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Congressional Hearing on Obamacare
Aired October 30, 2013 - 11:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
REP. GREGG HARPER, (R), MISSISSIPPI: The president is ultimately responsible for -- for the rollout, ultimately? You work --
KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: No, sir.
HARPER: OK. All right.
SEBELIUS: No, sir. We are responsible for the rollout.
HARPER: But who do you answer to?
SEBELIUS: I answer to the president.
HARPER: Is the president not ultimately responsible, like a company CEO would be?
SEBELIUS: Sir, he's the president of the United States. I have given him regular reports. And those -- I am responsible for the implementation of the Affordable Care Act. That's what he asked me to do and that's what I'll continue to do.
HARPER: So you're saying that the president is not responsible for HHS?
SEBELIUS: Sir, I didn't say that.
HARPER: OK. So the president ultimately is responsible. While I think that it's great that you're a team player and taking responsibility, it is the president's ultimate responsibility, correct?
SEBELIUS: You clearly -- whatever. Yes. He is the president. He is responsible for government programs.
HARPER: My time as expired.
REP. FRED UPTON, (R-MI), CHAIRMAN, HOUSE ENERGY AND COMMERCE COMMITTEE: Gentleman's time has expired.
Mr. Lujan?
REP. BEN RAY LUJAN, (D), NEW MEXICO: Mr. Chairman, thank you very much. Before I begin, I would like to ask unanimous consent to submit into the record articles from New Mexico publications, "The Albuquerque Journal" and "The Albuquerque Business Journal," the first entitled "Small Business Owner: Health Exchange Will Save Me $1,000 a Month."
ROGER: Without objection.
LUJAN: Thank you, Mr. Speaker.
And I see my time did begin there. So I'll try to get through this.
Madame Secretary, I was intrigued by a line of questioning by Congressman Green asking questions about the individual marketplace. How volatile was the individual marketplace before the Affordable Care Act became law?
SEBELIUS: I would say it wasn't a marketplace at all. It was unprotected, unregulated, and people were really on their own.
LUJAN: Madame Secretary, the Kaiser Family Foundation reports that over 50 percent turn out of individuals that have coverage on the individual market turn out of coverage every year. Is that consistent with what you're aware of?
SEBELIUS: That's an accurate snapshot. About a third of the people are in for about six months and over half are in for a year or less.
LUJAN: So individuals that were in the individual marketplace before the package of the Affordable Care Act did not have the same protections as those that were in group coverage?
SEBELIUS: That's true.
LUJAN: And would those individuals in the individual marketplace sometimes have higher copays?
SEBELIUS: Higher copays, unlimited out-of-pocket costs for often coverage that was medically underwritten or excluded whatever medical condition they had in the first place.
LUJAN: These were typically one year contracted. If they used the plan, sometimes they would be thrown off their plans or their rates would go up?
SEBELIUS: Yes.
LUJAN: I think that's important to note, Madame Secretary. And I'm intrigued as well that my understanding is last month HHS conducted an analysis and found that nearly six out of 10 uninsured Americans getting coverage will pay less than $100 a month, is that correct?
SEBELIUS: They will have a plan available for less than $100 if that's their choice, yes.
LUJAN: And that number be would be higher and be better if more states chose the option of using federal funds to expand Medicaid to cover their low-income population?
(CROSSTALK)
SEBELIUS: Oh, very definitely. That's just a marketplace snapshot. Those are people who will be in the marketplace.
LUJAN: Madame Secretary, I don't think I've heard anyone from the other side of the aisle today, my Republican colleagues, ask you, how can Congress work with you and support you in fixing this website and fixing this problem. I hope that we all agree went this website fixed.
I would yield to anyone that would disagree.
Seeing no one accepting that. I'm glad to hear that we agree with this.
Now, Madame Secretary, what can Congress do to work with you to fix this website?
SEBELIUS: Well, I'm not sure that there is hands-on work that you can do. Maybe we have some technical expertise. But I would say getting accurate information to constituents is helpful. Letting people know that they can check out the facts and the law, that they may be entitled to some financial support. That cancelation of policies means that the policy that they had may not exist but they have a lot of choices of new policies and a law that says they must be insured in a new policy, that they don't have to be insured by their company at a higher price.
LUJAN: I appreciate that, Madame Secretary. Going back to the individual marketplace, did this Congress in previous years before the Affordable Care Act make it illegal for health insurance companies to raise rates on someone after they submitted a claim for going to the hospital or becoming sick or getting rid of preexisting conditions?
SEBELIUS: No, sir.
LUJAN: One last note here. It seems that we've received some horrible news that there are bad actors already taking place of fraudulent websites to imitate the health care exchange or misleading seniors to disclosing their personal information. I've signed on a letter to you to request that you prioritize fraud prevention efforts. What's the administration done to prevent these acts to protect personal information?
SEBELIUS: I can tell you, Congressman, that the president felt strongly that that needed to be part of our outreach effort, which is why the attorney general and I convened representatives of state attorneys general, insurance commissioners, the U.S. attorneys and the Justice Department and Federal Trade Commission, which has jurisdiction to make sure that we first got out ahead of some of this developing consumer outreach. No one should ever give personal health information. It's not needed for these policies any longer. That's a red flag. We want to make sure that people turn over potential fraudulent acts. We have put training in place for navigators. We have our law enforcement --
(CROSSTALK)
UPTON: Gentleman's time has expired. I would just note that we -- with the indulgence of the secretary, we're hoping that we can have all members ask some questions. We know that with four minutes we're going to have trouble. I'm going to ask unanimous consent that we try to limit our questions and answers to no more than two minutes.
And I've talked to Mr. Waxman.
Is that OK? Otherwise, we will -- they'll be a lot of folks who will not be allowed to ask questions at all.
(CROSSTALK)
SEBELIUS: And, Mr. Chairman, I would submit that if the questions get submitted, we would be happy to provide timely answers.
UPTON: OK. So with that, we'll try two minutes.
Mr. Lance?
REP. LEONARD LANCE, (R), NEW JERSEY: I guess I won the lottery on the two minutes --
(LAUGHTER)
-- Madame Secretary.
UPTON: Time is expired. OK.
(LAUGHTER)
LANCE: 20 seconds, Mr. Chairman.
On the website, Madame Secretary, the contractors testified last week that they need more than two weeks for end-to-end testing. Why, in your opinion, was there not more than two weeks?
SEBELIUS: Again, we had products. The insurance policies themselves by companies were loaded into the system. So we could test up until then. But it wasn't until September, mid-September, that that was done.
(CROSSTALK)
SEBELIUS: And again, the contractors said we would have loved more testing time, but we think we're ready to go ahead.
LANCE: I believe that will ultimately be a dispute between CMS and HHS and contractors. And if there's anything we can do regarding that, because obviously that didn't work. And I had thought, given this as the signature issue of the president, that the website would be ready.
Number two, in my judgment, the president's statements were overstatements. The four Pinocchios were an indication of that. There's a report in the New Jersey newspapers this morning that 800,000 people in New Jersey who purchased their policies in individual or small employer markets will be affected by this.
Mr. (INAUDIBLE), in a previous question, mentioned the fact that in an individual market you would be able to keep your policy grandfathered. Yet regulations issued by HHS say that grandfathered status would not be continued for so much as a $5 change in a copay. Is that accurate and do you believe that that is a significant change?
SEBELIUS: Sir, we gave, I think, in the grandfather regulations, a guide for how pricing could change, medical inflation, and I think it was in most cases, plus-15 percent. There were some individual consumer outfacing issues that were more ridged than that. But I would say that in terms of having companies being able to collect a profit margin, that was certainly built in to the grandfather status.
LANCE: I think that's two little a change (INAUDIBLE).
UPTON: Gentleman's time has expired.
Mr. Tonko.
REP. PAUL TONKO, (D), NEW YORK: Thank you, Mr. Chair.
And welcome honorable secretary. Thank you for fielding our questions and for responding when you are extended the courtesy to offer a response.
As a strong supporter of the Affordable Care Act, I'm frustrated and I think it's fair to say that the American people are frustrated as well. And I heard you say many times this morning you're frustrated. I think by and large people want this law to work. When I talk to folks back home that I represent, even people who opposed the law initially aren't rooting for the failure of the Affordable Care Act. Instead, they want Congress to come together to fix these problems so we can move on to real issues that matter. My home state of New York, which also experienced website problems at the outset, has now completed enrollment on 150,000 New Yorkers, with more than that signing up. Given that many states have had success overcoming these initial issues, has HHS looked at what it's doing and getting solutions for fixing it?
SEBELIUS: Absolutely. We shared a lot of the information going in. I think that the hub feature that we have in our website that all states are using, including the state of New York, is fully functional. And that's good news for the states running their own state websites. We are learning from them. We've shared information with them. And we are eager for all of the help and assistant moving forward.
TONKO: Many stated made the choice of rejecting Medicaid expansion that would help some of the poor steps get access to the health care. Can you comment broadly on HHS's plan in the future to encourage more states to run their own marketplaces and expand Medicaid so the law can function as it's designed?
SEBELIUS: Absolutely. Most recently, last week, the state of Ohio did move into the Medicaid market. And we now have 30 governors. I think 27 states have fully completed the process. Another three are in the process. Republicans and Democrats who -- some of who sued us about the constitutionality of the act, who are now deciding that for the citizens of their state, they want to be part of the expanding Medicaid. And we will continue to have those conversations. It's not just about the marketplace. It's also about Medicaid.
TONKO: Thank you very much.
UPTON: The gentleman's time is expired.
Mr. Cassidy -- Dr. Cassidy?
REP. BILL CASSIDY, (R), LOUISIANA: You said that only if an individual policy is only canceled if it changes significantly. But to be clear, after May 2010, if coinsurance went up by any amount, even by a dollar, according to your regulations, that would not qualified as a grandfathered clause. Just to have that out there for the record. I gather even by a dollar.
That said, I get a letter from someone in my district, Adrienne (ph). She says that she lost her coverage. She lost her coverage because spousal coverage is gone. She's going on the exchange and doesn't qualify for a subsidiary. But her premium and out-of-pocket costs under any plan is $10,000 a year. She writes this. She feels betrayed by her government. She has to sit there asking herself, is this fair? If you were she, do you think that this would be fair?
SEBELIUS: Dr. Cassidy, I want to start by the amount that you gave is not accurate. It told $5 not $1.
CASSIDY: That's for the copay, not for the coinsurance. For the coinsurance it's any amount. But I have limited time. Do you think that it's fair -- if you were she, if you were Adrianne (ph), do you think this is fair? Losses her spousal coverage, now it's 10K, no subsidies?
SEBELIUS: Sir, I don't have any idea what she's looking at. I can tell you, again, that what we've seen in the market and in the plans, people will be getting full insurance for the first time at --
(CROSSTALK)
CASSIDY: Again, this is what she reports. If what she reports is true, do you think it's fair?
SEBELIUS: I can't answer fair or not fair. I don't know what she was paying or what --
(CROSSTALK)
CASSIDY: That's OK. Let's move on.
SEBELIUS: Did she have full insurance in --
CASSIDY: Richard writes that his daughter received a note that the premium is going up because she's being lumped with older costlier patients. Now it's possible that only those that will sign up will be more costly. Does HHS have plans on what to do if that happens and premiums rise for everybody?
SEBELIUS: I think that's what we're trying to make sure that --
(CROSSTALK)
CASSIDY: But if only the costly sign up, do you have plans?
(CROSSTALK)
SEBELIUS: That's of the importance of individual mandate that you've just out lined. Getting rid of preexisting conditions --
(CROSSTALK)
CASSIDY: But if only the more costly sign up, do you have backup plans?
SEBELIUS: We will encourage others to sign up. It's why there is a penalty and --
(CROSSTALK)
CASSIDY: Is this to assume there are no back-up plans --
(CROSSTALK)
UPTON: Gentleman's time has expired.
Mr. Yarmuth?
REP. JOHN YARMUTH, (D), KENTUCKY: Thank you Mr. Chairman.
Madame Secretary, nice to see you.
I come to this hearing with a little bit different perspective. Kentucky is doing a great job with our exchange. As of this morning we had 350,000 people who have explored the website. 59,000 started applications. 31,000 are fully enrolled in new coverage and 5,000 just in the last week. And I think very importantly more than 400 businesses have gun applying for their employees as well. The idea that somehow this is going to be bad for businesses is not born out in Kentucky.
Would it be safe to say that if 36 states had done what Kentucky and New York and California had done that the rollout would have been much smoother and the website would have been much easier to construct?
SEBELIUS: I don't think there's any question that in January of 2013 we knew how many states were not running their own website. In, I think, mid-February, we learned about partnerships. So it was northwest until that point that we learned that 36 stated -- having said that, we should have anticipated and planned better. That's not an excuse. But we clearly are running a different vehicle for enrollment than we thought we were going to run in March of 2010. YARMUTH: On the subject of cancelation of policies. Isn't it true that the federal government can't require insurance companies to sell insurance?
SEBELIUS: That they can't?
YARMUTH: The federal government can't require insurance companies to sell insurance?
SEBELIUS: Yes. Yes, sir.
YARMUTH: And, in fact, insurance companies all over the country are making difficult decisions now about where they want to participate and where they don't. And in some markets, they're trying to get out of the market, canceling people because they want to play in other markets and so forth. They're all making those decisions now.
SEBELIUS: Well, we know we have more insurers, 25 percent more insurers in the individual market than we did prior to the law being passed.
YARMUTH: So there a lot of dynamics going on here that are not necessarily an indication that the president misled anybody. There are business decisions being made all over now?
SEBELIUS: Now in cancelation of policies, again, the one-year contract notice is routine in the individual market. It has been in place for years. And for a lot of people, they are policies now, they're being canceled because they're being notified that you can no longer be medically underwritten. We can't charge you more because you're a woman. We won't ever have the kind of limitation on what your policy can pay out or charge exorbitant out-of-pocket rates. Those policies will cease to be offered in the marketplace.
UPTON: Gentleman's time has expired.
Mr. Guthrie.
REP. BRETT GUTHRIE, (R), KENTUCKY: Thank you, Madame Secretary, for being here.
Last week, Mr. Lauh (ph) from Sirco (ph) was here. I know the president has talked about the alternatives to the website, his phone call, calling or using paper application, and what he said, and I think you said it, they take the paper application but enter it into the same web portal. But also, there are still issues with data within the web portal. As you said, you can't get reliable data who has even signed up. He also said, because of the surge in paper applications, it's like six to eight weeks to process. If November 30th is when this will be ready, they can use and somebody does lose their insurance so they're signing up to this and they get to January 1st, even though you have a March 31st open enrollment, is there a contingency plan for these people to continue their insurance?
SEBELIUS: Sir, I think that we have improvements every day on the speed of the site. Sirco (ph) was giving you early snapshots of difficulty of accessing the site. I think that's greatly improved.
GUTHRIE: They said just processing the paper, actually.
SEBELIUS: I understand. But it is the site for dash they put the application into the site and get a determination. That's part of what the process is. So the site is part of the portal all the way through. This is an integrated insurance vehicle. And so that will improve. And we, again, with four months of continuous service, which is far longer than most people had, some of these cancelation numbers, Mr. Garrity (ph), again, pointed this out from Florida BlueCross, but it's true of everyone else. These are not January 1st numbers. They are year-long numbers. So over the course of 2014 when an individual's policy is due to expire --
(CROSSTALK)
GUTHRIE: But somebody's could expire January 1st and not be able to get coverage in the website -- and the vendors said they needed and liked to have months and months to test. If we're going to --
(CROSSTALK)
SEBELIUS: I would say we're testing as we go. This is beta testing going on right now. That's why we're fixing and how we can identify things. People are getting through every day.
GUTHRIE: But the paper process, if it takes four weeks, November 30th and people canceling on January 1st, there needs to be contingency for that person.
SEBELIUS: Well, again, typical insurance is two to four weeks of signup. They will have two full months of signup.
UPTON: Gentleman's time has expired.
Ms. Schakowsky?
REP. JAN SCHAKOWSKY, (D), ILLINOIS: Thank you, Madame Secretary, for bringing to millions of Americans access to affordable, comprehensive health care coverage that's going to be there when they that's going to be there.
I want to thank you especially as a woman. Being a woman can no longer be considered a pre-existing condition. Women can no longer be charged more than a man for coverage. Women have access to prescription drugs, free preventive screenings and free maternity care which is often left out of coverage. And the days of complicated pregnancy or diabetes or domestic violence being a pre-existing conditions, those days are over.
You know, I want to say to my colleagues, after a three-and-a-half year campaign to repeal to discredit, to even shut down the government over Obamacare, I want to say get over it. We all agree that there are problems, but these are problems that I see being fixed.
And so I want to ask one -- I want to say that what we did under Medicare Part D can be an example of how we can work together. And in fact, Chairman Upton and I both sent a letter asking for more money for community-based groups to help implement the program and make it work. We can work together.
So if you could just briefly say, how are the navigators, how important are they in making this system work for the American people?
SEBELIUS: Well, what we know, Congresswoman, is that a lot of people are not web savvy and are not frustrated because they don't trust a computer, they need a live human being to ask questions, get questions answered, talk about the plan, talk about insurance. So the navigators play a hugely important role. We have about 2500 trained navigators on the ground right now. We have thousands more community assisters trained and ready to go. About 45,000 agents and brokers have gone through Affordable Care Act training. But those individuals working with their clients, customers and, in the case of navigators and community assisters, is just the public at large. They are not paid by a company. They are not collecting a fee. They just want to help people get coverage. They're hugely important.
UPTON: The gentlelady's time.
Mr. Olson.
REP. PETE OLSON, (R), TEXAS: Welcome, Madame Secretary.
I'd like to open with a quote from an American icon and hold up a poster. It says, "If the user is having a problem, it's our problem."
I'm glad to hear that you embrace this is philosophy during your testimony today, ma'am.
Obamacare was signed into law 1,256 days ago. And since then, there's been user problem after user problem after user problem. Regarding healthcare.gov, your deputy administrator for consumer information, Gary Cohen, testified one month ago, right where you're sitting that, and this a quote, "CMS has worked hard to test the infrastructure that will allow Americans to enroll in coverage confidently, simply, and securely," end quote.
Yet, according to Forbes, and the "Wall Street Journal," you told them that you need five years of construction and one year of testing. The program has crashed and burned at least three times. And the user is still having problems.
Get up here, ma'am.
It's been down the whole time you've been testifying. The system is down at this moment.
My question, ma'am, is very simple: When did you know the exchanges were going down, a month, a day, a quarter, and did you tell the president what you knew?
SEBELIUS: Sir, I was informed that we were ready to launch on October 1st. The contractors, who we had as our private partners, told us and told this committee that have they had never suggested a delay, and that is accurate. Our CMS team felt we were ready to go. I told the president that we were ready to go. Clearly, I was wrong. We were wrong. We knew that in any big new complicated system, there would be problems. No one ever imagined the volume of issues and problems that we've had. And we must fix it.
OLSON: Yes, ma'am. Credible journalists said you knew you needed six years to get this program --
(CROSSTALK)
SEBELIUS: That quote has been repeated. I can guarantee I would have never stated that because the law was passed in March of 2010. I chose the open enrollment date. I don't know where that quote comes from, but that is not from me.
UPTON: The gentleman's time has expired.
Mr. Barrow?
REP. JOHN BARROW, (D), GEORGIA: Thank you, Mr. Chairman.
Thanks for attending today, Madame Secretary.
I suspect deep down most people on this committee accept the concept of the performing insurance markets so more people have access to better insurance coverage. We have disagreements about the means used to get to those ends which is why I voted against the Affordable Care Act.
It seems every day we're hearing of something new going wrong. I'm many concerned the long-term enrollment problems could be market problems. My students are losing confidence. The way to restore their trust is to delay the penalties till we're sure the system is going to work. It's not fair to penalize consumers. We also need to take the time to make sure fits and starts won't cause larger problems.
Right now, I'm less concerned about who's to blame and what went wrong and how to fix it and we'll assure it doesn't happen again.
Nearly all of our constituents want and need health insurance. It would be a huge mistake if we're so blinded by our love or hatred of Obamacare that we miss opportunities to address its flaws.
To the subject of technical problems becoming market problems. Can problems of folks getting into the system snowball into risk pool problems where those who choose not to enroll can actually affect the cost of those who do choose to enroll?
SEBELIUS: Certainly, a risk pool needs a balanced market. So you need people who are older and sicker to be balanced with people who are younger and healthier. That's how a pool works.
BARROW: At what point are we going to see a problem having the risk pool if the tech problems affect the folks entering? What are we going to look for? What are we going to use to decide something needs to be done?
SEBELIUS: Well, again, sir, we be monitoring during the six months of open enrollment as will our insurance partners who is coming into the pool. That's why we want to give this committee and others reliable, informed data about not only who it is but what the demographics are and where they live.
BARROW: If things aren't better by the end of this next month, at what point will we start thinking about further delays and imposing penalties?
SEBELIUS: Again, I think having a defined open enrollment period is one of the ways you make an assessment if you have a pool that works or not. You can't have an unlimited open enrollment period with any insurance company because that really doesn't work.
BARROW: Thank you.
UPTON: Mr. McKinley.
REP. DAVID MCKINLEY, (R), WEST VIRGINIA: Thank you, Mr. Chairman.
Last week, CGI representative Campbell said that she had met her contract obligations and specifications. And she said the only problem she had was pace. But the pace wasn't part of the specification. Do you -- and we asked her what you would testify to. Did -- she said you would testify that she did complete her contract in accordance with the specifications. Would you?
SEBELIUS: Sir, I don't think until the product is working the way it's designed to work that anybody has finished their job. That's really my --
MCKINLEY: I'm sorry. They've shortened our time.
So if she hasn't met their specifications but yet we're still using her, is the American taxpayer still paying money to fix the problems that she didn't do and her company didn't do appropriately in the first place?
SEBELIUS: None of our contractors have been paid the amount of their --
MCKINLEY: Will she be paid for this work into the future as we go to correct this problem?
SEBELIUS: We will make that determination as the work goes forward. I would tell you as we learn what needs to be fixed --
(CROSSTALK)
SEBELIUS: -- we'll know more about whether they delivered.
MCKINLEY: I'm very sorry, the time frame. I'm sorry but the time frame has been cut down.
Who owns the software now, now that this has been developed with taxpayer money to develop the software to do this?
SEBELIUS: It is owned by the Centers for Medicare, Medicaid Services.
MCKINLEY: So it's all owned by us. OK. Will they be able to use it by a license for other clients?
SEBELIUS: Not to my knowledge. I think it is specifically designed for the marketplace with these products in mind.
MCKINLEY: Then the last question --
(CROSSTALK)
SEBELIUS: And the clients are the American public.
MCKINLEY: -- that under I.V. & V, and she testified that she thought that was something we should have done. Under HHS, you recommend or the HHS recommends that for software development that they should you have an independent verification validation program, but it wasn't used in this case. Can you share with us -- the time is gone -- why we didn't use I.V. and V on something as crucial as this?
SEBELIUS: Again, I don't think that's accurate. At every point along the way, there is independent testing --
MCKINLEY: Independent?
SEBELIUS: Yes.
MCKINLEY: You recommend --
SEBELIUS: An outside --
MCKINLEY: -- independent testing and validation, not someone within your staff.
SEBELIUS: Pardon me. There is a level of company self-attested testing. There is a level of CMS testing and then there is an independent test on each piece of the contracting. An independent not --
(CROSSTALK)
MCKINLEY: What she's done independently. And that's what --
UPTON: Gentleman's time --
MCKINLEY: It needs to be done independently. People that do not have --
UPTON: -- has expired.
(CROSSTALK)
SEBELIUS: No, it isn't CMS. I will get you the information. One of the three levels of testing. One of them is independent for every piece of this contracting, yes.
UPTON: Mrs. Castor.
REP. KATHY CASTOR, D-FLA.: Good morning.
When open enrollment began a few weeks ago the people back home in Florida who are helping neighbors sort through the new options for coverage, the navigators, were taken aback by how grateful people are to have new pathway to the doctor's office and the care they need.
