[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
FISCAL YEAR 2020 BUDGET
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HEARING
BEFORE THE
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, D.C., MARCH 26, 2019
__________
Serial No. 116-6
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Printed for the use of the Committee on the Budget
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on the Internet:
www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
36-985 WASHINGTON : 2019
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COMMITTEE ON THE BUDGET
JOHN A. YARMUTH, Kentucky, Chairman
SETH MOULTON, Massachusetts, STEVE WOMACK, Arkansas,
Vice Chairman Ranking Member
HAKEEM S. JEFFRIES, New York ROB WOODALL, Georgia
BRIAN HIGGINS, New York BILL JOHNSON, Ohio,
BRENDAN F. BOYLE, Pennsylvania Vice Ranking Member
RO KHANNA, California JASON SMITH, Missouri
ROSA L. DELAURO, Connecticut BILL FLORES, Texas
LLOYD DOGGETT, Texas GEORGE HOLDING, North Carolina
DAVID E. PRICE, North Carolina CHRIS STEWART, Utah
JANICE D. SCHAKOWSKY, Illinois RALPH NORMAN, South Carolina
DANIEL T. KILDEE, Michigan CHIP ROY, Texas
JIMMY PANETTA, California DANIEL MEUSER, Pennsylvania
JOSEPH D. MORELLE, New York WILLIAM R. TIMMONS IV, South
STEVEN HORSFORD, Nevada Carolina
ROBERT C. ``BOBBY'' SCOTT, Virginia DAN CRENSHAW, Texas
SHEILA JACKSON LEE, Texas KEVIN HERN, Oklahoma
BARBARA LEE, California TIM BURCHETT, Tennessee
PRAMILA JAYAPAL, Washington
ILHAN OMAR, Minnesota
ALBIO SIRES, New Jersey
SCOTT H. PETERS, California
JIM COOPER, Tennessee
Professional Staff
Ellen Balis, Staff Director
Dan Keniry, Minority Staff Director
CONTENTS
Page
Hearing held in Washington D.C., March 26, 2019.................. 1
Hon. John A. Yarmuth, Chairman, Committee on the Budget...... 1
Prepared statement of.................................... 3
Hon. Steve Womack, Ranking Member, Committee on the Budget... 5
Prepared statement of.................................... 7
Hon. Eric D. Hargan, Deputy Secretary, Department of Health
and Human Services......................................... 9
Prepared statement of.................................... 11
Hon. Scott H. Peters, Member, Committee on the Budget,
summary submitted for the record........................... 39
Hon. Pramila Jayapal, Member, Committee on the Budget, letter
submitted for the record................................... 53
Hon. Sheila Jackson Lee, Member, Committee on the Budget,
statement submitted for the record......................... 84
Hon. John A. Yarmuth, Member, Committee on the Budget,
questions submitted for the record......................... 92
Hon. George Holding, Member, Committee on the Budget,
questions submitted for the record......................... 93
Hon. Jason Smith, Member, Committee on the Budget, questions
submitted for the record................................... 94
Hon. Chip Roy, Member, Committee on the Budget, questions
submitted for the record................................... 95
Hon. William R. Timmons IV, Member, Committee on the Budget,
questions submitted for the record......................... 96
Answers to questions submitted for the record................ 97
DEPARTMENT OF HEALTH AND HUMAN
SERVICES FISCAL YEAR 2020 BUDGET
----------
TUESDAY, MARCH 26, 2019
House of Representatives,
Committee on the Budget,
Washington, D.C.
The Committee met, pursuant to notice, at 10:05 a.m., in
Room 210, Cannon House Office Building, Hon. John A. Yarmuth
[Chairman of the Committee] presiding.
Present: Representatives Yarmuth, Moulton, Jeffries,
Higgins, Khanna, Doggett, Schakowsky, Morelle, Horsford, Scott,
Jackson Lee, Jayapal, Omar, Sires, Peters; Womack, Woodall,
Smith, Stewart, Roy, Meuser, Timmons, Hern, and Burchett.
Chairman Yarmuth. The--this hearing on the--thank you to
the Ranking Member--this hearing on the HHS fiscal year 2020
budget--I would like to welcome Deputy Secretary Eric Hargan,
and thank you for joining us.
I yield myself now five minutes for my opening statement.
Today we will discuss the President's 2020 budget for the
Department of Health and Human Services and its impact on
American families.
There are many concerning parts of the Administration's
proposal, but the budget for HHS is particularly troubling
because the line between massive funding cuts and severe
consequences for American families, between policy changes and
life or death outcomes, is so direct.
The Trump budget cuts more than $12.1 billion from HHS'
discretionary budget; $4.5 billion from NIH, which includes
research on the prevention, treatment, and care of diabetes,
cancer, heart disease, Alzheimer's, and nearly every other
disease or disorder facing Americans. It embraces austerity
level spending caps, and the resulting cuts to health care
investments, even though these caps have been repeatedly
rejected by Congress on a bipartisan basis.
The budget also cuts $1.4 trillion from mandatory health
care spending, including Medicare and Medicaid, which are the
only sources of health care coverage for tens of millions of
Americans.
The budget repeals the Affordable Care Act and replaces it
with an inferior plan that would leave millions of families
without meaningful insurance, while failing to continue
guaranteed protections for people with pre-existing conditions.
It ends the Medicaid expansion under the ACA, terminating
health coverage for millions more.
In my home state of Kentucky, with total population of just
over four million, nearly half-a-million people gained health
care coverage thanks to the ACA's Medicaid expansion. All this
before the Administration's abhorrent decision last night to
ask the 5th Circuit to completely invalidate the Affordable
Care Act, making it crystal clear to the American public that
this President has zero interest in protecting their health
care in any form.
The budget also converts base Medicaid funding into a block
grant or per-capita cap. This will force states to eliminate or
drastically reduce services for low-income children, people
with disabilities, and seniors, or, in the alternative, to
raise billions of dollars to cover the cost--the loss of
federal resources, which we all know states don't have.
In addition, the budget requires all states to implement
work requirements for Medicaid enrollees, putting yet another
barrier between Americans and quality health care. In
Arkansas--wonderful home of my ranking member--which
implemented the first work requirement in the country last
year, more than 16,000 people have already lost their health
insurance with no evidence that they found new employment.
Expanding this policy nationwide would undoubtedly result in
hundreds of thousands, if not millions, of Americans losing
their health care coverage.
Deputy Secretary Hargan, it is clear that this budget
jeopardizes the health care security of millions of Americans
and their families. So it is hard for me and my Democratic
colleagues to understand how that meets HHS' mission to
``enhance the health and well-being of all Americans.'' Given
the severity of the funding cuts and the extreme nature of the
policy changes, this seems much more like an irresponsible way
of offsetting our Republican colleagues' deficit-financed tax
cuts for millionaires and big corporations than a true budget
you or Secretary Azar would have crafted for your agency to
succeed. I hope to discuss that further today.
There are some other areas of the budget that don't add up
either, where the message doesn't match the math.
For example, the budget includes a $291 million investment
in HIV/AIDS, but cuts the National Institute of Allergy and
Infectious Diseases, which is responsible for most HIV/AIDS
research at the National Institutes of Health, by $769 million.
The budget provides an additional $50 million for pediatric
cancer research--sounds good--but cuts funding for the National
Cancer Institute by $897 million.
The budget requests $1.5 billion for state opioid response
grants--again, something I think we all favor--but it cuts
Medicaid, the source of coverage for four in 10 adults with
opioid addiction, by $1.5 trillion.
When you compare these small funding increases to the large
cuts they are paired with, it is not hard to see them for what
they are: token investments designed to get a good headline. If
there is another explanation, Deputy Secretary, we would
welcome it.
I know my Democratic colleagues have other questions about
the choices made in this budget and the resulting consequences,
about promises made by the President that are broken in this
document. We want to know more.
So once again, thank you, Deputy Secretary Hargan, for
being here today. We look forward to your testimony.
[The prepared statement of John A. Yarmuth follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Yarmuth. I now welcome, and I recognize the
Ranking Member for five minutes for his opening statement.
Mr. Womack. Apologies for running just a little bit late.
But thank you, Mr. Chairman, and thank you, Deputy Secretary
Hargan, for joining us.
Today we are here to examine the President's budget request
for the Department of Health and Human Services for fiscal year
2020. This is an important conversation. Your agency is
responsible for administering programs on which millions of
Americans rely, including Medicare; Medicaid; Temporary
Assistance for Needy Families, or TANF; Head Start.
Further, your agency is at the forefront of combating some
of our country's biggest health crises, including the opioid
epidemic which claims the lives of 115 Americans every day.
Now, let's put that in context. Assuming we are here for two
hours this morning, 10 people--10 people--will die because of
this epidemic.
The growth in spending has been caused by several factors
that require our attention in Congress. Health care spending is
growing faster than any other sector of the economy. In 2017,
the U.S. spent $3.5 trillion in health care. By 2007 [sic]
health care spending is projected to reach nearly $6 trillion,
just under 20 percent of GDP, according to a recent report of
the Centers for Medicare and Medicaid Services' actuary.
The cost of care is increasing. According to Bureau of
Labor Statistics, in 2018 the price of hospital services
increased by 3.7 percent, the price of medical care by 2
percent, both of which were higher than the rate of inflation.
The second contributing factor? Americans are living
longer. Thanks to advancements in modern medicine, the average
life expectancy has increased by more than nine years since
Medicare was created in 1965. It is projected to continue
increasing. That is good news, but it does have an impact on
growing health care spending.
Finally, the ratio of retirees to workers is shrinking,
with an average of 10,000 Baby Boomers a day leaving the
workforce. Unfortunately, the laws governing how our health
care programs work do not reflect the dynamics we face today.
As a result, there is increasing pressure on programs like
Medicare, which today provides care to about 15 percent of our
population.
As an example, Medicare Part A, which covers inpatient
hospital care, skilled nursing facilities, Hospice, and lab
tests, is expected to be insolvent by 2026, threatening the
health benefits many expect to receive in the future--2026.
That is just eight years away.
Congress and the Administration together have a shared
responsibility to address these challenges and put our health
care spending back on a sustainable path. That requires taking
a hard look at what is working and what is not. It requires the
courage to make tough choices that preserve and strengthen
programs for Americans today and in the future.
The President's budget takes important steps to do just
that, investing in the long-term health of the American people,
while also advancing proposals that will help rein in health
care spending.
For example, the President's budget continues historic
funding to fight the opioid epidemic by expanding access to
prevention, treatment, support services, and research. This
includes efforts to prevent improper or abusive prescription
practices that have dangerously and unnecessarily exposed
patients to opioids.
It also aims to dramatically decrease the number of people
affected by HIV, with the goal of reducing new infections by 90
percent within a decade.
At the same time, the budget includes several common-sense
reforms that have been proposed by Republicans and Democrats to
make Medicare work better for patients by cutting waste, fraud,
and abuse, increasing competition, and lowering drug prices and
out-of-pocket costs.
All told, these efforts achieve roughly a trillion of
savings in mandatory spending. That is important progress. But
with $22 trillion in debt, and annual deficits nearly a
trillion, there is much more work to do.
As I have said before, mandatory spending accounts for 70
percent of all federal spending, and the glide path we are on
takes it to 78 percent by 2029. Until we make structural
reforms to mandatory spending like Medicare, discretionary
spending--including funds for defense and border security--we
will continue to feel the squeeze, and Congress will continue
to have the same battles year after year over what programs to
fund, and how to handle our debt.
I am fearful that my colleagues on the other side of the
aisle may double-down on this approach, proposing ideas that
will make our nation's grim fiscal reality even worse. We have
already seen a proposal that would radically disrupt our health
care system, adding trillions of dollars to our national debt,
while eliminating patients' choice and raising taxes. And there
is no plan to pay for it.
We have a responsibility to put forward serious solutions,
not catchy slogans, to improve our health care system and rein
in spending.
I look forward to hearing more from the deputy secretary
this morning as we work through these questions in Congress.
Mr. Womack. And with that, Mr. Chairman, I am proud to be
here, and I yield back my time.
[The prepared statement of Steve Womack follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Yarmuth. I thank the Ranking Member. And in the
interest of time, if other members have opening statements, you
may submit those statements in writing for the record.
Deputy Secretary Hargan, the Committee has received your
written statement, and it will be made part of the formal
hearing record. You will have five minutes to deliver your oral
remarks, and you may begin when you are ready.
STATEMENT OF THE HON. ERIC D. HARGAN, DEPUTY SECRETARY,
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Mr. Hargan. Thank you. Chairman Yarmuth and Ranking Member
Womack, thank you for inviting me here to discuss the
President's budget for HHS for fiscal year 2020.
It is an honor to be here today, and it is an honor to
serve as deputy secretary of HHS. The men and women of HHS
delivered remarkable results since the release of our last
budget, including record new and generic drug approvals at FDA,
the beginnings of a sea change in drug pricing behavior,
opening up new affordable personalized insurance options, and
initial signs that the trend in drug overdose deaths is
beginning to flatten and decline.
The budget proposes $87.1 billion in FY 2020 discretionary
spending for HHS, while making important reforms to help our
discretionary and mandatory programs work more effectively and
efficiently. While this budget delivers on our mission, it is
important to realize that HHS had the largest discretionary
budget of any non-defense department in 2018, which means that
staying within the cap set forth by Congress has required
difficult choices about the investments we make. Today I will
highlight some budget proposals around four priorities
Secretary Azar has identified for the Department: increasing
the affordability of individual health insurance; bringing down
drug prices; transforming our health care system into one that
pays for value; and combating the opioid crisis.
First, the budget proposes reforms to help deliver
Americans truly patient-centered, affordable health care. It
would empower states to create personalized health care options
that put the American patient in control and ensure he or she
is treated like a human being, not a number. That means giving
more responsibility back to states, and increasing options for
patients, while promoting fiscal responsibility and maintaining
protections for people with pre-existing conditions.
Second, the budget supports access to affordable
prescription drugs through the four pillars of the President's
drug pricing blueprint: more competition, improved negotiation,
better incentives around list prices, and lower out-of-pocket
costs. The budget will boost competition through fostering
efficient approvals of generic drugs and biosimilars, ending
anti-competitive practices, delaying or restricting these
drugs' market entry, and reforming incentives to increase their
adoption. The budget proposes that historic modernization of
Medicare Part D to lower seniors' out-of-pocket costs, improve
incentives for Part D plans that negotiate on their behalf, and
save money for the program.
Third, President Trump is focused on the broader goal of
delivering Americans better care at a lower cost. This means
ensuring our federal health programs are driving value for
patients, and living up to the promises that we have made to
our seniors. The budget proposes a value-based payment system
for hospital out-patient departments and ambulatory surgical
centers; expands site neutrality and payments; reduces burdens
on providers; and addresses overpayments to post-acute care
facilities. These reforms will mean lower cost for seniors and
a stronger, more sustainable Medicare program. The budget, in
total, will extend the life of the Medicare trust fund by eight
years.
As you all know, the Administration has worked with
Congress to make historic investments to address our country's
opioid crisis, a crisis that, years ago, hit the town I grew up
in, and it struck my own family.
The budget fully supports HHS's five-point strategy to
improve access to prevention, treatment, and recovery services;
to better target the availability of overdose-reversing drugs;
to strengthen our understanding of the crisis through better
data; to support research on pain and addiction; and to improve
pain management practices.
The budget provides us four--provides $4.8 billion towards
these efforts. This investment builds on appropriations
Congress made in 2018, and ensures that the Substance Abuse and
Mental Health Services Administration will continue all its
opioid activities at the same funding level as fiscal year
2019. That includes the $1 billion state opioid response
program, which we have focused on access to medication assisted
treatment, behavioral support, and recovery services. The
budget proposes to provide a full year of Medicaid benefits for
pregnant women diagnosed with an opioid use disorder, and takes
steps to reduce inappropriate prescribing within federal health
care programs.
Finally, the budget invests in other important public
health priorities, including fighting infectious disease at
home and abroad. In particular, it proposes $291 million in new
funding for the first year of President Trump's plan to use the
effective treatment and prevention tools we have today to end
the HIV epidemic in America by 2030.
This budget will advance American health care and help
deliver on the promises we have made to the American people. I
look forward to working with this Committee on our shared
priorities this year, and I look forward to the Committee's
questions today.
[The prepared statement of Eric D. Hargan follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Yarmuth. Very good. I thank you for your
testimony. The Ranking Member and I will defer our questions
until the end.
So with that I recognize the gentleman from New York, Mr.
Higgins, for five minutes.
Mr. Higgins. Thank you, Mr. Chairman. And thank you for
being here, Mr. Hargan.
Firstly, I just wanted to point out that the National
Cancer Institute was seeking a $400 million increase in funding
over this year for next year. This was intended to bring
promising new cancer treatments, particularly in the area of
immunotherapy, to market.
As you may know, that drug discovery is a process that
takes some 10 or 15 years. So when funding is delayed,
promising new treatments are delayed, and those promising new
treatments are denied for people that are in desperate need of
new, effective therapies.
So the President's budget proposes to cut $900 million from
the National Cancer Institute. What is the rationale behind
that cut, which is enormous, based on anybody's view of it?
Mr. Hargan. When we work within the caps that--on the
budget, which were set forth by President Obama and this
Congress years ago, we face a tough budgetary environment this
year.
We fully support medical research and the NIH. We know that
this is very important to the American people, and particularly
the National Cancer Institute is important to ongoing research
in oncology and cancer area.
Within that we are also proposing, as I am sure you have
seen, increases for pediatric cancer. So we have attempted to--
--
Mr. Higgins. What is that amount?
Mr. Hargan.----focus on----
Mr. Higgins. Is that $50 million?
Mr. Hargan.----on pediatric cancer?
Mr. Higgins. Is that initiative $50 million dollars more
for pediatric?
Mr. Hargan. Yes.
Mr. Higgins. Okay.
Mr. Hargan. So we are proposing new money for pediatric
cancer.
Mr. Higgins. So it is still a cut of $850 million,
generally, to the National Cancer Institute. Does that concern
you, as a----
Mr. Hargan. Within the discretionary budget that we have,
we had its--the NIH is the largest component of our
discretionary side of our budget. And we have attempted to be
evenhanded in how we approached the--approached it. We have a
lot of different initiatives within the Department, and we
wanted to make sure that it--we were as evenhanded as we could,
and as thoughtful as we could when we were confronting----
Mr. Higgins. Well, here is what I would say to you, that
government funding is--has been involved in about 97 percent of
the basic science and research toward the goal of bringing
promising new cancer treatments to market. In fact, the last
100 major products, from Herceptin for metastatic breasts
cancer, and many of the vaccines for immunotherapy are a direct
result of government involvement in the financing of clinical
trials that test both efficacy and safety.
And a cut of this amount, even when you take into account
the increased funding for pediatric cancer, is still $850
million. That will have a devastating impact on what NCI is
able to fund to the various cancer institutes throughout the
country, including in Buffalo, New York, the nation's first
cancer center, Roswell Park. So that is of concern.
Secondly, on the issue of Alzheimer's, Alzheimer's is a
horrible disease. It inflicts pain not only on the afflicted,
but those who love and care for the afflicted. Some 3.5 million
new cases will be diagnosed this year. And the primary
treatment is a drug called Aricept. And it was developed
probably two decades ago. And in 60 percent of cases, it may
delay the onset of Alzheimer's by maybe six months. This
problem is growing, and we don't seem to have a handle on it.
I would ask you what are the Administration's initiatives,
as it relates to developing new treatments for Alzheimer's,
beyond the Aricept era of those drugs?
Mr. Hargan. We definitely see the impact of Alzheimer's on
our--directly on our--the beneficiaries of our programs.
Obviously, a disease like that falls straight into many
elements of the Medicare program that we administer. So we--and
we take the issue of medical research very seriously across the
Department to develop new therapies, new modalities to treat
it.
It has proven a difficult disease to solve, but we are
committed to standing behind our researchers that are working
on that, both at NIH and then in the grantee community that is
served with the money that is given generously by Congress to
NIH.
Chairman Yarmuth. Okay, the gentleman's time has expired. I
now recognize the gentleman from Missouri, Mr. Smith, for five
minutes.
Mr. Smith. Thank you, Mr. Chairman. Thank you, Deputy
Secretary Hargan, for being here.
Labor HHS has been one of the most difficult funding bills
to get through Congress. In fact, the fiscal year 2019 Labor/
HHS being passed by the Republican House, the Republican
Senate, and then signed by President Trump was the first time
that a Labor/HHS bill had passed in over 20 years. And I think
it is very noteworthy that the last time that a Labor/HHS bill
was passed and funded was in 1996, the prior time that the
Republicans were in power.
And so, I find it to be very ironic that my colleagues on
the other side may throw arrows at you, and may criticize your
budget, but yet they have failed to ever, in the last 20 years,
to pass their own Labor/HHS budget. It is easy to point blame,
but it is their turn to govern. And let's see if they govern
this Congress in being able to pass a budget, and whether they
will be able to appropriate a Labor/HHS.
I do want to say, Secretary, where did you grow up?
Mr. Hargan. I was actually born in Cape Girardeau,
Missouri.
Mr. Smith. What a wonderful city.
[Laughter.]
Mr. Hargan. Absolutely.
Mr. Smith. It is home of Rush Limbaugh, as well.
[Laughter.]
Mr. Smith. So two great people from southeast Missouri. And
it is the great congressional district that I get to represent.
So we definitely are very interested of your rural
upbringing. How has that affected how you have helped mold this
budget?
Mr. Hargan. Well, I didn't just grow up in a rural area in
deep southern Illinois after being born in southeast Missouri,
but my mother was actually an x-ray technician in a small
hospital outside the town of 800 that I grew up in. She was an
x-ray tech there for 58 years. So, yes, my late mother was
there from 1953 to 2011.
So this is--the area--the issue of rural health is
something that is extremely close to my heart. Having grown up
underfoot in a hospital like that, you see the real challenges
that are faced by rural hospitals and rural providers close up,
and really, for my entire life.
I was very gratified that Secretary Azar last year
instituted a rural health task force that brings together a lot
of the elements of the Department to focus on rural health,
particularly. In many cases, agencies deal specifically with
their parts of the rural health landscape, and being able to
unify that and focus on it when we have a lot of shared issues
across the different agencies, I think, is going to result in
some good effects that we are going to be able to have. And
also, allowing more flexibilities around the use of tele-health
and other sort of technological areas that I think are going to
be important to solving rural health issues as we go forward.
We are going to need a lot of imagination to deal with the
issues that are coming forward, a lot of good thinking about
what is going--about how we solve the problems with rural
health.
Mr. Smith. We have nine critical-access hospitals in
southeast Missouri, nine qualified health centers that serve
almost 130,000 patients in 51 different sites. So when you are
looking at a geographic area of 20,000 square miles, access to
quality, affordable health care in rural America is big. So, I
appreciate the Administration's effort on that. I appreciate
your background.
Earlier I stated the fiscal year 2019 appropriations and
budget passing for the first time in 20 years. Mr. Hargan, what
benefits did you see from the certainty of fully funding HHS?
Mr. Hargan. Yes, well, it was tremendous. As you say, the
first time in 22 years that we have had a budget pass for the
Department. So it creates a lot of confidence on our part to be
able to plan for the future.
We were able to work through a lot of the issues to stand
out the new initiatives--say the Ending HIV Epidemic in America
initiative that the President announced in the State of the
Union Address. It allows us to focus on--rather than focus on
funding issues, we really focused on new initiatives to help
the American people, to allow us to promote new ideas that we
are going to--that we are standing out right now.
Mr. Smith. I do want to state real quickly that proposal on
the investment for eliminating HIV in the President's State of
the Union is something that I applaud. And also investment in
pediatric cancer research.
So thank you for being here, thank you for representing the
Show Me State very well. Even though you were just born in Cape
Girardeau, we adopt you. So----
[Laughter.]
Mr. Hargan. I appreciate it. Thank you. Thank you,
Congressman.
Chairman Yarmuth. The gentleman's time has expired. The
love fest for Missouri will continue at some point.
The Chair now recognizes the gentleman from Texas, Mr.
Doggett, for five minutes.
Mr. Doggett. Thank you very much for being with us, Mr.
Hargan. But as to health, how is Secretary Azar? Is he ill this
morning?
Mr. Hargan. I don't have any knowledge of----
Mr. Doggett. Well, I know he has offered all week to be
here. This is the second week he has been offered an
opportunity to come. And it is almost as if the Administration
has a policy of being fearful of sending its cabinet members to
be questioned, indeed, on the tax bill. We couldn't get anyone
at any level of the Trump Administration to come and answer
questions and be held accountable about the hypocrisy in the
bill.
So I do find it troubling that he has not come to respond
on some of these issues, and all the more so because of what
happened yesterday. And that is the decision of the
Administration down in my home state of Texas to, once again,
throw in the towel with our indicted Attorney General, and not
only to go after pre-existing conditions, which you have been
doing, but to say that you favor, as our Republican colleagues
did 60 or 70 times, the total repeal of the Affordable Care
Act. And I don't see anything in your budget that would provide
comparable care for the tens of millions of people that will
lose out if you and the Texas Attorney General are successful
in destroying the Affordable Care Act, which our Republican
colleagues tried so often but were unable to do anything about.
Let me ask you, since I am sure we are not going to agree
on that, about one issue that I would hope we could agree on,
that you referred to in your testimony, though I don't see it
anywhere in the fine print, and that is this whole question of
prescription drug costs, and whether we can save taxpayers and
seniors anything on that.
Candidate Trump made it very clear that he could save
hundreds of billions of dollars on prescription drugs, and it
seems to me that this budget really abandons that. It goes
around the edges. It does not deal with what candidate Trump
said on January 11th of 2017, among other times, that we are
the largest buyer of drugs in the world, and yet we don't bid
properly. And he said we could save hundreds of billions of
dollars, and of course, he is right. The estimates are up to
half-a-trillion dollars in annual--excuse me, in 10-year
savings that could be had by negotiating drug prices.
I don't see anything in this proposal that calls for the
negotiation of drug prices, and I would just ask you if the
Administration is abandoning candidate Trump's promise that we
bid, as he talked about it, that we negotiate drug prices in
order to protect seniors and to protect taxpayers.
Mr. Hargan. We welcome all of this, we welcome this issue.
The President is very dedicated to lowering drug prices for
Americans----
Mr. Doggett. So far he hasn't been too successful. But I
am--he has reiterated his desire, and I hope there could be
some bipartisan action on this.
Mr. Hargan. We have the first lowering of drug price
inflation in 46 years.
Mr. Doggett. Well, he didn't run on a promise that he would
keep prices from going up quite as much as they had before. He
said he was going to do something to lower them and save us
hundreds of billions of dollars. And there is nothing in this
budget to do that.
Mr. Hargan. We have seen the actions that have been taken
that resulted in companies lowering drug costs for cholesterol
medicine, for diabetes medicine----
Mr. Doggett. They've lowered it where they had competition
to meet. And I agree with you that competition is a good way to
deal with this problem. But unless there is a negotiation, as
the President himself pointed out when he was a candidate, you
don't get where we need to be.
And in that regard, I will move from prescriptions directly
into one specific prescription and another issue you mentioned,
which is the opioid crisis.
We know that the price of Naloxone from one provider went
up about 700 percent at the same time our first responders all
over the country were being told to stock it. Chris Christie,
who headed the President's opioid commission, and more recently
the Office of National Drug Control Policy, Jim Carroll, in
testimony to the Oversight Committee here within the last
month, have agreed that what we need to do is at least, if we
can't get comprehensive negotiation through Medicare, we ought
to at least negotiate down the price of Naloxone, which can
help respond to the fact that we are seeing so many Americans
every day--an average of 115 every day--die of overdose.
Do you agree with Mr. Carroll and Chris Christie and his
commission, that we ought to be negotiating on the prices for
these overdose drugs?
Mr. Hargan. We believe that the most popular form of
Naloxone, which is Narcan, the nasal spray, is highly
affordable, that there are other forms of Naloxone that have
higher prices. But we believe that it is widely available to
all states and first responders.
Mr. Doggett. While I don't agree with you, I thank you for
your candor. You don't really think there is a problem on
Naloxone that needs to be negotiated.
Mr. Hargan. We believe that it is highly affordable for----
Mr. Doggett. Thank you very much.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from Utah, Mr. Stewart, for five
minutes.
Mr. Stewart. Thank you, Mr. Chairman.
Deputy Secretary, thanks for being here. You have a
difficult job, but it is important work. And I think you take a
very serious approach to that. I want to thank you for that.
And the proposal that you have before us that you are here
to defend today, I would like to point out before I get to my
main point and my question, many parts of it are bipartisan. I
was interested to see a New York Times, which is hardly a
bastion of conservative thought--even the New York Times in the
last day had an editorial scolding the Democrats for
disparaging it and putting aside some of the proposals that you
and the President have put forward, saying that many of them
make sense, that many of them should have bipartisan support,
and they are just practical reforms that will drive down costs.
And I could go into that, but again, that is not where I want
to spend my time.
But I will conclude by saying this. We will hear again and
again and again--we are going to be told the Administration
wants to cut $845 billion from Medicare, and $1.5 trillion from
Obamacare. But again, it is not true. It is just simply not
true. About a third of that $845 billion is being shifted out
of Medicare, but it is being shifted into other programs. The
money is still going to be spent, it is just being spent more
efficiently.
And again, I appreciate your being here to defend that, and
I hope you do so vigorously, because these are defensible
positions that you and the Administration have taken.
Now, if I could get to my point, and that is, like you, I
grew up in a small town. In fact, I have you beat on this. You
grew up in Mounds, which has 800 people. That was a big city to
me. I grew up in a town of 295. It had two bars. I don't
understand how that quite adds up.
But in my district--I represent Salt Lake City, but also
very rural parts of Utah, some incredibly beautiful places--
Zion National Park and Bryce's and Canyonlands--but these are
rural, difficult places to get to here in the country. About a
third of my district lives very rural. They drive up to an
hour, just--not to see a specialist--just to see a family
doctor.
So talk to me a little bit about tele-health. I mean we
think it is incredibly important to providing our rural
communities with better health care. We know you are interested
in this. Take a few minutes and tell us how we are going to
help our rural communities, especially in the West.
Mr. Hargan. Sure. We think that it is one thing that has
got to be one of the keys. We have to get more specialty care.
We have to have more access to more sophisticated care to be
provided at the rural locations. And with--between that and the
development of a health care workforce that can get the
information once we are able to use tele-health to provide
information to a rural setting, I think we will be able to see
there to be just much more and better provision of health care
in rural areas.
So we have allowed there to be much more flexibility in CMS
for the use of tele-health, and we are looking forward to kind
of building out on that, and----
Mr. Stewart. Elaborate on that, if you would, the
flexibility and, you know, practical application, what that
means to a family.
Mr. Hargan. So a practical application would be that--how
do you--if you have somebody who is going to be prescribing to
you, can you use a--can you use tele-health to be able to--for
a patient in one location to be able to have a screen in front
of them, to be able to talk to a doctor. A doctor can then
analyze something, make a prescription, then the prescription
can be sent by tele-health, and then sent bar-coded to a
pharmacy, and they can dispense it there, so that you can
actually do prescriptions remotely.
You can actually provide--with the sophistication of the
cameras and the technology we have now, you can have a lot of
things that are done, a lot of visits, virtual visits that are
done by doctors that can provide really good and sophisticated
care and diagnoses to a patient which can then be used locally
to provide care.
Mr. Stewart. So, Mr. Hargan, I would be curious, and I
don't know the answer to this.
One of the benefits--again, my district and others--is to
make it more accessible. It can be difficult, especially for
someone on a fixed income, someone who has some limited
capabilities, to travel an hour to see a doctor. That is a
great thing. Get that--you just indicated that that was
possible.
I am curious whether this is also more efficient. Do we
actually save money by some of these processes, where the
doctor is able to see the patient more quickly and more
effectively?
Mr. Hargan. We have been doing research on that. We look
forward to sort of further developing that with Congress about
what the cost impacts are going to be. But we definitely want
to have them move from higher-cost settings like hospitals into
being able to take care of themselves at home.
I personally have sponsored this thing called the Patient
Empowering Technology Summit that--we are looking to advocate
for more tele-health, more wearable technologies, and things
where patients can have technology for themselves in their own
homes, in their own settings, that allow them to have better,
more sophisticated care for themselves at home or in local
settings like community health centers.
Mr. Stewart. And thank you. I am out of time, but I
appreciate your answers.
Chairman Yarmuth. Thank you. The gentleman's time is
expired. I now recognize the gentlelady from Illinois, Ms.
Schakowsky, for five minutes.
Ms. Schakowsky. Thank you, Mr. Chairman, and thank you,
Deputy Secretary. I want to talk to you about Title X, which is
the only federal program dedicated to contraceptive health care
and family planning services. The program has operated
successfully for about half a century, and serves 4.1 million
low-income individuals, which is why I think its funding
actually should be increased. Right now it is--in the budget it
is $280 million. I think $400 million would be better.
But my concern right now is the way that a--an executive
order was issued, and a regulation that would dramatically
change Title X and the organizations that are possible
recipients of Title X funding, providing a tremendous service.
I wonder if you could describe in--perhaps more
specifically what we see, many of us, including providers, as a
domestic gag rule preventing physicians and providers from
giving the full story of the full range of health care
services, including even recommending or referring for abortion
services.
Mr. Hargan. The final rule is not a gag rule. It is--it
does not prohibit. In fact, it affirmatively permits
counseling, non-directive counseling, about abortion. So it
is--in this way it is different than the Reagan
Administration's Title X rule that was upheld in the Supreme
Court.
What we are trying to do is to make sure that the Title X,
the statute we have to obey, says none of the funds
appropriated under this title shall be used in programs where
abortion is a method of family planning. This rule is intended
to safeguard the requirements in the law that require us not to
fund abortions or to--in the program.
Ms. Schakowsky. Well, you know that under current law,
under the Hyde amendment, no dollars can be spent for abortion
services. But what we are concerned about--and correct me if I
am wrong--that organizations like Planned Parenthood, who
provide many preventative services, the single largest
organization to receive Title X funding, believes that their
programs would have to dramatically change, not just a matter
of providing abortions, but my understanding is that counseling
about abortions, leaving it as a potential option, or for--with
other money, not federal dollars, providing abortion.
Are you saying that Planned Parenthood is misinformed, and
that they will continue to receive funding from the federal
government under Title X?
Mr. Hargan. I don't know the details of Planned
Parenthood's internal finances or how they arrange their
centers. I know as long as they comply with the law, that they
will be entitled to apply for the funds under Title X, as long
as they comply with the rules and regulations----
Ms. Schakowsky. Well, how would you define them, complying
with the law? That is what I want to get at, because many of us
feel that the--preventing qualified providers who--the Planned
Parenthood itself sees about five million people a year, often
for screening for cancer, STDs, for basic health care, that
they would be prevented from getting Title X, which is very
important.
Mr. Hargan. Well, the final rule is there to help provide
high-quality, comprehensive family----
Ms. Schakowsky. No, no, no. I want to know, regarding
abortion, how this affects organizations like Planned
Parenthood.
Mr. Hargan. I would have to refer you to them for the
impacts that they think the rule would have for that
particular----
Ms. Schakowsky. No, except that you--aren't you the person
that is speaking on behalf of the Administration on a dramatic
change?
In your view, do you think these changes in Title X will
lessen the number of people who get served by Title X?
Mr. Hargan. I don't believe that--we have lots of
federally-qualified health centers located all over the
country, 1,400 health centers----
Ms. Schakowsky. Other than what? You said we have many
other.
Mr. Hargan. Other providers.
Ms. Schakowsky. Than Planned Parenthood?
Mr. Hargan. And Planned Parenthood can comply with the
rule. They are--they can come and provide these services. And
we are not intending to box out any particular provider. We
just have to make sure that the law is implemented, and this
regulation is intended to implement the intent of that law.
So if they intend to apply for this, it is not directed to
prevent them from applying for these things, just that they
have to comply with the law. So any provider can apply for
this, as long as they fit within the regulatory framework and
the statutory framework.
Chairman Yarmuth. The gentlelady's----
Ms. Schakowsky. Their concerns are warranted, and I yield
back.
Chairman Yarmuth. The gentlelady's time has expired. I now
recognize the gentleman from Pennsylvania, Mr. Meuser, for five
minutes.
Mr. Meuser. Thank you, Mr. Chairman, and thank you to
Deputy Secretary Hargan, very much, for being here with us this
morning.
The President's budget seems to me to be very focused on
making health care more affordable. In fact, better for
beneficiaries. For instance, the goal is to make prescription
drugs far more affordable than over the past.
It also provides much more responsibility to the states,
and there is no question--I would say 50 out of 50 states--
appreciate that.
It also addresses--in, really, an unprecedented manner, and
I hear this from drug awareness groups in my--throughout my
district--very strong fixes and support to fight the deadly
opioid and drug epidemic that many districts and communities
face.
So there is a lot of positives. It also has programs such
as Medicare Advantage, or enhances them by--Medicare Advantage
has a--has reduced both premiums and deductibles, and I have
heard this from many constituents, and the data proves that to
be the case. So there is as number of positives.
What I would like to ask is my district, on the opioid and
drug epidemic issue, like many communities throughout the
country, have some big problems. Can you outline what the
Department's budget request allocates to address this crisis?
Mr. Hargan. I am happy to. As I have mentioned, you know, I
come from a community that has been afflicted by the opioid
epidemic for decades. In fact, in my own family. The President
has signaled this as, you know, the foremost public health
crisis of our time, and the budget invests $4.8 billion, an
increase over last year, in a difficult environment, of over--
of $123 million. This is to--this shows the seriousness with
which we have to take this. It is the driver of a three-year
decline in American life expectancy.
And the efforts that the Administration has been taking has
resulted in what we hope to be a flattening and a decline for
the first time in years of the opioid overdose deaths that we
are seeing. So we are driving both research into non-addictive
pain killers, the greater access to medication-assisted
treatment, more money for states and opioid response grants
that we have been standing out over the last couple of years to
really build out the capacity of the states and localities to
deal with this, and for families to get access to the treatment
and the recovery services that they need and deserve.
Mr. Meuser. Thank you. You addressed somewhat the issue of
rural areas and the support that this budget provides. You did
mention something about workforce development. Could you expand
upon that?
Mr. Hargan. So we have a number of proposals, one of which
within the Indian Health Service, which addresses a lot of
rural areas throughout the United States, where we are trying
to focus on community--the community health aid program. The
budget advocates for this, which is providing a training for--
to build out a corps of community health aids who can be on the
ground in rural areas. And also, Indian Health Service is one
of our foremost agencies identified by us in fighting the
opioid epidemic, which disproportionately affects tribal
members.
So--and we can get lessons learned from a lot of these
things, in terms of workforce development.
Mr. Meuser. Great. Can you describe a few of the Medicaid
reforms that are in this budget?
Mr. Hargan. Yes. So the Medicaid reforms, as you have
mentioned, are really dedicated to providing flexibilities for
states. So we have put forward a block grant program of $1.2
trillion over 10 years that really is intended to refocus the
Medicaid program on the populations it was originally intended
to serve: pregnant women, children, the disabled, the elderly.
So we are really focusing on the most vulnerable populations,
and giving states flexibility to deal with their particular
populations that they uniquely have the knowledge on the ground
of how to deal with them.
So we have--it is--so we have actually stood out more
programs, more flexibilities on that side, and $1.2 trillion on
a new program to address these issues and provide flexibilities
for the states.
Mr. Meuser. Thank you. I just got a couple of seconds here.
I will just ask quickly. Prescription drugs, are there one or
two examples of what you are doing effectively to reduce
prescription drug costs?
Mr. Hargan. Yeah. We have seen companies reduce in
cholesterol medicines, in insulin for diabetics, and in
hepatitis C drugs, where companies actually announced lowering
drug costs for patients in those areas, and these are widely-
used drugs. Millions of people use cholesterol drugs, as well
as those dealing with diabetes.
Mr. Meuser. Thank you.
Thank you, Mr. Chairman.
Chairman Yarmuth. Sure. The gentleman's time has expired. I
now recognize the gentleman from Nevada, Mr. Horsford, for five
minutes.
Mr. Horsford. Thank you, Mr. Chairman, and thank you for
holding this hearing to allow us to discuss the President's
Health and Human Services 2020 budget proposal. I would like to
start off with Medicaid.
Today more than 640,000 Nevadans rely on Medicaid, which
provides health coverage to children, pregnant women, parents,
seniors, and individuals with disabilities.
President Trump promised during his 2016 campaign that he
would not cut Medicaid funding. In fact, on May 7th, 2015 then-
candidate Trump tweeted--and I quote--``I was the first and
only potential GOP candidate to state there will be no cuts to
Social Security, Medicare, and Medicaid.''
Deputy Secretary, can you tell me and my constituents back
in Nevada why the President is now breaking his promise and
proposing to cut Medicaid by $1.5 trillion over the next 10
years?
Mr. Hargan. The budget does not propose to cut. It cuts and
adds in $1.2 trillion, as I mentioned, in new grants that allow
flexibilities for states to respond. So, whereas----
Mr. Horsford. And those new cuts----
Mr. Hargan. Whereas----
Mr. Horsford. Those new programs are being paid for through
cuts to the existing Medicaid program, correct?
Mr. Hargan. So there--it shifts--the budget shifts the
money from being paid as it currently is to more flexibilities
on a different line. So it might appear to say it cuts Medicaid
by a certain amount, but actually the money is mostly shifted
into a more flexible budget line.
So we are standing up the market-based health care grants
to the states, which is going to allow them to focus the
program more flexibly. So----
Mr. Horsford. Yes. As a former state legislator, having
worked on budget issues, we understand what those block grants
to the states would actually mean. For states like Nevada, that
have population growth, it is not going to actually allow us to
keep up with our health care needs.
Let me turn to the HIV eradication. President Trump, in his
State of the Union speech said it is his goal to end the U.S.
HIV epidemic. And while that is a very commendable goal, I
question the approach. Some of my colleagues have talked about
the $1.2 billion cuts to global health programs, but we can't
ignore the cuts the Trump Administration is making to domestic
health care programs that help address HIV.
You see, Medicaid is the single largest source of coverage
for all Americans with HIV, and this plan looks to gut the
program. This will be detrimental in Nevada, which has the
seventh-highest population of individuals with HIV in the
nation. Evidence shows that reducing federal funds through a
per capita or block grant would limit Nevada's ability to
respond to public health crisis such as the HIV epidemic or the
opioid epidemic. Without Medicaid coverage, 8,900 people living
with HIV in Nevada will likely go without any care.
So Deputy Secretary, how does the Administration plan to
make up for the loss of care for HIV patients?
Mr. Hargan. We have proposed to end the HIV epidemic in
America by 2030. This budget proposes $291 million targeted to
the areas that account for 50 percent of new diagnoses. We are
dedicated to ending this scourge for all Americans, and we
followed the advice of our public health specialists, our
researchers, that----
Mr. Horsford. You are not answering my question.
Mr. Hargan.----we think between----
Mr. Horsford. Reclaiming my time, can you answer the
question? How does your plan specifically seek to end the
eradication of HIV, when you are making these dramatic cuts?
Mr. Hargan. We are going to be standing out, through the
community health clinics, more access to PrEP, which will allow
us to suppress the virus on the front end, prophylactically,
and then also maintain funding for the Ryan White CARE Act,
with--which allows us to--which is where we get the ART on
the--for people who are infected.
So between PrEP and ART, and through community health
clinics, and through the state and local-based elements of the
Ryan White CARE Act, we believe that we will be able to,
through those and----
Mr. Horsford. I will look forward to getting more
information, since it is not very clear.
I want to just mention on the issue of tele-health--I know
the budget does factor in $44 million of additional money to
tele-health grants. I just visited a number of rural health
care centers in my district last week with FCC Commissioner
Starks.
However, based on the need that I heard from those
providers, $44 million, while an increase, still seems rather
inadequate, based on the information that I received from those
health care providers. So I would ask the Administration to
really look at that, based on the fact that it is an area where
we may share some agreement. Thank you.
Mr. Hargan. Thank you, Congressman.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from South Carolina, Mr. Timmons, for
five minutes.
Mr. Timmons. Thank you, Mr. Chairman. Thank you, Deputy
Secretary, for taking the time to come before our committee
today.
We are hearing a lot from my colleagues across the aisle
about the changes in spending. The spending priorities that
have been proposed are different than last year, and these cuts
that we keep hearing about--I understand some of their
concerns. But I want to talk to you about a different kind of
cut.
We have $22 trillion in debt right now. We passed a $1
trillion deficit budget. What happens when our credit limit
runs out? It is not a question of if, it is a question of when.
So whether it is five, 10, 20 years from now, or next year, I
want you to give me the scenario of a 20 percent across-the-
board cut to your budget.
Mr. Hargan. Well, as you have seen, we are trying to
preserve the viability of these programs. In fact, in the
budget we are extending the life of the Medicare trust fund by
eight years, just simply by lowering the rate of growth in the
program from 7.8 percent to 6.9 percent, and by taking some of
the elements out of the Medicare trust fund that may not really
belong there, like graduate medical education or uncompensated
care--by moving those out into the general fund, we are
extending the life of the Medicare trust fund by years, which
helps us keep our promises to American seniors.
Just by enacting some common-sense reforms to these
programs, we are going to extend the life and the promises that
we have made.
Mr. Timmons. Let's get more specific, though. So next year
you get 25 percent less dollars. You--just specifically, what
would you have to do?
Mr. Hargan. You know, I would say that if we have
hypothetical scenarios, we work through a lot of these
different elements in 25 percent to--a scenario would be a huge
cut this year.
We have proposed a 12 percent cut in our discretionary
lines within the budget. It would require a lot of thoughtful
work on our budget people's behalves to make sure that we can
balance out the necessary--there is a focus, like, for example,
this year, opioids, pediatric cancer, where we are trying to
focus on these areas. But it would require a lot of difficult
decisions.
Mr. Timmons. Would Americans see a reduced quality of
health care?
Mr. Hargan. With a 25 percent cut, it depends on where we
would, hopefully, be able to--we would be able to work to make
sure that there were no lowering in overall care for Americans.
We would do our best.
Mr. Timmons. You would do your best, but 25 percent less
money, it would be catastrophic.
Mr. Hargan. It would be a blow to have to endure larger and
larger cuts as time went on.
Mr. Timmons. So the Budget Committee of the United States
Congress should take very serious steps to make sure that that
doesn't happen.
Mr. Hargan. Yeah, I think that we have laid out some
common-sense reforms in this budget that would enable us to
take action in time to prevent--to make moderate changes now
that would prevent worse decisions taking place later on down
the line.
Mr. Timmons. Thank you.
Thank you, Mr. Chairman.
Chairman Yarmuth. I thank the gentleman. I now recognize
the gentleman from Virginia, Mr. Scott, for five minutes.
Mr. Scott. Thank you.
Mr. Hargan, if an--does your budget anticipate funding
agencies that discriminate based on religion?
Mr. Hargan. We enforce all the civil rights laws, and all
the constitutional safeguards that are given to us in trust.
Mr. Scott. Okay. So if an agency said that they are going
to discriminate in hiring based on religion, and then turned
around and--say if it is an adoption agency only considers
certain religions for adoption, would you--would that
disqualify them from federal funding? Or would you support that
discrimination in hiring and providing the service?
Mr. Hargan. We can balance the needs of grantees and their
religious expression with--that is one of the constitutional
guardrails----
Mr. Scott. Is that a yes or a no?
Mr. Hargan.----that we are given to enforce.
Mr. Scott. Would that agency be disqualified by virtue of
the fact that they intend to discriminate in hiring with the
federal money, only hiring, say, Christians, other religions
need not apply; and then only considering for adoption services
Christian families, other religions need not apply? Would they
be disqualified from federal funding?
Mr. Hargan. So I assume you are dealing with the Miracle
Hill----
Mr. Scott. I am not--I am just asking a general question.
Mr. Hargan. We have to protect both religious expression--
--
Mr. Scott. Is that a yes, you would fund such an agency?
Mr. Hargan. We have to protect all the constitutional
rights----
Mr. Scott. Is that a yes, you would fund such an agency?
Let me ask it another way. Is it yes, you have funded such
an agency?
Mr. Hargan. South Carolina approached us with a request for
an exception for--to allow them to place more children with
foster care and loving homes----
Mr. Scott. Is that a yes? Wait, wait, wait a minute. Wait.
An agency intends to discriminate based on religion in hiring,
and then based on religion they are going to disqualify
families from participating in adoption services.
Mr. Hargan. No, no family is disqualified for participating
in adoption services. Any time that an organization like
Miracle Hill----
Mr. Scott. They----
Mr. Hargan. It--they are referred back to the state, and--
the state or another agency. So anyone who wants to participate
in that as a foster parent can apply to the state, they can
apply to another agency----
Mr. Scott. But not that agency. That agency is going to
discriminate. Is that right?
Mr. Hargan. The agency is allowed to----
Mr. Scott. To discriminate.
Mr. Hargan.----to express----
Mr. Scott. And you will--and they can use federal funds
doing that?
Mr. Hargan. The agency is allowed to express its
religious----
Mr. Scott. I am just trying to get a straight answer. I
mean this is a very straightforward question.
Mr. Hargan. No one is prevented from participating in that
foster care program.
Mr. Scott. They are--but the agency can disqualify them--
they are not going to consider any non-Christian adoptive
parents, is that right? And you are going to give them federal
money?
Mr. Hargan. The state agency----
Mr. Scott. Excuse me. You gave them federal money?
Mr. Hargan. The state agency will not turn away anyone who
wants to apply to----
Mr. Scott. Answer--this is----
Mr. Hargan.----be a foster----
Mr. Scott. Did you fund--are they spending federal money
and discriminating? Yes or no.
Mr. Hargan. We give money to the state----
Mr. Scott. Yes, okay.
Mr. Hargan. We give money to the state, and the state gives
it to the agency----
Mr. Scott. Yes, okay. I think we have gotten the point. You
have funded an agency that has the express intention--I do not
know if they are doing it or not--but discriminating in hiring
with federal money, and disqualifying, that agency, parents who
are not the right religion from participating, and they are
using federal money.
Mr. Hargan. I could not as a Catholic participate as a
foster family with that organization.
Mr. Scott. And you gave them federal money?
Mr. Hargan. I could not participate.
Mr. Scott. You gave them federal money. Let me get to
another one, talking about block grants. Is it true that a
community services block grant that reduces poverty, did they
get zeroed out?
Mr. Burchett. I believe that we have not allocated money
for that program.
Mr. Scott. And Social Services' block grant, supportive
services for families, did they get zeroed out?
Mr. Hargan. Like other programs where we have sort of low
results for the program----
Mr. Scott. Is that a yes?
Mr. Hargan.----we zero them out.
Mr. Scott. And you are going to a block grant with - in
terms - after the Affordable Care Act. Your plan anticipates
ending the Affordable Care Act and replacing it with a block
grant, and the block grant will increase annually with
inflation; is that right?
Mr. Hargan. Yes, we have the whole provision set out.
Mr. Scott. Okay. And the inflation, is that regular
inflation or is medical inflation?
Mr. Hargan. I would have to get back to you. I believe it
is regular inflation.
Mr. Scott. And so what is the difference between regular
inflation and medical inflation?
Mr. Hargan. There are lots of different calculations for
different kinds of----
Mr. Scott. Medical inflation is a lot higher than regular
inflation. So every year you would be falling behind. The
purchasing power of that block grant would be eroding every
year based on the difference in inflation; is that right?
Mr. Hargan. If the inflation rate that year were higher
than regular inflation.
Mr. Scott. Oh, come on. The inflation rate for medical
inflation has been higher than regular inflation. When was the
last time it was not higher?
Mr. Hargan. I do not know. We would have to get back to
you.
Mr. Scott. Okay.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Oklahoma, Mr. Hern, for
five minutes.
Mr. Hern. Thank you, Chairman, Ranking Member Womack.
Deputy Secretary Hargan, I want to thank you for your work
you do in promoting and enhancing the health and well-being of
the American people. I appreciate your work and this
Administration's commitment to lowering the cost of
prescription drugs, protecting the unborn, combating the opioid
crisis, and many other ideals.
This Administration's equal commitment to health and fiscal
responsibility is commendable.
First, I would like to express my support for the
Department of Health and Human Services' final rule separating
abortion from family planning. Until now, the Title X program
accounted for hearing 60 percent of Planned Parenthood
expenditures from all agencies reported between 2013 and 2015.
During this time frame, Planned Parenthood received $170
million of taxpayer money through the Title X program, an
average of $56 million annually.
While previous regulations violated longstanding conscience
laws and required all Title X recipients to refer for abortion,
the final rule ensures that none of the funds appropriated for
Title X may be used in programs where abortion is a method of
family planning.
The elimination of the egregious abortion referral mandate
appropriately protects the conscience rights of health care
providers. Abortion is not family planning, and I am grateful
for this Administration's acknowledgement of the fact.
So really briefly, I would like to know what else this
department is doing to ensure that they are allowing our great
medical care providers to protect the religious freedoms and
consciences while on the job.
Mr. Hargan. Thank you, Congressman.
We have set out in our Office of Civil Rights a Division
for Conscience and Religious Expression to be able to protect,
to be able to investigate potential violations by our
conscience rule, that is, to protect people's conscience rights
and their religious rights when they are providing medical
care.
There are a number of statutes that have been put in place
over years, some stretching back decades into the 1970s that
protect Americans who are in the health care sector, that
protect both their conscience and their religious expression
rights.
So under this Administration, we now have staff that are
going to be dedicated to making sure that those rights are not
violated.
Mr. Hern. Thank you, Mr. Secretary.
I would also like to ask you about the medical device tax.
This fundamentally flawed public policy was put into place in
an effort to pay for the unaffordable health care act. This
punitive tax punishes businesses in a specific industry for
innovation. It is the epitome of the war on business and is
already having a major negative impact on the competitiveness
of vital, world-leading, American industry.
According to data from the U.S. Department of Commerce, the
U.S. medical technology industry saw its job ranks fall by
nearly 29,000 while the medical device tax was in effect. In a
2017 study by the American Action Forum, assessed that this
rate of job losses would likely return if the tax goes back
into effect.
Those workers earn an average of $58,000 annually, well
above the national average for manufacturing.
First, do you support the repeal of the medical device tax?
Mr. Hargan. Yes, I and we do.
Mr. Hern. And what is your department doing, working with
Congress, urging them to--let me just rephrase it this way.
What is your department urging Congress to do to keep the
health care industry competitive?
Mr. Hargan. Yes. We are supporting innovation on all
fronts, not just through medical research that we are doing on
NIH, but we are also going to try to enact a series of
regulatory reforms.
For example, I am chairing something called the Regulatory
Sprint which is going to hopefully help de-burden a lot of
areas around coordinated care, that is going to allow there to
be more innovation in this area.
We think that innovation is really in many ways a solution
to some of the health care problems that we have, and it is a
way in which we can kind of solve some of the problem, whether
cost, and also help American industry. If we can support
innovation in this country, we are really going to support the
position of the entire United States.
It is the largest sector of the American economy, and
whatever we can do to help enhance innovation in this country,
it is going to help not just the Americans as patients, but
also American industry as well in the health care sector.
Mr. Hern. Thank you, Mr. Secretary.
Mr. Chairman, I yield back.
Chairman Yarmuth. The gentleman's time has expired.
I do not know what is going on with the mikes here. Still
working out the kinks.
I recognize the gentlelady from Texas, Ms. Jackson Lee, for
five minutes.
Ms. Jackson Lee. Mr. Chairman and Ranking Member, thank you
so very much.
And to the Deputy Secretary, thank you for your service to
the Nation.
I am going to ask very quick questions, and I would
appreciate, as best you can, answers that would move as quickly
as possible because my time is limited.
Let me start out by saying in 2012 there were 45.6 million
people that were uninsured. As the Affordable Care Act began to
do its work, 2018, 28.3 million, 8.8 percent uninsured.
I think every life, every child is valuable and should have
access to health care. Do you believe that, yes or no?
Mr. Hargan. Yes.
Ms. Jackson Lee. Thank you very much.
Let me, with that in mind, let me begin methodical
questions. It is my understanding that the President's budget
includes $1.5 trillion in Medicaid cuts over 10 years. Part of
the work of Medicaid is cutting HIV transmission. Part of its
work is dealing with prescriptions. The Part D plans must cover
all HIV drugs.
But the Administration now is limiting the coverage of
drugs, when we are seeing a surge of HIV. Is that giving a
death knell to people who are suffering from HIV?
What mindset would cause you to engage in cuts in people
who are fighting for their lives?
Mr. Hargan. As you know, the President is dedicated to
ending the HIV epidemic in American by 2030.
Ms. Jackson Lee. By his works, not his words, by his deeds.
Mr. Hargan. We are putting $291 million more, million new
dollars, into fighting HIV. Both are expanding access to prep
and as well as ART. So the main forms by which people fight
this terrible scourge, we are enabling people to have actually
more access to----
Ms. Jackson Lee. I am interested in your answer about the
fact that HIV transmissions and drugs that are going to be
excluded are going to be lost. That opportunity is going to be
lost. Do you admit that?
Mr. Hargan. We hope that access to effective HIV therapies
is not just not lost, but it's going to be enhanced.
Ms. Jackson Lee. But we are hoping that.
Let me move on to indicate that you are cutting $130
billion from Medicaid over 10 years. What is your estimate of
the people who will lose Medicaid coverage?
Mr. Hargan. Well, we believe that what we are doing in this
budget is, first of all, as I indicated earlier, while there
are cuts in the budget, there is also $1.2 trillion in grants
that are going to go to states to enable them to focus
Ms. Jackson Lee. In block grants.
Mr. Hargan.----to focus on the most vulnerable.
Ms. Jackson Lee. And that is a challenge.
Do you know how many people in your new work formula will
lose Medicaid because of the mandatory work requirement? And
these people are unable to work.
Do you know how many people will lose it because of that?
Mr. Hargan. We believe that we are going to look for the
effects of the community engagement requirements that we have
in states right now. We are hopeful with the strong economy
that we have right now and that has been enabled by President
Trump's reforms----
Ms. Jackson Lee. Forgive me for reclaiming my time or
restoring my time. I know you are believing in hope. I want you
to see the picture of devastation.
Let me also say coming from Texas, we were the poster child
for the uninsured. Now the Administration is going in to
implode, blow up, and destroy the Affordable Care Act with his
position on the Texas v. Azar decision.
Were you involved in that decision making?
Mr. Hargan. Litigation strategy is with the Department of
Justice.
Ms. Jackson Lee. Do you agree with throwing out the
Affordable Care Act that has been a lifeline to many people?
Mr. Hargan. President Trump wants to make sure that people
with preexisting conditions and all the----
Ms. Jackson Lee. That will be impossible if he blows up the
Affordable Care Act. What is his substitute right now? Does he
have bill that is going through the House and Senate that he is
going to pass and sign?
Mr. Hargan. We have spelled out in the budget a----
Ms. Jackson Lee. You have no legislation that will deal
with that.
So let me deal with the unaccompanied children. How many
unaccompanied children does HHS anticipate needing services for
in 2020? How much are you asking for?
Mr. Hargan. We are asking for an expansion of our ability
to transfer to 20 percent and then a $2 billion contingent fund
that will enable us to deal with influxes and surges into
this----
Ms. Jackson Lee. And do you have an accounting? I have
asked almost every administration representative that comes
before my Committees, plural. What is the number that you have
right now?
Mr. Hargan. It is between 11 and 12,000.
Ms. Jackson Lee. And that 11 to 12,000 has been a steadfast
number of holding and incarcerating children. Aren't you part
of the process of getting connected to their family members?
Mr. Hargan. We want to make sure that process takes place
as quickly as possible.
Ms. Jackson Lee. Then can I ask you to ask the President to
cease and desist incarcerating these children?
I wrote the legislation. So let me just say I understand.
We in the judiciary tried to find alternative places for
children as opposed to the detention conditions, but now it has
become an industry, and you are asking for another $2 billion.
Mr. Hargan. We want to make sure that the children's
welfare and safety is at the center of everything we do at HHS.
Ms. Jackson Lee. I will be back in touch with you.
Let me quickly ask. Head Start, you are lowering the Head
Start funding. With the Head Start funding you are going to be
able to serve one-third less eligible children, and we know
that it is only reaching less than one-third of eligible
children, and you are proposing to reduce it.
How are you going to help the children that need to be in
Head Start with reducing the budget?
Mr. Hargan. We are actually focusing our efforts on making
sure we preserve programs that have demonstrable effects like
Head Start and the child care programs. We are putting forward
actually new proposals on child care, I think $1 billion more
into a child care fund.
Ms. Jackson Lee. Mr. Hargan, you are losing slots, and the
parents are begging. I would beg that to be revisited as we
will revisit it in terms of all these questions that I asked.
These are desperate situations, desperate times, and they
need the help of the federal government as it relates to health
care, HIV/AIDS, and, of course, Head Start, and many others. So
I beg of you to be a voice of reason for this Administration.
I yield back.
Chairman Yarmuth. The gentlelady's time is expired.
I now recognize the gentleman from Tennessee, Mr. Burchett
for five minutes.
Mr. Burchett. Thank you, Mr. Chairman.
And thank you for being here, Ranking Member. Thank you,
sir.
I will not beleaguer questions that have already been
asked. Being number 436 out of 435, I am going to wing it on a
couple of things that I was curious about.
On these deductions or supposed cuts to Medicare-Medicaid,
but you say that, in fact, you are going to basically--correct
me if I am wrong--you are going to take the bureaucracy out of
it and send it to the states and allow them to share in the
responsibility of providing this care and maybe the aspect of a
local control is best.
Is that primarily what I understand you saying, sir?
Mr. Hargan. Yes, it is.
Mr. Burchett. Okay. I wanted to get that straight.
Two other issues I was concerned about. The pediatric
cancer investment, I salute you for that. That along with the
HIV investment, I guess my biggest concern is I have seen up
here both parties do it. So it is not like it is any big
secret, but it seems that in funding bills we reward and we
punish, and you see funding for research for things possibly
spread out among members who may be more cordial with others
than some are, than some that aren't.
And I am wondering, and I guess my biggest concern is for
things like pediatric cancer, you know, we have got St. Jude's
in Memphis, which is on the other end of the state, but they
clearly do the Lord's work. I'm wondering if you all are
looking at areas where there could be duplication.
Because in that funding, it seems a lot of times it has
very little to do, at least in my layman's view, of the ones
that are actually delivering the goods, but it is going to the
more prestigious areas and it may be that more prominent
members represent those districts. And I am concerned of
duplication.
I would just like to get to the bottom of it, get to the
cures, take care of these sick folks, and quit with all of the
politics. I don't care if they do it in Dan Crenshaw's district
or Tim Burchett's district, but if they're solving the problem,
that is where the money needs to go, and I hope you all are
addressing that duplication that I see a lot in research.
Because it seems to me that, you know, we just keep
reinventing the wheel on some of these things, and if we could
consolidate and maybe have some collaboration within these
institutions that we could solve some of these problems.
If you would, just comment on that.
Mr. Hargan. I think that is probably the central case that
we are trying to deal with here. Pediatric cancer has been very
fragmented and siloed in a number of different places that we
think has sort of dragged at the ability to make as much
progress in this area as we would like.
So us being able to kind of gather information on the data,
get it together into a single place, and determine where we are
seeing better results within pediatric cancer is kind of
central to the problem that we have articulated to ourselves.
So the President's initiative on pediatric cancer, a lot of
it is going to be addressed precisely with what you are talking
about, which is the fragmentation and siloing of pediatric
cancer research in the past.
Mr. Burchett. You used the term ``silo.'' I understand what
that means, but could you explain that to Mr. Crenshaw because
I am not sure that he understands exactly what that means.
Mr. Hargan. Yes, there is often a development straight up
in a particular area. They do not talk to each other, right?
Mr. Burchett. Honestly, I do not know what ``siloed''
means. So if you can just explain it to me.
[Laughter.]
Mr. Burchett. That was me saying that, you know, trying to
look a little smoother, but you did not catch onto that, but go
ahead.
Mr. Hargan. I guess coming from a farm, I did use a rural
term. So, yes, so siloing, we often find that people do not
talk to each other within this area. They do not share data
collaboratively within this area, and it is just the
development of these longstanding ways of doing business that
we hope to be able to overcome.
Mr. Burchett. Okay.
Mr. Hargan. To bring the information together, stop the
fragmentation, stop the non-sharing of data, and prepare a
single data resource that is available more broadly that will
allow us to kind of make some steps forward in this area.
Mr. Burchett. Thank you, brother.
I yield the rest of my time, Mr. Chairman. Thank you for
your indulgence.
Chairman Yarmuth. Well, I thank you, sir.
The chair now recognizes the gentleman from California, Mr.
Peters, for five minutes.
Mr. Peters. Thank you, Mr. Chairman.
And thank you, Deputy Secretary Hargan, for coming to join
us today.
One of the challenges in health care is keeping premiums
down, and I think you would agree that one of the ways we do
that is to make sure we get young people into the pool. Would
you agree with that?
Mr. Hargan. There are lots of ways to address those issues
with the pool.
Mr. Peters. I just it was one of the ways, is to get
younger----
Mr. Hargan. It is possible one of the ways is to bring
lower cost people into the pool.
Mr. Peters. Right. And you know, we did have a mechanism in
the Affordable Care Act which was enacted before I got here. So
I have no pride of authorship. The individual mandate was
intended to get people to come in, and now after you are 26 and
you come off your parents' insurance, assuming you have it from
them, there is no real incentive to get you to get in the pool.
And I notice that one of the things that the proposed
budget would do would be to cut advertising by 90 percent and
in-person consumer assistance by more than 80 percent, close to
$150 million.
Don't you think it would be useful to help get the word out
that insurance is available in terms of as one mechanism at
least to get young people who are healthy into the pool and
keep insurance premiums down?
Mr. Hargan. We have seen torts as the ACA enrollment has
developed. We have seen less and less use of navigators, for
example; that they were not really connecting people at some
point.
We had one result where we had spent $200,000, and there
was a single person enrolled by a navigator in one area. That
is an area where it seems like there was some waste going on.
Mr. Peters. I certainly think we should root out the waste.
I will just tell you that California's experience has been at
variance with that.
According to Covered California, Mr. Chairman, without
objection, I would ask that the Covered California summary of
marketing matters be added to the record.
Chairman Yarmuth. Without objection.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Peters. They will spend about $111 million on marketing
outreach for just one state, although we are 40 million people,
and they believe that the amount that they have spent has kept
premiums down by 6 to 8 percent, and that if the federal
government would go ahead with its 72 percent reduction in
marketing, there will likely be one fewer Americans getting
insurance, a less healthy risk pool, and premiums will be 2.5
percent higher now than they were in 2019.
They also say that the premium savings from expenditures on
advertising would yield more than a 500 percent return on
investment for the federal government. We know that getting
folks in, and if there is no mechanism to do this through a
requirement like the individual mandate, all we've got is
advertising, and it has worked well in California.
I just do not understand the logic of bringing us to this
point.
Mr. Hargan. When we previously had reduced some of the
advertising and navigator money, we saw, really, very little
effect on enrollment, and we have seen that the private plans
had themselves advertised for their own product and that we
were seeing a lot of brokers and agents that had appeared
privately to guide people into the plan.
So we did not really see a lack of enrollment; that there
had been kind of a period where those navigators and the
advertisement that had been done had been useful in the early
stages when people were less familiar with the ACA, but now we
have seen that really being transitioned into the plans
themselves, the brokers and agents guiding people.
Mr. Peters. Again, that is at variance with California
which has had the most successful uptake rates in the country.
I guess I would suggest we learn a lesson.
I wanted also just to comment generally on someone
mentioned the New York Times editorial on Medicaid cuts, that
we should work together.
I want you to know that I am someone who was not here when
the Affordable Care Act was passed. I believe it is a
tremendous undertaking to remake the entire health care system
in the United States. It is going to need tweaks.
But it is hard for us to talk, on one hand, to you about
these changes when, on the other hand, the President's Justice
Department is out there trying to sabotage the whole thing. It
puts us in a very defensive position.
And I know this was not something that was up to you. I
appreciate your work on the Affordable Care Act, on making it
right and making it work for people, but if the Administration
is trying to cut out the whole thing, it makes it very, very
difficult for us to feel like we are in a cooperative mood or
feel that we can trust it.
And I ask that you take that back to the Administration.
Finally, I want to just point out that your budget would
cut funding by $4.5 billion on NIH, the National Science
Foundation by 13 percent. This is a devastating blow to
biomedical research, particularly devastating in San Diego
where the life sciences industry is a major driver of economic
growth, home to more than 1,000 biotech companies, 80
independent research and university-affiliated research
institutions.
According to NIH, investments in research focus on a
particular area stimulate increased private investment in the
same area. A $1 increase in basic public research stimulates
$8.38 of industry investment after eight years. A $1 increase
in public clinical research stimulates an additional $2.35 of
industry R&D investments after three years.
Have you estimated the devastating impact that these cuts
would have on our economy?
Mr. Hargan. Well, we are fully behind the medical research
mission of NIH, and we know that the things that are done by
the staff at NIH and by our grantee network is very important
for the health of the American people.
Mr. Peters. Well, I would suggest that this is extremely
counterproductive, and I think it should be opposed.
Mr. Chairman, I yield back.
Chairman Yarmuth. Thanks. The gentleman's time has expired.
I now recognize the gentleman from Texas, Mr. Crenshaw, for
five minutes.
Mr. Crenshaw. Thank you, Mr. Chairman.
And thank you, Deputy Secretary, for being here on this
very important subject as we have a hearing about what is
almost a third of our budget.
Under HHS, tell us again how much of that budget do you
manage, mandatory and discretionary?
Mr. Hargan. Yes. It is about a $1.3 trillion budget, about
a quarter, a little over a quarter of the federal budget.
Mr. Crenshaw. It is an enormous amount, and we don't have
an infinite amount of resources. So any time we budget, this is
always about choices.
And I want us to recognize the fact that as politicians, we
often get elected by promising action, by promising more. We
take advantage of the human preference for more things,
especially if somebody else might pay for those things and we
don't have to.
It is a cultural trend that is going on in this country,
and it affects everything. It is an unsustainable cultural
trend, this idea that someone else should take action so that
you do not have to.
And it is also this idea that the states are completely
incapable of managing their own systems of government.
This unsustainable cultural trend also leads to completely
unsustainable policies, and Medicare is one of those. Medicare
is completely unsustainable, and that greatly affects a
generation like mine. I just turned 35, and I have really
little hope that I will see Medicare in my lifetime.
But there is a good chance that you will have to raise my
taxes considerably to pay for this unsustainable program, and
it frustrates me that on the Republican side we often have to
be the adults in the room and say, ``Hold on. We cannot promise
all of these things.''
So on Medicare specifically I want to talk about some of
those things that are driving those costs. What are some of the
main elements driving the unsustainability of Medicare?
And what are you doing to fix that?
Mr. Hargan. Well, some of the things were really things
that were put into Medicare Trust Fund that really did not
belong there, things like uncompensated care, things like
graduate medical education. Simply moving those out into the
general fund means that Medicare Trust Fund is the sort of the
reckoning that is delayed by a number of years.
Also, just lowering the amount spent from 7.8 percent
growth to 6.9 percent has a tremendous effect overall.
Then we also address some of the issues where some of the
payment rules have kind of gotten to making things more neutral
between sites of care.
Mr. Crenshaw. Okay. And how does this affect the consumer
of Medicare, our senior citizens relying on it? Will they see
these changes?
Mr. Hargan. They will not see these changes. These changes
are not to beneficiaries. They are not going to increase out-
of-pocket costs to seniors. They are not going to affect the
beneficiaries' access to any one of these things.
Mr. Crenshaw. Thank you for that. That is a very important
point. Thank you.
I also had an interesting note from a group of nurses in my
district. They said, ``We do not need Medicare for All. We need
primary care for all.'' It is an interesting look at things.
Are you familiar with direct primary care?
Mr. Hargan. Yes.
Mr. Crenshaw. What is the Administration doing to foster
more direct primary care, this market-based solution to gain
more access for people for primary care?
Mr. Hargan. So one of the things that we are doing is by
allowing more money to be put into health savings accounts and
allowing people to manage their care more through either health
reimbursement accounts, health savings accounts.
So if they are able to do this, they are able to be able to
access direct primary care, we are able to provide more
flexibilities in the budget at the state level, but also at the
patient level, that is going to allow people to be able to have
access to direct primary care.
Mr. Crenshaw. Excellent. It is amazing what can be
accomplished in our markets if we let people take back their
own money and use it for things like direct primary care.
I also want to ask you about the pay for delay regarding
generics and biosimilars and what the Administration is doing
on that front.
Mr. Hargan. Yes. So we are proposing a whole suite of
reforms in this area. So in the case of pay for delay, we
intend to actually reduce payment for drugs where a company has
engaged in gaming of the system, like pay for delay, where they
pay another company to keep a competing drug off the market.
Mr. Crenshaw. Okay. The last question I want to ask you
about is graduate medical education. You have made some reforms
to that. In Texas, we are unfairly discriminated against
compared to other states when it comes to GME. We have less
spots according to our size and on our needs.
Does this help states like Texas? Does this equalize it
across the board?
It is unclear what these reforms will do.
Mr. Hargan. So by consolidating some of the fragmented
programs that we have right now, we are going to be able to put
them into a single overall graduate medical education program,
and we hope that is going to allow for a more rational approach
to GME. It could include things like allowing places that are
under-resourced to be resourced.
Mr. Crenshaw. Thank you.
Thank you, Mr. Chairman.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentlelady from Washington, Ms.
Jayapal, for five minutes.
Ms. Jayapal. Thank you, Mr. Chairman.
And thank you so much for being here.
Just to my colleague across the aisle, when you talk about
adults in the room, perhaps I wish you were here last year when
we were talking about the GOP tax cut, and we clearly said at
the time that this was a three-step dance, that the Republicans
were going to cut taxes for the rich; that that would then
explode the deficit, and in fact, it has, estimates of $1.9
trillion; and then that would lead to demanding big cuts to the
things that Americans really care about like Medicaid and
Medicare.
And I think, Mr. Chairman, that we are right at that place
here. And I hope that I will have a chance to talk about my
Medicare for All bill that really takes on a broken health
insurance marketplace. I believe we will on Budget Committee,
and I look forward to telling my Republican colleagues about
exactly what that looks like.
Mr. Hargan, I wanted to start with questions about HIV and
Medicaid. There are over 955,000 individuals living with
diagnosed HIV, and it continues to be a significant health
concern in the United States, but thanks to the gains of our
scientific and public health community that we have seen in
improved screening and treatments, over 90 percent of
individuals with HIV survive for more than three years after
the diagnosis.
In his State of the Union address, President Trump
announced a new initiative to end HIV transmissions by the end
of the decade, and the President's budget provides $291 million
to support that initiative.
However, it is very important for the American people to
understand it includes $1.5 trillion in Medicaid cuts over the
next 10 years, and Medicaid is the largest source of insurance
coverage for people living with HIV.
And that is because as of 2017, 32 states expanded Medicaid
coverage to include individuals with HIV who were previously
excluded. And so now more than 40 percent of people with HIV
who are receiving treatment are covered by Medicaid.
How is the goal of ending HIV transmissions achievable when
the Administration is simultaneously proposing to cut roughly a
quarter of the Medicaid budget?
Mr. Hargan. So while we had moved a reduction in one line,
we actually plussed up $1.2 trillion in flexible grant money
for states in Medicaid. So the shift is really from one type of
program to another, to allow there to be more flexibility for
the states in Medicaid and allow them to concentrate on the
traditional vulnerable Medicaid populations: the elderly, the
pregnant women, children, the disabled.
So we are really moving the money from----
Ms. Jayapal. But you are talking about converting Medicaid
into a block grant or a per capita cap and then requiring
states to implement so-called work requirements, all of which
would strip Medicaid as we know it. That is essentially what
you are talking about.
Let me move on to public health in the United States,
comprised of federal agencies, state health agencies, tribal
and territorial departments, and more than 2,500 local health
departments. These are systems that protect us not only from
emerging health threats, but also serve our everyday needs,
like immunization, food safety, and delivery of health
services.
And that is why the CDC, our Nation's health protection
agency, dedicates 85 percent of its domestic funding to state
and local public health departments. And yet, the President's
budget proposes cutting the CDC's budget, that is, the Center
for Disease Control, by nearly 20 percent.
What is your justification for cutting this major source of
funding for local and state public health agencies, and an
agency that is central to the prevention and transmission of
disease in the United States?
Mr. Hargan. Well, we had just proposed in terms of CDC
funding there is really only a net decrease of 1 percent from
FY2019. So our net decrease in funding for it is really just
about 1 percent for CDC.
In a difficult environment, we really did preserve public
health funding for CDC among our agencies.
Ms. Jayapal. Maybe my numbers are wrong. So it is not a cut
of nearly 20 percent?
Mr. Hargan. No. We had moved from $12.1 billion in fiscal
year 2019 to $12.0 billion in 2020.
Ms. Jayapal. Well, that is good. If that is true, that is
great, and I apologize for getting that wrong. I hope that we
actually see an increase in CDC funding, which would be even
better.
Actually, I do not have time. I wanted to just put on the
radar the public charge rule that we are deeply concerned about
and that would strip care for a number of people across the
country who might be seeking care that is legitimately provided
through state programs and introduce for the record a letter
signed by 111 members of Congress around the public charge
rule.
Mr. Chairman, I ask unanimous consent to introduce that
letter.
Chairman Yarmuth. Without objection.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Jayapal. Thank you.
Thank you, Mr. Hargan. I will follow up with you on the CDC
thing because I do not usually get those things wrong, but if I
did, I apologize.
Thank you.
Chairman Yarmuth. Thank you. The gentlelady's time has
expired.
I now recognize the gentleman from Georgia, Mr. Woodall,
for five minutes.
Mr. Woodall. Thank you, Mr. Chairman.
I would like to endorse what my friend Ms. Jayapal said.
She rarely gets things wrong. So I hope you will share it us,
too, when you find out what that is.
Ms. Jayapal. I will do that.
Mr. Woodall. CDC sits in my backyard, and so I tend to
associate myself with the numbers Mr. Hargan has in front of
him, and we are also proud of that mission, but it was not
always that way. CDC was woefully underfunded in the 1980s and
1990s, and only when we realized what we had missed out on did
we finally redouble those efforts. So I appreciate your focus
on that.
Mr. Hargan, I want to talk about some things that I think
went right and some things that could go even better. I know
you have already gotten an earful about things folks don't like
and they don't think we are moving in the right direction on. I
want to move in the right direction.
You have done some work on pressure ulcers as it results to
hospital discharges. That is something that is near and dear to
me personally, but it is also near and dear to me as a budget
hawk because we throw away a lot of money on preventable
hospital-acquired illnesses.
When the Appropriations Committee last cycle asked HHS to
go back and look at pressure ulcers to see if we were doing all
that we could do, you came back with a new model that was based
on a ten-factor scale and used pressure ulcers as one of those
to say we can do better than the 58 percent increase in
pressure ulcer discharges and do better down the road.
We have got a lot of great groups. One is in my district,
Molnlycke, that has an amazing technology that we can do more,
not do more with less, but do more and prevent more bad
outcomes, and thus, we end up spending less.
The entire Pressure Ulcer Association is working along
those lines, and you all have I would say moved with the
efficiency one would expect from a government agency. You can
take that as you see fit, but there is some good work that is
happening there. There is more good work that can be done, but
I want to thank you for that.
I also want to put on your radar screen, and I know you
have been busy preparing for this hearing, the General Assembly
in Georgia yesterday passed a bill that will give our governor
permission to ask for two waivers, one is an Affordable Care
Act waiver. Another is a Medicaid waiver.
I listened to Mr. Peters as he challenged your numbers,
talking about all of the good work that California does. I have
no doubt that California is doing good work, and I have no
doubt that the failures that you observed in the case of a
$200,000 program only signing up one individual; I have no
doubt about the accuracy of that either.
We can do better in Georgia. No offense to the federal laws
and statutes, regulations that are on the books. We just have
more experience in rural Georgia than you do. We have more
experience in metropolitan Atlanta than you do, and so when
those waiver proposals come forward, I just want to encourage
you to look favorably upon those.
There are limited resources. Can you tell me a little bit
about the resources dedicated to approving those waivers?
And either or not we'll be able, I know so many are coming
across your desk. Will we be able to proceed on those
expeditiously?
Mr. Hargan. I would say that, you know, we very much look
forward to if Governor Kemp bringing the proposal forward to
us. We would very much look forward to engaging with him.
We know that states and localities know a lot more about
their unique needs than we do here in Washington. So we know
that they are going to be in the best position to know the
unique needs of their populations there, and we applaud states
for bringing creative proposals forward to us.
So we are going to look forward to engaging with him if he
brings it forward after the passage of the bill.
Mr. Woodall. I do not see my timer. Oh, there I am up on
the wall. Let me re-ask that specifically.
When we get to the appropriations cycle, folks will take
money out of administrative accounts and put them into things
that feel better, like NIH funding, like CDC funding, and so
on.
Are we at risk, underfunding the administrative account at
HHS, of not seeing those applications acted on as quickly as we
would all like to see them acted on?
Mr. Hargan. I think that the Administrator at CMS is going
to focus what she needs to focus on having a swift analysis and
resolution on whatever we have, whatever is brought forward by
Governor Kemp or anyone else creatively in the 1115 space.
Mr. Woodall. I do not know if you have been down to the CDC
recently. It is always a good excuse to go to Atlanta. Security
is one of the things that troubles me. We spend a lot of money
on science, but we do not spend as much money on security.
You're in a difficult space. Health is the focus, but bad
security leads to bad health outcomes from time to time. Is
that an issue that rises to your C Suite level?
Mr. Hargan. Particularly cybersecurity is an issue that we
take very seriously. We deal a lot with data, with science,
with new ideas, with new science and intellectual property, and
so cybersecurity is a big issue both for Americans, to make
sure that their health data is kept secure for researchers.
So we have actually stood up a Health Sector Cybersecurity
Coordination Center at HHS that is going to help facilitate
maintaining security over a lot of the information that
Americans entrust to their doctors, to the health care system,
and to HHS.
Mr. Woodall. Mr. Chairman, as I look at the pictures on the
wall, I see that only Mr. Panetta was brave enough to leave
Congress and go and serve in the Administration afterwards. So
thank you, Mr. Hargan, for what you are doing. Clearly, it is
not something that we choose to do.
I yield back.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from New York, Mr. Jeffries,
for five minutes.
Mr. Jeffries. Thank you, Mr. Chairman, for your leadership.
And thank you, Deputy Secretary Hargan, for your presence
here today.
Medicaid provides health coverage to 7.2 million low income
seniors who are also enrolled in Medicare; is that correct?
Mr. Hargan. Medicare, yes. Medicare serves tens of millions
of people.
Mr. Jeffries. The answer would be Medicaid provides health
coverage to 7.2 million low income seniors, correct?
Mr. Hargan. I will take your number as being accurate.
Mr. Jeffries. Roughly 60 percent of all nursing home
residents receive Medicaid coverage; is that correct?
Mr. Hargan. I will take, again, your number as being
accurate.
Mr. Jeffries. Do you think that nursing home care is an
important part of our health care fabric here in the United
States of America?
Mr. Hargan. Yes, all different kinds of post-acute care
settings are important. Skilled nursing facilities, long-term
care facilities, home health, we seek to make sure that
whatever setting Americans want and choose what is best for
their care is enabled.
Mr. Jeffries. So nursing home care is important, correct?
Mr. Hargan. Nursing home care can be important for the
right senior.
Mr. Jeffries. Close to half of all long-term care services
for the elderly are paid for by Medicaid. True?
Mr. Hargan. Yes, it is an important component for
individual nursing home payment.
Mr. Jeffries. Medicaid also covers premiums, deductibles,
and cost sharing for Medicare beneficiaries; is that correct?
Mr. Hargan. In certain settings, yes.
Mr. Jeffries. Medicaid provides coverage to 27 million
children under the age of 18 in the United States of America.
True?
Mr. Hargan. Again, I will take your numbers to be accurate.
Mr. Jeffries. More than 700,000 children in Medicaid
expansion states gained coverage between 2013 and 2015; is that
correct?
Mr. Hargan. I will take your numbers as accurate.
Mr. Jeffries. And research shows that children with
Medicaid coverage have better health care outcomes as adults.
Is that true?
Mr. Hargan. Could you repeat the question?
Mr. Jeffries. Research shows that children with Medicaid
coverage have better health outcomes as adults than those
without Medicaid coverage, correct?
Mr. Hargan. I am not familiar with that research.
Mr. Jeffries. Okay. But the totality of the import of what
Medicaid provides, I think, is well established, and you have
agreed in several different areas that Medicaid is covering a
substantial number of Americans from children all the way to
low income seniors and those who are receiving care in nursing
homes.
So for the life of me I am struggling to try to figure out
why this Administration proposes essentially to slash $1.5
trillion in Medicaid and create a smoke and mirrors block grant
program that will devastate, devastate the ability of these
recipients who rely on Medicaid to receive care.
Now, the President during the campaign promised that he
would not touch Medicaid; is that correct?
Mr. Hargan. The President is fully committed to supporting
the Medicaid program.
Mr. Jeffries. Why is the President breaking his promise not
just with respect to Medicaid, but also Social Security and
Medicare by submitting a budget that would cut approximately $2
trillion?
Mr. Hargan. The budget proposes a shift into a $1.2
trillion new program to allow states to flexibly deal with the
most vulnerable populations that Medicaid was intended to
address: the elderly, disabled, pregnant women, children.
So we are fully committed to that, and that is a $1.2
trillion new program that we are advocating for in this budget.
Mr. Jeffries. And you propose creating this $1.2 trillion
new program because you want to address alleged waste, fraud,
and abuse in the current Medicaid program; is that right?
Mr. Hargan. We want to make sure that states have the
flexibility in the new program to address the unique needs of
their populations and focus the program on the traditionally
vulnerable, fragile populations that Medicaid was intended to
address from its very beginning.
Mr. Jeffries. Okay. So at minimum, even if we assume that
this new $1.2 trillion block grant program is going to actually
reach the people who are currently being served by Medicaid,
which there is reason to doubt, you are cutting at least $300
billion from Medicaid.
Can you give me a single example of the type of waste,
fraud, and abuse that you are trying to address that would
justify billions of dollars in cuts, not millions, not tens of
millions, not thousands, billions of dollars in cuts?
Can you give me some understanding of the waste, fraud, and
abuse that you are addressing?
Mr. Hargan. Actually over 10 years, Medicaid spending goes
up under this budget plan. So we are not addressing actually a
lowering in the budget of Medicaid spending, but actually
increasing it.
Mr. Jeffries. Can you give me a single example of the
waste, fraud, and abuse that justifies cutting billions of
dollars from children, low income seniors, and those receiving
nursing home care?
Mr. Hargan. Our Inspector General and our Centers for
Program Integrity are constantly working to identify areas
where there are waste, fraud, and abuse that take place
throughout our programs. We have entire----
Mr. Jeffries. Reclaiming my time. I assume that is a no.
I yield back. Thank you.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Texas, Mr. Roy, for five
minutes.
Mr. Roy. Thank you, Mr. Chairman.
I appreciate you coming here to testify today and taking
the time to join us here.
Just as a threshold matter, the national debt to today is
what? Do you know? Twenty-two trillion, over $22 trillion, does
that sound about right?
Mr. Hargan. That is my understanding.
Mr. Roy. I was recently PolitiFact'ed that I made a comment
in a hearing that we were racking up $100 million of debt per
hour, and I actually got a mostly true out PolitiFact, which
basically means it is the Book of Luke in the eyes of
PolitiFact if I get a mostly true.
A hundred million dollars of debt per hour, right? So as a
backdrop for the questions that we are going to ask here.
With respect to some of the Medicaid questions that were
just asked, it was alleged that it is smoke and mirrors when we
talk about block granting Medicaid. Are you familiar with some
of the studies and some of the state organizations and think
tanks, for example, the Texas Public Policy Foundation, which
would suggest that they might be able to save upwards of $4 to
$5 billion in Texas in administering Medicaid if they were able
to get the money in the form of a block grant?
Is that where some of the kinds of savings you were talking
about are?
Mr. Hargan. I am not familiar with their particular study,
but we have certainly seen lots of examples from our program
integrity initiatives and otherwise where we see examples
overall of waste in programs.
Mr. Roy. Well, I appreciate that.
And also with respect to Medicaid, we talk a whole lot the,
quote, gains in coverage for Medicaid. Are you also familiar
with some of the studies in think tanks, for example, the
Illinois Policy Institute, which pointed out that there are
literally thousands of people that are on waiting lists in
Medicaid rolls because of the number of people that were jammed
onto the Medicaid rolls after Obamacare and the expansion of
Medicaid so that people for whom Medicaid was originally
designed are on the outside looking in because of so much
burden being placed on the Medicaid system?
Is that an accurate depiction at least in some areas of the
country?
Mr. Hargan. That is certainly something that we have heard.
Mr. Roy. Is it also true that we have had upwards of six
million or more people who lost private coverage since
Obamacare has been put in place in the private market?
Mr. Hargan. I am not sure of the exact number, but we
certainly had people who lost their plans in the wake of the
passage of the Affordable Care Act.
Mr. Roy. Okay. I appreciate that.
And then one last question on Medicaid that I am just
curious. With respect to Medicaid expansion, has anybody in the
Administration, has the Secretary or anybody in the
Administration, actively encouraged states that have not
expanded to embrace a partial expansion or expansion now, for
example, Texas, which has not expanded?
Mr. Hargan. We only entertain things coming from the states
as opposed to, say, encourage or discourage. Normally, we are
responding in that program to initiatives coming from the
states.
So, for example, in the Georgia case that was just cited,
if the Georgia legislature passes that bill and the governor
brings it to us, we are going to entertain that, within the
statutory restrictions that we have in the program.
Mr. Roy. Okay. Thank you for that.
One last question on budgeting. Do you all ever engage in
what some people might refer to as zero based budgeting or
building up from the ground up, or do you basically budget off
of last year's numbers and so forth when you work with OMB and
others to get the budgeting process done?
Mr. Hargan. We work with OMB on any number of different
scenarios for the budget, but generally, we abide by the rules
that they give us in order to base off of our budget line.
Mr. Roy. But you are not aware of that budget. This is not
what you might refer to as a zero-based budget?
Mr. Hargan. This is abiding by the caps agreement, which
President Obama and the Congress passed years ago.
Mr. Roy. A couple of questions on the $2 billion line in
the budget with four unaccompanied alien children. Do you know
how many alien minor children that is meant to try to deal with
over the next three years?
And am I correct it is $2 billion allotted for the next
three years?
Mr. Hargan. Yes, it is a $2 billion contingent fund for the
next three years if the program needs it and exceeds the
transfer authority, and in this case we have asked for 20
percent transfer authority to the UAC program.
Mr. Roy. Is this mandatory or discretionary spending?
Mr. Hargan. I believe this was a mandatory. The $2 billion
is on the mandatory side, I believe.
Mr. Roy. Okay. So I guess my question is: do you have any
estimate on how many UACs were preparing for in coming up with
that $2 billion number?
Mr. Hargan. We have to look really within HHS. We deal with
the children when they are brought to us.
Mr. Roy. Sure.
Mr. Hargan. We can look at ins and outs. There are great
differences year to year. That is why we had a contingent fund
as opposed to asking for more increased money every year just
because there are great fluctuations with the number of
unaccompanied alien children coming over the border year to
year, month to month, day to day.
Mr. Roy. Well, and to that point, right, in fiscal year
2018, CBP apprehended 50,000 unaccompanied alien minor children
at the southwest border. Just between October and February, we
saw 26,937, which means we are looking at a higher number.
We have seen a massive expansion over the last several
months in February and March. We see the numbers that are
coming across that we are having to deal with, my point being:
is it fair to say that the burdens of what is happening at the
border with our inability to secure the border is putting a
strain on HHS' budget because we are having to deal with this
problem in failing to secure our border?
Mr. Hargan. Fundamentally, this is traced back to a broken
immigration system, and the fact that we have to deal with a
tremendous number of children that we are going to care for, we
are going to advocate and make sure that the child welfare and
safety is the utmost and that we move them to an appropriate
sponsor as quickly as we can out of these shelters, but it does
mean that there are huge numbers of children being sent to us
to take care of, and that does place a strain on our budget.
Mr. Roy. Thank you for that. Thanks for being here.
Chairman Yarmuth. The gentleman's time has expired.
And now I recognize the gentleman from California, Mr.
Khanna, for five minutes.
Mr. Khanna. Thank you, Mr. Chairman. Thank you for your
leadership.
Thank you, Secretary Hargan, for being here.
Secretary Hargan, you worked for President Bush; is that
correct?
Mr. Hargan. I did.
Mr. Khanna. And you were there during his tenure and when
he was doubling NIH funding; is that correct?
Mr. Hargan. Yes, I was.
Mr. Khanna. You probably remember that President Bush ran
saying that we need to double the NIH budget in five years. Do
you remember that?
Mr. Hargan. Yes, we were, I believe, continuing over a
doubling that was taking place at NIH.
Mr. Khanna. It is kind of you to give President Clinton
credit. He started it, and then President Bush continued it.
Are you aware that when President Bush took over, the NIH
budget was $17 billion, and when he left, the NIH budget was
$28.6 billion?
Mr. Hargan. I will defer to your numbers on the past
numbers for NIH.
Mr. Khanna. I was recently with Secretary Condoleezza Rice,
and she said one of the biggest things we can be doing for this
country is doubling funding for the NIH and National Science
Foundation. Would you agree with her comments?
Mr. Hargan. I believe that, as I said, medical research is
core to part of the mission of HHS to enhance the health and
well-being of the American people. We stand fully behind NIH
and its medical research mission, both for it and for the
grantees that it enables to do that important work.
Within the caps agreement and the budget that we have, we
have to operate within the budgetary environment we have been
given by the caps agreement that was entered into.
Mr. Khanna. In your opinion though, when you look at
President Bush's approach and the approach Condoleezza Rice is
recommending, I mean, they also have to operate within hard
budgets. They found the money to double NIH.
Do you think their approach was better for a
competitiveness or the current President's approach?
They are two very different philosophies.
Mr. Hargan. I have great respect for Ms. Rice, but we also
have to operate within the legal environment that we have, the
budgetary rules that are put in place. We can't violate those.
And we have to prepare our budgets realistically within the
bounds that are set for us by the law. So in making those
decisions, we have to abide by the agreements and the laws that
we are given by the Congress.
Mr. Khanna. But you know that in the context of the federal
budget, $4.5 billion, do you think that is a significant
percentage?
You just have to guess. I mean, it is probably less than .1
percent or .5 percent of our federal budget.
Mr. Hargan. And we are attempting also within the NIH
budget to preserve focus on a lot of the important focuses that
we have within opioids, within pediatric cancer, within the HIV
epidemic. To focus within those and to save those areas within
NIH, apart from the overall budgetary environment that we are
in, a tough budgetary environment dealing with the caps
agreement.
Mr. Khanna. Would it be fair to say that President Bush and
Condoleezza Rice put a higher priority on the National
Institutes of Health than this current President?
Mr. Hargan. Well, President Bush was not operating in an
environment where there were discretionary caps, and so there
were sort of fewer restrictions on this, but we have to operate
in an atmosphere of discretionary caps.
Mr. Khanna. Would you say that if you were meeting
President Bush and he asked you do you think President Trump
has as much of a priority on the NIH, what would you say to
him?
Mr. Hargan. I would hope that President Bush would
understand as we have just talked about, which is in an
environment with no discretionary caps versus an environment
with real discretionary caps, you have to operate in those
areas.
There were hard decisions made in the budget under
President Bush. I was in leadership at HHS at that time, and we
had hard decisions to make, and we have hard decisions to make
here, and hopefully we have made them as thoughtfully as we can
for your consideration when you are working through the budget.
Mr. Khanna. You stand by the $4.5 billion NIH funding cut
and the $897 million cut for National Cancer Institute? Given
your experience, your service in the Bush Administration, your
views with Condoleezza Rice and her basic view that we ought to
be doubling, and she understands the budget constraints, I am
just trying to understand, and I mean this with respect.
Are you defending this because that is your job? You work
for the President. He gets to set the direction, or do you
really think that his vision is better than Bill Clinton's and
George Bush's and Barack Obama's and every single President
before him in modern time who wanted to increase funding for
the NIH?
Mr. Hargan. Well, I would say we have something around a
$99 billion discretionary budget at HHS. NIH has been $38
billion of that. It is the largest single item of discretionary
spending within our department.
We have many programs within that, within the caps
agreement, within the cuts to discretionary funding and the
caps that we have to abide by. We have to try to be as
thoughtful as we can be in that environment to make sure we
comply with the law and the caps that were sent to us.
Mr. Khanna. Thank you.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from New York, Mr. Morelle,
for five minutes.
Mr. Morelle. Yes, thank you, Mr. Chairman, for hosting the
hearing.
And thanks to the Deputy Secretary for joining us I was
going to say this morning, just about this morning and
afternoon.
Let me just editorialize for just a second. I am new to the
Congress, and I note that in the budget there are a number of
changes which have been discussed by my colleagues regarding
Medicare payment policies. For a number of these changes,
however, the budget does not indicate how much they would cost
or save the government, and I am just struck by the footnotes
that say estimates were not available at the time of budget
publication.
And I just note that I find it unusual and strange that you
could recommend policies without knowing exactly how they would
affect federal spending on Medicare, both to the government and
to beneficiaries.
But if I can, I just want to jump around in the limited
time. Related to investments, I recognize as many members have
talked about the impending challenges of Medicare and mandatory
spending as the population ages, as costs will grow, and there
is the need to clearly address this.
I would do it from the point of view of investments and
looking at key investments and whether spending on those
investments, do for instance, in the area of health care, what
the AAA and everyone talks about, better outcomes, better
experience for patients, and bending the cost curve.
One of the investments that we make typically is in
graduate medical education. I represent the University of
Rochester, which is an academic medical research facility. The
budget restructures federal support for graduate medical
education, cuts the funding by a total of $48 billion over a
10-year period by capping funding, and it grows at less than
the rate of inflation.
The population is aging. There is a growing need for
doctors in areas such as primary care and gerontology. How does
this proposal improve the health care and the health needs of
the workforce to meet the needs of that growing senior
population?
Mr. Hargan. The reforms that we are advocating for in the
budget are intended to better focus the federal spending on
health care professionals because we are consolidating GME
programs that are currently fragmented into a single program.
By consolidating these disparate streams of funding, we
believe that we are going to be able to address shortage areas,
rural health, making sure that we have better trained
professionals to build a stronger health care workforce that is
more targeted to the needs that we have now. When we have these
different funding streams consolidated, if these reforms are
undertaken, we will be able to reorient these programs.
Mr. Morelle. But it does, and I am sorry to interrupt, and
I appreciate that, but there is a significant cut in dollars
that accompanies it. It is not only the consolidation, which I
might argue maybe there are some valid reasons to do that and
it will give you more authority, but the $48 billion cut is a
real one even as you combine the programs into a single
program.
Mr. Hargan. Yes. Again, we are operating within a tough
budgetary environment. We do understand the needs to work--to
make sure that the next generation of the health care workforce
is in place. We are hoping that by doing these targeted
reforms, we will be able to kind of sort of skate to where the
puck is going to be in terms of graduate medical education.
Mr. Morelle. Okay. Very good. Thank you. Let me jump now
briefly in the few moments I have left. The budget calls for no
increase in funding for Head Start, another investment I think
is very important, particularly as we are trying to get to
children in poverty, getting them to read at grade level.
You fund the program at the same level as that of 2019.
Your own internal documents show funding will support 871,000
slots, down from 890 funded last year. Head Start currently
reaches less than one-third of eligible children. Why would we
reduce the slots in the 2020 budget?
Mr. Hargan. Holding Head Start level in a tough funding
environment like this is showing what a priority we place on
this program. So we have actually attempted within a very tough
budgetary environment, where we have been--where we have been--
we have had to put cuts into some programs, trying to maintain
levels----
Mr. Morelle. Would this be a program--I am sorry to
interrupt--but would this be a program you would increase if
you were not in a tough budgetary cycle?
Mr. Hargan. I think we have to abide by the restrictions on
the discretionary funding that we have been given by past--by
the existing law. But we have held it level, and that is
attempting to make sure that we show the focus that we have on
programs that we think work.
Mr. Morelle. I do want to--and you do not need to respond
to this--but just acknowledge that the budget also eliminates
$250 million in preschool development grants, which help build
state and local capacity, and many of my colleagues often talk
about local and state governments being closer to the people.
But it reduces their capacity to provide preschool to low
and moderate income households, and another troubling, in my
view, cut to a significant investment to people who would be
far more productive as citizens if we could give them that
support. And I yield back my time, Mr. Chair.
Chairman Yarmuth. The gentleman yields back. I now
recognize the gentleman from New Jersey, Mr. Sires, for five
minutes.
Mr. Sires. Thank you, Mr. Chairman. Mr. Hargan, thank you
very much for being here.
You know, in New Jersey we have about 1.7 million people
that take advantage of Medicaid. About 1.4 of those are
Medicaid; the other is involved in the CHIP program. I see that
the budget proposes to implement a work requirement for
Medicaid recipients in all 50 states. Are you aware that when
they implemented the work requirement program in Arkansas, how
many people lost their coverage?
Mr. Hargan. We have seen, I think, the latest numbers of
people show a sort of average churn in the Medicaid program. We
have not yet seen--it is very early days in Arkansas's
implementation of that community engagement requirement. So we
have seen, so far, the numbers show an average number of people
passing in and out of the program.
Mr. Sires. Well, the numbers that I got is about 16,000
people lost their coverage in Arkansas when they implemented
the work program. Are you----
Mr. Hargan. Did you have a question?
Mr. Sires. Yes. Following up on the question, I understand
also that you are also cutting $130 billion--you anticipate
$130 billion in savings--on the Medicaid program?
Mr. Hargan. We have a number of different ways, places that
we are showing savings in the Medicaid program.
Mr. Sires. Well, how much of that do you think is from
kicking people off the program by requiring them to work?
Mr. Hargan. I do not know that there is--it is going to
depend on how different programs are implemented in different
states. This is ultimately a Medicaid issue, which means that
it is a state-directed program. So each state is going to come
in with a different way of dealing with the community
engagement--with the community engagement requirement that they
want to put into their own state.
Some of them, they are going to have different structures.
They are going to have different ways in which the populations
deal with the community engagement requirement. Ultimately, it
is a state--it is a state set of requirements that they come to
us and----
Mr. Sires. But you are anticipating that if you ask a work
requirement, there will be people losing their coverage?
Mr. Hargan. That could happen because--but it is also--and
certainly Arkansas has structured some of these things so that
people have the requirement in there. If they do not obey the
requirement, it is an issue for them maintaining Medicaid
coverage.
There are also other requirements that states put into
place. If people get work of a certain level, they leave the
Medicaid program. If people move out of state, if they do not
return their paperwork--there are other ways in which people
lose Medicaid coverage as well.
Mr. Sires. To me, this looks like this is a way of cutting
the Medicaid programs by requiring people to work, knowing full
well that you're going to lose coverage on people. So
therefore, you are slashing.
Mr. Hargan. Primarily, the community engagement requirement
is intended to help people. It is----
Mr. Sires. How can that help people when they----
Mr. Hargan. We know that there are studies dealing with
social isolation, dealing with the health--behavioral and
mental health effects of people who do not engage with their
community by states that come to us that have a thoughtfully
structured way in which to encourage people to have community
engagement, whether it is work or other forms of community
engagement.
That is an area where we believe that people are going to
be well affected, both in their health, and it can have also
fiscal effects on the state as well, as well as having good
effects on people for engaging in work to have money in their
pocket, to have more engagement with their community.
If that is the way in which the program is structured, we
think it can have a number of good effects, not just dealing
with keeping the sustainability of the state Medicaid program
moving forward from a fiscal point of view. It has other
effects as well.
Mr. Sires. So what are the bad effects? What are the bad
effects? You have all these good effects that you are telling
me. What are the bad effects that you anticipate?
Mr. Hargan. Well, we are hoping that any state that comes
in is going to avoid bad effects by structuring a community
engagement requirement so that, say, in the case of Arkansas,
that people who are primary caregivers for children, people who
are medically frail, people who are full-time students, people
who a doctor or medical professional says cannot work or should
not work, are exempted from the program.
So hopefully, the restrictions on the community engagement
requirement themselves will help obviate bad effects of the
program, but also enable people who can engage in the community
to encourage them to do so.
Mr. Sires. Thank you, Mr. Chairman. My time is up.
Chairman Yarmuth. The gentleman's time is expired.
I now recognize the gentleman from Massachusetts, Mr.
Moulton, for five minutes.
Mr. Moulton. Mr. Hargan, thank you very much for joining
us.
Does the President believe that individuals should be able
to deduct healthcare insurance premiums from their taxes?
Mr. Hargan. I believe that we have stood for a lot of
different proposals in the budget regarding healthcare. It
depends on the type of--the type of things. We have certainly
advocated for greater expansion of health savings accounts
that----
Mr. Moulton. Well, if you do not what the President, your
President, has proposed, he said during the 2016 presidential
campaign that his reform--excuse me--his plan to reform
healthcare included allowing individuals to deduct all of their
insurance premiums from the income tax that they owe.
Historically, which Americans are most likely to benefit
from these tax deductions? Wealthy Americans? Poor Americans?
Middle class?
Mr. Hargan. I would--for tax issues, I would have to refer
you to possibly the Department of Treasury for----
Mr. Moulton. Well, the answer is that wealthy people can
take advantage of deductions.
The President's budget justification states, ``All
individuals receiving subsidized coverage should contribute a
portion of their health insurance premium.'' So the President
believes that individuals making $12,490 or families of four
with a household income of $25,750 should pay more towards
healthcare.
Does the President's budget propose wealthier Americans pay
more for the cost of health insurance?
Mr. Hargan. I believe that we are trying to reorient----
Mr. Moulton. Actually, it is just quite a simple question,
Mr. Hargan. Does the President's budget propose that wealthier
Americans pay more of their costs for health insurance?
Mr. Hargan. We are proposing greater expansions of health
insurance options to all Americans. We are actually proposing
areas like where we expand more options that cost less for
Americans, for example short-term plans----
Mr. Moulton. That is great. So I have given a chance to
dodge the question. Now maybe you could just answer it. Is it
yes or no?
Mr. Hargan. So short-term--say short-term plans cost 50 to
80 percent less for Americans. By expanding options, all health
insurance options----
Mr. Moulton. The President is not asking wealthy Americans
to pay more. But he is asking poor Americans to pay more for
health insurance. My Republican colleagues often state during
these hearings that there is a philosophical difference between
Republicans and Democrats on spending.
And I agree. Apparently Democrats think that the poor
should pay less, and Republicans think that the poor should pay
more.
Mr. Hargan. We are supportive of the ACA exchanges. We have
been implementing them all along, and they provide a tremendous
premium subsidy----
Mr. Moulton. The President supports the Affordable--wait.
The President supports----
Mr. Hargan. The Administration has carried out the ACA
exchanges and those----
Mr. Moulton. So would you be willing to say that the
President supports the Affordable Care Act?
Mr. Hargan. We obey the law within the Administration. We
have put forward----
Mr. Moulton. Does the President support the Affordable Care
Act? You said he supports the exchanges.
Mr. Hargan. We have put forward alternatives to the ACA.
But as long as----
Mr. Moulton. But just does he support it or not?
Mr. Hargan. But as long as it is the law of the land, we
are going to provide premium support, a tremendous amount of
premium support.
Mr. Moulton. Well, that is hardening to hear--we certainly
know that we have a President who loves to follow the law of
the land.
Mr. Hargan, who famously said that the most terrifying
words in the American language are, ``I am from the Government
and I am here to help''?
Mr. Hargan. I am not sure who the actual originator of that
quote is.
Mr. Moulton. It may have been a speechwriter. But of course
it is attributed to President Ronald Reagan. So even with his
quest to limit the federal government, he signed into law the
Low Income Home Energy Assistance Program during his first year
in the White House, which specifically protects millions of
low-income households each year from extreme heat and cold when
high energy bills exceed their ability to pay.
So how much does President Trump propose for this program
in fiscal year 2020?
Mr. Hargan. Zero.
Mr. Moulton. Okay. And his justification states that it is
because there are 15 states that offer similar protection. So
what about the people so unfortunate to live in the other 35
states?
Mr. Hargan. Many states make it so that utilities cannot
cut off service to people during periods of severe weather.
Also, in 2010, the GAO found that that program was not high-
performing, had lots of problems with waste and fraud. We
believe that this is not a program that is a very high-
performing program----
Mr. Moulton. So it sounds like if it is not high-
performing, the problem is not with the poor people who cannot
afford to heat their homes, but the administrators of that
program. And as the Administration, you are in charge of the
administrators of that program.
So why not reform the program rather than forcing low-
income people to freeze?
Mr. Hargan. The program----
Mr. Moulton. Sorry. My time is expired.
Chairman Yarmuth. I thank the gentleman.
I now recognize the gentlelady from Minnesota, Ms. Omar,
for five minutes.
Ms. Omar. I will just pick up, I think, where my colleague
left off. I am from the state of Minnesota, and we are very
much accustomed to having extreme cold weathers. And so I
understand the need for us to worry about what happens when
families are not able to heat their homes.
So the program that my colleague was talking about helps
6.3 million households. In Minnesota alone, there are 120,000
families that utilize this particular program. And so my
question to you is: What do you propose happens to these
families who now have health and safety problems because of the
extreme cold weather?
Mr. Hargan. Well, I am from Chicago, so I understand the
issue about cold winters. When we have a program that does not
have strong performance outcomes, and LIHEAP is one of those
that has had this going all the way back to when I was at HHS
under President Bush, and when the GAO tells us that it is at
risk for fraud for improper payments and we look at----
Ms. Omar. But sir, there is a difference between what my
colleague is suggesting about us reforming and figuring out the
best ways to utilize the dollars that we have, and saying zero
dollars should go to assist people who live in conditions where
it gets as low 12, 30 negative.
Mr. Hargan. So all 50 states have protections for people
who cannot pay their bills in periods of severe weather. So
every state----
Ms. Omar. Where would the resources come from if that
protection exists? Yes, you need by legislation----
Mr. Hargan. Every state protects people from their
electricity, their heat, being cut off during periods of severe
weather. And the LIHEAP program is really duplicating
protections that are out there, $3.7 billion to duplicate
protections that people have already who are disadvantaged.
Now, 15 states have alternative programs that really
duplicate by providing payments and other things. But all 50
states protect people against having their----
Ms. Omar. So let me get this clear. You have 15 states out
of the 50 states that have programs where there are resources
to help assist people. Other states just have a protection that
might say, you might not be able to cut this off, or other
things.
But we are deciding that there is no resources from the
federal government that is going to help any of these people.
Correct?
Mr. Hargan. Well, we are--they are protected. So they are
not going to lose their heat. They are not going to lose their
cooling in hot weather.
Ms. Omar. But protection and providing resources for them
to do that are totally two different things. You know that, and
you are trying to say otherwise. So we will just move on.
I wanted to, for the remainder of my time, talk about the
child care budget within the budget that you proposed. The
budget includes a one-time temporary funding of $1 billion to
help address the cost of child care. It is unclear whether this
approach will ultimately achieve the intended goal. Why are you
only providing it on a one-time basis?
Mr. Hargan. Well, this money, which is one-time mandatory
funding which we put in place due to the caps proposal, it is
intended to augment what we think of as being the most
effective parts of our budget in social services, which is
supporting child care and allowing states to build out capacity
to provide new ways to provide child care. We also----
Ms. Omar. And how will the funds be distributed? Is it
going to be up to the states to determine what regulations they
will use to meet the definitions of unnecessary?
Mr. Hargan. Yes. So this is going to be provided as a grant
to states, to help businesses and localities, to help them
provide new ways of doing child care, and hopefully to reach
underserved areas, rural communities, and communities that are
underserved with child care.
Ms. Omar. All right. Thank you. I yield back.
Chairman Yarmuth. The gentlelady's time is expired.
I now yield 10 minutes to the Ranking Member for his
questions.
Mr. Womack. I thank the chairman, and again, Mr. Hargan,
thank you for being here today. I will say at the outset I
appreciate you being patient with my friend from Rocky Top, Mr.
Burchett, who was trying to get a question answered and blaming
it on Crenshaw's lack of knowledge of something when it was
actually his own.
But what can you say about a guy that walks around in a
Carhartt jacket when it is pretty moderate outside and a big
hole in the right sleeve? But that is Tim. He is a great guy
and fellow mayor. So I appreciate him, and he does a very good
job on this Committee.
You were asked a few questions in the hearing by two or
three different members on the other side of the aisle from me,
questions about HIV initiative, yes or no questions, those
type, treatment of foster care within the budget request--there
were a handful of other questions that you were attempting to
close on with your answers, but because of their quest for yes
or no answers, not given an opportunity to explain.
I will give you a chance here for a moment or two, if you
would like, to finish, maybe, some of those thought processes
on those subjects and any others that you would care to expound
on regarding this part of the President's budget.
Mr. Hargan. Right. Well, thank you for that. I mean, I
think that some of the questions about the effects that
Medicaid might have on people with HIV, as I had explained, we
are actually replacing the cuts or reductions in one line with
an increase on the other side, and flexibilities.
So we do not believe that a state would choose to
disadvantage a particular population or places being served
just simply because they are given more flexibilities in
funding. So we are hopeful that to the extent that people are
fearful that the states would cut Medicaid funding to HIV, we
do not have any idea that that is what would happen.
And in the meantime, we are increasing funding for HIV $291
million. It is clearly one of the primary focuses of this
department, to address that issue, to end that scourge for
Americans. So we want to make sure that that focus is really
clear on that.
With regard to the issue of Miracle Hill, there is no one
who is going to be turned down as a foster parent who is
otherwise suitable as a foster parent by the state of South
Carolina. If an organization like Miracle Hill has a parent
like me, for example, as a Catholic, who is not going to
qualify for that program, they are going to refer me, and they
are supposed to refer me, to another agency or to the state for
me to apply and get inside the foster care program.
We have to. The American people have given HHS a budget of
$1.3 trillion and tremendous amount of authority in some of the
most intimate and personal parts of their lives. And in return,
we have to obey the constitutional safeguards and the legal
safeguards that the American people expect us to obey. Some of
those are the Bill of Rights, the constitutional safeguards of
people's religious expression. That has to be a cornerstone of
everything that we are doing.
And so it is important to us that we can do both of these
things. We can make sure that we both fund important social
services and healthcare activities and also obey the
constitution. We have to be able to do both at the same time.
Mr. Womack. It was said earlier, and I cannot remember
which one of my colleagues made the comment, but about the
prospect of healthy kids. Kids that have access to healthcare
at an early age typically would be better performing physically
from a health perspective later on in life.
I can sign onto that. I think that is a rational,
reasonable approach. But I would also ask whether or not that
same healthy child early on in life is going to be well served
if in fact that later on in life, the costs associated with
what we are doing today are piled on to that generation of
children in the form of higher taxes in order just to meet the
daily needs.
So $22 trillion in debt, I think you would agree, is a
pretty substantial amount of money that we owe currently.
Mr. Hargan. Yes.
Mr. Womack. And that trillion dollar deficit that is going
to be added to that $22 trillion in debt is also a very
significant amount of money.
Mr. Hargan. Yes.
Mr. Womack. So in your business, when you are preparing a
budget, you are having to take the--just like people at home.
People watching this hearing today do this at home. They take
their income and they take their expenses, they compare the
two, and then they have to make what I call tough choices.
So you have to make tough choices. What are some of those
tough choices?
Mr. Hargan. So some of the tough choices that we have to
make are situations where we are seeing that we are going to
have to reduce the rate of growth in programs. Those are tough
choices. We have to make choices between making sure that
different sites of care are equally provided. Those are going
to impose potential costs on providers, but not beneficiaries.
We have to maintain the focus that the seniors, the
beneficiaries of our programs, are taken care of and that they
do not have an increase in out-of-pocket cost. But at the same
time we have to have reforms in these programs or they will
not, as you rightly point out--will they be sustainable for the
long run?
We have to make sure that they are and that the child today
that we are going to endeavor to have the best healthcare
possible for them, that these programs are around for them. And
that is why we try to adopt a thoughtful approach in this
budget that extends the life of the Medicare Trust Fund by
eight years, and that it does with making thoughtful choices
within a tough budget environment.
Mr. Womack. My colleague, Mr. Sires, brought up the state
of Arkansas, my home state, and changes it has made to its
Medicaid program regarding the work requirement. Are you
familiar with a work requirement? What is that work
requirement?
Mr. Hargan. Yes. So this is a community engagement
requirement that we have that we have allowed Arkansas to put
into place. There are a number of elements of it. But Arkansas,
while requiring people to engage in community engagement or
work, also has a lot of safeguards on that program that we have
built into place to make sure that really this is targeted
towards people who can engage in work, who can engage in
community engagement.
So that people who are caring for a minor child 17 or
younger are exempted from that program; that we have people--
anyone who is caring for an incapacitated person, people who
have substance use disorder--those are all categories that are
exempted from the community engagement requirement by Arkansas.
Mr. Womack. How many hours are they required to work?
Mr. Hargan. I believe it is----
Mr. Womack. It is about 20 hours a week?
Mr. Hargan. 20 hours a week. I think it is 20 hours a week.
Mr. Womack. 20?
Mr. Hargan. Yes. I think it is 20 hours a week.
Mr. Womack. Do you think that is reasonable?
Mr. Hargan. Well, I think that it is probably not a work
week--a lot of people work a 40-hour work week. We are
requiring--Arkansas is requiring 20 hours in this case.
Mr. Womack. In my area, in the 3rd District of Arkansas,
the unemployment rate is significantly below 4 percent. In my
home county, it is probably 2, 2.5 percent, which I would
assert is very close to full employment. Lots of jobs. Lots of
opportunities.
In the 16,000 or so people that have lost their Medicaid
coverage, is it not true that because of the youth of the
program, so to speak, the fact that it is not a mature program
yet; we do not have a longitudinal study on its effects--but is
it not possible that many of those 16,000 people have entered
the workforce?
Mr. Hargan. Yes.
Mr. Womack. Is it possible that many of those 16,000 now
have acquired some form of health insurance through their
employer?
Mr. Hargan. Yes. I mean, we definitely know that this
economy is the strongest that it has been in years. We are
seeing unemployment rates that are the lowest they have been in
50 years, the lowest African American unemployment, Hispanic
unemployment, female unemployment. We see very--those very high
numbers.
We also know that besides employment issues, we also see
that there are other reasons why people--they move out of the
state. There are lots of reasons why people leave a Medicaid
program. And we look forward to engaging with Arkansas on that
and figuring out exactly why people might drop out of
enrollment.
But it is nothing out of the ordinary. The percentages we
are seeing in terms of what we call ``churn'' within Medicaid,
people coming in and out of the program, has not yet--we have
not yet seen a significant effect statistically in that from
Arkansas.
Mr. Womack. Mr. Hargan, you have got a tough job in a
constrained resource environment where we find ourselves
consistently with trillion-dollar deficits and a $22 trillion
debt. The country is going to have to look at its spending
habits and the promises it has made and going to have to make
some of those tough decisions.
And I applaud the fact that over in HHS they are looking at
programs to reform for long-term sustainability because so many
people rely on the programs, but at the same time with an eye
toward the future in terms of our fiscal solvency.
With that, Mr. Chairman, I yield back my time.
Chairman Yarmuth. I thank the gentleman.
I now yield myself 10 minutes for my questions. Once again,
Deputy Secretary, thank you for being here. Thank you for your
responses.
You have, on a number of occasions throughout your
testimony today, talked about the constraints of the budgetary
caps under the Budget Control Act of 2011. Perfectly
understandable. You also said, if I remember correctly, that
you appreciated the spending levels in 2019 that you are
working under now that was much more adequate for the programs
that you are trying to manage.
Can I infer from those comments that you would be
supportive of raising the budgetary caps for 2020 and 2021?
Mr. Hargan. We do not formulate budget policy within HHS.
We only work with the Office of Management and Budget, within
the caps environment, to present to you what we hope is a
thoughtful budget that's compliant with the caps agreement. So
I would refer any questions on overall budgetary policy to OMB.
Chairman Yarmuth. But you did say that you appreciated the
spending levels in 2019. It made things easier for the
department.
Mr. Hargan. Well, I think we appreciated, for example, the
opioids, the great support for the opioids initiative of the
President, and that Congress had great support from the point
of view of resources and authorities within the opioids
initiative, the SUPPORT Act, all of which we very much
appreciate.
Chairman Yarmuth. Well, if you were to have spending levels
for 2020 and 2021 that resemble 2019 levels, would you still
make the cuts that you are proposing to make in this budget?
Mr. Hargan. Well, we would have to--whatever proposal was
made by the Congress, we would have to work with OMB and
throughout the rest of the Administration to come up with,
hopefully, a wise budget for you, depending on the priorities
that you all establish and that we have in the Administration.
Chairman Yarmuth. Thanks. Last night DOJ announced that the
Administration believes the entire Affordable Care Act should
be invalidated, adding--sending a message to the federal court
in Texas where the case is under appeal. Were you or others at
HHS consulted on this DOJ decision?
Mr. Hargan. DOJ sets the litigation strategy for the
federal government. We do not have independent litigating
authority.
Chairman Yarmuth. No. But were you consulted as to, for
instance, what kind of impact that ultimately might have if the
courts totally invalidated the ACA?
Mr. Hargan. Well, as things stand now, the judge has not
issued a stay or enjoined the Affordable Care Act. So it will
have no impact as it stands on our administration of the
Affordable Care Act. But this Administration, the Trump
Administration, stands ready to work with the Congress on
policy solutions like those in our budget, and then power
consumers in states to regain control over their healthcare and
increase affordability and continue to protect individuals with
preexisting conditions.
Chairman Yarmuth. I am going to spend most of the rest of
my time on Medicaid. But I have one question on Medicare--well,
two questions on Medicare.
Has anyone in the HHS ever considered increasing the
Medicare withholding tax?
Mr. Hargan. The which? Could you repeat that?
Chairman Yarmuth. Considered increasing the withholding tax
that funds the Medicare Trust Fund?
Mr. Hargan. I do not think that the budget sets forth an
increase in the withholding tax.
Chairman Yarmuth. Has anybody ever discussed that, to your
knowledge, in this Administration? We talk about adjustments to
the program, but we always talk about it on the spending side.
We never talk about it on the revenue side. I was just
wondering whether, since it has been a very long time since
that tax has been changed.
Mr. Hargan. I do not believe that we have proposed that.
Chairman Yarmuth. All right. Thank you.
Mr. Hargan. Any changes would the withholding tax.
Chairman Yarmuth. Thanks. We talked from time to time
during the hearing about different things that affect the
Medicare costs, prescription drugs being one, of course. Are
there not things in the statute and rules that need to be
changed because they drive up costs unnecessarily?
I am referring, for instance, to the Medicare three-day
rule, that you have to spend three days in a hospital before
you can get post-acute care paid for by Medicare. Every
physician I have talked to thinks that is an absurd rule.
Mr. Hargan. I think we are--we would love to work with you.
You had mentioned drug pricing. We would love to work with the
Congress on a lot of issues that have been stood out in the
blueprint, and that we would very much welcome working with you
and providing technical assistance to you all on drug pricing
reform that brings the costs of prescription drugs down in this
country.
Chairman Yarmuth. You talked a number of times, again now
getting to Medicaid, about how you want to increase flexibility
for the states. In recent years, a number of states with
Republican administrations that had initially decided not to
expand Medicaid--thinking about Arizona and thinking about
Utah; there are several others, referendums and otherwise--and
they made the decision, after watching what had happened over
the first few years of the ACA, that it was to the benefit of
their citizens to expand Medicaid.
How does your initiative comply with that degree of local
control that those states exercised?
Mr. Hargan. Well, states that--when we provide the
flexibilities, we would hope that the states would welcome the
amount of flexibilities that we would plan to provide them
under this initiative, and that they would also welcome the
fact that Medicaid is oriented towards those vulnerable
populations that it is intended to cover; that we would have--
we have other programs that are outside of Medicaid and that we
are proposing that would cover different kinds of populations.
And we would allow more flexibilities across the board,
more choice and more competition, among different payers and
different plans, to allow Americans to purchase the kind of
coverage that they want to have.
Chairman Yarmuth. But when you eliminate the ACA's Medicaid
expansion, you have limited the amount of local control that
those states have. You have done it in my state. In my state,
we have roughly a half a million people out of a little over
four million people covered under Medicaid expansion alone,
another 800,000 covered by regular Medicaid.
So I am wondering what that says to those states who are
trying to do the best thing for their citizens.
Mr. Hargan. I think that--I think that hopefully they would
see that individuals--that they are not necessarily required to
cover the same people under the Medicaid expansion. But we do
not have a lot of assumptions on how states would use the block
grants.
We really are looking to provide more flexibilities for
those. It would not--so given greater state flexibility with
regard to eligibility requirements, benefits, the use of the
block grant funds, we are hopeful that they are going to be
able to cover their most vulnerable populations under Medicaid
with the new flexibilities; and really whichever state it is,
Kentucky or Arkansas or otherwise, that they would be able to
fashion this and really achieve the ultimate goal that Medicaid
was originally set out to be, which is a state federal-directed
program with flexibilities to allow the states to fashion it
for their own populations.
Chairman Yarmuth. All right. Is there anything in the
Medicaid law that defines it as a job program?
Mr. Hargan. It is not a--it is not a--I don't know that it
is defined as a job program.
Chairman Yarmuth. Well, we are fighting this in Kentucky
because our governor is trying to impose work requirements and,
actually, also premiums under a Section 115 waiver that
basically was written by Seema Verma, the now-administrator of
CMS, and it was approved by her. And how it has already been--
that decision has already been overturned in court once, and it
is back in court again.
And one of the things that we have been questioning
continuously since the effort of the governor--by the way, the
Section 115 waiver application specifically or explicitly says
that if it is approved, 95,000 Kentuckians will lose coverage.
So I think that is a pretty good indication when somebody
who is actually trying to get a waiver and impose a work
requirement, or community engagement requirement, admits that
almost 100,000 people will lose coverage. You extrapolate that
across the entire country and it is going to have a
considerable impact, presumably, on the healthcare of our
country.
But I was wondering: Do you have any data to show--you said
that you do not really know what happens, what the exact reason
is for 16,000 in Arkansas losing their coverage. But when you
have taken this path, do you have any experiential reasons for
saying that this is not going to be devastating for people? Do
you know, for instance, what percentage of people on Medicaid
across the country are working already or would be otherwise
exempt from these programs?
Mr. Hargan. So when--we are really looking for the states
to come to us with regard to their specific populations to
determine the parameters of the community engagement
requirement. So we would look to Kentucky. We would look to
Arkansas and the other states when they are coming forward to
us to see what works for their population in terms of the hours
that they have, in terms of the other requirements of the
program.
So in that sense, we do monitor what we are expecting from
the states. We are certain they are going to send us
information about how work is going to affect and whether it
allows the transition off of the program ultimately and into
the workforce, which I think many people, that's what they are
trying to achieve here.
We are looking at it more broadly, as community engagement
or as work. But I know that a lot of people, that is going to
be the form that they take. And that is going to have both
economic effects on them, on their community, on the workforce
that is allowed to be there.
And then, at the end of the day, we think on their
behavioral and their mental health as they engage with their
community. And I have heard about it as I come across the
country. I have heard about it many, many times in Kentucky. It
was one of the places where I met with a group of people with
substance use disorder.
And one of them said to me, said that: ``The thing about it
was, before I was working, I was just a patient. I was a person
who is an addict. And all I did was sit at home and look for
the next meeting with my doctor, the next meeting with my
counselor, the next meeting with my group. When I had work, at
least for eight hours a day people are treating me as a
coworker and a colleague, and I did not think about my
addiction all the time.''
That took him out of himself and meant that he was not
always an addict And that was a huge improvement for him, for
his own feeling about himself. And that has ramifications, and
I think that as we see these things going forward, whether I
have heard it from people with mental health issues, for people
who have substance use disorders, for the disabled, that they
all look to us and they say--I have heard it from each one of
those groups, saying, ``It is so important for us to have
encouragement to work so that people see us not just as a
disabled person, a person with a mental disorder or an addict,
but as somebody who can contribute to them, who can be a
coworker, a colleague, and a fellow American.''
So I think it is an important--I think it could be a
tremendous achievement.
Chairman Yarmuth. I do not want to abuse the power of the
chair. But I would say I think that maybe makes the case for
not having work requirements because what it indicates to me is
that people basically do want to work, and if they can, they
will. So you do not need to put this unnecessary burden on
them.
But with that, I would say thank you so much, Deputy
Secretary Hargan. I appreciate your testimony. And please be
advised that members can submit written questions to be
answered later in writing. Those questions and your answers
will be made part of the formal hearing record. Any members who
wish to submit questions for the record may do so within seven
days.
Once again, thank you. And with that, without objection,
this hearing is adjourned.
[Whereupon, at 12:45 p.m., the Committee was adjourned.]
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