[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
PPACA PULSE CHECK
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
AUGUST 1, 2013
__________
Serial No. 113-78
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
______
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky FRANK PALLONE, Jr., New Jersey
JOHN SHIMKUS, Illinois BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania ANNA G. ESHOO, California
GREG WALDEN, Oregon ELIOT L. ENGEL, New York
LEE TERRY, Nebraska GENE GREEN, Texas
MIKE ROGERS, Michigan DIANA DeGETTE, Colorado
TIM MURPHY, Pennsylvania LOIS CAPPS, California
MICHAEL C. BURGESS, Texas MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee JANICE D. SCHAKOWSKY, Illinois
Vice Chairman JIM MATHESON, Utah
PHIL GINGREY, Georgia G.K. BUTTERFIELD, North Carolina
STEVE SCALISE, Louisiana JOHN BARROW, Georgia
ROBERT E. LATTA, Ohio DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington DONNA M. CHRISTENSEN, Virgin
GREGG HARPER, Mississippi Islands
LEONARD LANCE, New Jersey KATHY CASTOR, Florida
BILL CASSIDY, Louisiana JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky JERRY McNERNEY, California
PETE OLSON, Texas BRUCE L. BRALEY, Iowa
DAVID B. McKINLEY, West Virginia PETER WELCH, Vermont
CORY GARDNER, Colorado BEN RAY LUJAN, New Mexico
MIKE POMPEO, Kansas PAUL TONKO, New York
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Ohio
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
(ii)
C O N T E N T S
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Page
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, opening statement.......................... 1
Prepared statement........................................... 2
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 3
Prepared statement........................................... 4
Hon. Henry A.Waxman, a Representative in Congress from the State
of California, opening statement............................... 4
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 20
Prepared statement........................................... 21
Hon. Tim Murphy, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 21
Hon. Joe Barton, a Representative in Congress from the State of
Texas, opening statement....................................... 22
Hon. Diana DeGette, a Representative in Congress from the State
of Colorado, opening statement................................. 26
Witnesses
Marilyn Tavenner, Administrator, Centers for Medicare and
Medicaid Services, Department of Health and Human Services..... 80
Prepared statement........................................... 82
Answers to submitted questions............................... 165
Submitted Material
Minority memorandum, dated August 1, 2013, submitted by Mr.
Waxman......................................................... 6
Article, dated July 17, 2013, ``Insurance squeezing budget,'' The
Ennis Daily News, submitted by Mr. Barton...................... 24
Democratic Staff Reports, dated July 2013, ``Benefits of the
Health Care Reform Law,'' submitted by Ms. DeGette............. 27
Newspaper advertisement, dated August 1, 2013, ``A message from
union leaders on ObamaCare:,'' Washington Post, submitted by
Mr. Murphy..................................................... 113
Report, dated May 14, 2013, ``Seven House-Passed Bills President
Obama Signed that Repeal or Defund Parts of His Health Care
Law,'' submitted by Mr. Burgess................................ 117
Letter, dated February 21, 2013, from David E. Wilkins,
Secretary, Florida Department of Children and Families, to
Stephanie Kaminsky, Senior Policy Advisor, Centers for Medicare
and Medicaid Services, Department of Health and Human Services,
submitted by Mr. Bilirakis..................................... 152
Article, dated July 30, 2013, ``Florida, Georgia say insurance
rates to spike under Obamacare,'' Reuters, submitted by Mr.
Bilirakis...................................................... 153
Letter, undated, from A Concerned Kansas Doctor to Mr. Pompeo,
submitted by Mr. Pompeo........................................ 158
PPACA PULSE CHECK
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THURSDAY, AUGUST 1, 2013
House of Representatives,
Committee on Energy and Commerce,
Washington, DC.
The committee met, pursuant to call, at 10:05 a.m., in Room
2123, Rayburn House Office Building, Hon. Marsha Blackburn
(vice chairman of the committee) presiding.
Members present: Representatives Upton, Hall, Barton,
Whitfield, Shimkus, Pitts, Terry, Murphy, Burgess, Blackburn,
Gingrey, Scalise, Latta, Harper, Lance, Cassidy, Guthrie,
Olson, Gardner, Pompeo, Kinzinger, Griffith, Bilirakis,
Johnson, Long, Ellmers, Waxman, Dingell, Rush, Eshoo, Engel,
Green, DeGette, Schakowsky, Barrow, Matsui, Christensen,
Castor, Sarbanes, and Tonko.
Staff present: Clay Alspach, Chief Counsel, Health; Gary
Andres, Staff Director; Sean Bonyun, Communications Director;
Matt Bravo, Professional Staff Member; Megan Capiak, Staff
Assistant; Karen Christian, Chief Counsel, Oversight and
Investigations; Noelle Clemente, Press Secretary; Andy
Duberstein, Deputy Press Secretary; Paul Edattel, Professional
Staff Member, Health; Julie Goon, Health Policy Advisor; Sydne
Harwick, Legislative Clerk; Brittany Havens, Legislative Clerk;
Sean Hayes, Counsel, Oversight and Investigations; Robert
Horne, Professional Staff Member, Health; Kirby Howard,
Legislative Clerk; Nick Magallanes, Policy Coordinator,
Commerce, Manufacturing, and Trade; Carly McWilliams,
Professional Staff Member, Health; Monica Popp, Professional
Staff Member, Health; Andrew Powaleny, Deputy Press Secretary;
Krista Rosenthall, Counsel to Chairman Emeritus; Heidi Stirrup,
Policy Coordinator, Health; Tom Wilbur, Digital Media Advisor;
Brian Cohen, Democratic Staff Director, Oversight and
Investigations, and Senior Policy Advisor; Alli Corr,
Democratic Policy Analyst; Hannah Green, Democratic Staff
Assistant; Elizabeth Letter, Democratic Assistant Press
Secretary; Karen Nelson, Democratic Deputy Staff Director; and
Stephen Salsbury, Democratic Special Assistant.
Mrs. Blackburn. The committee will come to order. The Chair
recognizes herself for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
As we prepare to return to our districts for the August
work period, there is one topic of conversation that will be
sure to arise whether I am in Williamson, Montgomery, or
Henderson Counties, all areas that are familiar and known to
our witness today. Of the folks I hear from most when it comes
to Obamacare, I would say that they are probably in two camps:
those who aren't quite sure what Obamacare will mean for them
and their families, and those who have studied the law and its
policies and are opposed to what it will do.
It is the uncertainty of the law that most concerns me:
uncertainty about how much individuals' health insurance costs
are going up to comply with the laws and the mandates and the
taxes; uncertainty about what new and additional expenses
employers must take on as a result of the law; and business
uncertainty for the numerous medical device companies that call
Tennessee home due to the medical device tax.
It appears you have a lot of work to do by October 1 and
the end of the year, so much so that Secretary Sebelius even
acknowledged having--and I am quoting her--``very tight
deadlines.''
I voted yes on the Fairness for American Families Act
earlier this month to delay the individual mandate for 1 year,
a mandate supported by just 12 percent of the Americans.
Despite being told over and over by the President that if you
like what you have you can keep it, and that healthcare
premiums would go down on average $2500, individuals in
Tennessee are seeing the opposite. Based on the exhaustive work
by our staff here at committee, our report found that for those
in the individual market in Tennessee, premium increases of 49
to 54 percent could be expected, as well as increases of 35
percent in the small group market.
Unfortunately, these increases should surprise no one. If
something is taxed, and there is $165 billion in taxes and fees
on health plans, plans sold on the Federal exchanges, drug
manufacturers, and medical devices, and then loaded down with
mandates, which guaranteed issue, community rating, essential
health benefit requirements, it is absolutely going to be more
expensive.
According to a recent Gallup Poll, more than 40 percent of
the small business owners have frozen hiring, 19 percent have
reduced the number of employees, and 9 percent of the over 600
employers surveyed say that Obamacare would be good for their
business, as opposed to 48 percent that say it would be bad.
[The prepared statement of Mrs. Blackburn follows:]
Prepared statement of Hon. Marsha Blackburn
As we prepare to return to our districts for the August
work period, there is one topic of conversation that will be
sure to arise whether I am in Williamson, Montgomery. or
Henderson County.
Of the folks I hear from most when it comes to Obamacare,
I'd say there are two camps--those who aren't quite sure what
Obamacare will mean for them and their families, and those who
have studied the law and its policies and are opposed to what
it will do.
It is the uncertainty of the law that most concerns me.
Uncertainty about how much individual's health insurance
costs are going up to comply with the law's mandates and taxes.
Uncertainty about what new and additional expenses
employers must take on as a result of the law.
And business uncertainty for the numerous medical device
companies that call Tennessee home due to the medical device
tax.
It appears you have a lot of work to do by October 1 and
the end of the year--so much so that Secretary Sebelius even
acknowledged having ``very tight deadlines.''
I voted yes on the Fairness for American Families act
earlier this month to delay the individual mandate for one
year--a mandate supported by just 12 percent of Americans.
Despite being told over and over by the president that ``if
you like what you have you can keep it'' and that health care
premiums would go down by an average of $2,500, individuals in
Tennessee are seeing just the opposite.
Based on the exhaustive work by our staff here at
committee, our report found that for those in the individual
market in Tennessee, premium increases of 49-54 percent could
be expected, as well as increases of 35 percent in the small
group market.
Unfortunately, these increases should surprise no one. If
something is taxed and loaded down with mandates, it's going to
be more expensive.
According to a recent Gallup poll, more than 40 percent of
small-business owners have frozen hiring.
Another 19 percent have ``reduced the number of employees
[they] have in [their] business as a specific result of the
Affordable Care Act [Obamacare].''
Finally, just 9 percent of the over 600 employers surveyed
said that Obamacare will be good for their business compared to
48 percent who said it will be bad.
This is why the House voted to join President Obama in
delaying the employer mandate reporting requirements earlier
this month.
So, Administrator Tavenner, we thank you for coming before
us today. We look forward to your testimony and for a chance to
expand on some of these issues during question and answer.
Mrs. Blackburn. At this time, I yield my remaining time to
the chairman of the full committee, Mr. Upton.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Well, thank you very much.
You know, for more than 3 years we have heard mounting
confusion and concern about how the healthcare law will impact
coverage and costs for families and job creators. We have heard
about the law's red tape that has stifled job creation and
threatened existing healthcare coverage for millions. And with
just 60 days left until enrollment begins my constituents want
clear answers on the law's true costs. What will premiums look
like for millions of Americans who thought they would be able
to keep their current plan if they liked it? How much will
American taxpayers spend over the next 10 years? And what
assurances are in place to ensure that taxpayer dollars are, in
fact, protected?
Will businesses stop hiring full-time employees? And are we
in a permanent transition to a part-time economy? I met with a
number of my small businesses earlier this week, and the
healthcare law has been a mess for our job creators from top to
bottom.
Finally, with 2 months left until open enrollment in the
exchange begins, is HHS really ready? The recent decision by
the administration to delay the employer mandate less than 6
months before full implementation makes us wonder if HHS is
planning other delays or changes to the law as well. The
decision raises serious questions about the administration's
ability to implement the law and the authority to rewrite it,
questions that the Treasury Department did not sufficiently
answer last week.
The public's anxiety is real, and it is escalating every
day, especially as they are left behind to endure the looming
premium rate shock while businesses are shielded from reporting
and penalties. The President made a lot of promises to the
American people, both before and after the law's passage, and
the promises to make health care more affordable and more
accessible have fallen woefully short.
This hearing will provide an opportunity to further check
on the status of those promises. This committee has conducted
ongoing oversight of the law's implementation. Since January of
2011, we have held dozens of hearings to ensure that the
American public indeed has the information that they need, and
today is no different. With the clock ticking, it is time for
the administration to keep its promises of transparency.
I appreciate you being here today, and our constituents are
seeking real information. We look forward to getting those
answers. And I yield back.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
For more than three years, we have heard mounting confusion
and concern about how the health care law will impact coverage
and costs for families and job creators. We have also heard
about the law's red tape that has stifled job creation and
threatened existing health care coverage for millions of
Americans.
With just 60 days left until enrollment begins, my
constituents want clear answers on the law's true costs. What
will premiums look like for millions of Americans who thought
they would be able to keep their current plan if they liked it?
How much will American taxpayers spend over the next 10 years
and what assurances are in place to ensure taxpayer dollars are
protected? Will businesses stop hiring full-time employees and
are we in a permanent transition to a part-time economy? I met
with a number of my small businesses on Monday and the health
law has been a mess for our job creators from top to bottom.
Finally, with two months left until open enrollment in the
exchanges begins, is HHS truly ready?
The recent decision by the administration to delay the
employer mandate less than six months before full
implementation makes us wonder if HHS is planning other delays
or changes to the law. This decision raised serious questions
about the administration's ability to implement this law and
its authority to rewrite it--questions that the Treasury
department did not sufficiently answer last week. The public's
anxiety is real and escalating by the day, especially as they
are left behind to endure the looming premium rate shock while
businesses are shielded from reporting and penalties.
The president made a lot of promises to the American people
both before and after the law's passage-and the promises to
make health care more affordable and more accessible have
fallen woefully short. This hearing provides an opportunity to
further check on the status of those promises.
This committee has conducted ongoing oversight of the law's
implementation and since January of 2011; we have held dozens
of hearings to ensure the American public has the information
they need, and today is no different.
With the clock ticking, it's time for the administration to
keep its promises of transparency. Dodging simple questions
like we saw last week will not work for our constituents who
are already struggling with a flawed implementation.
Administrator Tavenner, your office agreed you would be
available and willing to answer any and all questions related
to the health care law. Thank you. Our constituents are
desperate for information, and with 60 days left, there is no
time left except for honest answers.
Mrs. Blackburn. Gentleman yields back.
At this time I recognize Mr. Waxman for 5 minutes.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you, Madam Chair.
I am pleased to welcome Administrator Tavenner to our
hearing today. She comes before this committee with an
impressive record of achievement in both the public and private
sectors, and she was recently confirmed by a huge bipartisan
majority in the United States Senate. And we are delighted to
have you here.
Four years ago, this committee was voting to report out of
the committee and onto the House floor the Affordable Care Act.
We were in markup for days and had heard testimony from dozens
of witnesses. They described a system with rapidly rising
costs, gross inefficiencies, and painful inequalities. We heard
how those most in need of coverage--people who were ill,
injured, or born with preexisting conditions--were not able to
purchase quality health insurance.
So we passed the Affordable Care Act to address these
chronic problems in our healthcare system. We incorporated an
individual responsibility requirement, championed by such
conservative groups as the Heritage Foundation, and put in
place in the State of Massachusetts by Governor Romney; we
created a system that built upon the existing private sector
insurance system; and used the same free market model that
President Bush created when he signed into law the Medicare
Part D program. We eliminated Medicare waste, fraud, and abuse,
and we made sure our legislation reduced the deficit.
The Affordable Care Act deserved bipartisan support, but we
faced united opposition from Republicans in the Congress who
did not want to give President Obama a victory. And since then
the law has become the Republicans' great white whale. They
will stop at nothing to kill it.
Madam Chair, I would like to enter into the record a
memorandum released by my staff this morning that provides more
detail on the Republican efforts to ensure that healthcare
reform is a failure.
Mrs. Blackburn. Without objection, it will be submitted.
[The information follows:]
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Mr. Waxman. It describes 10 ways that Republican leaders in
Congress and statehouses have worked to sabotage the law. As
this memorandum documents, independent, nonpartisan observers
have been harsh in their depiction of what Republicans are
doing. USA Today says, Republicans are using, quote, ``the most
cynical of tactics,'' and inflicting, quote, ``human misery,''
end quote, on their constituents. Ezra Klein writes that
Republicans are trying to, quote, ``knowingly damage America's
healthcare system on the off chance the damage is severe enough
to help them accomplish a much larger policy goal,'' end quote.
Tomorrow, the House will vote to repeal the law for the
40th time. Many Republicans are threatening to shut down the
government in order to force repeal of this law. Republicans in
Congress are intimidating groups working to inform the public
about the law. Their allies outside of Congress are actively
working to discourage their uninsured constituents from
enrolling in coverage. Some Republican Members even appear to
be saying they will not perform basic constituent services to
help citizens who live in their districts sign up for the
benefits of the Affordable Care Act.
Noted congressional scholar Norm Ornstein has described
these actions as, quote, ``sharply beneath any reasonable
standards of elected officials with the fiduciary
responsibility of governing,'' end quote. He called them,
quote, ``simply unacceptable, even contemptible.''
The Affordable Care Act is the law of the land. And because
of this law, tens of millions of Americans will soon be able to
receive affordable, high quality healthcare coverage for the
first time. As Administrator Tavenner will tell us today, she
and others at HHS are doing yeomen's work to make sure the law
works. All of our constituents, Republicans and Democrats, will
enjoy these benefits. I thank her and her Department for their
work, and I look forward to her testimony. Thank you, Madam
Chair.
Ms. Blackburn. Gentleman yields back.
At this time, I recognize the subcommittee chairman, Mr.
Pitts, for 5 minutes.
OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Pitts. Thank you, Madam Chairman.
Administrator Tavenner, thank you for appearing before us
today.
For months, various administration officials, including HHS
Secretary Sebelius, have been telling Congress that
implementation of the President's healthcare law is on track
and that statutory deadlines will be met. And yet earlier this
year we were informed that the Federal preexisting conditions
program had suspended enrollment and cut payments to providers
for existing patients. In April of this year, HHS announced it
was delaying full implementation of the Small Business Health
Options Program, or SHOP exchanges, which were designed to
offer small businesses multiple health insurance plans from
which to choose. On July 2nd, the administration announced via
Treasury Department blog post that the employer mandate would
be delayed for 1 year, until January 1, 2015. Just a few days
later, HHS announced that it had decided to disregard the
requirement that State exchanges verify individuals' income
when applying for exchange subsidies.
Based on a recent HHS decision to implement what they
simply want, rather than what is statutorily required, what
assurances do we have that exchanges will be ready to enroll
individuals in just 60 days and that States are ready as well?
How can we believe that provisions deemed inconvenient by the
administration, such as verifying that someone is actually
eligible for a taxpayer-funded subsidy, won't be labeled as too
complex to administer and simply be ignored? My constituents
want to know what to expect over the next couple of months and
what assurances that only those individuals who are eligible
for subsidies will be receiving them. American taxpayer dollars
should be protected and not hastily spent on a law that may not
be ready for primetime or on policies that don't require the
utmost operational integrity.
Our constituents have concerns, and they need answers. And
with just 60 days until the large pieces of this law get
started, I trust you came prepared to answer these concerns.
Thank you, Madam Chair. I yield balance of my time to Dr.
Murphy.
[The prepared statement of Mr. Pitts follows:]
Prepared statement of Hon. Joseph R. Pitts
Thank you, Mr. Chairman.
Administrator Tavenner, thank you for appearing before us
today.
For months, various administration officials, including HHS
Secretary Sebelius, have been telling Congress that
implementation of the President's health care law is on track
and that statutory deadlines will be met.
And, yet, in April of this year, HHS announced it was
delaying full implementation of the Small Business Health
Options Program or SHOP Exchanges, which were designed to offer
small businesses multiple health insurance plans from which to
choose.
On July 2, the administration announced via a Treasury
Department blog post, that the employer mandate would be
delayed for one year, until January 1, 2015.
Just a few days later, HHS announced that it had decided to
disregard the requirement that State exchanges verify
individuals' income when applying for Exchange subsidies.
Based on recent HHS decisions to implement what they simply
``want'' rather than what is statutorily required, what
assurances do we have that Exchanges will be ready to enroll
individuals in just 60 days and that states are ready as well?
How can we believe that provisions deemed ``inconvenient''
by the administration- such as verifying that someone is
actually eligible for a taxpayer-funded subsidy--won't be
labeled as too complex to administer and simply be ignored?
My constituents want to know what to expect over the next
couple of months and want assurances that only those
individuals who are eligible for subsidies will be receiving
them.
American taxpayer dollars should be protected and not
hastily spent on a law that may not be ready for primetime or
on policies that don't require the utmost operational integrity
Our constituents have concerns and they need answers and
with just 60 days until the large pieces of this law get
started, I trust you came prepared to answer their concerns.
Thank you, Mr. Chairman, and I yield back.
OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Murphy. I thank the gentleman.
Since the Affordable Care Act was enacted in March of 2010,
this committee has heard from numerous officials from the
administration telling us that all is well. But because this
committee has worked tirelessly to monitor implementation, we
know that the administration has been promising one thing and
delivering another. The CLASS Act had to be shut down because
it was totally unsustainable. In April, more than 1,400 groups
providing insurance to 3.1 million were given waivers from the
law's mandates in 2011. Employers have been complaining for
months about the costs increasing and how they had to
drastically cut employees.
Last month, every employer was given a waiver hidden in a
4th of July week blog. But the American people get no waiver.
We are promised rigorous oversight, but last month the IRS and
HHS, buried in an announcement, said they were going to scrap
income coverage and verification for the exchanges. The
President promised premiums would go down, but millions of
families are seeing rates going up. The Teamsters and electric
workers are saying they oppose the bill because of the problems
it is going to cause.
When the administration announced it would delay the
employer mandate, not a single word was spoken about what is
wrong with the law; instead they continue to blame those of us
who are doing what we are supposed to be doing, shining a light
of transparency. There is a lack of trust because the bill was
written behind closed doors, the Senate bill was different from
the one that passed this committee, our markup version
disappeared, they have hidden or buried changes in rules or
blogs, they have ignored our concerns, denied prices were going
up, and the administration focus has been to hire millions of
people to help them sell it.
Tens of thousands of employees, employers, doctors, and
millions of Americans who oppose or have grave concerns about
this bill can't all be wrong. It is no surprise the public
doesn't trust the administration to properly implement this
law. If you are not going to trust the American people and tell
them the truth, the American people won't trust those of us who
are looking at implementing this law in a straightforward way.
I now yield to Mr. Barton. Thank you.
OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Barton. Thank you, Dr. Murphy.
I live in Ennis, Texas. It is a town of about 15,000 people
just south of Dallas. This is the headline in the Ennis Daily
News, Wednesday, July the 17th, 2013: ``Insurance squeezing the
budget. Total premium costs to jump nearly $50,000 monthly for
city plan. City employees will see their health insurance
premium costs more than double in response to changes in the
market brought about through the Affordable Care Act.'' And
then it goes on to outline what those costs are. Later in the
article it says that because of these costs many of these city
employees are probably going to opt out of the city insurance
plan and take their chances in the health exchange, if that
ever gets up and running.
Madam Chairwoman, that says it better than anything I could
say. I will submit this article for the record when we get to
that point.
Ms. Blackburn. Without objection, so ordered.
[The information follows:]
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Mrs. Blackburn. At this time, I recognize Ms. DeGette from
Colorado for 5 minutes.
OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Ms. DeGette. Thank you, very much, Madam Chair.
The Affordable Care Act is now the law of the land, and it
is already bringing benefits to millions of Americans. But
today we are standing before one of the most important moments
of the ACA, and that is implementation. We are just 2 months
away from the open enrollment period for the exchanges. That is
why I would urge my colleagues on both sides of the aisle to
work on educating constituents on how to make this new law work
for individuals, families, and businesses.
I remember when we passed the Medicare Part D bill, and the
Democrats, frankly, didn't like it. We didn't like the fact
that the Administrator couldn't negotiate prescription drug
prices. But, despite that, we all went out to our districts and
we worked with our constituents to let them know how they could
enroll. Why? Because this would help our constituents and, in
fact, now Medicare Part D has become very, very popular.
I met a lady last week when I was in Denver who is paying
on the individual market. She is 58 years old, and she is
paying $600 a month on the individual market for insurance
because she has a preexisting condition. I told her, as of
October you will be able to enroll in the exchange in Colorado,
and you can probably save yourself a bundle of money. She had
no idea that this option even existed. And I think it is our
job as elected representatives of our constituents to go out
there and tell people like this woman that they can have these
benefits and get the insurance they need and save money.
Now, an important step in doing this is to make sure that
we go home and talk to our constituents in this August recess
about that. So, Administrator Tavenner, I am really looking
forward to hearing what the administration is planning to do to
make sure people know about this.
Madam Chair, earlier this month, Energy and Commerce
Democratic staff released fact sheets on the benefits of the
Affordable Care Act in every district in the country, and I
would ask unanimous consent to put those fact sheets into the
record of this hearing today.
Ms. Blackburn. Without objection, so ordered.
[The information follows:]
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Ms. DeGette. Thank you so much.
I would like to share some of the information on the
benefits in my district, Denver, Colorado. Already in my
district, the Affordable Care Act is providing 8,000 young
adults with healthcare coverage through their parents' plan.
More than 6,900 seniors in my district have gotten drug
discounts worth $9.3 million. Almost 200,000 of my constituents
now have health insurance that covers preventative service
without copays. Hundreds of thousands of my constituents with
private insurance are saving money due to the ACA provisions
that limit insurers' administrative overhead costs. And when
the law finally goes fully into effect, over 120,000 of my
constituents who currently don't have health insurance will be
able to get that insurance without fear of discrimination or
higher rates because of a preexisting condition.
So even if you disagree with the law, it is important that
you know how the Affordable Care Act's benefits are already
helping our constituents.
Now, Madam Chairman, we have had many hearings on this law,
many in our Oversight and Investigations Subcommittee. And one
of the common concerns that we have already heard today in the
opening statements is that premiums will be too high. We are
beginning to get answers on this. An HHS analysis received
earlier this month found that in the States for which data are
available the lowest cost Silver plan in the individual market
in 2014 will cost on average 18 percent less than the rate
predicted by the Congressional Budget Office. On the small
group market, the average premium that small employers will pay
is again 18 percent lower than the same plan would cost absent
the Affordable Care Act.
In Colorado, similarly, the lowest cost Silver plans are on
average 18 percent less than the status quo. So it seems like
every day we are getting more and more information about a new
State where the rate review process and competition are causing
insurers to lower their premiums even more than expected. And
of course the actual cost of these plans will be even lower for
many citizens once the Affordable Care Act's tax credits go
into effect.
Now, Administrator Tavenner, I know you have got to be
pleased with this. But as you know, your job is not yet done.
In 2 months, the data systems for the insurance exchanges will
go live. I don't think everything is going to go completely
smoothly; it certainly didn't with Part D. But I want to hear
what the administration is doing to deal with all of these
foreseeable problems and developing systems to deal with the
unexpected problems.
I think we all have legitimate questions. We are happy to
have you here today, and I look forward to hearing your answers
to all of them.
Thank you very much, Madam Chair. I yield back.
Ms. Blackburn. Gentlelady yields back.
I would like to welcome our witness today, Marilyn
Tavenner. She is currently the Administrator for the Centers
for Medicare and Medicaid Services. Previously, she was the
Principal Deputy Administrator for CMS. In this role, she
served as the agency's second-ranking official, overseeing
policy development and implementation, as well as management
and operations.
Ms. Tavenner, you are recognized for 5 minutes.
STATEMENT OF MARILYN TAVENNER, ADMINISTRATOR, CENTERS FOR
MEDICARE AND MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN
SERVICES
Ms. Tavenner. Thank you, Vice Chair. I would like to thank
Chairman Upton. I would like to thank you.
Ms. Blackburn. Ms. Tavenner, if you will check your
microphone.
Ms. Tavenner. I have it on. Can you hear me now? I didn't
have it close enough?
Mrs. Blackburn. Let's pull it a little closer.
Ms. Tavenner. All right. How about that?
Mrs. Blackburn. That is much better. Thank you.
Ms. Tavenner. All right. I would like to thank you,
Chairman Upton, and Ranking Member Waxman, and members of the
committee for inviting me here today to update you on the
implementation of the Affordable Care Act. I am pleased to say
that you are right, 60 days from now is the beginning of open
enrollment when Americans will be able to compare and enroll in
affordable healthcare coverage, and that implementation is on
track.
This is a large and complicated endeavor that I am proud to
lead and every decision is being made by my prior work
experience. My clinical perspective from my early days as a
staff nurse keeps in the forefront of my mind the reason why we
are here: that patients deserve better, higher performing
delivery systems that they can afford.
My perspective on business comes from my days as a hospital
CEO, where I not only managed complicated systems that included
the merging of hospitals, but where I had patients come to see
me to tell me that they didn't have health insurance. And these
were hard-working individuals with families who could not
afford their hospital bills. They had been unable to get
insurance or they were unable to afford insurance. So I would
sit down with each person that came to me and we would work out
a payment plan, sometimes $5 a month, sometimes $10 a month,
sometimes a 23-year plan, a 30-year plan, because I couldn't
stand to see that family have to file a medical bankruptcy.
Today, I would continue to help everyone who asked for my help,
but the concern were those who didn't know to ask.
Finally, I have the government perspective. From my work as
Virginia's Health and Human Resources Secretary and obviously
the last 3-1/2 years at CMS. I am extremely fortunate to have a
strong and dedicated team at CMS who have experience in
operating programs that cover millions of Americans today and
also have experience in implementing large transformations,
including programs such as Medicare Advantage, CHIP, and Part
D, all of which are now quite popular.
I consider partnerships as essential to my leadership role
at CMS, and have made it a point to work with Congress and
partner with all the various stakeholders in the healthcare
community. Over the last 3 years, I have worked and listened to
our partners, including States, hospitals, health insurers,
providers, employers, and consumers. Implementation of the
Affordable Care Act depends on the hard work of thousands of
people across the country, and we are all in this together to
make it a success.
I am motivated and energized to fully implement the
Affordable Care Act. I am thinking about those staff nurses now
who, thanks to the law, are able to focus on patient care and
coordination, and those hospital CEOs who won't have to set
people on payment plans. Instead they will be able to get
people enrolled in health insurance, something far more secure
and valuable.
I am thinking about the policymakers and those in
government who will benefit from the new tools from our
modernized systems and improved data initiatives. Even before
we begin enrollment on October 1, we are already seeing changes
in the healthcare delivery system through improved
accountability and coordination. Growth in national health
expenditures for the last 3 years is lower than any time in the
last 50. We are observing a decrease in the rate of patients
returning to the hospitals after being discharged. Millions of
Medicare beneficiaries are now getting better care from ACOs
whose bottom line benefits from keeping them healthy.
From health insurance markets we are seeing changes through
improved transparency and competition. In States like
California, Maryland, New York, Washington, new competition and
new choices are pushing costs down. New York announced average
premiums that were at least 50 percent lower next year than
they are now. And I can go on and on.
CMS is ready for October 1, and we are motivated and well
prepared for the hard work ahead. We are ready and on time over
the next 60 days to refine our systems and get the word out. We
are proud to meet this challenge, and we are proud to help our
fellow Americans.
Today, I am focused on answering your questions. I know you
are returning to your districts soon, so I hope today we will
engage in a dialogue and that my answers can help you respond
to your constituents' concerns. I look forward to working with
you today and in the future. Thank you.
[The prepared statement of Ms. Tavenner follows:]
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Mrs. Blackburn. And thank you, Ms. Tavenner. We appreciate
that.
We will begin our questions, and I will begin by yielding
myself 5 minutes.
And I want to start by talking with you about fairness,
which is what I hear from my constituents. At this point, what
they are doing is coming in to our meetings with papers in
hand, and they can actually document the higher premiums, the
disruptions in their existing coverage, and show me where it is
due to the Affordable Care Act, or Obamacare. And while they
are looking, many of them are looking for some reprieve from
the taxes, the penalties, and the increased costs, you and your
employees at CMS are fully protected, and you are eligible to
keep the insurance coverage that you have, which you have
taxpayer dollars that are paying for that insurance.
So I want to ask you this: If you are able, are you willing
to enroll yourself in an exchange plan come October 1?
Ms. Tavenner. If I were eligible for an exchange plan, I
would be happy to enroll in an exchange plan.
Mrs. Blackburn. Should CMS employees, who are all
responsible for implementing this law, be required to enroll in
the same plans that Americans are being forced to enroll in, in
these exchanges?
Ms. Tavenner. Chairman Blackburn, I would say that if
Congress decides that the employees of CMS should be enrolled
in exchanges that the CMS employees would support that.
Mrs. Blackburn. Would you support a bill to that effect for
you and all CMS employees?
Ms. Tavenner. I would be happy to work with you on the
development of a bill, and we can discuss that.
Mrs. Blackburn. Do you think all government employees,
whether they are at Treasury, HHS, Labor, OPM, White House,
that they should be subject to the same plans and premiums that
our constituents are having to face?
Ms. Tavenner. Well, I will remind you that if you look at
the Affordable Care Act, if you remember, there is a large
number of your constituents----
Mrs. Blackburn. We remember well.
Ms. Tavenner [continuing]. That are not subject to the
Affordable Care Act. Remember----
Mrs. Blackburn. That was not my question. And would you
support having all these government officials having to enroll
in an exchange plan, everybody involved in implementing this?
Ms. Tavenner. To the extent that if you look at the
exchanges, exchanges offer full coverage at reasonable prices,
we are promoting competition, we are promoting transparency----
Mrs. Blackburn. We are in the Dingell room, so I am going
to ask a Dingell question: Yes or no, would you support it?
Ms. Tavenner. Yes, I would support it.
Mrs. Blackburn. OK. Thank you.
CMS has awarded Equifax a contract to conduct income
verification of potential applicants seeking an exchange
subsidy. So what is the estimated percentage of potential
applications where income data can actually be verified by
Equifax, given the volume of data that it currently controls.
Ms. Tavenner. I think there is a lot of confusion about
income verification, so I would like to spend a couple of
moments talking about that from the standpoint of the Federal
exchange.
If you look at what happens when an individual fills out an
application, and they record their income, there is a check, a
100 percent check against IRS. There is also a 100 percent
check against Equifax. If those two, obviously, work, match,
the individual proceeds. If there is a discrepancy, then we
begin an intervention where individuals bring in pay stubs----
Mrs. Blackburn. Let me ask you this, then. Are you all
going to have other contractors that are there to assist in
verification of potential enrollees? And I am asking you this
because the self-attestation provisions are of tremendous
concern to us, especially to me. And you are familiar with
TennCare and what happened there with self-attestation and
Governor Bredesen's efforts to go pull all of these individuals
off that program. So, you know, tell me how you are planning to
handle that.
Ms. Tavenner. We will do a 100 percent review of self-
attestation.
Mrs. Blackburn. Immediately?
Ms. Tavenner. Immediately.
Mrs. Blackburn. OK.
Ms. Tavenner. Now, individuals--when I say ``immediately,''
it obviously is a process where individuals bring in pay stubs,
this sort of information, so that we work with an enrollment
and eligibility worker. In the meantime, those individuals
are----
Mrs. Blackburn. So 100 percent review means of all of their
self-declarations, you are going to go back through every bit
of that.
Ms. Tavenner. That is correct.
Mrs. Blackburn. By when? If not immediately, by when?
Ms. Tavenner. So if you will remember, what we have in
regulation is they have--if an individual attests to their
income, we enroll them for what they are eligible for. We have
up to 90 days to reconcile that.
Mrs. Blackburn. So you foresee having all of this completed
on each enrollee within 90 days?
Ms. Tavenner. Absolutely.
Mrs. Blackburn. And if someone is committing fraud, how
quickly will you remove them?
Ms. Tavenner. If someone is incorrect, right, as soon as we
find out that there is a problem, if they are not eligible for
tax credits, they would be removed immediately.
Mrs. Blackburn. My time has expired. At this time I yield 5
minutes to Mr. Waxman.
Mr. Waxman. Thank you, Madam Chair.
Ms. Tavenner, you were asked is this fair that your
employees aren't going to go into the exchange. Well, most
people who are working in this country are not going to go to
the exchange because they have their insurance through their
jobs. Are they going to be required to go to the exchange and
drop the insurance they already have?
Ms. Tavenner. Absolutely not.
Mr. Waxman. So if employers offer insurance to their
employees, that is not going to be affected. What we have tried
to do is to give access to health insurance for those people
who don't have coverage. Isn't that right? Isn't that what the
exchanges and the bill is all about?
Ms. Tavenner. That is absolutely correct.
Mr. Waxman. So it just seems to me so bizarre to hear
arguments, well, are you going to go to the exchange? If you
didn't have insurance, you would be delighted to be able to go
and buy health insurance. If people lose their jobs, and we
have seen a lot of people lose their jobs in the last couple of
years, they usually lose their health insurance. Now, there is
a thing called COBRA that allows them to pay the full cost,
both the employer side and the employee side to keep that
insurance. They won't have to do that anymore, they will be
able to go to the exchange and choose between different private
insurance plans that will be affordable to them. Isn't that
correct?
Ms. Tavenner. That is correct.
Mr. Waxman. So I just find it amazing, this attack all the
time by the Republicans on the law that is going to help so
many tens of millions of people get insurance. The whole
insurance system of the country is not going to be transformed
overnight. We are going to keep Medicare for people who are on
Medicare. People who have insurance with their employers, they
are going to keep it. And we hope small businesses will cover
more of their employees because we are giving them tax breaks.
But if small businesses don't cover their employees, they will
be able to go to the exchange. Either the employees or the
employers will be able to go to the exchange.
When you have an exchange, you are pooling people together
so they have the advantages of the big employers in getting
better insurance at a lower cost. Otherwise, if it is a small
business or a small group or an individual, right now, if you
are an individual, you have got no standing because these
insurance companies don't want to insure you if you have a
preexisting condition. But when you are in the pool with
everybody else, they spread the cost. Isn't that the philosophy
behind this law?
Ms. Tavenner. That is absolutely correct. And that is the
point I was trying to make with Congresswoman Blackburn. If I
could not get insurance today, I would be very happy to have
the exchange available. These are good plans at good prices.
Mr. Waxman. Absolutely.
Now, we hear a lot about rate shock, people are being
scared, especially by Republicans and the right-wingers who
want to scare people about the act itself and what it is going
to mean to them. Even Chairwoman Blackburn alluded to all the
increasing costs. And we hear about these predictions of major
increases in costs, rate shock. They are not correct, are they?
Ms. Tavenner. What we have seen to date, and what has been
released, and I mentioned that in my opening statement, is we
are actually seeing a reduction. And as we mentioned, it is
actually coming in around 18 percent below CBO estimates. So we
are very pleased. We are in the process of finishing out the
Federal exchange rates. They had till July 31st, States did. So
we will be looking at States who are on the Federal exchange.
But from the State-based exchanges, it has been a very good
news story, and we are very pleased. And I think it just speaks
to what happens when you have competition and transparency in a
marketplace, plus the, quite honestly, the number of insurance
laws that we have been able to adjust in the last 3-1/2 years.
Mr. Waxman. That is interesting, because you believe that
the costs are going down because of transparency and
competition.
Ms. Tavenner. I do.
Mr. Waxman. I believe that, too, in any kind of product. If
you have got competition, you are going to look at what is the
best product and at the best price. And when these companies
are competing for my business, they are going to want to hold
down their costs. The benefits will all be the same, because
the essential core benefits will be the same in every plan
offered on the exchange. Isn't that correct?
Ms. Tavenner. That is correct. And also a reminder that the
things that we have done with MLR and other rules have not only
had a benefit on small businesses and individuals, when I talk
with large employers, and what we are seeing in large employers
is they are reaping some of those rewards as well. Their
average increase is around 3 percent. And while we don't want
any increase, obviously, 3 percent is a lot better trend than
we were seeing in the past.
Mr. Waxman. Most people don't have a choice of their health
insurance, they are lucky if they get any health insurance at
all. There is no competition, so they got to pay the price,
whatever it is. If they can't afford it, they can't get it in
this country. It seems to me that the attack is to keep things
from being transparent and to prevent competition and help the
consumers. That sure helps the insurance companies a lot.
Thank you, Madam Chair.
Mrs. Blackburn. Gentleman's time has expired. I recognize
Mr. Barton for 5 minutes.
Mr. Barton. Wow. OK. I was thinking I was later in the
queue. But I am ready to go.
In my opening statement, I quoted from the Ennis Daily News
of July the 23rd that the city of Ennis' increase in their plan
that they provide to their employees was going up double, and
that the monthly cost was about $50,000 a month for the city.
The deductible was going up, the deductible was tripled, the
city said that this was its largest increase in any budget item
in the city budget. What is your response to that?
Ms. Tavenner. My response to that would be I would want to
take a look at that article, and I am happy to sit down with
you.
Mr. Barton. All right. Well, that is easy. We will make
that happen. But I listened with interest to Ranking Member
Waxman's questions. And he and I are apparently living in
parallel universes because when I go to my town halls or when I
am out in my district, I don't have anybody coming to me saying
that they can't wait for the Affordable Care Act to be
implemented and they are waiting for this great day when they
can get all these benefits. I hear just the opposite. I hear
small businessmen saying that they are not going to be able to
provide the coverage. And I hear, like, the city employees of
the town that I live in complaining that their premiums are
going up and their benefits are going down. And now we have you
come and say that even though we are going to allow income
verifiability based on self-attestation, we are going to then
verify 100 percent of the self-attestations. Well, that doesn't
make sense to me either.
Do you have data on 100 percent of the American population
to verify the income levels? I was told that that was not
available, which was why you were not going to use it.
Ms. Tavenner. I will try to answer all of those questions,
but let me start with the income verification, because I think
there has been a lot of confusion out there on income
verification. A reminder that when an individual records their
income, it is first checked with IRS, based on the 2012 tax
returns. If there is a match there and they are eligible,
obviously, there is no need for--obviously, you are obviously
signing, you are telling the truth. But we are able to check
it. There is a second check through Equifax. OK? It is only
when those two do not match that you have to go further and ask
individuals for pay stubs or other information. And that is
where I am saying we will do 100 percent proofing.
Mr. Barton. All right. Well, the staff----
Ms. Tavenner. It is a subset of the whole population,
obviously.
Mr. Barton. Well, I hope you are right. I mean----
Ms. Tavenner. Well, I know I am right.
Mr. Barton. I voted against this every time I could. But I
do hope for the people's sake if we are going to implement it
that you are right. Now I want to ask a specific question----
Ms. Tavenner. Let me go back to answer your question about
businesses. Just a reminder to individuals that if you are a
small business, you are exempt from the requirement.
Mr. Barton. If you have less than 50 employees or your
average worker works less than 30 hours a week.
Ms. Tavenner. Well, if you have less than 50 employees, you
are exempt from having a requirement for coverage. Now, we hope
that individuals will do that coverage because, obviously, we
want more people covered, and that is the reason for the tax
incentives and others.
For large employers, here is what I am hearing from
individuals. When I start talking to them about their average
cost increases, they are seeing very low cost increases in
terms of premium. That doesn't mean that some employers aren't
increasing their deductibles or copay, which is a business
decision separate from the Affordable Care Act.
And the last thing I will tell you is if I ever lead--I
have been in Texas, I have been in Florida, Louisiana, Georgia,
Virginia, I can go on and on--if I ever lead with the
Affordable Care Act, individuals are often confused about what
I am saying. But if I lead with something that is like this, if
you have had a preexisting condition and you can't get
insurance or your insurance is $1,500 a month and you can't
afford it, effective January 1 that doesn't exist any more, and
here is why. If your child is being covered to age 26 and you
are happy about it but you didn't understand why, here is why.
So if you start----
Mr. Barton. The only group that I think does benefit from
the Affordable Care Act----
Ms. Tavenner. Absolutely.
Mr. Barton [continuing]. Are people that did not have and
could not get coverage before. That 1 percent of the population
does benefit if the coverage is available.
Ms. Tavenner. Well, it is a lot more than 1 percent, but
they do benefit.
Mrs. Blackburn. The gentleman's time has expired.
At this time I recognize the gentleman from Michigan, Mr.
Dingell, for 5 minutes.
Mr. Dingell. Madam Chairman, I thank you for your courtesy.
I thank you for holding this hearing.
And thank you, Madam Administrator, for being here today.
We are 60 days away from the open enrollment period, which
begins October 1. We are finally at the cusp of implementing
reforms that are going to see to it that quality health care is
a right and not a privilege. And now that we are close to full
implementation of the law, we are going to have to guard
against those who want this legislation to fail. This would be
a dreadful, shortsighted policy which would hurt the country
very badly.
My questions today, Madam Administrator, will focus on the
benefits that we have already seen from the Affordable Care Act
and what we may expect in the forthcoming months. Please answer
these questions yes or no.
Will the new health insurance marketplaces be up and
running for open enrollment as scheduled 60 days from now?.
Ms. Tavenner. Yes, sir. Yes.
Mr. Dingell. I would like you to give us a brief monograph
on how the different States are going to be doing, because some
will come in, some will not, some are going to partner. So if
you could submit that to us for the record.
Ms. Tavenner. Yes, sir.
[The information appears at the conclusion of the hearing.]
Mr. Dingell. Now, just this month the Department of
Treasury announced that employer responsibility provisions of
ACA were delayed for 1 year. Does this decision impact the
implementation of the timetable for the remainder of ACA? Yes
or no?
Ms. Tavenner. No.
Mr. Dingell. Would you like to submit a monograph, a brief
paragraph explaining that, if you please.
[The information appears at the conclusion of the hearing.]
Mr. Dingell. Next question. One claim I have heard recently
is that the employer delay will limit the ability of government
to verify the incomes of applicants for purposes of determining
the eligibility for subsidies. Will the marketplaces have
income verification measures in place during 2014? Yes or no?
Ms. Tavenner. Yes.
Mr. Dingell. Now, Madam Administrator, in your testimony
you note that between 1999 and 2012 the cost of coverage for an
average family rose by 172 percent. Is that correct?
Ms. Tavenner. Yes.
Mr. Dingell. Madam Administrator, when the marketplaces are
up and running, we hope that consumers will have a greater
choice among health plans than they currently have in the
individual market. Is that a real expectation?
Ms. Tavenner. Yes.
Mr. Dingell. Madam Administrator, consumers across the
country will reap the benefits of increased competition through
lower rates. We have already seen extraordinary results in
States such as California, Oregon, Washington, and Vermont.
Most significantly, in New York rates will go down by an
average of 50 percent. Could you submit us a brief monograph on
that particular point.
Ms. Tavenner. Yes.
[The information appears at the conclusion of the hearing.]
Mr. Dingell. Administrator Tavenner, do you believe that
increased competition amongst insurance companies is in any way
responsible for the lower rates we have seen in these States?
Yes or no?
Ms. Tavenner. Yes.
Mr. Dingell. Another provision in ACA that has helped lower
rates is the rate review provision. Administrator Tavenner, in
your testimony you indicate that Americans have saved over $1
billion in health insurance premiums thanks to this provision.
Is that correct?
Ms. Tavenner. Yes.
Mr. Dingell. Furthermore, you also discuss how the average
premium increase for all rates in 2012 was 30 percent below
what it was in 2010. Is that correct?
Ms. Tavenner. Yes.
Mr. Dingell. Would you submit a brief comment on that
answer and also on the answer to the previous question?
Ms. Tavenner. Yes, sir.
[The information appears at the conclusion of the hearing.]
Mr. Dingell. Do you believe the trend will continue into
the future? Yes or no?
Ms. Tavenner. Yes.
Mr. Dingell. Could you give us a brief statement as to why
that might be so?
[The information appears at the conclusion of the hearing.]
Mr. Dingell. Now that we are on the precipice of
implementing this landmark law to its fullest extent and the
Affordable Care Act is the law of the land, I believe we should
all accept this fact and work together to ensure implementation
goes smoothly as possible rather than rooting for the law to
fail. I know that that is what the American people want of us,
and it is my hope that we will be doing so.
Madam Chairman, I thank you for holding this hearing.
Madam Administrator, I thank you for your presence.
I yield back the 17 seconds remaining.
Mrs. Blackburn. The gentleman yields back.
At this time Mr. Shimkus, 5 minutes.
Mr. Shimkus. Thank you, Madam Chairman.
Let me first make a couple comments. I would be much more
willing to be lectured by Norman Ornstein if he had placed his
name on a ballot, ran for office, had been elected, and had to
represent a constituency, than just another DC pundit who can
throw accusations at if we are doing our job or not. So I just
put that on the record.
Second thing is, for Diana, who is a great friend of mine,
I would beg the question with your premise of how actively my
friends on your side actively promoted Medicare D. I know I
did. And I think if we could go back through the record of
people who had town hall meetings and actually tried to enroll
people in Medicare D, I think we could get a better idea than
just making a statement.
I will say, though, because I am struggling with that issue
of how do I get involved in this role and working with my State
and its exchange, the problem is we have had three briefings so
far and each briefing is different, and we don't have the
information yet. And that is the State of Illinois.
Ms. DeGette. Will the gentleman yield?
Mr. Shimkus. I would.
Ms. DeGette. I would be happy to sit down, Mr. Shimkus,
with you or anybody else on your side of the aisle and talk to
you about what I have been doing in my district meetings----
Mr. Shimkus. No, and I don't doubt that. I am just saying
to make a claim of Medicare D and how much you all were out
there pushing it, I am questioning----
Ms. DeGette. I will tell you what you I did about that----
Mr. Shimkus [continuing]. The credibility of that.
Ms. DeGette. Be happy to.
Mr. Shimkus. Our folks in the media can do due diligence
and really decide if they want to research that or not. I would
question that.
Now, Marilyn, it is great to see you. She has been in my
district before. Great credibility. Lot of support on both
sides of the aisle from the Senate. So thank you for being
here, and I know you have got a tough job on your hands.
I do want to refer two quick questions. One deals with the
testimony on how you used the State of New York and talked
about the premium issue. But didn't New York already require
health insurers to issue coverage to all applicants, otherwise
known as guaranteed issue?
Ms. Tavenner. They did.
Mr. Shimkus. And did not New York already restrict rating
and underwriting, otherwise known as community rating?
Ms. Tavenner. I believe that is correct.
Mr. Shimkus. So part of the debate on this, and it is going
to follow up to my next question, is, they are already a high
State insurer, probably the fourth highest in the country. So
they are already doing a lot of stuff that this law is forcing
them to do. So you would expect that their rates would not be
as high because they are already doing some of these new adds,
versus a State like Illinois.
And our issue is not this coverage, our concern is people
who have insurance are going to lose their insurance. That is
our debate. People who have employer-sponsored health care will
lose their health care, will be forced into an exchange in
which they are going to pay 30 or 40 percent more.
And I am not doing an anecdotal story, I am just going to
read a letter. I read this on the floor of the House yesterday
during a 1-minute speech. And it is from a small businessman
from Hamel, Illinois, which is in my district. And he says,
``Last week, I was advised by my insurance agent that Blue
Cross Blue Shield of Illinois is increasing my rates by more
than 38 percent. I have to release one employee and have
advised all remaining employees that their increase in health
insurance premiums will be passed on to them. I was proudly
able to pay 100 percent of the employees' healthcare coverage,
but after two consecutive 20 percent increases in the last 2
years, and the latest 40 percent increase, simple business
logic requires that I pass on this increase or simply go out of
business. My employees will have less to take home--take-home
pay under Obamacare.''
And here is the question. I am going to ask it because he
is asking us: ``Does anyone in Congress realize that under this
still uncertain program it is more logical for me to shut down
my business and take subsidies on one of the exchanges than to
remain open?'' Do you all understand that this is what small
business is dealing with?
Ms. Tavenner. Congressman Shimkus, you know I have great
respect for you, and I enjoyed being in your district as well.
And I would be happy to sit down with you and go through this
one because I am interested to see how the rate review process
worked in this particular----
Mr. Waxman. Ms. Tavenner, would you pull the mike closer?
Ms. Tavenner. I am sorry. I was saying that I would be
happy to sit down and work with the Congressman on this issue,
because obviously we now have rate review available in all
States, so I am curious to see the process that went into that.
But, obviously, if they have had years of 20 and 30 percent
increases, this was prior to any influence of the Affordable
Care Act.
Mr. Shimkus. And this one is 40 percent. The 40 percent is
the straw that broke the camel's back, at least for this guy.
Ms. Tavenner. Right. And this is the very issue that we are
trying to address. And so I am happy to sit down and work with
you.
Mr. Shimkus. Well, I would just say the debate really is we
are afraid premiums go up, jobs get lost, more people go onto
the exchange and can't afford the exchange amount which they
had when they had employer-sponsored health care. That is
really the difference in this debate.
Thank you, Madam Chair, and I yield back the balance of my
time.
Mrs. Blackburn. Gentleman's time has expired.
Mr. Rush for 5 minutes.
Mr. Rush. I thank you, Mr. Chairman.
Ms. Tavenner, I want to extend a warm welcome to you for
your appearance before the committee today. And I also want to
thank you for sending your staff to assist me and my staff with
the Affordable Care Act town hall meetings and other events in
my district. My constituents were happy to have them, learned a
lot from them, and are looking forward to having more
interactions with your excellent staff.
I want to ask you about the administration's decision to
delay the employer mandate until January 1, 2015. There has
been a lot of rhetoric from my Republican colleagues, a lot of
hot air about how this decision is going to derail
implementation of the ACA or is somehow an indication that the
law is unworkable.
CMS is charged, Ms. Tavenner, with implementing four
elements of the law. These include health insurance
marketplaces, which will make sure every American has access to
quality affordable coverage even if they have a preexisting
condition. The 80/20 rule, which stops insurers from spending
25, 30, or even 40 percent of enrollees' premiums on profits
and overhead and make them spend more on actual health care.
And then there are the insurance market reforms, such as the
end of lifetime and annual limits on coverage, and the
requirement that insurance cover preventive care with no cost
sharing. All of these four reforms put patients and their
doctors and not the insurance company in charge of basic
healthcare decisions.
Madam Administrator, what does Treasury's recent decision
mean for the core elements of the law that CMS is charged with
implementing? And people who do not receive healthcare coverage
from their employers next year will in general be able to
afford affordable, high quality coverage through the State or
Federal marketplaces. I think that is correct. Would you answer
those questions?
Ms. Tavenner. Yes, sir. The delay of the employer mandate
does not have any impact on CMS' implementation. Just as a
reminder, the delay of the employer mandate was a decision to
try to work with business. And I have heard this morning that
we need to work with business and help them. And a reminder
also that 96 percent of large employers currently have
coverage.
So this employer mandate was also a very small subset. And
the decision to delay for 1 year was to try to help not
increase regulatory burden on employers as they walk through
this process, and it has no impact on our implementation.
Mr. Rush. So it is safe to say that delaying the employer
mandate for a year is not going to derail the law, and that the
core elements are going into effect as planned.
Ms. Tavenner. Yes, sir.
Mr. Rush. Well, it seems to me exceedingly wrong and
backwards and ill informed by my Republican colleagues to try
to use this relatively minor transitional relief to try to sow
doubt and confusion about whether this law is going into
effect. It is really cold-blooded, cold-hearted, and callous,
and they should be ashamed of themselves.
I yield back the balance of my time.
Mrs. Blackburn. Gentleman yields back.
Mr. Pitts for 5 minutes.
Mr. Pitts. Thank you, Madam Chair.
Ms. Tavenner, on April the 10th, 2013, the Office of
Management and Budget released its sequestration preview report
for fiscal year 2014. In this report, OMB confirmed the cost-
sharing subsidy program in the ACA is subject to sequester to
7.2 percent reduction, a reduction of $4 billion. Has CMS
communicated to officials operating an exchange, both Federal
and State, how this sequester will be applied?
Ms. Tavenner. We have not. We are still working with OMB.
Mr. Pitts. Will the navigators and other assistance
personnel be expected to properly explain to enrollees the new
cost-sharing levels under sequester?
Ms. Tavenner. That is currently under review with OMB, so I
would have to get back to you on that.
Mr. Pitts. Well, doesn't this mean applicants may not be
aware of their financial liability when signing up for an
exchange plan?
Ms. Tavenner. Once again, I will follow up with you after I
have had discussion with OMB.
Mr. Pitts. All right. Well, given that the Department has
had significant time to prepare for reductions in cost-sharing
subsidies as part of the sequester, is this information
available to the public?
Ms. Tavenner. Congressman Pitts, I will have to work with
OMB and get back with you on that.
[The information appears at the conclusion of the hearing.]
Mr. Pitts. Can you commit to providing detailed information
regarding the implementation of the cost-sharing subsidy
program?
Ms. Tavenner. Yes, sir. I can commit to providing you
information. Of course it is our strong preference that the
issue of sequestration go away entirely.
[The information appears at the conclusion of the hearing.]
Mr. Pitts. Will this information be available before open
enrollment, which starts on October 1, 2013?
Ms. Tavenner. Yes, sir.
Mr. Pitts. I don't, you know, mean to ask the same question
again, but are you actually testifying in front of this
committee that agencies will likely be giving exchange subsidy
applicants incomplete information about their financial
liability? Telling my constituents to talk to OMB is really not
an answer.
Ms. Tavenner. That is not what I am saying. I am saying
that I will follow up with OMB and get back to you with an
answer.
Mr. Pitts. Another question. Has CMS conducted live, end-
to-end testing involving all parties responsible for
implementation, including the Departments of Homeland Security,
the Social Security Administration, the Treasury Department,
HHS, OPM, State Medicaid agencies, State exchanges, and
associated contractors?
Ms. Tavenner. So that is several questions, so let me try
to answer them one by one. We started testing in October of
last year, October of 2012. And so as we test we move from
basic to more complex scenarios. So we will finish all end-to-
end testing by the end of August.
So when you talk about systems, let me start with insurers.
We have accepted their QHP submissions for more than 120
issuers. We began enrollment testing those scenarios in July.
They will be complete by the end of August. And then obviously
payment testing occurs between September and December because,
if you remember, payments do not go out until January.
Mr. Pitts. I only have so much time. I only have a minute
left. Have you had one live test with all the agencies?
Ms. Tavenner. With all the Federal agencies? Absolutely.
Mr. Pitts. Yes. And what vulnerabilities and challenges has
such testing revealed?
Ms. Tavenner. I am happy to give you a more detailed
explanation from our IT folks.
[The information appears at the conclusion of the hearing.]
Ms. Tavenner. But as we have identified any vulnerabilities
we correct them. And so right now we are in good shape.
Mr. Pitts. OK. Do the contractors who HHS is paying to
build these exchanges have certain targets or milestones that
they have to meet?
Ms. Tavenner. Absolutely.
Mr. Pitts. Can you tell us today that every contractor has
met these targets and is on time?
Ms. Tavenner. Yes, sir, I can.
Mr. Pitts. Will HHS provide any reports, audits, or work
plans to the committee to show the contractors' work?
Ms. Tavenner. We will certainly provide anything that we
can that is publicly available. And I am happy to have people
come sit down with you and walk you through our testing.
[The information appears at the conclusion of the hearing.]
Mr. Pitts. Have any of the contractors asked for delays of
their contract deadlines or work plans?
Ms. Tavenner. No, sir.
Mr. Pitts. My time has expired. Thank you, Madam Chair.
Mrs. Blackburn. Gentleman yields back.
Ms. Eshoo, 5 minutes.
Ms. Eshoo. Madam Administrator, welcome. And thank you for
the work that you are doing on what is truly historic. It is a
heavy lift because it has many working parts, 50 States,
hundreds of millions of people in our country. But I think that
the confidence with which you have approached this and the
experience that you bring to it will only enhance the pulse
check on the Affordable Care Act.
Now, my colleague from Illinois intimated that Norman
Ornstein really doesn't have any skin in this game because he
is a scholar and he is not elected. Well, you know what? Our
constituents are not elected either. Scholars aren't elected.
But you know what? They all count in our country. So I think
that Norman Ornstein and Thomas Mann are recognized as the two
preeminent congressional scholars. Neither Republicans or
Democrats do they claim. I don't know how they are registered,
but I welcome what they write and how they think, and I think
we can all draw something from it whether we agree or not. I
didn't think I was going to get to Norm Ornstein this morning,
but I can't help but jump in and say something about ``just
because they are not elected'' that they don't count.
There is something extraordinary that is taking place: not
only the implementation of the ACA, but the counterpush in the
House of Representatives where for the 40th time--not 4th
time--but 40th time that the Republicans are moving to repeal
the law. I don't know, and maybe I will have to check with Norm
Ornstein or the Librarian of Congress to see if there has ever
been any such effort in the history of our country where
something has been taken up 40 times.
I believe my friends on the other side of the aisle are on
the wrong side of history.
Now, I think that what we need to examine is what people
are now legally entitled to as a right, not only having been
passed into law, but confirmed by the United States Supreme
Court. But none of that seems to matter. For the 40th time they
are going to move to repeal.
But I would like to examine this through the lens of
constituents and the right that they have and the rights that
my colleagues want to take away from them. These are very
important things that my colleagues want to take away from
them. They want to take away closing the prescription drug
donut hole that was created through the program that they
passed. They want to take away from children the ability for
them to stay on their parents' insurance policy up to the age
of 26. They want to take away from them what is now prohibited,
and that is the lifetime limit caps on insurance policies.
How can anyone argue that lifetime limit caps were
terrific? You are arguing to take that away from your
constituents.
You want to take away preventive services from your
constituents, like mammograms and colonoscopies. Don't you get
those now? Doesn't your wife, your spouse enjoy that now? Why
do you want to take that away from your constituents? Take away
health care premiums that are truly spent on medical care
instead of advertising, and the right to plain language
explanations of a plan's benefits, and most of all take away
the freedom by decimating the whole issue of preexisting
conditions. That is taking away a lot of rights that the
American people have today. And I think that is the lens in
which to examine this.
I would just like to ask you, Madam Administrator, very
quickly about the flexibility the States have. There has been
an awful lot tossed around that States are going through hell,
that people are being forced. Can you just spend a moment to
explain the flexibility that States are being offered in this?
Ms. Tavenner. Yes, and there obviously are various types of
programs. Obviously, we have 17 State-based exchanges where
they have tremendous flexibility. They are basically
establishing their own programs, following the law, and then we
have some oversight. The second one are we have created various
types of partnerships to try to work with States, such as in
Utah with the SHOP, where they wanted to be involved in SHOP.
We have created other partnerships where States wanted to
keep their review of health plans or they wanted to do consumer
outreach. We are currently working with Mississippi----
Mrs. Blackburn. Ms. Tavenner?
Ms. Tavenner. Sorry?
Mrs. Blackburn. If you will submit for the record. We are a
minute over time and we are trying to keep it to 5 minutes as a
courtesy to all members.
Ms. Tavenner. Right.
Mrs. Blackburn. Thank you, Ms. Eshoo.
At this time I yield to Mr. Terry, 5 minutes.
Mr. Terry. Thank you, Madam Chair.
Appreciate you being here. And I am going to ask some
questions about transparency and if information is being
withheld from this committee regarding particularly data hubs.
So as I understand, HHS has contracted with a number of
companies to help build different parts of what is known as the
data hub. Is that correct?
Ms. Tavenner. The data hub is actually a single contract.
Mr. Terry. It is a single contract for the data hub?
Ms. Tavenner. Yes.
Mr. Terry. And is UnitedHealthcare Group, their subsidiary,
QSSI, that contractor?
Ms. Tavenner. That is correct. That is correct.
Mr. Terry. Now, last month GAO issued a report stating that
the exchanges are behind schedule. A number of news articles in
the last month have talked about the expected glitches and the
fact that the companies--or company--setting up these systems
is racing to get it done in time.
This committee has asked UnitedHealthcare to provide us
with a briefing on the status of the building of the data hub,
and they have refused and told us to talk to HHS. So has HHS or
you as under HHS told UnitedHealthcare not to talk to us?
Ms. Tavenner. We have not. I have not. Speak for myself. I
have not said that.
Mr. Terry. Do you have any concerns about UnitedHealthcare/
QSSI talking to our committee?
Ms. Tavenner. We have frequently brought--usually we have--
--
Mr. Terry. I am sorry, is that a yes or no? Do you have a
problem with UnitedHealthcare talking to this committee?
Ms. Tavenner. I do not have a problem with that. I was
going to say we have done that in the past, and we have
actually brought contractors with us to talk to committees.
Mr. Terry. OK. Do you think it is a fair conclusion that
when somebody refuses to talk to you that they are hiding
something?
Ms. Tavenner. I do not think that is a fair conclusion.
Mr. Terry. You don't?
Ms. Tavenner. No.
Mr. Terry. You don't think that when somebody refuses to
talk to you that there is a reason behind it?
Ms. Tavenner. I think perhaps maybe they wanted to
doublecheck with the person who is doing the contracting, but I
think we can work this out.
Mr. Terry. So when United refuses to talk to us, they are
not trying to hide anything, they are just being a good
company?
Ms. Tavenner. They are a good company to work with.
Mr. Terry. OK. So I will ask you then what they won't talk
to us about: How much money has HHS paid UnitedHealthcare and
QSSI to date?
Ms. Tavenner. Through the QSSI contract, I think we have
spent about $400 million to date on the building of the hub.
But if you would let me, I will get you specifics. As you might
imagine, both testing and our spending are dynamic, so I may
have data that is a week or 2 old.
[The information appears at the conclusion of the hearing.]
Mr. Terry. Is QSSI/UnitedHealthcare on schedule?
Ms. Tavenner. Yes.
Mr. Terry. Have they met each of their targets set by HHS
for their work?
Ms. Tavenner. That is something I am happy to review with
you in detail. I don't want to speak to each and every target,
but obviously we are on schedule for October.
Mr. Terry. But you would have no problems with
UnitedHealthcare talking to us about that as well?
Ms. Tavenner. I would have no problem with that. We have
done that in the past.
Mr. Terry. Has UnitedHealthcare/QSSI begun to do test runs
of the data hub?
Ms. Tavenner. Yes, they have begun test runs.
Mr. Terry. Have there been any glitches discovered?
Ms. Tavenner. I would to have to go through the specifics
of that. But of course we make modifications as we go. But if
you are asking----
Mr. Terry. That is the whole point of doing a test.
Ms. Tavenner. Right. And the testing, we have made
modifications and the system is working.
Mr. Terry. Now, has UnitedHealthcare/QSSI tested the
connections with the relevant agencies, such as Social Security
Administration?
Ms. Tavenner. Yes.
Mr. Terry. Have they tested the connections with the
Department of Homeland Security?
Ms. Tavenner. Yes. And I am happy to get you a schedule of
that testing.
Mr. Terry. OK. And the same question with the Internal
Revenue Service.
Ms. Tavenner. Yes. And I am happy to get you a schedule of
the testing of each of our Federal partners.
Mr. Terry. Have they tested the connections with State
Medicaid programs?
Ms. Tavenner. Yes, that work is in progress.
Mr. Terry. Good. Are there other contractors? Will you tell
us what Equifax' and SERCOS's involvement is?
Ms. Tavenner. Equifax' involvement is income verification.
As I was discussing earlier, we have a contract with them so
that when an individual completes an application and fills out
their income, we check that against IRS records, as well as
Equifax records, to verify accuracy. They have that contract.
Mr. Terry. Thank you.
Mrs. Blackburn. The gentleman's time has expired.
Ms. DeGette, 5 minutes.
Ms. DeGette. Thank you very much, Madam Chair.
Ms. Tavenner, I want to add my thanks to you for coming to
testify today. I have a couple of areas I want to explore with
you. The first one is these data hubs that are going to be
managed by HHS and that are going to provide access to
information that is necessary to determine an individual's
eligibility for certain ACA benefits.
Yesterday in the Denver Post, in part of what seems to be a
national campaign on this issue, there was an op-ed that raised
concerns about the privacy of data that is going to be provided
to individuals who sign up for health insurance on the Federal
marketplaces. And obviously, after the recent leaks on the NSA,
we are all concerned about privacy. But the op-ed stated, in my
opinion a little hysterically, quote, ``The Federal data hub is
a privacy disaster waiting to happen, drawing from databases of
seven different U.S. agencies, including the Department of
Justice and IRS.''
So I hope that you can help us address some of these
concerns about data hubs.
First, Administrator Tavenner, very briefly, what are these
data hubs?
Ms. Tavenner. So there is a single data hub, and I think
that is an important piece of information. It serves as a
router. And it is important to note that the hub does not store
any information. It routes information. Second point is there
is no health information stored or scattered.
Ms. DeGette. So what type of information is involved with
these data hubs?
Ms. Tavenner. OK. What the data hub does is you fill out an
application, then that automatically, for lack of a better
word, pings Social Security, and so we verify that what you are
entering as a Social Security number matches you as an
individual. Then it also will ping Social Security for if you
are eligible for other types of programs which would make you
ineligible for tax credits. Then it will move, it moves through
each of the systems that make sense, right, Homeland Security,
you are verifying that person is a legal citizen, you are
verifying if they are eligible for other programs such as
TRICARE, et cetera. And so you are making sure that this
individual is actually eligible for a tax credit. This is a
routing of information, no storage in the hub----
Ms. DeGette. Right. So once the information has been
checked against all those sources that you just talked about
and confirmation has been forwarded back to the appropriate
marketplace, what you are saying is this information is not
stored. Is that right?
Ms. Tavenner. It is not stored in the hub. When the
individual actually completes an application, then we do store
that application in the marketplace, which is a separate piece.
So that if you are making an appeal or whatever, we are able to
go back to your record. But again, we do not store health
information.
Ms. DeGette. So the information that has been stored in the
marketplace, who has access to that information?
Ms. Tavenner. Individuals who have access to the
marketplace are enrollment and eligibility workers that are
either through the State-based exchange, they have their own
enrollment and eligibility workers, or we have a single
contract, which is the SIRCOS contract.
Ms. DeGette. And what are we going to do to make sure that
those workers do not use that information inappropriately?
Ms. Tavenner. There is a series. The history of CMS is we
handle millions of records. So we have very tight security
controls, the Privacy Act, we follow all the security
requirements agreements.
Ms. DeGette. So let me just ask you, as Mr. Dingell would
say, could you just provide us with a short written answer what
the agency is doing to ensure consumers' privacy about this
information?
Ms. Tavenner. Yes. But it will be a lengthy answer because
we have lots of security----
[The information appears at the conclusion of the hearing.]
Ms. DeGette. Lengthy is good in this situation. Thank you.
I have one last issue I want to talk to you about, because
we keep hearing about people talking about again and again how
health care reform is going to increase health care costs. So I
am wondering if you can talk very briefly to us about recent
trends in Medicare spending growth.
Ms. Tavenner. Yes. We are very pleased with recent trends
in Medicare spending growth. We have actually seen for 3 years
in a row the lowest growth ever in Medicare spending, and we
are very pleased with that.
We think it is a combination of things. Obviously, there
are some payment reforms we have put in place. But we are most
excited about our delivery system reforms, and we are excited
about those because they are actually changing from paying for
quantity to actually paying for outcomes. And we are taking
this delivery system changes and we are spreading it across not
only Medicare, but Medicaid, and we are working closely with
the private industry to make sure this is an effort--we want to
be agnostic to payer. What we are trying to do is actually
change the system so that we have coordinated care at lower
cost. And we are actually focused on the high costs, which are
complicated care, complex, long-term chronic disease. So it is
a combination of things.
Ms. DeGette. Thank you very much.
Thank you Madam Chair.
Mrs. Blackburn. Gentlelady yields back.
Dr. Murphy, 5 minutes.
Mr. Murphy. Thank you Madam Chair.
First of all, to get on the record, I just want to make
sure we are still working on this. Is it your and the
administration's intention to respect and adhere to the
Constitution's First Amendment freedom of religion in the
implementation of this law with employers.
Ms. Tavenner. Yes.
Mr. Murphy. Thank you. Now I want to get at some other
things here. I want to ask you a simple and direct question.
Has the Affordable Care Act resulted in employers cutting
workers' hours because of the mandate, yes or no?
Ms. Tavenner. No.
Mr. Murphy. OK. Well, let me tell you a story here. A
gentleman contacted me who works two full-time jobs, one with a
transformer manufacturer, another with a restaurant. He has a
health insurance plan with the transformer manufacturer, but
the restaurant says they have to cut his hours to part-time
because otherwise they would have to provide him with health
insurance. He asked the office, my office, if there was a form
to fill out to prove the restaurant he has health insurance. So
we called the Department of the Treasury asking them if there
was anything they can do to assist him. Treasury officials we
spoke to said that it is an issue between the gentleman and his
employer, there is no way for the Federal Government to prove
to the restaurant he has insurance with another employer and
that they have no solution.
Now, is the answer the administration is giving to people
acceptable under those circumstance, they have no way of
working on such things to prove that they have insurance?
Ms. Tavenner. I cannot speak to Treasury's answer, but I
will tell you that when I----
Mr. Murphy. Do you have any solution to that?
Ms. Tavenner. Yes. When I am out in the marketplace I have
actually met with small business, with large business. We are
not seeing folks changing their hours. Yes, we hear anecdotal
stories as well.
Mr. Murphy. This goes back to the parallel universe
situation. And when we had before my subcommittee, Oversight
and Investigations, Mr. Mark Iwry, he was a senior adviser with
the Department of Treasury, he had said that one of the issues
of why they needed to delay the mandate for a year for
employers was because employers were having a number of
problems there. When asked specifically if he was hearing from
individuals, it appeared that they did not have that, so I
asked what his address was so people could let him know.
Now, I am hearing from you that you are not hearing from
people either, which I think is a problem. So who can Americans
write to, to get you the facts--because apparently you are not
hearing them--that employers are cutting back hours and
employees are losing hours? Should they just write to you care
of CMS?
Ms. Tavenner. They can certainly write to me, and many of
them do. But I think----
Mr. Murphy. But apparently you are not hearing----
Ms. Tavenner. I am out actually in the markets talking to
individuals.
Mr. Murphy. I hear that, but the fact that you are saying
that you are not hearing that anybody is losing hours is
phenomenal, because this is where--look, we understand that
this is the law. We are trying to get transparency. But when
you and the administration hide things in a Fourth of July blog
or in the middle of some other document, or one bill appears
before us in committee and another one appears before us on the
floor and waivers are granted to people, there is something
wrong.
Now let me ask about this, too. Recently, some of the law's
original supporters, labor unions, have claimed the law would
substantially harm their current medical benefits despite many
promises that if you like your coverage you can keep it. Are
you having discussions with these unions about the impact of
health care on their coverage?
Ms. Tavenner. Yes, we are certainly having discussions with
unions.
Mr. Murphy. Did you see the full page ad in today's
Washington Post from the Teamsters, the International
Brotherhood of Electrical Workers, the Laborers International,
the Treasury Employees, the United Union of Roofers,
Waterproofers and Allied Workers saying it threatens to harm
their members, that it takes money from the pockets of each
laborer covered by health and welfare fund, it takes coverage
away from employees who already receive it through their
employers? Have you seen this ad?
Ms. Tavenner. I have not.
Mr. Murphy. It is in today's paper. You might want to take
a look at it.
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Mr. Murphy. This is no small concern. Now, you are saying
that you haven't heard from people. It seems to me that these
folks who represent thousands and thousands of workers are
saying they are seeing some real problems here.
Ms. Tavenner. I have actually said we have had ongoing
meetings.
Mr. Murphy. This is 26 million people. Now, that is more
than significant. And you are saying you are not hearing from
people that there is a problem?
Ms. Tavenner. For the third time, I have said we have had
ongoing discussions with the labor unions.
Mr. Murphy. Are they telling you there are problems with
people losing their jobs or losing coverage?
Ms. Tavenner. We have heard their concerns and we are----
Mr. Murphy. Are you hearing from them that there is
problems with people losing their jobs or losing their
coverage?
Ms. Tavenner. I have not heard that specifically.
Mr. Murphy. Whoa. Would you like to read today's paper? And
this isn't the first time they have printed this in articles in
Washington, DC.
So this is the parallel universe. Look, I understand this
is the law, but our concern is that if you are all living in
``Alice in Wonderland'' you can't manage what you can't
measure. You can't measure what you are not paying attention
to. And although there are people on the other side of the
aisle who are saying that we are not handling this the right
way, this is our obligation to make sure that we are providing
the kind of oversight to this.
And if you are not listening to the American people and not
listening to labor unions, then some poor individual who
contacts me that works at a restaurant and says, ``I don't know
what to do,'' I have no answer for him.
Thank you, Madam Chair.
Mrs. Blackburn. The gentleman yields back.
Ms. Matsui.
Ms. Matsui. Thank you very much, Madam Chairman.
And welcome, Madam Administrator. We are so happy to have
you here and glad that you are on board.
I just have a few questions here. You know, opponents of
reform have spent a lot of energy trying to scare seniors into
believing that they were losing Medicare benefits because of
health reform. I would like to take this opportunity to correct
this misinformation.
Administrator Tavenner, isn't it true that no senior will
see their guaranteed Medicare benefits reduced, whether in
private Medicare Advantage plan or traditional Medicare where
seniors have free choice of doctors because of the Affordable
Care Act?
Ms. Tavenner. Yes.
Ms. Matsui. Yes or no?
Ms. Tavenner. Seniors continue to receive all of their
benefits.
Ms. Matsui. With the improvements in preventive benefits
and prescription drug coverage, benefits actually improve for
all Medicare beneficiaries, correct?
Ms. Tavenner. Correct.
Ms. Matsui. In fact, in your testimony, you stated over 6.6
million seniors have saved more than $7 billion on their
prescription drugs as a result of the ACA. Is that correct?
Ms. Tavenner. That is correct.
Ms. Matsui. And almost 17 million Medicare beneficiaries
have taken advantage of at least one free preventive service
thus far in 2013, correct?
Ms. Tavenner. Correct.
Ms. Matsui. OK. Thank you very much. And I will make sure
this summer that my constituents understand that.
Now, we all agree that eliminating waste, fraud, and abuse
in Medicare and Medicaid should be a top priority as we seek to
reduce spending. Roughly 10 percent of Medicare funding is lost
to waste, fraud, and abuse each year.
Now, the Affordable Care Act takes important steps toward
combating health care fraud, waste, and abuse, and over the
last 3 years alone $10.7 billion has been returned to the
Medicare Trust Fund thanks to the ACA's anti-fraud provisions.
I understand that just last week CMS imposed a temporary
moratorium on the enrollment of Medicare home health providers
in specific areas of the country considered fraud hotspots.
Can you give us a sense of other successful examples of the
instances where the ACA has enabled CMS to successfully combat
waste, fraud, and abuse?
Ms. Tavenner. Yes. Obviously the moratorium was an
important step and the first time we have actually taken that
action. And the other areas, we have moved to a lot more on the
predictive modeling. Instead of paying the funding out and then
having to go recover, we are trying to do more sophisticated
analytics, and so we have seen recoveries increase year over
year over year. But likewise there is still a fair amount of
fraud out there, so we have close working relationships with
the OIG and DOJ, and we have expanded what we are calling our
HEAT Programs and our work in that area.
We also have a close partnership with the States, working
with attorneys general, and we have recently created a public-
private partnership to work with insurers directly. So we are
trying to combat fraud from many different angles. And we
appreciate the tools that were given to us in the Affordable
Care Act and the increased penalties to allow us to put more
pressure in that area.
Ms. Matsui. Thank you very much.
Now, amid all the important growth to help enroll millions
of Americans into Medicaid and new and improved private
insurance options, we must not lose focus on one of the chief
goals of health reform, transforming our current sick care
system into a true health care system. As you know, a number of
provisions in the Affordable Care Act were aimed squarely at
promoting prevention, for example coverage for annual wellness
visits for seniors in Medicare, access to recommended
preventive services, no cost sharing for those in the new
marketplace plans, and the creation of the historic Prevention
and Public Health Fund.
To what extent is CMS overseeing implementation of these
provisions and what progress can you report?
Ms. Tavenner. As you mentioned earlier, and we sent reports
out this week of the uptake in preventive services that we have
seen in Medicare. We are also doing the same type of work in
Medicaid, and the same type of cost sharing, lack of cost
sharing, et cetera, is available on the exchanges. So there has
been a big push toward prevention and a big piece of making
prevention the first piece of the healthcare system and one
that doesn't have copays or deductibles so we can encourage
individuals to take advantage of the program.
It is also part of our regular ongoing marketing and
educational information. And we will continue that as we open
the exchanges.
Another point I will make is frequently we are so busy
talking about the exchanges we forget to talk about the
Innovation Center and the work that is going on there, which is
also steeped in prevention, and working with States.
Ms. Matsui. Well, thank you very much, and I look forward
to continue to work with you.
Thank you. I yield back my time.
Mrs. Blackburn. The gentlelady yields back.
Dr. Burgess 5 minutes.
Mr. Burgess. I thank the chairwoman.
First off, I would like to ask unanimous consent to put
into the record a list of seven House-passed bills that
President Obama has signed into law that repeal or defund parts
of his healthcare law. And I would ask that be made part of the
record.
Mrs. Blackburn. So ordered.
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[GRAPHIC] [TIFF OMITTED] T7165.083
Mr. Burgess. Madam Administrator, let me just ask you, and
this is a quick one, April 13th, 31 members of this committee
from both sides of the dais sent you a letter on the issue of
the average sales price Part B drugs in Medicare as they were
affected by the sequester. Many of us think you have done the
math wrong. You have sent us a reply that was actually a
nonresponse. So we sent you another letter asking for an actual
response. That was over a month ago. Can we expect a response
to the second letter?
Ms. Tavenner. Absolutely.
Mr. Burgess. Very well.
The issue of delaying the employer mandate, now, you
testified before another committee that that was something you
learned about late in June. Is that correct?
Ms. Tavenner. June 25th.
Mr. Burgess. Well, who made the decision to do that?
Ms. Tavenner. I did not answer who made the decision.
Obviously it falls under----
Mr. Burgess. Yes, you did. Who told you that it was going
to happen?
Ms. Tavenner. I actually heard about it from my chief of
staff on a phone call.
Mr. Burgess. Well, I would appreciate you getting back to
us with the information of who phoned your chief of staff.
At any point did Valerie Jarrett interact with your office
and say, ``This is what we are going to do''?
Ms. Tavenner. Valerie Jarrett did not interact with me.
Mr. Burgess. Did you think it odd that it was a blog post
on Valerie Jarrett's blog that informed the country of the
delay of the employer mandate?
Ms. Tavenner. I don't know that I would think it odd.
Mr. Burgess. Well, the rest of the country thought it was
odd. You know, there are still a lot of unanswered questions
there as to who is actually pulling or who is actually in
charge here. I think you are supposed to be in charge, so I
think you would have to be integrally involved with that
decision, and yet I get the impression from you that you were
kind of an innocent bystander while something came out of the
West Wing of the White House. And that makes me uncomfortable
because we had Mr. Cohen in our committee a few weeks before
that, I asked him, are you going to be ready? Are you talking
about delay? Are you going to narrow the scope of the
Affordable Care Act? Absolutely not, we are on target, we are
going to be ready. You said some of the same things this
morning. And yet on July 2nd we are going to delay the
individual mandate by a year.
So, again, can you understand our discomfort? You are
supposed to be in charge of the administration of this program
and yet it doesn't seem like you are.
Ms. Tavenner. Well, I am very much in charge of the
administration of the marketplace.
Mr. Burgess. Great. Then you will provide us the
information and the chain of information that came forward to
your chief of staff as to how you were informed about that
decision. I would also be interested, did you push back on that
at all and say, ``Hey, this law was perfect the way the
President signed it in March of 2010.'' Did you push back
against the West Wing at all about that?
Ms. Tavenner. I am happy to get you that information.
[The information appears at the conclusion of the hearing.]
Mr. Burgess. All right. And my time is limited, let me move
on to something else: 100 percent review for people who are
under the self-attestation. That is great. I am glad to hear
that. So how is subsidy recapture actually going to work?
Someone on January 1st of 2014, is their subsidy based on what
they earned in the previous calendar year? Because they won't
have filed their income taxes yet. Are they going to tell you
how much they are going to earn in calendar year 2014 for that
subsidy? How is that actually going to work?
Ms. Tavenner. If their income is unchanged from what they
filed on their income tax, obviously it is based on that. If
they have new information, they would provide us that and we
would base it on their projected income for 2014.
Along the same line, part of the instruction to a consumer,
someone signing up for tax credits, is if they suspect their
income is going to change, or it does change, then they have a
responsibility to notify us.
Mr. Burgess. Do they understand that the subsidy is paid to
the insurance company for which they register to have
insurance, but if there is an overpayment, if there is subsidy
recapture, the individual, not the insurance company, the
individual will have to pay that back. Do you think people have
an understanding of that?
Ms. Tavenner. Yes, that will be part of the----
Mr Burgess. No, they do not. I will just tell you they
don't because I have asked in this committee other people who
are signing up for insurance.
When can Texans expect to go online and be able to get
information about how expensive coverage will be in the
exchange?
Ms. Tavenner. So the information about what is available in
the exchange will be available to them October 1.
Mr. Burgess. So we won't know what our insurance is going
to cost until October 1?
Ms. Tavenner. The rates will be available in September. But
I thought you were asking when an individual could actually go
online.
Mr. Burgess. I will just tell you, we have heard a lot
about constituents coming to town halls and asking questions. I
went through your Web site sitting here at the dais, and the
answer that I got was, your search returned zero plans, please
check back later. That is what our constituents are seeing
today if they go on your Web site to find out how much their
insurance is going to cost in October.
Thank you, Madam Chairwoman.
Mrs. Blackburn. The gentleman's time has expired.
Ms. Castor, 5 minutes.
Ms. Castor. Thank you very much.
And welcome. I want to thank you for your oversight of
implementation of the Affordable Care Act. It is so meaningful
for my neighbors in Florida, in the Tampa Bay area. It has
given them the economic security that they need in what is a
difficult economy. It is lowering costs, improving benefits.
And I wanted to share with you in the greater Tampa Bay
area just some of the statistics. First are my older neighbors
on Medicare, it is pretty impressive. Over 77,000 of my older
neighbors that are on Medicare have seen their drug costs
lowered since 2011. That has put over $100 million back into
their pockets. Very meaningful indeed.
For those Medicare beneficiaries now, it is so important
that they can go get the mammograms, the colonoscopies without
the copay, and they are taking advantage of it. Because of this
provision in the Affordable Care Act, over 1 million seniors in
the greater Tampa Bay area have been eligible for those
services without a copay, without additional co-insurance or
deductible.
And then most people have insurance. If you have private
insurance, and in my district alone I have kind of a younger
community with a lot of college students, but when you look at
the greater Tampa Bay area, we have almost 50,000 young adults
that have been able to stay on their parents' policy. These are
the parents and students I run into in the grocery store, the
ones that call me, and they are now connecting the dots, yes,
this was because of the Affordable Care Act.
In the greater Tampa Bay area, over 1 million individuals
in the private plans also have better insurance and
preventative services. And I love this number, this is one of
my favorite ones: Almost 1 million individuals in the greater
Tampa Bay area have received those rebate checks. And this is
one where there is a little bit of a disconnect, and they get
that rebate check from the insurance company and they don't
know it is because of the Affordable Care Act. So we have work
to do to connect the dots there. That has brought $47 million
back to many of my neighbors throughout my community. And I
know that there is more to come this summer, correct?
Ms. Tavenner. That is correct.
Ms. Castor. You have been very measured in your testimony
today. But I have to tell you, I get very distressed and almost
upset when you think about the political theater up here. We
are going to have another vote tomorrow, for the 40th time, to
repeal these rights now that consumers have, the more
meaningful insurance, those rebate checks, the fact that people
with cancer and preexisting conditions can actually get
insurance for a change.
And in Florida we have, you know, it appears that it almost
does border on sabotage, to say to this consensus of the
business community, the Florida Chamber of Commerce, the
associated industries, consumer groups, the Republican-led
Florida Legislature said we are not going to take the Medicaid
expansion, even though that is our tax money, $50 billion over
the next 10 years. It is outrageous.
But were you also aware that the Republican legislature in
Florida has tied the hands of our insurance commissioner to
negotiate the new rates? Now, we are going to have a Federal
exchange, but most States allow their insurance commissioner to
negotiate rates. And just recently in Maryland, it is obvious
that because the insurance commissioner had the ability to
negotiate rates that the new premiums, rates came out, and they
are much lower.
So I would like to ask you, what do you think of that? Our
Office of Insurance Regulation, the good news is that in my
home county, Hillsborough County, there are going to be 82
plans for people to choose from, six different health insurance
companies. It is the same across the Bay in St. Petersburg and
Pinellas. But why would you tie the hands of your insurance
commissioner to regulate rates? And then what role will you
have now in the review of those rates going forward?
Ms. Tavenner. So I obviously can't speak to what is going
on in Florida. I will tell you that we do have good working
relationships with each of the commissioners, and so we try to
help them. Also, that is exactly what is going on in August.
States on the Federal exchange are submitting their proposed
rates now, and we will be doing a review, working with each
State during the month of August. And then obviously those
rates get published in September.
Ms. Castor. And, you know, one of the other things they
did, they passed a law that said there is going to be a State
report on the rates, but they barred the insurance commissioner
from taking into account the actual tax credits and subsidies.
So here is the warning for Floridians: When you see the
information you are going to have to dig a lot deeper because
it is likely what will be published, the misinformation
campaign, will not be the reality on the ground at the end of
the day.
Thank you very much.
Mrs. Blackburn. Gentlelady yields back.
Dr. Gingrey, 5 minutes.
Mr. Gingrey. Madam Chairman, thank you so much.
First of all, I would like to thank Administrator Tavenner
for appearing before the Energy and Commerce Committee today.
With 60 days until the insurance exchanges have to be
ready, we still, unfortunately, continue to see headlines that
insurance costs will be going up and people purchasing through
the exchanges will have fewer options.
Just this week, Administrator, the insurance commissioner
in my home State of Georgia, Ralph Hudgens, announced that we
could see rates rise as much as 198 percent. On average, it is
not a pretty situation. For an average 27-year-old male,
premiums are set to rise 85 to 198 percent within the
exchanges, while for a 45-year-old premiums will rise 40 to 100
percent.
And even an adult, an older adult just before the Medicare
eligibility age will pay 18 to 48 percent more in the Obamacare
exchanges.
This is not just a Georgia problem, Madam Administrator, we
have heard from a number of States that, believe it or not, the
exact scenario we have been talking about since this bill was
passed is occurring and people will be forced to spend even
more money on their monthly premiums.
Did you expect to see such a rise?
Ms. Tavenner. This is not what we are seeing across the
country. Obviously, we have as many stories or probably more
stories of where rates have actually come in lower than
expected. And as I stated earlier----
Mr. Gingrey. Well, Madam Administrator, of course I am
concerned about the entire country, yes, but I am especially
concerned about Georgia.
President Obama campaigned that his plan was going to lower
premiums across the country by $2,500 a year, and here we are 3
years later with premiums higher by $3,000 with a large jump
expected again next year.
Do you expect there to be a time soon where we ever see
premiums begin to drop across the country, including my State
of Georgia?
Ms. Tavenner. Yes, sir, I do. And that is why the
competition and transparency are so important.
Mr. Gingrey. Listen, I appreciate that, and I hope you are
right. I hope and pray that you are right.
I also would like to point to the front page of this
morning's Atlanta Journal-Constitution, you may have seen this,
Madam Administrator, where the top headline reads, ``Insurance
Options Shrink.'' The article follows on the announcement
yesterday that Aetna and Coventry will not be offering
insurance through the exchanges next year in Georgia in any of
the 16 regions.
Are you worried about a lack of competition in the
exchanges?
Ms. Tavenner. We have certain isolated incidences where we
have fewer subscribers. In Georgia we are fortunate, we still
have six plans. Even with Aetna and Coventry's withdrawal you
do have good competition.
Dr Gingrey. Well, I am glad that you have a concern because
I certainly do, and as I pointed out and you just mentioned,
there are the 16 insurance regions in Georgia. Georgia is a big
State, 10 million people. Two of these regions have only one
insurance option, and in 8 of the 16 there are only two
options. Thank goodness Blue Cross Blue Shield is going to
offer an option in all 16 regions. But it is the only health
insurance company that is doing that. And it seems to me that
this is no way to foster competition and encourage better and
cheaper options for consumers.
Would you please help the committee to understand how
citizens from the State of Georgia will be benefiting from
higher costs and a lack of competition on these exchanges other
than to dole out Federal subsidy money by self-attestation? You
tried to assure us earlier that maybe that wouldn't be the
case, but tell me a little bit more about your concerns.
Ms. Tavenner. What we are seeing nationwide is actually
more plans entering the market. So we are seeing an increase in
competition, which is what we expected to happen. We have
already said this process would take a few years, more and more
companies will get interested. And we certainly think that will
be true for Georgia. And we are pleased that Georgia has six
plans and is covered.
Mr. Gingrey. Well, my last comment to you is in regards to
the lack of a response. And this article I just referenced this
morning in the AJC, Atlanta Journal-Constitution, to our
insurance commissioner Mr. Hudgens regarding his request for an
emergency 30-day delay for the submission of his rate review.
While I understand there was a tight timeframe given for a
response, I find it unacceptable that the health and human
services commissioner has still not offered even a preliminary
response to his request, especially since yesterday was the
deadline for submission.
So if you will take that message back to her, Madam
Administrator, I would really appreciate it. The commissioner
of insurance in Georgia, Ralph Hudgens, needs an answer and
PDQ.
Ms. Tavenner. Yes, and I understand that they were able to
clear more plans yesterday. So we appreciate the commissioner's
hard work.
Mr. Gingrey. Thank you very much.
And, Madam Chairwoman, I yield back.
Mrs. Blackburn. The gentleman yields back.
Dr. Christensen, 5 minutes.
Dr Christensen. That you, Madam Chair.
And welcome, Administrator. We are glad to have you fully
on board and look forward to working with you. And you may know
that the Congressional Black Caucus is out in different
districts helping to inform our constituents about the
Affordable Care Act, the benefits that they have had, such as
were recounted by my colleague, Ms. Castor, and what they can
expect and how to access what will be available in 2014.
I also just, before I ask my question, want to refer my
Republican colleagues to our Democratic memo, which really
demonstrates that the dire predictions about insurance premiums
are not really what is panning out in reality.
My question comes from my recent visit with the National
Medical Association. Many of the newly insured will be
minorities. And because they have not had ready access to
health care, as even was reported by the most recent national
health disparities report by the, Agency For Health Care
Research and Quality, so they are going to be sicker, they are
going to have multiple chronic diseases, exactly what the
accountable care organizations, medical homes, and those new
formations are meant to address.
The doctors that I met with are really concerned about
their being left out of the ACOs that are being planned in
their areas, as happened with many of the HMOs. And we know how
important concordance of cultural, racial, ethnic, and
linguistic concordance is between the patient and provider in
terms of outcome.
So I know you are just recently confirmed, but you have
been at CMS for a while. Do you know what has been done to
reach out to black, Hispanic, Native American, and Asian health
providers, who just like their patients may need special
outreach and maybe some more support to make sure that they are
able to fully participate and their patients benefit?
Ms. Tavenner. So a couple of things. Obviously, as we move
forward with the exchanges of the marketplace, there is
considerable amount of energy, funding, campaigning that is
targeted to African-American, Hispanic, and overall uninsured.
So that is one area in our marketing.
In our education, the work that we are doing with
navigators, the navigator awards will be made on August 15th,
and part of looking through those awards is making sure that
our navigator awards match the individuals who have expertise
in that area. So that is a second area.
A third area, as we see ACOs and medical homes grow, we are
starting to push on this issue of making sure we are hitting
the underserved communities, particularly those with higher
minority populations. So we are coming at it from several
fronts and we are very interested in getting it right.
Mrs. Christensen. Thanks. I would hope that the Office of
Minority Health at CMS is involved, and perhaps we would like
to maybe bring a few of the representatives of some of these
organizations over to meet them.
Ms. Tavenner. We would welcome that. And the Office of
Minority Health is very involved. And in fact Cara is a member
of our senior management team, so she is at every meeting right
there with us.
Mrs. Christensen. Thank you. And many of us have been
concerned for a while and interacted with CMS over the years on
issues about service and care for patients with end stage renal
disease. With private insurance there is a period of time where
the private insurance can continue before they go over to
Medicare. Has this been considered for patients who are in the
exchange who may develop end stage renal disease so that there
is no----
Ms. Tavenner. Gap.
Mrs. Christensen [continuing]. Gap, barrier, for them to
continue to receive their end stage renal disease treatment?
Ms. Tavenner. Yes. We have been meeting with advocates with
the associations and with insurers to make sure that there is
not a gap.
Mrs. Christensen. OK. The article that Dr. Cassidy, I think
it was, referenced, a couple of things, just if you could tell
me if they are true or false. ACA takes money from the pockets
of each laborer covered by health and welfare funds?
Ms. Tavenner. I don't think that is true.
Mrs. Christensen. It is not. Or they take coverage away
from employees who already have it through their employers?
Ms. Tavenner. No.
Mrs. Christensen. OK. And this is the article that was
referenced: ACA threatens to harm our members by dismantling
multiemployer health plans.
Ms. Tavenner. No.
Mrs. Christensen. Not true.
Thank you, Madam Administrator.
I yield back.
Mrs. Blackburn. Thank you, Dr. Christensen.
At this time, Mr. Scalise, 5 minutes.
Mr. Scalise. Thank you, Madam Chair. I appreciate you
having this hearing.
And, Administrator Tavenner, I appreciate you coming to
testify. There are a lot of questions that we have, and a lot
of them really are rooted in the questions that our
constituents have. And with all due respect to some of the
answers you have given about the lack of problems that
employers are facing, every single day I hear from employers
back in my district that have nothing but problems and
questions that are unanswered about the President's healthcare
law.
And just Monday back in New Orleans I held a town hall
meeting specifically focused on the healthcare law, again
because we have a lot of people that have these questions. I
invited the head of the Louisiana State Medical Society to come
and talk about some of the impacts that our medical doctors are
having in Louisiana. And I wish you were there because you
would have heard some very serious concerns by a packed house,
they literally had to bring in more chairs because of the
overflow crowd. And first they had the Louisiana Medical
Society talk about how this is adversely impacting our doctors
in Louisiana, this interference between the doctor and patient
relationship.
They had actually written an article about the expansion of
Medicaid and the problems that that causes. In fact, they
talked about the lack of ability for many doctors to even see
new Medicaid patients because of the reimbursement rates and
all of the problems in Medicaid. Medicaid is probably the most
broken part of health care. And yet President Obama wants to
put another 30 million people on Medicaid.
And then when we heard some of your questions, especially
as it relates to employers that are being forced to reduce
their workforce and also to reduce the number of hours of their
workers because of the requirements and their inability to
comply with components of this law, you seem to have a
disconnect where you act as if you are not aware that this is
going on.
Are you aware that employers across the country, clearly
employers in my district, every single day are saying one of
their biggest impediments to hiring more people, in fact one of
their biggest impediments to keep in the current workforce they
have is the President's healthcare law?
Ms. Tavenner. What I am saying to you--and I have spent
time in your State, both in Baton Rouge, New Orleans, I have
talked with hospitals, I have talked to physicians, so I have
been involved in the States. And that is one point I want to
keep making over and over again: I am out there, I am
listening. I do hear isolated incidents of individuals trying
to cut back hours. I don't hear so much about reducing----
Mr. Scalise. Do you really think that is isolated? I hear
it every day and it is across the board, large employers, small
employers, medium-size employers that are all saying the same
thing. Rarely do you get that, competitors, people that compete
down the street from each other saying the exact same thing
about being forced to reduce their workforce. They don't want
to do this. They love their employees.
Their employees have good health care. By the way, one of
the broken promises of President Obama, if you like what you
have you can keep it. I don't know if you have seen, and I
know--I think Dr. Murphy pointed out the article in the paper
from the various unions, there was a letter written by James
Hoffa, president of the International Brotherhood of Teamsters,
Joseph Hansen, International President of UFCW, and D. Taylor,
president of UNITE-HERE. Let me read you some of the comments
because it sounds like you haven't heard this. And these are
people, by the way, that pushed for this law to be passed. They
were not opponents of the President's healthcare law. They were
active supporters.
They said, the ACA, the Affordable Care Act, ``will shatter
not only our hard-earned health benefits, but destroy the
foundation of the 40-hour workweek that is the backbone of the
American middle class.'' That wasn't Steve Scalise or some
other conservative Republican that voted against the law. This
is the head of the unions that helped push this saying it will
destroy, the President's healthcare law will destroy the
foundation of the 40-hour workweek, which is the backbone of
the American middle class.
And then you are testifying that this is some isolated
incident. I mean, are you aware that they wrote this?
Ms. Tavenner. Yes.
Mr. Scalise. Have you seen some of the other things they
have said? ``We have been bringing our deep concerns to the
administration...our persuasive arguments have been disregarded
and met with a stone wall by the White House and the pertinent
agencies.''
Again, this isn't some right-wing group. This is James
Hoffa of the Teamsters saying that you all have been
stonewalling their concerns, and then you are testifying saying
these problems are isolated. And it seems like you are living
in some cocoon where you think and you say in your testimony,
``Two months from today, the Health Insurance Marketplace will
be open for business, giving consumers an easy way to compare
and enroll for affordable health insurance coverage.'' And
again the President just admitted this thing is not working
when he delayed the employer mandate. I think you even said
that the delay of the employer mandate could greatly contribute
to the integrity of employer verification in the future. Did
you write that or put that in a rule?
Ms. Tavenner. I am sorry, could you repeat that?
Mr. Scalise. That the delay of the employer mandate could
greatly contribute to the integrity of the reporting sections
under 55 and 56 of the code, the employer mandate could greatly
contribute to the integrity of the employer verification in the
future. And as the President, and supposedly they didn't
consult you, but as they decided to delay that employer
mandate, does that jeopardize the integrity of the employer
verification in the future? Because that was a concern you
raised.
Ms. Tavenner. No, it was not a concern I raised. I said the
delay or the transitional or whatever we are calling it, the
delay of 1 year the employer mandate does not affect the
implementation of the marketplace or the exchange----
Mrs. Blackburn. The gentleman's time has expired.
Mr. Scalise. Thank you. I yield back the balance of my
time.
Mrs. Blackburn. Mr. Sarbanes.
Mr. Sarbanes. Thank you Madam Chair.
Thank you for being here. I appreciate your time.
I think our colleagues on the other side of the aisle are
in a difficult place right now because they know that if this
works it is going to do really great things for their
constituents. So they are in this weird position where they are
hoping it won't work but they don't want to really say that, so
they keep bringing data and information and evidence of
problems that are really part of the old system that don't bear
the impression yet of the Affordable Care Act and the change
that it can make.
If you look at the things that have actually taken effect
already, I mean, the exchange is not in place yet. So if you
are talking about premiums and what they are out there that are
happening today, you are talking about something that exists
prior to the implementation of the exchanges.
The stuff that the Affordable Care Act contain that has
already taken effect actually are working pretty well, like
keeping young people on their parents' insurance coverage until
age 26. That has worked. Hundreds of thousands are benefiting
across the country, the young people themselves and their
families who don't have the anxiety attached to that anymore.
You look at the reduction in out-of-pocket expenses because we
have eliminated some copayments for our seniors for certain
kinds of preventive screenings and other things. That is
working and being embraced by the audience that is benefiting
from it.
So if you were to look at the thing, if you were to say,
projecting forward based on the experience of provisions that
have already taken effect, how they have been received and how
they are working, can we be optimistic that there is good
things to come, you have to say yes about it.
Now there are projections being made, insurers are starting
to come forward and indicate what the cost would be in the
exchange. And Maryland, according to data we got a hold of, the
average per-person monthly premium in the individual market in
2010 was $219, slightly over what the U.S. average was. Under
rates that were released last week for what would happen in the
exchange where you get the benefit of this pooling, the rates
would vary from $114 for the Bronze plan for a 25-year-old, up
to $269 for a Silver plan for a 50-year-old. Those are pretty
good rates by comparison. And that doesn't even account for the
subsidies that are going to be available.
So in those States, frankly, where the leadership embraced
the Affordable Care Act, has been working closely with your
agency to make sure that we have a good launch, the projections
are pretty good.
The question I wanted to ask you is, I guess there are
three categories of States in terms of how they have responded
to the challenge of the exchanges. The one who have really
embraced and said we are going to go out and do this, we are
going to make it work. Maryland is an example of that, I am
proud to say. There are States that I guess are going to be in
a kind of joint capacity with you all.
Ms. Tavenner. Right.
Mr. Sarbanes. And then there are the ones that completely
resisted it. And, you know, you are going to have to kind of
step in and make it work.
Presumably, in places where people have been embraced this,
the prospects of the launch of this and the implementation
going well, are going to be better than in places that were
very resistant. And a lot of criticism of what is coming and
projection of these doomsday scenarios, frankly, are coming
from Members and others from the States that have been
completely resistant to it, which I imagine is a little bit
maddening for you. But maybe you could, in the last 30 seconds
of my time here, you could just kind of talk about the
distinctions of having to grapple with those three categories.
Ms. Tavenner. Yes. Let me start by saying even those States
that have been resistant that are in the federally facilitated
exchange, that when I meet with individuals in those States,
there is a great deal of enthusiasm of helping us, advocates,
social services departments, hospital associations. And we have
individuals who are going to be trained, who are going to help
people sign up who want this law to pass, because they are
frustrated with having individuals come in and saying, you
can't get health insurance because of a preexisting or you
can't afford your health insurance. So they want to help. So
even though they are in a federally facilitated exchange, there
is a lot of enthusiasm at the ground level.
Large employers certainly have some concerns, and I have
met with them and we have discussed those concerns and we have
talked about how to manage. But they are also pleased to see
the cost trends.
So even in States that have not actively embraced the
State-based exchange, there is a lot of on-the-ground
enthusiasm, and that is where the navigators and the in-person
assisters will be so helpful to those States.
Mr. Sarbanes. Thank you.
Mrs. Blackburn. Gentleman yields back.
Mr. Latta.
Mr. Latta. Thank you very much, Madam Chair.
And, Madam Administrator, thanks very much for being with
us today. It has been, I am sure, very interesting for all of
us hearing your testimony. And it is also interesting to me
because, again, listening to my fellow Republicans on this side
of the aisle, some of the questions they have asked, and
especially about how it is affecting their individual districts
when they are out. And I know that some of the Members have
already heard me say this, but the number one issue when I am
out in my district when I talk to my businesses, small and
large, is about Federal regulations. And now with the Obamacare
coming on, it is really front and foremost in a lot of people's
minds. And I would like to give you a couple of examples here.
First, I represent a district that has 60,000 manufacturing
jobs--again, large and small. I also represent the largest ag
district in the State of Ohio, which is kind of an interesting
way to have a district, but I am very, very proud of it.
I also have a lot of entrepreneurs out there that really
want to get out there and employ people. But when I have had
over, according to my office, over 330 meetings at businesses
and factories with farmers and across the spectrum at
universities, schools and colleges, and also with hospitals,
they are very, very concerned about this law, especially what
is happening, especially when I heard that you are saying you
only know of isolated instances. So maybe what I could do is
kind of point out more that what I am hearing, because we are
on the road in our districts all the time.
And one of the things also I find interesting is that from
the CBO, when they said recently that we are still going to
have 31 million people uninsured in 10 years, and is that
correct?
Ms. Tavenner. I am sorry, I don't know what which one you
are referring to.
Mr. Latta. With the Congressional Budget Office, when they
came out with a report that we are still going to have 31
million people still uninsured in this country in 10 years?
Ms. Tavenner. I am not familiar with that.
Mr. Latta. OK. I advise you, if you can look that up.
Let me give you a couple of examples, because again, since
you said that you are really not aware of these isolated
instances, again, we are the ones that spend our time in the
car in our districts. One report that came out from one of our
local television stations about a gentleman that they
interviewed that he worked at a restaurant, that he is going to
have his hours cut because the owner of the restaurant said
they just couldn't make the payment when it came on the
insurance side. And so what is going to happen to him is going
to happen to a lot of people in this country. The owner tried
finding other ways of cutting hours instead of cutting the
employees, because he wanted to make sure people have a job.
But the problem is now in this gentleman's case is that he is
going to have less than 30 hours that he will be working a week
and the worker reported that he will lose about $400 a month
with fewer hours having to pay the health insurance. And when
he said he added it all up, he is going to have $27.50 a week
to live off of.
These are not isolated incidences out there.
Let me give you another example. I am getting calls from
colleges and universities. I am very blessed to have quite a
few in my district. These universities and colleges are calling
me saying that the folks out there, these students, are having
their hours cut right now, and they are getting fewer hours. So
it is not only that they are not going to have problems getting
health insurance, but the other problem they are going to end
up with, they are going to have fewer dollars to be able to pay
for their tuition. That is not an isolated incident. That is
going across my district.
Give you another example. I went to two companies not too
long ago, and it is very odd it was back to back with both of
these companies, one had 35 employees, the other had 45
employees. The one with 45 employees had a business that could
expand right now and they said they could double their business
and double the amount of employees up to 90, but they are not
going to do it. Why? Because they will not expand over the
employer mandate of 50.
So what protections out there are we going to have,
especially on the administration side, what protections from
these penalty increases do employers have if they choose to pay
that penalty? Are we going to see this penalty increasing? What
is going to happen to those folks, for the employers?
Ms. Tavenner. I will give you an isolated incident back
about the Affordable Care Act. I met with an individual this
past weekend who was employed State government, lost his job.
He is an attorney. He is back on the individual market. So he
is paying $1,500 a month for his insurance. His agent called
him last week to let him know that with the Affordable Care Act
he could look for that to halve because he would have some
buying power in the small market.
So when I say isolated incidences, I have met with large
employers in Georgia, in Florida, I have met with small
employers. I have been all across this country and I will
continue to do so. And I will try to work with them. But there
are stories of both examples, and that will continue to be the
case.
Mr. Latta. Madam Chair, my time has expired and I yield
back.
Mrs. Blackburn. The gentleman yields back.
Mr. Green for 5 minutes.
Mr. Green. Thank you, Madam Chairman.
Madam Administrator, I am a supporter of the Affordable
Care Act, and I represent a district that has some of the
highest in the country of people who work and are uninsured
because their employers don't provide it. It is in Houston,
Texas. And so we have a lot of challenges. And I know
implementation of the ACA is a work in progress, but I am
encouraged by the good news on rates from States like Maryland,
New York, and California.
My first question is, what is the Federal Government doing
to set up our national exchange in Texas? And when the
federally run marketplace is operational in Texas, can my
constituents count on some of the same things we are hearing on
rates that would be in New York or Maryland or California, high
quality health insurance?
Ms. Tavenner. Yes, you can. And, in fact, we work closely
with the Texas insurance commissioner. They have submitted
their rates, they are on the Federal exchange. They have
submitted their rates as of yesterday, as a matter of fact----
Mr. Green. I didn't know we had--excuse me--I didn't know
we had a rate, we have never regulated rates in Texas.
Ms. Tavenner. Well, they submitted the plans, they are
going to participate on the exchange. We will be reviewing
those in the month of August and then those rates will be
public in September.
I have also spent a fair amount of time traveling in Texas,
and will be back in Texas, because Texas is a huge population
with a huge number of people who can be benefited from the
Affordable Care Act. And when we release the navigator grants
later this month, there will be a lot of people on the ground
in Texas helping get folks signed up.
Mr. Green. OK. And I am disappointed in our Governor and
our legislature not being able to expand Medicaid. It will
leave a lot of my constituents without access to health care.
One of the concerns I have, the politics of the Affordable
Care Act and Medicaid expansion has no place in our DSH
procedures. And your office and myself, plus a number of
Members, have been working on a problem we have with certain
children's hospitals, one in Houston, Texas, but also in other
parts of the country. I appreciate your work on that. I just
heard that CMS has rejected any efforts on that.
My concern is, is that because Texas made a decision to
reject Medicaid expansion or set up an exchange or partnering
exchange, that shouldn't have any influence on the decision
that we are working on for the children's hospitals. And let me
talk a little bit about that.
Our office and members of the committee, that CMS
regulations are now saying that freestanding children's
hospitals are required to declare payments received from
patients with private payers who, if they didn't have that
private pay, would be counted as they would be under Medicaid.
But since they have it, CMS has made the decision now that they
are going to count those private payers as reductions in,
frankly, Texas Children's Hospital in Houston. That would wipe
out their DSH funding. We are fortunate, thank goodness, that
we have some folks who can be covered who, if they weren't
working, didn't have insurance, they would be under Medicaid.
It seems like it is, you know, why would you count them against
their Medicaid allocation and hurt their DSH funding?
I know we have tried to work together, but I just heard
that there was a decision made, and I would hope you would
continue and CMS would continue and delay that decision until
we can find out a way we can do it. If we can't do it
administratively, it is a bipartisan issue, we will have to
find some vehicle to do it. But it seems like you are punishing
folks, children's hospitals, who have an opportunity to have
these folks to have insurance. And if they didn't they would be
under Medicaid and they would be counted. I don't know why that
decision was made.
Ms. Tavenner. Well, I will continue to work with you and I
can come meet with you on that topic. But one thing I will
remind you on Medicaid and the DSH is it is in the President's
proposed budget to delay the Medicaid DSH funding cuts--
separate issue, but obviously affects your facilities--for 1
year to give States such as Texas an opportunity, if they
decide to pursue the Medicaid expansion.
So we understand that some States might not be able to do
it in year 1, but may be able to be on board by year 2, so the
President is trying to take that into consideration.
Mr. Green. And we would hope by year 3 or 4 or 5 that a lot
of these folks who show up--although in Texas, because we have
a very lean Medicaid program, they may not even be qualified
for that. So, anyway, I appreciate your working with us. And
also I wanted to keep in touch on what we are doing to roll
out, because a lot of us in Texas are planning to do a lot of
aggressive effort over the next month, and even into September,
for October 1st.
Ms. Tavenner. And I will say your hospital association has
been wonderful working with us.
Mr. Green. OK. Thank you.
I yield back the time.
Mrs. Blackburn. The gentleman yields back.
Mr. Lance, 5 minutes.
Mr. Lance. Thank you, Chairwoman Blackburn.
Good afternoon to you, Administrator. I have not met you. I
look forward to working with you. Congratulations on your
appointment, and congratulations also on your confirmation, not
an easy feat.
Regarding Medicaid, it is my understanding that, whether or
not a State has decided to participate in the Medicaid
expansion, all States are now required to use a single
streamlined Medicaid application. Is that accurate,
Administrator?
Ms. Tavenner. That is correct.
Mr. Lance. And as I also understand it, the application
requires CMS approval and must be compatible with the
application for the Federal exchange. And I believe that this
streamlined application is supposed to be available for
consumer use by October. Have you yet approved the streamlined
application or when do you expect to be able to approve such
application?
Ms. Tavenner. So the streamlined application has been back
and forth, posted for public comment, et cetera, and it will be
approved and available, the final, the end of August.
Mr. Lance. By the end of August, and that will give States
roughly a month before it goes into effect in----
Ms. Tavenner. Many States have already agreed to accept
this application. There are some States who want to do their
own, and we are working with those and approving those. But
they will be approved before October.
Mr. Lance. Thank you. And as a matter of information, do
you know where New Jersey is in that?
Ms. Tavenner. I do not, but I can certainly find that out.
[The information appears at the conclusion of the hearing.]
Mr. Lance. Certainly. Thank you very much.
Regarding the President's decision, or at least the
administration's decision to postpone for 1 year the effect of
the law as it relates to large employers, that was a decision
of the Treasury, is that right?
Ms. Tavenner. Yes. There are many pieces of the Affordable
Care Act that rest with different agencies, and that rests with
them.
Mr. Lance. And did CMS have any involvement in that? Were
you advised or did you give your position on that before the
decision was made by the administration?
Ms. Tavenner. No. We were not asked to provide input. We
were advised.
Mr. Lance. I see. Thank you.
Regarding the navigators, as I understand it, they cannot
receive direct or indirect compensation from a health insurer,
is that accurate, Administrator?
Ms. Tavenner. There is some conflicts of interest involved
in the navigators.
Mr. Lance. And regarding donations, is a nonprofit group
permitted to receive donations from health insurers regarding
navigators?
Ms. Tavenner. So navigators are funded through CMS.
Mr. Lance. Absolutely.
Ms. Tavenner. So that is actually separate and apart.
There are some, I am sure, insurers are also working on
their own marketing campaigns. I am not aware of any overlap,
but I can certainly ask that question.
Mr. Lance. Thank you. I have a concern as to how they will
be paid and how the compensation will be determined and will
there be any amounts that might be deemed too high for a
navigator, for the payment of a navigator, and would this
result in the application's being rejected? That is all
currently being worked out?
Ms. Tavenner. Yes, it is. And they will be awarded around
August 15th. But that is part of what we look at today, because
they have to follow all the Federal contracting rules, et
cetera.
Mr. Lance. And we will be advised of that as these
contracts are awarded in the middle of August?
Ms. Tavenner. Yes.
Mr. Lance. Thank you very much, Madam Chairwoman. I yield
back half a minute.
Mrs. Blackburn. Excellent.
Mr. Engel, 5 minutes.
Mr. Engel. Thank you, Madam Chair.
Administrator, welcome. I am sorry, I wish some of my
friends on the other side of the aisle would stop badgering
you. They ought to get over it. The Affordable Care Act was
passed, it was signed into law, and the 2012 Presidential
election was largely held on that. And the last time I looked
the President won and the Republican nominee lost. And we ought
to understand that the Affordable Care Act is here to stay.
This committee played a very important role in the affordable
healthcare act, and I am proud of the role we played, and I
think that history will vindicate us in terms of it.
Some of my colleagues asked questions about rates. They are
concerned about rates. My home State of New York long ago
implemented numerous important consumer protections in the
individual health insurance market, including community rating
and requiring insurers to provide coverage for those with
preexisting conditions. And unfortunately, without an
individual mandate to purchase insurance, New York's health
insurance rates have historically been very high. Therefore, I
was very pleased to see the anticipated rates released last
month for New Yorkers, it was the lead story in The New York
Times, seeking to purchase health insurance in our State-run
exchanges. On average the approved 2014 rates for even the
highest tier plans represent a 53 percent reduction compared to
last year's individual rates. Furthermore the average approve
rates for the benchmark individual Silver plan in New York are
nearly 10 percent lower than the nationwide average previously
forecast by the CBO. These reductions don't take into account
the subsidies that will be available for many New Yorkers
purchasing coverage on the exchange, which will lead to even
lower costs.
So these results tell a far different story than the claims
of rate shocks that we have heard from many Republicans on this
committee. Moreover, far from the Republican myths about the
ACA resulting in a government takeover of health care, the free
market is thriving. There are 17 insurers who have been
approved to participate in our exchange, including eight
carriers who are participating in the New York market for the
first time.
So, Administrator, can you elaborate on the importance of
the individual mandate for reducing costs and helping enroll
people in both private insurance and Medicaid? And some of my
Republican friends on this committee have suggested that the
individual mandate, like the employer mandate, should be
delayed for a year. What would be the impact of a delay of the
individual mandate?
Ms. Tavenner. Well, I think you have actually outlined some
of that for me. The importance of the individual mandate is
that we need all individuals to participate to spread the risk
so that we can have competitive rates. And it actually is the
foundation for the work that is going on with the establishment
of the marketplaces, very different than the employer mandate.
We are pleased with New York. New York is an excellent
example of new carriers entering the market, being able to
decrease rates. We have great working relationships with the
insurers. And I would be remiss if I didn't say that. And part
of their interest in participating, obviously, is it is a
growth market for them. These States represent new strong
applicants. They have been good partners for us. So the
individual mandate is critical.
Mr. Engel. I am going to also congratulate you as the
confirmed administrator of the CMS. It is important to have
one, and we are glad it is you. I also want to say that some of
my colleagues who complained about the President delaying the
employer mandate for a year, they complained when he didn't
delay it, they complained when he delayed it, they would
complain if he did nothing, and they would complain if he
worked. So I think it is clear that they are just complaints at
this point almost for the sake of complaining.
I wanted to raise something that Mr. Green raised and that
is DSH cuts. The Affordable Care Act mandated significant
changes to the Medicare and Medicaid DSH program starting in
fiscal year 2014, and I am frustrated that many States are
choosing to hurt their most vulnerable citizens by forgoing the
Medicaid expansion and in some cases actively resisting efforts
to make the insurance exchanges successful.
The result of these political games will be that far fewer
Americans--uninsured Americans--will gain coverage through the
ACA than originally projected, which undermines the very
premise upon which the ACA's DSH provisions were based.
So I remain a strong supporter of the ACA, but I am
concerned that the ACA's Medicare and Medicaid DSH provisions
could significantly impact New York's hospitals and the
patients they serve, even though New York is doing all it can
to ensure its residents have healthcare coverage.
So could you please generally address CMS' approach to
these DSH cuts and their impact on providers and the concerns
that I have raised?
Ms. Tavenner. Yes. Both of those are in proposed rules.
Obviously, the President's budget would delay the Medicaid DSH
cuts for 1 year. On the Medicare side, we have met with many
constituents. We have listened to their concerns. We have
reviewed their comments. And we are in the process of making as
fair of a process as we can.
Mr. Engel. Thank you.
Thank you, Madam Chair.
Mrs. Blackburn. Thank you.
Dr. Cassidy, 5 minutes.
Mr. Cassidy. Ms. Tavenner, I have got lots of things, but
first I want to clear up the record some. First, as I gather,
you mentioned that the exchanges have been tried, but I have
heard confidentially from a State director, not Louisiana's,
but he does not want to be identified, that the testing with
the States is not going particularly well and there is a
growing concern by the States the exchanges will not be ready.
Ms. Tavenner. So 40 of the States have----
Mr. Cassidy. I will just say that because----
Ms. Tavenner. Well, I am challenging----
Mr. Cassidy. But I only have 5 minutes.
Ms. Tavenner. I understand.
Mr. Cassidy. Secondly, also to clear up for the record, you
mentioned that you had not heard of anybody decreasing hours in
response to the ACA----
Ms. Tavenner. Actually, I said I had heard of isolated
incidents.
Mr. Cassidy. Yes, so isolated incidents. The Bureau of
Labor of Statistics says that involuntary part-time workers
increased by $322,000 in June, and that is a trim which has
been preceding, so that is the Bureau of Labor statistics. We
can get that for the record. The Philadelphia Fed and the New
York Fed have both surveyed and let me just quote from the
Philadelphia Fed. They are both basically the same, though.
``What do you plan to do in the upcoming year in response to
the ACA? Six percent are going to fire or refrain from hiring
to keep below 50 FTEs, 8 percent are going to shift from full-
time to part-time, 18 percent are going to outsource more
work.'' This is objective data from the Fed. I know you have
heard of isolated incidents.
Ms. Tavenner. Congressman Cassidy, I could also present the
same number of reports that say the opposite.
Mr. Cassidy. I have a question for you in just a second. I
just have to clear up the record.
Secondly, my folks on the other side are saying that all
these rate increases are less than the CBO estimate, but let's
just also say that that is not a CBO estimate, it is the
Assistant Secretary for Planning and Evaluation, ASPE, and so
it is kind of a tortured methodology.
And lastly I would like to point out that my friend from
Maryland says, ``Oh, my gosh, Maryland is working hard, it is
really going well.'' Actually, the rate increases for their
folks, young, single, are estimated to be 150 percent. If that
is working well, I don't know what to say about it.
Now, can you show my slides?
[Slide.]
Mr. Cassidy. I am concerned about what is happening in
Louisiana. You may not be able to see that, but if you look at
the top--let me see if I can get the slides here, I can't see
it--this is a young single guy, 26 years old, he is healthy.
And right now--heck, I can't see that, let me just see if I can
get that up here--his income is $33,000. His premium currently
is about $1,200. His premium is going to go to $2,300. Now,
here is a guy whose take home is 33K before taxes, before
paying his student loans, before paying for his car, and we are
going to charge him 1,000 bucks more.
Go to the next slide, please.
[Slide.]
Ms. Tavenner. So could I make a comment?
Mr. Cassidy. I will ask you to comment in just a second. In
just a second. I only have 2 minutes left.
Ms. Tavenner. First of all, those rates are not yet
available for 2014----
Mr. Cassidy. This couple earns $63,000 a year gross, they
currently pay $2,400 for their policy. Under the ACA it is
going to go up to $8,000, a 211 percent increase. Now, if you
were that 32-year-old couple--I would love to be 32 again, I
suppose--if one of us were and we had student loans trying to
buy a house, maybe planning to have a kid, and you are going to
be paying 5K more for insurance, taking things that, frankly,
you don't particularly think you need, would you buy that
policy?
Ms. Tavenner. First of all, let me go back. Louisiana rates
are not published for 2014, so I am assuming it is speculation.
Mr. Cassidy. This is a Blue Cross Blue Shield that they
have released.
Ms. Tavenner. Speculation.
Mr. Cassidy. Well, it is speculation, but I can tell you,
Blue Cross Blue Shield----
Ms. Tavenner. OK. But on the first one I will remind you
that I am assured those premiums----
Mr. Cassidy. Can you tell me five States that you think are
going to have lower rates in the individual market than
relative to the pre-ACA baseline for an equivalent policy?
Ms. Tavenner. Absolutely.
Mr. Cassidy. New York.
Ms. Tavenner. California. Oregon.
Mr. Cassidy. No, California, that is not baseline and I can
show you that that is comparing to the small group market.
Ms. Tavenner. So you asked me to name five states.
Mr. Cassidy. But California is not true. You are being
disingenuous.
Ms. Tavenner. Oh, I am very true.
Mr. Cassidy. They are comparing--and you know this, Ms.
Tavenner, you are so smart--they are comparing relative to the
small group market, not to the individual market. It has been
shown----
Ms. Tavenner. So the States would be California, Oregon,
Washington, Maryland, New York, OK.
Mr. Cassidy. Washington? OK. Let's just move on, because
frankly we have a question of fact here, but we can clear that
up.
Ms. Tavenner. And by the way, that young guy, he is also
eligible for catastrophic, and he can probably get that for 100
bucks a month.
Mr. Cassidy. OK. That is a nice segue here. We had Mr.
Cohen come and testify. He said that only dollars, if somebody
took an HSA with a high deductible health plan that as regards
calculating the MLR, only the portion of the HSA that was
spent--that was spent--would count towards actual expenditures.
If the person decides to save that dollar, husband it, if you
will, then that would not count as an expenditure, it would
count against the insurance company as regards their MLR. Is
that your understanding of how the HSA----
Ms. Tavenner. I am happy to take a look at that.
Mr. Cassidy. OK, well, that is great.
I have 16 seconds left, but I can't get my next question. I
yield back.
Ms. Tavenner. That 32-year-old----
Mrs. Blackburn. Gentleman----
Ms. Tavenner [continuing]. Is speculative as well.
Mrs. Blackburn. Gentleman yields back.
Dr. Olson.
Mr. Olson. Thank you, Madam Chairwoman, for holding this
hearing.
And thank you, Administrator Tavenner, for joining us.
As some of my colleagues already pointed out, there are 2
months until the exchanges are open for enrollment, 61 days to
be exact.
Ms. Tavenner. Yes, I have a calendar in my office.
Mr. Olson. Yes, ma'am. My own State of Texas has opted to
take part in a Federal exchange, and there is a real lack of
information about what Texans need to know. The people I
represent in Texas 22 are scared of Obamacare. They feel like
they have been disrespected and not given information.
A couple of examples. They were stunned when the former
Speaker told our Federal colleagues in Congress that they had
to vote for the Affordable Care Act so they could figure out
how it works later. Stunned. They threw their hands up. When
the administration quietly announced that the heart of
Obamacare, the employer mandate, was going to be
unconstitutionally delayed, they are wondering what is going to
happen next? What shoe will fall next?
And these Texans, who are struggling in this jobless
recovery, are being told that they are going to lose a quarter
of their salary, 25 percent, because of Obamacare's
redefinition of a full-time employee from 40 hours per week to
30 hours. They are being called a 29er. They have no idea what
that means.
They hear that one of the biggest proponents of this law on
Capitol Hill is calling it a train wreck. They find out that
last week, and now in The Washington Post today, that the labor
unions, big proponents of this bill, this law, wrote a letter
to Democrat leadership here in Congress saying that, and this
is a quote, the Obamacare ``will shatter not only our hard-
earned benefits, but destroy the foundation of the 40-hour work
week that is the backbone of the American middle class''--
``destroy the foundation of the 40-hour work week that is the
backbone of the middle class.''
All they have heard from the administration for 3 years, 4
months, and 7 days since Obamacare was signed into law is all
is well, everything is fine. And, ma'am, you sort of said that
today. With all due respect, they are not buying that spin.
I have tried to help my constituents. I went to
HealthCare.gov, the page that says how can I get ready to
enroll in the marketplace, for some information for them. Here
are some of the bullet points it gives to them, profound bullet
points. Number one of them, gather basic information about your
household income, say your budget. And the one I want to talk
about most, ask your employer if it plans to offer health
insurance in 2014.
And at the risk of going to a parallel universe, and
following the lead of Chairman Pitts, Chairman Murphy, Mr.
Terry, and Mr. Scalise, ma'am, every time I have gone home in
the 3 years since this bill has been law every single time I go
to a small business they have all said--who provide health
insurance for their employees--Congressman, I have a plan to
get rid of health insurance. It is good for my business, that
is why I got it, I get better employees, I retain them, but I
have to compete in the market. And it costs me, I have heard
the minimum is $6,000 per employee, per year, minimum. That is
twice as much as the maximum penalty they will get under
Obamacare. So automatically if one of their competitors drops
off, they will have a huge competitive advantage, they will be
forced to drop their health care.
And you have said the labor unions, you talked with them.
How about a small business back in Texas or any part of the
country that says they will have to drop their health care? Yes
or no, ma'am?
Ms. Tavenner. I have talked with lots of small businesses,
none of them said they were dropping their health care.
Mr. Olson. None?
Ms. Tavenner. None.
Mr. Olson. That is a parallel universe, ma'am. Come on down
to Fort Bend County. It is the most diverse county in America,
Hispanic small businesses, Asian small businesses, African-
American small businesses, white small businesses, they will
all tell you this thing is a train wreck, I am going to
probably drop my health insurance because I have to compete. I
cannot believe that no one has told you----
Ms. Tavenner. I actually talked to over 1,000 small
businesses in Miami a couple of months ago. And what they are
doing is they are trying to learn about the law and see if they
can make it work for them.
Mr. Olson. These guys are trying to make it work, ma'am,
but it is not economic, $6,000 per year as opposed to $3,000,
that is huge costs savings for a competitor. They will be
forced to drop their health care. This bill again is a train
wreck. I would love to have you come down to Fort Bend County,
Texas, and take you around and meet the small business people I
have met.
Ms. Tavenner. I am happy to do that.
Mr. Olson. Yield back the balance of my time.
Mrs. Blackburn. Gentleman's time has expired.
Mr. Johnson, 5 minutes.
Mr. Johnson. Thank you, Madam Chairman.
What did you do, Billy?
Mr. Long. I don't want to get blamed for this.
Mr. Johnson. This is an awfully big seat to sit in.
Ms. Tavenner, my colleague asked you about small businesses
that have said they are dropping their health coverage. You
said you have not talked to any. We have talked to hundreds, if
not thousands, across America. If we give you a list will you
add them to your call list so you can talk to some American
businesses that are struggling with this? That is a simple--
that is a simple--you will either do it or you won't.
Ms. Tavenner. Of course I will do it.
Mr. Johnson. OK. Great.
Ms. Tavenner. I think anyone would tell you, I have a
complete open door policy.
Mr. Johnson. Great. All right. Great. We are going to give
you that list and get you to call some of them.
Ms. Tavenner. I am fine to take that list. I get hundreds
of emails a day.
Mr. Johnson. The preexisting condition insurance program
was supposed to last until 2014. You closed enrollment to this
recently, Correct?
Ms. Tavenner. The PCIP program?
Mr. Johnson. Yes.
Ms. Tavenner. Yes.
Mr. Johnson. OK. The Early Retiree Reinsurance Program was
supposed to last until 2014. You closed enrollment for this in
2011, correct?
Ms. Tavenner. No, I think they were to last----
Mr. Johnson. When did it close?
Ms. Tavenner. Could I finish my sentence, please?
Mr. Johnson. When did it close?
Ms. Tavenner. They were to last till 2014 or till the
funding expired, and the funding expired.
Mr. Johnson. When did it close?
Ms. Tavenner. I would have to get you the exact time. But
the funding obviously expired last year.
Mr. Johnson. But you have closed it. You have closed it.
Ms. Tavenner. Yes, because we expended all the funding.
Mr. Johnson. The CLASS program, Obamacare's long-term care
program, this was actually repealed, right?
Ms. Tavenner. I think you would know that.
Mr. Johnson. I am sorry?
Ms. Tavenner. I think you would know that. I am taking your
word for that.
Mr. Johnson. No. You don't know whether the CLASS program
has been repealed or not?
Ms. Tavenner. I said yes.
Mr. Johnson. Well, I am asking you the questions, ma'am.
You are not asking me the questions.
Ms. Tavenner. I said yes.
Mr. Johnson. Was it repealed?
Ms. Tavenner. Yes.
Mr. Johnson. OK. Thank you.
The 1099 reporting requirements, the need for businesses to
report transactions totaling $600, this was repealed as well,
correct?
Ms. Tavenner. I don't know the answer to that one.
Mr. Johnson. You don't know the answer to that one.
Ms. Tavenner. I do not know the answer to that one.
Mr. Johnson. Wow. You have lived a sheltered life.
Ms. Tavenner. I live a busy life.
Mr. Johnson. Full implementation of the Small Business
Health Options Program has been delayed as well, correct?
Ms. Tavenner. I am sorry, could you repeat that?
Mr. Johnson. The full implementation of the Small Business
Health Options Program has been delayed as well.
Ms. Tavenner. The SHOP program has not----
Mr. Johnson. The full implementation.
Ms. Tavenner. The full implementation. The employee choice
has been delayed for----
Mr. Johnson. OK. Great. The employer mandate has been
delayed as well, correct?
Ms. Tavenner. For 1 year.
Mr. Johnson. For 1 year. OK.
This is six Obamacare programs that were closed early,
delayed, or outright repealed. Do you have any knowledge of
other parts of the law that currently may need to be delayed?
Ms. Tavenner. There is another piece of the law that
already was delayed, the basic health plan.
Mr. Johnson. Do you have any knowledge of any other parts
of the law that may need to be delayed?
Ms. Tavenner. I do not.
Mr. Johnson. Have you had any conversations about delaying
any other parts of the law besides those that we have
discussed, you and I here?
Ms. Tavenner. No.
Mr. Johnson. OK.
Well, you know, I have got a fundamental question. You went
to great lengths in your opening testimony to talk about how
the Affordable Care Act was going to take care of working
families. Yet when the administration determined that Obamacare
is not ready for primetime, and I, along with millions of other
Americans agree that it probably will never be, the decision
was to delay the employer mandate. In other words, protect big
business over working families.
Can you please explain to me and this committee and
ultimately the American people why the administration chose to
delay the employer mandate, but they are leaving hard-working
American families out in the cold and still struggling to
figure out how they are going to comply with the individual
mandate?
Ms. Tavenner. I see that as quite the opposite. What the
exchanges and marketplaces will do will allow hard-working
families who today cannot get insurance----
Mr. Johnson. But they are not even--your Web site doesn't
even tell them how they are going to enroll in these things.
And you tell us that it won't be available until the 1st of
October.
Ms. Tavenner. Yes.
Mr. Johnson. I mean what are working families that have to
live by a budget--see, we understand that the administration
doesn't buy into the idea of a budget, but the American people
do. And they sit around their kitchen and dining room tables,
and they have to learn to live by a budget. How are they
supposed to figure out what they are going to be paying and not
paying if you are not going to have this stuff ready until the
day the law goes into effect?
Ms. Tavenner. Well, a reminder that the day the law goes
into effect is 3 months prior to coverage actually starting. So
they will actually have information in October and can begin to
enroll in October for coverage that begins in January.
Mr. Johnson. Well, I submit that the administration and
your Department have made it very clear that your support is
behind big business, it is not behind hard-working American
families as you have tried to indicate that it is.
And with that, I yield back.
Mrs. Blackburn. The gentleman yields back.
Mr. Long for 5 minutes.
Mr. Long. Does my 5 minutes start after I sit down?
Mrs. Blackburn. Yes, sir.
Mr. Long. Thank you.
And thank you for being here today, giving your testimony.
And for the record, I have been here 2 hours and 42
minutes. I took about 3 minutes to walk out and get a cup of
coffee in the breezeway out here. But when we have these
committee hearings I try and attend them, and I try and stay,
because I really try and drill down and figure out what the
real problems are. And I think that you and anyone else would
agree that there is a lot of problems with the implementation
of this bill. The bill, if I remember right, was 2,600-some
pages. I am 6'-1''. I have got a picture of myself standing by
the regulations so far that have been written for this bill
that are about a foot and a half above my head stacked flat on
the floor, the regulations.
And unfortunately, on the other side of the aisle, where
there is one person now, people come in and sit down, you know,
hit and run I call it. They come in and criticize what we are
trying do on our side of the aisle here, and they haven't even
heard the testimony. They don't know what we have heard from
people, they don't know what the other members have asked you.
So I appreciate you sitting through the full 2 hours and 45
minutes, because I did miss 3 minutes of it.
And I believe during one of those questionings the
gentlelady from the Virgin Islands asked you about this ad that
is in today's paper. And actually, this is an ad in today's
Washington Post, but it is a copy of an editorial that was in
the Wall Street Journal back July the 12th. And I think, and
correct me if I am wrong, but she said, the Affordable Care Act
threatens to harm our members by dismantling multiemployer
health plans. That is from the International Brotherhood of
Electrical Workers. And you said that is not right, correct?
Ms. Tavenner. I said I do not agree with that, that is
correct.
Mr. Long. Yes. OK. I don't want to put words in your mouth.
And then she also said that, according to the National Treasury
Employees Union, that it will take coverage away from employees
who already receive it through their employers. And you don't
agree with that either, do you?
Ms. Tavenner. Well, I think what you are referring to here
is some of the Taft-Hartley. And most of those employees are
not eligible for tax credits. And I will remind you it is a
very small individual----
Mr. Long. Take coverage away from employers who already
receive it through their employer.
Ms. Tavenner. I don't understand that statement.
Mr. Long. OK. But I was thinking that you had disagreed
with it earlier.
How much time we got? Two-and-a-half. OK. Here we go.
With those two things fresh in your mind, that the
Affordable Care Act threatens to harm our members by
dismantling multiemployer health plans, and you said you didn't
agree with that--and again, that is from the IBEW workers--I
apologize for my throat. I have been fighting this croup for a
week.
In my questioning, I would like to focus on the private
insurance market reforms enacted under Obamacare and the effect
they are having on dozens of businesses across the State of
Missouri. Since 2006, the Missouri Association of Manufacturers
has operated two healthcare consortiums, commonly referred to
as multiple employer welfare arrangements. These groups now
consist of 57 midsize employers that provide good, affordable
health coverage to over 2,500 families that live in the State.
Final rules relating to Obamacare's market reforms were issued
in February of this year and state that in the case of the
Missouri manufacturers healthcare consortiums any employer with
fewer than 50 employees will be subject to strict new rules
under the group market.
Eighty-one percent of employers covered under these
consortiums have fewer than 50 employees. And this ruling will
result in breaking apart their current arrangements and end the
unique benefits and protections afforded to their employees. As
President Obama promised years ago to these families, if they
like their current healthcare coverage and want to keep it,
they can. But sadly, it appears that that is not going to be
the case.
While my staff attempts to get a final determination out of
your agency on the future viability of these health plans, I
would like to ask you some questions directly, yes or no, if
you would, please.
Do you believe that these thousands of employees who do not
want to lose their current coverage should be allowed to keep
it? Yes or no?
Ms. Tavenner. I would have to understand some of the
details around this. I am not familiar with this, but I am
happy to sit down with you and go through it, or with your
staff.
Mr. Long. OK. Well, it is a group of manufacturers, and
maybe one has got seven employees and one----
Ms. Tavenner. No, I understand that. But I don't know what
their current coverage is. You know, I don't know how much it
costs----
Mr. Long. Well, they have been told that they can no longer
do this consortium thing if they are under 50. I mean, the
point is----
Ms. Tavenner. They have not been told that by me. I am
happy to sit down with them and review it, but I can't answer--
--
Mr. Long. They would love to talk to you, and we will set
that up. And is your agency dealing with similar multiemployer
arrangements across the Nation and also effectively forcing
them to end their current health benefit plan? You haven't
heard of this?
Ms. Tavenner. I cannot answer that yes or no. I am happy to
deal with this on a case-by-case basis.
Mr. Long. OK. But you don't know if similar multiemployer
arrangements have been--you don't have anybody come to you and
say, hey, we have got a group of different employers and they
are not going to be able to keep their coverage?
Ms. Tavenner. I have not had anyone come to me. But that
doesn't mean it doesn't exist.
Mr. Long. OK. That is my question. OK. Yes, OK.
And then once these new rules do eventually break up
Missouri's healthcare consortiums, where would you suggest
these employers and families go for similar affordable
comprehensive coverage?
Ms. Tavenner. Once again, I would have to sit down with
them and see what----
Mr. Long. I will get you with those people. And I
appreciate it. And I know I am over my time, but earlier you
said that these exchanges were going to be affordable, I
believe you said, and a lot of people were going to be saving a
lot of money on the exchanges. Is that accurate?
Ms. Tavenner. Yes, I do believe that people will save
money.
Mr. Long. OK. If you would----
Mrs. Blackburn. The gentleman's time has expired.
Mr. Long. OK. Thank you.
Mrs. Blackburn. Ms. Ellmers, 5 minutes.
Mrs. Ellmers. Thank you, Madam Chairman.
And thank you, Administrator Tavenner, for being with us
today. In your opening statement you had mentioned your
previous----
Ms. Tavenner. Yes, I saw your background as well.
Mrs. Ellmers [continuing]. As nursing, and also as a
hospital administrator.
Ms. Tavenner. Yes.
Mrs. Ellmers. Which leads me to some of my questioning
today. I would like to go back to some of the discussion that
was had by a couple of my colleagues. After the Treasury had
come out with the employer reporting requirements being delayed
for a year, you were asked by a couple of my colleagues, you
know, did you express concern that the integrity of the
employer verification system would be compromised? And you
indicated no, that you had not done that after the delay was
implemented. Is that correct?
Ms. Tavenner. That is correct.
Mrs. Ellmers. OK. Are you aware that you have previously
issued a rule, on January 22nd, 2013, that stated that you--and
I am quoting--``reporting under section 6055 and 6056 of the
code,'' that is the employer mandate, ``could greatly
contribute to the integrity of the employer verification into
the future''?
Ms. Tavenner. I am happy to take a look at that.
Mrs. Ellmers. OK. So yes or no, you are going to take a
look at it?
Ms. Tavenner. I am not doing a yes or no.
Mrs. Ellmers. OK. Because I have that here as fact.
Ms. Tavenner. I am happy to take a look at it.
Mrs. Ellmers. OK. So you are not going to indicate whether
that is true or that is not true?
Ms. Tavenner. No, I would have to pull what I have done,
take a look at it, and I am happy to verify that----
Mrs. Ellmers. OK. So you can't comment on a rule that you
put forward?
Ms. Tavenner. I put a lot of rules forward, as you know.
Mrs. Ellmers. OK. Well, we would like that for the record
for committee, please. Thank you.
Ms. Tavenner. I am happy to do that.
[The information appears at the conclusion of the hearing.]
Mrs. Ellmers. OK. The next thing is the asset verification.
Now, one thing I would like to clarify is CMS essentially is,
you know, the governing body or the agency that is going to
make sure that the coverage, the exchanges, that Medicaid, you
know, will be implemented, and that you are overseeing that,
correct?
Ms. Tavenner. Yes.
Mrs. Ellmers. Yes. So when we are talking about HHS, HHS is
actually over you, and essentially the decisions that they are
making at that level will affect you, but not necessarily in a
direct fashion, but almost in an indirect fashion.
Ms. Tavenner. I usually am part of the senior management
team of HHS.
Mrs. Ellmers. OK. OK. Great. So my question for you is, do
you agree that because the asset verification is also going to
be kind of put aside and we are going to be on an honor system,
that this can contribute to fraud and abuse? That individuals
who are going to the exchanges would possibly put forward
information that they could be mistaken about or that they just
feel that they are putting in information so that they can get
a subsidy?
Ms. Tavenner. Are you talking about income verification?
Mrs. Ellmers. I am talking about income verification and
insurance verification. By delaying this, do you believe that
that could contribute to fraud and abuse?
Ms. Tavenner. No.
Mrs. Ellmers. OK. So you said no. OK. Let's stop there. If
the answer is no----
Ms. Tavenner. No, you are asking about--are you asking
about income verification? I am confused.
Mrs. Ellmers. OK. Income verification or insurance
verification by an employer. Either one or both.
Ms. Tavenner. OK. On the front end, remember we are doing
100 percent review of this, so if you ask me----
Mrs. Ellmers. OK. On the front end. But that is put aside.
The verification process will be on the back end, correct?
Ms. Tavenner. Not for income, no, it is on the front end.
Mrs. Ellmers. OK. So----
Ms. Tavenner. That is why I think I am confused with what
your question is.
Mrs. Ellmers. OK. So the asset verification, so the
understanding that we all have----
Ms. Tavenner. Do you mean employer verification?
Mrs. Ellmers. No, I am not talking about employer
verification.
Ms. Tavenner. OK.
Mrs. Ellmers. I am talking about the rule that came out by
HHS a couple of days after. That is what I am talking about.
OK. So let's just stop there.
Ms. Tavenner. It is income verification, I think.
Mrs. Ellmers. OK. We are talking about income verification.
Mrs. Tavenner. I think you are confusing it with asset. We
don't look at individual assets.
Mrs. Ellmers. OK. Assets, income, you know, money.
Ms. Tavenner. Income is what we look at, right?
Mrs. Ellmers. Money. OK. Income verification. Do you or do
you not believe that that could contribute to the possibility
of someone fraudulently putting information forward?
Ms. Tavenner. I don't know. I think there is a very small
world of individual----
Mrs. Ellmers. OK. Well, let's move on. Now, I do want----
Ms. Tavenner. I really didn't answer that, right?
Mrs. Ellmers. Well, but you are not answering.
Ms. Tavenner. I am trying.
Mrs. Ellmers. In your opening statement you discussed--and
I am with you, I want to see as many people as we can get
coverage, insurance coverage, affordable insurance coverage.
But isn't that really your goal? I mean, you know, as far as
income verification, whether there is insurance being provided,
isn't your goal really to just get as many people on this
exchange as possible so that it prevents the possibility of
moving forward for the actual verification and actual removal
of the subsidy or having to pay back that money, because of
your background?
Ms. Tavenner. Once again, we are doing 100 percent review
of income verification, so I don't understand your question.
Mrs. Ellmers. OK. So you are saying that up front there
will be 100 percent income verification.
Ms. Tavenner. Correct.
Mrs. Ellmers. OK. And I would like for you to provide to
the committee that information as well, because that is not our
understanding.
Ms. Tavenner. That is fine.
[The information appears at the conclusion of the hearing.]
Mrs. Ellmers. Thank you.
And, Madam Chairman, I yield back the remainder of my time.
Mrs. Blackburn. Mr. Harper, 5 minutes.
Mr. Harper. Thank you, Madam Chair.
And thank you, Ms. Tavenner, for being here and for your
testimony. And I also would like to tell you how much I
appreciate your personal involvement with compounding
pharmacists in Mississippi and our discussions with you towards
our shared goal of maintaining access to necessary pain
medication for some of Medicare's most vulnerable
beneficiaries.
It was recently announced that the administration would be
delaying the law's employer mandate until 2015. One of the
reasons cited by the administration for delaying was to provide
time to adapt health coverage and reporting systems while
employers are moving toward making health coverage affordable
and accessible for their employees, thereby decreasing the
amount of uncompensated care that hospitals must provide.
As you are aware, hospitals, which certainly are large
employers and a crucial component of our medical landscape, are
also faced with navigating a multitude of regulations. Delaying
DSH cuts would grant these medical providers the same stability
recently afforded other employers. If the mandate to provide
new coverage is to be delayed, then so should any corresponding
cuts to reimbursements for uncompensated care.
In light of this decision, is the administration taking
steps to delay the cuts to the DSH payments, to the
disproportionate share hospital payments?
Ms. Tavenner. In the President's proposed budget for 2014
there is a request for delay of Medicaid DSH cuts for 1 year.
Mr. Harper. So you would agree that the administration has
that authority to do that?
Ms. Tavenner. It is in the President's proposed budget for
Medicaid, yes.
Mr. Harper. Thank you.
Just last week I received an email from a gentleman in
Ridgeland, Mississippi, in my district. Forrest Collier is his
name. And he noted that his family's healthcare premiums
increased from roughly $8,000 last year to nearly $19,000 this
year. That is an incredible jump. So we have a family in my
home State that has seen their premiums jump from $8,000 to
$19,000 a year.
Not only does this limit Forrest's ability to provide for
his family, but this rate shock also has kept the Colliers from
doing the things that they enjoy most. In Mr. Collier's words,
he said in his email, ``Obamacare is a train wreck and is
having a huge impact on working families.'' You know, he is
right, and this is not what Mississippi families were promised.
Ms. Tavenner. So I actually think, obviously, Obamacare,
from his perspective, rates have not gone into effect yet. But
what he is experiencing is what is in my written testimony, is
the last decade of double-digit, triple-digit increases. That
is what the Affordable Care Act is designed to correct.
Mr. Harper. And if I may say this, he is not the first
person, he wasn't the one who coined the term train wreck.
Actually, there have been Democratic Senators who voted for it
who are declaring this a train wreck themselves. But the
American people were promised time and again that working
families would see a $2,500 drop in premiums. And in your
testimony, and you claim, and I paraphrase, that there is
growing evidence that these reforms are working for the entire
system, keeping costs low for consumers shopping for coverage
in the private health insurance market.
How can the administration make this claim when Mr.
Collier's testimonial proves otherwise, the other questions
that we have had here? And interesting, it appears that the IRS
chief Danny Werfel--not the quarterback from Florida, but the
current IRS chief--said that he wanted to keep his healthcare
plan and not switch to Obamacare. And so I just see that that
has been reported. And of course the National Treasury
Employees Union has done the form letter. And so, you know, I
know you have said----
Ms. Tavenner. So going back to your first question about
costs, if you look at Medicare cost trends, it is at an all-
time low. Medicaid is the same. And if you talk to large
employers, as I have, particularly in Georgia, they will tell
you that their cost trend is at the lowest.
Mr. Harper. And that is so contrary to what we are hearing
in my State and from others that we have had. And I know you
have talked to people all over the country. I have talked to
people all over the State of Mississippi, more than even just
my district, small and large as well. And the trend is greatly
increasing. And we are also having people----
Ms. Tavenner. So I think that in the individual----
Mr. Harper. I am going to give you a chance, OK?
Ms. Tavenner. OK.
Mr. Harper. But let me say this. And I do, again,
appreciate your hospitality on our phone calls. But I do want
to say this. I have had numerous people, employers and the
employees, who said they have gone to part-time hours. So I
think that your statement earlier in your testimony you might
want to take another look at, because that is contrary to what
we are seeing. And I thank you for your time today. Thank you.
And I yield back.
Mrs. Blackburn. Mr. Kinzinger, 5 minutes.
Mr. Kinzinger. Thank you, Madam Chair.
And again, thank you for being here. I am sure you are
enjoying every moment of this. But we love having you in front
of us. And I appreciate your service to your country and being
here. I don't know why I am getting echo here. It is probably
you.
Mr. Griffith. That is what I was thinking. It must be
Pompeo.
Mr. Kinzinger. I will see if that one works. All right.
This is better.
I wanted to dovetail on what I heard a little earlier. I
have not really had any small business tell me that this was
going to work out for them. In fact, all we have been hearing,
and I talk to small businesses and regular big businesses all
the time in my district, and we consistently hear about their
concern about this, what it is going to do. In fact, a lot of
folks have said that they have held off on hiring people
because they don't know what this is going to mean.
So I don't know, if you haven't heard from it, maybe we
could set up a hotline or something where people can call, or
an email address where they can tell their stories, because I
guarantee you----
Ms. Tavenner. So I am happy to work with your staff and set
up as many conversations as you would like.
Mr. Kinzinger. That would be wonderful. Let me just ask
you, I just have a few quick, hopefully, questions. Do you know
how many agencies are involved with implementing the healthcare
law?
Ms. Tavenner. How many agencies?
Mr. Kinzinger. Yes.
Ms. Tavenner. I wouldn't know exact numbers. There are
obviously multiple. We are at least working with eight other
agencies.
Mr. Kinzinger. How many? What would you estimate? I mean,
if you had to say.
Ms. Tavenner. I am happy to get that information for you. I
wouldn't make a guess.
[The information appears at the conclusion of the hearing.]
Mr. Kinzinger. OK. And how often are you in contact with
the other agencies implementing this healthcare law? So who are
some of the other ones you are in contact with? How often are
you talking to them?
Ms. Tavenner. So I think for our staff, because of the
testing of systems, they are in frequent contact with other
agencies.
Mr. Kinzinger. Is there, like, a regular interagency
meeting on the implementation that happens?
Ms. Tavenner. Yes.
Mr. Kinzinger. How often is that?
Ms. Tavenner. I actually think it is monthly.
Mr. Kinzinger. OK.
Ms. Tavenner. But I can get back with you with the details.
[The information appears at the conclusion of the hearing.]
Mr. Kinzinger. Is there a deputies or other regular kind of
meeting convened by the White House staff on implementation?
Ms. Tavenner. I don't know the answer to that, but I can
get it for you.
Mr. Kinzinger. OK. So you don't know if the White House
is----
Ms. Tavenner. I am sure the White House is meeting. I am
just saying I can't give you specifics. I would rather not
speculate as I am sitting here in front of the committee. So I
am happy to get you that information.
[The information appears at the conclusion of the hearing.]
Mr. Kinzinger. OK. And as the head of CMS, how are you
briefed on the implementation of the law as it is being
implemented?
Ms. Tavenner. How am I briefed?
Mr. Kinzinger. Yes, how do they brief you?
Ms. Tavenner. Oh, we talk about this daily, as you might
imagine.
Mr. Kinzinger. So is it like an official brief, or is it
kind of a spitballing, like here is what is going on?
Ms. Tavenner. We have weekly operations meetings. We have
informal briefings every day, as you might imagine, with 61
days left.
Mr. Kinzinger. Sure. Do you guys run a daily implementation
meeting for the agency?
Ms. Tavenner. Pretty much.
Mr. Kinzinger. Do you receive written updates, too?
Ms. Tavenner. Written updates not so much, because you
imagine every day it is much easier do that in an oral.
Mr. Kinzinger. So you get no written updates?
Ms. Tavenner. We have written updates, yes.
Mr. Kinzinger. Would you mind at some point maybe
submitting some of those for the record?
Ms. Tavenner. I don't mind. I think that we have submitted
them in the past, and we are happy to do so.
[The information appears at the conclusion of the hearing.]
Mr. Kinzinger. Good. Thank you. And does the HHS Office of
Health Reform run regular meetings on implementation? And if
so, how often?
Ms. Tavenner. So the Office of Health Reform has been more
on the policy end, so not so much daily implementation. They
certainly participate in some of our meetings.
Mr. Kinzinger. OK. Quickly, again, how much did you say the
healthcare law was going to cost to implement? What is the
latest estimates that you know?
Ms. Tavenner. I think the specific request that I had was
how much had we spent on the hub, and that is $400 million.
Mr. Kinzinger. So does that number include the money spent
on advertising and implementation?
Ms. Tavenner. It does not.
Mr. Kinzinger. Do you know about how much that is?
Ms. Tavenner. I am happy to get you our budget.
Mr. Kinzinger. But you don't have that on the top of your
head, how much is being spent on----
Ms. Tavenner. Well, I mean, I can start down the path. We
are going to award like 50-some million in navigator grants. We
have enrollment and eligibility contractors, which are a couple
hundred million. I mean, I can go through the list, but I just
think it is easier to supply you that on paper. I pretty much
have all those memorized in my head. I just would like to get
them accurate.
Mr. Kinzinger. And I got it. And I appreciate you
submitting that on paper. But this is a public hearing where,
you know, obviously, people want to be updated on how much
their law is costing.
Ms. Tavenner. Yes.
Mr. Kinzinger. So give me like just kind of a big total
number. I don't need all the details----
Ms. Tavenner. So a big total number for our spend, all
inclusive of everything that we are doing?
Mr. Kinzinger. Yes, advertising and outreach and all that.
Ms. Tavenner. Right. Would be probably about $1.3 billion.
Mr. Kinzinger. OK. All right. And where is that money
coming from?
Ms. Tavenner. Well, obviously, part of it is from the
Affordable Care Act, the billion, and then there has been some
secretarial transfer of funding, and then some use of the
prevention fund.
[The information appears at the conclusion of the hearing.]
Mr. Kinzinger. OK. All right. Well, that is all of my
questions. And I thank you again for your time and being here.
And I yield back.
Ms. Tavenner. Thank you.
Mrs. Blackburn. Mr. Bilirakis for 5 minutes.
Mr. Bilirakis. Thank you very much, Madam Chair. I
appreciate it. We are getting a little echo again. OK.
Thank you for being here. I appreciate it very much. Thanks
for being here all these hours.
I have a question, Administrator Tavenner. We are beginning
to hear from States about their increasing concerns with the
new eligibility system and the new requirements for determining
Medicaid eligibility. These concerns are coming from States
that are expansion States, but also non-expansion States like
my State of Florida. Under the President's healthcare law,
Medicaid eligibility will now follow a uniform income
verification standard of modified adjusted gross income
methodology. The question: Is CMS confident that all States
will be ready to transition their existing eligibility policies
to the new eligibility standard on October 1st, about 40
business days from now? That is the first question.
Ms. Tavenner. So what we are doing with States, we have
States in varying degrees of readiness based on their systems
and the changes in their systems. So we have some that will be
fully automated and ready to go, some that have workarounds,
but everyone will be able to move to the new----
Mr. Bilirakis. Specifically, as of today, how many States
will be absolutely ready to implement these changes on October
1st?
Ms. Tavenner. That is a different question. You are asking
me about the marketplaces. All States are ready to implement
the marketplaces.
Mr. Bilirakis. All States will be ready.
Ms. Tavenner. On October 1st, yes.
Mr. Bilirakis. What protections are in place for States
that are forced to make these quick Medicaid eligibility
decisions? What protections are there? Has CMS done any
internal projections and calculations of the cost from
improperly accepting or denying individuals from Medicaid under
the new eligibility requirements? But, yes, first answer me
what protections are in place to protect States.
Ms. Tavenner. So I don't know that I look at it so much for
protections. What we do is we have a team that is dedicated to
working with the States to help them implement their programs
and to help them have systems in place so that we can make sure
that individuals are adequately being screened for Medicaid if
they are eligible. Because each State is different. So we have
individual teams working with each State to help them prepare.
Mr. Bilirakis. OK. Then it is my understanding that there
have been a total of $20 billion in improper--Medicaid
eligibility review has resulted in an average of $20 billion
overpayments each year on the average. Can you share any
projections with this committee with regard to that?
Ms. Tavenner. You are talking about improper payments. And,
yes, we can get you that information.
Mr. Bilirakis. You can get that information to me?
Ms. Tavenner. Of course.
Mr. Bilirakis. You don't have that available now?
Ms. Tavenner. It is public, and I will be happy to get it
to you.
[The information appears at the conclusion of the hearing.]
Mr. Bilirakis. OK. Are you working on a contingency plan
with States in the event that their systems are not ready by
October 1st?
Ms. Tavenner. That is what I am talking about with
workarounds, mitigation, call it whatever you want. But yes, we
have----
Mr. Bilirakis. But you are working on a contingency plan?
Ms. Tavenner. Yes. Of course. As any large business.
Mr. Bilirakis. OK. All right. Very good.
Madam Chair, I ask unanimous consent to enter into the
record two items. The first is a letter from the Florida
Department of Children and Families, where they talked about
the challenges of the new Medicaid eligibility rules and the
need for flexibility meeting the October deadline. And then the
second one is a news story from Reuters about how the insurance
rates in Florida and in Georgia are going to rise
significantly. I ask unanimous consent.
Mrs. Blackburn. Without objection, so ordered.
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Mr. Bilirakis. OK. Thank you very much. Appreciate it. I
yield back.
Mrs. Blackburn. The gentleman yields----
Mr. Bilirakis. Oh, I would like to yield the remaining time
to Dr. Cassidy, please.
Mrs. Blackburn. Without objection.
Dr. Cassidy.
Mr. Bilirakis. Thank you.
Mr. Cassidy. Thank you.
Hey, Ms. Tavenner, I am sorry I couldn't give you time to
answer last time. There is so much to get through. But my
friend yielded to me.
You mentioned that there is going to be 100 percent
attestation for income. But I think we have up there, and again
my bad eyes won't tell me this, but I have it on my computer,
that you had issued a statement earlier. If you look at the
second paragraph up there, this is in the Federal Register,
``To provide relief to State-based exchanges planning to rely
upon this attestation service, we are delaying the date by
which the exchange must implement sample-based review, not 100
percent.'' And it goes on to say, without further verification,
instead of following the procedure in 155.320, et cetera, et
cetera.
So you are providing relief to State-based exchanges, and
the exchange may accept the applicant's attestation regarding
enrollment in the eligible employer-sponsored plan and
eligibility for the qualifying coverage and eligible employer-
sponsored plan. And that just seems different than what you
said, that there is going to be 100 percent----
Ms. Tavenner. Remember, I was talking about 100 percent
review for the Federal exchanges, so for 34 States.
Mr. Cassidy. So California is the biggest State in the
Union, obviously. So you will not have attestation for the
biggest State in the Nation. You are giving them relief.
Ms. Tavenner. I will get you how they are individually
working it for each of the State-based exchanges. That is the
easiest way to explain it.
[The information appears at the conclusion of the hearing.]
Mr. Cassidy. I understand that. But just for the record,
you will not be doing, you are not requiring attestation----
Ms. Tavenner. That is correct.
Mr. Cassidy [continuing]. For California----
Ms. Tavenner. That is correct.
Mr. Cassidy [continuing]. Which is the biggest State. So I
am sorry, I didn't realize that you were speaking only of the
Federal plan earlier. I wish this was earlier in the hearing,
because I am not sure our colleagues appreciated that either.
I yield back. Thank you.
Mrs. Blackburn. The gentleman yields back.
Mr. Pompeo, 5 minutes.
Mr. Pompeo. Thank you, Madam Chairman.
A couple questions, I want to try and get yes or no
answers. We haven't been very successful at getting yes or no
answers today. I would sure appreciate if you would at least
try.
You are involved in running test cases today with private
insurers. Is that correct?
Ms. Tavenner. Correct.
Mr. Pompeo. CMS is, not you. But CMS is involved.
Ms. Tavenner. Yes.
Mr. Pompeo. What percentage of the exchange enrollment test
cases you are running with these private insurers have been
successfully passed?
Ms. Tavenner. So I don't exactly know how to answer that
question. All of them have been successfully passed. So you
test----
Mr. Pompeo. So the answer is 100 percent.
Ms. Tavenner. Yes, you test, you correct, you test, you
correct, and you keep going. So we are about 80 percent
complete on all of our testing throughout, OK? And the last 20
percent would be what you complete between now and October 1.
Mr. Pompeo. Sounds good. I want to ask you whether you
agree with--you talked about California being a model that is
successful to where you are seeing rates go down. Is that
right?
Ms. Tavenner. The rates, yes.
Mr. Pompeo. I want to read you a statement that is in
Governor Brown--noted conservative--Governor Brown's budget,
where he says, ``Large rate increases in the individual
insurance market are likely at the outset due to the
requirement to offer coverage to all individuals.'' Is he just
wrong?
Ms. Tavenner. I am not----
Mr. Pompeo. No, but he made a statement. It conflicts
apparently with what you said. Is Governor Brown wrong?
Ms. Tavenner. I am going to say we were pleased with the
rates, and we have seen a decrease, and so far what we have
seen in terms of published rates, it is actually running about
18 percent below CBO estimates.
Mr. Pompeo. I asked that question, importantly today, we
had someone on the other side say that we are badgering you and
suggested this was conservatives who didn't like the Affordable
Care Act. Governor Brown in California, the State that you all
hold up as the model for what the Affordable Care Act is doing,
in his budget, where he has got to actually balance, suggests
otherwise. And so I suppose time will tell whether you, Ms.
Tavenner, are correct or Governor Brown is correct.
CBO says $12 billion is the cost from the delay of the
employer mandate. Do you agree with that data?
Ms. Tavenner. I saw the CBO estimate.
Mr. Pompeo. Do you agree with the estimate? Do you believe
that is correct?
Ms. Tavenner. I mean, I would have no way----
Mr. Pompeo. But you are responsible for the implementation
of this. You have to have a view. When you made the decisions,
you have to have a view.
Ms. Tavenner. So first of all, I will remind you, the
employer mandate sits with Treasury. Second, I would have every
reason to believe CBO estimates.
Mr. Pompeo. Do you know how 1 year was chosen for the
delay? Why not 11 months and why not 13 months? Do you know how
1 year was chosen? Did you have input into that?
Ms. Tavenner. I did not have input into that.
Mr. Pompeo. So you don't know why it was chosen. Do you
think there is any risk that it will be delayed again?
Ms. Tavenner. I don't have an answer for that either.
Mr. Pompeo. So you think there is some chance that it will
be. You didn't know about it the first time.
Ms. Tavenner. That is not what I said, but OK.
Mr. Pompeo. No, my question is, do you think there is any
chance it will be extended one more time?
Ms. Tavenner. I don't see any reason that it would be.
Mr. Pompeo. No reason. So you think the probability is
zero?
Ms. Tavenner. Yes, I think the probability is zero.
Mr. Pompeo. All right. Time will tell.
You have a series of folks that have talked to you about
things today, you have mostly excused them as anecdote, you
said they were isolated. You have talked about folks with
businesses who were going to get rid of their coverage.
I have a letter that I would like to submit that came from
a doctor in Kansas, Madam Chairman, I would like to submit it
for the record.
Mrs. Blackburn. Without objection.
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Mr. Pompeo. And he talks about the fact that it will be
more difficult for him to run his practice under the Affordable
Care Act and that he thinks throughout Kansas there will be
less access as a result of that. Is he right about that?
Ms. Tavenner. If you are asking are we having good
physician participation on the exchanges, the answer would be
yes. We still have it in Medicare and Medicaid, so we are not
seeing less access. We have always had pockets of access and
coverage that we have been worried about across the country.
Mr. Pompeo. So what should I tell him? Should I tell him to
stop worrying about it, or that he is wrong, or that Ms.
Tavenner assures him he is going to be OK? Which of those three
responses? Because I have got to respond----
Ms. Tavenner. First of all, you can tell him he can talk to
me. OK?
Mr. Pompeo. All right. I am confident he will like to speak
to you.
Ms. Tavenner. But second, what I would tell him is that we
actively work to make sure that we have access in Medicare,
Medicaid, and in the exchanges, and that we are also actively
promoting training. Because we understand as you insure more
people you are going to need more primary care physicians. And
that was also part of the funding of the Affordable Care Act.
Mr. Pompeo. So you are assuring me that we are going to
continue, that we are not going to see large numbers of doctors
have the same view that he is concerned with. Is that right?
Ms. Tavenner. That is right.
Mr. Pompeo. All right. Great. I hope that you are right.
Last, this should be easy for you to answer yes or no. The
President said, if you like what you have you can keep it. Is
that true?
Ms. Tavenner. Yes, it is true for large employers.
Mr. Pompeo. No, no, he didn't put the caveat for large
employers. You just added a caveat. He said, if you like what
you have you can keep it. Is that true?
Ms. Tavenner. It is true, and that is under the assumption
that your insurance is true insurance, that it provides
coverage. Obviously, we have put some protections in place
against insurance that is not true insurance where individuals
are paying monthly fees and then go in to find out, oops, their
hospitalization is not covered, or oops, their cancer care is
not covered. So we put some protections in place around that.
Mr. Pompeo. Madam Chair, I yield back.
Mrs. Blackburn. The gentleman yields back.
Mr. Griffith, 5 minutes.
Mr. Griffith. Thank you, Madam Chair.
Thank you for being with us. I would reference you first to
a Roanoke Times article that is actually a reprint or same day
as the Richmond Times-Dispatch about Virginia, our home State.
And it says that while most localities in Virginia have three
or four plans available, talking about plans that have been
approved by the Virginia insurance folks to be in the insurance
exchange, while most localities in Virginia will have three or
four plans available, several localities in southwest Virginia
will have only one plan offered.
That certainly wasn't what was contemplated when the bill
was passed, was it, that there would be areas that would only
have one plan, one choice? That wasn't contemplated? Yes or no?
Because we only have limited time.
Ms. Tavenner. Congressman Griffith, you know as well as I
do there has only been a history of one insurance plan in
southwest Virginia. It will take time to introduce new plans to
rural markets, and that is an example of a rural market.
Mr. Griffith. And I was surprised that you have indicated
throughout this that you have heard of isolated incidences
where people were laying off or cutting back hours
significantly in light of the fact that the Commonwealth of
Virginia itself, 7,500, according to the Richmond Times-
Dispatch, Washington Post article indicates that maybe as many
as 10,000 Virginia, Commonwealth of Virginia employees are
having their hours cut. You wouldn't consider the Commonwealth
of Virginia as an isolated incident, would you?
Ms. Tavenner. I have heard of the State of Virginia, yes,
and that it would be one of the ones of the isolated incidents
I have seen.
Mr. Griffith. So up to 10,000 employees that are being
impacted are isolated?
Ms. Tavenner. And I will remind you it is up to 10,000.
Mr. Griffith. Let me refer----
Ms. Tavenner. But I don't think they have taken any action
yet. In fact----
Mr. Griffith. Oh, yes, they have, ma'am. It is the law of
the Commonwealth of Virginia as of July 1. It would have been
nice, if the administration was going to delay that, if they
had let folks know before then, because they notified after the
law took effect in Virginia. And so those employees have
already been impacted.
And furthermore, it is not just the Commonwealth of
Virginia. I have counties in southwest Virginia that also have
made some decisions in that regard. And according to a
Washington Post article of July 24th, talking about the
Virginia situation, that is not isolated. They indicate there
that a company called Mercer in that article, which I would
recommend to you, has done a survey, and estimated that 12
percent of the employers in the United States plan to lay off
workers or cut their hours back. This is where we get
frustrated----
Ms. Tavenner. And I can submit to you an equal number of
studies that say quite the opposite.
Mr. Griffith. OK. Well, the Commonwealth of Virginia is not
a study, it is a fact.
Now, that being said, you indicated earlier that you are
willing to talk. Because I have employers all over southwest
Virginia that are concerned. And you indicated to Mr. Kinzinger
that you would be happy to talk with those employers. Is that
also true for my constituents?
Ms. Tavenner. Absolutely.
Mr. Griffith. Thank you very much. I do appreciate that,
because it is a big concern. And I will tell you that, you
know, we are hearing--I mean I have heard from one business
that does deal with the service industry that they are
struggling with what they are going to do. But one of the
things that they might be able to do would be to lay off about
12 or 13 employees on one shift that is their least productive
shift. But if they laid that shift off they wouldn't be covered
because they would have less than 50 employees. For those of us
out in the field on a regular basis, and I know you have said
you have been out there, but you are hearing something
completely different from us.
Also, if I might ask this question. When does the Medicaid
maintenance-of-effort expire for a State that has deferred to a
federally facilitated exchange? Will you be issuing further
guidance on the MOE, as the last guidance was issued before the
Supreme Court decision?
Ms. Tavenner. OK. So the exchange and MOE are two separate
issues, right?
Mr. Griffith. All right.
Ms. Tavenner. But there is guidance out there on
maintenance-of-effort. And I am happy to answer any of your
questions.
Mr. Griffith. When would that expire for a State that has
deferred to the Federal exchange?
Ms. Tavenner. I don't think it is related to the Federal
exchange. And I don't think the MOE expires per se.
Mr. Griffith. So you don't think it will ever expire?
Ms. Tavenner. I am not sure what your question is.
Mr. Griffith. I understand. All right. Well, will get that
question to you so you can get us a question in writing back on
that.
Ms. Tavenner. That would be fine. If you can give me an
example.
Mr. Griffith. Yes. I also will tell you that one of the big
concerns I have, because in those areas where we have limited
health insurance coverage in southwest Virginia, we are also
seeing some real stress on our small rural hospitals.
Ms. Tavenner. Absolutely.
Mr. Griffith. And I am very concerned. Some have already
indicated they are laying off folks because they are concerned
that they won't get enough patients in a particular practice
area. And for some of my people that means in very critical
areas of health care they are now looking to have to drive an
hour and a half to 2 hours to get the care that they used to be
able to get in their hometown. And the folks are saying that
that is directly related to some of the aspects of Obamacare.
Do you have time to comment on that?
Ms. Tavenner. You know that I am very familiar with rural
Virginia----
Mr. Griffith. Yes, ma'am.
Ms. Tavenner [continuing]. And issues of access. I think
they were there before Obamacare.
Mr. Griffith. They were there before Obamacare.
Unfortunately, the stress from Obamacare is making them worse.
I appreciate it and yield back.
Mrs. Blackburn. The gentleman yields back.
And Mr. Long, I think you wanted 30 seconds to finish?
Mr. Long. Thank you, Madam Chairwoman.
Earlier I had mentioned to you about the Missouri
Association of Manufacturers. And my staff has informed me that
they have been in contact with your people, your attorneys in
particular.
Ms. Tavenner. OK.
Mr. Long. So Pete Stehouwer from my office is going to give
you Rita Needham's phone number and email.
Ms. Tavenner. Perfect.
Mr. Long. And if you would promise me that you will get
involved directly with her and talk to her. Because sometimes
it gets at the staff level, through your attorneys, you might
not be aware of it. But it is 25,000 families in Missouri. And
I really appreciate it.
Ms. Tavenner. I will do that.
Mr. Long. Thank you. And thanks for your time here, our 3
hours and 20-some minutes we have been here. Thank you.
Ms. Tavenner. And I am hoping we are near the end, because
I do have some other work to do called 61 days.
Mrs. Blackburn. Well, and I do want to thank you. And I do
want to thank all of our members who have been very patient
today. And we thank you for your testimony. I would ask that
all members remember that additional questions can be submitted
for 10 days, that will be by August 15, the close of business.
Ms. Tavenner, we do ask that you respond very promptly to
these because we are looking at an October 1 start.
And as you can hear, our constituents have questions. They
are very valid. And on both sides of the aisle, there were
questions for you. And they are things that are coming from
constituents who are seeking answers and are not getting them.
So we do thank you for that.
Without objection, this hearing is adjourned.
[Whereupon, at 1:25 p.m., the committee was adjourned.]
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