[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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                        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:]
    
    
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    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:]
    
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    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:]
    
    
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    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:]
    
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    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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