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Live Coverage of HHS Secretary Kathleen Sebelius Testifying on Obamacare Website

Aired October 30, 2013 - 10:00   ET


REP. ELIOT ENGEL, (D)-NEW YORK: They voted over 40 times to repeal the law. They shut down the government and threatened to force a default in order to stop it. They're rooting for failure.

Madam Secretary, can you tell us what would be the impact on Americans' health insurance if Republicans had been successful in their efforts to de-fund or repeal the Affordable Care Act?

HHS SECRETARY KATHLEEN SEBELIUS: Well, I think that the estimates at the Congressional Budget Office is that would have increased the deficit by about $110 billion in the first decade and close to a trillion dollars in the second decade.

We know that we have 42 million or 43 million Americans without health insurance at all, some of them Medicaid eligible and some in the -- over the Medicaid eligibility. Thirty governors so far, Republicans and Democrats, have declared their support for moving ahead with Medicaid expansion, but absent that, the Affordable Care Act, those folks would be without any kind of health security. And in the private market, what we know is it takes a real toll.

But I'd say the biggest issue is not just the financial toll, not the community toll, not the country toll -- which is significant. I have a good friend who runs the cancer center at the University of Kansas. I was with him and cancer researchers recently, and he said that if you get a cancer diagnosis, you are 60 percent more likely to live five years and beyond if you have insurance than if you don't. I think that's a pretty powerful statement for why we need affordable healthcare for all of our citizens.

ENGEL: Well, thank you. The -- the Republicans have not been able to de-fund or repeal it, but they have denied requested funding. They've raised specious arguments about death panels and socialized medicine, and they've worked to intimidate groups that could help the implementation effort. There's been a spreading of misinformation about the cost of coverage -- we hear some of that today -- and to actively dissuade the uninsured from seeking coverage.

So Madam Secretary, how are these tactics -- impacted your ability to implement the Affordable Care Act?

SEBELIUS: Well, I don't think there's any question that a lot of people need a lot of information. I think it's one of the reasons we had millions visit the site -- try to visit the site. It's why I am so frustrated and disappointed that the site is not fully functional, and why I'm so committed to getting it functional, because clearly there is a demand. We need to get information to people about the law.

This is the law. This is not any longer a debate. It was a law passed by both houses of Congress, signed by the president of the United States, upheld by the Supreme Court. The president was re- elected. It is the law. And people have benefits and rights under that law, and we've got to get that information so they can make good choices for themselves and their families.

ENGEL: Well, thank you.

It is the law, and, frankly, I find it disconcerting that my Republican colleagues have done nothing but root for this law to fail for the last three and a half years. And now there's a big show here of being upset at problems with the website--


ENGEL: -- keeping people from signing up for coverage fast enough.

So I would just say to my colleagues on the other side of the aisle, you're really on the wrong side of history here. The website will be fixed and millions of Americans will be able to get quality, affordable health insurance coverage through the Affordable Care Act.

And again, I thank you for being here today, Madam -- Madam.

REP. FRED UPTON, (R)-MICHIGAN: Mr. Pitts, chairman of the Health Committee.

JOE PITTS, (R)-PENNSYLVANIA: Thank you, Mr. Chairman.

Welcome, Madam Secretary.

Have you personally tried to register or enroll on the website?

SEBELIUS: Sir, I created an early light account so I would see the prompts that were coming to people who were interested. I did work my way to the application feature fairly early on. But, frankly, I -- I have affordable healthcare, so I--


PITTS: No, I just wanted to know if you've been through the process that millions of Americans are having to go through.

Madam Secretary, the -- the initial website crashes appear to be largely a result of the decision to prevent browsing of the plans. CGI Federal testified at our hearing last week that they had designed the website to allow users to browse and compare plans before having to create an account.

Ms. Campbell told us that two weeks prior to the October 1st launch, they were told to turn off the browsing feature. Were you aware in September that this decision was made?

SEBELIUS: Sir, I wasn't aware of that particular decision that was made by the CMS team. I was aware that we were paring back some features to not put additional risk on the website, which is ironic at this point.

PITTS: And who made that decision? Who made that decision?

SEBELIUS: Administrator Tavenner made that decision.

PITTS: And do you know why that was made?

SEBELIUS: Yes, sir, because we were anxious to get the website up and running and functional -- which we clearly have failed to do to date -- although I would suggest the website has never crashed. It is functional, but at a very slow speed and very low reliability, and has continued to function.

Having said that, they pared down some of the features, feeling that it would be better to load them in later. One was the shop and browse feature. Another was the Spanish version of the website and the Medicaid transfers. All three of those issues were paired down in September --

PITTS: Thank you.

SEBELIUS: -- to not load the system.

PITTS: Thank you.

Last week, CGI Federal and QSSI testified that CMS was responsible for end-to-end testing and that they believe that months of testing would have been preferable to two weeks.

Do you believe that two weeks was enough time to complete testing of the entire system?

SEBELIUS: Clearly, not.

PITTS: And when were you made aware of the result of the test, including the one where the system collapsed with only a few hundred users?

SEBELIUS: Leading up to the October 1st date, we had regular meetings with not only a team at CMS but administrators involved. I was made aware that we were testing, and as we found problems we were fixing those problems. And I think there is a CGI report at mid- August identifying some problems. And between August and October that became the punch list for CGI to fix those problems. That's why you test.

PITTS: Now, in The Washington Post on October 21st there was an article that said about a month before the exchange opened a testing group of 10 insurers urged agency officials not to launch the site because it was riddled with problems. Were you aware in September that insurers recommended a delay in the launch of the exchange?

SEBELIUS: I was not aware that they recommended delay. I know everyone was concerned that there were risks and there were likely to be problems with a brand new integrated insurance system. I don't think anyone ever estimated the degree to which we've had problems in the system, and, certainly, the contracting partners did not.

PITTS: And did HHS respond to the insurers' recommendation to delay the launch?

SEBELIUS: Sir, I can't -- I wasn't in the meeting. I don't know--

PITTS: Can you find out and--

SEBELIUS: -- what occurred at the meeting, and I don't know who they talked to.

PITTS: -- answer that question for us?

SEBELIUS: Sure, I will get back to you.

PITTS: Thank you.

Thank you, Mr. Chairman.

UPTON: Mr. Green?

REP. GENE GREEN (D)-TEXAS: Thank you, Mr. Chair.

Madam Secretary, thank you for taking time to be here today.

I represent parts of east and north Houston, Harris County, and our district has one of the highest uninsured rates in the country. Even worse, we have one of the highest rates of people who have jobs but don't receive their insurance through their employer.

It's for this reason that I believe Houston would be a good place for you to come and spend -- spread the word about the tremendous benefits of the Affordable Care Act. However, we learned (inaudible) your office that you're unable to attend because of scheduling conflicts.

And I -- hopefully, we can have agreement that some time in the future you'll come to the fourth largest city that probably has the highest number of uninsured in a metropolitan area. And, of course, we're in the state of Texas that has the number of highest uninsured in the country.

The -- it's important to me and our constituents to get it right, and that's why I share your and the president's disappointment the website's not working as planned.

November 30th is not soon enough. Many of my constituents have been waiting for years to be able to purchase health insurance, and we owe it to them to get the marketplaces up and running.

The contractors have not served our country well and should fix it or not be paid.

Now we're hearing about the cancellation letters being sent by insurance companies (inaudible) customers notifying them that their plans are no longer offered. Are these Americans losing their health care coverage because of the Affordable Care Act, or is it because these plans were changed after the enactment of the act?

SEBELIUS: I would say it's the latter, sir. If a plan was in place since the enactment of the act, no one would have received a cancellation--


GREEN: So if somebody in America had an insurance plan before the act and -- the president was correct: If you have -- if you like what you have, you could keep it.

SEBELIUS: Yes, sir.

GREEN: The plans were changed, and so now they have to comply with the new law.

SEBELIUS: They can either choose to be grandfathered and keep the same plan, which meant the same benefits and -- and actually the regulation allows insurance companies to charge medical inflation plus a trend line so they didn't have to charge the same price.

They could increase it; they could increase co-pays. They could increase co- insurance. What they couldn't do is cancel benefits that the policy holder relied on. They couldn't disadvantage the policy holder. But if that plan is in effect, absolutely, it is still in effect.

GREEN: OK, but some of these millions of letters we're hearing about are probably because their plans changed?


SEBELIUS: Absolutely. And again, in the individual market, plans change every year. Insurers design new products--

GREEN: And that's -- even in the small business market that happens. So these plans are not allowed now, because they're completely inadequate. They don't offer the minimum essential benefits, is that correct?

SEBELIUS: That is correct.

GREEN: OK. And having been a state legislator -- and I know as governor in Kansas -- I assume every state has some type of minimum mandated benefits that they have for their health insurance plans.

SEBELIUS: They do, but it applies, again, sir, in the past usually to the group markets, where 90 percent of covered Americans get their policies. This market has always been the wild west.


GREEN: OK. The Americans who received those letters from their companies about cancellations, they're eligible to purchase plans on the exchange?

SEBELIUS: Or out of the exchange. Individuals who don't -- aren't interested in some kind of financial help can go outside the exchange, inside the exchange. Their insurer can offer them plans. They have choices they've never had before.

GREEN: And because of the benefits of the Affordable Care Act, 80 percent of their premium dollar will come back to them?

SEBELIUS: That's correct. That's--


GREEN: OK. And that's not true -- and I don't -- I know it's not true in Texas, but I don't know what -- any states that have that 80 percent requirement.

SEBELIUS: Well, no state had it, I would suggest, in that kind of broad base prior to the Affordable Care Act, so it's--


GREEN: Let me give you an example of one of the plans I found out doing case work a few years ago. A large company provided $25,000 maximum benefit for their employees in the year. Most employees didn't know about it, and -- until this one constituent found out that she had cancer. And the bill ended up being $300,000. And so that's some of those plans that are not being allowed to be sold now, is that correct?

SEBELIUS: Well, not only will (ph) the plan have a limit on out- of-pocket costs per year, it will have a limit on a lifetime out-of- pocket costs, and it will have -- it will take away the notion that you would run out of your coverage in the middle of a treatment, which a lot of plans do.

GREEN: I know I'm out of my time, but it's like buying a car--


GREEN: -- look good, but if it doesn't have a motor, it's no good to have that car.


GREEN: So that's why the Affordable Care Act has--

SEBELIUS: Save a lot of gas, but it doesn't get you-- (CROSSTALK)

UPTON: Gentleman's time has expired.

Gentleman from Oregon, Mr. Walden.

REP. GREG WALDEN (R)-OREGON: Thank you very much, Mr. Chairman.

Governor -- Secretary, we're delighted to have you before the committee. You and I both know how important this issue is to all Americans that we get it right. So I hope you can appreciate, we're trying to understand what we missed along the way. And -- and one of the things that bothered me was the letter that was sent from your agency to the GAO back in -- June 6th.

And I'll read in part, it said, "We're in the final stages of finalizing and testing the I.T. infrastructure that will support the application enrollment process. HHS is extremely confident that on October 1, the marketplace will open on schedule and millions of Americans will have access to affordable, quality health insurance."

I'm just an average guy from a small town in Oregon, but when I read that, it tells me you believed everything was good to go, the testing was in place, and we should have full confidence everything would work. Correct?

SEBELIUS: That's the letter I signed, yes, sir.

WALDEN: Actually, it was signed by your assistant.

SEBELIUS: Or whoever -- yes, yes.

WALDEN: But the same point.

And so I went into this believing in your response -- your agency's response to GAO, things were ready to go, we should have full confidence, because when somebody uses the word "extremely confident," tells me you're extremely confident.

Second piece, then when we had the testimony from the witnesses last week, I asked them about the end-to-end testing and what the industry standard would be, and they said it really should have been months, especially for a project of this magnitude. And yet we heard it was only two weeks.

Now in August, GCI told CMS in their report--


WALDEN: I'm sorry, CGI, thank you.

That on August 9th that there was not enough time in the schedule to conduct adequate performance testing. Did that make its way all the way to you? And do you think there was adequate time?

SEBELIUS: Sir, clearly, as I've said before, we did not adequately do end-to-end testing. The products were not locked and loaded into the system until the third week in September. Each of the component parts--

WALDEN: Right--

SEBELIUS: -- was tested, validated--

WALDEN: -- they told us that.

SEBELIUS: -- independently validated end-to-end (ph).

WALDEN: I'm sorry.

All those worked, though, right? They told us last week that their individual modules were tested and met specification. Do you concur with that analysis based on what you know?

SEBELIUS: I do concur with the testing that was done, yes.

WALDEN: OK, so it really was the end-to-end -- which is why some of us thought we should delay until it could be done right to avoid this very collapse that now is upon us. And I realize not everybody agreed to (ph) that.

The second piece here gets back to The Washington Post, which I realize you haven't had -- and I understand -- a chance to read this morning, but the four Pinocchios about the president repeatedly saying, 'If you have a plan, you'll keep your plan.' We all heard that to mean, 'I've got a plan with a company. I'll continue to have it even if they make minor changes,' when in fact your own rules as written said, no, that's really isn't what's going to happen. If minor changes are made that means the plan changed; that means you don't get it.

SEBELIUS: Well, sir, that isn't true. They (ph) -- rules did not say what you just suggested, and I think the estimate, given that there would be turnover in the market, was really an outside projection. It wasn't our rules. It's -- it was a snapshot of what happens in the market; that plans change so dramatically--

WALDEN: Sure, every year.

SEBELIUS: -- over time that the estimate was -- they wouldn't be -- not because of our rules, but because of insurance companies' business decisions.


WALDEN: Well, but you set up what (ph) those market rules looked like they had to comply with, correct?

SEBELIUS: Only if they chose not to grandfather the policy. That's--

WALDEN: But that meant they couldn't make any change (ph)-- (CROSSTALK)

SEBELIUS: Any grandfathered policy stayed in place, still would be in place.

WALDEN: Right, but if they made--

SEBELIUS: -- none of these rules apply.

WALDEN: But if they made any change--

SEBELIUS: No, they could make changes in pricing. They could make changes in benefits. They couldn't dramatically disadvantage the consumer, but they could have trend lines. They -- they had a wide corridor to make sure that -- that a similar plan -- so if a consumer liked the plan, the plan, if it stayed--


WALDEN: So here's what the practical implication -- I've got letters from constituents all over my district who have gotten letters from their insurers who say because of Obamacare, they're no longer going to be in the individual market, or at least with that plan in the individual market. And the result is this person from Cove, Oregon, said, "I was paying $600 a month for a $3,000 deductible. Now it costs me $800 a month for a $5,000 deductible."

I've got others here I'll put in the record.

A woman whose job -- she had 40 hours, now down to 29. Neither has health insurance, nor enough income to live on her own because of the way this law is getting implemented.

I realize my time's (ph) expired.

UPTON: Gentlelady from Colorado, Ms. DeGette.

REP. DIANE DEGETTE (D)-COLORADO: Thank you very much, Mr. Chairman.

And thank you, Secretary, for being with us today.

I want to follow up on a couple of those questions that Mr. Walden was asking you about CGI. As you know, Chairman Issa last night released this document, monthly project status report from CGI last night, and it looks to me as sort of a technical document that has a punch list of outstanding open issues.

And some of them do highlight items that upon first read seem to be alarming. For example, one of the entries said, "Due to the compressed schedule there's not enough time built in to allow for adequate performance testing." And this certainly, in retrospect, sounds bad. But the date of the document that Chairman Issa released is September 6th, and then on September 10th, four days later, CGI came into this committee and testified under oath, quote, "CGI Federal is confident it will develop -- deliver the functionality that CMS has directed." And -- and we're -- we're trying to figure out, or at least I'm trying to figure out, how CGI is now coming in and saying, you know, 'We warned everybody that this wasn't gonna be ready,' when they came in and directly told me that they would be ready to launch on October 1st.

So it kind of raises a question, how these statements can be reconciled. One explanation is that CGI was lying to this committee. I think that's unlikely. Another is that CGI thought that the items flagged in the report were like a punch list that could be addressed.

So here's my question to you, Madam Secretary: Was CGI telling your department the same thing that they told the committee on September 10th, that the company was confident that its programs would be ready?

SEBELIUS: Congresswoman, all of the contractors testified here in September and again, I think, last week before this committee. And the testimony was fairly similar, that they were ready to go in September. They were asked in -- last week if they had suggested that we should delay the launch date. Each of them said, no. I think the chairman--


DEGETTE: So they never asked you to delay the launch date?

SEBELIUS: They did not. And, frankly, I -- I think it is not valuable at this point--


SEBELIUS: -- to do a lot of pointing blame, fixing the blame. What I want to do is fix the problem.

DEGETTE: And so do I--

SEBELIUS: I think we need the whole team to move ahead, and we will report back regularly.

DEGETTE: Right, but we're relying on these contractors to fix this. And so that goes to my last question, which is Mr. Zients has now come in and he says the site is going to be functional for the vast majority of users by the end of November. Is that right?

SEBELIUS: That's correct.

DEGETTE: And given what CGI told us and the other vendors, do you believe that that is correct? Do you believe it will be pretty much ready to go by the end of November?

SEBELIUS: I do. And I think that we are making improvements each and every day. It is easier to use now than it was two weeks. It is way from where we need it to be.

DEGETTE: So it's not like it's all going to be fine by the end of November. It's beginning to improve already. Is that your testimony?

SEBELIUS: It is a continuous process, as websites are. Patches are made, fixes are made on an ongoing basis. And as we find issues like Congresswoman Eshoo talked about, we are fixing them in real time.

DEGETTE: And you're going to guarantee yes or no that people will have privacy when they go on this site?

SEBELIUS: Absolutely.

DEGETTE: Now I just want to say one last thing. I was on the Washington Journal where callers call in this morning, and I had a man, Max, call in. And he said he got one of those letters from the insurance companies that his insurance was canceled.

So what he did is he went on to the website and he -- under the federal exchange and he found a better plan, and now he's going to sign up. So I would hope that that's what everybody would be able to do. And I thank you, Mr. Chairman.

UPTON: Mr. Terry?

REP. LEE TERRY (R)-NEBRASKA: Thank you, Mr. Chairman. And I'm pleased to hear that the website will be fully operational by the end of November. And would be able to -- would you come back to our committee so we can see if that's actually accomplished and how it was accomplished?

SEBELIUS: I will make every effort to do that.

TERRY: OK. You were governor and state insurance commissioner in Kansas, and I reached out to our state insurance commissioner and governor and found out that they have absolutely no data about Nebraskans who have either tried to enroll or enrolled.

As you know, Nebraska is one of the states that opted not to do their own exchange and rely on the federal exchange. So it's interesting to me that neither our insurance commissioner nor the governor's office had any data about Nebraskans and this -- this -- and enrolling in these plans.

I also asked our insurance commissioner if any of the navigators, if they knew who the navigators were and whether they had to apply to be certified or licensed in essence like an insurance agent would be. And they told me they have no clue who's been authorized by HHS to be a navigator and work with people in Nebraska.

So this is concerning to me, so I'm going to ask you a few questions along this line. First of all, do you have data on how many people in general in the United States have tried to enroll in a plan through this website?

SEBELIUS: No, sir. We do not have any reliable data around enrollment, which is why we haven't given it to date.

TERRY: Or have any data on how many people have tried to enroll but because of the problems have not been able to accomplish that?

SEBELIUS: No, sir. I can tell you I met with insurers last week. And one of the priority fixes is the so-called 834s, the document that sends an individual's name to a company and verifies it. That is one of the systems that is not working.

TERRY: I appreciate that. And the contractors I asked specifically about the information of how many people have tried to enroll and enrolled, and they say they do have those numbers but can't tell us that because of a contract with HHS saying that they -- they're gagged on that information.

SEBELIUS: I would suggest that the numbers are not reliable according to (inaudible).

TERRY: Well, I'll tell you what. My question is going to be though will you on the record right now authorize them to give us those numbers and let us determine whether those are reliable?

SEBELIUS: No, sir. I want to give you reliable, confirmed data from every state and from the federal marketplace. We have said that we will do that on a monthly basis. By the middle of the month you will have that data, but I don't want to turn over anything that is not confirmed and reliable, and that's what we'll do.

TERRY: Well, but that data out there exists and you will not let us (inaudible)

SEBELIUS: Sir, I would -- I would tell you right now it is not reliable data. According to the insurance companies who are eager to have customers, they are not getting reliable data all the way through the system (inaudible) real problems that we have.

TERRY: The number of people that have clicked on and tried to get or enrolled, I'm not asking about what they enrolled in or whether they came in and said they were 65 and were quoted something that they were 27 years old. That should be a pretty reliable number just on the surface. So would you--

SEBELIUS: The system isn't functioning, so we are not getting that reliable data. Insurers who I met with said that that is the case. We know that there's 700,000 applications that have been (inaudible).

TERRY: The reliability of that data certainly flies in the face of the testimony from the contractors. All right. I yield back.

UPTON: Ms. Capps?

REP. LOIS CAPPS (D)-CALIFORNIA: Thank you, Mr. Chairman. Thank you, Secretary Sebelius, for your presence here today and your testimony. While I too am frustrated with the flawed roll-out of, I do appreciate your longstanding commitment to improving the health care options for all Americans and fixing this website quickly.

I think it's important to note that in my home state of California and other states as well, the new exchange marketplace, we call it Covered California, is working. And rates -- constituents are finding that rates are as much as 29 percent less than those that they found on the marketplace last year.

I'm thankful my constituents now have this option. And as I look around to implementation nationwide, it seems clear to me that political decisions in individual states have really made the difference for consumers.

The governors and legislators -- state legislators that embrace this law are delivering for their communities, but those elected who are trying to ignore the opportunities presented and continue to throw up road blocks both here in Congress and in state legislatures should not now seem surprised that there are significant bumps along the way.

This seems to me to be completely disingenuous. Having embraced the law since open enrollment began October 1, Californians have started nearly 180,000 applications with more beginning every day.

I know my time is limited, but I want to have a second to mention a conversation I had just last night with a (inaudible) town hall to my district on the central coast of California. One of the first callers I heard from was a mother from Santa Barbara. Her name's Meryl, and she wanted to tell me the story of her son.

Her son is 28 years old and he had been paying $425 a month for his insurance before the Affordable Care Act. She was happy to report that he has already applied through Covered California and has found a policy that works better for him. It has all the essential health benefits covered, which his former policy did not, and now will only cost him $109 a month.

This is significant savings for Meryl's son, and this is a story that's being repeated at least in California often. So there are millions of residents in many states who have now set up their own websites and marketplaces. In those states, tens of thousands of people are now as we speak signing up for coverage. And this is demonstrating that the Affordable Care Act is working.

In New York and Washington, over 30,000 people have enrolled. In Oregon, over 50,000 people have been enrolled. Kentucky, 31,000 people have been enrolled. We could go on and on. The success of the state exchanges, which is where this is meant to be implemented, shows how badly this law is wanted and needed, how much it will be of help to so many people who want quality, affordable health care.

So my three quick questions to you are this, Madam Speaker (ph). What is your assessment of how this first month have been gone -- has gone in the states that are running their own marketplaces, which this Congress intended that the Affordable Care Act work?

SEBELIUS: Well everything we hear from the state-based markets is that they are doing well. They have not submitted data yet. We, again, are working with them around a monthly schedule so that they will confirm Medicaid data and enrollment data. And we'll see the real numbers at the end of the month and make sure that the -- they're available to the public.

But everything we hear is that they see the same demand, they are eager to enroll folks and that that is going smoothly.

CAPPS: And what do you think this success shows about the demand and the interest for affordable health insurance on the part of constituents?

SEBELIUS: Well I don't think there's any question that in spite of a series of road blocks and blockades and a lot of misinformation driven by about a $400 million marketing campaign last year, Americans are eager to see what their benefits may be under the law, what their opportunities are, how to get health security for themselves and their families, and we want to make sure that they see those benefits.

The website is one of the ways to do that. The call center, on the ground enrollment, personal outreach, are a variety of ways, and I would tell your colleague, Mr. Congressman, I'd be happy to get you the list of the Nebraska folks who are on the ground. It's available easily. It's public record, so I'd be happy to send it to you, so you could share it with your insurance commissioner and governor.

UPTON: The gentlelady's time has expired.

Gentleman from the great state of Michigan, Mr. Rogers.


Thank you, Madam Secretary, for being here.