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<title> - THE PRESIDENT'S FISCAL YEAR 2015 BUDGET PROPOSAL WITH U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES SECRETARY KATHLEEN SEBELIUS</title>
<body><pre>
[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
THE PRESIDENT'S FISCAL YEAR 2015 BUDGET
PROPOSAL WITH U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
SECRETARY KATHLEEN SEBELIUS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
MARCH 12, 2014
__________
Serial No. 113-FC16
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
U.S. GOVERNMENT PUBLISHING OFFICE
21-115 WASHINGTON : 2016
________________________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="6a0d1a052a091f191e020f061a44090507">[email&#160;protected]</a>.
COMMITTEE ON WAYS AND MEANS
DAVE CAMP, Michigan, Chairman
SAM JOHNSON, Texas SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin JIM MCDERMOTT, Washington
DEVIN NUNES, California JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois MIKE THOMPSON, California
JIM GERLACH, Pennsylvania JOHN B. LARSON, Connecticut
TOM PRICE, Georgia EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida RON KIND, Wisconsin
ADRIAN SMITH, Nebraska BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota DANNY DAVIS, Illinois
KENNY MARCHANT, Texas LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio
Jennifer M. Safavian, Staff Director and General Counsel
Janice Mays, Minority Chief Counsel
. C O N T E N T S
__________
Page
Advisory of March 12, 2014 announcing the hearing................ 2
WITNESS
The Honorable Kathleen Sebelius, Secretary, U.S. Department of
Health and Human Services...................................... 6
SUBMISSIONS FOR THE RECORD
The Honorable Jim Renacci........................................ 58
The Honorable Todd Young......................................... 60
The Honorable Xavier Becerra..................................... 70
The Honorable Pat Tiberi......................................... 81
The Honorable Sander Levin (Submission 1)........................ 90
The Honorable Sander Levin (Submission 2)........................ 93
THE PRESIDENT'S FISCAL YEAR 2015 BUDGET
PROPOSAL WITH U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
SECRETARY KATHLEEN SEBELIUS
----------
WEDNESDAY, MARCH 12, 2014
U.S. House of Representatives,
Committee on Ways and Means,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
1100, Longworth House Office Building, Hon. Dave Camp [Chairman
of the Committee] presiding.
[The advisory announcing the hearing follows:]
ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Wednesday, March 5, 2014
No. FC-16
Chairman Camp Announces Hearing on the
President's Fiscal Year 2015 Budget Proposal with
U.S. Department of Health and Human Services
Secretary Kathleen Sebelius
House Ways and Means Committee Chairman Dave Camp (R-MI) today
announced that the Committee on Ways and Means will hold a hearing on
President Obama's budget proposals for the Department of Health and
Human Services (HHS) for fiscal year 2015. The hearing will take place
on Wednesday, March 12, 2014, in 1100 Longworth House Office Building,
beginning at 10:00 a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from the invited witness only. The
sole witness will be the Honorable Kathleen Sebelius, Secretary, U.S.
Department of Health and Human Services. However, any individual or
organization not scheduled for an oral appearance may submit a written
statement for consideration by the Committee and for inclusion in the
printed record of the hearing.
BACKGROUND:
On March 4, 2014, President Obama submitted his fiscal year 2015
budget proposal to Congress. The President's proposed budget contains
his tax, spending and policy proposals for the coming fiscal year,
including his proposed budget for the Department of Health and Human
Services and the programs it oversees and operates. Many of the
Department's programs such as Medicare, healthcare programs under the
Affordable Care Act and Temporary Assistance for Needy Families are
within the Committee's jurisdiction.
In announcing this hearing, Chairman Camp said, ``Reviewing the
budget, I am troubled by the President's decision to ignore what he
once saw as a crisis in our entitlement programs. By leaving out any
real reforms to protect and preserve Medicare, the President has chosen
to provide political cover in an election year when what this country
needs most are solutions that protect both today's seniors and future
generations.
``We also must ask difficult questions about HHS' troubled efforts
to implement the Affordable Care Act. Open enrollment is almost over,
enrollment is behind schedule and the website is not completed. Most
importantly, the American people are facing higher premiums, fewer
healthcare choices and a loss of wages--the exact opposite of what they
need in a tough economy. Administrative delays and exemptions cannot
fix this law, and the Committee looks forward to hearing how Secretary
Sebelius plans to work with Congress to solve this crisis.
``Members also look forward to reviewing the Administration's
proposals affecting human services programs, including those that may
help welfare recipients replace welfare checks with paychecks or assist
youth in foster care become successful adults.''
FOCUS OF THE HEARING:
U.S. Department of Health and Human Services Secretary Sebelius
will discuss the details of the President's HHS FY15 budget proposals
that are within the Committee's jurisdiction.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit
for the hearing record must follow the appropriate link on the hearing
page of the Committee website and complete the informational forms.
From the Committee homepage, http://waysandmeans.house.gov, select
``Hearings.'' Select the hearing for which you would like to submit,
and click on the link entitled, ``Click here to provide a submission
for the record.'' Once you have followed the online instructions,
submit all requested information. ATTACH your submission as a Word
document, in compliance with the formatting requirements listed below,
by the close of business on Wednesday, March 19, 2014. Finally, please
note that due to the change in House mail policy, the U.S. Capitol
Police will refuse sealed-package deliveries to all House Office
Buildings. For questions, or if you encounter technical problems,
please call (202) 225-1721 or (202) 225-3625.
FORMATTING REQUIREMENTS:
The Committee relies on electronic submissions for printing the
official hearing record. As always, submissions will be included in the
record according to the discretion of the Committee. The Committee will
not alter the content of your submission, but we reserve the right to
format it according to our guidelines. Any submission provided to the
Committee by a witness, any supplementary materials submitted for the
printed record, and any written comments in response to a request for
written comments must conform to the guidelines listed below. Any
submission or supplementary item not in compliance with these
guidelines will not be printed, but will be maintained in the Committee
files for review and use by the Committee.
1. All submissions and supplementary materials must be provided in
Word format and MUST NOT exceed a total of 10 pages, including
attachments. Witnesses and submitters are advised that the Committee
relies on electronic submissions for printing the official hearing
record.
2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.
3. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. A supplemental
sheet must accompany each submission listing the name, company,
address, telephone, and fax numbers of each witness.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four
business days notice is requested). Questions with regard to special
accommodation needs in general (including availability of Committee
materials in alternative formats) may be directed to the Committee as
noted above.
Note: All Committee advisories and news releases are available on
the World Wide Web at http://www.waysandmeans.house.gov/.
<F-dash>
Chairman CAMP. Good morning. The Committee will come to
order.
Secretary Sebelius, thank you for joining us today for a
discussion of the President's 2015 budget.
It has been 4 years since Obamacare became the law of the
land, and it has been a bumpy road since then. Millions of
Americans are paying more for health care as a result of the
law.
The Committee will come to order. Please take your seats.
It has been 4 years since Obamacare became the law of the
land, and it has been a bumpy road since then. Millions of
Americans are paying more for health care as a result of the
law, a trend which will only continue to spike as a result of
the failed healthcare exchange launch. All across the country,
low- and middle-class income Americans are seeing smaller
paychecks and working less. Towns, schools, restaurants, and
businesses are struggling to comply with the law, finding that
they are forced to cut hours or hold off on hiring. Millions of
Americans have discovered the plan they have and like has been
canceled or they can no longer rely on the care from their
local doctor or hospital.
I hear about how the healthcare law is affecting
communities like my hometown of Midland, Michigan, and how
families are dealing with the uncertainty this has brought them
and their children.
Unfortunately, despite Republican attempts to provide
Americans relief from the burdens of this law, it appears that
this is a road map of what is to come. We now know, after the
failed launch of the exchanges, that since the Administration
was unable to meet their enrollment targets and failed to sign
up enough young and healthy individuals, premiums will be
higher next year. The Congressional Budget Office has also
found that compared to initial estimates, fewer individuals
will find healthcare coverage through the exchanges, Medicaid,
or employer-sponsored insurance.
And while Democratic leaders promised that Obamacare would
create 4 million jobs, 4,000 almost immediately, the CBO
projects fewer Americans will be working as a result of
Obamacare. In fact, the U.S. economy will see a decline in the
number of full-time-equivalent workers of about 2 million in
2017, rising to about 2.5 million in 2024, according to CBO.
CBO went on to emphasize this should mean, and I am quoting,
``The largest declines in labor supply will probably occur
among lower-wage workers.''
Secretary Sebelius, you have stated that there is
absolutely no evidence, and every economist will tell you this,
that there is any job loss related to the Affordable Care Act.
But the evidence is everywhere. We hear it from employers back
home, from testimony in front of Congress, and we read about it
in the papers weekly.
The law is not working as was promised, and yet the
President's budget doubles down on this law and requests
another $1.8 billion for its implementation. With so many
unanswered questions, it is hard to understand how or why
Congress would approve such a request. I am hopeful you will
shed some light on those questions and provide some answers
today, basic questions such as how much taxpayer money has been
spent thus far and where did it come from, how much taxpayer
money will be spent on subsidies for individuals outside of the
exchange, how much did the failed launch of the exchange cost
taxpayers, how many people have actually paid a premium, and
how many previously uninsured Americans have signed up for
Obamacare?
And increasingly, we must all ask the question, when is the
next delay or next administrative change in the law coming? It
seems not a holiday goes by without a new announcement from the
Administration that delays some part of Obamacare.
Notably missing from this budget is any mention on how we
can secure the promise of Medicare for seniors in the future.
In just a few short years, Medicare will go broke. This
Committee has released numerous discussion drafts, based on
bipartisan ideas, to secure Medicare for current and future
seniors, some of which were included in previous budgets from
President Obama.
We have the opportunity now to work toward reforms that
strengthen the program, and the longer we wait, the harder the
choices we must make will be. We need to have an open dialogue
between the Administration and Congress on this, and I am
disappointed that the Administration has walked away from this
commitment and seemingly provided political cover during an
election year rather than offer solutions.
I appreciate your making the time to be here today, and I
hope we can count on a more open, constructive dialogue between
Congress and the Administration if we are going to make
progress on resolving the law's failures and working toward
solutions for our Nation's seniors.
Before I recognize Ranking Member Levin for the purpose of
an opening statement, I ask unanimous consent that all Members'
written statements be included in the record. And without
objection, so ordered.
I now recognize Ranking Member Levin for his opening
statement.
Mr. LEVIN. Thank you very much.
Madam Secretary, welcome. We really do welcome you here, a
chance to have some dialogue. I hope that is what will occur.
Instead of dialogue, what we have really had from the
Republicans is diatribe. And we are going to see that further
this week when there is an effort to take up our reform on SGR
that is on a bipartisan basis and fund it with essentially the
destruction of ACA.
The New York Times talks about today where the enrollment
is. And it is interesting, the Republicans often used to talk
about Part D and how it proceeded. The Energy and Commerce
Committee is going to come out with a report this morning, and
it is going to turn out that ACA enrollment as a percentage of
projected enrollment is already better than Part D's voluntary
enrollment. So I hope you will be able to set the record
straight. As we know, it is short of the original goal. And I
hope you will address that, where we are, what the figures
really mean. And also you may want to comment that 3 million
young adults have already gained access to health insurance
through their parents' policies, which would not have happened
if it weren't for ACA.
I just want to give one example of what this has meant for
people in this country. A person from Brighton, Michigan, in
her thirties, has lupus, a preexisting condition. She hasn't
had insurance in 6 years because it was simply too expensive.
She lived in constant fear of getting sick or injured, and she
said, and I quote, ``There are lots of things I haven't done. I
used to like to ski and mountain bike, but I know that if I
broke a wrist it would cost me $10,000. It is that constant
worry of what happens if.'' And that uncertainty ended January
1, when her new insurance plan, costing $175 a month, took
effect.
The real contrast is an ad that has been running in
Michigan about a cancer patient, and I won't go into the
details. But essentially, she said her policy was unaffordable
through the marketplace. The ad has been funded over a million
dollars by Americans for Prosperity. It turns out, according to
the Detroit News and others, that that ad and that statement
together are just false. It turns out that this person will
save more than $1,000 a year.
So, Madam Secretary, I hope you will use your time to
acknowledge the problems with the website at the beginning and
put in perspective what has happened since then and where we
are going, and indeed, to have a dialogue. What has been most
short in the discussion of ACA has been dialogue. We welcome
you here and look forward to your testimony.
Chairman CAMP. Well, thank you, Mr. Levin.
Again, I want to now welcome our witness, Secretary
Kathleen Sebelius of the Department of Health and Human
Services.
Again, thank you for being with us today. The Committee has
received your written statement and testimony, and it will be
made part of the formal hearing record. You are now recognized
for 5 minutes for your oral remarks. Thank you.
STATEMENT OF THE HONORABLE KATHLEEN SEBELIUS, SECRETARY, U.S.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Secretary SEBELIUS. Well, thank you, Chairman Camp, and
Ranking Member Levin, and Members of the Committee.
In his State of the Union, President Obama laid out values
that are the backbone of his 2015 budget: opportunity for all,
economic growth, and security, the notion that if you work hard
and take responsibility you should have the opportunity to
succeed in America. Our budget will allow our Department to
move this mission forward.
We start with the fact that every child deserves the
opportunity for a healthy start and a high-quality learning
environment. And as the President has said, research shows that
one of the best investments we can make in a child's life is
high-quality early education. Science has clearly demonstrated
over and over that the return on early childhood investments is
at least seven to one, far exceeding any investment in the
stock market. And the fact of the matter is these investments
are good for our kids, good for our economy, and good for a
family's economic security.
In every State, currently the cost of child care for two
children now exceeds the median annual rent. Our budget puts a
special focus on birth to kindergarten. It brings the total
investment in child care and development funds to $6.1 billion,
so more of our children have access to quality care.
We also propose to expand early Head Start child care
partnerships for more of our children. This allows us to build
on the progress we are making in reforming Head Start. And by
funding the President's Opportunity, Growth, and Security
Initiative, we could provide an additional hundred thousand
children with access to high-quality early learning.
Our global competitors have figured out that investing in
early education makes good economic sense. China plans to
increase the preschool enrollment by 50 percent by 2020. And in
Japan, virtually every 4-year-old attends preschool. So if we
want our children to compete for the global jobs of the future,
these investments really matter.
This budget also extends and expands voluntary home
visitation so we can empower our children's first and best
teachers, their parents.
The investments don't add a dime to the deficit. One of the
ways they are paid for is through an increase to the tobacco
tax, which we know encourages younger Americans from smoking.
But here is the snapshot: Every day more than 3,000 children
try their first cigarette, and nearly 1,000 a day become daily
smokers. So the efforts to reduce their smoking habits are
imperative.
These investments have broad bipartisan support from
governors, from business, military, and law enforcement
leaders, from parents and health providers, and can make a huge
difference in our Nation's prosperity.
Of course no child can learn with a toothache that his or
her family can't afford to have treated. No family can save for
college when they are drowning in medical bills. This budget
protects the progress we are making in helping more Americans
obtain the opportunity of affordable health coverage.
Yesterday, we announced that 4.2 million people had signed up
through the end of February, which is an increase of 29 percent
in the month of February in the number of signups. The number
of people choosing a plan every day last month also increased
from an average of 32,800 in January to 34,000 a day in
February. We expect that number to rise by the March 31st
deadline, as more Americans learn how affordable the
marketplace coverage can be. We also know that we have had a
total of 8.9 million people, as the last Medicaid report
indicated, that have been determined eligible for either
renewal or new Medicaid benefits.
Now, one of our best tools also for expanding access to
health care are the community health centers, which are
throughout our urban and rural areas. This budget invests to
help them serve an additional 31 million Americans at new and
existing sites. The budget also protects our seniors by
increasing investments for elder justice to protect them from
abuse, neglect, and exploitation. It protects consumers with
additional resources to help the FDA oversee the safety of our
food supply and pharmaceutical resources. It expands the
efforts to protect hospital patients from healthcare-associated
infection.
And because the opportunity, growth, and security mean very
little when a family faces unemployment, the budget is a job
creator. It invests in industries that drive our economy,
innovation, science, and discovery. The investments fuel
entrepreneurship and economic growth, while saving lives, the
NIH-funded BRAIN Initiative, vaccine development, and other
innovative products.
Through the Health Care Workforce Initiative, the budget
expands the National Health Service Corps, enabling us to focus
training dollars on the primary care workforce by expanding
residency training opportunities. And for all these proposed
investments, the budget makes tough, fiscally responsible
choices. It will contribute a net $369 billion to our deficit
reduction over the next decade by incentivizing high-quality,
efficient care, and by continuing to reduce healthcare cost
growth, strengthen Medicare and Medicaid with $415 billion in
net savings over 10 years.
We will also produce budget savings for taxpayers by
continuing to crack down on waste, fraud, and abuse. Every
dollar we invest in the Health Care Fraud and Abuse Control
Initiative, for example, returns $8.10 in money we recover,
which last year was a record-breaking $4.3 billion.
Now, in many ways the budget reflects the notion from the
Book of Matthew that where your treasure is there also your
heart will be. A budget is more than a ledger. It is a
statement of a mission, intentions, and priorities. This budget
succeeds in that mission by expanding opportunity, encouraging
growth, and protecting both our families' economic security and
our Nation's health security.
Thank you, Mr. Chairman, and I would be pleased to answer
your questions.
[The prepared statement of Secretary Sebelius follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman CAMP. Well, thank you, Madam Secretary.
The Secretary has a hard stop at 12:15. And in the interest
of time, questions will be limited to 3 minutes. I am going to
hold my questions to the end of my time and yield to the Health
Subcommittee Chairman, Kevin Brady, to begin questioning. I
will then recognize Health Subcommittee Ranking Member
McDermott, and then we will start in reverse order of
seniority. If we run out of time before I have an opportunity
to ask questions, I will submit mine for the record, and would
ask that I get a timely response to those.
The Committee still seeks some basic information about how
many people have paid their premiums, how many uninsured are
actually enrolled in the exchanges, how much the launch of
exchanges has cost taxpayers, and what programs were cut to pay
for the implementation that really didn't work. So if we can
get answers to those questions during the hearing, I think that
would be helpful.
Mr. Brady is now recognized.
Mr. BRADY. Thank you, Mr. Chairman.
Madam Secretary, you were before the Committee in April of
last year. You assured us all there would be absolutely no more
delays in the Affordable Care Act. We have seen eight delays
since you gave us those assurances, bringing the total now to
35. So the question is, I think fairly for our families at
home, what other delays should they expect? Are you going to
delay the mandate that individuals have to buy government-
approved health care or pay a tax?
Secretary SEBELIUS. No, sir.
Mr. BRADY. Are you going to delay the open enrollment
beyond March 31st?
Secretary SEBELIUS. No, sir.
Mr. BRADY. Is it correct that you don't have the authority
to extend that deadline? The position that the Centers for
Medicare & Medicaid Services have made, you agree with that?
Secretary SEBELIUS. I haven't seen their statement, sir,
but there is no delay beyond March 31st.
Mr. BRADY. Well, my question is, the law very clearly makes
the case that tax credits are available only to individuals who
are enrolled through the exchanges. Yet 2 weeks ago in
regulation you deemed that individuals who haven't enrolled in
the exchanges are eligible for those tax credits. My question
is, what specific provision in the Affordable Care Act grants
you that authority?
Secretary SEBELIUS. Well, sir, I can get you the specific
cite, but the authority really comes from the law, which states
if a person is eligible for the Affordable Care Act and in the
exchange process, then they are eligible for a tax credit. We
have made it clear that if through no fault of their own they
were unable to enroll, that eligibility extends to a delayed
enrollment period, and they will have a special enrollment
period which we have the authority to grant.
Mr. BRADY. Madam Secretary, to be very clear, the law is
very plain, only people enrolled in exchanges are eligible for
tax credits. As the Committee that handles the tax credits, we
know this section well. So maybe you could ask the folks who
are here today.
Secretary SEBELIUS. Sir, I would be happy to get you the
statutory authority.
Mr. BRADY. Your experts are behind you. If you would like
to ask them, please do. But there is no provision there.
Secretary SEBELIUS. Sir, I will get you this in writing.
There is a provision that indicates that if a person is
eligible, the eligibility--and in the enrollment process--we
can grant a special enrollment period.
Mr. BRADY. I guarantee you, Madam Secretary, you won't be
getting us back that provision because it is not there. And my
point is, if you delayed this law because it is not workable
for businesses, why aren't you delaying this law because it is
not workable for our families? How is that fair?
Secretary SEBELIUS. I am sorry, sir?
Mr. BRADY. How is it fair that you delayed this law because
it is unworkable for businesses of all sizes, but it is not
workable for families? Why aren't they getting the same
treatment?
Secretary SEBELIUS. Well, sir, we haven't delayed the law's
implementation across the board.
Mr. BRADY. Not across the board, but for businesses, large
businesses, medium and small.
Secretary SEBELIUS. Ninety-four percent of business owners
are less than 50, and the law has never applied to them. There
are 2 percent of business owners who are in the above 100
percent. They have an additional year to fill out paperwork.
Another 2 percent----
Mr. BRADY. Madam Secretary, it is just not fair.
Chairman CAMP. Time has expired.
Mr. McDermott.
Mr. MCDERMOTT. Wow. Take a breath.
Your budget contains several proposals for structural
reforms to Medicare, all of which will increase the cost on
beneficiaries. What I don't see in your budget is Medicare
reforms that ask providers and pharmaceutical companies to
share in the pain. Frankly, that concerns me. I think there
ought to be a sharing of the pain among the providers and those
who benefit from Medicare.
As you know, Medicare beneficiaries already spend a
disproportionate share of their income on health care compared
to those under age 65, and upper-income Medicare patients pay
more.
Now, I understand these proposals, while they concern me,
were put into the budget as a part of a so-called big, bold,
balanced budget deficit reduction plan, one that calls for
shared sacrifice among working and retired Americans, wealthy
or not.
So let me ask this question. The notion that completely
seems to be around here is much different that you can cherry
pick those Medicare reforms here and one there, sort of low-
hanging fruit as a way to offset or to pay for the SGR. Our
Republican colleagues have been talking about doing this. And I
think that it is hard for that to actually occur, because SGR
needs to be fixed. There is not actually a documented access
problem throughout the program. And it seems unconscionable to
ask those with household incomes averaging $23,000 a year to
pay more in order to increase payments to doctors.
My question is this: Does the Administration support cherry
picking structural reforms which would increase costs for
Medicare beneficiaries, or are those reforms solely intended as
a part of a substantial deficit reduction package with shared
sacrifice for all Americans?
Secretary SEBELIUS. Well, Congressman, as you know, the
President has said for a number of years that he remains
hopeful for a big deal, tax reform, entitlement reform package
that would put us on the path to multiyear fiscal solvency. And
so I think in the context of those reforms, that is why these
proposals continue to be made in the budget, but it is in the
context of a major effort. Entitlement reform is a piece of the
puzzle, but only a piece of the puzzle if there is additional
tax reform and revenue sharing that, as you say, involves
everyone.
Mr. MCDERMOTT. So the White House doesn't support selecting
out pieces to pay for SGR.
Secretary SEBELIUS. Well, I think the budget is a package
that moves forward, and the cherry picking of one piece or
another gives, as you say, undue burden on seniors.
Chairman CAMP. All right. Thank you.
Mr. Renacci is recognized.
Mr. RENACCI. Thank you, Mr. Chairman, for holding this
hearing on the President's budget.
Chairman CAMP. I think you need to lean into the
microphone.
Mr. RENACCI. It is not working.
Mr. CROWLEY. These aren't working. Are you pulling an Issa
on us? This isn't an Issa, is it? Just making sure.
Chairman CAMP. There we go. Mr. Renacci is recognized.
Mr. RENACCI. Thank you, Mr. Chairman, for holding this very
important hearing on the President's budget and allowing us the
opportunity to question the Administration on behalf of our
constituents.
Secretary Sebelius, welcome back, and thank you for taking
the time to speak with us today.
Madam Secretary, Obamacare was sold to the American people
as a bill that would make health care more affordable. In my
State of Ohio, it has become clear this is not the case, as
premiums, deductibles, and out-of-pocket costs have increased
for a significant number of Americans, causing working-class
families and young individuals to spend more of their hard-
earned pay on healthcare expenses. In fact, I have had many
individuals in my district who are now covered who can't afford
their deductibles now questioning me as to what they are
supposed to do to access health care.
Mr. Chairman, I would like to submit for the record a
transcript of an interview between NBC News and Secretary
Sebelius on September 30, 2013.
Chairman CAMP. Without objection.
Mr. RENACCI. Madam Secretary, in an interview on September
30, 2013, you said, when asked regarding Obamacare, what
success would look like. Your answer, and I quote, was, ``I
think success looks like at least 7 million people signed up by
the end of March 2014.'' Open enrollment ends this month, and
you are well short of that target. Based on your own standards,
Obamacare will not be successful at the end of March 2014. What
do you now call success?
Secretary SEBELIUS. Well, Congressman, I think that in
answer to your initial question, I don't know the constituents
you are speaking to, but I can give you a national snapshot
where private insurance rates in the 10 years before Obamacare
were running about 8.6----
Mr. RENACCI. Madam Secretary, can I get you to answer that
question on what is now success because I only have 3 minutes?
Secretary SEBELIUS. Well, success looks like millions of
people with affordable health coverage, which we will have by
the end of March, in the private marketplace, in Medicaid,
young adults on their family plan. So we will have I think a
successful program. We have a market, we have competition. We
have for the first time self-employed individuals who don't
have affordable care through their worksite getting affordable
coverage.
Mr. RENACCI. So you are changing your standard of 7 million
by the end of March 31st.
Secretary SEBELIUS. I said success looks like millions of
people having affordable health care.
Mr. RENACCI. Actually, you said 7 million. I have one other
question. In that interview, you also talked about deductibles,
and your answer was, ``Well, I think families can make a
choice. It isn't something they can pay for. A lot of people
couldn't pay their out-of-pocket, they will want a lower
deductible.'' Can you answer the question as to how about those
people in my district who can't afford a lower deductible? What
should they be doing?
Secretary SEBELIUS. Again, sir, I think that the range of
plans in the marketplace is more robust than the range of plans
ever has been in the individual marketplace or in the small
group marketplace. Some, as you know, have lower premiums in
exchange for higher deductibles, some have lower deductibles
and higher premiums. But that range has never been there, nor
have the millions of Americans who now qualify for some
financial help to get into the marketplace to have that
benefit. So I meet people every day who are actually having
affordable health care for the first time. They have never had
employer-based health care, and they have an opportunity for
health security for themselves and their families.
Chairman CAMP. All right. Thank you.
Ms. Sanchez is recognized.
Ms. SANCHEZ. Okay. My mike is working. Thank you, Mr.
Chairman.
And, Madam Secretary, I want to thank you for taking the
time to appear before the Committee today to discuss the
Administration's fiscal year 2015 budget.
I continue to believe that budgets are a reflection of what
our priorities are in this country, and our priorities should
be pretty clear: creating an environment for good-paying jobs
that allow workers to support a family, properly funding health
care for all, and protecting benefits for those who have earned
them. Those should be the focus. And I am happy to see that the
President's budget does reflect some of these goals.
Specifically, just some things I wanted to point out, the
proposed 2015 budget gets rid of a misguided approach to
chained CPI, to change the chained CPI balanced on the backs of
our seniors. It expands HIV/AIDS treatment and care through
investments in the Ryan White HIV/AIDS program and CDC
activities. It funds the National Institutes of Health at $30.2
billion, and provides $140 million in services for victims of
domestic violence.
As one of the few women who sit on this Committee, I think
I would be remiss if I didn't spend at least a few moments on
issues that are specific to women's health care. I want to talk
about Title X. It is the only Federal program exclusively
dedicated to family planning and reproductive health services.
Publicly funded family planning services have helped reduce the
rates of unintended pregnancy and abortion in the United
States. And in fact the CDC has included family planning on its
list of the top 10 most valuable public health achievements of
the 20th century, along with things like childhood vaccinations
and fluoridation of drinking water.
I was pleased to see that the President's budget calls for
a slight increase in Title X funding. And I was wondering,
Madam Secretary, if you agree that the investment in family
planning services is a valuable one that reduces government
healthcare expenditures in the long run.
Secretary SEBELIUS. Well, I think it has been shown,
Congresswoman, that family planning and having families be able
to make choices about the timing of children and the timing of
pregnancy is a huge health issue and a huge family security
issue, and we have made some significant strides.
I would also point out that as part of the Affordable Care
Act, insurance policies now will cover a full range of health
services for women, which was not necessarily the case. They
will not be allowed to charge women more than men, which was
typically a feature in the individual market, and for the first
time have a focus on women's health issues, including family
planning issues.
Ms. SANCHEZ. And do you think that the increased access to
affordable birth control will affect healthcare costs overall
under the Affordable Care Act?
Secretary SEBELIUS. Well, what we have seen, actuaries of
private insurance companies will tell you that actually having
contraception services as part of their package decreases costs
because they pay for fewer unintended pregnancies and sometimes
pregnancies that could result in very high birth and followup
costs. So as an actuarial point of view, it is actually a net
gain in terms of overall health costs. But more importantly, it
allows families to make their own choices about families and
timing, and the health of the mother and the health of the
child are often significantly improved by that timing.
Ms. SANCHEZ. Thank you, Madam Secretary, and I yield back.
Chairman CAMP. Thank you.
Mr. Griffin.
Mr. GRIFFIN. Thank you, Mr. Chairman. Apparently it is not
working now.
Secretary SEBELIUS. It is just when you try to use it that
it doesn't work.
Chairman CAMP. Right. Why don't you come up.
Mr. GRIFFIN. I think a website manufacturer and website
developer has been working on our mike system.
Thank you for coming. I appreciate it. What I would like to
talk with you a little bit about is the issue of investments.
You mentioned investments. Almost every constituent that comes
to see me in my office talks about the need for additional
funding, for example, for the NIH, for Alzheimer's research,
for cancer research, MS, diabetes. They may talk about
education, they may talk about some other program that is
funded by discretionary spending. And a lot of times when
people mention investments, that is what they are talking
about.
I have supported increasing NIH research funding. I wish we
had the money to increase it drastically. But the reality is
that that funding is getting pressured or squeezed out by the
growth of entitlement spending. If you could look, I have a
slide here.
[Slide]
So this is something that President Obama said in 2011.
``If you look at the numbers, Medicare in particular will run
out of money, and we will not be able to sustain that program
no matter how much taxes go up. I mean, it is not an option for
us to just sit by and do nothing.''
Next slide.
[Slide]
This is what I call the Pac-Man problem. I use this to
explain to folks who come to visit me why the funding that they
are in favor of, which often I favor, NIH funding, for example,
why it is under pressure. And it is under pressure because the
yellow part, which we recognize as Pac-Man, is continuing to
close its mouth on all the stuff that you refer to as
investments. And HHS Secretary after HHS Secretary, I have
talked to both Administrations, Republican and Democrat, praise
their budget as fixing the problem. But the problem persists.
And I just invite you to work with us for real reform on
Medicaid and Medicare to fix this. And I would welcome your
comments on how your budget will address this problem.
Secretary SEBELIUS. Well, sir, I would welcome the
opportunity to work on a serious, big budget deal, including
entitlement reform, but also including tax reform and revenue
sharing, and spread that equally across the board.
I would say that the passage of the Affordable Care Act was
one of the most significant issues of late to increase the
solvency of the Medicare Trust Fund. The trustees put that
passage at about a 12-year additional solvency. This budget
adds an additional 5 years. So when this President came into
office Medicare was likely to go broke in 2017. That window has
now been significantly extended. And this Committee has voted
50 times to repeal those very----
Mr. GRIFFIN. But you are robbing Peter to pay Paul, and the
seniors are bearing that burden.
Chairman CAMP. All right. Time has expired.
Mr. Crowley.
Mr. CROWLEY. Thank you, Mr. Chairman.
Madam Secretary, thanks so much for being here once again
today. I am up here now. They moved me. Madam Secretary, they
moved me up here. I am sorry. I know. Musical chairs. It is
going to take a long time for me to get up here normally
speaking. I thank the Chairman for this opportunity.
Secretary SEBELIUS. Just don't give it up.
Chairman CAMP. Don't get used to that seat.
Mr. CROWLEY. I am not getting used to it. I am enjoying my
time here. I have very little time.
The Affordable Care Act has made great strides in improving
access to quality health care, such as by closing the
prescription drug coverage gap, strengthening the Medicare
program, and establishing competitive marketplaces for working
families to purchase insurance, for many people for the first
time. I am glad that the budget sustains and builds upon these
successes.
I am also pleased to see that this budget looks toward the
future on improving our healthcare system, such as through the
new physician workforce proposal growing the need for more
doctors at the same time. Projections show that by 2020 the
United States will face a physician shortage of more than
91,000 physicians, growing to over 130,000 physicians by 2025,
not that long from now. That is both primary care physicians
and specialists.
So clearly there is a need for continued Federal investment
in doctor training. Yet I am concerned that some of the
proposals in this budget would fundamentally change this
longstanding contract on how doctor training is supported in
our country. Our Nation has long recognized the need for doctor
training to be a shared investment between our medical schools,
residency training programs, and the Federal Government.
Medical schools have increased graduating classes, and teaching
hospitals are training residents above and beyond what Medicare
supports.
In my home State of New York, there are almost 840
residents currently being supported by hospitals alone because
Medicare can't fund these positions. Nearly 10,000 residents
nationwide are in a similar situation. There is a clear and
obvious demand for more residency slots even within the
Medicare program, demonstrating that this is not the time to be
drawing teaching dollars away from Medicare to other programs.
I have introduced legislation, the Resident Physician
Shortage Reduction Act, to meet the real need of adding
additional residency spots in these specialties, as well as in
the primary care area. If you could, please comment in terms of
the budget itself and the effect that this will have on
teaching hospitals. I don't think this is the time to be taking
away those moneys. We need to be adding money to produce the
number of physicians we will need in lieu of the Affordable
Care Act.
Secretary SEBELIUS. Well, Congressman, I think the
President definitely shares your view that the healthcare
workforce is of enormous importance. And we certainly have been
focusing on that since the beginning of this Administration.
I would say there are three major components of a
significant, $14.62 billion workforce initiative over the next
10 years. Increasing the size of the National Health Service
Corps, which goes a long way to putting doctors, nurses, mental
health techs, dentists in underserved communities, growing that
force to about 15,000 from its current 8,800 and keeping it
there.
Second, to focus on the targeted support for graduate
medical education, really again driving not only the primary
care workforce, but specific underserved specialty areas.
Currently, hospitals kind of pick and choose which residencies
they will slot. And we think at this point it is more helpful
to really focus on the great need for primary care, preventive
care, community-based care, nurse practitioners, so that the
growing population of elderly and others, who hopefully will
stay out of the hospital, will have that kind of care.
And third, to continue the increase that was passed in the
Affordable Care Act for primary care doctors who take Medicaid
patients. And I think those three initiatives combined will
really do a significant amount to increase the primary care
workforce, but also to make sure that primary care docs and
nurses are in the right places in the most underserved areas.
Chairman CAMP. All right. Thank you.
Mr. Kelly is recognized.
Mr. KELLY. I thank the Chairman.
Madam Secretary, thanks for being here today. I just want
to get directly to the budget, because on page 33 of the budget
it highlights or alludes to a potential large tax increase that
is not defined. Now, reading from page 33, this is what it
says: ``Even with reforms to Medicare and other entitlements
and tough choices, we will need additional revenue to maintain
our commitments to seniors.''
Now, as I read this, it looks like an open-ended
discussion, but with no real specifics. What specifically are
we going to do? Because we are past the rug-cutting time. Where
do we go? Where do we go to get this revenue? What taxes are
going to have to come about?
Secretary SEBELIUS. Well, I think, Congressman, as you
know, there have been discussions over the last several years.
The President has proposed a number of tax loopholes being
closed.
Mr. KELLY. And I understand. I don't want to cut you short.
I have a very short period of time.
Listen, we are playing ring around the rosy with this.
There is no way that we can look at the metrics of this and say
this is going to work. My question is, because the real choice
right here is between entitlement reform or going to some other
type of a tax, which I think a lot of people on the right and
left are saying we are going to have to have a European-style
VAT tax. This is going to put a tremendous burden on the
middle-income folks, the lower-middle-income folks, and the
lower-income folks because it hits every one of them hard,
hard. Nobody walks away from this. Forget all the subsidies and
everything else.
I want to know where are you going to get the money? Show
me the money. If there is not going to be reform, show me the
money. Where is the revenue going to come from? Because we know
in this model you tax it, you fine it, it is through taxes,
fines, fees, or borrowing, or God forbid just printing our way
out of it. So where is the money going to come from?
Secretary SEBELIUS. Well, sir, nobody, as you know, in this
Administration has ever suggested a VAT tax. I think what we
are eager to do----
Mr. KELLY. Not yet. Not yet.
Secretary SEBELIUS [continuing]. Is work with Congress on a
comprehensive program which shares the burden, not taking it
out of the backs of seniors, of the backs of the poorest
Americans.
Mr. KELLY. No, no, no, no, no. Listen, listen.
Secretary SEBELIUS. That has always been the proposal in
the past.
Mr. KELLY. Madam Secretary, we agree, we agree violently on
that. It comes down to dollars and cents. You can't wave a
magic wand and make this money appear. You can't do it. If we
are not going to have serious entitlement reform, where is it
going to come from? It is simple math. The President says it
all the time. Just do the arithmetic. It doesn't float.
Secretary SEBELIUS. Well, I would say some of the most
serious entitlement reform is underway right now under this
Administration. We have cut in half the cost trajectory of
Medicare year in and year out. We are seeing the slowest growth
in 50 years in the program. Plus more Medicare beneficiaries
coming in and more benefits. So I would say that it is
underway.
Mr. KELLY. I understand that. But sometimes it is much
easier to talk the talk than it is to walk the walk. We heard
this wouldn't cost us anything, and now we are finding out it
is trillions more than we thought. It is just not working. I am
looking at this, and the reform is absolutely necessary. I just
don't see anybody walking that plank.
And I don't see any specifics of this. We can talk in
flowery terms about what we want, what our hearts are willing
to do, but what our wallets can't provide. The question is, how
do you pay for it? It has to be tax increases. It can't come
from anyplace else. I wish it was, just tap a magic wand and
the money just magically appears. It doesn't. We are on a heck
of a trajectory right here, and there is no way out of this
absent real reform or huge tax increases. There is just no
other way to do it.
Chairman CAMP. All right. The time has expired. We will try
the mikes again.
So, Mr. Pascrell, you are recognized.
Mr. PASCRELL. Thank you, Mr. Chairman.
Madam Secretary, I am glad that we are now all talking
about middle-income people. Well, we have come a long way in 3
years. That is good. I think we are on the right trail.
But let's change the pace a little bit. The commitment that
the President has made to expanding educational opportunities
and the investments in research and science within this budget
are things I strongly support. The BRAIN Initiative is one of
the investments that I think is particularly worthwhile. Today,
we are celebrating what we have done for the past 14 years in
the Rayburn Building, all the research that is being done both
in the military and the civilian on traumatic brain injury,
post-traumatic stress disorder, which has now helped in many,
many ways to help our kids in making sport decisions.
The BRAIN Initiative is one of the investments that I think
is worthwhile. As cochair of the Traumatic Brain Injury Task
Force, along with Congressman Rooney of Pennsylvania, I am well
aware of the advances that we have made in research in the
brain in recent years and how much we have learned and continue
to learn.
Your presence here today is very timely. As I said, the
Congressional Brain Injury Awareness Day is evident on Capitol
Hill, and a number of your offices are participating. The
Centers for Disease Control and the CDC estimates that 2.4
million TBIs occur each year and that 5.3 million Americans
live with a lifelong disability as a result of TBI.
Beyond those numbers, TBI has become the signature wound in
Iraq, as well as in Afghanistan. Twenty percent of our soldiers
deployed are estimated to have experienced brain injury. This
is serious. What is even more serious is how many have fallen
through the cracks.
It is because of this Congress and the last three
Presidents that we finally have come to the point of
recognizing it and have stopped sweeping it under the rug, and
we have insisted on it in a bipartisan way. Brain injuries can
impact anyone at any time.
I know this $200 million commitment, which is double the
investment in last year's budget, is not just coming from your
Department. But can you speak to the goals of the BRAIN
Initiative and how important it is that we pay attention to
what is going on in that research? Very briefly, if you would.
Chairman CAMP. Okay. Time has expired. But if you will
respond briefly. And if you want to supplement in writing a
longer response, that would be fine.
Secretary SEBELIUS. I would be glad to, Mr. Chairman. I
would say that Dr. Collins, the head of the National Institutes
of Health, has identified the BRAIN Initiative as one of his
signature efforts going forward. He has assembled what he would
call the dream team of top-notch researchers from a variety of
institutions and mapped out really a very aggressive strategy,
multi-year strategy.
But the private sector will be intimately involved in this.
Some of the key drug companies are at the table. There is an
effort underway in the drug front to also get them involved in
accelerating cures. So I would say it is a multifaceted
project, and I would be glad to get you some more information.
Chairman CAMP. All right. Thank you very much.
Mr. Young is recognized.
Mr. YOUNG. Madam Secretary, thanks for being here today. I
am going to start on a couple of words of encouragement and
appreciation. First, coming from the State of Indiana, know
that our delegation, our Governor and the people of our State
really appreciate your consideration of allowing the Healthy
Indiana Plan, which covers 40,000 low-income Hoosiers, to play
an important role in terms of our Medicaid expansion in our
State. HIP is the first consumer-directed plan for Medicaid
recipients in the country, and thank you for that.
We also appreciate internally within HHS, and I know this
is a priority for OMB, increasing the evaluation of the
existing government programs so that we are focusing more on
outcomes as opposed to inputs. I would love to work with you on
that evidence-based approach in the future.
One of the biggest concerns related to this healthcare law,
of course, is its impact on jobs and wages. The CBO has
indicated that the Affordable Care Act will shrink the
workforce by the equivalent of 2.3 million full-time jobs.
Teamsters President James Hoffa has said the law, quote,
``destroys the foundation of the 40-hour workweek that is the
backbone of the American middle class.'' UNITE HERE is a union
representing 265,000 casino, hotel, and food service and
warehouse workers. And they recently published a new report,
``The Irony of Obamacare: Making Income Inequality Worse.'' And
I would like to submit this report for the record.
Chairman CAMP. Without objection.
Mr. YOUNG. UNITE HERE supported what the President calls
Obamacare, but they don't anymore. The report says, ``Without
smart fixes, the ACA threatens the middle class with higher
premiums, loss of hours, and a shift to part-time work and less
comprehensive coverage.'' You have indicated, as reported in
the press, ``There is absolutely no evidence, and every
economist will tell you this, that there is any job loss
related to the Affordable Care Act.''
Based on the growing body of evidence, including this
report, have you rethought whether or not the Affordable Care
Act might in fact adversely impact wages, hours, and jobs for
in particular low-income Americans?
Secretary SEBELIUS. Congressman, I have had some great
meetings with Governor Pence and look forward to continuing
those around Healthy Indiana and the expansion. I would say
that, unfortunately, the Congressional Budget Office report I
think has been mischaracterized. It does not say that the
passage of this healthcare law will lead to 2 million fewer
jobs. It does indicate that people will have some choices that
they don't have today. They won't have job lock until they get
to 65, where they have healthcare guarantees with Medicare.
They can choose to stay at home. A lot of farm families will
have the choice of not having to have an off-farm job to get
health insurance for the family.
So there is an average that they give, and they say you
could have an average number of hours worked less, or they say
you could have an average number of hours worked more.
Mr. YOUNG. I see our time has expired. I guess we could
lower the definition of full-time employment to 20 hours,
giving employees more flexibility under your analysis of the
CBO report. But thanks so much for entertaining my questions.
I yield back.
Chairman CAMP. Mr. Kind is recognized.
Mr. KIND. Thank you, Mr. Chairman.
And, Madam Secretary, thanks for being here, and thanks
again for your service to our Nation. I know this hasn't been
the easiest time, the rollout of the ACA. We didn't think it
would be easy, but it is worth trying to do.
First a comment and then a question for you. My comment,
coming from a very large rural congressional district, just
keep an eye on those critical access hospitals. They face some
unique challenges as far as recruitment, retention, and access
issues. And I know we have had budget discussions about that in
the past.
The question is one of the great stories in recent years,
the last few years, has been the trajectory of healthcare
spending, costs per beneficiary, which has never been lower in
the last 50 years. I wonder if you could just take a moment to
tell us what you are seeing in regards to the health system
that is leading to these cost reductions.
Obviously, part of the Affordable Care Act is to reform not
only the way health care is being delivered so it is more
integrated and coordinated and patient-centered, but changing
the financial incentives so it is more value and quality
driven. But if you could take a moment and just let us know
what you are seeing as far as costs and whether these reports
are sustainable in the future.
Secretary SEBELIUS. Well, Congressman, you and a number of
the House delegation were instrumental in making sure that the
sort of quality and value pieces were added to the Affordable
Care Act, that that became a fundamental piece of this. And I
would say that the framework of having for the first time real
tools within the Medicare system to look at aligning value with
payment is significant. And we are already seeing the first
real reduction in preventable hospital readmissions, a very
dramatic change in hospital infection rates. Good for patients,
good for the bottom line.
In terms of overall expenditures, the 10 years before the
Affordable Care Act, Medicare cost growth was on average 6
percent a year, year in and year out. Since the passage of the
Act, 2010 to 2012, it was 1.6 percent, a dramatic drop. Last
year, 0.7 percent. As you say, the lowest cost increases in
history. And Medicare beneficiaries have more benefits, lower
prescription drugs, additional costs. Private insurance costs
have been cut in half during that same period of time. Overall
health expenditures in the United States per capita were
raising at about 6 percent a year. They now are at 3 percent a
year, again cut in half. And Medicaid expenditures, again, are
seeing the lowest cost increases.
But in part, it is because I think some of the fundamental
structure of looking at ways to deliver more effective
preventive care, earlier intervention with very high-cost
patients, some of the pieces you put in place with the dual
eligibles, a very expensive population, only about 10 million
individuals, but people who spend over a third of both the
Medicare and Medicaid budgets, that work with the States is
very much underway. So there are some very promising trends I
think on the horizon.
Mr. KIND. All right. Thank you.
Chairman CAMP. Mr. Reed, and then we will go to Mr.
Blumenauer. And then we will begin two to one.
Mr. Reed.
Mr. REED. Thank you, Mr. Chairman.
Thank you, Madam Secretary, for being here today.
I wanted to join with my colleague Mr. Kind to bring a
message to you. Representing a rural district in western New
York, I can tell you the Medicare and Medicaid reimbursement
cuts that your proposals have done and implemented are
seriously jeopardizing our critical access hospitals, our low-
volume Medicare-dependent hospitals. I am dealing with two
right now, St. James Hospital and Lake Shore Hospital. Lake
Shore is actually going through a closure. St. James is going
through a rebuild.
On the front line, in particular on rural hospitals, these
cuts are causing significant problems for access to care for
our people. So I am delivering to you some information, and
join my colleague in highlighting that need.
Now, what I wanted to talk to you today about is we just
had an election in Florida last night. The Democratic opponent
was talking a lot about ways to fix the Affordable Care Act.
And what I wanted to get from you is that the Administration
has had 37 significant changes in the Affordable Care Act that
it has put forward by Executive order and other amendments. And
what I am looking for from you, if you have any suggestions,
have you supplied to Congress, to us, in areas that you want to
fix the Affordable Care Act? Has there been any legislation
sent from the Administration up to Congress in regards to those
fixes?
Secretary SEBELIUS. I have not sent legislation to
Congress, no, sir.
Mr. REED. Yeah, because the answer is zero. I knew the
answer to that question. I just wanted to see exactly where you
were coming at. So is the Administration's position that the
Affordable Care Act is not fixable, therefore there is no need
for any legislative fixes?
Secretary SEBELIUS. No, sir, I don't think that is the
case.
Mr. REED. Okay. So it is fixable. There are areas that you
want to fix. Could you state for the record what areas of the
Affordable Care Act does the Administration want to work with
us in order to fix?
Secretary SEBELIUS. Sir, we have said from the outset, from
the passage of the law in March of 2010, if there are
suggestions or ways that we----
Mr. REED. So the White House has no suggestions or ideas on
how to fix it.
Secretary SEBELIUS. We have implemented a number of changes
in the way the law was written to ease the transition into the
marketplace.
Mr. REED. I appreciate that because we have had the same
thing up here on the Hill with the employer mandate delay, that
we passed legislation and then the White House vetoed that, or
threatened to veto it, and then by Executive order implemented
it.
Secretary SEBELIUS. No legislation has passed the Congress.
Mr. REED. So if we pass that you will say you will sign
that?
Secretary SEBELIUS. I don't sign legislation.
Mr. REED. Well, the White House. What is the White House's
position on that?
Secretary SEBELIUS. The White House made their position
clear. But no legislation has passed the Congress in the 3\1/2\
years that the law has been implemented. And the House has
voted 50 times to repeal the Act.
Mr. REED. Yeah. So when we pass a bill in the House and the
White House issues a veto threat to it, that is an indication
that the White House wants to work with us on policies that it
is by Executive order implementing? I mean, we have the
employer mandate delay. You have the health insurance plan,
that you can keep if you like it. We get threats of veto from
the White House on things that you are doing by Executive order
over there. See, that doesn't make sense to us. Can you explain
to the American people why that makes sense?
Secretary SEBELIUS. Sir, I think that the issue is the
breadth of some of the legislation. We believe strongly that
having a transition for people who are already insured
gradually into ACA-compliant plans makes sense. The measure
considered by the House of Representatives was considerably
broader than that. It would have basically destroyed the new
marketplaces. So that was a very different piece of
legislation.
Mr. REED. That is not true. That is just not true.
Chairman CAMP. All right. Time has expired.
Mr. REED. Thank you.
Thank you, Madam Secretary.
Chairman CAMP. Mr. Blumenauer.
Mr. BLUMENAUER. Thank you, Mr. Chairman.
Madam Secretary, thank you again for being here. We
appreciate your tenacity and your patience. I would like to
just shift something that doesn't bear directly on the
Affordable Care Act.
I worked very hard on the House version, and it passed this
Committee unanimously, provisions that would have provided
reimbursement for voluntary consultation for patients who are
facing difficult end-of-life circumstances. It stayed in the
bill, but because of the reconciliation process it dropped out.
Since then, the evidence is even more compelling for the
need for this service. I would just cite Reverend Billy
Graham's most recent book talking about the need for families
to approach this, or as former Majority Leader Bill Frist, in
one of the op-eds on Capitol Hill, pointed out that because of
a lack of this planning and assistance, quote, ``patients are
more likely to receive medical interventions that can actually
prolong or worsen their suffering and will certainly increase
the expense of their loved ones.''
Yesterday, I joined with the American Association of
Clinical Oncology, who had just a great report about this, and
included a provision that I think is very compelling that they
have research that shows, if you do this right, if you work
with patients, you can actually, by adding palliative care,
people will actually live up to 3 months longer while they get
chemotherapy.
Well, in November 2010, CMS released a final payment rule
that would have reimbursed Medicare doctors to have
conversations with their patients on options for end-of-life
care. This provision would have given people more control. And
it speaks to much of the legislation, bipartisan legislation
cosponsored by a number of people on this Committee, that Dr.
Roe and I have introduced. Yet just days after that final rule
went into effect, the Administration reversed course, pulled it
back, and it has been 4 years, because of some sort of
procedural something.
Is there some way that we can work with you and our
legislation so that we can give people, at no cost to the
Federal Government, something that 92 percent of the American
public thinks they want? Is there a way that this
Administration can work with this Committee on a bipartisan
basis to solve this problem?
Secretary SEBELIUS. Yes, Congressman, I would welcome that
opportunity. I can tell you it is a personal passion of mine.
My mother spent her last 10 weeks in three different hospitals
with dozens of procedures, and basically I would see it as
being tortured to death. So I welcome the chance to look at how
families and patients and providers can have more control over
those end-of-life decisions.
I also think that--two things I would point out. One is
that you did add to the Medicare benefits a wellness visit, a
yearly wellness visit, which gives patients and doctors an
opportunity to have conversations about health plans and
potentially, you know, have a conversation about issues that
arise in critical care. But, also, we are very much working
with revisions in the hospice benefit area, and we hope soon
to----
Mr. BLUMENAUER. It is very important. I see my time has
expired----
Chairman CAMP. Thank you.
Mr. BLUMENAUER [continuing]. But I would hope after 4 years
that you could revisit the rule or that you support our
bipartisan legislation so we can solve this.
Chairman CAMP. All right.
Mr. BLUMENAUER. Thank you very much.
Chairman CAMP. Ms. Black and then Mr. Marchant. Ms. Black
is recognized.
Mrs. BLACK. Thank you, Mr. Chairman.
And, Madam Secretary, thank you for being here. I think
that this dialogue is so important for us to have because these
are big issues that directly impact individuals and their
lives.
So my first question for you is, do you believe that the
individual mandate tax penalty is an essential component of the
implementation of Obamacare?
Secretary SEBELIUS. Congresswoman, I think that the mandate
issue came from, I think, originally the Heritage Foundation
and some other legislative analysis that ties it to getting rid
of the preexisting-condition barrier for insurance companies.
Mrs. BLACK. So you do believe that it is an important
component?
Secretary SEBELIUS. You need to apply them together. Yes,
ma'am.
Mrs. BLACK. You do believe.
So I ask this question because in the Wall Street Journal
editorial today, it was exposed that a rule released last week
quietly excused millions of people from the requirement to
purchase insurance or else pay a tax. And the rule actually
allows Americans whose coverage was cancelled to opt out of the
mandate altogether.
Now all you need to do, according to this, is fill out a
form attesting that your plan was cancelled and that you
believe that your plan options available in the Obamacare
mandates in your area are more expensive than what was
cancelled or that you consider other available policies
unaffordable.
Further, there is also a provision that says people can
also qualify for hardship for the unspecified non-reason, and I
quote, you experience another hardship in obtaining health
insurance, which only requires documentation if possible. And
yet another waiver is available to those who said they are
merely unable to afford coverage regardless of their prior
insurance.
In a word, these shifting legal benchmarks offer an
exemption to anyone who conceivably wants one. Keep in mind,
though, that the White House actually argued at the Supreme
Court that the individual mandate to buy insurance was
indispensable to the law's success.
So my question for you is: It just seems to me that only
the people who might be subject to this individual tax are
those who were never insured. Because these are the people that
were insured and then for whatever reason--do you think that
this is fair?
Secretary SEBELIUS. Well, Congresswoman, I did not read the
Wall Street Journal editorial. I will read that later today.
But I can tell you the description that you have just made is
not accurate.
The hardship exemption was part of the law from the outset.
There were some very specific rationale there, and it starts
with the notion that if you can't afford coverage, you are not
obligated to buy coverage. And that has always been a
framework. What this says is, if your plan is unaffordable, you
can file a hardship exemption. That was the part of the rule
that was also included.
Mrs. BLACK. So if your plan is unaffordable----
Secretary SEBELIUS. It has always been based on
affordability of coverage.
Mrs. BLACK. And if you feel your plan is unaffordable, you
sign a form to say, attestation, my plans--I can't find a plan
that is affordable for me, you just sign a document----
Secretary SEBELIUS. That is what the hardship exemption has
always been based on, unaffordability of insurance. It has a
measure in it----
Mrs. BLACK. So all of these----
Secretary SEBELIUS [continuing]. About income, that if you
are offered employer coverage, but it has always been in----
Mrs. BLACK. Madam Secretary, all of these provisions that
came out in this rule that was sort of hidden, not very much
exposed, you feel that was already in the law previously and
this is not a new piece.
Secretary SEBELIUS. What this allowed--the new piece is not
the hardship exemption, which has always been part of the law.
Mrs. BLACK. Okay.
Secretary SEBELIUS. It allowed people who could not find an
affordable option to also have the option of purchasing a
catastrophic policy. That is the new piece, but it is not to
get the exemption. The exemption has always been based on a
hardship exemption. That has always been part of the law.
Mrs. BLACK. I can tell you, with 37 different changes in
this law, my folks are really confused about what this law does
and doesn't do and what applies to them.
Chairman CAMP. All right.
Mr. Marchant.
Mr. MARCHANT. Thank you, Mr. Chairman.
Secretary Sebelius, I have been hearing from the seniors in
my district who rely on Medicare Advantage plans to fund their
health care. They are very concerned as they are seeing their
benefit reductions increase and the result of the recent cuts
to the program.
It may come as a surprise to many seniors that only a small
percentage of the cuts resulting from Obamacare have actually
gone into effect. The vast majority of mandated Medicare
Advantage cuts have not yet gone into effect and are backloaded
in the Affordable Healthcare Act.
Can you please tell the seniors in my district that depend
every day on their Medicare Advantage plans what to expect in
the coming years once the Obamacare Medicare cuts are fully
imposed?
Secretary SEBELIUS. Congressman, I think there is a very
good story to tell on Medicare Advantage.
Seniors are benefiting from what has happened since 2010 in
a number of ways. The premiums in Medicare Advantage have
fallen by 10 percent since 2010. The enrollment has increased
to nearly 33 percent--has increased 33 percent to nearly 30
percent of Medicare beneficiaries choosing Medicare Advantage
plans. Quality has improved, with our five-star quality rating
system. And taxpayers and other Medicare beneficiaries who were
subsidizing the overpayment to insurance companies are now
again seeing the benefits of that.
So enrollment is higher, premiums are lower, quality is
better. We have many more plan sponsors in the market. There is
99.6 percent of Medicare beneficiaries who have Medicare
Advantage choices. And I think we are seeing an even stronger
program for the future.
Mr. MARCHANT. The Administration has issued countless
waivers, modifications, and forms of release for business and
others affected by Obamacare.
Forty percent of the enrollees in Medicare Advantage earn
less than $20,000 a year. Many of these individuals will have a
significant problem in dealing with the premiums and in the
cuts that they are experiencing in their future.
Can you guarantee that they will receive the same level of
benefits and the same access to their doctors? Because this is
their biggest fear.
Secretary SEBELIUS. Well, sir, I can't guarantee the
benefits that are outside of the Medicare benefit package.
Insurance companies pick and choose. Some offer free gym
memberships, some offer free eyeglasses. I can't guarantee
that.
What I can say is that seniors have more choices than they
have ever had. They have lower premiums in Medicare Advantage
plans than they have ever had. And they have higher quality.
More Medicare beneficiaries are choosing higher-quality plans.
And I think that is all very good news.
Medicare Advantage plans are still being paid over 100
percent of the costs of fee-for-service. And that is what is
gradually coming down, but there is no evidence--in 2010, it
was stated unequivocally that these cuts in Medicare Advantage
plans would destroy Medicare Advantage, that seniors would have
no choice. That was just flat-out wrong. And I think there is
very good news for the seniors now who are choosing Medicare
Advantage plans. They are paying less and having higher
quality.
Chairman CAMP. All right. Thank you.
Mr. Larson.
Mr. LARSON. Thank you, Mr. Chairman.
Thank you, Secretary Sebelius, for your dedication and hard
work, and we deeply appreciate it, and also your willingness to
come before this Committee and others and focus on what has
been a frustrating rollout but something that is vitally
important to the American people, our economy, and, most
importantly, to the wellbeing of our citizens.
You know, this is an issue that has been debated for the
last 4 years. I was impressed with something that John McCain
had to say, and I want to submit that for the record.
But to summarize, in talking about the Finance Committee
and what went on and the kind of debate that was taking place
in the Senate and actually took place here on the floor, what
Mr. McCain said: The Finance Committee submitted 564
amendments. One hundred thirty-five amendments were considered.
Seventy-nine roll-call votes were taken. Forty-one amendments
were adopted. Then the Senate Health, Education, Labor, and
Pension Committee approved the Affordable Care Act by a 13-to-
10 vote. Five hundred amendments were considered. More than 160
Republican amendments were accepted.
It is that kind of framework, even though Senator McCain
disagreed and wanted to see the bill--didn't vote for the bill.
And what he said at the end of the day and I think what the
American people expect is us to work together to improve the
bill.
What we see politically has been an attempt to total repeal
to the far extreme, saying every single letter of the bill
ought to be repealed, including preexisting conditions,
including the great disparity that existed, especially for
women, as it relates to health care.
There are a lot of positive, straightforward, pragmatic,
programmatic reforms that have been made and are
extraordinarily helpful to the American people. It is appalling
to the American public--I come from a State where this is
working extraordinarily well, where people are able to get
insurance when they didn't have it before, where what was
called the insurance capital of the world is now embracing and
changing and meeting these reforms, where genomic projects in
the biosciences are moving forward in an area that is going to
be helpful.
And the only thing that drags the country down is this
endless, mindless debate instead of constructive criticism
about how we can work together to improve the health and
wellbeing of the American citizens.
Thank you for your service.
Secretary SEBELIUS. Amen.
Chairman CAMP. Thank you.
Mr. Paulsen.
Mr. PAULSEN. Thank you, Mr. Chairman.
And, Madam Secretary, thanks for being here.
You know, Americans needed real healthcare reform before
the President signed the new healthcare law, and the fact is
they still need it today. The more we learn about the
President's new healthcare law, I think the more the facts show
it is hurting more people than it is actually helping.
I am hearing from constituents on a fairly regular basis
right now who are genuinely concerned. Many are upset, many are
confused because of the different delays in parts of the law.
And they are fearful; they are fearful about the cost to their
pocketbooks for increased healthcare costs for themselves and
their families.
And instead of getting what the President I think promised
when it was rolled out, for having lower premiums and lower
costs, many are now paying more for health care--significantly
higher deductibles, more expensive premiums. Many have lost
their insurance, the plans that they liked or the plans that
they had. Many have fewer choices now for doctors and for their
plans.
And there is no doubt that some companies have been forced
to scale back hours with more part-time jobs and less full-time
jobs, and so those employees that had good full-time jobs now
have part-time jobs. And there are jobs that are being lost. I
know the medical device tax was a central component for the
revenue stream of the Affordable Care Act, but we have 33,000
jobs now that have been estimated to have been lost in this
industry. And this is one of our best American success stories;
this is where health innovations come from to help patients.
And I have 51,000 seniors in my district that are part of
that Medicare Advantage population. And some of the past cuts
in the MA program and some of the proposed cuts are certainly
giving them concern for losing benefits or maybe even losing
some of their plans.
And I think, Madam Secretary, the irony in all this is that
in Minnesota, a State like Minnesota, where we had one of the
lowest uninsured rates before the law was put into place, we
are actually likely to see an increase in the uninsured number
now because the law eliminated a lot of the reforms
successfully that had been implemented in a State like
Minnesota.
So my question, Madam Secretary, is: Why should the
Administration as a part of your budget request get another
$1.8 billion for the exchanges and for all the other programs
that are associated with the rollout of Obamacare?
Secretary SEBELIUS. Well, again, Congressman, I think that
the evidence out with the recent health survey in the last 2
days indicates that the overall uninsured rate in this country
is actually going down. So more people have insurance coverage,
according to the survey, than did before this law was passed.
So the evidence says that this actually is making an impact,
and a positive impact.
I would also say that the vast majority of Americans have
coverage through their workplaces, and that coverage over the
last 3 years has gotten stronger. There are more consumer
protections, so they don't have an annual cap anymore and they
can't run out of treatment during chemotherapy, they have some
features that----
Mr. PAULSEN. But, Madam Secretary----
Secretary SEBELIUS [continuing]. They didn't have before.
But that is in place.
Mr. PAULSEN. But----
Secretary SEBELIUS. Medicare has gotten stronger with this
plan. There are additional people who now----
Mr. PAULSEN. Madam Secretary----
Secretary SEBELIUS [continuing]. Have Medicaid benefits.
And the individual market----
Mr. PAULSEN. I don't mean to interrupt, but can I just ask
one more question? Do you expect healthcare premiums to
increase again next year, on average? Will they go up? Because
they certainly went up for a lot of folks this year, but do you
expect that trend to continue next year again?
Secretary SEBELIUS. I think premiums are likely to go up,
but go up at a smaller pace. And what we have seen since 2010,
the increases are far less significant than they were prior to
the passage of the Affordable Care Act. Yes, sir.
Chairman CAMP. All right.
Ms. Jenkins.
Ms. JENKINS. Thank you, Mr. Chairman.
Thank you, Madam Secretary, for being here. Greetings from
Kansas.
Secretary SEBELIUS. Thank you.
Ms. JENKINS. I wanted to visit with you about the
President's healthcare law and the costs associated with it.
The American taxpayer, it has been estimated, will be billed
nearly $2 trillion over the budget window. And the costs
continue to mount. A Government Accountability Office, GAO,
report issued last year says that the law will increase the
Federal deficit $6.2 trillion in the long run.
The cost of this law seems to be rising every time we turn
around. In the budget proposal that you are here to discuss
with us today, the President is requesting another nearly $2
trillion for the healthcare exchanges.
And after all of the broken promises--like if you like what
you have, you can keep it; if you like your doctor, you can
keep it; premiums will go down by $2,500--I am wondering if you
can tell us all today what happened to the President's promise.
And I will quote him. He said, ``I will not sign a plan that
adds one dime to our deficits, either now or in the future.''
This is what he told us in a joint session of Congress in
September of 2009. ``I will not sign it if it adds one dime to
the deficit now or in the future, period.''
So given that the President's budget that you are here to
defend today never, ever balances, can't ever point to a time
in this Nation's future that you will stop spending more money
than we take in, I am just wondering how you can explain his
promise to us, first off.
Secretary SEBELIUS. Well, Congresswoman, greetings back to
Kansas.
And the Congressional Budget Office, which I think you all
rely on for scoring various pieces of legislation, when the
Affordable Care Act was passed, said that the passage of the
Act would save about $100 billion in the first 10 years and
then closer to $1.1 trillion in the second decade. They updated
that score and made it even more generous when cost trends
began coming down.
That is what the Congressional Budget Office said. They
have scored that again. Every time there is a vote on repeal
and questions are asked, they continue to say repealing the
Affordable Care Act would actually add to the deficit, not that
it would subtract from the deficit.
So that, I think, is exactly what the President was talking
about when he said he wouldn't sign a bill. Unlike the Medicare
Part D, which was paid for on some credit card and added
enormously to the deficit and still was never paid for, the
Affordable Care Act was fully paid for within the scope of the
law and was----
Ms. JENKINS. But, Madam Secretary, it is not fully----
Secretary SEBELIUS [continuing]. Scored as detracting from
the deficit, so----
Ms. JENKINS [continuing]. It is not fully paid for. How can
you explain--and now that you have the data that indicates this
will add over $6 trillion to our national debt, what have you
proposed that is going to bring that into line?
Secretary SEBELIUS. I have to tell you, Congresswoman, I
would be happy to try to answer that. I have no idea what the
$6 trillion to the national debt is based on, so I would love
to----
Ms. JENKINS. But you do know what the Government
Accountability Office is. And are you questioning their----
Secretary SEBELIUS. I have never seen the study that you
are talking about. Yes, I----
Chairman CAMP. All right.
Secretary SEBELIUS [continuing]. Do know what the
Government Accountability Office is. Thank you. But I will be
happy to look up the study. I am not aware of that.
I do know the scoring on the Affordable Care Act by the
Congressional Budget Office, and it continues to be updated.
And I would be happy to provide that to you.
Chairman CAMP. All right.
Mr. Thompson.
Mr. THOMPSON. Thank you, Mr. Chairman.
Madam Secretary, thank you very much for being here and for
your tireless effort to ensure that people have access to
quality, affordable health care.
I would like to ask you questions about two things that are
in the budget, and I will just ask the questions and give you
time to respond.
When is the new GME program? I think this is an issue. Ms.
McMorris Rodgers and I have a bill that would hopefully provide
more opportunity to train physicians. And, as you know, folks
tend to practice where they train, and in especially rural and
underserved areas, this is huge.
The Administration has a targeted support program, and I am
just interested in what sort of assurance we will have that
they will provide training outside of hospitals and in
community-based settings and what the certainty is going to be
in this program. Because you know the residency programs take a
long time, and I want to make sure that the program is in place
so folks have a certainty.
And then, second, on the administrative law judge appeals
funding, the Administration has put $100 million in for
Medicare hearings and appeals. And I know that is a little more
than was in last year, but I question whether or not it is
enough. And what are you going to do until the proper funding
level is reached to make sure that our constituents don't get
hung up in this void?
Secretary SEBELIUS. Congressman, the training grants will
be consistent with the workforce goals, which include targeting
more physicians to primary care and understaffed specialties,
encouraging the practice in rural and underserved areas, and
encouraging training in some of the key competencies for
delivery system reform.
So I think it is very consistent with the outline that you
have made about your goals in the workforce. And I think that
HRSA, the Health Resources Services Administration, who would
be administering these training dollars, has the expertise in
identifying the underserved areas throughout the country and
the whole workforce capacity issue. And that is why I think
this program is really on target to try to not only train the
providers that we are missing but making sure, connecting them
to the areas that are the most underserved.
In terms of--what was your second? Oh, yes, the
administrative appeals. We are doing two things simultaneously,
and we would welcome the opportunity to work with Congress. We
don't want to recede from what are appropriate examinations of
overcoding and overbilling and fraudulent activities; on the
other hand, I think there are some system changes we can put in
place.
But we share your concern that beneficiaries should not be
in some queue waiting for appeals to be made, and we are trying
to triage the system. But we would love to work with you on it.
Chairman CAMP. All right. Thank you.
Mr. Smith.
Mr. SMITH. Thank you, Mr. Chairman.
And thank you, Madam Secretary, for taking time to have a
conversation with us today. Obviously, the issues are very
important. I am concerned that some of the policies enacted out
of Washington, D.C. are actually hurting the very people,
individuals they were intending to help.
If you could elaborate or reflect a bit on critical access
hospitals. We know that that is a singular designation for a
number of different approaches in various parts of the country.
And, obviously, I represent a large number of critical access
hospitals in rural Nebraska. I am sure you are probably
familiar with facilities in Kansas.
The treatment of these hospitals, with kind of a cookie-
cutter, one-size-fits-all approach, whether it is the 96-hour
rule or whether it is the physician supervision, these are very
cumbersome and burdensome. I have tried to find out exactly how
and why they were adopted or proposed, even from HHS and CMS.
Have those saved money? I mean, can you point to the
effectiveness of these things? Because it seems to me that the
very professionals who are trained to make healthcare decisions
find Washington, D.C. meddling and standing between a patient
and their provider.
Secretary SEBELIUS. Congressman, I certainly share your
concern about the important nature of critical access
hospitals. And, as you say, coming from the State of Kansas,
where vast territory is rural and closing a hospital often
means closing a community, I know how essential a hospital
presence is.
I think that what the administrators at CMS are trying to
do is find the appropriate balance. As you know, critical
access hospitals are still paid more than 100 percent of
Medicare reimbursement. There is evidence that the proximity of
one hospital to another, kind of, belies the definition of
critical access----
Mr. SMITH. But that doesn't lead to--these arbitrary
regulations, say, physician supervision, for example, you know,
requiring a physician to be on the premises, on the same floor
of the premises, when a phlebotomist might draw blood in order
to be reimbursed, it seems to me that that would actually drive
up the cost of the delivery of care rather than find an
efficiency.
Secretary SEBELIUS. Well, again, I would be happy to take
the specifics back and try to find the evidence behind why
specific recommendations were made. I can assure you that at
least the staff that is looking at these situations is very
concerned that patients not be jeopardized by the care and
trying to not add administrative burden.
But I would be happy to, if you could give me some
specifics----
Mr. SMITH. Absolutely.
Secretary SEBELIUS [continuing]. Get the evidence back to
you.
Mr. SMITH. Thank you. And, again, I think these are
examples that I hope we can avoid of the Federal Government
standing between a patient and his or her provider.
Thank you. I yield back.
Chairman CAMP. Thank you.
Mr. Buchanan.
Mr. BUCHANAN. Madam Secretary, thanks for being here today.
I want to touch on the biggest issue in our area, employer
mandates. A lot of people are concerned. I am looking at a New
York Times article. It is about 2 weeks old; I would be glad to
give it to you. But it says cities, counties, public schools,
community colleges around the country are being limited or
reducing hours in terms of part-time employees to avoid paying
healthcare insurance under the ACA. And this is coming from
State and national leaders from around the country.
Are you aware of this? And do you have any sense of the
impact that this is having on communities? And I can tell you
in our community, in Sarasota-Bradenton, Florida, it is a
gigantic issue.
Secretary SEBELIUS. I have heard, Congressman, certainly,
conversations about the 30-hour, kind of, cliff: that more than
30, people would be required to provide health coverage for
those employees; less than 30, they would not. Again, I think
there is disputing evidence of what is happening with that, but
we are watching it very closely----
Mr. BUCHANAN. I would just ask you to take a look at it. We
need to clearly--because this is--I know we are trying to get
more health care out there, but everybody is taking, in a
sense, a 25-percent pay cut.
I also want to mention something you said earlier, about
the fact that it only affects 2 percent of the businesses. Do
you have any idea--it is one way to spin it or present it, but
do you have any idea what the 2 percent make up in terms of the
number of jobs, the impact in the country? Do you have any
sense of what that 2 percent is?
And I will say that because I have one employer in my area,
they have over 1,000 employees. They are moving most of their
employees from 40 hours to 29, and they are part of the 2
percent. But I think you are looking at 20, 30 percent of the
jobs across the country are going to be impacted by these
mandates. And even though you are pushing the mandates off,
people are making those adjustments in the public sector and
the private sector today. So we are very concerned about that.
But I would like to have you get back to me on what that 2
percent makes up.
One other thing I want to just mention, in terms of the
taxes and revenues. Part of the reason we are having a record
surplus this year--not a surplus, but record revenues this year
is because we did increase taxes 25 percent. We went from 35 to
44. That is what the passthrough entities are paying that
create a lot of the jobs in the country. And if you look at the
taxes for State and Federal, the average across the country is
49.6.
So I don't know how much more burden we can put on our
employers across the country, as we, as you have mentioned, we
need additional revenues. I hope you are not considering going
after more passthrough entities that are the job creators of
America.
Secretary SEBELIUS. Congressman, one thing I would point
out is that the recently released rules by the Treasury
Department did look at the 30-hour employee and particularly
the, kind of, mixed work group where you have part-time and
full-time, and indicated that employers, if they offer coverage
to 70 percent of their employees, would meet the criteria.
I would tell you that the 30-hour definition came out of
the offerings in the private-sector marketplace prior to the
Affordable Care Act. That is what employers chose to do, that
people who were working more than 30 hours were defined as
full-time employees, people who were working less--so as the
Congress looked across the country, that is where that hour
rate came from.
But we are watching, as I say, that very closely.
Chairman CAMP. All right. Thank you.
Mr. Doggett.
Mr. DOGGETT. Thank you, Mr. Chairman.
Madam Secretary, so much of the original promise of the
Affordable Healthcare Act has been undermined by faulty
implementation that has sometimes been indifferent to local
concerns. Last month, the Congressional Budget Office, as you
know, concluded that faulty implementation of the healthcare
law, quote, ``impeded so many people's enrollment in exchanges
that 1 million fewer people will actually obtain exchange
coverage this year than they had previously projected.''
From your testimony this morning, it is clear we will not
have 7 million or even 6 million. And, of course, the number
that is
really important is not how many people have enrolled, but how
many people have paid their premiums and are actually getting
exchange-based coverage, a number we have never been given.
As you are aware, since last August, I have been voicing
concerns to your office about implementation in Texas. At best,
less than 10 percent of exchange-eligible Texans have selected
a plan. In other words, more than 90 percent of the people whom
we wrote this law to get exchange coverage for have not been
covered.
To meet your projections, we would need to enroll and have
premiums paid for as many people this month as have been
enrolled since the beginning in October to yesterday, or last
week.
This is much more than a website problem, though I believe
that the individual assistance program there has been handled
with about the efficacy of the original website rollout. I have
been unable to get straight answers about even who is
responsible for coordinating in-person assistance in Texas--a
place where we have multiple assisters in some areas and none
in many others.
I have sought to get even just a dedicated line so that the
certified counselor, who yesterday had put in 10 hours trying
to help one person, would be able to call a line dedicated to
assistance counselors to be able to get prompt assistance and
help people get enrolled in this. But there has been no
response from HHS or CMS about that.
It seems to me that we are to a point where, instead of
just circling the wagons against all the political arrows that
are shot against this plan, we need a little more
accountability, and we need to ensure that the next enrollment
period is not handled as poorly as the last one.
I am very interested in answers to the questions that the
Chairman raised at the beginning of this hearing. We haven't
gotten them yet, and I hope that we do get them.
We come at this from a different perspective, but taxpayers
deserve to get their money's worth. And I think much of the
focus as it relates to in-person assistance needs to be to find
out--and I assume, Mr. Chairman, that some of these questions I
have been raising since last fall can be submitted by you with
your questions for prompt answers, such as how much it costs us
per person who is actually insured through the exchange for
some of these contractors that have been providing these
services. Two Washington Beltway contractors have been paid $9
million for in-person assistance in Texas. I have been unable
to find out what it costs per enrollee for those persons.
And so I think that, while our goal should be to try to
improve and strengthen this Act, if it is to perform any better
in the next enrollment period than it has in this one, we need
answers to these questions to get the taxpayer their money's
worth and to get the promise of this Act fulfilled.
And I yield back.
Chairman CAMP. All right.
At this time, Dr. Price.
Mr. PRICE. Thank you, Mr. Chairman.
Welcome, Madam Secretary, back to the Committee.
I think you sense a growing lack of trust that we reflect
from our constituents. Americans have a growing lack of trust
in their own Federal Government. I think there is no doubt
about that. And I would suggest that Obamacare is really the
poster child for one of the reasons that exists or that is
increasing because word isn't matching deed. Promises have been
made and absolutely broken.
And as a former practicing physician, it is distressing
because we are not talking about just some nebulous program
now; we are talking about real people's lives. And in so many
ways, some of the stories that you have heard here, real people
are getting harmed.
In spite of that, you have the Senate Majority Leader,
Harry Reid, taking to the floor of the Senate and saying any
story that decries a problem with Obamacare, all of them are
lies. Do you agree that all of these stories that have been
raised are lies?
Secretary SEBELIUS. Congressman, I did not hear what
Senator Reid said. And, of course, there are lots of anecdotes
of lots of people and----
Mr. PRICE. If you were to----
Secretary SEBELIUS [continuing]. Lots of success stories.
Mr. PRICE. If you were to have heard the Senate Majority
Leader say all the stories----
Secretary SEBELIUS. Yeah, I----
Mr. PRICE [continuing]. About ACA are lies----
Secretary SEBELIUS [continuing]. I really don't want to
comment on his comments. I didn't hear them.
Mr. PRICE. Again, it is--and that is the kind of trust that
is lacking, because it begs for----
Secretary SEBELIUS. I just said clearly there are lots of
people and lots of real stories. I don't assume that people are
lying, no.
Mr. PRICE. Let me go to some specific questions. You
mentioned in your opening remarks 4.2 million people have
signed up on the exchange, and I want to get to some of the
concerns that others have.
How many of those that have signed up, that have enrolled
in Obamacare, have paid their premium?
Secretary SEBELIUS. I can't tell you that, sir, because I
don't know that.
Mr. PRICE. How can it be that HHS, in charge of this
program, cites a number, 4.2 million people signed up, but has
no idea how many people have paid?
Secretary SEBELIUS. Because the consumers don't pay us;
they pay their insurance company. We can tell you who has
enrolled----
Mr. PRICE. You can get information from the insurers?
Secretary SEBELIUS. We get information now in aggregate
form of the customers who qualify for----
Mr. PRICE. Let me ask another question.
Secretary SEBELIUS [continuing]. A tax credit. Not all
their customers do, and----
Mr. PRICE. How many of those, of the 4.2 million, were
previously insured?
Secretary SEBELIUS. I do not know that, sir.
Mr. PRICE. Isn't it true that many Members of Congress are
in that 4.2 million? We had insurance before; we were forced
off that insurance----
Secretary SEBELIUS. I assume if you have signed up on the
exchange, you are in that number, yes, sir.
Mr. PRICE. McKinsey did a recent survey that said 27
percent of those joining the exchanges were previously
uninsured. And that is a low number compared to what you all
projected. Is that consistent with your information?
Secretary SEBELIUS. Again, we don't collect information on
the previously insured. I think these questions would be--we
would be happy to give answers to you as soon as we have
accurate information. In the meantime, insurers have this
information about their customers, because that is who is being
paid and that is who is enrolling.
Mr. PRICE. It begs credulity, Madam Secretary, that you
don't know the answers to these----
Secretary SEBELIUS. These are private insurance plans, and
customers are----
Mr. PRICE. You all are charged with running the program.
Secretary SEBELIUS [continuing]. Buying a private product
from a private insurance plan. We qualify them, we get their
tax information to make sure they qualify, and then send them
to their company----
Mr. PRICE. The American people trust that you----
Secretary SEBELIUS [continuing]. And they enroll with the
company.
Mr. PRICE [continuing]. Know what you are doing, and you
are not fulfilling the bill.
Chairman CAMP. All right.
Secretary SEBELIUS. This is not Medicare or Medicaid, sir.
It is a private plan in the private market. It is not
government insurance, in spite of the fact that it has been
characterized that way. People are buying a product in the
private market.
As soon as we have accurate information, we will give it to
you, but we do not currently have information about how many
people have paid.
Mr. PRICE. Sounds like last fall, Mr. Chairman.
Chairman CAMP. All right.
Mr. Gerlach.
Mr. GERLACH. Thank you, Mr. Chairman.
Madam Secretary, there is a section in the ACA on a
reinsurance tax; is that correct?
Secretary SEBELIUS. Yes.
Mr. GERLACH. What is the purpose of that reinsurance tax,
the proceeds from that tax?
Secretary SEBELIUS. Well, there actually are three
components of risk corridors, reinsurance tax, and risk
adjustment. A 3-year program that, again, is paid for by the
insurance companies----
Mr. GERLACH. Right.
Secretary SEBELIUS [continuing]. Operating in the market,
and it is to really balance the risk pool. It is exactly the
same as the risk program----
Mr. GERLACH. Does the reinsurance tax----
Secretary SEBELIUS [continuing]. In Part D when Part D
started----
Mr. GERLACH. I am focused on the reinsurance tax, in
particular. Are the revenues to be used to fund other portions
of the Act, including exchanges?
Secretary SEBELIUS. The revenues will be used to balance
the marketplace.
Mr. GERLACH. How much is expected to be raised in the
reinsurance tax this year?
Secretary SEBELIUS. I was just told that figure is $10
billion for this year.
Mr. GERLACH. Okay. But there is also a proposal out there
to provide waivers to some of those that are right now under
the law to pay that reinsurance tax; is that correct? In
particular, unions?
Secretary SEBELIUS. Oh, yes, this is the--I am sorry--the
rule that if you are self-administered and a self-funded plan,
you do not pay the tax, and that is not exclusive to unions.
There are a lot of self-administered, self-funded plans that
are not paying the tax.
Mr. GERLACH. Okay. So how much relief under this waiver
will unions receive as a result of this rule?
Secretary SEBELIUS. I could get you that information in
writing.
Mr. GERLACH. Could you give me a ballpark right now?
Secretary SEBELIUS. I can't.
Mr. GERLACH. Okay. Well, I find it curious that--the
reinsurance tax section of ACA is very clear as to who is to
pay that tax. It is to be used, then, to help fund aspects of
the ACA, including exchanges. And yet the President is
requesting an additional $1.8 billion in his budget request for
program management to continue to build and operate exchanges.
So what it seems to me is, you are providing a waiver to
perhaps what would be termed ``political friends'' not to pay
what the law requires them to pay, but then coming back to the
taxpayers and asking them for more money to help fund the
exchanges.
Secretary SEBELIUS. Well, sir, the statutory language talks
about issuers or those who operate plans with third-party
administrators. And the self-funded, self-administered plans,
which are a much broader category than you have just described,
are not in the statutory configuration of the law.
In addition----
Mr. GERLACH. Okay. Just so----
Secretary SEBELIUS [continuing]. The 1.8----
Mr. GERLACH [continuing]. I am clear on what you are
saying, Madam Secretary, just make sure I understand what you
are saying, it is your determination that those that are being
granted this waiver are not covered by the language of the Act,
and therefore----
Secretary SEBELIUS. They are not----
Mr. GERLACH [continuing]. You are granting that waiver.
Secretary SEBELIUS [continuing]. An issuer, nor do they
operate with a third-party administrator, yes. Self-funded,
self-administered plans--again, much broader than the category
of unions; there are many who operate that way--are not
specified in the statutory language.
Mr. GERLACH. Then why were unions jumping up and down
asking for this relief if they weren't covered by the tax to
begin with?
Secretary SEBELIUS. I can just tell you that is what the
statutory language says. That was our interpretation of the
statutory language. That is the rule we put out. The $1.8
billion that you suggest, 1.2 of that will be paid for by user
fees. Six hundred million dollars is the request for
appropriation.
Chairman CAMP. All right.
Mr. GERLACH. Thank you.
Chairman CAMP. Mr. Becerra.
Mr. BECERRA. Thank you, Mr. Chairman.
Madam Secretary, great to have you with us.
Actually, before I go to some of the questions about the
Affordable Care Act, I wanted to check in with you regarding
the financial alignment demonstration project being carried out
in California, called the Dual Eligible program, for
beneficiaries who receive both Medicare and Medicaid.
We share the goal of ensuring that everyone who transitions
into this program will have uninterrupted, quality health care
that they can count on. And I was just wondering, will you and
CMS Administrator Tavenner keep us informed as you continue the
rollout so we can make sure that there is a successful
implementation of that program?
Secretary SEBELIUS. Yes, sir, we will.
Mr. BECERRA. Appreciate that.
Now, I know that, even today, if anyone is watching, there
is no reason why folks should not be left with some sense of
misunderstanding about what is going on. The disinformation and
scare tactics that have been used over and over again have been
difficult to combat. But I wanted to just make sure about
something.
As I read the facts, since the passage of the Affordable
Care Act, you mentioned that several million people have now
become insured. In fact, I think you mentioned that over 4
million people now have private health insurance.
Did you mention the 3-or-so million young Americans who
have insurance as a result of the Affordable Care Act, that now
they can stay on their parents' insurance policy?
Secretary SEBELIUS. I did not mention that.
Mr. BECERRA. And that is about 3 million or so?
Secretary SEBELIUS. Yes, sir.
Mr. BECERRA. And we have some----
Secretary SEBELIUS. Three million previously uninsured. Far
more young adults are on their parents' plan, but 3 million
previously uninsured young adults.
Mr. BECERRA. Got it.
And we have some 4 million or more individuals who now have
health coverage as a result of Medicaid?
Secretary SEBELIUS. Closer to 8.9 million in the Medicaid.
Some of those are renewals; some of them are newly eligible in
States that chose to expand their Medicaid program.
Mr. BECERRA. Right. So the 8-million-plus number includes
people who probably qualified before but had--or who just
transitioned from current Medicaid, what they had before to
what they have now.
Secretary SEBELIUS. Some States require yearly renewals,
and they are included in that, but there are close to 9 million
people who will have Medicaid coverage. A number of those are
newly insured.
Mr. BECERRA. So if I do the quick math, 9 million under
Medicaid, 4 million with the private insurance under the
marketplace, 3 million young adults, that is about 16 million
Americans who have health security today that they might not
have had before.
Secretary SEBELIUS. That is accurate.
Mr. BECERRA. My understanding, as well, looking at the job
numbers, that since the Affordable Care Act passed, more than 8
million jobs have been created in this country, not lost. And,
in fact, if you look just at the--I looked at just the
healthcare sector, and in the healthcare sector, since the
passage of the Affordable Care Act, we have seen over a million
jobs created, just in the healthcare sector.
So as we continue to hear folks talk about job loss, that
the Affordable Care Act will result in job loss, just the
opposite is occurring. And, of course, we are also finding that
we have seen a decrease in the rate of increase of the cost of
health care, which I would think you would agree is a good
sign.
Secretary SEBELIUS. I think that is a good sign.
And on the job front, we also see that the number of people
working part-time hours is decreasing, the number of full-time
workers is increasing.
Mr. BECERRA. Mr. Chairman, if I could just add to the
record--ask unanimous consent to submit into the record the
CBO's updated estimates that deal with job loss and the issues
of employment and job creation.
Chairman CAMP. Yeah, without objection.
Mr. Roskam.
Mr. ROSKAM. Thank you, Mr. Chairman.
Madam Secretary, we just heard from Mr. Becerra, who
criticized critics, characterizing it as disinformation and
scare tactics, and yet that wasn't what we heard from Mr.
Doggett. Mr. Doggett was essentially admonishing the Department
for a lack of information and a lack of accountability.
So I want to associate myself with the spirit of Mr.
Doggett and also bring in one of the themes that Dr. Price was
trying to articulate, and that is this: Wouldn't it be great,
Madam Secretary, if Dr. Price, in the question that he asked,
if you were able to say, here is the answer, here is the
answer, when he made the inquiry and you said, you know what, I
don't have that information, I am just the Secretary of Health
and Human Services, that is what the private insurance
company--that was your answer a minute ago. Wouldn't it be a
great thing if you were to say, here is the information and
here is the answer?
And the problem is, at least as far as the construction of
the Affordable Care Act, as it is currently constructed, some
of this information you may not know, some of it you may, but
it is because of the limitations of the Act itself.
So we have an inspector general, and your own inspector
general is only able, Madam Secretary, to go and ask inquiries
of Health and Human Services. That inspector general who
reports to you cannot go and make any inquiries to the
Treasury.
One of your earlier answers, you cited tax credits. Well,
when it comes down to it, the HHS Secretary has no jurisdiction
over tax credits. You don't know what is happening in that
other department.
Wouldn't it be a good thing if we were to amend the law and
you had that information and there were a special inspector
general that had broad jurisdiction? Wouldn't that be a good
thing?
Secretary SEBELIUS. I don't think that is necessary, and I
think that is additional expenditure.
I will give you the information as soon as we have it. And
we will have it----
Mr. ROSKAM. Yeah, but by your own admission----
Secretary SEBELIUS [continuing]. From insurance companies,
but we do not have it now.
Mr. ROSKAM [continuing]. You don't know it.
So why is it a good idea to have a Special Inspector
General for Iraq Reconstruction? Why is it a good idea to have
a Special Inspector General for Afghanistan Reconstruction? Why
is it a good idea to have a Special Inspector General for TARP
oversight? Cumulatively, all of these have literally saved
billions of dollars.
The Affordable Care Act, according to the Congressional
Budget Office, is a $1.8-trillion expenditure. What is it that
is sacrosanct that says that this should not be subject to that
broad jurisdiction?
By your own admission, you don't know the answers to these
questions, do you?
Secretary SEBELIUS. I could not answer Dr. Price's question
because I don't have the information from the insurance
companies yet.
Mr. ROSKAM. Right, because you can't----
Secretary SEBELIUS. We will have it, and I will----
Mr. ROSKAM [continuing]. Reach out.
Secretary SEBELIUS. This is in the private sector. This is
not Treasury. This is private insurance companies----
Mr. ROSKAM. Right. That even begs the question----
Secretary SEBELIUS [continuing]. Three hundred of whom are
selling policies in the marketplace.
Mr. ROSKAM. You can't get to it. Your inspector general
can't get to it.
Secretary SEBELIUS. This is not an inspector general issue.
It is private insurers who are selling plans to their
customers. They can tell----
Mr. ROSKAM. That is even worse.
Secretary SEBELIUS [continuing]. You know how many of their
customers have----
Mr. ROSKAM. It is ongoing----
Secretary SEBELIUS [continuing]. Paid their bills.
Mr. ROSKAM [continuing]. And you don't have the
information, and you don't have the capacity to have the
information.
Chairman CAMP. All right. I would just say, Madam
Secretary, part of the frustration is that you did have the
answer to the number of insured children, and that is also
private-sector information, but yet, when we are trying to get
further information, we don't----
Secretary SEBELIUS. That came directly, Mr. Chairman, from
the insurers. And I am telling you, as soon as we have this
information from the insurers--we don't collect it. We didn't
have it. They turned that in to us.
Chairman CAMP. All right.
Dr. Boustany.
Mr. BOUSTANY. Thank you, Mr. Chairman.
Madam Secretary, one of the glaring omissions in ACA was
addressing the flawed physician payment formula under Medicare,
SGR, the sustainable growth rate formula. A lot of work has
been done. It has been a thorny problem facing Congress for
quite a while, and over the past few years, we have actually
gotten to an agreement on a policy--bicameral, bipartisan.
So first question: Does the Administration agree with this
policy, and will the Administration support this policy?
Secretary SEBELIUS. Well, as you know, Congressman, the
President has supported a long-term fix of the SGR long before
the Affordable Care Act was signed into law. He has included it
in every budget. And, yes, we do support the bicameral
position.
Mr. BOUSTANY. Okay.
The other issue is going to be paying for this. And this
will be a difficult fight, obviously, and it certainly can
become a partisan fight. But in the interest of trying to get
something done, will the Administration come forward and work
with Congress, work with the Senate, to try to get to a
solution on this?
Secretary SEBELIUS. We would be eager to do that. The first
couple of budgets that the President put forward had specific
pay-fors. Those were rejected. He does assume that the SGR is
fixed; we have put that in our baseline for the next 10 years.
We would be happy to work with Congress.
Mr. BOUSTANY. And pursuant to that same question, the
President, in the past, put on the table some Medicare reforms
that would help, I think, improve the outlook of Medicare over
the long haul, one being combining Medicare Part A and Part B
into a single structure, making it work more like a modern
insurance type program. Second was limited means-testing.
Does the President still support these?
Secretary SEBELIUS. I think, as you know, Congressman, that
was put on the table as part of a global package of both
entitlement and structural spending reforms. And we would be
eager to talk about those issues in that, kind of, global
package.
Mr. BOUSTANY. But not within the context of reforming SGR,
which is a pretty big piece.
Secretary SEBELIUS. Well, the SGR does impact, certainly,
Medicare physicians. It is probably the single biggest threat
to Medicare's future in terms of beneficiary service, the
looming cuts.
Mr. BOUSTANY. It is a threat to access.
Secretary SEBELIUS. So we are eager to talk about pay-fors,
but I think having a more global discussion about entitlement
reform, tax reform, and revenues is also something we would be
eager to----
Mr. BOUSTANY. And, finally, is the Administration willing
to put forth the capital to try to solve this before the end of
March so that we can avoid another patch, which will be
expensive?
Secretary SEBELIUS. Put forward the capital--again, we
would be happy to have the discussion with Members of Congress
about what the pay-fors might look like.
Mr. BOUSTANY. Thank you, Mr. Chairman.
Chairman CAMP. Thank you.
Mr. Neal.
Mr. NEAL. Thank you, Mr. Chairman.
Madam Secretary, I want to come back to you in a few
moments about you as the trustee of Medicare and Social
Security, but just a reminder here that the Democratic minority
vigorously opposed the original Part D prescription drug
benefit plan offered by the Bush Administration because we did
not think it had gone far enough. Upon ascending to the
majority right after, we took the role not to undo what had
been done but instead to work hard to improve it, and closing
the donut hole was a pretty masterful piece of work. And now
there is broad acceptance of the whole notion of the Part D
benefit. Now, I wish that that would have been the model that
we would have adopted in Congress for working with ACA.
But let me draw your attention specifically to a couple of
issues: graduate medical education and the role of Medicare in
financing our hospitals across the country. As you know, in
Massachusetts, our hospitals would be the equivalent of what
Boeing perhaps means to the Pacific Northwest. I think that is
a reasonable description in terms of not only the success that
they have but the employment opportunities that they present.
You, I think, by law, have to sign every year a document
certifying as to the longevity of Medicare. Is that correct?
Secretary SEBELIUS. Yes, sir.
Mr. NEAL. Would you talk a little bit about what ACA has
done to that signing?
Secretary SEBELIUS. Yes.
The first year I was a Medicare trustee in 2009, the
anticipation was--the actuarial projection was that Medicare
would begin to be insolvent--not that they wouldn't have any
money, but they would have about 70 cents on the dollar--by
2017. So, in 2009, it was a 2017 cliff.
The passage of the ACA added years to that solvency,
according to the actuary who looked at the law and the impact
over time, and subsequent budgets have also added years. So we
are now, the 2015 budget, according to the actuarial
projection, would add an additional 5 years to the solvency of
the Medicare Trust Fund.
So during this Administration, I would say significant
solvency years have been added.
Mr. NEAL. Are there Republican trustees?
Secretary SEBELIUS. Yes.
Mr. NEAL. Do they sign the document?
Secretary SEBELIUS. Yes, they do.
Mr. NEAL. And did they sign?
Secretary SEBELIUS. Yes.
Mr. NEAL. Okay.
My point is that, here is an example, again, of a very good
story, much like the one that Secretary Lew presented about
deficits in his appearance before the Committee recently, and
it is frequently underreported in terms of the good news,
because the emphasis remains on the conflict of the story as
opposed to the substance of the story.
So I would hope that you use the opportunity, with Medicare
solvency, graduate medical education, to promote the notion
that this is a widespread success story on that basis.
Secretary SEBELIUS. Thank you.
Chairman CAMP. All right. Thank you.
Mr. Reichert.
Mr. REICHERT. Thank you, Mr. Chairman.
Madam Secretary, in response to Mr. Reed's question
regarding legislation, your answer was that there was no
legislation that has passed Congress. Are you aware that there
are actually eight pieces of legislation that have passed
Congress and have been signed by the President in regard to the
Affordable Care Act?
There are eight pieces of legislation passed by Congress
and actually signed into law by the President. So there is
another--I think you ought to go back and review the laws that
have been passed that affect the law that you are trying to
implement.
I want to go back real quick. It has been 4 years since
passage of the healthcare law, nearly 6 months since the
exchanges opened for business. So let's look back at the 4
years.
In January 2010, the President spoke at the White House
Republican Retreat and acknowledged that some stray cats and
dogs were added to the healthcare bill and that some of the
provisions that got snuck in the law might have violated the
pledge that, if you like your health care, you can keep it; if
you like your doctor, you might be able to keep your doctor.
In February 2011, during your testimony and my questioning,
you said, in response to whether or not you can keep your
doctor or your health care, you said, ``I don't think there is
any language in the bill that interferes with the current
system.'' Again, you were wrong.
Again, in February 2012, when I raised these same concerns,
you said, ``The notion that somehow companies in grandfathered
plans will not be able to keep their grandfathered plan is
really not accurate.'' Again, you were wrong.
Yet, due to the law's many mandates and the regulations put
out by HHS under your leadership, as many as 5 million
Americans have lost their existing healthcare plans. The law
has created so many disruptions that the President announced,
perhaps illegally we think, that States and insurers can begin
to ignore the law.
In fact, as Mr. Reed said, there are 37 changes to the law.
September 24th, September 26th, October 23rd, November 14th,
there were seven more changes to the law. On November 21st,
November 22nd, January 1st, November 27th, and 30th of
November, December 12th, December 19th, December 23rd.
And then, Secretary Sebelius, you were on Fox News and
assured the American people who were watching Fox News at that
time that there would be no more delays. Yet, on January 10th
of this year, another delay; January 14th, another delay; and
then February 10th, another delay.
Are there any further delays? Can you make a promise to the
American people today, another promise, Madam Secretary, that
there will be no more delays to the so-called Affordable
Healthcare Act?
Secretary SEBELIUS. We will continue to put out
regulations----
Mr. REICHERT. Do you make a promise to the American----
Secretary SEBELIUS [continuing]. And policies as we go
through this Act.
And, sir, I would like an opportunity to correct some of
the, I think, misstatements.
Mr. REICHERT. Will there be----
Secretary SEBELIUS. There is nothing in the law that would
stop insurance companies----
Mr. REICHERT. Will there be further delays, Madam
Secretary?
Secretary SEBELIUS. There are no planned delays in the law
that----
Mr. REICHERT. Do you consult with HHS when you--or, pardon
me. Do you consult with the Treasury Department before
announcing any delays and changes?
Secretary SEBELIUS. Sir, most----
Mr. REICHERT. Do you consult with----
Secretary SEBELIUS [continuing]. Of the regulations that
we----
Mr. REICHERT [continuing]. The Department of Treasury----
Secretary SEBELIUS. Most of the regulations that are
written are written----
Mr. REICHERT. Do you consult with the Department of
Treasury, yes or no?
Secretary SEBELIUS. Sir, the regulations require three
agencies' participation: Treasury, Labor, and HHS. So there is
broad consultation.
Mr. REICHERT. Okay. Thank you.
Chairman CAMP. Mr. Ryan is recognized.
Mr. RYAN. Thank you.
I would just quickly say to my friend from Massachusetts,
he should look at the unprecedented original appendix of the
trustees' report that talks about the double counting that
occurred. And the putting Part D on the credit card, the
Democratic proposal was more than double the credit card bill.
Here is what I want to ask, Madam Secretary. We keep this
list here in the Ways and Means Committee about all the delays.
We have 23 so far. One I want to ask you about is IPAB, the
Independent Payment Advisory Board.
In your Table S-9 of your budget, last year you claimed in
your budget you are going to save $4 billion from IPAB's
recommendations. This year, you tripled that to $12.9 billion
for IPAB's recommendations. This is above and beyond all the
provider cuts that are in the ACA to pay for the ACA.
So here is my question: Where are we with IPAB? They have
given us their last April report. I assume another one is
forthcoming from the actuary. But where is IPAB itself? When
are you going to submit the names?
If you don't do that, as you know, the law lets you, one
person, submit the plan to save the $12.9 billion. So what is
happening with that? And if you are going to do it, how do you
come up with the $12.9 billion? Where is that savings coming
from?
Secretary SEBELIUS. Well, Congressman, the President has
not yet sent to Congress names for the nominees of IPAB. But,
as you may know, the law is constructed in a way that IPAB
wouldn't trigger any recommendations unless there is a gap
between what the trajectory----
Mr. RYAN. I realize that, and you are claiming $12.9
billion.
Secretary SEBELIUS. So they would not have any
recommendations to make in the foreseeable future. Nor would I
take any action in the foreseeable future----
Mr. RYAN. Okay, so how----
Secretary SEBELIUS [continuing]. As long as the cost
trajectory is----
Mr. RYAN. So are we to ignore the fact that you are
claiming $12.9 billion in savings from IPAB?
Secretary SEBELIUS. I think the President intends to submit
names to Congress as we watch the cost trajectory--if the cost
trajectory changes, the IPAB will be in full effect. And those
recommendations are presented to Congress, as you know, not to
me. They come to Congress.
Mr. RYAN. No, I realize that.
Secretary SEBELIUS. And if Congress doesn't change them,
then they go into effect.
Mr. RYAN. Or you just recommend them, if there is no IPAB
at the time.
Secretary SEBELIUS. If there is no IPAB, that is correct.
Mr. RYAN. So you have no answer to where the $12.9 billion
is going to come from?
Secretary SEBELIUS. We are optimistic that the current
trajectory of Medicare costs would actually negate any impact
of IPAB or me taking any kind of action in the foreseeable
future.
Mr. RYAN. That is another way of saying, ignore our budget
because it is not real.
Secretary SEBELIUS. I think the IPAB recommendations are
based on an actuarial----
Mr. RYAN. No, I understand.
Secretary SEBELIUS [continuing]. Of out-year costs----
Mr. RYAN. You go from GDP of 1 to GDP of 5, I get all that.
You did that last year; you went to GDP .5 last year. And you
still had $4 billion. Now you triple your savings to 12.
And the question is, where is it coming from? What are
those justifications? What is the assumption you are using to
claim this savings to show how your budget is put together?
Secretary SEBELIUS. I think the actuarial projection is
that out-year Medicare costs will rise again.
Mr. RYAN. Right.
Secretary SEBELIUS. So far, they have been incorrect about
those increases. We are hoping that they continue to be
incorrect. And so, if the IPAB indeed does rise--I mean, I am
sorry----
Mr. RYAN. Yeah, the--I understand.
Secretary SEBELIUS [continuing]. The trajectory rises, IPAB
would kick into gear, and we will make recommendations through
the IPAB to Congress about those specifics.
Mr. RYAN. Okay. So you are saying, though, just so you
know, in your own budget, it is going to triple from this year
to last year. That is coming. It is above projection. You have
it in your budget. But you are telling me you have no idea
where in Medicare you are going to cut to get that, is
basically what you are saying.
Secretary SEBELIUS. It is based, again, on what the
actuary, the independent actuary----
Mr. RYAN. I understand that.
Secretary SEBELIUS [continuing]. Says will happen in out-
years. Currently, we have not made specific recommendations
about any cost cuts because none of that is actually happening
right now.
Mr. RYAN. Okay. I know time is out. When are we going to
see the names? What are we going to see IPAB----
Secretary SEBELIUS. I can't tell you. They come from the
President.
Mr. RYAN. All right.
Secretary SEBELIUS. I don't know when you will see them.
Chairman CAMP. All right.
Mr. Davis.
Mr. DAVIS. Thank you, Mr. Chairman.
Madam Secretary, thank you very much for being here. But,
also, I want to thank you for the Medicaid waiver for Cook
County in the State of Illinois. As a result of that action,
the Governor's expansion of Medicaid, and a lot of hard work on
the part of a lot of people, Illinois is doing much better in
signups for the Affordable Care Act than many other States. And
for that, we are indeed grateful.
I am a big fan of home-visiting programs and community
health centers, and I am pleased to note that both are included
in the budget. As a matter of fact, I get my personal care at
one of these centers in Chicago at the Mile Square.
Could you elaborate on the value and effectiveness of these
two programs that relates to providing health care for
especially low-income people?
Secretary SEBELIUS. Well, Congressman, I share your high
regard for both programs. I think that there is no question the
community health centers are the backbone of primary-care
delivery in this country in rural and urban areas. They are
proven time and time again to deliver lower-cost, high-value
primary care.
And thanks to both investments from the Recovery Act and
ongoing investments through the Affordable Care Act, the
footprint of health centers is spreading, increasing services
and increasing clients. And we are now going to be able to
serve about 31 million people, including yourself. And I think
they are an incredibly important--play an incredibly important
role, particularly in underserved communities.
In terms of the home-visiting program, again, there is lots
of very strong scientific evidence that it makes a huge
difference to help give parents the tools to be the best parent
they can be, that having a professional encounter with young
parents is often extremely beneficial as a pathway to an early
strong start in learning.
So the President's budget, as you say, both increases the
voluntary home-visiting program as well as continues to expand
the footprint, both new sites and additional services at sites,
for the community health center program.
Mr. DAVIS. Thank you very much.
And I would like to just point out that our experiences in
Illinois with the Affordable Care Act have not been automatic,
but our experiences have come as a result of a large number of
people believing in the program, believing that it will work,
and then working to make sure that it does work.
So I thank you very much and----
Secretary SEBELIUS. Well----
Mr. DAVIS [continuing]. I yield back.
Chairman CAMP. Thank you.
Secretary SEBELIUS [continuing]. I don't think it comes as
a surprise that in States where the Governor is very
supportive, where there are delegation members, providers,
others reaching out, there is a more positive experience than--
Congressman Doggett has mentioned Texas, where there are not
only barriers but significant laws that have been passed which
make it very difficult for a lot of the outreach people to even
do the job they were contemplated to do.
Chairman CAMP. All right. Thank you.
Mr. Tiberi.
Mr. TIBERI. Madam Secretary, Mr. Young submitted for the
report this report, ``The Irony of Obamacare: Making Inequality
Worse.'' I would like to read the conclusion, which says, ``For
two years, labor unions, employer partners have patiently
explained to the Obama Administration and Congress the
potential damage that the ACA poses to these unique successful
nonprofit plans.
``Having already made efforts to accommodate businesses,
churches, congressional staff, it is ironic the Administration
is now highlighting issues of economic inequality without
acting to preserve health plans that have been achieving the
goals of ACA for decades. Without a smart fix, the ACA will
heighten the inequality that the Administration seeks to
reduce.
``We take seriously the promise that if you liked your
health plan you can keep it, period. UNITE HERE members like
their health plans. UNITE HERE members' plans are ready to
compete with the corporate giants of the healthcare industry if
Washington will simply create a level playing field.''
There were three articles in local papers in my district I
would like to submit for the record, Mr. Chairman, that
highlight this very issue.
Chairman CAMP. Without objection.
Mr. TIBERI. The Mansfield Journal reported on Monday that
only six of the Obamacare exchange plans in Richland County
include the only hospital in the county, MedCentral, in-
network. The Marion Star reported on Monday only 6 of the 26
Obamacare plans in Marion County have Marion General Hospital,
again, the only hospital in Marion County, in-network. And,
finally, the Newark Advocate reported only 6 of the 26
Obamacare exchange plans in Licking County consider the only
hospital in Licking County, Licking Memorial, to be in-network.
That means that three-quarters of the exchange insurance
plans in these counties don't give access to county residents
to the only hospital and hundreds of doctors in-network. And
because many of my constituents now are facing the choice of
being in-network and having to travel out of the county maybe
100 miles to a hospital and are now losing doctors that they
had--and these were people who had insurance and now have been
forced to go into the exchanges. And in the county in which
they reside, they can't even go to their hospital. This is a
problem just beginning.
We spoke to a lady in the office yesterday, a central
Ohioan, who wanted me to give you her name. Her name is
Colleen. She had health care; now she is one of the 4 million
in the exchange. And she has a plan that she is paying more
for, that she doesn't like, with which she actually lost her
doctor. She liked what she had, she couldn't keep it, and now
she can't even keep the doctor that she had.
So the articles aren't misinformation or disinformation.
The union report--not supportive of Republicans, by the way--is
not disinformation. And yet there seems to be a disinformation
campaign within the Administration that this is all just make-
believe.
Madam Secretary, please help us reassure our constituents
that the Administration is going to deal with the reality that
is hitting the ground, and that is people are losing their
doctor and now they are losing their hospital.
Chairman CAMP. All right. Thank you.
Mr. Schock.
Mr. SCHOCK. Thank you, Mr. Chairman.
Welcome, Madam Secretary.
Yesterday, the House of Representatives passed a bill
dealing with the Affordable Care Act that clarifies the
religious exemption clause for a small segment of the
population who, on their annual tax return, will have to
basically verify that their religious conscience prohibits them
from participating in traditional health care here in our
country.
This is modeled after a law that the State of Massachusetts
put into effect. In the State of Massachusetts, since 2006,
only 6,000 residents have taken advantage of it, primarily
Christian Scientists and others.
The bill passed out of the House yesterday unanimously. It
is now headed to the Senate, where it enjoys bipartisan
support--Senators Ayotte, Schatz, Durbin, Bernie Sanders.
And I am just wondering if you could speak to whether or
not you support this clarification in the religious exemption
clause?
Secretary SEBELIUS. Congressman, I haven't read the
language, but I will take a strong look at it. And I do know
that it passed yesterday, but I haven't read the bill.
Mr. SCHOCK. Will you get back to us with your opinion on
it?
Secretary SEBELIUS. Sure.
Mr. SCHOCK. Okay. Thank you.
My second question has to do with the Administration's
change in, or HHS's change in how you are handling the appeals
process for Medicare providers. The Office of Medicare Hearings
and Appeals has recently taken the unprecedented and unorthodox
step in no longer accepting Medicare appeals for processing at
the administrative law judge level.
Obviously, I am concerned about the current healthcare
providers and current seniors who could be denied
reimbursement, what effect that will have downstream, if you
will, if they are not allowed their due process.
And then, of course, if we fast-forward into the
implementation of the Affordable Care Act, if we set the
precedent that HHS says we are not going to allow due process
for current Medicare recipients, one would then assume perhaps
that would be a practice that the agency would do for folks on
the ACA.
Are you working through that? Do you see the Administration
standing firm in not allowing due process on the appeals?
Secretary SEBELIUS. Congressman, this is a major problem
and issue. And I know that our head of the Office of Medicare
Appeals has been here on the Hill briefing, in a bipartisan
nature, both the House and the Senate just on what has happened
over the last couple of years.
It is my understanding--and I don't want to misspeak, but I
will tell you what my understanding is, and if it is incorrect,
I will correct it immediately--that their initial decision to
suspend hearings was not for beneficiaries but for hospitals
and providers. So they were very concerned that beneficiaries
not get caught in this----
Mr. SCHOCK. Right.
Secretary SEBELIUS [continuing]. Huge queue and go to the
back of the line.
In the meantime, they are looking at the whole array of
systems which could alleviate the queue. The volume has about
tripled over the last couple of years. We need to do some
system changes. We need to work carefully with Congress.
Because the last thing we want to do is have anybody give up
their due process rights.
Chairman CAMP. All right. Thank you.
Mr. SCHOCK. Thank you.
Chairman CAMP. Mr. Rangel.
Mr. RANGEL. Thank you.
Madam Secretary, I am convinced that when the final pages
of history are written, that your name will be included among
the courageous pioneers that have brought health care to all
Americans.
There seems to be some concern about the delay in the
program. Do you recall when last we had a program for the
Nation where all people would have access to health care?
Secretary SEBELIUS. No, sir.
Mr. RANGEL. So that is since the beginning of the Republic?
Secretary SEBELIUS. Yes.
Mr. RANGEL. And so this is the first time.
When we had Social Security, were there delays and
legislation necessary to improve it?
Secretary SEBELIUS. Well, I would say both Social Security
and Medicare certainly has transformed over time since they
have been in place.
Mr. RANGEL. So I understand that the enrollments are going
up and that people young and old are applying?
Secretary SEBELIUS. That is correct. We put out information
yesterday that, as of the end of February, about 4.2 million
people had enrolled in the private market, another almost 9
million have qualified to be Medicaid-eligible, and 3 million
young adults got their coverage earlier in the program thanks
to their parents' plan.
Mr. RANGEL. And that is young and healthier people, to
bring the balance that we need.
Secretary SEBELIUS. Yes, sir.
Mr. RANGEL. Is there any indication that they are all
Democrats?
Secretary SEBELIUS. We don't have that information
currently.
Mr. RANGEL. Well, is there any reason to believe that
Republicans are not in need of health insurance or they don't
have preconditions or that they all are insured? Is there any
evidence that Republicans will not receive the benefits of the
Affordable Care Act?
Secretary SEBELIUS. No, sir.
Mr. RANGEL. Well, in the 50 attempts to derail or to repeal
the Affordable Care Act, which has passed the House, the
Senate, and has been approved by the Supreme Court, is there
any indication from the President if, by some stretch of our
imagination, the repeal goes through the Senate as to what the
President would be inclined to do?
Secretary SEBELIUS. I think he has indicated he would veto
a repeal of the Act.
Mr. RANGEL. And so, has there been any suggestions, then,
from the Republican leadership, since this is the law of the
land and is universal and bipartisan as it relates to the
beneficiary, have there been any suggestions from the
Republicans as to how we can improve upon this bill--that is,
the provision to provide health care for everyone? Have they
suggested to you anything that makes sense?
Secretary SEBELIUS. Well, there have been a number of
conversations, and I would say some productive conversations.
Unfortunately, I think the suggestions of how to improve are
often tied to suggestions of----
Mr. RANGEL. Well, Madam Secretary----
Secretary SEBELIUS [continuing]. How to repeal.
Chairman CAMP. All right. Time has expired. And I would
just say----
Mr. RANGEL. Oh, that is terrible----
Chairman CAMP [continuing]. There have been suggestions----
Mr. RANGEL [continuing]. Because I wanted to congratulate
the Chair, and I will insist on congratulating him, as being a
part of that Republican Party that has tried to be constructive
on legislation. And I thank you----
Chairman CAMP. Well, thank you.
Mr. RANGEL [continuing]. For your courtesy.
Chairman CAMP. There is always time for that.
We are just down to Mr. Levin and myself. And I just want
to return to this issue about how many individuals have paid
their first month's premiums. And I realize that you have
repeatedly said under questioning that you don't have that
information yet.
But I just want to make the point that we are 2 weeks away
from the end of the 6-month open enrollment. And, you know, I
know there has been--you know, HHS has spent $2 billion
building these exchanges. And your own budget document states,
and I quote, ``CMS administers the insurance affordability
programs on behalf of all marketplaces. This process involves
receiving enrollment information from marketplaces, including
the level of APTC selected to calculate and distribute monthly
aggregate payments to issuers for APTC and CSR owed.''
But given all the time and the critical need that your own
department has for this basic information, I think it is just
absolutely critical that we find a way to get this information.
And there are reports that up to 20 percent of individuals
who have selected plans have not actually paid their premiums.
And I don't know if this is in line with what you are seeing.
Do you have any information along that line about, is the 20
percent in line with what you have been finding out?
Secretary SEBELIUS. I think, again, Mr. Chairman, the 20-
percent number came from insurance companies, if I recall,
about the first of the year, where they were heartened by the
fact that, even though the deadline for payment of the first
month's premium--and many people, if you will, enrolled for the
first time in December, and we have had, kind of, 3 months of
strong enrollment--they were heartened by the fact that they
had about an 80-percent payment rate.
But, again, that did not come from us. We will eventually,
when the fully automated financial system is in place, have
that information and be glad to share it with the Committee on
a real-time basis. We just don't have it right now.
Chairman CAMP. Well, and I think there is such an interest
in this for one reason, that we know that at least one and--
that you have made at least one, and you are about to make the
second payment to insurers for the premium tax credits and
cost-sharing subsidies.
Secretary SEBELIUS. Yes, sir.
Chairman CAMP. And so these payments reflect what insurers
are telling you about how many people have paid their premiums.
Secretary SEBELIUS. They are an aggregate number based on
only those customers who would be qualified for either cost-
sharing or APTC. And that is not at all the entire look of the
marketplace.
So we don't even have any information at this point, even
in aggregate. We don't have individual information about the
group that is premium tax credit. And the insurance companies,
to get paid month two, just restated the first month, as an
indication that they did not have the full information.
So we are getting aggregate data about a portion of the
marketplace and not individual data about customers.
Chairman CAMP. Well, unless they have paid their first
month's premium, they can't get a premium tax credit.
Secretary SEBELIUS. That is correct.
Chairman CAMP. And so, obviously, that is in the
jurisdiction of this Committee. We are very interested to make
sure that that is being used. And my----
Secretary SEBELIUS. And we are, too. And we will be trueing
up with insurance companies a person at a time. We just don't
have that at this particular point.
Chairman CAMP. Have you asked the insurers for this
information?
Secretary SEBELIUS. We have. We are working, Mr. Chairman,
on the automated system, which, at the end of the day, the 834,
which is the process by which we send to the insurance company
from the website Chairman Camp's name and that he wants to
enroll in Blue Cross of Michigan, and there will be a process
where they will send back the confirmed 834 that Chairman Camp
paid his premium, and that will be the end of the loop.
Currently, that part of the process is not in place.
Chairman CAMP. Is there a coordination between the agencies
on this? Because, obviously, some of this is administered
between IRS and Treasury. Are you coordinating? I know in
answer to some other questions you mentioned that some of this
is involving more than one agency. So are IRS and Treasury----
Secretary SEBELIUS. Well, as in most bills, Treasury
basically pays the bills. And they pay them based on a system
of our presenting them with information, much the way Medicare
bills are paid.
Chairman CAMP. All right.
Mr. Levin, and then we will conclude.
Mr. LEVIN. Thank you.
Well, welcome.
I just want to ask that there be entered into the record,
Mr. Chairman, three documents relating to the Medicare
Advantage rates: one from the Secretary to the Speaker, one an
article from the New York Times, and one a letter from
beneficiary groups.
Chairman CAMP. Without objection, they will be entered into
the record.
Mr. LEVIN. And I also ask that the CBO table on 4015 that
will be coming up in the next couple days, with your amendment,
showing that about 13 million people more would be uninsured, I
ask that be entered into the record also.
Chairman CAMP. Without objection, as well.
Mr. LEVIN. Thank you.
Chairman CAMP. Well, with that, again, I thank you for your
time this morning and----
Secretary SEBELIUS. Yes, sir.
Chairman CAMP [continuing]. Appreciate that.
With that, this hearing is now adjourned.
[Whereupon, at 12:25 p.m., the Committee was adjourned.]
[Submissions for the Record follow:]
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