Mr. Faso. Thank you.
        Ms. Turner. But the effect has been to discourage young
    people to getting it and actually it harms older people now
    currently because the young people simply do not enroll because
    of this 3-to-1 band.
        Ms. Blumberg. It does not harm older people and I think you
    have far overstated the circumstances.
        Ms. Turner. But they are paying higher premiums.
        Ms. Blumberg. This is my turn now. You far overstated the
    circumstances because age is very inversely correlated with
    income. So actually, a very large percentage of our young
    adults are eligible for financial assistance, which caps what
    they have to pay relative to their income when they enroll
    through the marketplaces and that protects them. Our analyses
    found that there is no difference in coverage as a consequence
    of 3-to-1 versus 5-to-1. It is a matter of who is going to be a
    little more uninsured; older adults who need a lot more care or
    younger adults who need less.
        Mr. Faso. Thank you, Dr. Blumberg. Dr. Book, did you have
    something to add to that?
        Mr. Book. Yeah, thank you. To answer your first question, I
    would recommend not specifying that in that ratio in the
    statute. Prior to the ACA, some states did not have that in
    their State statutes either and the ratio was usually 5-to-1.
    We find with the ACA premiums even for older Americans have
    increased relative to what they were before. So, I do not think
    this 3-to-1 is necessarily saving them money, because they are
    paying more.
        Mr. Faso. Okay. Mr. Haislmaier, do you have something to
    add to that?
        Mr. Haislmaier. Congressman, yes. I can supply you with a
    study that was done by the American Academy of Actuaries that
    has looked at the relationship between age and health care
    expenditures. And basically, when you look at that, if you
    assume that there is a blended rate, meaning that you are not
    differentiating between men and women, because women tend to be
    more expensive younger and then that flips and men are more
    expensive when they are older, but if you assume a blended
    rate, then the approximately 5- to 6-to-1 range is the natural
    variation in health care spending.
        Mr. Faso. Thank you. One last question that the panel, if
    you could briefly answer since I have 1 minute and 19 seconds,
    the essential benefits, my understanding that is done through
    strictly regulation now at HHS. What changes would you
    recommend in that regard, Ms. Turner?
        Ms. Turner. There are 10 specified categories in the ACA.
    The HHS secretary has a broad license to redefine those and I
    think that is something that the American people would like to
    have looked at again so that they can have more flexibility.
        Mr. Faso. Dr. Book.
        Mr. Book. Yeah, I would like to say a word about
    preventative care, which is listed as a general category, but
    somehow, in reality, preventative care does not include
    anything that actually prevents you from getting sick. For
    example, high blood pressure medicine is not included,
    cholesterol medicine is not included, blood thinners for people
    who had strokes are not included. It just includes things like
    vaccines, screening tests, and contraception. So, a lot of the
    things that actually prevent people from getting sick and
    prevent people needing more expensive treatments are actually
    not counted as preventive care, according to the ACA and its
    regulations.
        Mr. Faso. Dr. Blumberg.
        Ms. Blumberg. One must remember before you remove something
    from an essential health benefit or remove all essential health
    benefit requirements, is that as soon as you take something out
    of that benefit package it is out of the sharing of healthcare
    risk across the population. Any individual who needs that
    particular type of care is going to have to pay for it
    completely out of their own funds, and this will make that
    unaffordable care, in many circumstances, for many individuals.
        Mr. Rokita. The gentleman's time has expired.
        Mr. Faso. Thank you, Mr. Chair.
        Mr. Rokita. The gentlelady from New Mexico, Ms. Lujan
    Grisham, is recognized for 5 minutes.
        Ms. Lujan Grisham. Thank you, Mr. Chair, and while I had
    not intended to have this be the focus of my question, and I
    hope I do not lose all my time as a result. What is really hard
    about these hearings is that both sides have a limited amount
    of time to shoot out their sound bite and these falsisms or
    truisms do not get us anywhere closer to dealing with real
    healthcare reform. For somebody who has worked in health care
    for more than 30 years--I remember HMOs and I remember Medicare
    Part D and the problems with formularies--I can tell you that
    insurance companies and pharmaceutical companies are not trying
    to make it affordable for anyone, and I know that we have had
    lots of debates that have been bipartisan in Congress about
    hospital costs, and I just am really struck by the conversation
    about what HIPAA does and does not do.
        Most people in Congress, I will bet, have no idea that it
    is a privacy portability law that made some changes to the
    prior COBRA protections, which basically means when you lose
    your job or change your job there ought to be some way to take
    that insurance protection with you. But what we do not talk
    about is it was the full cost and it is time limited out, and
    if you do not get into another group plan after 24 months and
    you do not know to appeal, and you do not have a lawyer or you
    do not have me, then you do not get an extension.
        And if you had cancer, you are in real trouble, which is
    why we have so many bankruptcies and why people are so
    frustrated because while somebody on my side of the aisle did
    not quite get that right, her point was it does not really work
    in the way that we thought it did and most high risk polls
    around the country did not provide subsidies, which meant you
    were still paying the full cost of your care when you were
    excluded by a pre-existing condition, which is why so many
    Americans are so frustrated and we in Congress are not dealing
    with the real perpetrators of cost.
        You want to talk to doctors, which I do nearly every month,
    bipartisan, all different practices and relationships. They do
    not want to work insurance companies, not worrying about
    bureaucrats nearly as much as they are worried about
    corporations that tell them what they can and cannot do.
        You want a patient-centered system, take out the people
    that I have no control over. I have access to my doctor, but I
    cannot deal with my insurance company or pharmaceutical company
    that will not put any of the drugs--Dr. Book, that you just
    mentioned--as preventative care.
        It is not the ACA. We do not allow any negotiations with
    any of those pharmaceutical companies and, until we start to do
    real work in that regard, then the issues that you have by both
    members of this committee, including the mother pregnant with
    twins, husband loses his job, without the ACA, no way--and they
    are born prematurely--can she deal with it with the ACA.
        Another one of my constituents because insurance companies
    and hospitals do all sorts of interesting things, including in
    hard to serve places like my State, but certainly not just like
    New Mexico, but all across the country. We do interesting
    things like this, so this hospital is in my network and this
    hospital does women's care, which means they do maternity care,
    which means they got to have a neonatal wing. But guess what,
    that hospital is going to contract out with a Florida company
    that is going to provide those neonatal services.
        Now, I do not have any access to that information. I choose
    a plan. I go to the hospital in my plan. I give birth to
    triplets, prematurely. Those triplets are very sick, one
    survives. No complaints about the quality of care by this
    neonatal team. Now you need specialty care for the twin that
    survives. It is severely disabled and guess what I got? I got a
    $30,000 bill just for the first couple of weeks in neonatal
    care. You know why? Because they were not part of that network,
    and the ACA did not prevent that, the ACA did not cause that.
    Insurance companies cause that. Now, I was able as a member of
    Congress to solve that problem.
        I have legislation, ladies and gentleman, that would
    prohibit that. I do not think it has ever gotten here, and
    anybody who wants to get on that bill call me after. There are
    plenty of problems with large corporations and hospitals who
    have created huge cost problems and practices in this country.
    The real, one of the real issues; it is not the only one; we do
    not embrace public health in this country. Every other country
    that deals with reasonable healthcare costs and you want to get
    to prevention, then let's do public health.
        So, my questions were, are there any proposals, to Linda
    Blumberg, that you have seen in Congress. I will not even pick
    on Republicans, because I know about the Health Savings Account
    and I know about privatizing Medicare that would actually
    reduce deductibles or out of pocket costs, which I would agree
    I would love to see those go down. Any?
        Ms. Blumberg. No.
        Ms. Lujan Grisham. Me either. Not for 30 years.
        Mr. Rokita. The gentlewoman's time has expired. We will
    hear from the gentleman from Pennsylvania. Thank you, Mr.
    Smucker, for 5 minutes.
        Mr. Smucker. Thank you, Mr. Chair. I would like to thank
    the panelists for being here today. You know, I think it is
    important we not lose sight of the goal that I think is shared
    by everyone up here today, both sides of the aisle, and that
    is, we want to ensure that individuals--Americans--have access
    to quality health care at a price they can afford. And I am
    looking forward to working with my colleagues on both sides of
    the aisle to design such a system, because we know ACA has not
    done that--has not worked--and granted there are some who have
    had access to health care for the first time through ACA.
        And we are not going to pull the rug out from under them.
    We want to ensure we have a system that gives them better
    coverage, better care, but what I have been hearing and I, of
    course, like so many others--I am a first-time freshman
    member--have come through a 12 months campaign primary in
    general and the Obamacare system has been top of the list in
    people's minds. And what I have heard from constituents in my
    district is what we have been talking about today.
        People have seen extraordinary increases. People who had
    health insurance before have seen extraordinary increases in
    the cost of their premiums, 25 percent average increase in
    premiums across the country. It is higher than that in my area.
    I have talked to people who have seen doubling of their
    premiums, and then I have heard of others who have lost their
    insurance altogether, who have been forced onto a plan that
    they did not want.
        So, clearly, what we have is not working. I think there are
    better solutions and I am looking forward to working with the
    college to achieve that. My background is small business owner.
    I have been a small business owner for 25 years prior to
    serving in the State Senate, and I have spoken to a lot of
    small business members over the last year as well.
        I will just share one brief story. A husband and wife team,
    who operated a small machine shop in Elizabethtown in the
    Lancaster County portion of my district, and they prided
    themselves--they have 10 to 15 employees, I forget the exact
    number--but have been in business for quite some time, have
    always prided themselves in creating a kind of family
    atmosphere among their employees. They see their employees as
    family.
        They have always provided quality health care, seen that as
    an important part of their pay and benefit package, and
    literally believed that they may not be able to do that any
    longer and were very, very worried, not only about how it would
    impact their business and their profitability, but how it would
    impact their employees and their employees' families.
        I think this is one of the impacts of the Affordable Care
    Act that we have to find better solutions to allow employers to
    continue to provide that kind of service to their employees
    that they think is very, very important. But I want to get
    back, and I have taken most of my time--but I do have a quick
    question and I think, Mr. Haislmaier, you had talked about
    self-insurance. As a business owner, myself, we were one of
    those businesses that were self-insured and we found it an
    effective way to control costs, because you created a
    partnership with your employees and with the company.
        You designed a system that worked for employees and then
    created incentives for control and costs and so on, and just
    recently I talked to a business owner who said over the last 5
    years they have not had the kind of increases that many others
    have seen in health insurance, many other businesses have seen.
    And when I asked why, he said well, we are self-insured.
        So, we have had a very, very good experience with that. I
    think you mentioned that we have seen a slight increase in
    self-insurance after ACA and I guess I would be interested in
    learning more about that and whether you see this is as an
    important part of the solution.
        Mr. Haislmaier. Yeah, the most notable shift has been a
    significant drop off in fully insured employer plans, which is
    where you go and buy the coverage from an insurer on a group
    basis, and the insurer retains the risk. Those tend to be
    smaller and medium size businesses. Up until recently, the
    self-insured market has largely been large employers, but it is
    moving down the firm size scale. That is, by far, just to give
    you a relative concept, that has grown, but it has been a
    steady two percent sort of growth every year, but it is already
    from high base of about 100.
        It started out at about 100 million people in that. One of
    the reasons that--and I have been looking for this--I have not
    seen a significant acceleration in the data, but because of the
    ACA, if you get out from under----
        Mr. Rokita. I am sorry, the gentleman's time is expired.
    The gentleman's time is expired. Mr. Gaetz of Florida, you are
    recognized for 5 minutes.
        Mr. Gaetz. Thank you, Mr. Chairman. Hope is not a plan, was
    the admonishment we received from the gentleman from
    Massachusetts. It is perhaps also a fitting title for the
    obituary of the last 8 years. Time and again, we have heard our
    Democratic colleagues on this committee say, ``There is no
    replacement. There is no plan that Republicans have offered.''
        And whether they are here with us or back in their offices
    admiring their names on the wall, I would suggest that they
    look at the legislation offered by Mr. Rokita, where he has
    said that we functionally block grant Medicaid to the states,
    then we can experience the great vibrance of a Federalist
    system, where best practices will be attempted and copied and
    sure, there will be some who miss the mark, but that is sort of
    the deal we get in a constitutional republic, and certainly
    join Mr. Rokita in attempting to advance those efforts.
        I want to, for a moment, speak about emergency room visits.
    There was a promise in Obamacare that we would see a reduction
    in emergency room visits, but I have noted a 2015 study from
    Northeastern University suggesting that emergency room visits
    post Obamacare in Illinois are up. Another 2015 survey from the
    American College of Emergency Room Physicians where three in
    four emergency room physicians are experiencing higher
    emergency room volume, not lower volume, following Obamacare.
        And a February 2016 study, from the Center of Disease
    Control, suggesting that there has really been no reduction in
    emergency room visits as a consequence of this law, and so I
    guess my question for Dr. Blumberg is, why has Obamacare failed
    to reduce the number of emergency room visits?
        Ms. Blumberg. Well, first of all, I think it is not fair to
    assume that any change in emergency room visits is
    inappropriate use. There are always provider shortage areas
    where people tended to use emergency room care more. Those
    provider shortage areas were prior to the ACA and they still
    exist. But in addition, when you see an increase under the
    Affordable Care Act, what you are doing is you are lowering the
    price of medical care to people. And so, people who could not
    afford necessarily to go and get an emergency room care when
    they needed emergency room care, now have financial access to
    do so. So, it is not necessarily just because you have seen an
    increase that that is an increase in inappropriate use.
        Mr. Gaetz. Reclaiming my time, I am glad you mentioned
    that. So, let's then turn to the State of California. The State
    that has perhaps most enthusiastically embraced the expansion
    of Medicaid, where currently one in every three Californians is
    on their Medicaid product--13 million people--across the board
    reductions in reimbursements to providers.
        We read in the Los Angeles Times the story of Kevin Hill,
    58 years old. He was one of these Americans who was added to
    the Medicaid roles. He had to call 15 doctors in the Long Beach
    area. Either the doctors were not even answering the phones or
    they were not taking California Medicaid patients anymore
    because reimbursement rates were so low. And where did Mr. Hill
    end up? Back in the emergency room. So, I guess, you know, the
    question is if you have got a circumstance where you have got
    enrollment that is spiking beyond the ability to raise taxes to
    pay for it and reductions in what we pay providers, what is the
    hope looking forward?
        Ms. Blumberg. Well, we should not make public policies
    based on anecdote, and I do appreciate the story of your one
    constituent. But there are a lot of people who are getting
    Medicaid coverage now who have a usual source of care and we
    can demonstrate this through household surveys that never had a
    usual source of care before, and that is outside of----
        Mr. Gaetz. Reclaiming my time. You know, it is sort of like
    shifting ground. When I state the statistics that indicate that
    there is rising participation in our emergency rooms, the
    statistics cannot be trusted. When we cite the individuals who
    cannot go and obtain care, then we cannot trust the anecdote.
        Ms. Blumberg. But I did say when you lower the price of
    medical care, more people have access to use it. But that does
    not mean we are not also increasing access to usual sources of
    care for people who are uninsured for the first time under the
    Medicaid program, because the evidence is very strong that we
    are.
        Mr. Gaetz. Well, then let me conclude my time with some
    bipartisan agreement with the gentlelady from New Mexico. I
    agree wholeheartedly with her statements that we have real cost
    problems and cost drivers. I think frequently aided by a
    hospital industrial complex and an insurance system that, for
    the most part, has been supportive of the Affordable Care Act
    and does not want its repeal, and so the very people that the
    Democrats on this committee criticize for being the drivers of
    cost are the very same entities that are bellied up to the
    trough draining resources away from those who are truly
    vulnerable.
        So, I join the bipartisan sentiment about trying to attack
    those cost drivers, but it seems as though focusing only on
    coverage, which is illusory, which does not lead to real care,
    it just leads to more folks in the emergency room. It is not
    the better way that we should all be pursuing.
        Mr. Rokita. I thank the gentleman. The gentleman yields
    back. The gentleman from Texas, Mr. Arrington, is recognized
    for 5 minutes.
        Mr. Arrington. Mr. Chairman, thank you, and I am honored to
    represent West Texas. I am honored to be on this committee and
    to the ranking member Mr. Yarmuth, I look forward to working
    you and our colleagues on the other side of the aisle. The jury
    is not out in West Texas on Obamacare. Never--and I have been
    around public policy and politics a long time--never has there
    been a greater disparity or irony between the title and intent
    of legislation and its outcomes for the American people.
        It is not affordable care. It is the Unaffordable Care Act.
    It is the Raise a Trillion Dollars in Tax on Americans Act. It
    is the Kill More Small Businesses and Jobs Act. It is Crush the
    American Economy When it is Coming Up for Air from the
    Recession Act.
        It is the Weaken the Medicare Act by taking $800 billion
    from that program. It is make it more difficult on middle class
    and working class families. Let me tell you something, in West
    Texas, we do not care about the names on the halls and walls of
    Congress. We care about the people that have their names on
    their shirts and on the back of their belts, and they are
    getting creamed. How serious is this that we act now? That we
    act swiftly and with confidence that this paradigm, that this
    top down government run, centrally planned, one size fits all
    health care has failed us? How urgent is it that we act? How
    serious is it that we act, Ms. Turner?
        Ms. Turner. Absolutely crucial, and a new system cannot be
    built on the wreckage of Obamacare. You have to repeal it
    first. That is why members of Congress could not pass or
    replace legislation because the President vetoed the repeal
    bill.
        Mr. Arrington. Other members of the panel?
        Mr. Book. It is clear that simply repealing the ACA will
    not bring back the system that was destroyed by the ACA. That
    previous system also had a lot of problems with it and this is
    an opportunity to create a more caring and more feasible and
    more affordable and more economically rational system in which
    people can actually obtain the care they need, instead of just
    obtaining their $9,000 deductibles.
        Mr. Arrington. See, I am just a freshman congressman, you
    know, and I am trying to make sense of all this and this
    alternate universe and facts that have been mentioned. And I
    see the American healthcare system as a patient on the
    operating table or in the emergency room bleeding out and we
    are expected to take an Ace bandage and an aspirin and somehow
    allow it to live to see another day. The people I represent do
    not believe that. I am not disparaging or questioning the
    intent. The intentions were to provide affordable care. The
    outcomes were that it did not, period.
        And it is only the responsible thing to do for those who
    lead our country and represent the good people of these United
    States to step in and do something, and provide solutions, real
    patient-centered solutions, market-oriented solutions,
    flexibility to States, empowerment of the patient, to actually
    be a consumer of health care and create real markets where
    health insurance companies are competing for our business,
    driving the cost down and quality up. Good old fashion free
    enterprise, American way. I come from middle America.
        I come from rural America, and as I said on the floor the
    other day, when America is sick and believe me, the folks in
    the 29 counties in Texas District 19 would reaffirm this
    statement. When America is sick, and they are sick from
    Obamacare, and they are sick of Obamacare, and they are sick of
    big government being thrust upon them as the solution for every
    problem that ails us. But when America is sick, rural America
    is in the ICU: small businesses, family farms, community banks,
    rural hospitals.
        Put the slide back up, please, if you would of the 80 rural
    hospitals that have gone away, 600 on the brink of going away.
    How are we going to bring the food, fuel, and fiber to America
    if we do not have health care infrastructure? But the $58
    billion in additional regulatory cost, we cannot do it. So, if
    you want to feed and clothe the American people.
        Mr. Rokita. I thank the gentleman. The gentleman's time is
    expired. Now, I will hear from the gentleman from Georgia, Mr.
    Ferguson, for 5 minutes.
        Mr. Ferguson. Mr. Chairman, Ranking Member, thank you so
    much for the opportunity to address the panel. I thank you each
    for your time and thank you all for coming. I am going to start
    with a question and I do not mean to sound facetious, how many
    of you all sitting at that panel have delivered health care as
    a provider to someone in a rural community living below the
    poverty level. You have--in the last 24 months?
        Ms. Blumberg. Yeah, I am a volunteer for Remote Area
    Medical, so I work in Appalachia delivering care.
        Mr. Ferguson. Good, okay. So, a lot of the conversation
    that we will have, we will be able to connect with, okay. As I
    go through this, one of the things that I want to explore is
    the regulatory cost that has been added to health care
    delivery. Can you all explain to me, in the Affordable Care
    Act, how there is an intentional effort to lower regulatory
    cost in the delivery of health care? And I will start with Dr.
    Book.
        Mr. Book. Within the ACA? Within the ACA, I do not believe
    there is any attempt to do any of that.
        Mr. Ferguson. Okay, thank you. Would you all agree that
    there is increased regulatory cost as a result of the
    Affordable Care Act? Mr. Haislmaier, I will ask you that
    question.
        Mr. Haislmaier. Yes, so it is not evenly spread. I mean,
    certainly more in certain sectors than others, but yeah, it is
    a significant increased regulatory cost.
        Mr. Ferguson. With that increased regulatory cost, as a
    provider, this is something that I live with every single day.
    We are spending more and more time on regulation and less and
    less time on the most important part of health care delivery
    and that is the intimate conversation between a doctor and a
    patient. As I move forward every day with treatment with my
    patients, the single most important thing that I have to be
    able to do is to communicate in an effective way with my
    patient the value of the health care that is being delivered.
    And I do that every single day.
        What I have seen in recent times is we have less and less
    time to do that. Just because you have access to health
    insurance does not mean you have access to care. I am sure that
    has been said many, many times around here. It is true. Has the
    Affordable Care Act looked at the other barriers to access to
    care besides simply access to insurance? I will tell you in my
    practice I treat patients every single day from folks that are
    trying to figure out how to get their next meal to a family
    with unlimited needs. I do it every single day in my dental
    practice. There are a lot of other barriers to care for those
    that are caught in the cycle of poverty.
        Dr. Blumberg, you working in Appalachia can probably see
    that, too. Transportation issues, education issues, all of
    those types of things. So, a lot of times we are trying to
    solve a problem by providing an insurance product that really
    does not address the fundamental issues of access. We all
    assume that the number one reason that people do not receive
    care is because they do not have insurance. I will argue that
    that certainly can be an issue, but it is also not the only
    problem there. So, Ms. Turner, have you looked at the other
    issues surrounding the cycle of poverty and the access to care?
        Ms. Turner. We have particularly looked at how discouraged
    physicians are--all medical providers are--because of the
    regulations that you point out. They went to medical school to
    treat patients and they are forced to deal with so much
    bureaucracy that it is really discouraging and forcing them out
    of the practice of medicine--far too many of them--reducing the
    supply of people that are available and this is particularly
    acute in rural areas. So, yes, I am very concerned about this,
    I hope, unintended consequence of the regulation,
    overregulation of our health sector, but it is very real for
    patients.
        Mr. Ferguson. Okay, thank you. Dr. Book, Ms. Turner touched
    on something that I think is very important and that is the
    brain drain out of the healthcare industry. Can you make a
    quick comment on that? Do you see that trend continuing or do
    you see it reversing as a result of the Affordable Care Act?
        Mr. Book. We have seen increases in physicians retiring
    early. I know very few physicians who would tell their children
    to become physicians. Most of them tell them not to, avoid as
    much as possible. On the regulatory side, I have heard comments
    from physicians that now that their mandated to keep electronic
    medical records, it sounds like a great idea, but none of the
    systems talk to each other and it ends up just taking more time
    to accomplish the same thing they accomplished before.
        Mr. Ferguson. Dr. Book, I am going to reclaim my last 20
    seconds. I hope that as we move forward with this and find
    solutions that we are able to truly drive the conversation back
    to the two most important people in the room, and that is the
    healthcare provider and the patient. That intimate conversation
    cannot be had by an insurance company or a government
    regulator. It has to be had between those two individuals.
    Thank you.
        Mr. Rokita. I thank the gentleman. The gentleman's time has
    expired. The gentleman from Wisconsin, Mr. Grothman, is
    recognized for 5 minutes.
        Mr. Grothman. We have a couple of questions. First thing,
    in general, I think one thing we have not touched upon is the
    degree to which Obamacare discourages work, discourages full
    time work, both because of, you know, discouraging hiring of
    full time employees and on an individual basis, cliffs where
    you can be substantially penalized for working overtime or
    getting a raise.
        I know one of the problems we have in our country is we are
    having a hard time getting the wages up on the middle class. I
    would like some of you to comment on the degree to which
    Obamacare, or the way it was set up, punishes people who want
    to work full time, sticks people in a situation in which maybe
    that have to go for two jobs into one job, as well as according
    to my account I talk to, forces people into a situation in
    which they have to make sure they do not make too much money.
        Ms. Turner. Well, one of the problems with the law is that
    it redefined a full-time work week as 30 hours, which very few
    employers felt the full-time work week was 30 hours, and I have
    talked to far too many, especially small business owners, who
    have said that what this means is that if they have more than
    50 employees, and are therefore subject to this, that they have
    to reduce the hours and often reduce hiring.
        Mr. Grothman. Right. Have you heard stories, and my
    accountant has told me stories, of people--depending upon where
    the cliff is--of people saying, see, I can make more than
    $50,000 a year, I cannot make more than $60,000 a year, it is
    going to cost me $3,000 or $4,000? Could you tell me if you
    aware of those stories or elaborate the degree to which we are
    discouraging people from improving their income? I mean, after
    all, if you are going to make $90,000 a year, first of all, you
    have to make $60,000 a year. And if you tell people you cannot
    make $60,000 or can make $50,000, it kind of stunts your growth
    in your career. Any comments on that, Dr. Blumberg?
        Ms. Blumberg. The economic research is very strong that
    there has not been employment related negative effects as a
    consequence of the Affordable Care Act. There may have been a
    small increase in part time work that was voluntary, but not
    required, and there has been no impact except for possibly a
    positive small one as a consequence of the Medicaid expansion.
        Mr. Grothman. Dr. Blumberg, honestly, talk to some
    accountants and you will have no problem finding people who are
    refusing to make more money because if they make more money it
    is going to cost them $3,000 or $4,000 or $5,000.
        Ms. Blumberg. There may be people you can find like that,
    but they are more than offset by other individuals who are
    behaving differently. So, on that, there is strong evidence
    that there has not been a significant negative impact of the
    Affordable Care Act.
        Ms. Turner. It is very, very difficult to capture the
    opportunity cost and what did not happen to people who did not
    get jobs, the people who were not offered jobs, the companies
    that did not grow as a result of this mandate.
        Mr. Grothman. Okay, I will give you one more quick
    question. Our minute thing here is--oh, there we are. I am
    familiar with what goes on in the private sector and there are
    incredible things being done, a combination of self-insurance,
    a combination of HSAs together with funding the HSAs on the
    part of the employer, a combination of in employer clinics in
    which we are having substantial reductions in health care
    costs. And this is going on and is one of the major reasons why
    health care costs have not gone up more at this time. Could
    somebody comment on a combination of those three things in the
    way in which private sector employers are reducing costs?
        Mr. Haislmaier. Yeah, actually, if you do not mind
    congressman, I will speak to that. I think it is not just
    private sector employers, but unfortunately, Congressman
    Ferguson is not here, it is also some of the providers who are
    just redesigning it. I think this is one of the interesting
    unintended consequences of the ACA, is the ingenuity that it
    sparked in trying to get around the obstacles. For example,
    large employers are now moving towards to find contribution
    through private exchanges.
        The other thing that I find very interesting is providers
    moving to direct primary care where in they get rid of all the
    fee-for-service paperwork. They do not even take the private
    insurance. You just go to them for primary care and you buy it
    like Netflix or cable, $130 a month. I mean, two-thirds of
    those practices charge $135 a month and if you need a doctor,
    they are on retainer. Interestingly enough, you know, they come
    up with terminology. The ACA actually allows for, I do not know
    whether they envisioned it, that to be offered with a
    wraparound coverage----
        Dr. Grothman. I am going to cut you off. I disagree that
    that is because of ACA. I think what is going on is there was a
    race between the private sector that was solving the medical
    crisis in this country and people who just wanted to throw in
    the towel. I think the innovation on the private sector would
    have happened with ACA or not, it is just that----
        Mr. Rokita. The gentleman's time has expired. I thank the
    gentleman.
        The chair recognizes himself for 5 minutes. I did not get a
    chance to ask questions yet, so I want to first start off by
    saying I appreciate the discussion that has occurred here
    today. I especially appreciate the members of the Budget
    Committee here for the first time or on record, and I think
    they did an excellent job.
        I want to say, on the record, that I associate myself with
    the comments of Mr. Lewis, Mr. Bergman, Mr. Faso, Mr. Smucker,
    Mr. Gaetz, Mr. Arrington, and Mr. Ferguson. Excellent job. I
    look forward to working with you all.
        There was some discussion, especially from my friends on
    the other side of the aisle that we voted to repeal this
    insidious law over 60 times and then little to replace it with.
    Well, I think, Ms. Turner, you are right. We did not have a
    partner in the White House to help us accomplish that, but we
    made the case to the American people about how insidious the
    law was. It was built on lies. If you wanted your plan, you
    could keep it. If you wanted your doctor, you could keep it;
    all that nonsense.
        But our conference also has a replacement plan, and we have
    several plans from individual members, and none of those
    plans--in fact, you can find The Better Way Plan right here at
    better.gov. None of the plans are contradictory. It is not a
    matter of not knowing what we need to replace these things
    with, it is a matter of the overlapping of wills, getting it
    done in a way where the American people have a chance to see
    what could be.
        I do not have to remind this panel that back under Speaker
    Pelosi, we had to pass a bill in order to find out what was in
    it. I cannot think of a more backward or wrong way to
    legislate. We are going to take our time and we are going to
    make sure that we get this right with patient-centered health
    care that is consumer driven, that allows for competition in a
    healthy marketplace.
        I do have some questions. This is not speechifying on my
    behalf, Mr. Ranking Member--you love to hear me talk--I wanted
    to hear from Dr. Book and Mr. Haislmaier about a particular
    part of CBO. Of course, this panel has exclusive jurisdiction
    over the Congressional Budget Office, but they got Obamacare
    wrong. Dr. Book, we understand that it could be a difficult job
    scoring out major pieces of legislation, but can you tell us
    how the original CBO cost estimates have aligned with reality
    under current law?
        Mr. Book. Yeah, original CBO cost estimates forecast much
    lower costs than we have seen and many more people being
    covered. They originally forecast, for example, a decrease in
    the uninsured population to five percent. They forecast 30
    million people covered in the exchanges. The true numbers are
    somewhere between 10 and 15 percent uninsured depending on how
    you count it and about 11 million people covering the exchange,
    and when they made their forecast on the repeal last week, they
    said that they counted as people losing their insurance, 7
    million of the 18 million people covered in the exchanges.
    When, in fact, there is 11 million people covered to start
    with.
        It was a very optimistic forecast. I understand it is
    difficult to make forecasts. In general, I have a lot of
    respect for the people who work at the CBO. I cannot
    specifically say why they made those mistakes, because they do
    not really reveal their methods.
        Mr. Rokita. Thank you for that. In your work, do you see
    anything systemically errant about the way CBO has chartered or
    required to score major pieces of legislation? Anything you
    want to help with this--you do not have to say it now. If you
    want to get back with us later, that is fine, but we have
    oversight jurisdiction here and we have pledged to do budget
    process reform, and this was a major error.
        Mr. Book. Yes, it was and I would like to look into that
    and get back to you with some specifics.
        Mr. Rokita. Okay.
        Mr. Book. In general, they tend to assume that the world
    looks exactly the same as it does, except for minor changes,
    and that people are not going to react and change their
    behavior in response to a change in the law. But, of course,
    that is the whole purpose of the law.
        Ms. Blumberg. Could I comment, sir, on that?
        Mr. Rokita. No, I want to get to Mr. Haislmaier. Sorry for
    butchering your name earlier. In the last 59 seconds that we
    have, what is your account of this? Why did CBO's projections
    so grossly overestimate coverage gains on the ACA?
        Mr. Haislmaier. I think it is pretty clear that they
    overestimated the effect that the individual mandate would have
    on inducing people who were otherwise healthy and not
    qualifying for subsidies to get coverage, and I think they are
    still holding to that as well. There are some other minor
    things that--I mean I cannot fault them on the Medicaid numbers
    because the court case came in and they sort of changed things;
    however, in terms of the enrollment and Medicaid, they
    overestimated the attractiveness of the exchange to people who
    were not being subsidized. Interestingly, when you compare to
    the Office of the Actuary at CMS, they expected the Medicaid
    expansion to ramp up slowly. In fact, it came in quite quickly
    and they both underestimated the cost of that.
        Mr. Rokita. Thank you, and my time is expired.
        And now in closing, I would like to yield my closing time
    to the ranking member, my friend, Mr. Yarmuth for a thank you.
        Mr. Yarmuth. I thank the chairman. I just want to thank all
    the witnesses and these discussions have been going on for a
    long time, in many different forms, and sometimes it gets
    pretty heated up. I apologize for any of the heat that was
    directed at any of the witnesses, but I thank you for your
    testimony and your thoughts.
        Mr. Rokita. I thank the gentleman, and I thank the
    witnesses as well--Ms. Turner, Dr. Book, Dr. Blumberg, Mr.
    Haislmaier--for appearing before us today. Please be advised
    that members may submit written questions to be answered later
    in writing and those questions and your answers will be made
    part of the formal hearing record.
        And, again, Dr. Book, I would love to get your answers in
    writing, and anything you would like to add Mr. Haislmaier. Any
    members who wish to submit questions or any extraneous material
    for the record may do so within 7 days, and with that bit of
    business completed, I see no other business before the
    committee, and we remain adjourned.
        [Whereupon, at 1:10 p.m., the committee adjourned subject
    to the call of the chair.]
        ``Rep. Rokita submitted the following questions for the
    record.''

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