```

[Senate Hearing 113-817]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 113-817

                  THE ONLINE FEDERAL HEALTH INSURANCE
                   MARKETPLACE: ENROLLMENT CHALLENGES
                          AND THE PATH FORWARD

=======================================================================

                                 HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                                   ON

EXAMINING THE ONLINE FEDERAL HEALTH INSURANCE MARKETPLACE, FOCUSING ON 
               ENROLLMENT CHALLENGES AND THE PATH FORWARD

                               __________

                            NOVEMBER 5, 2013

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions
                                
                                
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland
PATTY MURRAY, Washington
BERNARD SANDERS (I), Vermont
ROBERT P. CASEY, JR., Pennsylvania
KAY R. HAGAN, North Carolina
AL FRANKEN, Minnesota
MICHAEL F. BENNET, Colorado
SHELDON WHITEHOUSE, Rhode Island
TAMMY BALDWIN, Wisconsin
CHRISTOPHER S. MURPHY, Connecticut
ELIZABETH WARREN, Massachusetts

                                     LAMAR ALEXANDER, Tennessee
                                     MICHAEL B. ENZI, Wyoming
                                     RICHARD BURR, North Carolina
                                     JOHNNY ISAKSON, Georgia
                                     RAND PAUL, Kentucky
                                     ORRIN G. HATCH, Utah
                                     PAT ROBERTS, Kansas
                                     LISA MURKOWSKI, Alaska
                                     MARK KIRK, Illinois
                                     TIM SCOTT, South Carolina
                                       

                    Pamela J. Smith, Staff Director
        Lauren McFerran, Deputy Staff Director and Chief Counsel
                   David P. Cleary, Republican Staff Director

                                  (ii)

  
                                CONTENTS

                               __________

                               STATEMENTS

                       TUESDAY, NOVEMBER 5, 2013

                                                                   Page

                           Committee Members

Harkin, Hon. Tom, Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Alexander, Hon. Lamar, a U.S. Senator from the State of 
  Tennessee, opening statement...................................     3
Mikulski, Hon. Barbara A., a U.S. Senator from the State of 
  Maryland.......................................................    15
Isakson, Hon. Johnny, a U.S. Senator from the State of Georgia...    17
Murray, Hon. Patty, a U.S. Senator from the State of Washington..    19
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming..    20
Bennet, Hon. Michael F., a U.S. Senator from the State of 
  Colorado.......................................................    22
Roberts, Hon. Pat, a U.S. Senator from the State of Kansas.......    24
Baldwin, Hon. Tammy, a U.S. Senator from the State of Wisconsin..    26
Scott, Hon. Tim, a U.S. Senator from the State of South Carolina.    28
Murphy, Hon. Christopher, a U.S. Senator from the State of 
  Connecticut....................................................    30
Burr, Hon. Richard, a U.S. Senator from the State of North 
  Carolina.......................................................    32
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    34
Kirk, Hon. Mark, a U.S. Senator from the State of Illinois.......    35
Hagan, Hon. Kay R., a U.S. Senator from the State of North 
  Carolina.......................................................    36
Murkowski, Hon. Lisa, a U.S. Senator from the State of Alaska....    39
Warren, Hon. Elizabeth, a U.S. Senator from the State of 
  Massachusetts..................................................    40
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode 
  Island.........................................................    42

                                Witness

Tavenner, Marilyn, Administrator, Centers for Medicare and 
  Medicaid Services (CMS), U.S. Department of Health and Human 
  Services, Washington, DC.......................................     6
    Prepared statement...........................................     9

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Senator Casey................................................    54
    Response by Marilyn Tavenner to questions of:
        Senator Harkin...........................................    55
        Senator Casey............................................    55
        Senator Hagan............................................    57
        Senator Alexander........................................    58
        Senator Roberts..........................................    64

                                 (iii)

  

 
THE ONLINE FEDERAL HEALTH INSURANCE MARKETPLACE: ENROLLMENT CHALLENGES 
                          AND THE PATH FORWARD

                              ----------                              

                       TUESDAY, NOVEMBER 5, 2013

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m. in room 
SD-106, Dirksen Senate Office Building, Hon. Tom Harkin, 
chairman of the committee, presiding.
    Present: Senators Harkin, Alexander, Mikulski, Murray, 
Hagan, Franken, Bennet, Whitehouse, Baldwin, Murphy, Warren, 
Enzi, Burr, Isakson, Roberts, Murkowski, Kirk, and Scott.

                  Opening Statement of Senator Harkin

    The Chairman. The Senate Committee on Health, Education, 
Labor, and Pensions will please come to order.
    About 5 years ago, Richard Streeter, a 47-year-old truck 
driver from Eugene, OR, was frustrated and worried. As New York 
Times columnist Nicholas Kristof described in his column this 
weekend, Mr. Streeter couldn't find affordable insurance in the 
individual market. Back in the bad old days, no insurance 
company would cover him. So he did what people locked out of 
the market do. He just went without care.
    After months of ignoring pain, Mr. Streeter finally went in 
for a colonoscopy, but he couldn't afford one. The only way he 
could get it was from a doctor who agreed to take half payment 
now and half payment later whenever he could afford it.
    After driving 100 miles to get the results, he found out he 
had advanced colon cancer. His doctor said this,

          ``It was heartbreaking to see the pain on his face, 
        and it got me very angry with the people who insist 
        that Obamacare is a train wreck, when the real train 
        wreck is what people are experiencing every day because 
        they can't afford care.''

    Mr. Streeter is the second patient the doctor had seen this 
year who put off getting a test because of a lack of health 
insurance and now has advanced colon cancer. He has a long 
tough road ahead of him, but at least now he won't have to 
worry about how he'll pay for his treatment. He signed up for 
health insurance starting January 1, which now can't turn him 
down because of his preexisting condition.
    We passed the Affordable Care Act so that this would never 
happen to another family. Right now, millions of Americans are 
shopping on new health insurance marketplaces for coverage that 
starts next year. Seven hundred thousand people have filed 
applications. And why is there this surge in interest? Because 
for the first time in history, their health, whether or not 
they have a chronic illness or an allergy or had a back 
operation 10 years ago, will not prevent them from getting 
insurance.
    These reforms will finally deliver on a long overdue 
promise to all Americans. If you work hard and play by the 
rules and pay your fair share, you'll never have to stay awake 
at night worried that you can't afford to see a doctor or pay 
your medical bills. It's a promise I wish we could have kept 
sooner for Mr. Streeter.
    Today we'll hear a status report on the implementation of 
these reforms. As everyone knows, the rollout of the Federal 
health insurance marketplace has been bumpy, to put it mildly. 
Consumers have run into roadblocks. The site has been 
functional 1 day and unresponsive the next. Americans who have 
been waiting for years for this moment deserve better.
    The President, Secretary Sebelius, and our witness today 
have taken full responsibility for the technical flaws in the 
Web site and have said that no resource will be spared to fix 
the problem quickly. And I look forward to hearing an update 
today on those efforts.
    I share my Republican colleagues' concern about the Web 
site's technical flaws and the bumpy rollout, and I look 
forward to a discussion about how we can move forward. But I 
want to be very clear that I hope we're here for a constructive 
discussion, not a game of gotcha. I am as upset as anyone with 
the difficulties that individuals who want to apply for 
coverage on the Federal marketplace have experienced, and I 
want to learn today how those problems will be fixed.
    But herein may be a difference. I want it fixed so the 
Affordable Care Act will succeed, not be torn down. There are 
many who have spent the last 3 years doing nothing but trying 
to tear this law down. Quite frankly, I feel they've kind of 
surrendered their right to express indignation that it's not 
working flawlessly.
    We voted 32 times, many of my colleagues on the Republican 
side--32 times to repeal or defund the law. As an appropriator 
and as chair of the Appropriations Subcommittee that funds the 
implementation of this law, my Republican colleagues year after 
year have denied implementation funds at every turn, tried to 
stop navigators from spreading the word. They even sent letters 
to the National Football League warning them against reaching 
out to fans.
    Republican Governors and legislatures, who in most cases 
are on a platform of strong States' rights and less Federal 
Government, handed over the responsibility of running the 
marketplace to the Federal Government. Before we get into the 
details, I think everyone should take a deep breath. This is, 
after all, a Web site. This is a machine that will be fixed.
    Americans have until the end of March of next year to sign 
up. As the President has said, the promise of the Affordable 
Care Act is far more than just a Web site. The promise of the 
Affordable Care Act is a benefit to 105 million Americans who 
have been protected against lifetime limits since 2010.
    It's a benefit to more than 3 million young people who can 
stay on their parents' policies until they're age 26. It's a 
benefit to 7 million seniors who have already saved $8 billion 
in discounts on prescription drugs. It's a benefit to the 71 
million people on private insurance that have used, at no cost 
and no co-pay, preventative services, which Mr. Streeter could 
have used had this law been in effect.
    It's a benefit to the 129 million non-elderly Americans 
with preexisting conditions who, beginning January 1, can no 
longer be denied or discriminated against by health insurance 
companies. That's the big picture, and we shouldn't forget it. 
Health reform is the promise of the health and financial 
security that insurance coverage brings.
    I can tell you that in Iowa, Iowa's marketplace premiums 
are among the 10 lowest nationwide. A family of four making 
$50,000 will be able to get bronze level coverage for $103 a 
month. A 27-year-old making $25,000 will be able to get a plan 
for less than $100 a month. That's real choice, real 
affordability.
    So let's get the Web site fixed as fast as possible so that 
every American can shop easily and enroll smoothly. But let's 
not forget the big picture, that because of Obamacare, if you 
want to call it that, or the Affordable Care Act, millions of 
Americans will not be in the same situation as Mr. Streeter 
found himself. That's what it's about.
    Slowly but surely, Americans who have waited years to get 
covered are enrolling in health insurance for the first time. 
We owe them our very best efforts to move the ball forward. So 
I will be listening closely when questions are asked today of 
our witness. Is this in order to help and fix this system so we 
can move forward to make this Affordable Care Act work, or is 
it another means to try to tear it down and discourage 
participation?
    I want to thank our witness, Ms. Tavenner, for her 
leadership of the Centers for Medicare and Medicaid Services 
and for her long dedication to making sure our healthcare 
system in America works for all. I know we'll have some tough 
questions. That's fine, because I do want to know why this 
problem came up. But I want to keep the big picture in mind as 
to what we're really doing here, and that is to make the system 
work.
    Finally, I have one administrative matter. I request that 
the record remain open for 10 days from today for statements to 
be submitted for the record.
    Now I'll turn to our Ranking Member, Senator Alexander.

                 Opening Statement of Senator Alexander

    Senator Alexander. Thanks, Mr. Chairman.
    Welcome, Ms. Tavenner. When I was in President Bush's 
cabinet, I used to testify before this committee from that 
seat, and I used to think that Senators deliberately put the 
chair down low so they could be up high. So we welcome you.
    My late friend, Alex Haley, used to say, ``Lamar, if 
instead of making a speech, you'd just tell a story, somebody 
might listen to you.'' So here's a story.
    Sixteen thousand Tennesseans have insurance through 
CoverTN, a low-cost narrow-coverage State program. Obamacare is 
canceling their policies. CoverTN is an example of what 
President Obama calls bad apples, an insurance plan that 
Washington decides isn't good enough for you.
    I recently heard from one of those Tennesseans whose policy 
will be canceled on January 1. Her name is Emily. She's 39. She 
has lupus. She told me, ``I cannot keep my current plan because 
it doesn't meet the standards of coverage. This alone is a 
travesty.''
    She said,

          ``CoverTN has been a lifeline. With the 
        discontinuation of CoverTN, I'm being forced to 
        purchase a plan through the exchange. My insurance 
        premiums alone will increase a staggering 410 percent. 
        My out-of-pocket expense will increase by more than 
        $6,000 a year. That includes subsidies. Please help me 
        understand how this is affordable.''

    Our healthcare system makes up nearly 20 percent of our 
economy, touching the lives of every American. And today, 
Obamacare is pushing that 20 percent of our economy in the 
wrong direction.
    The President has said repeatedly--and I looked up the 
White House Web site this morning--``If you like your plan, you 
can keep it, and you don't have to change a thing due to the 
healthcare law.'' Let me repeat, you don't have to change a 
thing due to the healthcare law. That's the White House Web 
site today.
    It's more than a Web site, as the President said. It's a 
law transforming our healthcare delivery system in the wrong 
direction, we believe, by increasing premiums, canceling 
insurance plans, destroying relationships with doctors, raising 
taxes, forcing people into Medicaid, spending a half trillion 
Medicare dollars on new programs instead of making Medicare 
solvent, and encouraging employers to reduce their employees to 
a 30-hour work week, and then having the IRS threaten to fine 
Americans for failing to sign up for insurance on a Web site 
that doesn't work.
    As the President promised, if you like your healthcare 
plan, you can keep it. But, in fact, the law cancels millions 
of individual policies, and for millions of others, employers 
are dropping insurance programs as they discover the added cost 
of Obamacare.
    For these Americans, the new promise is if you want 
healthcare, go find it on a Web site that the Administration 
says won't be working properly until the end of November. 
That's an unwelcome Christmas present--only 2 weeks to shop for 
and buy a new insurance policy by December 15, so that you're 
covered next year when Obamacare outlaws your policy.
    Ms. Tavenner, the President put Secretary Sebelius in 
charge of implementing this law. I've called on her to resign 
because it's hurt so many Americans.
    Before the Internet, RCA could tell you every day how many 
records Elvis was selling. Ford could tell you how many cars it 
was selling. McDonald's could tell you how many hamburgers it 
had sold. Congressman Issa has posted on his Web site notes 
from meetings in the Obama administration's war rooms, where 
you're apparently telling each other how many people are 
enrolling in Obamacare. But why won't you tell Congress and the 
American people?
    One Senator has described this law as an approaching train 
wreck. Well, my grandfather was a railroad engineer in Kansas. 
His job was to drive the locomotive onto a roundtable, they 
called it, turn it around and head it off in the right 
direction. That's what our country needs to do. We need to turn 
this train around, turn the law around, and head it in the 
right direction.
    Obamacare is the wrong direction because it expands the 
healthcare delivery system that we already knew costs too much. 
The right direction is more choices and more competition that 
lower costs so Americans can afford to buy insurance.
    Now, don't expect Republicans to show up on the Senate 
floor with our version of a 3,000-page bill to try to move the 
healthcare delivery system in the direction we want it to go. 
We don't believe in that approach. We believe instead in moving 
step by step in the right direction, make Medicare solvent, 
reform Medicare Advantage to compete with Medicare, make 
Medicaid flexible, encourage employee wellness plans, small 
business plans, expand health savings accounts, buy insurance 
across State lines, change 30-hour work weeks to 40-hours.
    That 39-year-old Tennessee woman I told you about, Emily, 
who is losing her insurance because Obamacare has decided it 
isn't good enough for her, finished her story with these words,

          ``This is one of the biggest betrayals our government 
        has ever committed on its citizens. I beg you to 
        continue to fight for those like me,'' she says, ``who 
        would only ask to be allowed to continue to have what 
        we already enjoy, a fair health insurance plan at a 
        fair price. Please find a way to return to affordable 
        healthcare,'' writes Emily.

    My message to Emily is that we will do our best to turn 
this train around and head our healthcare delivery system in 
the right direction so that you can buy and keep healthcare 
that you can afford.
    The Chairman. On behalf of the committee, I'd like to 
welcome our witness today, Marilyn Tavenner, the Administrator 
of the Centers for Medicare and Medicaid Services. She was 
confirmed by the Senate on May 15 of this year. Prior to her 
confirmation, Ms. Tavenner was Principal Deputy Administrator 
for CMS. She also served for 4 years as Governor Tim Kaine's 
Secretary of Health and Human Resources in Virginia.
    Before entering government service, Ms. Tavenner spent 25 
years working for the Hospital Corporation of America, and she 
began her career as a nurse at the Johnston-Willis Hospital in 
Richmond. Ms. Tavenner holds a Bachelor of Science degree in 
nursing and a Master's degree in health administration, both 
from the Virginia Commonwealth University.
    I know you're very, very busy these days. But I thank you 
for coming up here to share your experience and answer 
questions here today, Ms. Tavenner. And, now, what I'd like to 
do, since this is such an intricate subject--we usually give 
the witness 5 minutes. With the indulgence of the committee, 
I'd like to give you up to, but no more, than 10 minutes to 
make your opening statement, and then we'll have our questions.
    So welcome, and your statement will be made a part of the 
record in its entirety. Please proceed.

   STATEMENT OF MARILYN TAVENNER, ADMINISTRATOR, CENTERS FOR 
MEDICARE AND MEDICAID SERVICES (CMS), U.S. DEPARTMENT OF HEALTH 
               AND HUMAN SERVICES, WASHINGTON, DC

    Ms. Tavenner. Thank you, Chairman Harkin, Ranking Member 
Alexander, and members of the committee.
    On October 1, we launched one of the key provisions of the 
Affordable Care Act, the new marketplace where people without 
health insurance, including those who could not afford health 
insurance and those who were not part of a group plan, could 
actually go get affordable healthcare coverage. We know that 
some consumers are still having difficulty enrolling via the 
marketplace Web site, and we are focused on identifying and 
solving those problems quickly.
    But it is important to remember that the Affordable Care 
Act is more than just a Web site. It has created a new market 
which allows people access to quality affordable health 
insurance options. It does this by pooling consumers into 
statewide group plans that spread risk between sick people and 
healthy people, between young and old, and then bargains on 
their behalf for the best deal on health insurance.
    By creating competition where there wasn't competition 
before, insurers are now eager for business and have created 
new healthcare plans with more choices. The premiums for 
coverage on the marketplace are lower than expected, and 
millions of Americans will also qualify for tax credits to make 
this coverage even more affordable. People will have 
comprehensive coverage that cannot be taken away, even if they 
get sick.
    We know that consumers are eager to purchase this coverage, 
and I want to assure you that Healthcare.gov can and will be 
fixed quickly, and we are working literally around the clock to 
make that happen. We have made significant progress in 
improving the performance and functionality of the Web site, 
and we expect the user experience to continue to improve with 
each passing week.
    Over the past month, millions of Americans have visited 
Healthcare.gov to look at their new healthcare coverage options 
under the Affordable Care Act. In that time, nearly 700,000 
applications for coverage have been submitted from across the 
Nation, more than half in the Federal marketplace alone. This 
tremendous interest confirms that the American people are 
looking for quality, affordable healthcare coverage.
    We know that the initial consumer experience on 
Healthcare.gov has been very frustrating for many Americans. 
Some have had trouble creating accounts and logging into the 
site, while others have received confusing error messages or 
had to wait for slow page loads or forms that failed to respond 
in a timely fashion. In the first few days that we went live, 
few consumers could create an account. We have now resolved 
that issue.
    Users can successfully create an account and continue 
through the full application and enrollment process. We are now 
able to process nearly 17,000 registrants per hour or five per 
second with almost no errors. We've updated the site several 
times since October 1, fixing bugs and improving the 
Healthcare.gov experience.
    We've added more capacity, and we've doubled the number of 
servers in order to meet demand. We reconfigured various system 
components to improve site responsiveness. This has increased 
performance across the site, but, in particular, the viewing 
and filtering of health plans during the online shopping 
experience. This now responds in just seconds, whereas it was 
taking minutes before.
    We've also resolved issues so that eligibility notices now 
display properly to consumers at the completion of the 
application process. Consumers can now view and compare plans 
without registering for an account. This functionality was not 
working well in the days leading up to October 1, so we opted 
to prioritize work on the application process instead.
    One of our highest priorities was ensuring that consumer 
information was transmitted correctly to issuers. Over the past 
week, our team has worked with issuers to resolve outstanding 
issues, and now all necessary consumer information will be sent 
to issuers after they've enrolled in the plan of their choice. 
We will continue to work closely with issuers to identify and 
solve problems quickly.
    We've also seen success in improving response time across 
the Web site. For the first few weeks, we estimate that users 
were waiting, on average, 8 seconds for pages across the site 
to load. We've now lowered this time to less than 1 second, and 
we will continue to take aggressive steps to bring response 
downtime even further.
    We are pleased with these quick improvements and the parts 
of the system that are already working well. For example, the 
data hub, the routing tool that provides an efficient and 
secure way to verify information submitted by consumers, is 
sending determination to the marketplace in less than 1.2 
seconds. The Social Security Administration has reported 4.2 
million transactions with the hub, and the IRS has responded to 
more than 1.3 million requests.
    When consumers fill out the online application, they can 
trust that the information they are providing is protected by 
stringent security standards and that the technology underlying 
the application process has been tested and is secure. CMS has 
decades of experience at protecting personal information in 
Medicare, and we are extending that commitment to the highest 
security standards for the marketplace.
    Any system that is this large is inherently risky. We have 
continued to monitor the security of the system as envisioned 
in the risk mitigation and compensating control plan and have 
had no serious issues. Security testing never ends. It will 
never end, and it will not for this system or for any other 
large system.
    While we continue to improve Healthcare.gov, it is 
important to remember that the Web site is, in fact, working, 
and more people are applying and enrolling each week. In 
addition to the Web site, there are other ways for consumers to 
approach Healthcare.gov. One is they can choose to apply by 
phone and a 24/7 toll-free number. A customer service 
representative will work with each consumer to make sure that 
they can complete the application and enrollment process.
    Second, people can find in-person help in their communities 
and work with people trained or certified to help them 
understand their healthcare options. Third, consumers can fill 
out a paper application and mail it in, and they'll find out 
whether they're eligible for private insurance, Medicaid or 
CHIP, and then they can go online to compare, choose, and 
enroll in a plan, or they can contact the call center and do it 
by phone if they prefer.
    Today, more than three out of every four Americans get 
insurance from an employer, from Medicare, from Medicaid, or 
from the VA system. Americans who purchase insurance on their 
own, however, generally buy coverage on the individual market. 
Before the Affordable Care Act, coverage in the individual 
market often was unaffordable, had high co-pays or deductibles, 
or lacked basic benefits like maternity care, mental health 
services, and prescription drug coverage.
    These plans also had high turnover rates, greater than 50 
percent per year frequently, and often were not renewed at the 
end of a plan year. The healthcare law is creating new 
protections for people in the individual market as well as 
strengthening employer-based coverage. In the health insurance 
marketplace, consumers will no longer be charged more because 
of their gender or a preexisting condition.
    Recommended preventive services will be covered at no 
additional out-of-pocket cost. There will be caps on out-of-
pocket cost, and plans will have to offer a basic package of 10 
essential benefits.
    Plans that were in place before the Affordable Care Act 
passed and have not been changed in ways that substantially cut 
benefits or increase cost sharing are grandfathered in and are 
exempt from offering most of the new consumer protections. They 
must notify their enrollees that they are grandfathered plans, 
however, and for these enrollees, nothing has to change in 
2014.
    Some of the 5 percent of Americans who currently get 
insurance on the individual market have recently received 
notices from their insurance companies suggesting that their 
plans will no longer exist. These Americans do have a choice. 
They can choose a different plan being offered by their 
insurer, or they can shop for coverage in the marketplace or 
outside the marketplace.
    As insurers have made clear, they are not dropping 
consumers. They are improving their coverage options, often 
offering better value plans with additional benefits.
    Indeed, the majority of people in the individual market 
today will qualify for discounted or free healthcare coverage 
when signing up for coverage through the marketplace. One study 
found that, not counting the 1 million who qualify for 
Medicaid, 48 percent of people who buy insurance through the 
individual market will have a tax credit that averages over 
$5,500.
    The Affordable Care Act is almost 4 years old now, and 
during its time, we have seen many improvements in our 
healthcare system, Medicare, Medicaid, Medicare Advantage. The 
opening of the marketplace on October 1 is the latest step in 
the implementation of the law, and we acknowledge that we have 
a lot more to do, and we're ready to do it.
    Thank you, Mr. Chairman.
    [The prepared statement of Ms. Tavenner follows:]
                 Prepared Statement of Marilyn Tavenner
    Good morning, Chairman Harkin, Ranking Member Alexander, and 
members of the committee. On October 1, we launched one of the key 
provisions of the Affordable Care Act--the new Health Insurance 
Marketplace, where people without health insurance, including those who 
cannot afford health insurance, and those who are not part of a group 
plan, can go to get affordable coverage. Consumers can access the 
Marketplace in several ways--through a call center, by filling out a 
paper application, with the help of in-person assistance, or by going 
online and filling out an application on HealthCare.gov.
    Over the past month, millions of Americans have visited 
HealthCare.gov to look at their new health coverage options under the 
Affordable Care Act. In that time, nearly 700,000 applications have 
been submitted to the Federal and State marketplaces from across the 
Nation. This tremendous interest--with over 20 million unique visits to 
date to HealthCare.gov--confirms that the American people are looking 
for quality, affordable health coverage. Unfortunately, the experience 
on HealthCare.gov has been frustrating for many Americans. I want to 
assure you that HealthCare.gov can and will be fixed, and we are 
working around the clock to deliver the shopping experience that you 
deserve. We are seeing improvements each week, and by the end of 
November, the experience on the site will be smooth for the vast 
majority of users.
              improvements already made to healthcare.gov
    To ensure that we make swift progress, and that the consumer 
experience continues to improve, our team called in additional help to 
solve some of the more complex technical issues we are encountering. We 
brought on board management expert and former CEO and Chairman of two 
publicly traded companies, Jeff Zients, to work in close cooperation 
with our HHS team to provide management advice and counsel to the 
project. We have also enlisted the help of QSSI to serve as a general 
contractor for the project. They are familiar with the complexity of 
the system, and the work they provided for HealthCare.gov--the Federal 
data hub--is working well and performing as it should. They will work 
with CMS leadership and contractors to prioritize the needed fixes and 
make sure they get done.
    A number of fixes have already been completed. Two weeks ago, the 
tech team put into place enhanced monitoring tools for HealthCare.gov, 
enabling us to get a high level picture of the Marketplace application 
and enrollment system. Thanks to this work, we are now better able to 
see how quickly pages are responding, and to measure how changes 
improve user experience on the site.
    We reconfigured various system components to improve site 
responsiveness. This has increased performance across the site, but in 
particular the viewing and filtering of health plans during the online 
shopping process now responds in just seconds. It was taking minutes. 
We have also resolved issues with how the eligibility notices are 
presented to consumers. They now display properly at the completion of 
the application process.
    Another place where we have seen a lot of consumer frustration is 
in their ability to successfully create an account. This issue is 
something that we identified on October 1, and we have made significant 
progress since then to deliver a much smoother process for consumers. 
Users can now successfully create an account and continue through the 
full application and enrollment process. We are now able to process 
nearly 17,000 registrants per hour, or 5 per second, with almost no 
errors.
    Other fixes include software configuration changes and optimization 
that have increased the efficiency of system interactions. We also 
added capacity by doubling the number of servers and have replaced the 
virtual data base with a high-capacity physical one. This allowed us to 
be more efficient and effective in our processing time and 
significantly reduced the account registration failures. While 
significant work remains, these changes are already making the shopping 
process easier for consumers.
          expanding access to affordable coverage through the 
                      health insurance marketplace
    We are committed to improving the consumer experience with 
HealthCare.gov, which serves as an important entry point to the new 
Marketplace. The new Marketplace is a place that enables people without 
health insurance, including those who cannot afford health insurance, 
and those who are not part of a group plan, to finally start getting 
affordable coverage.
    Just a few weeks into a 6-month open enrollment period, while some 
consumers have had to wait too long to access the Marketplace via 
HealthCare.gov, the Marketplace is working for others and consumers are 
also utilizing the call center, paper applications and in-person 
assistance to apply for coverage.
    The idea of the Marketplace is simple. By enrolling in private 
health insurance through the Marketplace, consumers effectively become 
part of a form of statewide group coverage that spreads risk between 
sick people and healthy people, between young and old, and then 
bargains on their behalf for the best deal on health insurance. Because 
of enhanced competition, insurers are now eager for new business, and 
have created new health care plans with more choices.
    The premiums being charged by insurers provide clear evidence that 
the Marketplace is encouraging plans to compete for consumers, 
resulting in more affordable rates. The weighted average premium for 
the second-lowest-cost silver plan, looking across 47 States and DC, is 
16 percent below the premium level implied by earlier Congressional 
Budget Office (CBO) estimates.\1\ Outside analysts have reached similar 
conclusions. A recent Kaiser Family Foundation report found that, 
``while premiums will vary significantly across the country, they are 
generally lower than expected,'' and that 15 of the 18 States examined 
would have premiums below the CBO-projected national average of $320 
per month for a 40-year-old in a silver plan.\2\
---------------------------------------------------------------------------
    \1\ http://aspe.hhs.gov/health/reports/2013/MarketplacePremiums/
ib_marketplace_premi-
ums.cfm#_ftnref18.
    \2\ http://kaiserfamilyfoundation.files.wordpress.com/2013/09/
early-look-at-premiums-and-participation-in-marketplaces.pdf.
---------------------------------------------------------------------------
    This is good news for consumers. In fact, some insurers lowered 
their proposed rates when they were finalized. In Washington, DC, some 
issuers have reduced their rates by as much as 10 percent.\3\ In 
Oregon, two plans requested to lower their rates by 15 percent or 
more.\4\ New York State has said, on average, the approved 2014 rates 
for even the highest coverage levels of plans individual consumers can 
purchase through its Marketplace (gold and platinum) represent a 53 
percent reduction compared to last year's direct-pay individual market 
rates.\5\ Furthermore, States are using their rate review powers to 
review and adjust rates accordingly. In Oregon, the State has reduced 
rates for some plans by as much as 35 percent,\6\ and in Maryland, the 
State has reduced some rates for coverage offered through the 
Marketplace by almost 30 percent,\7\ offering consumers an even better 
deal on their coverage for the 2014 plan year.
---------------------------------------------------------------------------
    \3\ http://hbx.dc.gov/release/dc-health-link-applauds-aetna-
decision-cut-rates.
    \4\ http://www.oregonlive.com/health/index.ssf/2013/05/
two_oregon_insurers_reconsider
.html.
    \5\ http://www.Governor.ny.gov/press/07172013-health-benefit-
exchange.
    \6\ http://www.oregonlive.com/health/index.ssf/2013/06/
oregon_slashes_2014_health_
ins.html.
    \7\ http://www.kaiserhealthnews.org/stories/2013/july/26/maryland-
marketplace-premiums-exchange.aspx.
---------------------------------------------------------------------------
    In addition to the more affordable rates resulting from competition 
among insurers, insurance affordability programs, including premium tax 
credits and cost-sharing reductions, will help many eligible 
individuals and families, significantly reducing the monthly premiums 
and cost-sharing paid by consumers. Premium tax credits may be paid in 
advance and applied to the purchase of a qualified health plan through 
the Marketplace, enabling consumers to reduce the upfront cost of 
purchasing insurance. In addition, cost-sharing reductions will lower 
out-of-pocket payments for deductibles, coinsurance, and copayments for 
eligible individuals and families. A recent RAND report \8\ indicated 
that, for the average Marketplace participant nationwide, the premium 
tax credits will reduce out-of-pocket premium costs by 35 percent from 
their unsubsidized levels.\9\
---------------------------------------------------------------------------
    \8\ http://www.rand.org/content/dam/rand/pubs/research_reports/
RR100/RR189/RAND_
RR189.pdf.
    \9\ This is a simple calculation based on Figure 6 of the RAND 
study, available at the link above.
---------------------------------------------------------------------------
    CBO has projected that about 8 in 10 Americans who obtain coverage 
through the Marketplace will qualify for assistance to make their 
insurance more affordable, an estimated 20 million Americans by 
2017.\10\ A family's eligibility for these affordability programs 
depends largely on its family size, household income, and access to 
other types of health coverage.
---------------------------------------------------------------------------
    \10\ http://www.cbo.gov/sites/default/files/cbofiles/attachments/
44190_EffectsAffordableCare
ActHealthInsuranceCoverage_2.pdf.
---------------------------------------------------------------------------
    The fact is that the Affordable Care Act delivered on the product: 
quality, affordable health insurance. The tremendous interest shown in 
HealthCare.gov shows that people want to buy this product. We know the 
initial consumer experience at HealthCare.gov has not been adequate. We 
will address these initial and any additional problems, and build a Web 
site that fully delivers on this promise of the Affordable Care Act.
               other benefits of the affordable care act
    While we are working around the clock to address problems with 
HealthCare.gov, it is important to remember that the Affordable Care 
Act is much more than the opportunity to purchase insurance through 
HealthCare.gov. Most Americans already have health coverage through an 
employer-based plan, or health benefit program, such as Medicare, 
Medicaid, or the Children's Health Insurance Program (CHIP). For these 
Americans, the Affordable Care Act provides new benefits and 
protections, many of which have been in place for some time. For 
example, because of the Affordable Care Act, millions of young adults 
have been able to stay on their parents' plans until they are 26. 
Because of the Affordable Care Act, seniors on Medicare receive greater 
coverage of their prescription medicine, saving them billions. Because 
of the Affordable Care Act, for millions of Americans, recommended 
preventive care like mammograms is free through employer-sponsored 
health coverage. And in States where Governors and legislatures have 
allowed it, the Affordable Care Act provides the opportunity for many 
Americans to get covered under Medicaid for the first time. In Oregon, 
for example, a Medicaid eligibility expansion will help cut the number 
of uninsured people by 10 percent, as a result of enrollment efforts 
over the last few weeks, resulting in 56,000 more Americans who will 
now have access to affordable health care.
    The Affordable Care Act is also holding insurers accountable for 
the rates they charge consumers. For example, insurance companies are 
now required to justify a rate increase of 10 percent or more, shedding 
light on unnecessary costs. Since this rule was implemented,\11\ the 
proportion of rate filings requesting insurance premium increases of 10 
percent or more has plummeted from 75 percent in 2010\12\ to an 
estimated 14 percent in the first quarter of 2013,\13\ saving Americans 
an estimated $1.2 billion on their health insurance premiums.\14\ These 
figures strongly suggest that the rate review program has materially 
influenced premiums that ultimately get charged to individuals and 
small businesses.
---------------------------------------------------------------------------
    \11\ Health Insurance Rate Review--Final Rule on Rate Increase 
Disclosure and Review: http://www.gpo.gov/fdsys/pkg/FR-2011-05-23/pdf/
2011-12631.pdf.
    \12\ http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-
Resources/rate-review091
12012a.html.
    \13\ http://aspe.hhs.gov/health/reports/2013/rateIncreaseIndvMkt/
rb.cfm.
    \14\ http://aspe.hhs.gov/health/reports/2013/acaannualreport/
ratereview_rpt.cfm.
---------------------------------------------------------------------------
    The rate review program works in conjunction with the so-called 80/
20 rule (or Medical Loss Ratio rule),\15\ which generally requires 
insurance companies in the individual and small group markets to spend 
at least 80 percent of premiums on health care and quality improvement 
Activities and no more than 20 percent on administrative costs (such as 
executive salaries and marketing) and profits. In the large group 
market (generally coverage sold to employers with more than 50 
employees), insurers must spend at least 85 percent of premiums on 
medical care and quality improvement Activities. If insurers fail to 
meet their medical loss ratio requirement, they must provide rebates to 
their customers.
---------------------------------------------------------------------------
    \15\ Medical Loss Ratio Final Rule: https://
www.Federalregister.gov/articles/2012/05/16/2012-11753/medical-loss-
ratio-requirements-under-the-patient-protection-and-affordable-care-
act.
---------------------------------------------------------------------------
    New rules will help make health insurance even more affordable for 
more Americans beginning next year.\16\ Marketplace health insurance 
plans will be prohibited from charging higher premiums to applicants 
because of their current or past health problems or gender, and will be 
limited in how much more they can charge Americans based on their age.
---------------------------------------------------------------------------
    \16\ Health Insurance Market Rules: http://www.gpo.gov/fdsys/pkg/
FR-2013-02-27/pdf/2013-04335.pdf.
---------------------------------------------------------------------------
                               conclusion
    The Affordable Care Act has already provided new benefits and 
protections to Americans with health coverage, and we are committed to 
improving the experience for consumers using HealthCare.gov so that all 
other Americans can easily access the quality, affordable health 
coverage they need. By enlisting additional technical help, 
aggressively monitoring for errors, testing to prevent new issues from 
cropping up, and regularly deploying fixes to the site, we have already 
made significant improvements to the performance and functionality of 
HealthCare.gov. These continuing improvements will ensure that 
HealthCare.gov will be fully functional for the vast majority of 
consumers by the end of November. I appreciate the committee's ongoing 
interest in our efforts to deliver on the promise of the Affordable 
Care Act, and I look forward to your questions.

    The Chairman. Thank you, Ms. Tavenner.
    Now we'll start a series of 5-minute questions. I know 
everyone has questions. I'm going to hold myself and everyone 
else to 5 minutes. It might be you only get one question. But 
that way, we can go around once, we'll go around twice, and 
we'll go around three times, as long as it takes, so that 
people can get their questions asked. But I hope that we'll 
just keep within 5 minutes so everyone gets to ask a question. 
So we'll start now.
    Ms. Tavenner, as we evaluate the problems with the Web 
site, it's important to get the facts straight. Some have said 
that fixing the Web site could take 6 months to a year. Others 
state that there are 5 million lines of code to rewrite. Some 
have urged you to pull down the entire system and start from 
scratch. So I hope you can bring some facts to this much 
overheated debate.
    I understand this can get very technical very quickly. But 
I want to give you an opportunity to explain the problems with 
the site and the path forward just in plain English. What's the 
plan for fixing the Web site? Who is leading the effort? What 
is your role in this work? And what's your expected time table 
for the process to run smoothly?
    Ms. Tavenner. Let me start with the plan. As you all may be 
aware, we engaged QSSI to serve as the general contractor. They 
were engaged last week, they will be leading the effort, 
working with me directly. They will be responsible for 
coordinating contracts.
    I would describe the problems with the Web site in two 
categories. The first problem had to do with performance and 
speed. We added capacity, and we made system performance 
improvements. That has to do more with what I would call the 
hardware side of the equation. That work was done immediately.
    Although we had projected demand for the Web site, we 
obviously underestimated that demand, so we had to go back and 
catch up and add additional capacity and improve performance. 
That's some of what I was referring to in my opening comments 
about the slowness of the system as you were going through 
pages.
    The second issue has to do with software improvements. The 
first big one was the ability to establish an email account. 
That was a problem that we solved in the first week. We've had 
success there. There is not the problem of establishing an 
email account or going on to the identity proof. That problem 
has been resolved.
    Now we're into what I would call the internal piece of the 
architecture. I'll remind you that this Web site is covering 34 
States and 50 Medicaid programs and also services the State-
based exchanges. So it's pretty complicated. We knew all along 
we would have bugs in the system. I think we obviously had more 
bugs than we realized, particularly around the application.
    We actually are doing a series of software upgrades pretty 
much several times a week. We will continue that. You will see 
improvement week by week, but this is weeks, not months, and we 
are not rewriting the architecture.
    The Chairman. Could you address yourself to the issue of 
security? There have been several reports that you and others 
had concerns about the site's security protections leading up 
to October 1. Could you discuss your concerns, how they were 
addressed, and what efforts are we making to ensure that 
consumers' information is secure?
    Ms. Tavenner. Let me try to take the security question in a 
couple of different buckets, because I think there's been a lot 
of confusion around security. First of all, in the hearings 
over the summer, a lot of the questions that I answered and 
others answered had to do with security, the hub.
    The contractor is QSSI. The hub serves not only the Federal 
marketplace but all of the States as well and has been a smooth 
operating system. That security, including end-to-end testing, 
was completed by September, and there was sign-off on the hub.
    When it comes to the FFM, or the actual exchange, there was 
security testing by component, and then we did a short-term 
authorization to operate, because we knew we were going to be 
making software enhancements. We had announced prior to October 
1 that we were not going to bring shop up right away. We were 
not bringing the Spanish Web site up right away.
    We did a temporary or short-term authorization to operate, 
because we knew we would have to do continuous security testing 
while those programs were being installed and while software 
was being upgraded, which is routine. I think there's confusion 
about what was tested and what was not tested. So I need to 
separate those.
    The Chairman. I only have 27 seconds. When someone comes 
on, will they be assured that their social security number, for 
example, will be kept secure, that no one can hack in and take 
their social security number?
    Ms. Tavenner. Yes. And remember that the hub does not store 
any information. The hub is a router. So when you go in and 
fill in an application, it pings, if you will, social security. 
It pings the IRS to validate your income, to validate your 
citizenship, to validate your social security number. But 
that's not stored.
    What is stored is in your individual application, which is 
secure, and that was part of the secure or the identity 
proofing on the front end that was a little complicated, 
because we had taken additional steps to make sure that an 
individual application was secure. Now, in addition to all 
this, we also have continuous monitoring of all systems, which 
is something we do for Medicare as well.
    The Chairman. Thank you very much, Ms. Tavenner.
    Senator Alexander.
    Senator Alexander. Thanks, Mr. Chairman.
    Ms. Tavenner, let me go back to the President's words. I'm 
sure you'll be able to fix the Web site, and I'm not as 
concerned about the IRS fines that will come next year. What 
I'm more concerned about are the canceled policies and the 
inability of people to have time after you presumably fix the 
Web site by the end of November to replace their policies by 
January 1 so that they'll actually have health insurance.
    And I'm concerned about the kind of health insurance they 
get because of the large number of cancellation letters that 
are coming into our office from Tennessee. So let me suggest 
that a way to fix this problem of canceled policies in the 
individual market is to go to a Web site that does work pretty 
well. It still says if you like your plan, you can keep it, and 
you don't have to change a thing due to the healthcare law. 
That's the White House Web site. Those are the President's 
words in 2009.
    So why don't we put those words into law? Why don't we 
solve the problem of Emily, the lady I read about from 
Tennessee, who is losing her CoverTN insurance and finding that 
to replace it, it'll cost 410 percent more? Senator Ron Johnson 
has introduced a bill that he calls If You Like Your Healthcare 
Plan, You Can Keep It. It would basically put the President's 
words into law and assure those millions of Americans like 
Emily that they'll be able to keep a plan like CoverTN, and she 
won't be out of insurance on April 1.
    We're talking about millions of Americans. So my question 
to you is would the Administration support Senator Johnson's 
bill, which would put the President's words into law by saying 
to Americans that if you had a plan before the law was passed 
on March 23, 2010, or even a plan all the way up to the end of 
this year, that you can keep it? Wouldn't that solve a lot of 
problems and reassure many Americans that they can have 
affordable healthcare?
    Ms. Tavenner. Senator Alexander, when we wrote the 
regulation back in 2010, that's exactly what we did. We 
grandfathered in existing plans, both in the employer market 
and in the individual market. There was a lot of back and forth 
about that regulation. What was the phase-in time? So that's 
why we delayed it until--we said, basically, plans could be 
grandfathered over this period of time, and also we allowed the 
grandfathering to continue as long as it did not reduce 
benefits significantly. There were some things put in place.
    So I do think we put in steps, the ability to keep plans. 
Now, in these cancellation letters, these cancellation letters 
are also followed by a statement in each of them that says----
    Senator Alexander. Ms. Tavenner, I want to give you a 
chance to answer. But will you support Senator Johnson's bill?
    Ms. Tavenner. I would not--I have not even looked at 
Senator Johnson's bill. I'm happy to look at any----
    Senator Alexander. I'll get a copy to you. And if I may 
say, we know about the regulations that were written in 2010. 
They effectively made it impossible to grandfather a lot of the 
plans that people had. And according to your own regulations, 
it was estimated that 40 percent to 67 percent of those 
individual policies wouldn't be able to be grandfathered 
because of all the conditions you put in the regulations.
    So, in effect, didn't you know in 2010 that there would be 
a big turnover in these individual policies, and that it was 
wrong to go across the country saying that if you like your 
plan, you can keep it without having to change a thing?
    Ms. Tavenner. I don't think the regulation assumed that it 
was because of the grandfathering that these plans would 
change. These plans routinely change. The churn in these plans 
is greater than 50 percent per year, often not renewed. People 
move about this market. This is part of what the Affordable 
Care Act was designed to do, to try to stabilize this market 
and give individuals some protection.
    Senator Alexander. But your regulations said if you 
increase cost sharing, co-pays, change the employer 
contribution, change the fixed amount, change the benefits--all 
of those would mean that those plans didn't continue. And, 
basically, Washington is saying to people like the 16,000 who 
lose their CoverTN plan, ``We know better than you do what is a 
good plan for you. We want you to buy a better plan even though 
you like the plan you have.''
    So why not put the President's words into law and simply 
say,

          ``If you like the plan you have, we're not going to 
        decide for you. You can decide it, you as an 
        individual. If you like the plan you have, you can keep 
        it without having to change a thing.''

    That's what's on the White House Web site today.
    Ms. Tavenner. Senator Alexander, for those 16,000 
individuals that you listed, they were also given the option of 
renewing with a new plan. And, yes, maybe some of those plans 
were more expensive. But I would encourage those individuals to 
go on the Web site and take a look at what's available in the 
individual market in Tennessee. I think you will see that the 
pricing in the individual market actually came in about 18 
percent lower. Also, some of these individuals may qualify for 
a subsidy. So I would just encourage them to look at their 
current issuer, but also to go on the Web site, take a look at 
plans that are available in Tennessee, and also check to see if 
they qualify for a subsidy.
    Senator Alexander. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Alexander.
    Senator Mikulski.

                     Statement of Senator Mikulski

    Senator Mikulski. Good morning, Administrator Tavenner. 
Actually, I'm glad to see you, and I hope you're doing well. 
We're very proud of the fact that CMS is headquartered in 
Maryland, and there are thousands of people who work there 
every day in every way trying to make sure Medicare, Medicaid, 
and Obamacare is delivered effectively and efficiently, even 
though you've been revenue starved and kind of battered around 
in the failure to confirm permanent administrators.
    But we'll put that aside for this conversation, because the 
launching of the Affordable Care Act has been more than bumpy. 
I believe that there's been a crisis of confidence created in 
the dysfunctional nature of the Web site, the canceling of 
policies, and sticker shock from some people. In my own State 
of Maryland, it was also bumpy. We read in the Baltimore Sun 
this morning that 73,000 Marylanders' policies will be 
canceled. So there has been fear, doubt, and a crisis of 
confidence.
    So let me get to where I am, because it's not to finger 
point. It's to pinpoint. What I worry about is that there's 
such a crisis of confidence that people won't enroll. And the 
very people we need to enroll, particularly our young people, 
to make this whole system work, won't happen.
    As you know, the people who are the most desperate--Senator 
Alexander's compelling story of Emily is the kind of person--
serious health problems. But I'm looking for that 24-year-old 
working at Harbor East at a .com startup to be able to apply.
    Can you tell me what you're doing in terms of the crisis of 
confidence? And, also, how are we going to get young people 
back to looking at how they're going to apply, to make it 
attractive, to give them confidence in the system, and also 
then to make the whole system more affordable?
    Ms. Tavenner. Let me start with the affordability. I will 
talk about it both from the State-based exchange----
    Senator Mikulski. I have 2 minutes and 46 seconds. So do 
you have a plan to get the young people back?
    Ms. Tavenner. Yes, we do, and we will roll out that plan. 
Our goal is to stabilize the Web site this month, and then we 
do have a targeted plan that includes not only young people, 
but the large populations of the uninsured in markets. So, yes, 
there is a plan.
    Senator Mikulski. Well, what kind of plan is it?
    Ms. Tavenner. It's a combination of media, both television 
and radio, and some print. It's identified by top markets, and 
I'm happy to share that plan with you all.
    Senator Mikulski. And do you think you're going to restore 
the confidence in this plan?
    Ms. Tavenner. Yes.
    Senator Mikulski. How?
    Ms. Tavenner. I think, first of all, by the improvements in 
the Web site, which we're already seeing, and I would encourage 
folks if they've not been on the Web site in the last few days 
to please go on the Web site. It has improved. We're seeing 
more folks being able to complete applications. We're getting 
more positive feedback from individuals, and there is a 
tremendous amount of interest in this plan.
    Like I said, there's over 700,000 completed applications. 
Obviously, we've seen over 13 million visitors to the Web site. 
So the information is out there. We just need to ensure people 
that the site is working.
    Senator Mikulski. Well, I'd like to move to going to the 
Web site, which also goes to many of my loyal constituents. We 
talk a lot about, of course, the robust Baltimore-Washington 
corridor, but not everybody has access to a computer, and not 
everybody knows how to use a computer, including young people. 
We worry in Maryland about the digital divide--Governor 
O'Malley, Ben Cardin, Barb Mikulski.
    But you say you can go to the phone. Are you publicizing 
this number? No. 2, if you want a paper application, or you 
want to be able to talk to someone in person, as you said, 
where do you go, and where do you get this information? And are 
there designated sites? In other words, will we do this in post 
offices? Will we do this in libraries? What are we going to do 
where people actually can be able to do this if they're not 
going to go to a computer, or a computer is not available, or 
their friend?
    Ms. Tavenner. That is a great question. We do advertise the 
1-800 number, and we advertise that you can call there to also 
get information if you don't want to use the computer.
    We also advertise who in the community--we have currently 
over 70,000 agent brokers who have been trained to assist 
people. We have navigators in every State, and they are 
covering the entire State. So we advertise that. We also have 
many hospitals and other associations, including libraries, who 
have been certified and are offering to help.
    Senator Mikulski. Well, I'm going to be blunt, because I 
really want this to be a success. And my job is to pinpoint 
solutions, not finger point, looking at a retro way. I think 
it's very confusing. I know my time is up.
    But I think it's very confusing about where you go. We hear 
about the navigators and the this and that. But I can tell you 
people really don't know. They really, really don't know.
    The Chairman. Senator Isakson.

                      Statement of Senator Isakson

    Senator Isakson. Thank you, Mr. Chairman.
    Administrator Tavenner, thank you very much for coming 
today. You said, I think, that 10 days ago, QSSI, Quality 
Software Services, Inc., we put in charge of coordinating the 
Web site and the hub. Is that right?
    Were you aware that in June of this year, the inspector 
general issued the following report on QSSI? It said,

          ``Quality Software Services, Inc., did not 
        sufficiently implement CMS required information system 
        security controls over USB ports and devices, thus 
        risking exposure of personal identification information 
        for over 6 million Medicare beneficiaries.''

    Were you aware of that?
    Ms. Tavenner. No, sir.
    Senator Isakson. I'd like to put in the record the IG's 
report from June, because it did expose--because of their lack 
of discipline in following Federal information, they exposed 
over 6 million Medicare beneficiaries' information. [The 
information referred to may be found at https://oig.hhs.gov/
oas/reports/region4/4120545.pdf.]
    The reason I bring that up is--and I don't believe 
everything I see on television. In fact, I try and check 
everything out. But this morning, there was what seemed to be a 
pretty credible claim that a lawyer in South Carolina who had 
gone on the Web site and gotten access and set up an account 
was called by a man from North Carolina telling him when he 
went on and put in his password, he got that man's information.
    This information security is extremely important. Mike 
Rogers in the House has made some pretty strong statements 
about the importance of keeping it secure. So I would ask that 
you follow the IG's report and make sure QSSI is in compliance, 
and if they aren't, that they get in compliance.
    Ms. Tavenner. I will followup on that report. And there's 
two things. Mitre is actually the contractor that does the 
security of the marketplace, and we are working closely with 
them. On this incident in South Carolina, we actually were made 
aware of that yesterday, and we implemented a software fix 
yesterday to fix that. That would be treated as a personal 
identification issue, and we will do a complete followup on 
that to make sure.
    Senator Isakson. You said in your testimony that this was 
going to be ongoing, because we all know cyber security is an 
ongoing challenge. But I think it's critically important to 
tell whoever you said the person in charge of security was to 
get with QSSI and make sure they met compliance.
    Ms. Tavenner. I will make sure, and I'll give you feedback.
    Senator Isakson. Second, as one who was an independent 
contractor for 33 years and had about 1,000 independent 
contractors working for me, most of the people who are 
uninsured or have had lack of access to good insurance were 
independent contractors, because their employer could not, by 
law, provide it to them.
    But the unintended consequence--yesterday, I was with a 
group of them in Atlanta, speaking to them, not about 
healthcare, and I had three of them come up to me. One of them 
was a Mrs. Russell, who had had her own insurance that she had 
bought as an independent contractor. She had just received a 
cancellation notice, had tried to go to the Web site, couldn't, 
had called the toll free number and had gotten help from a 
human being who said they could send the information, but they 
could not guarantee when it would come.
    My point in this is when we passed the Affordable Care Act, 
it precluded insurance agents from being navigators and put in 
a medical loss ratio so high that you could not pay a 
commission to a salesperson. So the only access to human beings 
that could be incentivized to tell somebody what's in the plan 
was either to call the Web site, go on the Web site, or find a 
navigator.
    I really think CMS should consider rethinking the 
prohibitions, both on medical loss ratio and the unintended 
consequence of not allowing health insurance agents to be 
navigators, because that's limiting access of the American 
people to the information that you want them to have. That's 
just an editorial comment.
    My last statement--if you'd put up the chart on the 
iceberg. When everybody thinks of Georgia, they think of 
Atlanta. But there's a lot more to Georgia than Atlanta. A lot 
of our State is very rural, very agricultural. In southwest 
Georgia today, premiums are doubling and more than doubling in 
many cases, and health insurance cost is going through the 
roof.
    When you said that the Web site was only the tip of the 
iceberg, you were right, because you have tremendous problems 
and tremendous challenges. But the biggest one of all are the 
premium increases to the people who can least afford them. And 
in rural southwestern Georgia, that is by far the case.
    On behalf of those Georgians in my State, we're seeing a 
doubling of their premiums. We need to address that, and we 
need to make sure that the unintended consequence of requiring 
so much coverage is not running people out of coverage rather 
than providing the coverage they need. Do you know what's 
contributing to the cost of rural healthcare going up so much 
in terms of premiums?
    Ms. Tavenner. I would not be the expert there, but, 
obviously, the more competition we have, it tends to lower 
prices. And I find rural areas--I'm not familiar with Georgia, 
but I'm certainly familiar with Virginia, and that was part of 
the problem. There was not enough competition. The rates tended 
to be high. The rates were high prior to the implementation of 
the Affordable Care Act.
    We have seen new entrants into the market in most all 
States. So we're hoping that as these new entrants happen, it 
will continue to press the pricing downward, because 
competition does help.
    Senator Isakson. Thank you for your testimony. My time is 
up.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Isakson.
    Senator Murray.

                      Statement of Senator Murray

    Senator Murray. Thank you, Mr. Chairman.
    Thank you, Administrator Tavenner, for being here and for 
all the work you're putting into this. When we passed the 
Affordable Care Act, we really designed it to have States lead 
the way and drive market reforms by building their own 
marketplaces. States like Kentucky and my home State of 
Washington planned and designed and created their own 
marketplaces. And, of course, many States declined the 
opportunity to build their own marketplace and relied on the 
Federal Government to do the work for them.
    Washington State's Health Plan Finder has been really a 
national leader on the launch of their new marketplaces and in 
its first month enrolled nearly 55,000 people from my State for 
new health insurance coverage, including 10,000 kids. So I'm 
very proud of the work that's been done in my State to provide 
access to quality affordable coverage.
    I wanted to ask you to tell us a little bit about what you 
are seeing in the States, like mine, that developed their own 
marketplaces.
    Ms. Tavenner. Well, you certainly listed some of the top. 
I'll just list a few. All the States are working hard. We have 
17 partners at the State level, including Washington, DC, and I 
would say that what we're seeing in Washington and Kentucky is 
probably some of the strongest performances, which is great. 
They have good systems. They've had lots of application 
interest.
    The other area that I would say we're pleased with--because 
of the size of the States, they're so important--is New York 
and California, where we're seeing good progress. But each of 
the States are moving along. And part of what we will be 
submitting in mid-
November, as I've talked about in previous hearings, is some 
information about applications and enrollments that will look 
at the State and what's inside the State as well as the Federal 
marketplace. So we'll have more data for you.
    Senator Murray. Good. And we're going to be using some of 
those States to use their best practices to help?
    Ms. Tavenner. We are, indeed, and we have a meeting with 
them this Thursday. We meet with them regularly. We have a good 
relationship.
    Senator Murray. And I also wanted to ask you about the next 
round of outreach to Americans and what it will look like. 
Everybody is focused a lot on the Web site, and we all know 
it's improving, and those issues will be solved.
    But, obviously, a lot of Americans were frustrated by their 
initial applications, and we've got to get them to return to 
the site--the crisis of confidence that Senator Mikulski talked 
about. But in addition to those people, I want to know about 
the Administration's plan to reach out to those Americans whose 
individually purchased plans are being canceled by their 
insurance companies.
    There was a story in our paper in Seattle about a 56-year-
old woman who received one of those cancellation notices and 
who, like a lot of other people, was told to blame the 
Affordable Care Act in that letter. But, of course, she wasn't 
told that if she accessed the ACA marketplace, it could save 
her and her family thousands of dollars and provide her with 
upgraded, more comprehensive healthcare coverage.
    So when I read her story, I thought that's an important 
reminder that it's going to be an uphill battle against some 
political and industry interests to get those individuals good 
information that have received those letters. And I wanted to 
know what you are doing to get information out to those people 
whose policies have been canceled that we've been hearing 
about.
    Ms. Tavenner. This is actually a conversation we're having 
today about how do we use--we have a Consumer Assistance 
Program within CMS, within the CCIIO component. Is there a way 
we can actively engage to reach out to people who have been 
canceled. Although they're canceled, they are offered another 
policy.
    But I think what's important for them to understand is that 
it's not just that policy. It's also the ability to go on the 
exchange. As you mentioned, in Washington State, they don't 
even have to apply. They can go take a look at what the rates 
are. You can now do that on the Federal exchange as well. So we 
are working on a plan, and I'll be happy to get back to you on 
that. But I won't get back to you like this week.
    Senator Murray. I think that's really important, because a 
lot of them are just seeing ``Your policy has been canceled by 
Obamacare'' and not being told ``Here is what your options 
are,'' and we've got to really work on that.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Murray.
    Senator Enzi.

                       Statement of Senator Enzi

    Senator Enzi. Thank you, Mr. Chairman. I'm from a low 
population State. We're pretty much rural, and we do recognize 
that the problems with the Web site are probably just the tip 
of the iceberg, much as this chart demonstrates back here.
    Saturday, 2,600 people in Wyoming had their policies 
canceled. Fortunately, 3 years ago, I noticed that the rules 
were changing and that people would not be able to keep what 
they had been promised. We have a method for petitioning on 
that. It's called the Congressional Review Act. And I 
petitioned, got enough signatures, and we had a little debate 
about repealing the rule that would have kept them from keeping 
the policy that they like.
    That was voted down on straight party lines. I think some 
people will probably be paying for that in the next election. 
But on the accountants, I'll go into some of the more technical 
questions with this Web site. It's my understanding that CGI's 
contract is a cost-plus contract, where the company will 
continue to be paid for its work while they try to straighten 
out problems that maybe they even caused.
    How much more will it cost to fix the Web site, and where 
will these funds come from? Also, if it's their fault for 
delivering a product that didn't meet specifications, do you 
intend to recover payments for them, and what recourse is 
available?
    Ms. Tavenner. You are correct. The CGI contract is a cost-
plus contract. First of all, there is not additional funding 
being provided to CGI. They will work and make these repairs 
within the existing contract. I meet regularly with not only 
CGI Federal but also CGI Global to have these conversations, 
including one at 8:30 this morning. So the work is expected to 
be completed.
    There are recovery processes, even in a cost-plus contract, 
and I'll have to get you that information. I would not want to 
rely on my brain for that one. But I will work with our 
contracting person.
    Senator Enzi. I'd like to be able to get a copy of the 
contract as well. And then there must be a contract with QSSI 
as well?
    Ms. Tavenner. Yes.
    Senator Enzi. Is that a cost-plus one as well?
    Ms. Tavenner. I'll have to get you the details on the QSSI. 
But I thought we had--we can certainly get you the information 
you requested.
    Senator Enzi. Where is CGI headquartered?
    Ms. Tavenner. CGI headquarters is actually in Virginia.
    Senator Enzi. And QSSI?
    Ms. Tavenner. That's a good question--Minnesota. I'm 
guessing on that one, because it's part of Optim. They also 
have offices in Virginia. We're working currently with both the 
national and local. They're in Virginia, and they're also in 
Maryland.
    Senator Enzi. I also serve on the Finance Committee, and in 
the Finance Committee, CMS testified on doing the testing on 
this Web site. We were assured that it had all been done. It's 
my understanding that there was testing still going on the day 
before the Web site opened, and that there had not been the 
security testing that either was called for or wasn't called 
for to see that the Web site would be secure and intact.
    How much security testing was done as part of the beta 
testing?
    Ms. Tavenner. This is what I was trying to explain earlier. 
There are two components to the Federal exchange. One is the 
hub, and the hub was completely tested. Security testing signed 
off.
    In the case of the FFM, or the actual exchange itself, each 
component was tested, both by us, independently verified 
security tested. It was not signed off in a complete package, 
because we were still upgrading modules. That's ongoing. We 
signed the short-term authorization to operate, which would be 
customary if you were continuing to do work on the project.
    Senator Enzi. You also mentioned that this information that 
goes in there is just pinged and it's not stored. How do you 
identify the person later with whatever contract that there is 
if there isn't any of that information kept?
    Ms. Tavenner. What I'm saying is not stored is the social 
security number, and this sort of thing is not stored in the 
data hub. Obviously, when you complete an application, it has 
social security number information in it, and individuals can 
store that online. That's part of the ID proofing that an 
individual can do to store their application.
    We also have some storage in what I'll call the enrollment 
and eligibility process in case there's an appeal on this sort 
of thing. But what I was trying to say is there's no data 
stored in the hub. We obviously have information on some 
records.
    Senator Enzi. I don't think people care where it's stored. 
They're just concerned about their privacy and whether the 
storage is secure or not. So I'll have some more questions to 
followup on that. But my time is almost up.
    Thank you.
    The Chairman. Thank you, Senator Enzi.
    Senator Bennet.

                      Statement of Senator Bennet

    Senator Bennet. Thank you, Mr. Chairman.
    Thank you, Ms. Tavenner, for being here today. As I've 
watched this--and I've had some experience in the private 
sector and in local government and State level and here--I 
hope, as we go forward, that we don't lose sight of the fact 
that government does not do a great job with procurement, with 
IT, or with customer service. And I think we're seeing that 
here in spades.
    My hope is that we use this as an occasion not just to 
point fingers, but to figure out how to improve things for the 
American people going forward. In the short term, I think the 
customer service element of this is enormously important so we 
don't face the kind of crisis of confidence that Senator 
Mikulski talked about.
    That ought to be job No. 1, to figure out whether people--
put the politics aside--whether people sitting at their kitchen 
table can decide and evaluate for themselves whether this is a 
better deal or not for them. And in Colorado, as you know, 
we've set up our own exchange.
    One of the things that I've been told is that people have 
to go through numerous pages to have a determination made about 
their Medicaid eligibility before they can actually get access 
to the private marketplace. And there's been some suggestion 
that that's been required by the Federal Government. I don't 
know whether that's true or not. But I wonder whether you can 
enlighten me on that or shed some light on it, and whether we 
can figure out how to work together to make that less of a 
burden to people.
    It seems to me that a customer service friendly Web site 
would have a button that said ``If you think you might be 
eligible for Medicaid, click here,'' and it would take them 
through that. But for somebody who knows they're not eligible 
they could skip the cumbersome process and get to the private 
exchange.
    And as you talk about that, Ms. Tavenner, if you could, 
broadly address the question of this sort of customer service 
part of this, the changes that you have made to try to give 
people the opportunity on the Federal exchange to make their 
own decision.
    Ms. Tavenner. Let me start by saying it is a common 
application, whether you're going on to shop without a subsidy, 
or to see if you qualify for a subsidy, or for Medicaid. And I 
think that's what you're referring to. It's a common 
application. But whether you are Medicaid eligible or whether 
you are applying for a subsidy, it's a single application. So 
Medicaid doesn't add any additional steps to that process.
    Senator Bennet. My understanding is that on the--and, 
again, this is the Colorado exchange, not the Federal. My 
understanding is that you need to be denied by Medicaid before 
you can have access to shop in the private marketplace.
    Ms. Tavenner. I would need to check with Colorado, because 
they did devise--but I'll get back to you on that.
    Senator Bennet. OK. Let's do that.
    Ms. Tavenner. So let's go back to the customer service.
    Senator Bennet. Can we do that today?
    Ms. Tavenner. Yes, we can get you that information today.
    The customer service issue is very important to us. And as 
we stabilize the site, we're going to go back and deal with 
those individuals that we think may have had a bad experience 
on the front end, such as the establishment of an email 
account. We have individuals' information, so we're going to 
reach out to them and invite them to come back.
    Some of them may have already gone ahead and created a 
separate account, or maybe they were just on there out of 
curiosity. But at least we'll make an effort to go back and 
touch individuals and say, ``If you had trouble in the first 
week, please come back and try to establish your account again 
because we've solved that problem.'' That's the first step.
    The second step is how we handle it in the media and in the 
market. We do have what I was talking about before, a campaign 
to reach out to consumers. But we will not start that campaign 
until we stabilize the site over the next few weeks, and then 
we will spend December, January, February, and March reaching 
out to individuals.
    If you're in a State-based exchange, the State is 
responsible for doing their own marketing campaign. If you're 
in the Federal exchange, we have that opportunity. We've 
identified key markets based on the number of young uninsured 
and the number of uninsured in general in the population. We do 
have a targeted campaign for the next 4 months.
    Senator Bennet. What are the implications for your 
timelines with respect to eligibility, signup, and all the rest 
if you don't get this Web site fully functional by the end of 
the month or the end of--yes, this month?
    Ms. Tavenner. The end of November. Based on our analysis, 
we will have it fully functioning by the end of November. There 
will always be people who don't want to use the Web site, who 
want to do paper, or who want to call in. That's fine. We'll 
support that.
    But I think we always assumed, based on Massachusetts' 
experience, that the initial signup would be very slow. And, in 
fact, no payments have to be made until December 15 for 
coverage on January 1. So while we don't like the problems we 
had in October and fixing it in November, we do not think it 
will impact the timeline, because we have a 6-month enrollment. 
We will still have 4 months left, and individuals can apply up 
until the end of March.
    Senator Bennet. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Bennet.
    And now Senator Roberts.

                      Statement of Senator Roberts

    Senator Roberts. Thank you, Mr. Chairman. I'm going to 
focus, if I can, on the concern raised by Senator Isakson and 
Senator Alexander and by the chairman on security and privacy.
    We have a law, the Federal Information Security Management 
Act, FISMA. Everything has to have an acronym. This is FISMA. 
And it requires each agency to appoint a chief security officer 
to sign off on the security of government web systems to ensure 
Americans' private, financial, and identifying information is 
protected, and that's a big issue.
    Secretary Sebelius revealed last week that the exchange is 
operating on a temporary authority to operate. There's a 2012 
memo from Jeffrey Zients. That's the gentleman that has been 
picked by the President to fix the Affordable Healthcare Act, 
and they call him Mr. Fix-it. While head of OMB, he stated 
clearly that OMB does not recognize interim authority to 
operate per security authorizations.
    My first question is why was the exchange allowed to go 
operational without the apparent clearance required by the 
Office of Management and Budget? I'm going to go on and you 
just think about that for a minute. I don't like to do this, 
but time is limited.
    Again, as part of the FISMA security assessment, an 
independent testing organization must perform, must perform, a 
risk analysis of the security of the system. So my second 
question, or you can answer the first--did an independent 
testing organization ever test the whole integrated system end 
to end? I'm sorry to ask you two questions.
    Ms. Tavenner. That's all right. The first question--OMB 
does approve of short-term authorization, so we were following 
the rules as outlined by OMB, and I double checked that. The 
second one is, yes, we are FISMA and NIST compliant, and we did 
use an independent security firm. That would be Mitre, who 
actually did the work and did the testing.
    The only piece that was not completed, which is the piece 
I've talked about before, is we could not test in a live 
environment until October 1, which is the reason we went with 
the short-term authority, because the testing will continue 
this month and next month as we do the software upgrades, and 
it'll be tested in a live environment.
    Senator Roberts. Well, without revealing publicly, which, 
obviously, you can't do due to what you've just said, will you 
submit confidentially to the committee the results of the 
independent testing?
    Ms. Tavenner. I will submit everything I can within the 
security guidelines, yes, sir.
    Senator Roberts. All right.
    A September 27 memo addressed to you states that due to 
system readiness issues, the required security assessment was 
only partly completed. The memo notes that untested parts of 
the system pose a high security risk, and the contractor was 
not able to test all parts of the system in one complete 
version of the system.
    I have here a CBS News analysis, which I would like to 
include in the record at this point.
    [The information referred to follows:]

                      [CBS News, November 4, 2013]

    HealthCare.gov Ducked Final Security Requirements Before Launch

                         (By Sharyl Attkisson)

    Washington.--The health care Web site went down again Monday for an 
hour and a half, and no one is sure why. It's being taken offline on 
purpose every night from 1 a.m. to 5 a.m. for repairs. Millions are 
still having trouble buying insurance on it, and it turns out that even 
when the Web site works, it may not be secure enough to protect 
privacy.
    As HealthCare.gov was being developed, crucial tests to ensure the 
security and privacy of customer information fell behind schedule.
    CBS News analysis found that the deadline for final security plans 
slipped three times from May 6 to July 16. Security assessments to be 
finished June 7 slid to August 16 and then August 23. The final, 
required top-to-bottom security tests never got done.
    The House Oversight Committee released an Obama administration memo 
that shows 4 days before the launch, the government took an unusual 
step. It granted itself a waiver to launch the Web site with ``a level 
of uncertainty . . . deemed as a high (security) risk.''
    WH docs: Paper applications for Obamacare were problematic, too.
    Obamacare: Memo reveals health care adviser warned W.H. was losing 
control 3 years ago.
    Complete Coverage: Obamacare Kicks Off.
    Agency head Marilyn Tavenner accepted the risk and ``mitigation'' 
measures like frequent testing and a dedicated security team. But three 
other officials signed a statement saying that ``does not reduce the 
risk'' of launching October 1.
    Georgetown Law professor Lawrence Gostin is a big supporter of the 
Affordable Care Act. He helped Congress write the law to meet 
constitutional standards. But he's critical of the launch without 
proper security.

    Watch: Obamacare enrollment got off to very slow start, below.

    ``Nothing can undermine public confidence more than the fear of a 
security and privacy breach,'' Gostin said. ``You could have somebody 
hack into the system, get your Social Security number, get your 
financial information.''
    HealthCare.gov exchanges data through a massive hub that includes 
the IRS and Social Security Administration, to verify income and 
identity, and Veterans Affairs, for military personnel who receive 
special benefits.
    Last week at a congressional hearing, Health and Human Services 
Secretary Kathleen Sebelius told Democrat G.K. Butterfield that 
Americans have no reason to worry.
    Asked if she had confidence in measures the Administration was 
taking to protect the security of Americans' personal information, 
Sebelius responded, ``I do, sir.''
    While officials try to fix all the problems with the Web site, 
internal notes released Monday from a government meeting last week 
reflect a new concern: that the media may begin to follow customer 
experiences. In some cases, CMS fears, there are ``fewer health 
insurance options than would be desired'' and ``relatively high-cost 
plans.''

    Senator Roberts. This found that the deadline for a final 
security plan slipped three times from May 6 to July 16. 
Security assessments to be finished June 7 slid to August 16 
and August 23. The final required top to bottom security test 
never got done.
    Agency head Marilyn Tavenner, according to this analysis, 
accepted the risk and mitigation measures like frequent testing 
and a dedicated security team. But three other officials signed 
a statement saying that it does not reduce the risk of 
launching as of October 1.
    That September 27 memo recommends a mitigation plan to 
address these risks and recommends a 6-month authority to 
operate. That recommendation was signed by you. Are you the 
official at CMS responsible for making the security 
authorization decisions?
    Ms. Tavenner. I think in the case, because of the 
visibility of the exchange, the chief information officer 
wanted to make me aware of it, and I agreed to sign it with no 
recommendation to proceed.
    Senator Roberts. Does anybody else review or approve that 
decision before it's final?
    Ms. Tavenner. No, sir.
    Senator Roberts. Like Secretary Sebelius or----
    Ms. Tavenner. No, sir. That was my decision.
    Senator Roberts. I appreciate that. Thank you very much.
    The Chairman. I'll take the remaining 30 seconds of the 
Senator's time to just say, again, as I talk to my fellow 
Senators on both sides of the aisle, this is a paramount 
concern. Consumers have to be absolutely certain that when they 
go on and fill out that application and give all that 
information that that is secure, that no one can hack into that 
and steal their social security numbers or identity--another 
thing. I just think this is an issue that really has to be 
focused on thoroughly so that there's absolute assurance that 
that is secure.
    Senator Roberts. Mr. Chairman, could I get my 30 seconds 
back?
    The Chairman. Well, you gave it up already.
    Senator Roberts. Well, no, you took it. I just sort of gave 
it up.
    [Laughter.]
    I'd just like to reflect on what you said, sir. There is a 
lady named Margaret from Manhattan, KS, who I promised that I 
would bring this issue up. She tried to get on the exchange, 
and then she tried the call number about three to six, seven, 
eight times.
    She finally got somebody, and then she said, ``Well, if I 
selected that plan, would it be secure?'' And the answer was, 
``Well, you know, I'm pretty sure.'' That's a direct quote. And 
she said, ``Well, if you're pretty sure, I want to be sure,'' 
and hung up and called our office. So that's just an example of 
the concern that you've raised.
    The Chairman. I appreciate that. I do share that concern.
    Senator Baldwin.

                      Statement of Senator Baldwin

    Senator Baldwin. Thank you, Mr. Chairman. I want to thank 
you and the Ranking Member for convening us today.
    Administrator Tavenner, thank you for being here.
    Mr. Chairman, I appreciated your opening remarks and 
setting a context for where we are with real and significant 
challenges, but also a story of the earlier implementation of 
the Affordable Care Act that has proven to help many. I think 
about the parents of children with preexisting health 
conditions who can now secure insurance for their children and 
the peace of mind that provides.
    I think about the 6.6 million young adults who are covered 
on their parents' health insurance, and I take personal pride 
in that, because I worked on that amendment as a House member 
when we were marking this bill up in Energy and Commerce. I 
think about the $6 billion in prescription drug savings that 
seniors have had the advantage of since the passage of this 
bill.
    And then I think about the rough implementation of this 
next phase of the Affordable Care Act, and even with the 
significant technical issues around the Web site, 
Healthcare.gov, I've heard from families in Wisconsin who are 
already recognizing some of the new insurance options that are 
available. And as you said in context in your opening remarks, 
that's what this is about, a new marketplace, especially for 
those who are shut out.
    I heard from Carl and Bonnie, who own a farm in Hayward, 
WI, which is in the north woods of our State. They shared about 
their struggle to find health insurance prior to the passage of 
the Affordable Care Act. They were both dropped from their plan 
after health tests showed that Carl was at risk of developing 
prostate cancer.
    They had to buy a new plan--they were lucky they could find 
one--that had a $10,000 deductible and an $800 premium. But it 
had a rider that said it would not cover prostate cancer if 
Carl ever got sick. But due to the Affordable Care Act, they 
are now comparing and shopping for new coverage in the 
marketplace. And they contacted me to share that they are 
thankful and really excited to be able to find healthcare plans 
that are not only affordable but actually cover cancer.
    Given the quality health insurance options available on the 
marketplace, we need all of the doors to that marketplace to be 
wide open. The ongoing technical problems are unacceptable, and 
they must be fixed as soon as possible, and I'm glad to hear 
your update on the progress. They should have been fixed 
yesterday.
    The need for a well functioning Healthcare.gov is 
particularly acute in a State like the one that I represent, 
because our Governor chose not to build a Wisconsin-made State-
based health insurance marketplace for individuals and small 
businesses. He also failed to seize the opportunity that the 
Affordable Care Act presented to strengthen what we call 
BadgerCare in Wisconsin when he decided not to expand Medicaid 
under the Affordable Care Act.
    Instead, Governor Walker decided to kick off as many as we 
think will be around 90,000 to 92,000 people from their current 
Medicaid coverage. And I think about all our discussion about 
if you like your healthcare plan, you can keep it. Well, 
there's tens of thousands of Wisconsinites who like their 
BadgerCare, and the reason that they can't keep it is because 
of our Governor's decision.
    I wanted to ask you, Administrator Tavenner, to start off, 
can you confirm that Wisconsin is one of the only States in the 
Nation that's poised to kick off a large number of individuals 
from their current Medicaid coverage in 2014?
    Ms. Tavenner. Senator Baldwin, right now--and we are in 
discussions with Wisconsin--they and Maine are the two States 
that are looking at this idea. Other States have talked about 
it, but these are the two that have actually put proposals 
forward. And you're right. It is 92,000 people. And we are 
working with Wisconsin, our Medicaid agency, to try to make 
sure that those individuals are at least aware of the 
marketplace for those that would qualify for the marketplace.
    Senator Baldwin. I want to ask you a little bit more about 
that, because this is a significant number of people in my 
State. And in order to avoid a lapse in coverage, individuals 
losing BadgerCare must enroll by December 15 in the Federal 
exchange----
    The Chairman. I'm sorry. The Senator's time has expired.
    Senator Baldwin. Oh.
    The Chairman. I'm trying to hold everyone to 5 minutes.
    Senator Baldwin. Very good.
    The Chairman. Everyone's been very good about this.
    Senator Scott.
    Senator Scott. I wanted her to continue to talk to get more 
time for my side.
    The Chairman. What?
    Senator Scott. I wanted her to continue so I'd have more 
time.
    The Chairman. No, we're trying to keep it to 5 minutes. 
We'll get a second round. Everybody will get a second round.
    Senator Scott. Republican jokes aren't funny. I'm sorry. I 
apologize.
    [Laughter.]

                       Statement of Senator Scott

    Senator Scott. Thank you, Mr. Chairman. It's my southern 
drawl. Anyway, let's get back to the topic here.
    Ms. Tavenner, thank you very much for being here. We are 
now more than 30 days into one of the greatest Web site 
disasters in history. After nearly $400 million, Healthcare.gov 
is synonymous now with failure. The public's trust has been 
broken, and the reports I'm hearing reinforces why.
    One, in particular--and we've already heard discussion on 
this case of the South Carolina man--is so painful that I want 
to dedicate my time and my questions to try to resolve his 
issues. The case starts with Justin Hadley from North Carolina 
attempting on October 1 to get Obamacare through the 
Healthcare.gov. By Halloween, just 4 or 5 days ago, he was 
still unable to sign up for Obamacare.
    However, Mr. Hadley from North Carolina immediately saw two 
download links. The linked document was an eligibility notice 
to Mr. Dougall from South Carolina, including Mr. Dougall's 
name, his address, and his eligibility for subsidies. Mr. 
Dougall is now requesting that the personal information for all 
of his family be removed from Healthcare.gov because he could 
not remove it himself because there is no delete option for 
consumers.
    Of course, now, Mr. Dougall nor Mr. Hadley will use the Web 
site to purchase insurance. Making matters worse, when my 
office was contacted for assistance, we called the 
Healthcare.gov's 800 number as well, and we asked a very 
specific question, ``Can you remove Mr. Dougall's personal 
information?'' The response was silence, not a yes, not a no, 
not a maybe, not let me check with my supervisor. They just 
simply refused to have an audible word in response to our 
question.
    It's hard to believe that your account managers really do 
not know if they can delete accounts internally, especially 
after such an egregious breach of trust. By the way, Mr. 
Dougall has called on several occasions, but no one will call 
him back. Not a single person has taken the time, after having 
his information exposed, to even call Mr. Dougall back.
    I tell you this story because it illustrates what happened 
as a result of incompetence with this Web site and this 
program. The Administration and HHS knew that Americans' 
personal information was at risk before the Web site went up. I 
think Senator Roberts just spoke about the inspector general's 
report from August that warned that Obamacare's exchanges may 
end up illegally exposing Americans' private records to hackers 
and criminals.
    The report noted that CMS is working with a very tight 
deadline to ensure that security measures for the hub are 
assessed, tested, and implemented. Further, Senator Roberts 
alluded to the internal memo from September 27 obtained by the 
Washington Post. And to quote that memo, it says, ``Inherent 
security risks exposed a level of uncertainty that can be 
deemed as a high risk to personal financial information being 
exposed.''
    The memo--of course, as you have taken responsibility, and 
we do appreciate that--was written specifically to you from 
your consortium administrator for health plan operations and 
the deputy CIO. You signed the authority for Healthcare.gov to 
operate for the next 6 months with a mitigation plan to be 
implemented. In other words, you authorized Healthcare.gov to 
go forward, realizing that the potential of exposing personal 
information was, and I quote from the memo, ``a high risk.''
    Here are my questions. Do you believe that 6 months is an 
acceptable amount of time for this Web site to operate in a 
manner that puts Americans' financial information at high risk 
for a security breach? Has this happened before? Can you 
guarantee that social security numbers--and it seems like 
you've addressed this--are secure? Will you shut down the Web 
site, as my friends from the left have already suggested, until 
security issues are fixed?
    I would also like to finish by asking that we get Mr. 
Dougall an answer as it relates to deleting his information 
from the system, and that we get that answer today, if 
possible. I have a copy of the letter that he is requesting, 
and I would like to ask Catherine to bring the information over 
to your stack, as well.
    And I certainly realize at the beginning of this testimony, 
the answer was given that the software fix has happened on this 
information. But the software fix was simply to disable the 
links. So when Mr. Hadley goes back on the Web site, he still 
sees the links. He simply cannot click the links. So the 
guarantee or the clarification or the resolution that simply 
tells Mr. Dougall that he has complete confidence that his 
information has been deleted from the system has not yet been 
achieved.
    Ms. Tavenner. First of all, Senator Scott, we have reached 
out to Mr. Dougall several times, and we will find him, and we 
will followup on his question.
    Senator Scott. I'm happy to give you his phone numbers.
    Ms. Tavenner. I think we have them. Thank you, though.
    Senator Scott. He doesn't think so, actually, because no 
one has called him.
    Ms. Tavenner. Well, we have a disagreement there.
    Senator Scott. Yes, ma'am.
    Ms. Tavenner. Your second question about the hub is the hub 
was--and I keep trying to separate the two, because they are 
two different systems. The hub was completely tested all the 
way through, and there was a signoff by the chief information 
officer. So we should put the hub aside.
    What we're actually talking about is the FFM or the 
exchange piece, and that's the part that I described. And in 
the 6-month period, let me tell you what's going on at that 
site. There's a dedicated security team that works under the 
chief information officer. We do weekly testing of all border 
devices, including Internet facing web servers. We run daily, 
weekly, 24/7 continuous scans.
    We will have a full SSA test and a stable environment with 
all the security controls once the software upgrade is done, 
and that's standard operating procedure. And that will be 
within 60 to 90 days of us going live on October 1.
    Senator Scott. My only response--and my time is up. Thank 
you very much for your answers. I would only suggest that 
whether it's the hub or the other entity, the thing that the 
consumer sees is not what's going wrong. It's that their 
confidence is going down, and we're only trying to make sure 
that we alert you all to the fact that if any aspect of it 
doesn't work, then the confidence is gone.
    The Chairman. Thank you, Senator Scott.
    Senator Scott. Thank you, Senator.
    The Chairman. Senator Scott, I wonder if you would also 
make that information, what you gave her, available to the 
minority and majority staff directors of the committee.
    Senator Scott. Yes, sir.
    The Chairman. I'd appreciate that. Thank you.
    Senator Murphy.

                      Statement of Senator Murphy

    Senator Murphy. Thank you very much, Mr. Chairman.
    Welcome, Ms. Tavenner. I will concede that when you reorder 
one-sixth of the American economy, there are going to be some 
people who are unhappy with that experience. And I also concede 
that when you stand up a brand new mechanism to give 30 million 
people access to healthcare that they didn't have, there are 
also going to be some people that are unhappy with their 
experience.
    I think at some level this should be an exercise in setting 
the right expectations, that when you undergo this kind of 
effort to reorder a healthcare system that everyone on this 
committee agrees is broken, there are going to be some people 
who win, and there are going to be some people who lose. And, 
frankly, under any reform plan that has been debated in this 
place over the last 20 years, that was true.
    What we are suggesting is that there are going to be far 
more people over the course of the rollout of this legislation 
who have a better experience than what is happening currently 
in the system than have a worse experience. And while it's 
always risky to legislate by anecdote--we're telling stories 
here today, and so let me just add one to the mix, and that's 
Betty Berger from Meriden, CT.
    Betty and her family had insurance. Her husband switched 
jobs, and during the several week period in between his first 
job and his second job, their son was diagnosed with cancer. 
And guess what? His new employer wouldn't pick up coverage for 
the son.
    Betty's story became one that can be repeated 2 million 
times every single year across this country. They went 
bankrupt, they lost their house, they lost their savings, 
simply because their son had the misfortune to be diagnosed 
during a 2-week period in which they didn't have insurance. 
Their problem wasn't that they got dropped from coverage. Their 
problem was that they couldn't find any coverage, and their 
story can be told millions of times over.
    While this is a disruption to a large section of the 
economy, my confidence that, in the end, there are going to be 
far, far more winners than losers is rooted in part in 
Connecticut's experience. We have an exchange that is up and 
working, and in the first month of the exchange, we have hit 
nearly 10 percent of our overall enrollment goal, even given 
the fact that the Massachusetts connector, which was actually 
run by the same guy who's running Connecticut's exchange, in 
the first month only saw .3 percent of their total enrollees 
sign up.
    I have confidence that this product will fly off the 
shelves once people can get into the Web site, because I've 
seen what is happening in Connecticut. And I also am optimistic 
that once this site is up, it is going to be up in time for the 
largest number of people to enroll, because as you said in 
response to Senator Bennet's questions, the reality is that the 
vast majority of people are going to be looking for coverage as 
the enrollment date draws near.
    I guess that's the frame of my question to you. From the 
experience of people who have been able to access these 
exchanges, either at the national level or the State level, 
what do we know about the quality of the product? And what do 
we know about the timing of when people actually sign up for 
plans like this?
    We have the Massachusetts experience. We have the 
experience of Medicare Part D. To the extent that your timeline 
plays out and we have a fully functioning Web site within the 
next 30 to 60 days, is that in time for what we expect to be 
the majority of people coming in and wanting to access the 
product?
    Ms. Tavenner. Let me start with the product. I think that 
we are extremely pleased with the product, and I think it's 
important not to lose sight of that. As I said before, we had 
about 25 percent new entrants into the market, new issuers, 
offering new plans. We had over 200 issuers and over--I think 
it was close to 3,000 products, but I'll get you that specific 
information.
    There's a lot of interest. The insurance market wants us to 
succeed. They see it as a new line of business. So we've been 
pleased with the States and the competition. There are some 
rural exceptions, as we've talked about before, and we want to 
stimulate that as time goes on.
    The second piece--we have always believed that the first 
enrollment surge would come mid-December, and the second 
enrollment surge would come late February or early March, that 
there would be people who would want to sign up by January 1, 
but that there would always be another group who would wait 
until the last minute to sign up. They're presumably the 
younger, the healthier folks, who would wait until it became an 
issue for them.
    That's what we believe. The product is very strong. We 
would like to see more competition. That will occur year to 
year. This is our first year on the market. But we have been 
pleased, and, in fact, the pricing came in about 18 percent 
below what CBO estimates were. We would like more introduction 
in some markets for sure, but it was a good year-one start for 
us.
    Senator Murphy. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Burr.

                       Statement of Senator Burr

    Senator Burr. Administrator Tavenner, welcome. Last week 
during your time in the House, you noted that while many 
insurance companies have decided to cancel or stop offering 
insurance plans on the individual market, the ACA did not force 
insurers to make such decisions. You stated, ``The insurer has 
decided to change the plan. It didn't have to,'' and that plans 
were grandfathered in 2010. If they didn't make significant 
changes in cost sharing, they could keep the plans they had.
    Do you believe that was an accurate statement you made?
    Ms. Tavenner. Yes, I believe that was an accurate 
statement. When we did the regulation back in 2010, this is 
what plans could change.
    Senator Burr. Let me read your statement again. ``The ACA 
did not force insurers to make such decisions. The insurer has 
decided to change the plan. It didn't have to.''
    Ms. Tavenner. And I will stick by my statement.
    Senator Burr. Let me----
    Ms. Tavenner. Can I finish my sentence?
    Senator Burr. Well, let me just say you said today, 
``Insurers that do not cut benefits or increase cost 
sharing''----
    Ms. Tavenner. I will try to list that out. They were 
allowed under regulation to make modest changes to benefits, 
modest increases in fixed dollar co-payments and deductibles if 
healthcare costs increase. In other words, if healthcare costs 
went up, they could move up. They could modify their provider 
networks. They could update drug formularies. They could change 
the plan structure to add features like health reimbursement 
accounts. So, yes, there was some room if they wanted to stay.
    Senator Burr. So for an insurance product that didn't meet 
the minimum coverage benefit that was established under the 
ACA, they can't offer that insurance product, can they?
    Ms. Tavenner. They could be grandfathered in under this, 
yes.
    Senator Burr. But with the decisions that are made, if they 
don't meet the minimum benefit that was established under the 
ACA, that is an individual that will have a plan canceled. Is 
that not correct?
    Ms. Tavenner. No. What I'm saying is they could continue 
these plans. These plans could be grandfathered in. If they 
made these kinds of changes, if they started to reduce 
benefits, then they fell under the requirements of the ACA. So 
they could stay in these policies.
    Senator Burr. Did you personally share with the Secretary 
that there were problems with the exchange?
    Ms. Tavenner. I personally shared with the Secretary in 
September that there were modules that we were going to delay--
shop, Medicaid account transfer, Spanish version.
    Senator Burr. We've had a lot of conversations on security. 
Let me ask you very specifically--and this is on the exchange. 
It's not on the hub. Was there ever any end-to-end testing on 
the exchange?
    Ms. Tavenner. There was end-to-end testing on the hub.
    Senator Burr. I'm talking about the exchange.
    Ms. Tavenner. There was individual modular testing and 
demonstration testing inside the exchange, meaning we had 
sample cases, sample situations, that we tested all the way 
through. We obviously could not test live until we went live, 
therefore, the temporary authorization.
    Senator Burr. But one of the requirements is end-to-end 
testing. But, again, you signed on September 27 the authority 
to operate the Web site. And the memo noted this,

          ``From a security perspective, the aspects of the 
        system that were not tested due to the ongoing 
        development exposed a level of uncertainty that can be 
        deemed as a high risk for federally facilitated 
        marketplace systems.''

    Did you bring that security concern to the Secretary's 
attention and to OMB's attention?
    Ms. Tavenner. I did not.
    Senator Burr. Secretary Sebelius said last week that the 
implementation took place on October 1 because that was the 
law. I've read the act several times. My interpretation is that 
Secretary Sebelius had the authority not to execute that on 
October 1. And, clearly, my interpretation is if you had not 
signed the authority to operate the Web site, it would not have 
stood up on October 1. Are my two statements accurate?
    Ms. Tavenner. I don't know that your statements are 
accurate. The law says that January 1 is when individuals have 
to have coverage. We put a reg in place that said October 1 
would be the day we would start so that people would have time 
to sign up. We declared the 6-month enrollment window.
    Senator Burr. Do you think that the Secretary had the 
authority to waive the October 1 reg?
    Ms. Tavenner. I do not know the answer to that question.
    Senator Burr. Is it true that individuals who were enrolled 
in the health plan after March 23, 2010, are not eligible for 
grandfathered plans?
    Ms. Tavenner. Ask me that question again.
    Senator Burr. Is it true that individuals who enrolled in 
healthcare plans after March 23, 2010, are not eligible for 
grandfathered plans?
    Ms. Tavenner. That is true.
    Senator Burr. Do you think, personally, that Americans 
should----
    The Chairman. Senator.
    Senator Burr. Last question. Do you think Americans should 
have the ability to keep their plan?
    Ms. Tavenner. I think individuals--as we talked about, in 
the grandfathered plan, we allowed that to happen, and in large 
employer plans. Large employer plans were grandfathered as 
well. So I think we tried to look after those individuals 
through that grandfathering.
    Senator Burr. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Thank you, Mr. Chairman, for convening 
this hearing.
    Ms. Tavenner, like my colleagues, I'm frustrated and 
disappointed that a month into the open enrollment, there are 
still problems with the Federal marketplace. I appreciate your 
being here today. I think it's important that we understand 
what you're doing to fix the problems that have hindered 
comparison shopping and enrollment over the past month.
    My No. 1 priority is to see to it that Minnesotans have 
access to our State-run marketplace and that access is 
protected. Things seem to be going better with MNsure--that's 
Minnesota's health insurance marketplace--than with 
Healthcare.gov, and it's been going better in a lot of States. 
MNsure is reporting that thousands of individuals and families 
are completing applications for comprehensive affordable health 
coverage.
    Although MNsure was developed and operated by Minnesota, it 
does rely on the Federal hub for its eligibility 
determinations, and this is a problem we had very early on, 
getting people to be verified. And, also, when the hub is taken 
offline, MNsure must also go offline. What are you doing to 
make sure that Minnesotans can continue to enroll in health 
plans through MNsure, our State-run marketplace, while 
Healthcare.gov is undergoing maintenance?
    Ms. Tavenner. In the case of the hub, there's been very 
little downtime of the hub itself. We do have a window from 1 
a.m. to 5 a.m. that we had agreed to prior to ever going live 
with the system, and there are certain components, such as 
social security, which is not active during that time. That's 
the routine maintenance for social security.
    But the hub has actually worked flawlessly. So it has not 
been the issue. And, certainly, the Minnesota State-based 
exchange is doing well, and they have access to the hub. When 
we are going to schedule downtime of the hub for maintenance or 
other reasons, we let States know ahead of time so that they 
can plan accordingly and put up appropriate signage on their 
sites.
    Senator Franken. But the hub didn't work flawlessly the 
first week.
    Ms. Tavenner. I think the hub was not the problem. I think 
we had a problem with email accounts being established at the 
Federal level, and that was fixed. And I think Minnesota had 
some problems, too, as it related to account development. But I 
think those are all behind us. They were not hub issues.
    Senator Franken. MNsure is almost entirely separate from 
Healthcare.gov.
    Ms. Tavenner. Right. It just uses the hub.
    Senator Franken. And I believe it's been working a lot 
better. However, one of the critical elements of success for 
the State-run marketplaces will be clear communications with 
CMS about problems like those that MNsure saw in the first few 
days with the Federal Web site.
    Do you have open lines of communication with the States 
that are operating their own marketplaces about the challenges 
that they're facing interacting with Healthcare.gov?
    Ms. Tavenner. We certainly do. We have regular, almost 
daily communications with States, and we have teams assigned to 
work with States. And then we, every week or two, do either a 
video conference or calls with States. We've also had them in 
for meetings. So, yes, we have very open lines of communication 
with States.
    Senator Franken. There's been a number of questions about 
security of private information. I'm chairman of the Judiciary 
Committee on Privacy, Technology, and the Law, and I've spent a 
lot of time working on protecting consumer privacy, and this is 
very concerning to me.
    Can you tell me what you're doing now to make sure that 
consumers' health information is securely protected?
    Ms. Tavenner. As I talked about earlier, we are meeting all 
the FISMA standards. We do continuous security testing, and 
I've kind of walked through those. We have a dedicated security 
team. We also do independent security analyses. So it is 
continuous. We treat the marketplace the same way we would 
treat Medicare or any other system.
    These systems are inherently high risk, and I think that's 
important. Every quarter, I'm doing reports to the GAO and 
others about the high-risk nature of these systems. So we treat 
it as a high-risk system. We monitor it continuously, and we 
have a team dedicated to report on it and make us aware of 
things right away.
    Senator Franken. My time has expired.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Kirk.

                       Statement of Senator Kirk

    Senator Kirk. I have two questions. I think what we see 
here is a tale of two beltway bandits, QSSI and CGI, to mainly 
build what you have. Who is the CEO of CGI?
    Ms. Tavenner. CGI Federal?
    Senator Kirk. CGI Federal.
    Ms. Tavenner. Yes.
    Senator Kirk. Is it the appropriately named Michael Roach?
    Ms. Tavenner. George Schindler, and Michael Roach is the 
CEO of CGI Global, and I'm in close communication with both.
    Senator Kirk. My guess, from what information we have, is 
that you have provided upwards of $400 million to Michael Roach 
to do this work?
    Ms. Tavenner. I think current spending to date--the $400 
million includes CGI, it includes QSSI, and it includes other 
vendors.
    Senator Kirk. Could you provide the committee with a copy 
of the contract?
    Ms. Tavenner. I certainly can.
    Senator Kirk. Why do it in such a sneaky way? Why refuse to 
provide the contract to Congress? I'm from Chicago where we 
always kind of follow the money, and if I can't find out where 
it went----
    Ms. Tavenner. I'm happy to go back and check. I thought a 
lot of information had been provided to Congress, but I'm happy 
to check.
    Senator Kirk. So you will be able to provide the contract 
with CGI to us?
    Ms. Tavenner. I will get you everything I can, yes. I 
thought that had already been shared.
    Senator Kirk. Good. Don't you have money missing that has 
not been paid to CGI? My understanding is there's about $100 
million to go. After a disaster of this nature, is there a way 
to have some accountability here with the remaining funds and 
not give it to Michael Roach?
    Ms. Tavenner. I will get back to you with that information.
    Senator Kirk. Maybe he can skip a holiday in the Bahamas. 
Thank you. I will go--because it appears you're going to 
inflict CGI on the people of Illinois, where credible media 
reports tell us about upwards of 30,000 citizens of Illinois 
may lose their health insurance because of this program. I 
think the AP just ran a story about 3.5 million Americans will 
lose their healthcare because of this program.
    Ms. Tavenner. I'm not sure that that's accurate. I think 
you're referring to canceled policies, but they were canceled 
old policies. They were offered new policies. They can also 
shop on the exchange.
    Senator Kirk. I'm referring to the AP story.
    Ms. Tavenner. I don't know which AP story, but there are 
not 3 million people losing coverage.
    Senator Kirk. Are you accountable for the taxpayers' funds?
    Ms. Tavenner. I certainly think I am.
    Senator Kirk. Yes, you are, hundreds of millions of 
dollars, I would say. For Michael Roach, I would think that you 
have provided substantial wealth to him. I would just point out 
I think we ought to know the full details of the contract that 
you've signed with him.
    Ms. Tavenner. Unless I'm wrong, I think you have statements 
of work. You have a lot of information already, but I'll get 
you anything else that you think you want.
    Senator Kirk. The other CEO of QSSI is Bikram Bakshi that 
you have been paying money to? So how much--I was just thinking 
of a phone call that might have happened when you were getting 
ready for this hearing. ``Hey, Bikram, it's Marilyn. Whiskey, 
tango, foxtrot on my Web site,'' as we would say in the Navy. 
WTF, yes. So it would be like that. Just after hundreds of 
millions of dollars, you should have something. I would just 
wonder what Mr. Roach is driving right now, probably something 
really nice after the amount of money you've given to him.
    All right, Mr. Chairman. I yield back.
    The Chairman. Senator Hagan.

                       Statement of Senator Hagan

    Senator Hagan. Thank you, Mr. Chairman.
    Thank you, Ms. Tavenner, for being here. Let me just ask 
about the December contingency planning. At the end of this 
month, either one of two things is going to be true, either the 
Web site is going to be working smoothly for the vast majority 
of its users, or it won't. And in both cases, the 
Administration is going to have to take quick action to ensure 
that individuals across the country are being treated fairly. 
And I'm sure people are planning for this at the end of the 
month since it failed.
    If the site works, then individuals will just have 2 weeks 
to really shop and enroll in a plan that will take effect on 
January 1. Is the Administration planning an education and 
outreach strategy to match this tech surge that's currently 
underway?
    And if the site is not working, then what steps is the 
Administration going to take, including delaying the penalty 
for not buying the insurance? And then what are they going to 
do to help individuals to be sure there's not going to be a gap 
in their insurance coverage?
    Ms. Tavenner. Yes, there is a press or a public campaign 
that will match--the end of November and going into December, 
January, February, and March. There are no plans to delay the 
individual mandate.
    Senator Hagan. So what if the site is not working?
    Ms. Tavenner. The site will be working. The site is working 
now. What we're doing now is making performance improvements. 
But the site will be working.
    Senator Hagan. And are enough people able to get on the 
site?
    Ms. Tavenner. Yes.
    Senator Hagan. Do you have numbers?
    Ms. Tavenner. I already said earlier that we had over 
700,000 who have completed applications, and we will have 
numbers mid-November for October in more detail. So I think 
that's what you're asking.
    Senator Hagan. I have called for extending the open 
enrollment period and then waiving penalties for not buying 
insurance for 2 months to make up for the lost time that it's 
taking to get the site up and working. I think that's going to 
continue to be an issue.
    One of the things that I was concerned about in reading the 
material was the contract to build the site. Was it really 
awarded to companies that had bid on an IT contract that was 
back in 2007? Was it not open to other companies?
    Ms. Tavenner. It was actually what's called an IDIR 
contract. Back in 2007, there was a list of IT vendors that do 
this kind of work.
    Senator Hagan. But a lot has changed since 2007 to 2011 or 
2012.
    Ms. Tavenner. I think this is more around the process. 
These are certainly current IT vendors. But, yes, the process 
was IDIR.
    Senator Hagan. So you're saying if you weren't on that 
contract in 2007, would you not be eligible to bid?
    Ms. Tavenner. Yes, that's correct. You would not be 
eligible. But the IDIR process was completed in 2007. It's been 
used for IT projects inside CMS. It's a series of contractors 
who have been prescreened, prequalified. They still go through 
a competitive bid process, but it's limited to the individuals 
who qualified in 2007.
    Senator Hagan. For the tech surge that's just started 
recently, would those companies have been on that list of 2007 
qualified contractors?
    Ms. Tavenner. I would have to look at the individuals 
inside the tech surge. Certainly, some of the contractors that 
you would have seen on that list are common in the IT space. So 
it would not be unusual.
    Senator Hagan. On September 30, the night before the site 
was set to launch, what were your expectations for the launch 
day?
    Ms. Tavenner. That's a great question. My first expectation 
is that we would go live shortly after midnight, because we 
were doing a soft launch at midnight, and we had pretty much 
promoted that the site would go live at 8 a.m. the morning of 
October 1. So we went live shortly after midnight.
    We had tremendous interest, even during the night. And my 
expectation was that the site would work. It would have its 
customary glitches of a new site. It's a complicated Web site. 
So I think we knew all along it would have bugs that would have 
to be handled.
    We also knew all along that we had pulled certain 
functionality out in order to spend more time concentrating on 
the application process. Those are the ones we've talked about 
publicly--shop, Spanish, Medicaid account transfers. So what I 
expected was a site that worked with some issues.
    What we saw is more volume than we had anticipated, and we 
anticipated pretty high volume. And then we ran into the issue 
with the establishment of the email accounts right away. We had 
to problem solve for that. Those were two things we did not 
expect.
    Senator Hagan. It seems like the information that I have 
been reading was that there was warning before the site was to 
open, and that there was a lot of concern that testing had not 
been done. And I think in hindsight now, a lot of people are 
saying,

          ``Why didn't the Administration and the CMS give more 
        forewarning about the site not living up to the 
        expectations that were being called for?''

    And many people understood that it would be up and running 
and they would be able to access it quite easily.
    Ms. Tavenner. I would say that the testing, again, around 
the hub was complete. I think the testing that had not been 
finished was the testing in the live environment with real 
individuals, which we couldn't do until after October 1. But in 
our analysis and in our modular testing throughout the FFM, we 
had done independent verification. It had passed security 
checks.
    So we were comfortable and we did not have any high-risk 
recommendations in any of those components. We just could not 
do the live end-to-end testing until October 1 when we actually 
signed up. We did case testing prior to that.
    The Chairman. Thank you very much, Senator. I wasn't 
watching my clock. I went over and I apologize.
    Senator Murkowski.

                     Statement of Senator Murkowski

    Senator Murkowski. Thank you, Mr. Chairman.
    Ms. Tavenner, thank you for joining us in the committee 
today. I want to talk about Alaska. I had a meeting just about 
10 days or so ago with the navigators that are trying to help 
facilitate the exchanges in Alaska as well as Enroll Alaska, 
which is an insurance broker that has been set up specifically 
for this. These are all folks that want this to work.
    What I heard from them was: Stop. It's not working. As of 
the 29th of October, Enroll Alaska confirmed that there were 
exactly three Alaskans that had successfully enrolled. There is 
nobody else that has confirmed that they have successfully 
enrolled in the exchange from Alaska. Now, this is the 5th. We 
may have had somebody come in yesterday. But as best I can 
tell, it's three.
    In a letter that I received from Enroll Alaska, they 
confirm this, and they have specifically asked that the 
Administration pull the Web site down, rebuild it, and redeploy 
it. Again, these are the folks that really want this exchange 
process to work.
    One thing that was very disconcerting in that meeting was 
to learn that perhaps the three that have been enrolled have 
been given incorrect information, because it has been 
discovered that the FFM was calculating the subsidy for 
Alaskans incorrectly. Therefore, Enroll Alaska has suspended 
all enrollments until the issue is resolved. This was last 
week. I understand that they still have not had confirmed that 
this subsidy calculator has been resolved.
    Are you aware of this? Has it been resolved? Are we working 
on it? The concern is that not only can people not get on to 
enroll, but if they do, their subsidy calculations are 
incorrect.
    Ms. Tavenner. We are aware, meaning the staff is aware of 
this issue, and they are working on a fix to the system to 
correct the Alaska issue, and it's specific to Alaska.
    Senator Murkowski. In the meantime, what should Alaskans 
do? Should they stay off, as Enroll Alaska and the other 
navigators have suggested?
    Ms. Tavenner. I will get that information for you.
    Senator Murkowski. Watching the news yesterday, I saw that 
the exchanges will be offline between 1 a.m. and 5 a.m. Eastern 
Standard Time until further notification. Is that correct 
information?
    Ms. Tavenner. The 1 a.m. to 5 a.m. window is the window 
that we use to do software upgrades. So that is why.
    Senator Murkowski. That's fair enough. But unlike what some 
may believe here, the sun does not rise and set in Washington, 
DC, or on Eastern Standard Time. So when a family finishes up 
dinner, does the dishes, puts the kids to bed in Alaska, 9 p.m. 
is 1 a.m. So the time period that Alaskans would be able to 
actually sit and move through any aspect of this exchange, 
you're shut down.
    Can you give me some indicator as to when this might be 
available for all Americans to take a look at?
    Ms. Tavenner. Yes. The software fixes will just be done 
during this month. As we said, we were trying to complete the 
upgrades this month.
    Senator Murkowski. So we are in the situation where we have 
a concern with the subsidy calculator in the State. We have 
maybe three people who may be enrolled correctly. We're not 
sure yet. We can't get onto the exchanges when most people 
would have an opportunity to do so when they have some 
downtime.
    I'm having Alaskans coming to me and saying, ``OK. What 
happens on January the 5th? I have an incident where I need my 
insurance. My insurance has been canceled.'' Just about 60 
percent of the folks who receive their insurance through 
Premera, which is our largest health insurance by a long 
margin, have received their cancellation notices. So you've got 
that going on. You can't get onto the exchanges.
    We're all saying that this exchange is going to get worked 
out. But what they're coming to me and saying is,

          ``What happens if something happens to me and my 
        family that first week in January if I have been able 
        to apply for coverage timely, but for some reason, 
        there's a glitch in the confirmation, getting my 
        premium check?''

    If there's a health crisis in January, is it the individual 
who's on the hook? Is it HHS, because there's been a glitch 
here? They want to know if they fall through the cracks, are 
they going to be taken care of? And I don't have an answer for 
them.
    Ms. Tavenner. First of all, as just a reminder, this is 4 
hours of the day, a short period of time when the system will 
be down.
    Senator Murkowski. I understand that. I understand that. 
But it's very significant for----
    Ms. Tavenner. I understand. The call center is available 
24/7, and that's true in Alaska as well. So individuals can go 
on the call center and get help. They can also, if they want 
to, submit paper applications which would be processed and 
returned to them. So they shouldn't wait is my point.
    Senator Murkowski. And come January 1, what happens then? 
Who's on the hook?
    Ms. Tavenner. They would have time before January 1.
    Senator Murkowski. Thank you.
    The Chairman. Thank you, Senator.
    Senator Warren.

                      Statement of Senator Warren

    Senator Warren. Thank you, Mr. Chairman. Thank you for 
holding this hearing.
    Thank you, Administrator Tavenner, for being here to 
provide us with an update. I want to talk about Massachusetts. 
Everyone is frustrated by the first few weeks of 
Healthcare.gov, and everyone is looking for answers, including 
me. But last week, President Obama came to Boston where he said 
that health reform in Massachusetts, like the Affordable Care 
Act, is not a Web site. It's a value statement.
    The President is right. Leaders in Massachusetts, like 
generations of national leaders, sought to reform healthcare, 
not because it was easy, but because we all knew that the old 
system was broken for years. Cost exploded. Insurance companies 
discriminated against people with preexisting conditions. Too 
many consumers and patients, including those with insurance, 
were threatened with financial ruin if they got sick.
    Now, there have been a lot of comparisons between the ACA 
rollout and our experience in Massachusetts. And what I can 
tell you all from the experience is that getting everyone into 
a new healthcare system wasn't easy and it wasn't quick. In the 
first month that people could sign up for subsidized coverage 
during our health reform launch in 2007, we got 123 people 
enrolled.
    But because we were committed to making the law work and 
making sure that people had affordable healthcare, we kept 
working on it. We fixed the problems. We hit the pavement. We 
did whatever it took to get people signed up. Our enrollment 
period for subsidized insurance lasted almost a full year, and 
yet it was only in the last month that 20 percent of the total 
pool got themselves enrolled.
    People signing up for unsubsidized insurance had a shorter 
period of time, and yet over a quarter of them waited until the 
last month to get enrolled. So I understand that the beginning 
of an enrollment period is important. It allows people to shop 
and to carefully evaluate their options. But what we learned in 
Massachusetts is that when it comes to enrolling in healthcare, 
many of us wait until the end to get it done.
    So, Administrator Tavenner, what did the Administration 
anticipate would be the pattern of enrollment through the 
exchanges? What would it look like over time? What were you 
thinking about prior to the launch of Healthcare.gov? And do 
you think that the early problems you've had are going to 
affect the long-term pattern in enrollment?
    Ms. Tavenner. We always assumed that we would be able to 
enroll folks throughout the 6-months, but that the greatest 
surge would come in December, because we thought there were 
people who would want to get covered January 1, and then the 
second surge would probably come in late-February, early-March, 
by those individuals who probably weren't as motivated to get 
insurance but understood they needed it and it was required by 
law.
    So we had enrollment figures, but they were lower for 
October, and I think they will be low. It pretty much follows 
the Massachusetts experience, and that was part of the reason 
for such a long enrollment period in the first year.
    Senator Warren. So you still are confident that you've got 
time, if you can get these problems fixed, to get people 
enrolled?
    Ms. Tavenner. Yes. It's important for us to get the 
problems fixed in November. But, yes, I think we have time.
    Senator Warren. Well, good. I know we agree that the 
problems with the Web site are unacceptable and that they need 
to be fixed. But our experience in Massachusetts suggests that 
it might be prudent for us to take a deep breath about this.
    I'm sympathetic to your position. The launch of our own 
Health Connector Web site for insurance wasn't smooth, but we 
kept working on it. And when we had data mapping and volume 
problems during our launch in 2007, we kept working on it. When 
we needed our own tech surge to fix it, we kept working on it. 
We kept working on it because we stayed focused on what 
mattered, our conviction that no one deserved to be bankrupted 
or shut out of the healthcare system when they got sick.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Warren.
    Senator Whitehouse.

                    Statement of Senator Whitehouse

    Senator Whitehouse. Thank you, Chairman.
    Like Senator Warren, I'd like to talk about my home State's 
experience. Governor Chafee, who was a Republican member of 
this body, decided early on that he was going to do this and 
get it right. We may be a small State, but we're a pretty smart 
State. And he put Christy Ferguson--who some of the people who 
have been around here a while might remember as John Chafee's 
staffer on this committee years ago--in charge of the project. 
I want to say that in Rhode Island, it's been a success.
    The first time that I went to visit, I walked through the 
front door. It was late afternoon. It was probably 5:30 or 6 
o'clock. I think it was on a weekend. We're open all the time 
to make sure people can come in. And there was a family, mom, 
dad, three little kids, and they were at the reception desk.
    They had come in earlier in the day, and they'd been walked 
through the whole process. They were so thrilled with what they 
had heard that they had gone out--and this was their return 
trip--with two big boxes of Dunkin' Donuts coffee and a stack 
of doughnut boxes, because they wanted to give coffee and 
doughnuts to everybody who was working in the call center, 
because they were so happy.
    I walked around the call center and talked to people who 
were taking the calls and dealing with people over the 
computer, and one woman was just beaming. I said to her, ``You 
look like something wonderful just happened. You've got quite a 
smile.'' She had just talked to somebody who was paying--I want 
to say $800 a month--into COBRA and had just found a better 
plan for $500 a month, and $300 a month is actually a pretty 
big deal in that family's life. So she had had a really 
wonderful exchange with that person who had called in.
    We have people who, when they come in live, they're taken 
into private rooms to discuss their options. And when they find 
out what the deal is, we have a lot of people who are getting 
hugs. There's a story in the New York Times today about a woman 
who burst into tears of joy when she found she'd get coverage. 
In fact, I'd like to ask unanimous consent to have that New 
York Times study put into the record.
    [The information referred to follows:]

                 [The New York Times, November 5, 2013]

      For Uninsured, Clearing a Way to Enrollment: New York Times

                          (By Abby Goodnough)

    La Grange, KY.--Kelli Cauley's fingers raced over her keyboard as 
she asked the anxious woman at her side a series of questions. What was 
her income? How many people lived in her household? Did she smoke? 
(``That's the only health question it asks,'' Ms. Cauley said of the 
application they were completing.)
    The woman, a thin 61-year-old who refused to give her name, citing 
privacy concerns, had come to the public library here to sign up for 
health insurance through Kentucky's new online exchange. She had a 
painful lump on the back of her hand and other health problems that 
worried her deeply, she said, but had been unable to afford insurance 
as a home health care worker who earns $9 an hour.
    Within a minute, the system checked her information and flashed its 
conclusion on Ms. Cauley's laptop: eligible for Medicaid. The woman 
began to weep with relief. Without insurance, she said as she left, 
``it's cheaper to die.''
    Known as ``navigators'' or ``assisters,'' people like Ms. Cauley 
are going to work across the country, searching for the uninsured and 
walking them through the enrollment process. Under the Affordable Care 
Act, these trained, paid counselors typically work for community groups 
or government agencies, with a mandate to provide impartial guidance. 
Given the problems plaguing the Federal online insurance exchange used 
by 36 States, the workers have become even more important in helping 
people understand their insurance options.
    But in Kentucky and some of the 13 other States that have their own 
exchanges, which in general are running more smoothly than the Federal 
site, watching navigators on the job also provides the clearest view 
yet of how enrollment could work once the technical problems of 
HealthCare.gov are resolved.
    President Obama and proponents of the health care law have held up 
Kentucky in recent weeks as a model for the national enrollment effort. 
The State is far ahead of most of the Nation in signing up people: As 
of Nov. 1, more than 27,854 Kentuckians had enrolled in Medicaid under 
the law's expansion of that program, and 4,631 had signed up for 
private plans through the State-run exchange, known as Kynect. The 
State says it is enrolling 1,000 people a day.
    In contrast to the federally run exchange with all its problems, 
Kynect has had relatively few--for several reasons, Kentucky officials 
said. The primary contractor, Deloitte, worked closely with the State 
agency that runs health programs, ensuring guidance and oversight. 
Unlike the Federal Government, the State tested its online exchange 
early and often, so problems were addressed before the Web site went 
live. And people can check whether they qualify for Medicaid or 
subsidies without creating an account, a requirement that caused huge 
bottlenecks on the Federal exchange.
    While most States lack enough navigators to reach all who need 
help, Kentucky is spending $11 million in Federal money to promote its 
exchange, and it shows: Ads for Kynect blanket television and radio, 
city buses and highway billboards in Louisville.
    ``Compared to other States, we're sitting pretty,'' said Jacquelynn 
Engle, who is overseeing the sign-up effort at Family Health Centers, a 
network of seven clinics in Louisville that treats thousands of the 
city's uninsured. The clinics enrolled 421 people in October and helped 
an additional 260 start the application process. Officials in 
Louisville, a city of 600,000, have set a goal of enrolling about 
29,000 people in Medicaid and 27,000 more in private plans by mid-2014.
    So far, a total of 5,200 have signed up in Jefferson County, which 
includes Louisville, far more than in any other county in the State.
    Still, the first month's tally barely starts Kentucky on the path 
toward enrolling the 640,000 uninsured residents in the State who are 
eligible for health coverage, a goal that Governor Steven L. Beshear, a 
Democrat, has said is urgent because the State has high rates for 
smoking and obesity, among other health problems. And if Medicaid sign-
ups continue to far outpace enrollments in private exchange plans, with 
only the sickest people buying private coverage, the cost of premiums 
could rise.
    Though people can sign up on their own, navigators can help those 
confused by the sea of insurance options. The navigators listen to 
people voice their hopes and fears about the law, and their hard 
stories about being uninsured. Often hugs are exchanged. Sometimes 
tears flow.
    After Samantha Davis helped Deborah and Joseph Willis enroll in 
Medicaid one morning at a Family Health Centers clinic, Mrs. Willis, 
49, told her how she felt some doctors and nurses had treated her 
unkindly because she lacked insurance. ``Maybe they'll look at me a lot 
different now,'' she said.
    As the couple prepared to leave the clinic, Mr. Willis, who is 55 
and has severe foot and back pain from injuries but has not seen a 
doctor in years, turned to Ms. Davis and extended his hand.
    ``God bless you,'' he said.
                          high demand for help
    Ms. Cauley has put 1,000 miles on her car in the last month, 
driving across Louisville and the surrounding counties. She has met 
with the uninsured at doctors' offices, workplaces and their own 
kitchen tables, her laptop at the ready.
    Ms. Cauley, who is 42, is a ``kynector,'' Kentucky's name for an 
assister. She was hired in September by the Kentuckiana Regional 
Planning Development Agency, a council of local governments, which won 
a $937,000 contract with the State to help with enrollment in 16 
counties.
    The job is high pressure: The contract calls for eight kynectors to 
enroll 699 people per month in Medicaid or private plans through the 
exchange. They are required to hold educational events around the 
region, and the agency's phones have been ringing nonstop with requests 
for enrollment help at health fairs, cultural festivals and other 
events that the uninsured might attend.
    At a sign-up sponsored by AARP last month, a well-dressed woman 
approached Ms. Cauley with a problem: She had learned that she would be 
eligible for Medicaid under the new law, but she was unwilling to 
enroll because of what she saw as a stigma attached to the program. As 
a substitute teacher, she wanted to know whether she could afford full-
priced private exchange plans.
    ``I don't want to be a freeloader,'' said the woman, who asked to 
be identified only by her middle name, Kay, because she said she was 
embarrassed about qualifying for Medicaid. ``I believe in paying our 
way in life.''
    Ms. Cauley told her that she understood: ``I can remember meal 
after meal of beans and corn bread because that's all we could 
afford,'' she said. ``My father would not get food stamps.''
    She found that Kay's cheapest option through the exchange would be 
a plan with a $356 monthly premium and a $6,300 deductible. ``Holy 
cow,'' Kay said, shaking her head at the cost. Ms. Cauley thought for a 
moment and offered an alternative: Kay could sign up for Medicaid, but 
only use it in catastrophic events. For checkups and other routine 
care, Kay could pay her own way, perhaps negotiating a discount with 
her doctors.
    ``You're giving me an alternative I can live with,'' Kay said.
    Ms. Cauley gave her a card and told her to call when she was ready 
to sign up. ``At least it's there in case you need it,'' she told her. 
``Isn't that what insurance is for?''
    Ms. Cauley, who is a former home economics teacher, has left her 
house near Louisville as early as 4:30 a.m. to answer phones on a call-
in show about the law. With little time for lunch, she has lost 12 
pounds. She once forgot to put on makeup before leaving home and then 
forgot to turn off her car lights at her first pre-dawn appointment.
    Some fellow Republicans called her a traitor when she took the job, 
she said, but she has been happy to dispel myths about the health care 
law. Laughing, she called herself ``a Republican with a socialist 
agenda, or a social agenda anyway.''
    She expects the job to get harder as she comes under pressure to 
help people who might be more reluctant to sign up than the early 
enrollees. But she has some strategies: visiting small day care 
centers, for example, where workers are likely to be uninsured. For 
now, just meeting the initial flood of requests is a strain.
    ``You do have to be on your A-game constantly,'' she said.
                       a new challenge for agents
    Near the end of the 2 hours he spent helping Judy Shields choose a 
health plan through Kynect, Donald Mucci let out an emphatic sigh. Mr. 
Mucci, an insurance agent for more than three decades, has yet to get 
comfortable with the new system and does not much like it.
    Some of his colleagues refuse to sell plans through the exchanges, 
which they see as a threat, and have instead focused on selling other 
insurance, like property and casualty.
    Other agents--especially the young and aggressive ones--have jumped 
in, eager to capture new customers and prove their expertise is needed 
to help Americans grapple with the law's complexities.
    Mr. Mucci resents that the health care law prompted insurance 
companies to cut commissions paid to agents. And he thinks the exchange 
Web site makes it hard for people to understand the pros and cons of 
various plans, such as which hospitals and doctors they cover. Yet Mr. 
Mucci, an affable man in monogrammed shirt cuffs, said he wants the 
system to work.
    ``I have a social conscience, no question about it,'' said Mr. 
Mucci, 53, whose firm, the Garrett-Stotz Company, has been in 
Louisville for 82 years.
    So far, he has enrolled just a few longtime customers in exchange 
plans. They include Mrs. Shields, 49, a widow who had been rejected by 
insurance companies because she has diabetes. She is paying $745 a 
month for coverage through a program for people with pre-existing 
conditions, but the program will end in January.
    Mrs. Shields, who has an annual income of about $17,000, qualified 
for a monthly premium subsidy of $232 a month. With Mr. Mucci's help, 
she chose a silver-tier plan offered by Anthem that has a $2,450 
deductible and a $4,500 out-of-pocket maximum. She will pay a monthly 
premium of $151 after the subsidy.
    Mr. Mucci said he would get a commission of $18 from the 
transaction. Before the health care law, he said, he would typically 
receive a lot more.
    ``Is it a win?'' he said. ``For Judy, it sure is.''
    The question for Mr. Mucci is how to make it financially worthwhile 
to sell the exchange plans, which about 1,500 agents in Kentucky have 
been certified to do.
    The law requires insurers to spend at least 80 percent of money 
from premiums on medical care instead of on administrative costs, which 
include commissions to agents and brokers. Consequently, some insurers 
cut commissions, infuriating many agents and brokers.
    Some companies reduced commissions further just before the exchange 
opened, Mr. Mucci said, and enrollments are proving more time-consuming 
than he expected.
    Mr. Mucci did have an idea for how to ``help people and still get 
paid for it.''
    On Saturday, he held a series of seminars about the new private 
plans offered through the exchange, explaining who qualifies for 
subsidies and how to apply. He secured an auditorium at a local 
college, invited 1,100 customers and bought 3 hours of time on a local 
radio station to spread the word.
    But only about 40 people showed up.
    ``I don't know if it's ignorance, apathy or procrastination,'' he 
said on Monday, sounding downcast. ``That thing should have been 
standing room only.''
    The State, he said, should be doing a better job of letting people 
know they could turn to brokers for advice. Navigators and assisters 
can explain various plans but not recommend one over another. ``All the 
marketing is, ` It's easy, just a couple of clicks and you're in,' ''--
Mr. Mucci said. ``They'd be serving themselves better and the consumers 
better if they said, ` You ought to call an agent.' ''
    Mrs. Shields said she was stunned by how much financial assistance 
she qualified for. She sponsors six children at an orphanage in 
Guatemala, she said, but could afford to pay only $30 a month for each 
of them, mostly because of her expensive health insurance.
    ``Now I get to give more,'' she said.
                         overwhelmed by options
    David Elson leaned in front of a computer at a Family Health 
Centers clinic one recent morning, squinting at the screen. Uninsured 
for years, with medical bills accumulating in a cardboard box in his 
kitchen, he had just applied for coverage through Kynect.
    Samantha Davis, the clinic employee who helped Mr. Elson apply, 
explained that based on his income of about $22,000 last year, he was 
not eligible for Medicaid but had qualified for a Federal subsidy of 
$252 a month toward premium costs for a private plan. ``It's a pretty 
big one,'' she said, reassuringly.
    Through the exchange, Mr. Elson, 60, who has advanced diabetes and 
kidney disease, was offered a choice of 24 health plans, with premiums 
ranging from $92 to $501 a month after the subsidy. But if he felt 
elation or relief, he was too preoccupied to show it.
    Bleeding at the back of his eyes, caused by a complication of 
diabetes, had blurred his vision. He had run out of insulin the 
previous week and had not refilled his prescriptions, which cost almost 
$500 a month, because a recent tax bill had depleted his bank account. 
He had an appointment with an eye specialist that afternoon, and the 
possibility of more debt was hanging heavily over him.
    Overwhelmed by his insurance choices, he told Ms. Davis that he 
would study the options at home, consult with his doctors and get back 
to her.
    A few days later, in the kitchen of his small home here, he 
contemplated the dusty box of bills at his feet and wondered whether 
January would truly be a turning point in his fortunes. A 
hospitalization in May had sharply increased his debt.
    ``I'm hoping once I have insurance that I can sit down and figure 
out a budget and see if I have to go bankrupt,'' he said.
    Above all, he said, he hoped that being insured would allow him to 
work long enough to someday turn his alarm installation business over 
to his grandson.
    ``It's not a fact that I want to sponge off of somebody,'' he said. 
``I want to be able to pay my bills and be able to go through life 
without feeling I owe somebody.''

    Senator Whitehouse. So there's more than one story about 
this. And, like I said, Rhode Island isn't a very big State, 
and we made this work, and it's worked actually pretty well. We 
had a glitch recently where the hub was down and a couple of 
hundred people couldn't get through. You solved it and we're 
working through that.
    But when I see these much bigger States who didn't even 
try, and now everybody's sitting back and complaining that the 
Federal Government didn't do it for them well enough, there's a 
part of me that says, ``Well, you know, next time, stand up and 
give it a try yourself. You don't have to be just a 
recipient.''
    We're up to nearly 4,000 people enrolled but not paid. 
We're up to about 10,000 accounts of people who are working 
through the process, but they've got their account established. 
We've got all these wonderful stories.
    There's another path, and we're all very sorry that you 
guys had to botch up the healthcare Web site rollout. But it 
shouldn't mask that underneath it, there's a plan that is 
making a lot of families really, really happy. And if you go to 
the front lines and go to your State exchange and see what 
people are seeing, you'll see a lot of those stories. They're 
happening really across the board.
    So there's more to this. And if you didn't want to take the 
trouble to bother to set one up yourself, it's a little nervy 
to be complaining that the Federal Government didn't do it for 
you well enough, when you perfectly well could have by yourself 
as a State if you'd simply saddled up and done it.
    You know, there are these letters that people have been 
talking about, that people have gotten. When we got this 
started, you remember, we were dealing with a health insurance 
industry that was so cold hearted that when it took a client 
who had been paying premiums for years and suddenly came in 
with a big claim, their first reaction wasn't ``How do we help 
this family?'' It was,

          ``Let's look back in the records and see if we can 
        find a way to dis-enroll them and get rid of this 
        liability. Oh, they had acne. Is that a preexisting 
        condition they didn't disclose to us? Can we throw them 
        off?''

    I mean, that's the attitude. So there's some pretty nasty 
stuff, I think, that is happening through some of these 
letters. I want to use the example of Rhode Island Blue Cross 
Blue Shield. I'd like to put their letter in the record.
    [The information referred to was not available at time of 
print.]
    Senator Whitehouse. It is a wonderful, terrific letter. 
It's very clear. It lays out what your choices are. It says if 
you like what you've got, you can keep it, and here's how. And 
it says if you don't like it, if you want to use the exchange, 
here's how. It's three steps to stay in Blue Cross Blue Shield 
of Rhode Island. It's two steps to get onto the exchange.
    There's another way to do this. And I think Rhode Island 
has done it right, and as a result, we're seeing pretty low 
drama. So good luck getting through this mess. It has been 
frustrating for all of us. But I think it's pretty safe to see 
that across the river, there are broad and sunlit uplands, to 
quote Winston Churchill, broad and sunlit uplands for us to go 
to.
    Thank you, Chairman.
    The Chairman. Thank you, Senator Whitehouse.
    I know, Ms. Tavenner, that you have to be out of here also. 
I wanted to make it so that people could have 5 minutes and 
have a chance to ask another round. I'll just say, first of 
all, I thank Senator Whitehouse for mentioning the Rhode Island 
matter. That will be put in the record.
    Also, Senator Isakson asked earlier for an IG report to be 
made a part of the record, and I wanted to say that that also 
will be made a part of the record. I didn't mention that at the 
time.
    Again, I like what Senator Warren said about what President 
Obama's statement is on this. This new Affordable Care Act, or 
Obamacare, if you want to call it that, is not just a Web site. 
It's not about a Web site or some technical fix. It is a value 
system.
    Do we like the old value system where people couldn't get 
coverage, or if when someone got sick, they would drop your 
policy--cancellations? I hear so much talk from my friends on 
the Republican side about all these cancellations. I didn't 
hear much in the past when insurance companies would just 
automatically cancel you if you got sick or wouldn't renew your 
policy if you had cancer or something like that. I didn't hear 
much about that.
    What we're saying is that's over with. That old value 
system was no good for this country, because too many people, 
like Mr. Streeter, whom I mentioned in the beginning--or I 
could mention Kathleen Ferguson from Des Moines. Eight years 
ago, her son died at age 33, and she said,

          ``My son died needlessly because he had a preexisting 
        condition and could not get insurance and could not get 
        the medication he needed.''

    I want us to take better care of each other. I am grateful 
that people with preexisting conditions can now get coverage. 
That's the old value system. Mary Lapis from Swisher, IA, wrote 
and told me about her brother, who had been trying to find 
insurance to cover his wife for years. He tried to buy coverage 
with a $50,000 deductible, but no one would sell her a policy.
    When he logged onto the Federal exchange, he enrolled 
himself and his wife, saving $700 a month on what he was paying 
before. Mary Lapis writes that the ACA gives folks with chronic 
conditions a chance to avoid bankruptcy. A new value system.
    I guess there's going to be disruptions and things like 
that when you're moving from that old system to a new system. 
And, certainly, we have to make sure that we fix these problems 
in the Web site and other things. I will refer again to what I 
said earlier about security--paramount. I think that's maybe 
one thing that we all agree on here, is that security is 
paramount in this system. But in terms of the system itself, 
it's going to work, and it's going to be better for this 
country.
    I might say in terms of these cancellations that I love the 
Rhode Island letter. It's very clear. Blue Cross Blue Shield of 
Rhode Island sent a letter out and said, ``Don't worry. Nothing 
is set in stone yet. You still have choices,'' and they give 
another page that says ``You can either stay with us or you can 
go on the exchange.'' But they said, ``Don't worry. You've got 
plenty of time.'' That's the cancellation notices.
    In the past, you know what a cancellation notice was? 
``You're no longer eligible for insurance. Good luck.'' That 
was the old cancellation notice. Now you have choices and 
options. So, again, I say to people to take a deep breath and 
wait and get more people to understand what's going on.
    Now, I must say that there was a story the other day in the 
paper about somebody who said, ``Well, gee, now I have to take 
this policy that covers maternity care, but my wife and I 
aren't having any more children.'' I don't know if they were 
older or something like that. ``Why should I have to have a 
policy that covers maternity care?''
    I got to thinking about that. I thought,

          ``Well, you know what? Maybe because my wife and I 
        don't have any more children and they're grown up, 
        maybe I shouldn't have to pay property taxes to pay for 
        my local schools. My kids aren't there anymore. Why 
        should I worry about it? Maybe only the people that 
        have kids that go to the public schools ought to pay 
        for it.''

    No, we're better than that in this country. We're talking 
about being a part of our society. It's to our benefit, my wife 
and I, to pay our property taxes to support our local schools, 
because that's our next generation. We want them well taught. 
We want well-paid teachers. It's the same way with healthcare. 
It is a value system. I am indebted to Senator Warren for 
mentioning that.
    And the value is that no one is going to be left behind. No 
one is going to go without insurance. No one is going to have 
to wait until they get advanced colon cancer or prostate cancer 
or breast cancer before they can go to the emergency room and 
get help before it's too late. That's the new value system, and 
we're not turning back. Fix the problems. Move ahead. But let's 
aggressively get people enrolled in this system and have a new 
value system with healthcare in America.
    I've used up my time.
    Senator Alexander.
    Senator Alexander. Thanks, Mr. Chairman.
    Thank you, Ms. Tavenner, for being here today. The chairman 
is describing the fundamental difference of opinion that we've 
had for about 4 years here, because the value system that he 
likes, I believe, is a value system that transforms our 
healthcare delivery system in the wrong direction by expanding 
a system that we already knew costs too much.
    And the result is increasing premiums for millions, 
canceling insurance plans for millions, destroying 
relationships with doctors for millions, raising taxes by a 
trillion, forcing people into Medicaid, spending a half 
trillion Medicare dollars on new programs instead of investing 
in Medicare to make it more solvent, and encouraging employers 
to have their employees work 30 hours instead of 40. That's not 
the value system that I support.
    We have a different approach, which would say let's 
encourage competition, let's encourage choices, and let's try 
to make healthcare cheaper so people can actually afford it. 
But that's our fundamental difference.
    May I ask you, Ms. Tavenner, don't you know now with the 
improvements in the Web site how many people are trying to sign 
up every day for Obamacare, how many are succeeding, and what 
their level of insurance that they're buying is, what zip code 
they live in? Don't you actually know that now?
    Ms. Tavenner. That's the information, Senator Alexander, 
that we are putting together, and we will have available next 
week.
    Senator Alexander. Next week?
    Ms. Tavenner. Mid-November, and that's what I had said all 
along.
    Senator Alexander. You're going to release it once? I mean, 
why don't you release it daily?
    Ms. Tavenner. We had said all along, long before the 
program went live, that we would do monthly data, very similar 
to how we do Medicaid, how we do Medicare.
    Senator Alexander. But this is a little different. This is 
people who are making decisions, people who are going to lose 
their insurance starting January 1, people who have to sign up 
by December 15.
    Ms. Tavenner. And I would say that's all the more reason to 
do it monthly, because the fact is that this is early on, and 
people can decide to go in and out, and they don't have to make 
payments until December.
    Senator Alexander. But the people who need to know about it 
are Members of Congress who have appropriated $400 million. 
Let's say I'm a Governor in one of the States that hasn't 
decided whether to expand Medicaid. I'd like to know whether 90 
percent of the people who have signed up are going on Medicaid, 
or whether it's 80 percent or whether it's 70 percent.
    If we can know how many hamburgers and cars and records are 
being sold every day, why can't we know how many people are 
enrolling in Obamacare. If it's such a success, wouldn't that 
promote the success of the program and build confidence in it?
    Ms. Tavenner. We'll have that information next week.
    Senator Alexander. But that's once. I mean, why don't we 
know it every day? You know it now, right?
    Ms. Tavenner. We are in the process of putting together 
that information.
    Senator Alexander. But we're the U.S. Congress, elected to 
represent the people, and we're entitled to know answers to 
these questions so we can make our judgments about what to do. 
So are Governors and so are the consumers across America.
    Ms. Tavenner. I understand.
    Senator Alexander. As far as the example I used of Emily 
from Tennessee from CoverTN, isn't it true that the CoverTN 
program was simply canceled by Obamacare? I mean, it's a case 
of Washington saying, ``That insurance isn't good enough for 
you, so you can't buy it anymore.''
    Ms. Tavenner. First of all, I don't think it was canceled 
by Obamacare. I think the insurance company made a decision to 
cancel a policy and offer something else.
    Senator Alexander. Well, now, there's a letter from the 
State of Tennessee that says,

          ``CoverTN won't be available starting January 1. This 
        affects all CoverTN members. The new Federal healthcare 
        law will bring many changes, including new health 
        insurance coverage options for Tennessee.''

    Obamacare said if you didn't meet the standard for maximum 
limits, you couldn't offer that insurance anymore. That's the 
law. So in this case, for these 16,000 Tennesseans, Obamacare 
said, ``That insurance isn't good enough for you.'' So Emily 
can't buy it anymore, and she has to pay $6,000 more. Isn't 
that true?
    Ms. Tavenner. I think we've been down this issue before. 
They could have been grandfathered in. They could have kept 
their----
    Senator Alexander. No, ma'am. No. The law says that if the 
State program doesn't meet the maximum limits, it's outlawed. 
Does the law not say that?
    Ms. Tavenner. For new plans. I'd have to look at----
    Senator Alexander. No, for the old plans.
    Ms. Tavenner. There was an opportunity for old plans to be 
grandfathered in. We keep going around on this.
    Senator Alexander. Ms. Tavenner, there are provisions in 
the law passed in 2010 that say if a plan doesn't meet the 
maximum limits, the plan can't be offered. Tennessee and----
    Ms. Tavenner. So you're talking about lifetime limits.
    Senator Alexander. That's correct.
    Ms. Tavenner. I'll be glad to get you that information.
    Senator Alexander. Well, no. So the fact is Obamacare 
outlawed that plan, and millions of Americans are having their 
plans canceled. Why don't we put the President's words into law 
and say, ``If you like your plan, you can keep it,'' and end 
the debate?
    My time is up.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Baldwin.
    Senator Baldwin. Thank you, Mr. Chairman, and I thank you 
for staying around for a second round of questions.
    When I had my first opportunity, we were talking a little 
bit about the situation in the State of Wisconsin. We're 
hearing a lot of people reference this idea of if you like your 
insurance plan, you can keep it. In the State of Wisconsin, a 
lot of people like BadgerCare. But because of the decision of 
our Governor, having nothing to do with what Congress did years 
ago, 92,000 people who may really like their healthcare plan 
are being kicked off.
    Because of this, I really think it is a shared 
responsibility to figure out how to most effectively help these 
92,000 transition from BadgerCare to participate and enroll in 
the Federal exchange. So I want to sort of ask the companion 
questions. If it's a shared responsibility, what specific steps 
can the Administration take to ensure that these individuals 
are enrolled as soon as possible? But, also, what options are 
available to the State of Wisconsin to eliminate the risk of 
losing this BadgerCare Medicaid coverage January 1?
    Ms. Tavenner. Let me take that in reverse order. Obviously, 
Wisconsin, like every other State, had the ability to have the 
expanded Medicaid at no cost. About 25 States have elected to 
do Medicaid expansion, including many Republican States. But, 
obviously, Wisconsin was not one of those.
    As part of the process, we'll work with the State of 
Wisconsin with the Medicaid office to identify those 
individuals and make sure they are aware of what is available 
on the exchange. Obviously, there's a cost to that, and so you 
get into the issues of subsidy and this sort of thing. But we 
will try to work with the State closely to help those people at 
least identify what's available to them. It's unfortunate.
    Senator Baldwin. Earlier, you were asked questions about, 
you know, how you can target young people, young healthy 
people. How do you target these 92,000 people? And what is the 
State's role? What is the Administration's role when the State 
decided not to expand Medicaid?
    Ms. Tavenner. Obviously, the State knows who these 
individuals are. So they'll be able to send them information. 
What we're doing under the waiver is asking Wisconsin to give 
us a plan on how they're going to do that. So it's a shared 
responsibility. We obviously aren't sitting inside Wisconsin, 
but we will try to help.
    Senator Baldwin. I just have to say as commentary before 
the exchange marketplace opened, a letter went out from the 
State. And you were mentioning that the State is aware of who 
these people are. Well, it basically said, ``Someone in your 
household may be on BadgerCare and may be losing it.'' That 
type of information, in my mind, is not adequate to assure that 
people don't have a lapse or a gap in their health coverage.
    I guess the other question in my remaining time relates to 
the experiences of those States in the country in the early 
phases of this marketplace. What is their experience versus 
States in the Federal exchange, like Wisconsin, in enrolling 
people? What comparisons can you make at this point? And can 
the 36 States that rely on Healthcare.gov and the Federal 
exchange expect similar results when the technical issues with 
the Web site are fully worked out?
    Ms. Tavenner. Yes, I think we would obviously expect 
similar results to what the States are seeing. I think we've 
released some information around applications submitted. Some 
States have talked about that publicly. But that will be part 
of what we release next week. But, yes, we would think the 
Federal--if you look at Texas, Florida, there are some very 
large States with large numbers of uninsured. So that will be 
part of our targeted campaign, too, in December and beyond.
    Senator Baldwin. And with regard to the State-based 
exchanges, State-based marketplaces, can you talk about any of 
the successes that they've had or challenges in the early 
phases of enrollment?
    Ms. Tavenner. I think many of you have read about Kentucky. 
Kentucky has certainly been a successful State, both on the 
Medicaid side and on the exchange side. Their Governor has 
been, obviously, 100 percent behind this. He has led the 
effort. And so they have released some numbers publicly, and I 
can get those to you. Washington State was another, New York, 
California. The States all vary in process, but this will be 
part of what will be reported out next week.
    The Chairman. Thank you, Senator.
    Senator Burr.
    Senator Burr. Thank you, Mr. Chairman. Mr. Chairman, since 
you ended with a story, let me talk about Mr. Hood, who lives 
close to me in North Carolina. He now pays $324 a month for a 
plan with a $10,000 deductible. Under the new law, the 
comparable plan suggests for next year, he'll pay $895.27 per 
month, with an $11,000 family deductible. Their annual 
healthcare payment would almost double from $14,000 to $24,000. 
And he is unlikely to be eligible for a subsidy.
    Let me just suggest that the reason Congress has covered 
this so thoroughly is that this could be a hell of a lot 
easier. And I might remind the chairman that Dr. Coburn and I 
came up with an alternate bill. We were denied the ability to 
amend on the floor of the U.S. Senate and to offer an 
alternative.
    That alternative took care of preexisting conditions. It 
kept children on their parents' insurance longer. It actually 
accomplished many of the things that Republicans and Democrats 
highlight about the Affordable Care Act, but it didn't get into 
a large top-down, government-designed program that picks 
winners and losers.
    When you can have stories that are as passionate as yours, 
and I can have stories as passionate as mine, clearly, the 
system we have designed picks the winners and losers. It's not 
individual Americans who get to choose what they want, who get 
to choose how much exposure or how much benefit--in other 
words, their healthcare coverage matches their age, their 
health condition, and their pocketbook, and that's not what 
this does.
    Let me ask you, Ms. Tavenner, what is the target enrollment 
number for the end of November for the exchange?
    Ms. Tavenner. For the end of November?
    Senator Burr. Yes, ma'am.
    Ms. Tavenner. I think that we were looking at between 
October and November--I think that number was, I want to say, 
around 800,000.
    Senator Burr. On April 1, 2014, insurers are required to 
begin submitting bids for the 2015 plans. And extension was 
granted on enrollment to March 31. So for many Americans who 
are not going to sign up until next year, considering that 
insurers will have no experience or very little to go on to 
base their quotes for 2015, what accommodations will you make 
to ensure that insurers make informed decisions?
    Ms. Tavenner. I think the open enrollment period was 
actually--we worked in cooperation with insurers, so they think 
they will have the information necessary.
    Senator Burr. So they still, between April 1, 2014 and 
April 27, 2014, will have to submit their costs for their plans 
for the 2015 plan year.
    Ms. Tavenner. They will submit that over the second quarter 
of 2014, yes.
    Senator Burr. Without much experience of what the plan mix 
is that they're----
    Ms. Tavenner. I think they will have the experience that 
they've had for the first 4 or 5 months, yes.
    Senator Burr. Well, again, there are many people that 
aren't required to sign up until March 31. That's the month 
right before April, in other words, a day before they start 
submitting.
    Ms. Tavenner. I understand.
    Senator Burr. You said earlier in your testimony that all 
the fixes done by CGI would be required without additional 
fees, and that's in a cost-plus contract. Can you assure the 
committee that there will be nothing on the plus side that the 
Federal Government pays to CGI for their repairs on a Web site 
contract?
    Ms. Tavenner. The cost-plus contract is already paid or 
planned for payment through March 2014. So I'm assuring you 
that that's the contract that they will operate under, yes.
    Senator Burr. I'm asking a very specific question, though.
    Ms. Tavenner. I understand.
    Senator Burr. There's a fixed base part of the contract, 
and there's a plus base part of the contract. And I'm sure that 
the plus base deals with additional work done over the stated 
scope of the contract. Clearly, fixing this exchange was not 
part of the stated scope of the contract, I don't think. We 
haven't seen----
    Ms. Tavenner. But it's required of their work in their 
existing contract. They have to fix these problems.
    Senator Burr. Well, let me say this. I do know that many of 
us are going to be looking at the payment that's made on the 
plus side to see if, in fact, we are paying CGI for their 
individuals to fix a Web site that they were contracted to 
produce for the Federal Government.
    Ms. Tavenner. I understand.
    Senator Burr. Again, I thank you for the work that you've 
done on this. I know this is not fun to come up and answer the 
questions. I would say that the moral of this story is the more 
we share up front, which we haven't on the Affordable Care Act, 
the more informed all members are.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Burr.
    Again, Ms. Tavenner, thank you very much for being here and 
for being forthright in your answers. I thought this was a good 
session. I think that you and your staff understand some 
concerns that both sides have on this. I think there were 
legitimately good questions pertaining to that aspect of it.
    Of course, as my friend from Tennessee points out, we still 
have some philosophical differences on this issue. That's fine. 
But there are some points, I think, on which both sides agree 
that we need to ensure get fixed going forward, and I think we 
expounded on those quite forthrightly. But thank you very much.
    And, as I said, the record will stay open for 10 days for 
other statements and questions.
    Thank you, Ms. Tavenner.
    The committee will stand adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIALS

                  Prepared Statement of Senator Casey

    Chairman Harkin, thank you for convening this important 
oversight hearing into the implementation of the Affordable 
Care Act. I appreciate your leadership in overseeing the 
implementation of this law, following the passing of Senator 
Kennedy, who was the chair of the committee when we drafted the 
bill that was the basis of the Affordable Care Act. I would 
also like to thank Administrator Tavenner for coming to the 
HELP Committee today. I look forward to hearing your testimony.
    I am disturbed that the rollout of the health insurance 
marketplaces on Healthcare.gov has been so rocky. I do not 
believe the problems are indicative of flaws in the law, but I 
do think that they are indicative of flaws in implementation.
    Too many people have experienced problems with 
Healthcare.gov since October 1. They have had problems creating 
accounts, logging in, determining eligibility for premium 
assistance tax credits, and selecting plans. Insurers are 
having problems getting the information they need from 
Healthcare.gov, so that they can appropriately bill new 
enrollees for the coverage they have selected.
    Pennsylvania is one of the 36 States with a federally 
facilitated marketplace, that is, one being run by CMS. These 
States are entirely dependent on the federally created 
infrastructure; individuals in those States must use 
Healthcare.gov from start to finish if they wish to be able to 
see and compare all the available plans in their area.
    One constituent from Philadelphia wrote to me regarding her 
troubles with the Web site:

          ``Some time ago I created an account on 
        Healthcare.gov with all of our personal information. 
        The data was scrambled badly the next time I logged in. 
        I called and was told to delete the bad data and 
        correct it. Bad advice. A consumer cannot do that. For 
        the last 3 days the site indicates that I don't have an 
        account.''

    These problems are unacceptable. I am grateful that the 
Administration has taken steps to address these issues, and I 
understand that the account creation process has been 
significantly improved, but I believe we need a clearer 
accounting of what happened: where the breakdowns occurred, 
what problems were predictable and could have been avoided or 
mitigated earlier, whether there were unusual factors that led 
to unpredictable results.
    That being said, there is evidence that when the system 
works as intended, consumers are pleased. I have heard from 
another constituent from Palmyra, PA, who said,

          ``Since I moved here 4-plus years ago my rates have 
        gone up 9.9 percent per year, I do not qualify for a 
        subsidy with the ACA, but even so--because of the ACA 
        going into effect I will be saving approximately $135 
        per month on my new private insurance starting in 
        January.''

    These examples demonstrate that the intent of the law, to 
provide consumers with an easy way to compare and select from 
affordable health insurance options, is achievable. Now we need 
to figure out how everyone who needs to purchase health 
insurance has the same experience, and I am looking to 
Administrator Tavenner to provide insight on when the fixes to 
Healthcare.gov will enable the Web site to live up to its 
promise.
    I have never claimed that the Affordable Care Act is 
perfect, and I am open to reasonable improvements to the law. 
However, it is the law, and it has been upheld by the Supreme 
Court. Millions of Americans are eagerly awaiting its benefits: 
health insurance that doesn't cost more because you're a woman, 
or that excludes treatment for a preexisting condition, or 
charges outrageous rates without any guarantee of renewability 
at the end of the year. October 1 was an eagerly awaited date, 
but January 1, 2014 is even more eagerly awaited by so many 
people who have struggled for many years to access the health 
insurance they need to get the health care they need for 
themselves and their families.
    Administrator Tavenner, thank you again for appearing 
before the committee today. I hope that your testimony will be 
helpful, and that we will be able to work together to ensure 
that the Affordable Care Act is a success.
    Response from Marilyn Tavenner to Questions of Senator Harkin, 
  Senator Casey, Senator Hagan, Senator Alexander and Senator Roberts
                             senator harkin
    The Affordable Care Act establishes many important consumer 
protections and respects the significant authority of State licensing 
boards to regulate health care providers. I also appreciate your 
efforts to personally champion consumer rights and competition in the 
delivery of health care services. However, I am concerned by the 
Administration's guidance on enforcement of a key consumer protection 
in the law--new Section 2706 of the Public Health Service Act. 
Specifically, a frequently asked questions document recently posted on 
your Web site implies that the law allows insurers to exclude from 
network participation whole categories of providers operating under a 
State license or certification. In addition, the FAQ advises insurers 
that section 2706 allows discrimination in reimbursement rates based on 
broad ``market considerations'' rather than the more limited exception 
cited in the law for performance and quality measures. A plain reading 
of section 2706 prohibits exactly these types of discrimination.
    Question 1. Can you explain the Administration's position on the 
two specific issues described above and the legal basis for that 
position?
    Answer 1. The statutory language of Section 2706(a) of the Public 
Health Service Act applies to non-grandfathered group health plans and 
health insurance issuers offering group or individual health insurance 
coverage for plan years (in the individual market, policy years) 
beginning on or after January 1, 2014.
    Until any further guidance is issued, group health plans and health 
insurance issuers offering group or individual coverage are expected to 
implement the requirements of section 2706(a) using a good-faith, 
reasonable interpretation of the law.
    The Departments will work together with employers, plans, issuers, 
States, providers, and other stakeholders to help them come into 
compliance with the provider nondiscrimination provision and will work 
with families and individuals to help them understand the law and 
benefit from it as intended.
                             senator casey
    Question 1. Please detail the steps CMS intends to undertake to 
assist people who may have begun the enrollment process at 
Healthcare.gov, but not completed it (due to problems with the Web site 
or other reasons). Will there be outreach targeted to these individuals 
to find out why they did not complete the enrollment process, and 
provide extra assistance if they need it?

    Question 2. Similarly, one of the complaints I have heard is that 
individuals who had difficulty creating accounts ended up creating, 
intentionally or otherwise, multiple accounts on the site. Has CMS 
taken steps to improve the system specifically to address this problem? 
For example, many consumer Web sites require you to use your email 
address as your username, or to include that in the registration 
process. If an individual already has an account, they are then 
prompted to enter their password or given the option to reset the 
password. While Healthcare.gov appears to have this feature, it clearly 
was not working as intended.
    Answers 1 and 2. Unfortunately, the experience on HealthCare.gov 
has been frustrating for many Americans. The initial consumer 
experience of HealthCare.gov has not lived up to the expectations of 
the American people and is not acceptable. We are committed to fixing 
these problems as soon as possible. As part of our efforts to improve 
HealthCare.gov, we've established a new management structure, led by a 
general contractor, QSSI. This nerve center for technical operations is 
diagnosing problems and making quick decisions with developers and 
vendors to analyze, troubleshoot, prioritize and resolve issues in real 
time.
    This team has put in place enhanced monitoring and instrumentation 
tools for HealthCare.gov--providing us with data that enables us to get 
a high level picture of what's going on in the Marketplace application 
and enrollment process. We are now better able to see how quickly pages 
are responding, and measure how changes improve a user's experience on 
the site. We're also getting information on which parts of the 
application are causing the most errors--enabling us to prioritize what 
we fix next. We expect the vast majority of users will be able to 
successfully enroll through HealthCare.gov by the end of November.

    Question 3. Please provide an overview of the core teams that have 
been established with QSSI to address the ``punch list'' of work that 
needs to be done, and how each team is prioritizing its work.
    Answer 3. In October we announced QSSI as general contractor, which 
has brought in its top talent--a deep team with expertise across a full 
range of technology and program management. There is a rigorous 
management structure that is focused on prioritizing the punch list and 
real-time decisionmaking, 24/7.
    With QSSI, we have established dedicated teams to fix and monitor 
both software and infrastructure issues. There are four core teams:

     Application and software--this team addresses glitches so 
the site is faster and smoother for users;
     Infrastructure and hardware--this team is focused on 
adding capacity and redundancy to minimize disruptions;
     Security--this team is continuously working to ensure 
rigorous protections of the system and its data; and
     Monitoring and troubleshooting--this team is focused on 
analyzing system performance and spotting problems early.

    With these teams in place, we have the right management structure 
and accountability to make the necessary progress.

    Question 4. Can you describe the security measures in place to 
protect consumer data submitted by individuals applying for health 
insurance through Healthcare.gov, and how those protections compare to 
similar protections for other Federal programs like Medicare Part D?
    Answer 4. The privacy and security of consumers' personal 
information are a top priority for the Department. When consumers fill 
out their online Marketplace applications, they can trust that the 
information they are providing is protected by a comprehensive set of 
security standards and practices. Security testing happens on an 
ongoing basis using industry best practices to appropriately safeguard 
consumers' personal information. The components of the Federally 
Facilitated Marketplace (FFM) that are operational have been determined 
to be compliant with the Federal Information Security Management Act 
(FISMA), based on standards by the National Institutes of Standards and 
Technology (NIST) and on those promulgated through the Office of 
Management and Budget (OMB). Additionally, all of CMS's Marketplace 
systems of records are subject to the Privacy Act of 1974 and the 
Computer Security Act of 1987.
    Security testing is conducted on an ongoing basis using industry 
best practices to appropriately safeguard consumers' personal 
information. The security of the system is also monitored by sensors 
and other tools to deter and prevent any unauthorized access. CMS 
conducts continuous monitoring by a 24/7, multi-layer information 
technology (IT) professional security team, added penetration testing 
and a change management process with ongoing testing and mitigation 
strategies implemented in real time. As part of the ongoing testing 
process, CMS implemented risk-management strategies such as 
implementation of additional or stronger controls where appropriate.

    Question 5. I have heard that many individuals are turning to paper 
applications due to frustrations with the Web site, but I also 
understand that these paper applications will be processed using the 
same computer systems causing problems at Healthcare.gov. Does CMS, or 
the appropriate contractor, have the ability to ensure that these 
applications are processed in a timely fashion?
    Answer 5. We are processing them as quickly as possible. The 
individuals who apply on paper will receive an eligibility notice with 
their determination in the mail and will receive instructions on how to 
make their plan selections.
                             senator hagan
    When the extent of the technical problems facing Healthcare.gov 
became fully apparent last month, President Obama announced his goal of 
ensuring that the ``vast majority of users'' could use the site 
properly by the end of November. Since that announcement, fixes have 
been identified and made on a daily basis, yet much work remains to be 
completed in order to meet the President's goal.
    Question 1. If the online Federal health insurance marketplace is 
not functioning well for the vast majority of users on December 1, what 
contingency plans--including direct enrollment through insurers, access 
to the online marketplace for online brokers, or delaying the 
individual mandate--does the Administration plan on implementing to 
ensure that nobody has a gap in their health insurance coverage because 
the Web site wasn't working?
    Answer 1. We are committed to ensuring that consumers have a range 
of affordable health insurance options.
    The law says that if the Secretary finds that an individual has 
``suffered a hardship with respect to the capability to obtain 
coverage,'' then he or she may be exempt from the requirement to have 
insurance. We are holding this hearing today because online applicants 
are unable to shop and buy a plan online. Yet, the online applicants 
aren't the only ones finding that Healthcare.gov is a barrier to 
selecting a plan. According to notes from your own staff, even people 
trying to enroll by phone or paper ``are all stuck in the same queue'' 
as the online applicants.

    Question 2. As a result, do you think it's a hardship to obtain 
coverage if the Web site isn't working since online, paper, and phone 
applicants ``are all stuck in the same queue,'' and, if so, do you 
believe the Secretary has the authority to exempt individuals from the 
penalty for not buying insurance?
    Answer 2. Beginning January 1, 2014, the individual shared 
responsibility provision requires each individual to maintain health 
coverage (known as minimum essential coverage), qualify for an 
exemption from the requirement to maintain minimum essential coverage, 
or make a shared responsibility payment when filing a Federal income 
tax return. To help make coverage affordable for millions of 
individuals and families, the Affordable Care Act provides, among other 
things, a premium tax credit to eligible individuals and families to 
help pay for the cost of health insurance coverage purchased through 
Health Insurance Marketplaces.
    The shared responsibility payment generally applies to people who 
have access to affordable coverage during a taxable year but who have 
more than a short gap in coverage. The Affordable Care Act gives HHS 
the authority to establish hardship exemptions from the payments for 
individuals who ``have suffered a hardship with respect to the 
capability to obtain coverage under a qualified health plan.'' Under 
this authority, HHS has enumerated several situations that constitute 
such a hardship.
    HHS recognizes that the duration of the initial open enrollment 
period implies that individuals have until the end of the initial open 
enrollment period to enroll in coverage through the new Marketplaces 
while avoiding liability for the shared responsibility payment. Yet, 
unless a hardship exemption is established, individuals who purchase 
insurance through the Marketplaces toward the end of the initial open 
enrollment period could be required to make a shared responsibility 
payment when filing their Federal income tax returns in 2015. HHS has 
determined that it would be unfair to require individuals in this 
situation to make a payment. Accordingly, HHS is exercising its 
authority to establish an additional hardship exemption in order to 
provide relief for individuals in this situation.
    Specifically, if an individual enrolls in a plan through the 
Marketplace prior to the close of the initial open enrollment period, 
when filing a Federal income tax return in 2015 the individual will be 
able to claim a hardship exemption from the shared responsibility 
payment for the months prior to the effective date of the individual's 
coverage, without the need to request an exemption from the 
Marketplace. Additional detail will be provided in 2014 on how to claim 
this exemption.

    The State of North Carolina has submitted a State Plan Amendment to 
provide an additional 50 hours of personal care services to Medicaid 
recipients who need additional supervision, care, and safeguards 
related help fight the effects of memory dysfunction. I understand that 
these additional hours are critical to assuring that many of our 
State's frailest seniors are able to access the level of care that they 
need in the setting of their choice. I also understand that the State 
Plan Amendment (SPA) includes a significant reduction in the 
reimbursement rate from $15.52 per hour to $13.12 per hour, which will 
make it difficult for many providers to continue to offer personal care 
services to those who need it most. For these reasons, I am concerned 
that the rate reduction may threaten the ability of seniors to access 
the additional hours of care authorized by the SPA.
    As you know, the Social Security Act requires that States,

          ``assure that payments are consistent with efficiency, 
        economy, and quality of care and are sufficient to enlist 
        enough providers so that care and services are available under 
        the plan at least to the extent that such care and services are 
        available to the general population in the geographic area.''

    Question 3. Has the Department provided any updated historical cost 
data showing that a sufficient number of providers will be able to 
provide these PCS services at a rate of $13.12?

    Question 4. Has the Department provided any justification for 
reducing the reimbursement rate by 20 percent from a rate that 
previously was set by the Department with provider cost data that is 
less than a year old?
    Answers 3 and 4. In reviewing the State Plan Amendment (SPA), CMS 
has asked North Carolina to provide data that would justify the 
reduction and substantiate that the rates contemplated under the SPA 
would be sufficient to ensure that this service would remain available 
to Medicaid beneficiaries in the State.

    Question 5. Has CMS ever approved a decrease in a PCS reimbursement 
rate as severe as what is proposed by the Department? If not, what is 
the biggest decrease CMS has approved?
    Answer 5. Given the volume of SPAs CMS considers each year, CMS is 
unable to undertake a comprehensive review of all similar SPAs 
considered and approved and thus is not able to provide a documented 
answer to this question.

    Question 6. What is the anticipated timeline for CMS action on the 
State plan amendment?
    Answer 6. CMS is reviewing the SPA in abidance with the review 
process as described in 42 CFR 430.16 and is unable to provide a 
timeline for completion of that review.
                           senator alexander
    Question 1a. Who created the timeline for deliverables and testing 
ahead of the October 1 launch date?
    Who made the decision to allot only 2 weeks for end-to-end testing? 
When was that decision made?
    Answer 1a. The FFM eligibility and enrollment system consists of 
numerous modules. Each module of this system was tested for 
functionality. Each interface with our business partners and other 
Federal agencies was also tested. Numerous test cases were used to 
exercise the end-to-end functionality of the system, and through those 
tests, CMS was able to identify problems and address them. We know now 
that we underestimated the volume of users who would attempt to log 
onto the system at the same time, and therefore our testing did not 
include performance testing at the volume we experienced at launch.
    We are encouraged that the Hub is working as intended, and that the 
framework for a better-functioning FFM eligibility and enrollment 
system is in place. By enlisting additional technical help, 
aggressively monitoring for errors, testing to prevent new issues from 
cropping up, and regularly deploying fixes to the site, we have already 
made significant improvements to the performance and functionality of 
the system.

    Question 1b. Were any contractors consulted and asked for their 
opinions prior to the creation of the timeline for deliverables? Which 
contractors provided input on the timeline?
    Answer 1b. CMS worked closely with our FFM contractors throughout 
the development of the systems. At a staff level, there was almost-
constant communication about deadlines and timelines. At a higher 
level, senior CMS officials met multiple times with the presidents and 
vice presidents of the main FFM contractors to discuss deliverable 
timelines and deadlines. CGI was the main contractor working on the 
FFM, while QSSI was the main contractor working on the Data Services 
Hub.

    Question 2. The Wall Street Journal reported on October 28th that 
employees of CMS who were charged with setting deadlines for 
contractors skipped at least some of the sessions at which they were 
supposed to meet with policymakers to hammer out specifications for the 
Web site.
    Are you aware that CMS employees skipped key meetings?
    Why was this allowed to occur?
    How did these absences affect contractor deadlines and/or 
contribute to the Web site's problems?
    Answer 2. As Administrator, I cannot speak to staff attendance at 
each individual meeting held in CMS. Overall, CMS staff has worked 
closely across the Agency and with contractors throughout the 
Affordable Care Act implementation process to ensure contractors had 
the information required to perform their work.

    Question 3a. Reports indicate that CMS, CCIIO, and White House 
officials were often giving conflicting orders to contractors, and that 
orders were not prioritized by importance.
    Who is now in charge of making sure the November 30 deadline is 
successfully achieved?
    Answer 3a. The general contractor, QSSI, is making sure there is 
coordinated approach to the punch list for November 30th, and that the 
Tech Surge experts are being used as efficiently and productively as 
possibly. Along with QSSI, CMS has established dedicated teams to fix 
and monitor both software and infrastructure issues.
    There are four core teams:

    1. Application and software--this team addresses glitches so the 
site is faster and smoother for users;
    2. Infrastructure and hardware--this team is focused on adding 
capacity and redundancy to minimize disruptions;
    3. Security--this team is continuously working to ensure rigorous 
protections of the system and its data; and
    4. Monitoring and troubleshooting--this team is focused on 
analyzing system performance and spotting problems early.

    Question 3b. Is Jeffrey Zients responsible if the November 30 
deadline is not met? If not, who is responsible?
    If Mr. Zients is now in charge, what is your role? What is 
Secretary Sebelius' role?
    Answer 3b. As the head of CMS, I am ultimately responsible for the 
management and operations of Healthcare.gov. QSSI is now CMS's general 
contractor for the system. Jeff Zients is serving as an Advisor to me 
and to Secretary Sebelius and is working in close cooperation with our 
CMS team to provide management advice and counsel to the project. 
Working alongside our team, and using his rich expertise and management 
acumen, Mr. Zients will provide short-term advice, assessments, and 
recommendations to our CMS team to improve the functionalities of 
Healthcare.gov.

    Question 4. The Washington Post on October 21, 2013, reported that 
CMS knew a few days before October 1, 2013, that the exchange crashed 
with just a few hundred simultaneous users.
    Who was told of these results?
    If the Web site could not function with even a fraction of the 
expected traffic, why was the decision made to continue with the 
rollout?
    Answers 4. CMS leadership issued an authorization to operate the 
FFM application on September 27, 2013. An independent security control 
assessor tested each piece of the FFM that went live on October 1 prior 
to that date with no open high-risk findings. We know now that we 
underestimated the volume of users who would attempt to log onto the 
system at the same time, and therefore our testing did not include 
performance testing at the volume we experienced at launch.

    Question 5. Multiple news outlets have reported that insurers are 
receiving corrupted information about enrollments in what is called 834 
reports--for example, spouses are submitted as children; three children 
become three spouses; insurers get an individual's application then 
cancellation then another application again in the same day--creating a 
huge amount of confusion.
    Did anyone at CMS know about the problems transmitting the 834 
reports to insurers before the launch?
    Were there functionality tests done prior to the launch to see what 
kind of information insurers were receiving on the back end?
    For the people who have already signed up for insurance through the 
exchange, what, if any, steps are you taking to make sure that insurers 
have the correct information for these people?
    Answer 5. We've made specific fixes, correcting information 
provided to insurers that allow applications to be processed and 
consumers to complete their payments. One of our highest priorities is 
ensuring that consumer information is transmitted correctly to issuers. 
We also installed more upgrades, focusing on direct enrollment and 
improving the consumer experience.

    Question 6a. Both you and Secretary Sebelius testified that the Web 
site will be working normally and without problems by November 30.
    When the Web site is working normally, how many people will be able 
to log on to the Web site at one time?
    Answer 6a. The site will be able to support 50,000 concurrent 
users, or more than 800,000 consumer visits per day.

    Question 6b. How long will it take consumers to see options 
specific to their situations and the actual prices they will pay for 
the different plans?
    Answer 6b. The HealthCare.gov tech team is working around the clock 
to address performance issues including the site's response time. 
Average response time on the site as of November 1, 2013, was less than 
1,000 milliseconds, an 80 percent improvement from the 8 seconds it 
took for pages to load in the site's first few weeks.

    Question 6c. How long will it take consumers to choose a plan and 
get approved?
    Answer 6c. The time it takes for a consumer to choose a plan and 
get approved will vary widely based on each consumer's unique 
circumstances. Some consumers may be able to make a selection from 
among their QHP options right away; others might need some time to 
consider their options before proceeding to the next step in the 
process.

    Question 6d. How long will it take insurance companies to know who 
has signed up for their plans?
    Answer 6d. We are working closely with issuers to transmit to them 
the information they need to timely process consumers' applications for 
QHPs.

    Question 7. How much money, in total, has already been spent on the 
Federal exchange--not just the Web site and its supporting technology? 
Please provide a breakdown of these costs.
    How much money has been obligated since October 1, 2013?
    How much money do you anticipate obligating through March 31, 2014?
    Answer 7. From enactment of the Affordable Care Act through 
September 30, 2013, HHS has obligated $490 million for Marketplace IT, 
and of that amount has spent $230 million. This includes the 
Healthcare.gov Web site, and all of the systems and services that 
support enrollment through the Marketplaces, such as the data services 
hub and the Federally Facilitated Marketplace IT systems. During that 
same time period, HHS has obligated approximately $175 million in other 
IT costs necessary to support the Marketplace IT systems, such as cloud 
computing and enterprise identity management. We are not able to 
provide a specific estimate of further spending at this time.

    Question 8. How much more will it cost to fix all the problems with 
the Web site, and from where will these funds come?
    How much more will be paid to QSSI as a result of its recent 
engagement to be the end-to-end integrating contractor?
    Answer 8. QSSI is receiving $10 million as a supplemental agreement 
to an existing cost-plus fee contract, which is subject to change based 
on a final agreement with QSSI.

    Question 9a-c. On October 18, 2013, HHS notified the Senate that 
$450 million would be transferred from the Department's Nonrecurring 
Expenses Fund to the exchanges.
    (a) What, specifically, will that $450 million be used for? Please 
provide an itemized list.
    (b) Will any of the $450 million be spent on repairing the problems 
with the exchange? How much, and for what services?
    (c) Will any of the $450 million be spent on marketing efforts to 
encourage enrollment?
    Answer 9a-c. The estimated $450 million will support both one-time 
Marketplace work and needed capital improvements to Medicare and 
Medicaid systems. This amount will support development for 
Healthcare.gov and related systems, including functionalities that will 
first come online for 2015 (reinsurance, risk adjustment, risk 
corridors), and new development to improve consumers' abilities to find 
and select quality plans that best meet their needs. Additionally, this 
funding will support updating aging IT infrastructure that houses 
Medicare data, making consumer information more secure.
    There is no final estimate for future costs related to the work 
that is being done to address capacity and other functionality issues 
with Healthcare.gov. Software fixes have been made under existing 
contracts, but CMS may need to add funding to these contracts to cover 
continued development of systems through the end of the performance 
period. Of note, CMS also awarded a contract for approximately $10 
million to QSSI to act as a general contractor over the HealthCare.gov 
system, but that amount was from the prior year's NEF notification.
    By statute, the NEF may only be used for IT acquisitions and other 
capital acquisitions. Marketing efforts generally would not be an 
authorized purpose for the NEF, and accordingly we have not planned to 
use any of the estimated $450 million for this type of outreach.

    Question 10. If any of the contractors who built or contributed to 
Healthcare.gov are at fault for delivering a product that did not meet 
specifications, do you intend to recover any payments to these 
contractors?
    What recourse is available under any of these contracts if the 
contractor is found to be negligent?
    Answer 10. The terms of the task orders for FFM contractors provide 
recourse for CMS to hold contractors accountable.
    CMS will continue to monitor contractors' performance on their task 
orders. The past performance assessment will be reported in the 
governmentwide Past Performance Information Retrieval System and will 
be available for other agencies to use in making sources selection 
decisions for future contract awards.

    Question 11. CNN reported that private user information on the Web 
site is vulnerable to hackers, using nothing more than a user's email 
address. Private researchers discovered another security flaw in the 
Spanish-language site that would have allowed a hacker to obtain 
account information as a user typed.
    Have these security problems been repaired?
    What other user information security problems have been reported to 
CMS?
    Why was Healthcare.gov allowed to go live with these serious 
security vulnerabilities?
    What steps are being taken to ensure all security holes have been 
identified and resolved?
    Answer 11. CMS protects the FFM through intensive and stringent 
security testing. CMS conducts continuous anti-virus and malware scans, 
as well as monitors data flow and protects against threats by denying 
access to known bad IPs and actors. Additionally, we conduct two 
separate types of penetration testing on a weekly basis. The most 
recent penetration testing showed no significant findings. Also on a 
weekly basis, CMS reviews the operation system, infrastructure, and the 
application software to be sure that these systems are compliant and do 
not have vulnerabilities. Vulnerabilities are often mitigated 
immediately onsite, and re-tested to ensure the strength of our 
systems' security. Vulnerabilities that cannot be mitigated immediately 
are tracked using the system's plan of action and milestones which 
provides a process for assigning responsibility, allocating resources, 
and identifying specific milestones and completion dates. For the FFM, 
we conduct SCAs on a quarterly basis, which is beyond FISMA 
requirements.

    Question 12a. You have repeatedly stated that people can use the 
call center or in-person assisters to enroll in coverage if they are 
unable to enroll through the Web site.
    For those people using the call center or an in-person assister, 
does that application still have to be submitted and verified through 
the Web site?
    Answer 12a. Applications submitted by individuals on their own, or 
on an individual's behalf by a call center representative or in-person 
assister, are all routed through the FFM's eligibility and enrollment 
IT systems.

    Question 12b. From the date a paper application is mailed, how long 
does it take until that applicant is actually enrolled in an insurance 
plan? What are the steps of this process, from beginning to end?
    Answer 12b. When an application is mailed, it is processed by 
Serco, a private-sector contractor tasked by CMS with handling the 
paper application process for the FFM. Serco converts the information 
on an applicant's paper application into an electronic application, 
which is then routed through the HealthCare.gov eligibility and 
enrollment IT system. The system generates the applicant's 
determination of eligibility to purchase a qualified health plan 
through the Marketplace, subsidy eligibility if the applicant has 
applied for insurance affordability programs, and plan options, which 
are then mailed to the applicant to consider. Once the applicant has 
considered his or her options and selected a plan, the applicant pays 
their premium with the issuer. Because consumers vary on the amount of 
time they need to consider their plan options, there is no set length 
of time for the application process to be completed.

    Question 12c. For the call center, how long does it take from the 
initial phone call to actual enrollment in an insurance plan?
    Answer 12c. Because consumers vary on the amount of time they need 
to consider their plan options, there is no set length of time for the 
application process to be completed.

    Question 12d. What is the average wait time to speak with someone 
at the call center?
    Answer 12d. Wait times for consumers accessing the call center are 
in the minutes.

    Question 12e. How many people have called in to the call center 
since October 1, 2013?
    Answer 12e. As of October 23, 2013, the FFM call center had 
received 121,887 calls.

    Question 12f. How many people have enrolled in insurance coverage 
by using the call center?
    Answer 12f. CMS is working to prepare the first monthly enrollment 
report for the Marketplace, which we expect to release in mid-November.

    Question 13a. NPR reported that the Administration needs at least 2 
million healthy people who do not use a lot of health care services to 
enroll in coverage to subsidize coverage for the sick. Republicans have 
been warning about an ``insurance death spiral'' for years; we are 
concerned that if not enough people, especially young and healthy 
people, sign up for plans in the individual market, rates will increase 
in 2015. This is a problem for the people who buy the plans, for the 
insurers in the market, and for the taxpayers who pay for subsidies.
    What is the minimum number of enrollments needed to keep rates in 
the individual market at or below current levels for 2015?
    Answer 13a. As the Marketplace open enrollment period continues 
until March 31, 2014, and issuers will not submit rates for the 2015 
plan year until after that time, it is premature to speculate on 2015 
rates.

    Question 13b. How many young, healthy persons are projected to 
enroll in health insurance through the Federal exchange?
    Answer 13b. One of the things we've learned since the start of Open 
Enrollment on October 1 is that the demand for affordable health 
coverage is very, very high. And, in fact, a new Commonwealth Fund 
survey confirms just how eager Americans are to purchase coverage 
through the new Health Insurance Marketplace. The survey found that 
Americans across our country are aware of the Marketplace and plan to 
shop for affordable coverage. Some of those who are the most eager to 
purchase affordable coverage happen to be young, healthy adults. In 
fact, according to this study, one in five visitors to the Marketplace 
during the first month was between ages 19 and 29. A majority (nearly 
60 percent) say they are committed to shopping some more for a plan in 
the Marketplace and checking out their eligibility for financial help.

    Question 13c. What will happen to insurance premiums if a lower-
than-expected number of these young, healthy people do not enroll in 
insurance through the exchanges?
    Answer 13c. Rates are developed by issuers, who in turn make 
projections about the health status of the Marketplace enrollees. It is 
premature to speculate about 2015 rates.

    Question 13d. Has CMS conducted any analysis with respect to 
questions a, b, or c above, either in-house or by a contractor? If so, 
will you share a copy of those analyses with this committee?
    Answer 13d. CMS has not conducted this type of analysis. We note 
that because enrollees are in a single risk pool whether they purchase 
coverage in or out of the Marketplace, looking only at the enrollment 
mix in the Marketplace may not result in an accurate analysis.

    Question 14. What specific efforts are you undertaking to encourage 
young people to sign up for health insurance? What evidence do you have 
to suggest that these efforts will be successful?
    Answer 14. The outreach campaign is using a range of communications 
tactics, with an emphasis on paid media and digital outreach, to make 
the uninsured aware of the Marketplace and the health insurance options 
available to them. This includes targeted outreach to young adults in 
sports programming and other popular shows on television. We understand 
that to reach a younger demographic we need to engage in new outreach, 
which is why we also have created a robust set of social media tools 
both on Facebook and Twitter.

    Question 15. What is your back-up plan if your marketing efforts do 
not work, and not enough young people enroll in coverage through the 
exchange?
    Answer 15. We are confident of our outreach plans, as well as the 
plans of our State partners. The Affordable Care Act creates many new 
low-cost options for younger Americans to buy quality, affordable 
health insurance.

    Question 16a. We have learned that CMS is working on guidance for 
States regarding the applicability of asset tests and scope of long-
term care services for individuals who apply for Medicaid based on 
their modified adjusted gross income (MAGI). Can you please clarify the 
following for the committee.
    Must a Medicaid applicant still meet aged, blind and disabled 
criteria in order to receive Medicaid long-term services and supports 
(LTSS), regardless of their income?
    Answer 16a. MAGI-based individuals to whom long-term services and 
supports (LTSS) are available must meet the eligibility requirements 
for the category in which they are enrolled. MAGI-based categories 
generally do not require that individuals meet aged, blind and disabled 
non-financial criteria, and asset tests may not be imposed against 
individuals being evaluated for eligibility in MAGI-based categories.

    Question 16b. Under the statute and CMS' implementing regulations, 
in a State that takes up the new Medicaid eligibility expansion option, 
is the State permitted to apply an asset test to individuals who 
qualify for Medicaid based on their income and request LTSS? Or is the 
State Medicaid agency required to offer Medicaid beneficiaries a choice 
between the standard Medicaid package--including LTSS--and the 
alternative benefit plan (ABP) which may not necessarily include LTSS? 
If the latter, does this create any inconsistencies in policy for 
individuals who qualify for Medicaid LTSS based on criteria other than 
income?
    Answer 16b. Medicaid applicants who are being evaluated for 
eligibility in the new adult category in States that have adopted the 
Medicaid expansion may not have an asset test imposed against them. 
Individuals who qualify for the new adult category must be offered an 
alternative benefit plan (ABP) that includes essential health benefits 
(EHB). In some States, the ABP will include LTSS. A State's choice to 
offer LTSS within its EHB-related ABP does not modify the prohibition 
against an asset test for new adult category enrollees or other MAGI-
based individuals to whom such a plan is offered.
    Additionally, new adult category enrollees who meet one of the 
exceptions listed in the version of 42 CFR 440.315 that is effective 
January 1, 2014 (``Benchmark and Benchmark-Equivalent Coverage--Exempt 
Individuals''), must be offered the choice between the ABP that 
includes EHB or an ABP that includes all State plan services. Where a 
new adult category enrollee meets an exception in the regulation (e.g., 
the individual meets the criteria for the ``medically frail'') and 
chooses the ABP that includes all State plan services, his or her need 
for LTSS does not modify the prohibition against an asset test for 
enrollees of the category.
    Medicaid applicants who are not eligible for MAGI-based categories 
and seek coverage for LTSS (or any other Medicaid-covered services) are 
subject to the eligibility requirements that apply to the other 
categories for which they may qualify.

    Question 17a. There have been some reports about the account 
transfer process that involves the Federally Facilitated Marketplace 
(FFM) sending Medicaid applications to the State Medicaid agency.
    Can you please provide an overview of the timeline for the 
necessary guidance and detailed business rules that CMS provided States 
so that they could build their systems to link into the account 
transfer process. Is there further guidance that States still need to 
go live with account transfers?
    Answer 17a. CMS has worked closely with States to provide 
information on the business processes necessary to both send and 
receive account transfers to and from the FFM. CMS is currently working 
with States to determine their readiness to receive and send such files 
and will begin to transmit the accounts to the States at their 
readiness.

    Question 17b. What is your understanding of the scope and type of 
review that State Medicaid agencies will need to undertake to verify 
Medicaid eligibility for individuals who submitted an application and 
were either assessed or determined eligible for Medicaid by the FFM?
    Answer 17b. In the case of a State that has chosen to have the FFM 
determine eligibility for Medicaid and CHIP, the State will need to 
complete the enrollment process specific to their State but will not 
take any additional eligibility action as they have agreed to enroll 
individuals based on the determination made by the FFM. In States that 
have chosen to have the FFM make an assessment of Medicaid and CHIP 
eligibility, those States will finalize the eligibility determination 
process prior to enrolling an individual in the correct program.

    Question 17c. Have States indicated how much time they will need to 
process the backlog of eligibility determinations and enrollments 
submitted through the FFM by January 1, 2014? How will CMS ensure that 
States have sufficient time to process the Medicaid applications that 
are sent from the FFM through the account transfer process?
    Answer 17c. As we work with States to determine readiness for the 
transfer of accounts, we have sent States ``flat files'' which contain 
information that will help them prioritize and prepare for the full 
transfer of accounts. A State's ability to work through the accounts 
transferred from the FFM will depend on a number of factors including, 
but not limited to, whether the State is an assessment or determination 
State, when the State is prepared to accept the account transfer and 
the number of individuals that must be processed through the system.

    Question 17d. Has CMS developed a program integrity plan that will 
identify the source of and resolve inconsistencies or gaps that may 
arise during the initial period of these hand-offs and determinations? 
How will this information be reported?
    Answer 17d. The FFM is making accurate eligibility determinations. 
However, as with any system, it is important to review those 
determinations and make any adjustments needed to ensure the 
reliability of the determination system. CMS is reviewing the 
determinations made by the FFM and has a system in place to flag and 
review determinations that may contain an error. In addition, to the 
extent that a State discovers an error in a determination, CMS has set 
up a system by which the State can communicate that finding to the FFM 
in order to both resolve the individual error and provide a data point 
for continual improvement of eligibility determinations.

    Question 18. In States with an FFM model, can you describe the 
communications processes and tools that are in place to ensure the FFM 
is communicating accurate information to consumers about their State 
Medicaid program and its policies?
    Answer 18. Consumers who request financial assistance for coverage 
through the Marketplace will be determined or assessed potentially 
eligible for Medicaid and CHIP coverage in their State. The FFM 
processes Medicaid and CHIP eligibility using the 2014 MAGI-based 
eligibility rules provided by the State agency and validated by CMS.

    Question 19. Does CMS have processes in place to allow States to 
communicate with officials at CMS responsible for the FFM and vice 
versa? And if so, please describe how these are working and whether you 
are planning to modify and improve these critical lines of 
communication.
    Answer 19. CMS has State officers, who communicate frequently with 
States regarding Marketplace-related issues. In addition, CMS 
coordinates internally to make sure Marketplace issues are coordinated 
across CMS components. States can also communicate with CMS through 
learning collaborative calls and technical assistance activities.
                            senator roberts
    Question 1. The Federal Information Security Management Act (FISMA) 
requires each agency to appoint a chief security officer to sign off on 
the security of government web systems, to ensure Americans private 
financial and identifying information is protected. Secretary Sebelius 
revealed last week that the exchange is operating on a temporary 
authority to operate. What does that mean?
    Who decides whether a temporary authority to operate meets FISMA 
standards?
    A 2012 memo from Jeffrey Zients, while head of OMB, states clearly 
that OMB does not recognize interim authority to operate for security 
authorizations. Why was the exchange allowed to go live without the 
apparent clearance required by OMB?
    Can you provide this committee with the documentation to show OMB 
cleared the launch with temporary authority?
    Answer 1. CMS protects the FFM through intensive and stringent 
security testing. CMS conducts continuous anti-virus and malware scans, 
as well as monitors data flow and protects against threats by denying 
access to known bad IPs and actors. Additionally, we conduct two 
separate types of penetration testing on a weekly basis. The most 
recent penetration testing showed no significant findings. Also on a 
weekly basis, CMS reviews the operation system, infrastructure, and the 
application software to be sure that these systems are compliant and do 
not have vulnerabilities. Vulnerabilities are often mitigated 
immediately onsite, and re-tested to ensure the strength of our 
systems' security. Vulnerabilities that cannot be mitigated immediately 
are tracked using the system's plan of action and milestones which 
provides a process for assigning responsibility, allocating resources, 
and identifying specific milestones and completion dates. For the FFM, 
we conduct SCAs on a quarterly basis, which is beyond FISMA 
requirements.

    Question 2a-b. As part of the FISMA security assessment, an 
independent testing organization must perform a risk analysis of the 
security of the system. Who performed those tests and for what parts of 
the exchange?
    (a) Did an independent testing organization ever test the whole 
integrated system end-to-end?
    (b) Did the independent testing of the exchange identify any 
security risks to the system?
    Answer 2a-b. An independent security control assessor tested each 
piece of the FFM that went live on October 1 prior to that date with no 
open high findings. Protecting the privacy and security of consumers' 
personal information is a top priority for us. The components of the 
FFM that are operational have been determined to be compliant with 
FISMA, based on standards by NIST and on those promulgated through OMB.
    Security testing is conducted on an ongoing basis using industry 
best practices to appropriately safeguard consumers' personal 
information. The security of the system is also monitored by sensors 
and other tools to deter and prevent any unauthorized access. CMS 
conducts continuous monitoring by a 24/7, multi-layer information 
technology (IT) professional security team, added penetration testing 
and a change management process with ongoing testing and mitigation 
strategies implemented in real time. As part of the ongoing testing 
process, CMS implemented risk management strategies such as 
implementation of additional or stronger controls where appropriate.

    Question 2c. Without revealing publicly at this hearing, will you 
submit confidentially to the committee the results of the independent 
testing?
    Answer 2c. We will work with the committee to address your concerns 
within the security guidelines.

    Question 3a. A September 27 memo addressed to you states that, 
``due to system readiness issues, [the required security assessment] 
was only partly completed.'' The memo notes that untested parts of the 
system pose a high security risk, and the contractor was not able to 
test all parts of the system in one complete version of the system.
    The memo recommends a mitigation plan to address these risks, and 
recommends a 6-month authority to operate. That recommendation was 
signed by you. Are you the official at CMS responsible for making the 
Security Authorization Decision?
    Does anyone else review or approve that decision before it is 
final?
    Answer 3a. I am the appropriate senior executive to serve as the 
authorizing official, as I am the CMS Administrator and am in the best 
position to assess the acceptable risk level for operating the system 
given the administrator's budget and mission authorities. This approach 
is consistent with NIST guidelines.

    Question 3b. What training do you have to qualify you to make 
decisions about the security of information systems?
    Answer 3b. The authorizing official is a senior official or 
executive with the authority to formally assume responsibility for 
operating an information system at an acceptable level of risk to 
organizational operations and assets, individuals, other organizations, 
and the Nation. Authorizing officials typically have budgetary 
oversight for an information system or are responsible for the mission 
and/or business operations supported by the system.

    Question 4a. Healthcare.gov's privacy policy states that ``no 
personally identifiable information is collected by these tools.'' And 
yet, in apparent violation of its own privacy policy, it was reported 
last week that Healthcare.gov sends user information to third party 
advertisers. This is the same activity Facebook and My Space were fined 
by the FTC for. Was CMS aware that user information is sent to third 
party advertisers? Is this consistent with the privacy policy?
    Is this an issue the contractors are working to resolve?
    Answer 4a. This incident was remedied before an unauthorized person 
saw any PII. In this case, the username and password resets are 
included in an encrypted URL sent to Google Analytics. However, this 
information was not visible to any outside user and Google Analytics 
was unable to see the information. CMS stopped sending the information 
to Google Analytics shortly after being notified of the issue.

    Question 4b. Was the Web site tested before going live to ensure 
this was not possible?
    Answer 4b. CMS determined that the data sent to the site is 
encrypted and there was no indication that personal data would be sent 
to this service.

    Question 5. As a followup if ``no personally identifiable 
information is collected by these tools'' as was stated several times 
publicly, how and using what information, will CMS and HHS followup 
with those individuals, which has also been a public commitment, who 
have been unable to sign up in the first few months? As in what contact 
information or ``personally identifiable information'' has been 
retained to allow CMS and HHS to get in touch with the individuals who 
had problems?
    Answer 5. The Hub is not a database; it does not retain or store 
information. The FFM and State-based Marketplace eligibility, 
redetermination, and appeals systems do store certain eligibility and 
enrollment records in order to fulfill specific functions, including 
helping a consumer with an application or eligibility problem.

    Question 6. Privacy advocates have expressed concerns about an 
issue called ``clickjacking'' on Healthcare.gov, where users may click 
what appears to be a legitimate link but instead a malicious script 
runs. According to web security experts, Healthcare.gov does not deploy 
any defenses against this activity at the time it was launched. Has the 
Web site improved to prevent this sort of malicious hijacking of the 
Web site?
    Why was the site allowed to go live without this sort of basic 
privacy protection?
    Answer 6. Clickjacking is a well-known attack vector that CMS tests 
for and guards against. In order to defend against clickjacking, CMS 
designs Web sites to reduce the number of links that would take an 
individual off of the original source, or refer it to another site. 
Additionally, CMS uses extensible markup language options which protect 
against this, and runs tests against the site to independently verify 
the integrity of the system.

    Question 7a. We have seen the memo signed by you from September 27 
giving the ``go-ahead'' to launch the exchanges despite known problems. 
I am told that while initial testing had happened, it was limited to a 
few large plans operating within the Federal exchange. That this 
testing showed significant problems however CMS decided to move forward 
with further testing 2 weeks before the scheduled launch. We also know 
that this further testing shows that the site crashed with just a few 
hundred users logging in. My question to you then, is with all these 
known problems, why would you sign a memo authorizing authority to 
operate?
    Who did you notify that things were going to move forward despite 
known problems?
    Answer 7a. CMS leadership issued an authorization to operate the 
FFM application on September 27, 2013. An independent security control 
assessor tested each piece of the FFM that went live on October 1 prior 
to that date with no open high-risk findings.
    Protecting the privacy and security of consumers' personal 
information is a top priority for us. When consumers fill out their 
online Marketplace applications, they can trust that the information 
they are providing is protected by a comprehensive set of security 
standards and practices. The components of the FFM that are operational 
have been determined to be compliant with FISMA, based on standards by 
NIST and on those promulgated through OMB.

    Question 7b. Were you instructed by anyone to move forward with the 
launch even if unresolved issues could not be mitigated?
    Answer 7b. We know now that we underestimated the volume of users 
who would attempt to log onto the system at the same time, and 
therefore our testing did not include performance testing at the volume 
we experienced at launch. We are committed to fixing these problems so 
that the experience using the federally facilitated eligibility and 
enrollment system improves for the vast majority of consumers by the 
end of November 2013.

    Question 7c. Why was there not a greater effort to notify those in 
charge of the program, HHS, and the White House of identified problems?
    Answer 7c. The FFM eligibility and enrollment system consists of 
numerous modules. Each module of this system was tested for 
functionality. Each interface with our business partners and other 
Federal agencies was also tested. Numerous test cases were used to 
exercise the end-to-end functionality of the system, and through those 
tests, CMS was able to identify problems and address them. We know now 
that we underestimated the volume of users who would attempt to log 
onto the system at the same time, and therefore our testing did not 
include performance testing at the volume we experienced at launch.
    We are encouraged that the Hub is working as intended, and that the 
framework for a better functioning FFM eligibility and enrollment 
system is in place. By enlisting additional technical help, 
aggressively monitoring for errors, testing to prevent new issues from 
cropping up, and regularly deploying fixes to the site, we have already 
made significant improvements to the performance and functionality of 
the system.

    Question 8. My understanding is that the SHOP Exchanges were 
delayed until November 1, however last week I believe they were delayed 
again until sometime in November. Do you have a specific date for them 
to go live?
    How much testing have you allowed for in the timeline to go live?
    Was any testing done prior to November 1?
    Answer 8. We are exploring all options to ensure that small 
businesses have access to coverage in the federally facilitated SHOP 
Marketplace. Federally facilitated SHOP online functionality will be 
appropriately tested before being launched.

    Question 9. Very early this year, and even last year, members of 
this committee and their staff began asking for timelines related to 
the implementation of the exchanges. To my knowledge the timeline, 
plans, outlines were never provided. From a transparency perspective, 
from an oversight perspective, most especially knowing what we know 
now, why has that information not been provided?
    Additionally CMS was asked whether time had been built in for 
testing of the exchanges. Specific questions were asked about whether 
there would be enough time allowed for plans to test information 
exchange capabilities. Assurances were given that time was built in for 
these activities, but we now know they were not. What happened?
    Answer 9. CMS has been responsive to congressional requests for 
timelines related to the implementation of the Marketplaces, as well as 
other details regarding Affordable Care Act implementation. HHS and CMS 
officials have testified before congressional committees eight times 
this year, including a hearing held by this committee in April, and 
have participated in numerous staff-level briefings. CMS published 
online the Marketplace timeline with an accompanying narrative 
description.\1\
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    \1\ Available at http://www.cms.gov/CCIIO/Resources/Fact-Sheets-
and-FAQs/Downloads/marketplace-timeline.pdf.
---------------------------------------------------------------------------
    As you can see from this timeline, our goal was to complete during 
the month of September the IT development and integration testing. We 
know now that we underestimated the volume of users who would attempt 
to log onto the system at the same time, and therefore our testing did 
not include performance testing at the volume we experienced at launch.

    Question 10. People were promised that they could sign up on 
October 1, they were told it would be as easy as shopping on Orbitz, 
we've repeatedly been told that their data is secure, despite all 
evidence to the contrary. Why can you not be honest with the American 
people on exactly how bad this is?
    Answer 10. We know that consumers are having difficulty enrolling 
via the Marketplace Web site. To the millions of Americans who have 
attempted to use HealthCare.gov to shop and enroll in health coverage: 
I want to apologize that the Web site has not worked as well as it 
should. Consumers have four ways to access the Marketplace--online 
using HealthCare.gov, by phone, using our dedicated call center where 
customer services representatives are available 24 hours a day, 7 days 
a week, to work with them to complete the application process, mailing 
in a paper application, or seeking in-person help in their communities 
from a Navigator or other assistance personnel trained and certified to 
help them understand their health insurance options.
    The privacy and security of consumers' personal information are a 
top priority for the Department. When consumers fill out their online 
Marketplace applications, they can trust that the information they are 
providing is protected by a comprehensive set of security standards and 
practices. Security testing happens on an ongoing basis using industry 
best practices to appropriately safeguard consumers' personal 
information. The components of the Federally Facilitated Marketplace 
(FFM) that are operational have been determined to be compliant with 
the Federal Information Security Management Act (FISMA), based on 
standards by the National Institutes of Standards and Technology (NIST) 
and on those promulgated through the Office of Management and Budget 
(OMB). Additionally, all of CMS's Marketplace systems of records are 
subject to the Privacy Act of 1974 and the Computer Security Act of 
1987.

    Question 11. Kansans were promised if they like their health plan 
they can keep it. I'd like to read a message I received from Paige in 
Augusta, KS:

          ``I am one of the many who received a notice from my health 
        care company that I was no longer insured as of the first of 
        the year. A company I had insurance with for the last 30 years. 
        I am hoping to find something by the first of the year. At this 
        point it looks doubtful. I need a suggestion from you as to 
        what I need to do. Healthcare operated by the Federal 
        Government won't work. We all know it. I do need the insurance 
        in case of a catastrophic loss, plus the government has TOLD me 
        I have to have insurance, which I planned on having anyway. 
        Where do we go from here?''

     What shall I tell Paige who obviously wants to keep her health 
plan, but can't?

    Question 12. Stephen from Topeka can't keep his coverage either 
because of the new Federal requirements. However, President Obama 
promised that the typical family would save up to $2,500 on their 
insurance. Stephen is particularly concerned because ``The plan that is 
being offered as a comparable coverage has an increase of premiums by 
191 percent.'' He thinks he may be eligible for a subsidy but can't get 
on the Web site. Subsidy or not, how can plan rates that increase by 
almost double be a return on the commitment for saving him or his 
family money?

    Question 13. I also want to share Nancy's story from Kensington. 
Nancy called because she needed to talk to someone about the Affordable 
Care Act. Nancy and her husband are farmers who purchase coverage for 
themselves as employer coverage. They shared that they worked a really 
long time to find a great plan that works for them. However, Nancy just 
found out that the coverage that they've had for the last few years is 
no longer being offered because it doesn't meet the minimum 
requirements for the ACA. She's additionally frustrated and finally 
felt the need to call my office because she supported the President, 
she supported the Secretary, in fact has even spoken to her on 
occasion, and she supported Obamacare. She did this because her and her 
husband had such a hard time finding affordable coverage that worked 
for them. And she believed the President when he told her she could 
keep her plan. But she finally felt the need to call me because the 
President and Secretary Sebelius keep saying on TV that the plans that 
are dropping or pulling coverage are substandard, and she wanted me to 
know that this is just NOT TRUE! The plan was a good one. Her plan was 
NOT substandard. She liked her plan. She searched a long time for her 
plan. And she wanted to keep her plan. But now she can't. She feels 
like she was sold a bill of goods and that this Administration just 
lied to her and she really hopes that I can do something to bring light 
to these lies. Ms. Tavenner, what do I tell Nancy?
    Answer 11-13. We are committed to ensuring that consumers have a 
range of affordable health insurance options. The premiums being 
charged by insurers provide clear evidence that the Marketplace is 
encouraging plans to compete for consumers, resulting in more 
affordable rates. The weighted average premium for the second-lowest-
cost silver plan, looking across 47 States and DC, is 16 percent below 
the premium level implied by earlier CBO estimates.\2\ Outside analysts 
have reached similar conclusions. A recent Kaiser Family Foundation 
report found that, ``while premiums will vary significantly across the 
country, they are generally lower than expected,'' and that 15 of the 
18 States examined would have premiums below the projected national 
average of $320 per month for a 40-year-old in a silver plan 
(calculations are based on CBO's premium projections).\3\
---------------------------------------------------------------------------
    \2\ http://aspe.hhs.gov/health/reports/2013/MarketplacePremiums/
ib_marketplace_premi-
ums.cfm#_ftnref18.
    \3\ http://kaiserfamilyfoundation.files.wordpress.com/2013/09/
early-look-at-premiums-and-participation-in-marketplaces.pdf.
---------------------------------------------------------------------------
    In addition to the more affordable rates resulting from competition 
among insurers, insurance affordability programs, including premium tax 
credits and cost-sharing reductions, will help many eligible 
individuals and families, significantly reducing the monthly premiums 
and cost-sharing paid by consumers. Premium tax credits may be paid in 
advance and applied to the purchase of a QHP through the Marketplace, 
enabling consumers to reduce the upfront cost of purchasing insurance. 
In addition, cost-sharing reductions will lower out-of-pocket payments 
for deductibles, coinsurance, and copayments for eligible individuals 
and families. CBO has projected that about 8 in 10 Americans who obtain 
coverage through the Marketplace will qualify for assistance to make 
their insurance more affordable, an estimated 20 million Americans by 
2017. A family's eligibility for these affordability programs depends 
largely on its family-size, household income, and access to other types 
of health coverage.

    Question 14. I have received several reports of citizens trying to 
find out which plans on the exchange include abortion and finding it 
nearly impossible to get this basic information. Secretary Sebelius 
indicated in testimony before the House the week before this hearing 
that she, didn't know this information, but would ``check and make sure 
that it is clearly identifiable.'' Can you tell us how a consumer can 
get information about whether a plan includes abortion before 
purchasing a plan?

    Question 15. In an article the Friday before this hearing, NPR 
reported ``that whether or not abortion is a plan benefit remains 
largely a mystery.'' The average person seeking coverage on a 
marketplace should not have to spend hours trying to obtain basic 
information about whether or not they will have to pay a surcharge for 
a procedure that dismembers and chemically poisons innocent unborn 
children. In addition to providing this committee with the same 
information you promised the House prior to this week--a list of plans 
that include abortion coverage and plans that do not--what steps are 
you taking to make sure consumers can easily access information about 
abortion coverage and the abortion surcharge?

    Question 16. As you know, Section 1303 of the ACA sets up a system 
in which those who enroll in plans that include abortion will pay an 
abortion surcharge. Since many Americans will not want to pay such a 
surcharge, it is important that consumers are able to ascertain which 
plans will charge the abortion surcharge so they can make an informed 
choice. I have received reports that consumers are not able to obtain 
this information on the Web site. And a NPR article from Friday has 
reported the same in their article entitled: ``Which plans cover 
abortion? No Answers on Healthcare.gov.'' What steps are you taking to 
make sure consumers can access information about abortion coverage?

    Question 17. During an online ``chat,'' a Healthcare.gov 
representative told one consumer that ``You may have to wait until you 
pick a plan to see if they cover abortions.'' Do you think consumers 
should be able to find out whether a plan covers abortion before they 
purchase the plan? If so, what are you doing to make sure this 
information is readily available for every plan on the exchanges?

    Question 18. Rep. Chris Smith (R-NJ) has introduced a bill called 
the ``Abortion Insurance Full Disclosure Act'' (H.R. 3279). The bill 
would require the exchange to prominently display whether each plan 
includes abortion coverage. It also says if a plan includes abortion 
(and thus charges an abortion surcharge), the surcharge should be 
displayed anywhere the price is displayed. Would you support this 
legislation?

    Question 19. Section 1303(b)(3)(A) of the ACA says,

          ``A qualified health plan that provides for coverage of the 
        services described in paragraph (1)(B)(i) shall provide notice 
        to enrollees, only as part of the summary of benefits and 
        coverage explanation, at the time of enrollment, of such 
        coverage.''

    I have seen copies of the summary of benefits documents posted on 
the DC exchange. None of these documents say anything about abortion 
coverage and at least some of these plans are reported in the press to 
be plans that will include abortion coverage. I understand the same 
problem can be found on other exchanges including the Federal 
Facilitated Marketplace. Can you explain why information about abortion 
coverage does not appear in the Summary of Benefits document posted on 
the exchanges?
    Answer 14-19. CMS is committed to ensuring that HealthCare.gov 
provides the key information consumers need to make an informed 
selection from among the Qualified Health Plans (QHPs) available to 
them. The Affordable Care Act requires that each plan in the 
Marketplace include a Summary of Benefits and Coverage and a link to 
the plan brochure, where consumers can learn more about which services 
are covered. The Affordable Care Act requires plans in the Marketplace 
to cover the 10 essential health benefits. It is up to the issuer to 
determine which additional services they cover, and consumers may 
always contact issuers with any questions.

    Question 20. The Affordable Care Act establishes caps on out-of-
pocket spending for individuals enrolled in qualified health plans 
offered through the health insurance marketplaces. However, these caps 
only apply to in-network services. If an individual requires treatment 
from an out-of-network provider, there is no cap on the subsequent cost 
sharing obligation. This is a significant concern for patients, 
especially those with rare diseases who may require treatment from a 
number of different medical specialists. There is a crucial need for 
regulatory oversight to ensure that plans are providing patients with 
comprehensive provider networks that include the types of specialists 
required to manage and treat complex diseases. Additionally, when 
individuals are searching for a health plan on the marketplace, they 
should have the ability to easily search a plan's provider network to 
confirm whether their physicians are included in the network.
    Given the significant difference in potential financial liability 
for in-network versus out-of-network services, the need for provider 
network transparency is of paramount importance. Can you please explain 
the actions you are taking to ensure that enrollees have the necessary 
search tools to easily review a plan's network offerings and identify 
the providers included in that network?
    Answer 20. HealthCare.gov includes a function that allows consumers 
to preview plans without creating an account. Consumers can simply 
click and see the qualified health plan's summary of benefits and 
coverage, the online issuer provider network, and a list of covered 
prescription drugs. CMS will continue to post additional consumer 
materials on appeals and other consumer rights created by the 
Affordable Care Act in the future.
    We encourage consumers to be informed shoppers, and to shop for the 
coverage that best fits their needs. In addition to shopping online 
through HealthCare.gov, consumers can reach out to Marketplace-approved 
assisters, including agents, brokers and Navigators, to assist with 
network questions.

    [Whereupon, at 12:31 p.m., the hearing was adjourned.]

                                   [all]
```