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26–313 PDF 2017

FRAUD, WASTE, AND ABUSE UNDER THE 

AFFORDABLE CARE ACT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH CARE, 

BENEFITS AND ADMINISTRATIVE RULES 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

JANUARY 31, 2017 

Serial No. 115–9 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Jason Chaffetz, Utah, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Trey Gowdy, South Carolina 

Blake Farenthold, Texas 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Stacey E. Plaskett, Virgin Islands 

Val Butler Demings, Florida 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Vacant 

Vacant 

Vacant 

Vacant 

JONATHAN SKLADANY, Staff Director 

WILLIAM MCKENNA, General Counsel 

SEAN HAYES, Health Care, Benefits and Administrative Rules Subcommittee Staff Director 

NATALIE TURNER, Counsel 

SHARON CASEY, Deputy Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON HEALTH CARE, BENEFITS AND ADMINISTRATIVE RULES

Jim Jordan, Ohio, Chairman 

Mark Walker, North Carolina, Vice Chair 

Darrell Issa, California 

Mark Sanford, South Carolina 

Scott DesJarlais, Tennessee 

Mark Meadows, North Carolina 

Glenn Grothman, Wisconsin 

Paul Mitchell, Michigan 

Raja Krishnamoorthi, Illinois Ranking 

Member 

Jim Cooper, Tennessee 

Vacant 

Vacant 

Vacant 

Vacant 


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C O N T E N T S 

Page 

Hearing held on January 31, 2017 ......................................................................... 1 

WITNESSES 

Ms. Vicki Robinson, Senior Counselor for Policy, Office of Inspector General, 

U.S. Department of Health and Human Services 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 7 

Mr. John Dicken, Director, Health Care, U.S. Government Accountability 

Office 

Oral Statement ................................................................................................. 14 

Written Statement ............................................................................................ 16 

Mr. Jonathan W. Siegel, Citizen, Rochester, New York 

Oral Statement ................................................................................................. 29 

Written Statement ............................................................................................ 31 


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FRAUD, WASTE, AND ABUSE UNDER THE 

AFFORDABLE CARE ACT 

Tuesday, January 31, 2017 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HEALTH CARE, BENEFITS AND

ADMINISTRATIVE RULES

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, D.C. 

The subcommittee met, pursuant to call, at 2:00 p.m., in Room 

2247, Rayburn House Office Building, Hon. Jim Jordan [chairman 

of the subcommittee] presiding. 

Present: Representatives Jordan, Walker, Issa, Meadows, 

Grothman, Mitchell, Krishnamoorthi, Lawrence, and Norton. 

Also Present: Representative Cummings. 

Mr. JORDAN. The Subcommittee on Health Care, Benefits, and 

Administrative Rules will come to order. 

Without objection, the chair is authorized to declare a recess at 

any time. 

It is my understanding that the Democrat Caucus has not designated who all the members are. We know the ranking member, 

and we’re pleased to have Mr. K here and Ms. Lawrence as well, 

but I understand we don’t know for sure who all is on this committee. So we need to do a unanimous consent that all members 

of the Committee on Oversight and Government Reform be allowed 

to fully participate in today’s subcommittee hearing. 

Without objection, so ordered. 

Welcome to the new Congress. 

And, Mr. Krishnamoorthi—— 

Mr. KRISHNAMOORTHI. Yes, sir. 

Mr. JORDAN. —we appreciate you being here and being the ranking member. And if you’d like to—we have Mr. Mitchell, and I 

know a number of other new members to the Oversight Committee 

will be joining us from potentially the Democrat side as well. So 

we want to welcome Mr. Mitchell to the committee this afternoon. 

Let’s start with opening statements and then get right to our 

witnesses. And we appreciate our witnesses being here today, talking about this important subject. 

Health insurance premiums are soaring. President Obama and 

the administration promised multiple times that the Affordable 

Care Act would lower health insurance premiums by $2,500. American families are still waiting to see those reductions. Instead, the 

health insurance premiums have skyrocketed under the Affordable 

Care Act. There has been about a 25-percent average increase in 

premiums just this year. Some Americans have experienced even 


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higher premium increases and had to drop coverage because it became just too darn expensive. 

Under the Affordable Care Act, there are not just rising premiums; many Americans have also seen massive increases in the 

cost of their deductible. Healthcare costs are one of the top concerns for families, and even people with insurance oftentimes can’t 

afford to use it, especially individuals enrolled in high-deductible 

health plans under the ACA. 

There were promises from the administration about increased 

competition. In fact, though, in most parts of the country, there are 

only one or two insurers participating in the health insurance exchange in 2017. Insurers are seeing unprecedented losses on the 

exchanges. Losses on the exchanges are reaching into the billions 

of dollars for the health insurance industry. As a result, several 

large insurers are pulling out of the exchanges. 

According to the Heritage Foundation, before the ACA was implemented, there were 12 insurers participating in the individual 

market in North Carolina. Today, only two insurers are participating in the exchanges in that State. In many areas of North 

Carolina, there is only one insurer selling coverage on the exchange. 

And, finally, of course, we cannot forget the Affordable Care Act 

was sold on one of the biggest political misleading statements of all 

time: If you like your plan, you can keep it; if you like your doctor, 

you can keep your doctor. Even the President had to apologize for 

that one. 

As we examine healthcare reform proposals, it is important to 

keep these realities in mind. While millions of individuals receive 

health coverage under the Affordable Care Act, many more are 

being harmed by the skyrocketing healthcare costs. 

Today, I want to hear from the Health and Human Services Inspector General and the GAO on implementation of the Affordable 

Care Act and their recent and ongoing work in this area. Both of 

these agencies have done excellent work reviewing the Affordable 

Care Act programs and activities, and I want to hear their recommendations on how we can use lessons learned from the implementation of some of these programs to improve future programs. 

The work of HHS OIG is critical to ensuring the integrity of 

Heath and Human Services programs, and I am constantly impressed with the great work that comes out of their office. I look 

forward to hearing about the OIG’s work relating to the Affordable 

Care Act. 

Thank you, Mrs. Robinson, for testifying on behalf of OIG’s office 

today. 

The General Accountability Office has also done great work examining the early impact of the Affordable Care Act on private 

health insurance markets, and I look forward to learning more 

about their findings. 

So thank you, Mr. Dicken, for testifying on behalf of GAO today. 

And we are also pleased to have Mr. Jonathan Siegel here with 

us today to hear about his experiences under the ACA. 

Thank you again for your willingness to be here and to testify. 


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I look forward to the discussion today. Congress needs to find a 

way to help make sure Americans have access to affordable health 

insurance and can choose among a variety of plans. 

With that, I would now yield to our ranking member for his 

opening statement, and then we’ll get right to our witnesses and 

our hearing. 

The gentleman from Illinois is recognized. 

Mr. KRISHNAMOORTHI. Thank you, Mr. Chairman. 

And thank you to our witnesses for joining us today. 

Millions of people now have high-quality, affordable health care 

as a result of the Affordable Care Act. One of my constituents 

wrote this to me, and I quote: ‘‘We are so grateful for the changes 

brought about the ACA in our situation. They have truly been lifechanging for us. For the first time, our family has access to dental 

coverage. This means we actually go to the dentist. Before, this was 

a rare thing and only when in pain. For the first time, our preventative care is covered. This means my children are up to date on 

their vaccines and physicals because it is not costing me hundreds 

of dollars out of pocket. For the first time, we have hope that we 

may be able to dig out of the mountain of medical debt we have 

accumulated through a $10,000-a-year deductible plan that we 

were locked into because of preexisting conditions because we now 

can get reasonable coverage through the marketplace.’’ 

Mr. Chairman, there are millions of people with similar stories 

all across the country, and all of our offices are being flooded by 

correspondence relating the same. 

In addition, as a former small-businessman, I know that the ACA 

has allowed entrepreneurs to flourish because they don’t have to 

worry that starting a new business means they can’t afford health 

care. When people have high-quality, affordable health care, they 

can afford to follow their dreams, their talents, become entrepreneurs like myself, start businesses, create jobs, and grow the 

economy. When they are fearful about losing their health insurance 

or are buried under medical debt, none of those things are possible. 

The Affordable Care Act empowered millions of people. One of 

them is a witness today, Mr. Jonathan Siegel. 

And thank you, sir, for joining us. 

He will testify that the guarantee of affordable coverage under 

the ACA enabled him to start a new business. 

But there is a lot of fear in the country that those gains will be 

taken away by House Republicans if and when they repeal the Affordable Care Act. In fact, today, House Republicans have not offered an alternative to replace the ACA that offers the same coverage at a similar or lower cost. Let me repeat that: Today, House 

Republicans have not offered an alternative to replace the ACA 

that offers the same coverage at a similar or lower cost. 

The consequences will be seriously harmful to Americans. First, 

a recent CBO and Joint Committee on Taxation analysis estimates 

that 18 million Americans would lose their health insurance in just 

the first year following a repeal without replacement. Second, the 

CBO and Joint Committee on Taxation estimates that premiums 

would increase by 20 to 25 percent more than currently projected 

in the first plan year following repeal. 


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These consequences are not limited to those who bought their 

health care on exchanges. ACA protections apply to all health 

plans, including those that many Americans get through their employer. Employer-provided insurance plans would no longer be required to offer the same level of care that they do today. Employees 

with preexisting conditions would have restrictions placed on their 

care. The lifetime cap on out-of-pocket expenses would disappear. 

And we’d return to the days when parents could no longer have 

young-adult children under 26 on their plans. Removing these protections will hurt businesses, workers, and families in my district 

and across the country. 

Third and finally, the economic consequences of repeal without 

replace would be catastrophic. My home State of Illinois stands to 

lose over 100,0000 jobs and $13 billion in gross State output. My 

district alone would lose 4,000 jobs. Ohio, your home State, sir, 

could lose up to 126,000 jobs. 

Repealing without replacing is foolhardy and reckless. What 

House Republicans have proposed so far inspires little trust that 

their plans will actually help Americans. We will not sit idly by 

while the ACA is torn down without any replacement. We need a 

replacement that offers coverage at similar or lower costs. 

I yield the balance of my time. 

Mr. JORDAN. I thank the gentleman. 

We have three goals, I think, for today’s hearing. One, we want 

to review the impact of the ACA on the health insurance market, 

including its impact on affordability, quality, choice, and access. 

Two, we want to understand the Federal Government’s implementation of the ACA and how taxpayer dollars were spent, if there 

was any waste, any fraud, any abuse in those areas. And, three, 

as I think the ranking member was getting to in his comments, we 

have a big debate going on here in Congress, and we want to gather as much information as we can as we are debating the repeal, 

something I think should happen, of the Affordable Care Act. So 

those are our three goals. 

We’ll hold the record open for 5 legislative days for any members 

who would like to submit a written statement. 

And I want to recognize Mr. Grothman for being here. It’s the 

first time he’s been a part of this subcommittee. 

And I recognize, if he would like a short opening statement, our 

new vice chair, Mr. Walker from North Carolina. 

Mr. WALKER. Jim, I thank you for your work as the chairman 

and hope that we are able to really fulfill our promises to the 

American people in getting to the bottom of some of the issues and 

concerns that we have with the ACA as a whole. 

I’ve been privileged to work with you the last couple years. I 

know your heart is to work with all communities, and you have a 

record of that. And we look forward to seeing what we can get 

done. Thanks. I’m privileged to be part of it. 

Mr. JORDAN. Thank you. 

Ms. Vicki Robinson, Senior Counselor for Policy for the Office of 

the Inspector General at the U.S. Department of Health and 

Human Services, is with us today, as well as Mr. John Dicken, Director of Health Care at the United States Government Accountability Office, and Mr. Jonathan Siegel from Rochester, New York. 


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Welcome to you all. 

Pursuant to committee rules, all witnesses will be sworn in before they testify, so please rise and raise your right hands, if you 

would, please. 

Do you solemnly swear or affirm that the testimony you’re about 

to give will be the truth, the whole truth, and nothing but the 

truth, so help you God? 

Let the record show that each witness answered in the affirmative. 

You guys are way ahead of me. You’ve done this before. You’re 

already seated. So let’s start with our first witness. 

Ms. Robinson, you get to go first. And you know how it works. 

You get 5 minutes, give or take a few seconds, and then we’ll go 

to the next one. 

WITNESS STATEMENTS 

STATEMENT OF VICKI ROBINSON 

Ms. ROBINSON. Well, good afternoon, Chairman Jordan, Ranking 

Member Krishnamoorthi, and other distinguished members of the 

subcommittee. Thank you for the opportunity to discuss our work 

overseeing the Federal and State health insurance marketplaces 

established under the Affordable Care Act. 

We are committed to combating fraud, waste, and abuse and promoting integrity, efficiency, and effectiveness in the programs run 

by the Department of Health and Human Services. Our work looks 

retrospectively to determine whether programs have worked as 

they should and prospectively to identify weaknesses to avoid and 

best practices to replicate in the future. 

To oversee the marketplaces, we examined core program integrity questions: Are taxpayer funds being expended correctly for 

their intended uses? Are the right people getting the right benefits? 

Is the Department managing and administering the programs effectively and efficiently? 

We identified three types of vulnerabilities: one, the need for 

tighter payment controls to prevent wasteful spending; two, the 

need for more reliable processes to ensure accurate eligibility determinations for applicants; and, three, the need for improved management. 

Our findings and recommendations are detailed in my written 

testimony and in our reports. Let me offer some examples, starting 

with our payment accuracy work. 

CMS was hampered in its administration of the Advanced Premium Tax Credit that provides subsidies to help consumers afford 

insurance. At the start of the program, CMS used a manual financial process that did not collect data on enrollee-by-enrollee policylevel payments. Rather, CMS collected only aggregated payment 

data from insurers. As a result, we found that CMS was not able 

to verify the accuracy of the payments to insurers, nor that enrollees benefiting from these payments had paid their portion of the 

premium as required. 

We also found deficiencies in the administration of the establishment grant program that provided Federal funding to States to set 

up marketplaces. Most States we examined failed to allocate costs 


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properly between their establishment grant funding and funding 

for other programs that shared systems with the marketplaces, 

such as Medicaid. This resulted in States over-claiming Federal establishment grant funding. 

Further, we found vulnerabilities in eligibility verification processes at both the Federal and State marketplaces. For example, we 

found that the marketplaces did not always properly verify Social 

Security numbers, citizenship, and household income. 

Finally, we identified weaknesses in management of the Federal 

marketplace, including poor oversight of the many contractors engaged to build it. For example, CMS waited far too long to hire a 

systems integrator to coordinate the work of the contractors. 

We examined CMS’s management of the Federal marketplace 

across a 5-year period. We identified many missteps that contributed to the poor launch of the healthcare.gov website. We also identified better management practices that contributed to its subsequent improvement. These included, for example, assigning clear 

project leadership and fully integrating technical and policy staff. 

Our work offers important lessons to inform the management of 

complex policy and technology projects now and in the future. 

To close, protecting taxpayer investments and consumers requires vigilance and sustained focus. Program integrity should remain a priority for the design and operation of current and future 

programs. Preventing, detecting, and remediating problems is our 

collective mission. 

Thank you again for inviting me to appear today, and I look forward to answering your questions. 

[Prepared statement of Ms. Robinson follows:] 


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Testimony of: 

Vicki L. Robinson 

Senior Counselor for Policy 

Office of Inspector General, U.S. Department of Health and Human Services 

Good afternoon, Chairman Jordan, Ranking Member Krishnamoorthi, and other distinguished 

Members of the Subcommittee. lam Vicki Robinson, Senior Counselor for Policy in the Office 

oflnspector General (OIG), U.S. Department of Health and Human Services (HHS or the 

Department). Thank you for the opportunity to appear before you today to discuss findings and 

recommendations from OIG's oversight of the Federal and State-based marketplaces established 

under the Patient Protection and Affordable Care Act (ACA). 

Created by statute in 1976, OIG remains a nonpartisan body of evaluators, auditors, and 

investigators deployed across the Nation to help assess and protect the integrity of Federal health 

and human services programs enacted by Congress. We are committed to working with our 

stakeholders to protect taxpayer-funded programs and patients from fraud, waste, and abuse and 

to promote efficient and effective program operations. We focus on prevention, detection, and 

enforcement to fight fraud, waste, and abuse; promote quality, safety, and value; and foster 

sound financial stewardship ofHHS programs. When we identify misconduct, we take 

appropriate enforcement action and make recommendations to address vulnerabilities and 

improve Department programs and operations. 

OIG's Oversight of ACA Marketplaces 

ACA established health insurance exchanges (commonly referred to as "marketplaces") to allow 

individuals and small businesses to shop for health insurance in all 50 States and the District of 

Columbia. States could choose to operate their own State marketplace or the Department would 

operate a Federal marketplace for residents of States without a State marketplace. ACA 

provided funding assistance, known as establishment grants, to States for planning and 

establishing their own marketplaces. In addition, ACA provided funding to assist eligible 

consumers. This assistance consists of subsidies in the form of tax credits and cost-sharing 

reductions. ACA also provided funding for health insurance issuers in the form of premium 

stabilization programs, such as the reinsurance and risk adjustment programs. The marketplaces 

presented complex regulatory, operational, and technological challenges for the Department and 

for States. 

Testimony Before the United States House of Representatives 

Committee on Oversight and Government Refonn 

Subcommittee on Health Care, Benefits, and Administrative Rules 

January 31,2017 
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Beginning in 2012, OIG identified implementation, operation, and oversight of the health 

insurance marketplaces as among the most significant management challenges facing the 

Department. Our marketplace oversight work has focused on key program integrity questions, 

including: 

:>- Are taxpayer funds being expended correctly for their intended purposes? 

:>- Are the right people getting the right benefits? 

:>- Is the Department managing and administering the marketplace programs effectively and 

efficiently? 

Since 2013, we have issued 38 audits and evaluations regarding the Federal and State-based 

marketplaces and related programs. 1 In addition to this oversight work, OIG has established 

relationships with its law enforcement partners to investigate fraud and closely monitor activities 

and concerns. We work with the Department to help identify potential fraud and ensure that 

allegations of fraud are investigated appropriately. 

Today, I will summarize findings and recommendations from our oversight work with respect to 

payment accuracy, eligibility determinations, and the Department's management of the Federal 

marketplace. My testimony will highlight challenges and lessons learned that can inform the 

Department and policymakers as they consider HHS programs going forward. 

OIG's Findings and Recommendations 

OIG 's work identified several challenges that potentially hampered the operation of the 

marketplaces. These challenges generally fall into three categories: insufficient payment 

controls that could lead to wasteful spending, vulnerabilities in ensuring accurate eligibility 

determinations at the Federal and State-based marketplaces, and challenges for Departmental 

management. For example, we found weaknesses in the Centers for Medicare & 

Medicaid Services' (CMS) financial management systems as well as deficiencies in States' 

management of establishment grants. In addition, CMS's contract monitoring and administration 

needed improvement. Finally, OIG identified broader lessons through our review ofCMS's 

development and administration of HealthCare.gov (the website consumers use to access the 

Federal marketplace), including the poor launch and subsequent improvement of the site. OIG 

has recommended various improvements to address these challenges and vulnerabilities. 

1 A complete listofOIG reports related to ACA is on OIG's website at http://oig.hhs.gov/reports-andpublications/aca/. 

Testimony Before the United States House of Representatives 

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Insufficient Payment Controls That Could Lead to Wasteful Spending 

Ensuring sound expenditure of taxpayer funds for financial assistance payments and other 

marketplace purposes posed a substantial management challenge. OIG identified deficiencies 

that put Federal funds at risk of being misused or wasted due to ineffective internal controls in 

the financial management systems at both the Federal and State-based marketplaces. 

For example, OIG identified the following deficiencies in CMS's financial management systems 

related to advance premium tax credits (APTC) and cost-sharing reductions made available 

under ACA: 

:» CMS lacked controls to ensure that financial assistance payments were correctly 

calculated. Specifically, CMS had limited ability to ensure that payments were made 

accurately to health insurance issuers because CMS obtained payment data from issuers 

on an aggregate basis, rather than by enrollee. As a result, CMS could not verify the 

accuracy of the nearly $2.8 billion it authorized for financial assistance payments for the 

first four months of 2014. We recommended that CMS implement computerized systems 

for the Federal and State-based marketplaces to maintain individual enrollee and payment 

information. 

:» CMS lacked controls to ensure effectively that APTC payments were made only for 

enrollees who paid their monthly premiums. CMS relied on health insurance issuers to 

verify that enrollees paid their monthly premiums to the issuers. CMS did not obtain 

APTC payment information from the issuers on an enrollee-by-enrollee basis and thus 

could not verify whether individual enrollees had paid premiums. We recommended that 

CMS establish policies and procedures to ensure that APTC payments are made only on 

behalf of enrollees who have paid their premiums. 

OIG identified establishment grants awarded to State-based marketplaces as a risk for potential 

misspent funds because of the complex requirements related to implementation and the potential 

overlap with other programs. OIG has issued seven reports that review establishment grants. 

The following deficiencies were identified in these reports: 

:» Four of the State-based marketplaces misallocated costs between establishment grant 

funding designated for marketplaces and funding for other programs that shared 

marketplace systems, such as Medicaid. We found that this misallocation occurred 

because these States used outdated or flawed information when better data were 

available. Generally, States allocated more costs to the establishment grant than they 

should have under Federal grant rules. For example, one State misallocated $28.4 million 

in costs to the establishment grant. A portion of those costs may be claimed through the 

Testimony Before the United States House of Representatives 

Committee on Oversight and Government Reform 

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State's Medicaid program, which would require the State to pay for a percentage of those 

costs using State funds. We recommended that States refund misallocated costs, update 

or amend cost allocation methodologies to make use of better data, and develop written 

policies to ensure that costs are allocated appropriately. 

)> In our most recent report, the State-based marketplace charged the establishment grant 

for $4.5 million in unallowable costs, including prepaid operational expenses. OIG found 

that costs were unallowable because the marketplace used establishment grant funds to 

pay for operational support and maintenance services provided after December 31, 2014. 

Establishment grant funds were not available for such purposes after this date. In 

addition, the marketplace had other deficiencies, resulting in an additional $5.2 million 

not being expended in accordance with Federal requirements. We recommended that the 

marketplace refund $9.7 million and develop, finalize, and implement policies and 

procedures to ensure that it expends Federal grant funds in accordance with applicable 

requirements. 

OIG also identified a risk related to insufficient CMS guidance regarding the particular types of 

operational costs that State-based marketplaces could charge against an establishment grant. We 

were concerned that, absent better guidance, States might incorrectly charge the establishment 

grant funds for prohibited costs, such as rent, software maintenance, telecommunications, and 

utilities. To help prevent potential waste of establishment grant funds, we issued an alert to 

CMS. As a result, CMS published updated guidance to clarify which costs States could not 

charge against the grants. 

Vulnerabilities in Ensuring Accurate Eligibilitv Determinations 

Accurate eligibility determinations ensure that only qualifYing consumers can enroll in qualified 

health plans and receive financial assistance. OIG found vulnerabilities in CMS's eligibility 

verification and enrollment processes, as well as CMS's resolution of data inconsistencies. In 

three separate reviews of the Federal marketplace, OIG identified deficiencies related to the 

Federal marketplace's internal controls, including the following: 

)> Social Security numbers were not always validated with the Social Security 

Administration. 

)> Citizenship was not always verified in accordance with Federal requirements. 

)> Household income was not always verified properly. 

)> Inconsistencies between applicants' self-attested information and data received through 

the Federal data hub or from other data sources related to certain eligibility requirements, 

most commonly citizenship and income, were not resolved properly. 

Testimony Before the United States House of Representatives 

Committee on Oversight and Government Refonn 

Subcommittee on Health Care. Benefits, and Administrative Rules 

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These deficiencies may have limited the Federal marketplace's ability to prevent inaccurate or 

fraudulent information from being used to determine eligibility of applicants. 

OIG also reviewed internal controls on eligibility determinations at seven State-based 

marketplaces. We determined that certain internal controls were effective at the State-based 

marketplaces. However, we found that most of the State-based marketplaces had some 

ineffective internal controls for ensuring that individuals were enrolled in a qualified health plan 

in accordance with Federal requirements. Common deficiencies we identified included: 

~ Six State-based marketplaces did not always use existing data sources to verify whether 

applicants were eligible for health insurance through an employer or through other 

sources, such as Medicare or the Federal Employees Health Benefits Program. 

~ Four State-based marketplaces did not always properly verify annual household income. 

~ Six State-based marketplaces did not always resolve inconsistencies or notify applicants 

of inconsistencies. 

~ Four State-based marketplaces did not always properly maintain data or accurate records. 

We recommended that both the Federal and State-based marketplaces improve their internal 

controls and redetermine eligibility for the applicants in our sample whose eligibility 

verifications did not meet Federal requirements. 

Challenges That Impede Effective Department Management 

Effective Department management and administration are critical to meeting program objectives 

and providing sound stewardship of Federal resources. OIG conducted several reviews focused 

on CMS's management of marketplace programs. For example, we examined CMS' acquisition 

planning and procurement of contracts to implement the Federal marketplace. CMS awarded 

60 contracts across 33 companies to support the development and operation of the Federal 

marketplace. We identified vulnerabilities and offered recommendations related to contract 

monitoring and administration of payments for contracts related to the marketplaces. For 

example, we found: 

~ CMS did not always manage and oversee contractor performance in accordance with 

Federal requirements and contract terms. For example, CMS was unable to identify 

contractor delays and performance issues in all instances and was unable to identify when 

a contractor incurred $ 28 million in unauthorized costs that increased the cost ofthe 

contract. 010 recommended that CMS direct its acquisition personnel to refrain from 

authorizing additional work on contracts, absent proper approval and funding. In 

response, CMS updated its internal guidance to delineate clearly that only the contracting 

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officer could make changes to the terms and conditions of a contract or direct a contractor 

to perform work or make deliveries not specifically required under the contract. 

)> CMS did not accurately identifY all obligations and expenditures for six contracts we 

reviewed related to the Federal marketplace. CMS recorded $24.3 million of obligations 

and $22.9 million of expenditures, but it did not identifY them as being related to the 

Federal marketplace. Consequently, CMS was unable to account accurately for and 

report to interested stakeholders the amount spent on the development, implementation, 

and operation of the Federal marketplace. We recommended that CMS include all 

relevant contract costs when it identifies total obligations and expenditures related to the 

design, development, and operation of the Federal marketplace. 

)> CMS missed the opportunity to plan for a lead systems integrator to coordinate the efforts 

of multiple contractors for the Federal marketplace. CMS did not identifY a systems 

integrator until after the October 20!3 launch of the Federal marketplace. The many 

companies that were awarded Federal marketplace contracts had individual tasks to 

support the implementation of the Federal marketplace. Yet there was no single point of 

contact with responsibility for integrating contractors' efforts and communicating the 

common project goals to all companies. 

OIG also examined CMS's overall management and administration ofHealthCare.gov. In 2016, 

OIG published a case study detailing the implementation of the website and identifYing 

organizational factors that contributed to the website's poor launch and subsequent improvement. 

This work highlights lessons that can inform not just the management and administration of the 

marketplaces, but also other complex Department programs and operations now and in the 

future. These lessons learned will become increasingly important as Government programs 

become more dependent on the effective intersection of policy, technology, and management. 

In the case study, OIG found that HHS and CMS made many avoidable missteps in developing 

HealthCare.gov that contributed to the poor website launch. For example: 

);> Lack of clear project leadership led to fragmentation and poor coordination, causing 

delays in making policy decisions and confusion about goals and objectives. 

);> Mismanagement of information technology contracts resulted in inefficient use of 

resources, problematic technological decisions, and limited oversight of contractor 

performance. 

);> Poor communication, particularly between policy and technical staff, hampered efforts to 

identifY and correct problems, leading to a compressed timeframe for completing the 

Testimony Before the United States House of Representatives 

Committee on Oversight and f'.JOvemment Refonn 

Subcommittee on Health Care, Benefits, and Administrative Rules 

January 31,2017 

6 
13 


KING-6430 with DISTILLERInsert offset folio 7 here 26313.007

website build and a failure to recognize the magnitude of problems as the project 

deteriorated. 

Following the poor launch, CMS changed its management approach to improve operations, 

including: 

> hiring a systems integrator to coordinate the work of multiple contractors, simplify 

processes, and increase accountability; 

> integrating the policy and technical teams of employed and contracted staff into a single, 

"badgeless" team that fosters innovation, problem solving, and communication; and 

> practicing what CMS officials called "ruthless prioritization" oftasks to target the most 

urgent needs and align goals with available resources. 

These strategies led to broader organizational changes focused on leadership, a deeper 

integration of policy and technology, and more active communication among partners, such as 

other Federal agencies, States, contractors, and insurers. 

Conclusion 

OIG is committed to fighting fraud, waste, and abuse in HHS programs and promoting their 

economy, efficiency, and effectiveness. OIG's marketplace oversight work highlights challenges 

and lessons learned with respect to payment systems, eligibility determinations, and management 

and administration of complex programs. Ensuring program integrity requires vigilance and 

sustained focus on preventing problems from occurring in the first place, detecting problems 

promptly when they occur, and rapidly remediating detected problems through investigations, 

enforcement, and corrective actions. Program integrity is central to OIG's mission and should be 

a priority for current and future HHS programs. 

Thank you, again, for inviting me to speak with the Committee today to discuss our oversight of 

ACA marketplaces. 

Testimony Before the United States House of Representatives 

Committee on Oversight and Government Refonn 

Subcommittee on Health Care, Benefits, and Administrative Rules 

January 31.2017 
14 

Mr. JORDAN. Thank you, Ms. Robinson. 

Mr. Dicken, you’re recognized for 5 minutes. 

STATEMENT OF JOHN DICKEN 

Mr. DICKEN. Thank you. 

Chairman Jordan, Ranking Member Krishnamoorthi, and members of the subcommittee, I’m pleased to be here today as the subcommittee discusses the Patient Protection and Affordable Care 

Act. 

Ms. Robinson highlighted some of the Inspector General’s findings related to program integrity. My comments focus on the Affordable Care Act in relation to health insurance markets, highlighting findings from recent GAO reports on insurer availability, 

variation in premiums, and enrollee satisfaction. 

The Affordable Care Act contained provisions that affect how 

issuers determine health insurance coverage and premiums and 

how they market their plans. Many of these provisions took effect 

in 2014. 

For example, the act prohibits issuers from denying coverage or 

varying premiums based on health status or gender. The law also 

requires health plans be marketed based on metal tiers—bronze, 

silver, gold, and platinum—to help consumers compare the relative 

value of each plan. 

It also required the establishment of health insurance exchanges 

in each State through which consumers select from among participating health plans. About 11 million individuals purchased health 

plans through the exchanges in 2016. 

Given the act’s reliance on the participation of private health 

plans, the law required GAO to report on competition and concentration in health insurance markets. In a 2016 report, we found 

out health insurance markets were concentrated among a small 

number of issuers in most States from 2010 through 2014, where 

the three largest issuers had at least 80 percent of enrollment. In 

2014, enrollment in exchange plans during their first year was generally more concentrated among a few issuers than was true for the 

overall markets. 

GAO has also reported on consumers’ access to health plans offered through the exchanges. In 38 States for which GAO had sufficiently reliable data, we found most consumers had six or more 

bronze-, silver-, and gold-tier plans available through the exchanges in 2014 and 2015. For example, 94 percent of counties had 

at least six silver-tier plans available in 2015. 

Since GAO issued the report, HHS has reported a decline in the 

number of issuers participating in the federally facilitated exchanges in 2017. According to HHS, all consumers continue to have 

multiple plan options, but for about 21 percent of them the options 

were limited to plans offered by a single issuer. 

GAO also reported on the considerable variation in health insurance premiums available to consumers in 2014 and 2015. First example, in Arizona in 2015, the lowest-cost silver plan for a 30-yearold consumer was $147 per month, but in Maine the lowest-cost silver plan for a 30-year-old was $237 per month. 

The range of premiums also varied considerably by State. While 

the lowest-cost silver plan for a 30-year-old in Arizona was $147 


KING-6430 with DISTILLER
15 

per month, the highest-cost silver plan in 2015 was $545 per 

month, a difference of 270 percent. In contrast, in Rhode Island, 

2015 premiums for silver plans available to a 30-year-old range 

from $217 to $285 per month, a difference of just 32 percent. 

More recent analyses by HHS found that premiums for exchange 

plans increased more in 2017 than in earlier years, an average of 

25 percent from 2016 to 2017 for the second-lowest-cost silver plans 

in States that use the federally facilitated exchange. In comparison, 

average premiums for these plans increased 2 percent from 2014 

to 2015 and 7 percent from 2015 to 2016. 

Finally, let me close with key findings from a 2016 GAO report 

on enrollees’ experiences in health plans offered through the exchanges. 

Most exchange enrollees report being satisfied overall with their 

plans in 2014 through 2016, according to three national surveys. 

This report satisfaction was either somewhat lower than or similar 

to that of enrollees in employer-sponsored plans. 

While most enrollees expressed overall satisfaction, concerns 

about enrollees’ experiences with exchanges plans were revealed in 

other information GAO collected from stakeholders and literature. 

Often, these were consistent with longstanding consumers’ concerns about private health insurance generally, such as affordability of out-of-pocket expenses and difficulties understanding coverage terminology. 

Mr. Chairman, this concludes my statement. I would be glad to 

answer any question to you or the members of the subcommittee 

may have. 

[Prepared statement of Mr. Dicken follows:] 


KING-6430 with DISTILLER
16 


KING-6430 with DISTILLERInsert offset folio 8 here 26313.008

For Release on Delivery 

Expected at 2:00p.m. ET 

Tuesday, January 31,2017 

GA0-17·383T 

United States Government Accountability Office 

Testimony 

Before the Subcommittee on Health Care, 

Benefits, and Administrative Rules, 

Committee on Oversight and Government 

Reform, House of Representatives 

PATIENT PROTECTION 

AND AFFORDABLE 

CARE ACT 

Concentration, Plan 

Availability and 

Premiums, and Enrollee 

Experiences in Health 

Insurance Markets Since 

2014 

Statement of John E. Dicken 

Director, Health Care 
17 


KING-6430 with DISTILLERInsert offset folio 9 here 26313.009

Kighl\Qhts ofGA<:>-17:383!;.• testimony befi?re t~,Siibto~mi~e&:pn 'Hef:l,lth Ca~. 

Ben~frts, amfJ\dminlstfa.tiv~ Rules, committee on Ove~ht and Gove~nt R:efof"''h, House of R~pres.entatives 

Why .GAO Did This Study 

PPACA oo(ltainild p~iSlonS, many of 

whiclt took effect in 2014, that oould • 

alfe<Mrow !$sUerS determine nea!th 

insuiancei:pverage·end. premiums and 

how lhey·matl<et l!ieJr' plans. For 

: example, PPACAprohibits issuers 

from deny\llg covelage, or varying 

pr<lnfil\ftlS ba$i!d on consumer h<laltl\ 

sja!us or gero~r. PPACA .also requires 

health plans to generally be.marl<eted 

based oh.m!>t!ll tiers (bronre, silver, 

gold, and J)lal!nmn), which.alllJws 

consumers to compartllhe rejative value ol e119h pfal't It also !>lQUjred the 

establishment of health insu~nce 

exchanges in eacll slat"' through which oonsumera <:an <;Omp,.re and 

sele<if from among pal(ic:lpating heafth 

plans. 

This testimony <illscribe~ (1) ¢\late 

ha,.ttMnS\lllOnce rnar.t<et .coneeiltration 

and issuerpartiofpati6n from 2011 through 2014, the year byWhiCh key 

PPA'CA provi~(9ns took elf"\ll; (2) · 

hea~h plans. !'In<! p~mlul'll$ available. to 

lndMt:luat$ ih 201l! an<:! 2ll15, and (3) 

the experience. of ~nrolleesthaf 

obtained COW!llge jhJ:OUQh the 

ex-changes from21l14 !hmugh 2016. Jt 

i~ baset;t on<three .GAO r-epot(s: iss~ed 

in 2ll15and21l1!!: For these reports, 

GAO e~!'mined data fro(n lh.e Center$ for Medlcar<i ,!1.M!!dicald Services 

(CMs};·ravlewed pl1bfiShedresearoh; 

end intervtew..,i:!'stlikenoklem, 

inofudir>g exj>erts an<j Of!lc:lals from 

CMS and fJite.State~ol<>rado, 

Indiana .• fv!Ontana, North c ... rolina, and 

v,nnont-:that.:varied.'in googr"!)hy 

and )'lhelh!>r th<lstate or CMS offered 

the axchange, 

V!eW GA0-:11;3s~n~ fqr'more intotmatlon, con~ct JOhn fS.'J)tqken at {202} 512~7114 or dlekeni@l)ao,gov. • 

PATIENT PROTECTION AND AFFORDABLE 

CARE ACT 

Concentration, Plan Availability and Premiums, and 

Enrollee Experiences in Health Insurance Markets 

Since 2014 

What GAO Found 

GAO issued three reports in 2015 and 2016 on the early impact of the Patient 

Protection and Affordable Care Act (PPACA) on private health insurance 

markets. 

Market Concentration 

In a 2016 report. GAO examined enrollment in private health-insurance plans 

in the years leading up to and through 2014, the first year of the exchanges 

established by PPACA, and found that in all years analyzed, markets were 

concentrated among a small number of issuers in most states. 

Beginning in 2014. enrollment in PPACA exchange plans was generally more 

concentrated among a few issuers than was true for the overall markets. 

Plan Availability and Premiums 

In a 2015 report, GAO examined the availability of health plans for individual 

market consumers and found that they generally had access to more health 

plans in 2015 than in 2014. 

In both years, most consumers in 28 states for which GAO had sufficiently 

reliable data had 6 or more plans from which to choose in three of the four 

health plan metal tiers (bronze, silver, and gold). 

• The range of premiums available to consumers varied considerably by slate, 

and in most states the costs for the minimum and median premiums for silver 

plans increased from 2014 to 2015. In both years, the lowest cost plans were 

typically available on an exchange. 

• More recent analyses by the Department of Health and Human Services 

found that in 2017 all consumers continued to have multiple plan options, 

and that premiums for exchange plans increased more in 2017 compared to 

the annual increases for these plans since 2014. 

Enrollee Experiences 

In a 2016 report, GAO examined national survey data to examine satisfaction 

of exchange enrollees. GAO found that, from 2014 through 2016, most 

enrollees who obtained their coverage through an exchange reported being 

satisfied overall with their plans. 

In 2015 and 2016, the satisfaction that exchange enrollees reported with their 

plans was either somewhat lower than or similar to that of enrollees in 

employer-sponsored plans. 

Exchange enrollees reported varying degrees of satisfaction with specific 

aspects of their plans, including coverage and plan affordability. 

Stakeholders GAO interviewed and literature GAO reviewed revealed some 

concerns about exchange enrollee experiences that were generally 

consistent with longstanding concerns in the private health insurance 

market-including concerns about affordability of out-of-pocket expenses 

and difficulties understanding coverage terminology. 

-------------United States Government Accountability Office 
18 


KING-6430 with DISTILLERInsert offset folio 10 here 26313.010

Chairman Jordan, Ranking Member Krishnamoorthi. and Members of the 

Subcommittee: 

I am pleased to be here today to discuss findings of several recent GAO 

reports on the effects of the Patient Protection and Affordable Care Act 

(PPACA) on heatth insurance markets, including insurer availability, 

variation in premiums. and enrollee satisfaction. 1 

According to the most recently available Census Bureau estimates, over 

189 million Americans under the age of 65 obtained health coverage from 

private health insurance plans in 2015. 2 Private health insurance is sold 

through individual and group markets. Group market participants 

generally obtain health insurance coverage through a group heatth plan. 

usually offered by an employer-small employers purchase insurance 

from the small-group market and large employers purchase from the 

large-group market. 3 Americans without access to group heatth 

coverage, such as those with employers that do not offer health 

coverage, may choose to purchase it directly from an insurer through the 

individual market All three markets (individual, small-group, and largegroup) have historically been highly concentrated-that is, a small 

number of issuers in a market enrolled a significant portion of the people 

in that market• 

1

Pub. L. No. 111-148, 124 Stat 119 (Mar. 23, 2010), as amended by the Health Care and 

Education Reconciliation Act of2010, Pub. L. No. 111-152, 124 Stat. 1029 (Mar. 30, 2010) 

("HCERA"). In this report, references to PPACA include any amendments made by 

HCERA 

2

Census Bureau, Health Insurance Coverage in the United States: 2015 {Washington, 

D.C.: September 2016). 

3For group health plan purposes, federal law defines a small employer as having an 

average of 1 to 50 employees on business days during the preceding calendar year and 

employing at !east 1 employee on the first day of the plan year; however, states may 

instead elect to define the term as an employer having an average of 1 to 100 employees 

on business days during the preceding calendar year. See 42 U.S.C. §§ 300gg-91{e), 

18024(b). 

4

GAO, Private Health Insurance: Concentration of Enrollees among Individual, Small 

Group, and Large Group Insurers from 2010 through 2013, GA0-15-101R (Washington, 

D.C.: Dec. 1, 2014). 

We use the term "issuer" when referring to the insurance entities that are licensed by a 

state to engage in the business of insurance in that specific state. 

Page 1 GA0-17-383T 
19 


KING-6430 with DISTILLERInsert offset folio 11 here 26313.011

As you know, PPACA contained a number of provisions that could affect 

private health insurance markets, many of which took effect for plan years 

beginning in 2014. For example, it changed how insurers determine 

health insurance coverage and premiums and how they market their 

plans, such as by prohibiting insurers from denying coverage to 

individuals and from varying premiums based on consumer health status 

or gender and established limits on premium variation based on age, 

geographic location, and other factors. In addition, PPACA established 

requirements for the benefits that must be covered by hea~h plansreferred to as essential health benefits-and required insurers to market 

their plans according to defined categories based on the extent to which 

the plans would be expected to cover the costs of enrollees' medical care. 

PPACA also required the establishment of health insurance exchanges in 

each state beginning in 2014-marketplaces through which consumers 

can compare and select health insurance coverage from among all the 

health plans participating in the state exchange. These plans are known 

as qualified health plans (QHP). Some states have established their own 

exchanges-referred to as state-based exchanges. In states that have 

not done so, consumers have access to a federally facilitated exchange 

(FFE). For 2017, 17 states were operating a state-based exchange and 

34 states were using the FFE. In general, plans available on either type of 

exchange are also available for sale outside of the exchange, in that the 

consumer could work directly with an insurer to purchase a plan without 

using their state's exchange. However, PPACA provided incentives for 

many consumers to use the exchange instead of purchasing plans 

directly from an insurer. For example, certain consumers are eligible for 

tax credits to help them pay their premiums, but only if they purchase a 

QHP through the exchange. In addition, the exchanges are required to 

carry out certain consumer assistance functions that may facilitate 

individuals' selection of and enrollment in exchange coverage. The 

combination of all of these provisions allows consumers to use the 

exchanges to directly compare the health insurance plans available to 

them based on premium costs, benefits covered, and plan generosity5 

According to the Department of Health and Human Services (HHS), 

enrollments in the exchanges have increased every year since 2014, with 

about 11 million individuals having purchased health plans through the 

exchanges in 2016, up from about 7 million in 2014. 

SWe refer to the expected impact of the design of plan coverage on enrollee cost sharing 

as a plan's "generosity." A plan whose enrollees would incur lower out-of ..pocket costs is 

more generous than one whose enrollees would incur higher costs. 

Page2 GA0~17-383T 
20 


KING-6430 with DISTILLERInsert offset folio 12 here 26313.012

This testimony describes (1) private health-insurance market 

concentration and issuer participation in the individual, small-group, and 

large-group markets from 2011 through 2014, the years leading up to and 

through the first year that key PPACA provisions took effect; (2) the 

numbers of health plans and ranges of health plan premiums available to 

individuals during the first 2 years of exchange operation (2014 and 

2015); and (3) enrollee experiences with QHPs obtained through the 

exchanges during the first 3 years of exchange operation (2014 through 

2016). 

My comments are primarily based on three reports we issued in 2015 and 

20166 For these reports, we primarily examined data from the Centers for 

Medicare & Medicaid Services (CMS), within HHS, and previously 

published research. For our 2016 report on private health-insurance 

market concentration and issuer participation, we analyzed data from 

2011 through 2014, the first year of PPACA exchanges, to see how 

market concentration and issuer participation in 2014 compared to earlier 

years. We used 2011 through 2014 Medical Loss Ratio datasets and 

2014 Unified Rate Review data that issuers are required to report 

annually to CMS. For our 2015 report on the numbers of health plans and 

ranges of health plan premiums available to individuals in 2014 and 2015, 

we also analyzed data from CMS. Comparisons across years were 

conducted at both the state and the county level for states that had 

sufficiently reliable data in both years-including comparisons of plans 

offered either on or off an exchange in 28 states (1,886 counties), and 

comparisons of plans offered only on an exchange for 38 states (2,613 

counties). For our 2016 report on enrollee experiences with QHPs 

obtained through the exchanges during the first years of exchange 

operation, we performed a search of research databases to identify 

relevant literature published from January 1, 2014, through April30, 2016. 

Among other things, we identified and reviewed the results of five national 

surveys of QHP enrollees who obtained their coverage through the 

exchanges. We interviewed stakeholders, including officials from CMS 

and five states-Colorado, Indiana, Montana, North Carolina, and 

Vermont-that varied geographically and by whether the state or CMS 

5

GAO, Private Health Insurance: In Most States and New Exchanges, Enrollees 

Continued to be Concentrated among Few Issuers in 2014, GA0-16-724 (Washington, 

D.C.: Sept. 6, 2016); GAO, Private Health Insurance: The Range of Premiums and Plan 

Availability for Individuals in 2014 and 2015, GA0-15-687 (Washington, D.C.: Aug. 10, 

2015); and GAO, Patient Protection and Affordable Care Act: Most Enrollees Reporled 

Satisfaction with Their Health Plans, Although Some Concerns Exist, GA0-16-761 

(Washington, D.C.: Sept. 12, 2016). 

Page 3 GA0-17~383T 
21 


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Background 

offered the exchange. Each report includes a full description of our scope 

and methodology. For the purpose of this testimony, we also present 

more recent data on issuer participation, plan availability, and premium 

options in the exchanges that were published by HHS in 2016. 7 

We conducted the work upon which this statement is based in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

PPACA required the establishment of individual health insurance 

exchanges, as well as small business exchanges, within each state by 

2014. 8 PPACA does not require issuers to offer plans through these 

exchanges, but instead generally relies on market incentives to 

encourage issuer participation. Issuers seeking to offer a health plan in an 

individual exchange or small business exchange must first have that plan 

approved by the exchange in the state. We previously reported that most 

of the largest issuers holding the majority of the market in the 2012 

individual and small-group markets participated in the 2014 exchanges, 

although most of the numerous smaller issuers in those markets did not. 9 

In addition, some issuers that participated in the 2014 individual or small 

business exchanges had not participated in that respective market in 

2012. While some of these issuers had previously provided coverage in 

other markets in 2012, other issuers were newly established through the 

federally supported Consumer Oriented and Operated Plans (CO-OP) 

program." 

7

HHS Office of the Assistant Secretary for Planning and Evaluation, Health Plan Choice 

and Premiums in the 2017 Health Insurance Marketplace (Washington, D.C.: Oct. 24, 

2016). 

8

States may establish separate individual and small business exchanges or a single 

exchange to seiVe both individuals and small employers. 

9

GAO, Patient Protection and Affordable Care Act: Largest Issuers of Health Coverage 

Participated in Most Exchanges, and Number of Plans Available Varied, GA0-14-657 

(Washington, D.C: Aug. 29, 2014). 

10PPACA established a program to foster the creation of consumer-governed, not-forprofit issuers of health coverage-referred to as CO-OPs-that would provide additional 

coverage options in the individual and small-business exchanges. For 2014, 23 CO-OPs 

receiving federal loans offered coverage through the exchanges. 

Page4 GA0-17-383T 
22 


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Health-Insurance 

Markets Remained 

Concentrated in Most 

States in 2014, While 

Issuer Participation 

Generally Decreased 

from the Prior Year 

As I mentioned above, PPACA also changed, as of 2014, how insurers 

determine health insurance premiums and how consumers shop for 

health insurance plans. As part of this, PPACA required that health plans 

be marketed based on information that helps consumers compare the 

relative value of each plan. Specifically, plans must be marketed by 

specific categories-including four "metal' tiers of coverage (bronze, 

silver, gold, and platinum)-that reflect out-of-pocket costs that may be 

incurred by an enrollee. 11 These changes occurred at the same time that 

PPACA required the establishment of health insurance exchanges for 

each state, through which consumers could compare and select from 

among QHPs. Finally, beginning January 1, 2014, premium tax credits 

and cost-sharing subsidies became available under PPACA for qualified 

individuals who purchased QHPs sold through an exchange. 12 

In 2016, we examined enrollment in private health-insurance plans in the 

years leading up to and through 2014, the first year of the exchanges 

established by PPACA, and found that in each year, markets were 

concentrated among a small number of issuers in most states. On 

average, in each state, 11 or more issuers participated in each of three 

types of markets-individual, small group, and large group-from 2011 

through 2014. However, in most states, the 3 largest issuers in each 

market had at least an 80 percent share of the market during the period. 

(See fig. 1.) Not all issuers in the individual and small group markets 

participated in the exchanges in 2014, and several exchanges had fewer 

than 3 participating issuers. Enrollment through the exchanges was 

generally more concentrated among a few issuers than was true for the 

individual and small group markets overall in 2014. 

11The metal tier designation categorizes plans by their actuarial value, which reflects the 

amount out of pocket costs that may be incurred by an enrollee. Bronze plans (with an 

actuarial value of 60 percent) tend to have the lowest premiums but leave consumers 

subject to the highest out-of-pocket costs when they receive health care services, while 

platinum plans (with an actuarial value of 90 percent) tend to have the highest premiums 

and the lowest out-of-pocket costs. In addition to these metal tiers, catastrophic plans are 

available for certain individuals who are exempt from the requirement to have minimum 

essential coverage. Catastrophic plans' actuarial value must be lower than that of a 

bronze plan. 

12Premium tax credits may be used to reduce monthly premiums, and cost-sharing 

subsidies decrease out-of-pocket expenses such as deductibles and copays. 

Pages GA0·17·383T 
23 


KING-6430 with DISTILLERInsert offset folio 15 here 26313.015

Figure 1: Market Share for the Three Largest Issuers, by Market in 2014 

Individual Small group Large group 

Market share for the three largest issuers In each state mafket 

- 90%to100% 

~ 80% to !essthan90% 

CJ Lessthan80% 

Sources: GAO analysis of data from the eenwrs for Medicare & Medicaid SeMGes (data): Map Resouroos {map), 1 GA0.17·383T 

For our examination of issuer participation in the first year of the 

exchanges, we reported thai fewer issuers participated in most stale 

health insurance markets in 2014 compared to 2013, though exiling 

issuers generally had small market shares in that prior year. Specifically, 

we found that from 2013 to 2014, the number of issuers participating in 

individual markets decreased in 46 stales, while fewer stales' small-group 

and large-group markets had decreased participation (28 and 22 slates, 

respectively). (See fig. 2.) However, across the three types of markets, 

those issuers exiling each state market before 2014 generally had less 

than 1 percent of the market in the prior year. There were also issuers 

that newly entered state markets in 2014. Their market shares in 2014 

varied across the three types of markets, with some newly entering 

issuers in the individual market capturing a market share of over 10 

percent. Most newly entering issuers in 2014 participated in the 

exchanges and they generally had a larger share of the enrollment sold 

through the exchanges than through the overall markets. In addition, 

some newly entering issuers captured a majority of their exchange 

market, with CO-OPs having a higher proportion. 

Page6 GA0-17-383T 
24 


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Figure 2: Total Number of Issuers Participating In the Individual, Smaii~Group, and Large~roup Markets across All States, 

2012-2014 

Individual 

Number o-f i&suers 

2,000 

1,600 

1,200 

... 

400 

2012 

Calendar year 

2013 2014 

Small group 

Number of issuers 

2,000 

1,600 

2012 

Calendar year 

2013 

Large group 

Number of issuers 

2,000 

1,600 

2014 

Calendar year 

Source: GAO Ma!ysis of data from the Cerrters for Medicate & Medicaid Sel'lices. I GAO-17 -38JT 

Since 2014, there have been additional changes to the number of issuers 

entering and exiting the individual and small group markets. For example, 

most of the CO-OPs that offered coverage in the exchanges in 2014 have 

since discontinued offering coverage." In addttion, in an analysis of data 

from exchanges in states that used the FFE and state-based exchanges, 

where available, HHS has since reported that the number of issuers 

offering health plans through the exchanges decreased from 2016 to 

2017, reflecting multi-state withdrawals by a few large insurers. 14 

1

SWe found that as of January 2016, 12 of the 23 CO-OPs that offered coverage in 2014 

had since discontinued offering coverage. For additional information on the CO-OPs, see 

GAO, Private Health Insurance: Federal Oversight, Premiums, and Enrollment for 

Consumer Operated and Oriented Plans in 2015, GA0-16-326 (Washington, D.C.: Mar. 

10, 2016). 

14HHS Office of the Assistant Secretary for Planning and Evaluation, Health Plan Choice 

and Premiums in the 2017 Health Insurance Marketplace (Washington, D.C .. Oct. 24, 

2016). 

Page7 GA0-17-383T 
25 


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Consumers in the 

Individual Market Had 

Access to More Plans 

in 2015 than 2014, 

with Varying 

Premiums in Both 

Years 

In 2015, we reported that individual market consumers generally had 

access to more health plans in 2015-a year after the initial 

implementation of key PPACA provisions-than in 2014. Consumers in 

most of the counties analyzed in the 28 states for which we had 

sufficiently reliable data for plans offered either on or off an exchange had 

six or more plans from which to choose in three of the four health plan 

metal tiers (bronze, silver, and gold) in both 2014 and 2015. The 

percentage of counties with six or more plans in those metal tiers 

increased from 2014 to 2015. Specifically, in 2014, six or more bronze-, 

silver-, and gold-tier plans were available to consumers in the individual 

market (either on or off an exchange) in at least 95 percent of the 1,886 

counties and were available on an exchange in at least 59 percent of the 

2,613 of the counties for which we had sufficiently reliable data for plans 

offered on an exchange. In 2015, the percentage of these same counties 

with six or more bronze-, silver-, and gold-tier plans available in the 

individual market increased to 100 percent, and at least 71 percent had 

six or more of these plans available on an exchange. (See table 1.)15 

Table 1: The Percentages of Counties in Which Various Numbers of Health Plans Were Offered to Individual Market 

Consumers1 by Market Category and Metal Tier, 2014 and 2015 

Percentage of counties in 2014 Percentage of counties in 2015 

Market category Metal tier No plans Between 1 6 or more No plans Between 1 6ormore 

available and 5 plans plans available and 5 plans plans 

available available available available 

All plans (available on Bronze 0% 3% 97% 0% 0% 100% 

or off exchange t Silver 97 0 100 

Gold 95 100 

Platinum 31 60 15 84 

Plans available on an Bronze 20 80 12 88 

exchange0 

Silver 20 80 6 94 

Gold 41 59 29 71 

Platinum 46 48 31 63 6 

Soorce. GAO analySis of Center lor Consumer Information and Insurance Oversight d-ata. ! GA0-17-383T 

Note; Figures may not total100 across rows within each year due to rounding. 

3

lncludes data for plans in the 1,886 counties in the 28 states for which we had sufficiently 

reliable data on plans whether or not they were sold through an exchange. 

b!nc!udes data for plans in the 2,613 counties in the 38 states for which we had sufficiently reliable data on plans sold through exchanges. 

15Consumers had fewer options regarding platinum-tier plans, although the availabmty of 

platinum plans generally also increased from 2014 to 2015. 

PageS 
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In our 2015 report, we also found that premiums varied among states and 

counties, the lowest cost plans were typically available on an exchange, 

and in most states premiums increased from 2014 to 2015. Specifically, 

we found that: 

The range of premiums available to consumers in 2014 and 2015 

varied among the states and counties we analyzed. For example, in 

Arizona, the premium for the lowest-cost silver plan option for a 30-

year-old in 2015 was $147 per month, but in Maine, the lowest-cost 

silver plan for a 30-year-old in 2015 was $237. We also found that the 

range of premiums-from the lowest to highest cost-differed 

considerably by state. For example, in Rhode Island, 2015 premiums 

for silver plans available to a 30-year -old e~her on or off an exchange 

ranged from a low of $217 per month to a high of $285 per month, a 

difference of 32 percent. By contrast, in Arizona, 2015 premiums for 

these plans ranged from a low of $147 per month to a high of $545 

per month, a difference of 270 percent. 

The lowest cost plans were typically available on an exchange. 

Specifically, in both years, taking into account plans available through 

an exchange and those only available off an exchange, the lowest 

cost plans were available through an exchange in most of the 1,886 

counties we analyzed in the 28 states. 

In most states, the costs for the minimum and median premiums for 

silver plans increased from 2014 to 2015. For example, in the 28 

states included in our analysis, from 2014 to 2015 the minimum 

premiums for silver plans available to a 30-year-old increased in 18 

states, decreased in 9 states, and remained unchanged in 1 state. At 

the county level, we found that premiums for the lowest cost silver 

option available for a 30-year-old increased by 5 percent or more in 

51 percent of the counties in the 28 states. 

While our 2015 report examining the numbers of health plans and ranges 

of health plan premiums available to individuals in 2014 and 2015 was 

our most recent examination of these two issues, HHS has examined 

more recent data. 16 For example, in 2016, HHS reported that despite a 

decline in the number of issuers participating in the FFE from 2016 to 

2017, all consumers were able to choose among various plan options for 

16HHS Office of the Assistant Secretary for Planning and Evaluation, Health Plan Choice 

and Premiums in the 2017 Health Insurance Marketplace (Washington, D.C.: Oct. 24, 

2016). 

Page9 GA0·17-383T 
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Available Data Show 

That Most Early QHP 

Enrollees Expressed 

Satisfaction with Their 

Plans in 2014 through 

2016, Despite Some 

Concerns 

2017, although the options for about 21 percent of consumers were 

among choices of plans offered by a single insurer. HHS also conducted 

analyses focused on the premiums for the second-lowest cost silver plan 

in states that used the FFE and estimated that average premiums for 

these plans increased more between 2016 and 2017 (25 percent) than in 

previous years (2 percent between 2014 and 2015, and 7 percent 

between 2015 and 2016). 17 

In 2016, we reported that most enrollees who obtained their coverage 

through the health insurance exchanges were satisfied overall with their 

QHP during the first few years that exchanges operated, according to 

national surveys of QHP enrollees. For example, most QHP enrollees 

who obtained their coverage through the exchanges reported overall 

satisfaction with their plans in 2014 through 2016, according to three 

national surveys that asked this question. One survey found that most 

2015 enrollees re-enrolled in 2016 with the same insurer, and often with 

the same plan offered by that insurer, and another survey reported that 

most re-enrollees expressed satisfaction with their QHP. The surveys 

reported that QHP enrollees' satisfaction with their plans was either 

somewhat lower than, or was similar to, that of those enrolled in 

employer-sponsored health insurance in 2015 and 2016. To varying 

degrees, QHP enrollees expressed satisfaction with specific aspects of 

their plan, including their coverage and choice of providers, and with plan 

affordability. 

We also interviewed stakeholders-including experts, state departments 

of insurance, and others-and reviewed literature for our 2016 report. 

These interviews and the literature revealed some concerns about QHP 

enrollee experiences that were similar to longstanding concerns in the 

private heatth insurance market. For example, according to these experts, 

some enrollees found it too expensive to pay for their out-of-pocket 

expenses before reaching their deductibles and have reported concerns 

about affording care or have been deterred from seeking care. Some 

enrollees have also faced difficutties understanding their QHP's coverage 

terminology and others have faced problems accessing care after 

enrollment, according to stakeholders and literature we reviewed. 

second lowest-cost silver plan has significance because PPACA's premium tax 

credits are calculated based on the premiums for these plans. 

Page 10 GA0-17-383T 
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GAO Contact and 

Staff 

Acknowledgments 

1101435) 

Chairman Jordan, Ranking Member Krishnamoorthi, and Members of the 

Subcommittee, this concludes my statement. I look forward to answering 

any questions that you may have. 

For questions about this statement, please contact John E. Dicken at 

(202) 512-7114 or dickenj@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this statement. 

Individuals making key contributions to this statement include John E. 

Dicken, Director; Gerardine Brennan and William Hadley, Assistant 

Directors; and Kristen J. Anderson, LaKendra Beard, Sandra George, and 

Laurie Pachter. 

Page 11 GA0-17-383T 
29 

Mr. JORDAN. Thank you, Mr. Dicken. 

Mr. Siegel, you’re recognized. 

STATEMENT OF JONATHAN W. SIEGEL 

Mr. SIEGEL. Thank you, Mr. Chairman, Mr. Ranking Member, 

members of the committee. It is a pleasure to be with you today. 

I come as a husband, a father, and an independent businessman, 

but, most of all, I come as a citizen of our beloved country. 

Here is my story. In 2012, I was laid off. I was 56, with one child 

still in high school and the other just having graduated. I was 

lucky. I got a severance that provided the resources for me to continue my insurance through COBRA for the rest of 2012 and 2013. 

A friend invited me to be a founding partner of a new market 

research agency. Most importantly, by the time we started the 

firm, the effective launch of the ACA was only a year away. Because of the ACA, I could start this business knowing that my family would continue to get affordable insurance no matter how the 

business did. Without the ACA, I would not have had the courage 

to launch my own business but would have sought the sanctuary 

of traditional employment. 

We have purchased our insurance without subsidy, a gold plan, 

on the exchanges since the ACA began. Our premium is about 

$1,360 a month, plus an additional $60 a month for dental insurance—$600 less a month than our COBRA plan was. 

Because New York State took the Medicaid expansion, I know 

that, no matter what happens to me, my family will get affordable 

health care. Affordability is a big issue for us. My spouse of 30 

years has MS. She is the bravest person I know, taking her shots 

for over 20 years. The cost of her medications is over $30,000 a 

year at free-market prices. Yes, we do participate in a manufacturer’s program that gives some people access to their meds without 

charge, but we don’t know when it will end. Even so, there is the 

cost of ongoing doctor visits, MRIs, and other tests. 

The ACA and the Medicaid expansion also protect my children, 

now 21 and 23. They are working at jobs that do not provide health 

insurance. We make sure they have it today. It is a great comfort 

to an aging parent to know that the ACA assures that they can 

continue to have affordable coverage when they turn 26 no matter 

their employment situation. 

In all of these ways, the ACA enhances my security, reduces anxiety, and furthers freedom, not just for me but for all Americans 

who at any time may find that employer-based insurance just 

doesn’t work or isn’t available to them. 

The possible replacement of the ACA with insurance options that 

are unwise, inadequate, and discriminatory threatens us. We may 

not receive subsidies, but we are not making much more than the 

cutoff point for subsidies. About 20 to 25 percent of our income 

today goes for medical and dental insurance and health care. I 

don’t know what that percentage will be when purchase becomes 

voluntary and insurance can pedal anything they want, skimming 

away those lucky enough to be perfectly healthy. 

What happens if, without the ACA, the cost of adequate insurance goes up to $3,000 or more a month? How can anyone afford 


KING-6430 with DISTILLER
30 

that for years on end? My spouse is, after all, only 57 years old. 

What happens if no one will insure her at any price? 

Some people say that high-risk pools are a solution. I’ve got to 

tell you, there are few words more frightening to me than those. 

The term is a misstatement. My spouse is not a high risk. It is the 

healthy who are high risk, because we do not know what illness 

will strike us or when. So these pools are really pools of high-cost 

citizens. That is a real complaint some people have about my 

spouse: She has the nerve to need expensive care to treat an illness. 

Once it is clear that it is the cost, not the risk, that is a problem, 

it is obvious why so many of us fear high-risk pools. To work for 

the patient, you have to have clear rules for who gets put in them, 

you have to assure that they don’t pay for more insurance than 

others would pay, and you need to assure that they get all the care 

they need. 

I have yet to see a proposal that provides these protections. Instead, we have vague promises of Federal and State support. Without these protection, high-risk pools are not insurance or health 

care; they are just vicious cruelty to ordinary Americans who’ve 

worked hard, played by the rules, but have had a little bad luck. 

A better name for high-risk pools without these protections is 

death pools. The goal of their advocates, in my view, is to shunt 

off to one side the folks who cost too much, whose fate is too hard, 

and let them die out of sight and out of mind. My spouse is not 

someone to shunt off, to cast away. She is a human being who has 

as much right to quality health insurance and care at a price she 

can afford as any of us. 

I am also frightened by some proposed changes to Medicaid. The 

object of these proposals seems to be to reduce it by cutting what 

it covers or tightening eligibility. Paint it as you will, but the real 

goal seems to be punishing low-income people for the sin of being 

low-income. There is a good chance that will include my children. 

My children and all people with low income do not deserve this. 

They are children of God, just like the rest of us. 

In closing, the story of the ACA is not just my story or the stories 

of millions of other people. It is first and foremost a story about democracy. Democracy is not just a set of rules about who gets power 

and under what conditions; democracy is also about assuring equal 

dignity to all citizens. 

The argument over health care and health insurance is thus the 

latest battle in the unending struggle that Lincoln described many 

years ago, the struggle that to me defines the United States and 

the highest purpose of citizenship, the struggle to assure that government of the people, by the people, and for the people shall not 

perish from the Earth. 

Thank you. 

[Prepared statement of Mr. Siegel follows:] 


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KING-6430 with DISTILLERInsert offset folio 21 here 26313.021

Jonathan W. Siegel, Citizen 

Testimony Prepared for the Hearing "Fraud, Waste and Abuse Under the Affordable Care Act" 

Subcommittee on Health Care, Benefits, and Administrative Rules 

January, 31, 2017 

Thank You Mr. Chairman, Mr. Ranking Member, Members ofthe Committee: 

It is a pleasure to be with you here today. I come not as an expert on healthcare but simply as a 

husband, a father and an independent businessman. 

For the last 17 years my spouse and I and our two children, who are now young adults, have lived in 

Brighton, a suburb of Rochester, NY. For most of our time there we purchased insurance as most people 

do, through our employer, in my case Harris Interactive. 

In 2012, I became one of the hundreds laid off by that company over a decade as it struggled and 

ultimately failed to survive. As part of the process for obtaining unemployment insurance, New York 

State informed me that I was very unlikely to find employment in my field in Rochester and that I should 

consider starting my own business. I was 56, with one child still in high school and the other just having 

graduated. 

I was lucky. I got a decent severance package which provided the resources for me to continue my 

insurance through COBRA at about $2,000 a month for the rest of 2012 and 2013. I also had a former 

colleague who was launching a small market research agency and invited me to be one of the founding 

partners. Most importantly, by the time we launched the firm, the effective launch ofthe ACA was only 

a year away. My COBRA insurance though expensive would get me to then. 

Because of the ACA I could start this new business with the assurance that my family would continue to 

get affordable insurance no matter how the business did. Starting the business meant carefully watching 

our spending--we moved to a smaller house and cut back on other expenses--but thanks to the ACA we 

did not face financial ruin if something happened to our health. Without the ACA, I would not have had 

the courage to launch my own business, but would have instead sought the sanctuary of more 

traditional employment despite the view of New York State that the odds were against me. 

We have purchased our insurance without subsidy, a gold plan through MVP, on the exchanges since 

then. The current premium is about $1,360 a month, plus an additional $60 or so a month for dental 

insurance, much less than I had paid under COBRA for insurance that is comparable. It is not just our 

ability to purchase quality insurance today that matters. New York State took the Medicaid expansion 

so now I know that no matter what happens to me, even should I die, that my family can get good 

affordable insurance. 

This is a real issue for us. My spouse of 30 years has MS. She is one of the bravest people 1 know, taking 

her shots religiously for over 20 years and living with the uncertainties ofthis disease that results from 
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the rolling of G_d's dice. The cost of her medications is huge, over $30,000 a year at free-market prices. 

Yes, we along with others have benefitted from a manufacturer's program that gives some people 

access to their meds without charge, though we never know when the program might end. Even so, 

there is the cost of ongoing doctor visits, MRis and other tests. We know not what the future holds. 

The ACA and the Medicaid expansion also protect my children, now 21 and 23. Like many young people, 

they are struggling to find themselves in this world. They are both working at jobs that do not provide 

health insurance and offer no job security. We make sure they have it today and the ACA assures that 

we can continue to do this until they are 27. 

I cannot tell you how much of a comfort it is to an aging parent to know that under the ACA once they 

are 27 that they are assured of access to quality health insurance through Medicaid if they are not able 

to find an employer who provides insurance or do not make enough to purchase insurance through the 

ACA Marketplace. It means that there is at least one thing I don't need to worry about; they can get 

health insurance and healthcare no matter what happens to their mom or to me and no matter their 

employment situation. 

The ACA has thus helped me go out and start my own business, protected my wife from the potential 

financial burdens of MS and assured me that my children, whatever else may happen to them or to us, 

need not go without health insurance or health care. 

All of this is now in question because of the possible replacement of the ACA with insurance options that 

seem unwise, inadequate and discriminatory. I fear for my health insurance coverage, and even more 

for my spouse and my children. 

We may not receive subsidies, but we are not making that much more than the cutoff point for 

subsidies. About 20%-2S% of our gross income goes to pay for medical and dental insurance and health 

care (including deductibles and co-pays). What that percentage will go to if purchase becomes 

voluntary and insurers can peddle anything they want, skimming away those lucky enough for a short 

time to be perfectly healthy, G_d only knows; especially if you take away the power of New York State's 

insurance commissioner to approve plans. 

What happens to us ifthe cost of adequate insurance goes up to $3,000 or more a month? How can 

anyone afford that? For years on end? My spouse is, after all, only 57 years old. What happens if no 

one will insure her at any price? And what happens to her if my business fails or otherwise comes to an 

end? 

Now, some people say that high risk pools are a solution to this problem. Just put folks like my spouse 

in those pools and the cost will come down for everyone else. And by some miracle she'll be covered. 

There are few more frightening terms in this world than 'high risk pool'. It is, first, a miss-statement. 

My spouse is not a high risk. Doctors have a good feel forMS and how it progresses and the treatments 

that are available. It is in fact us, the healthy, who are high risk because we do not know what illness 

will strike us yet, though we know something will eventually. So these pools are really pools of 'current 
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high cost citizens'. And that is a clue to the real complaint some of you have about my spouse: she has 

the nerve to need expensive care to treat an illness. 

Once it is clear that it is the cost, not the risk, that is the problem, it should also be obvious why so many 

of us distrust 'high risk pools'. To work for the patient, you have to have clear rules for who gets in 

them, you have to assure thatthey don't pay more for insurance than they would pay if they were not in 

the pool, and you need to assure that they get all the care they need. 

So far, in all the discussion of high risk pools, I see no mechanism in anything that has been proposed 

that will do that. We have, instead, just vague promises that Federal and state governments will 

allocate money. The amounts we have heard such as $25 billion over ten years from the Federal 

government, for instance, are laughably inadequate. 

So, though it may sound harsh, it seems to me that a better name for ;high risk pools' is 'death pools'. 

The goal seems not to provide health insurance or health care but, rather, to shunt off to one side the 

folks who cost too much, whose fate is too hard, and let them die out of sight and out of mind. My 

spouse is not someone to shunt off, to cast away; she is a human being who has as much right to quality 

health insurance and care at a price she can afford as any of us. 

So high risk pools are not insurance or healthcare. They are just vicious cruelty to ordinary Americans 

who've worked hard, played by the rules, but have had a little bad luck, bad luck that it is the purpose of 

insurance to cover. How anyone in public office can propose this is beyond me. 

I am also frightened by some of the proposed changes to Medicaid. The thrust of most of these 

proposals seems to be to reduce Medicaid spending by reducing what it covers and tightening eligibility. 

Paint it as you will, but the real goal seems to be punishing low-income people for the simple sin of 

being low income. There's a good chance that will include my children. My children, and all people with 

low income, imperfect and struggling though they may be, do not deserve this; they are children of G_d 

just like the rest of us. 

It is, I think, easy to misunderstand the importance of the ACA in two ways. One is to get so tangled up 

in the details of public policy that one loses sight of the people affected. I hope 1 have helped you avoid 

that problem. The other is to get so focused on individual stories that one misses what the debate about 

the ACA means for our country. 

The story of the ACA is not just my story or the stories of millions of other people. It is first and 

foremost a story about democracy. Democracy is not just a set of rules about who gets power and 

under what conditions. Democracy at its core is about creating the assurance of equal dignity to all 

citizens. The ACA furthers this profound democratic goal. It liberates citizens from fear and ill health; 

enabling them to start a business, care for a parent, or help launch their children on their life voyage. 

The argument about the ACA is thus the latest battle in the unending struggle that lincoln so nobly 

declaimed about many years ago on a battlefield not far from here, the struggle that our forebears so 

willingly made the ultimate sacrifice to advance, the struggle that to me defines the United States and 
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the highest purpose of citizenship, the struggle to assure that "government of the people, by the people 

and for the people shall not perish from the earth." 

Thank you. 
35 

Mr. JORDAN. I thank you, Mr. Siegel. 

Real quick before we recognize the gentleman from North Carolina, I just wanted for clarification, because I wasn’t sure I understood, you currently don’t have a plan that is—you’re not receiving 

a subsidy from the government in the form of a refundable tax 

credit or anything else under your—— 

Mr. SIEGEL. No. That’s correct. No subsidy. 

Mr. JORDAN. So you’re paying for your insurance on your own. 

Mr. SIEGEL. Entirely. Have since day one. 

Mr. JORDAN. Okay. I just wanted to make that clear. 

I want to welcome the ranking remember of the full committee, 

Mr. Cummings, and would now recognize the gentleman from 

North Carolina. 

Mr. WALKER. Thank you, Mr. Chairman. 

Mr. Siegel, thank you for the courage you expressed today in 

sharing your story. I’m obviously impressed with how much you 

love your wife as well. You can tell she means a lot to you. Mine 

does as well, a nurse practitioner. We’ve been married 24 years. 

Most of my career I’ve spent as a minister, a pastor. I worked 

in the refugee camps in Europe, visited many people. I’ve seen destitute and despair, health, the funerals, you name it, have been 

across the board. 

I’m also concerned about the millions of people who have been 

damaged, even unintentional, by the Affordable Care Act. In fact, 

if you want to get down to raw numbers, we have 11 percent of 

North Carolinians who still don’t have any insurance of any kind. 

So I don’t want to get into all the bits and pieces of the numbers, 

but, according to your most neutral polling, 25 percent of the population have been damaged by either higher premiums, lost insurance, or something along when it comes to dealing with 

ObamaCare or the Affordable Care Act. 

In fact, even moving it from the individual aspect and even getting it to the business, it was President Clinton and the Minnesota 

Governor who recently talked about the damage the ACA has 

caused for small businesses. According to a Gallup poll not too long 

ago, 70-something percent believed it should be altered, overhauled, or completely repealed. 

So where I want to dial down my questions today, after giving 

a little bit of a preface there, is specifically I would like to talk to 

Mr. Dicken about some questions that we have on some broken 

promises when it comes to the Treasury. 

Under ObamaCare’s reinsurance program, section 1341 directed 

the HHS to collect—let me make sure we get this number correctly—$5 billion and send it directly to the United States Treasury to pay for ObamaCare’s cost. HHS sent the money to insurance 

companies instead and disregarded the Treasury and the American 

people. As of 2015, HHS denied the Treasury and taxpayers now 

up to $3.5 billion that they were owed. 

So I really don’t have a lot of questions, but just one major one 

here would be this, if you would answer it. Since September of last 

year, GAO issued a ruling concerning HHS’s actions. What did 

GAO determine with this report? 

Mr. DICKEN. Thank you, Congressman Walker. 


KING-6430 with DISTILLER
36 

And you’re correct that last year GAO did issue a legal opinion 

looking at the payments under the program. As you indicated, the 

Affordable Care Act indicated that both the payments that were 

collected were to be provided some to the general Treasury, some 

in reinsurance payments to the payers. 

In fact, the collections were less than the amount that HHS had 

fully intended to include in the reinsurance and paid all of that to 

the insurers instead. GAO’s legal opinion indicated that, in fact, 

those payments should have also been to the general Treasury. 

Mr. WALKER. Obviously, this is a pattern for the last 3 years. 

Can you share what the reasoning was, as far as disregarding the 

Treasury, which, as we know, is basically taxpayers’ money? Why 

was it disregarded? Can you brief us on that? 

Mr. DICKEN. Yeah, I would defer to—you know, I think, certainly, HHS’s attorneys would be able to speak to the legal reasoning there, but that, in general, because the collections were less 

than the amount that are authorized, that was the priority that 

HHS made in giving the reinsurance to the insurers first without 

payments to the Treasury. 

Mr. WALKER. Do you still—well, let me ask you this. Do you have 

any idea how much is still owed to the U.S. Treasury that the previous administration refused or denied to pay? 

Mr. DICKEN. I don’t have that at my fingertips but certainly can 

follow up. 

Mr. WALKER. Do you have any kind of ballpark? Is it in the billions of dollars? 

Mr. DICKEN. I think it indicated that the requirement was for 

several billion, Treasury. Some of those payments could still be 

made, because those collections for 2016 would actually be made in 

2017. And so some of that is still being reconciled. 

Mr. WALKER. Thank you, Mr. Dicken. 

Mr. Chairman, I yield back. 

Mr. JORDAN. I thank the gentleman and would now recognize the 

ranking member from Illinois for his 5 minutes. 

Mr. KRISHNAMOORTHI. Thank you, sir. I would like to yield to the 

ranking member of the general committee to make a few comments, please. 

Mr. CUMMINGS. Thank you very much. 

I want to thank you, Mr. Chairman. 

And I want to take an opportunity to officially welcome Congressman Krishnamoorthi to his first Oversight Committee hearing. We’re very fortunate to have him on our committee. He brings 

a valuable perspective as a small-businessman and entrepreneur 

and as a lawyer and a public servant. 

We also are fortunate that he has accepted the responsibility of 

serving as the ranking member on this very, very important Health 

Subcommittee. This subcommittee takes up some of the most important issues that come before our committee, not the least of 

which is the Affordable Care Act. 

Recent polls have shown that the number-one issue, even beyond 

this, by the way, is another subject that he, I’m sure, will touch on 

at some point, and that is the cost of prescription drugs. That is 

the number-one issue with regard to independents, Democrats, and 

Republicans. 


KING-6430 with DISTILLER
37 

And in recent hearings we’ve had testimony about how, Mr. 

Chairman and Ranking Member, about how the cost of prescription 

drugs, these folks who are improperly and because of greed raising 

the prices of these drugs, that, too, is going into the cost of health 

care, and very significant. 

And so we are truly at a crossroads with regard to the ACA. Congressional Republicans are moving forward to repeal this law without having an adequate replacement. As a matter of fact, they had 

a deadline, I think, of yesterday or today. They didn’t meet the 

deadline. If they do this, it will be nothing short of disastrous for 

tens of millions of Americans who have gained coverage thanks to 

the ACA. 

It will also be disastrous for Americans with employer-provided 

insurance who have benefited from the ACA’s many consumer protections. People with employer-provided insurance no longer have 

caps on the annual and lifetime coverage benefits. They now have 

free preventive care like cholesterol screenings and mammograms. 

And there is no price that you can pay or put on prevention, no 

price that you can put on wellness. And so they cannot be treated 

any differently by their insurance company because of a preexisting 

condition. 

Repealing the ACA would also have disastrous effects on our 

economy. Repeal would completely destabilize the insurance market, drive premiums up, and cost millions of jobs across our entire 

country. This is not what the American people want, and it is certainly not what they need. 

All types of statistics have been cited with regard to people who 

want to repeal, but a lot of times when people—you need to dig 

into those numbers a little bit and discover that there are a whole 

group of people that want to expand the Affordable Care Act. 

And so we’ve got a situation here where we have to keep in mind 

that health care should not be a privilege, it must be a right. When 

you have an unhealthy society, you have a society that cannot be 

all that God meant for it to be. 

And so I am excited about our new ranking member. I know that 

he will bring much to this discussion. He is here for a reason, and 

that is to make a difference. 

I would only say this. Mr. Ranking Member, you weren’t here 

when we voted for the Affordable Care Act, but I’ve told my constituents many times that in my 14 years as a member of the 

Maryland legislature and my 21 years as a Member of this legislature there is nothing that I have done that has been more important than pulling that lever for the Affordable Care Act. Because 

I have absolutely, unequivocally no doubt that we have saved lives 

and we will continue to save lives. We can repair—there are things 

that probably need to be done, but we must make sure that the 

American people are healthy. 

And, with that, I would thank the ranking member for yielding, 

and I yield back. 

Mr. JORDAN. I thank the gentleman. 

The ranking member is recognized. 

Mr. KRISHNAMOORTHI. Thank you, Mr. Ranking Member. I agree 

with your comments that it appears to me that we should mend the 

ACA, not end it—mend, don’t end it. 


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I have a couple questions. Thank you so much to the witnesses 

for coming today. I was heartened to learned from Mr. Dicken that 

the people on the ACA were about as satisfied, in terms of their 

satisfaction levels, as compared to those in employer plans. 

Is that generally correct? 

Mr. DICKEN. Yeah. The surveys we saw, there were generally 

satisfaction levels in the 70 or 80 percent overall satisfaction, 

which was similar to or somewhat lower than for employer-sponsored plans. 

Mr. KRISHNAMOORTHI. Right. And I would surmise that their satisfaction levels would go down if they had no health coverage, if 

there was a repeal without replacement, correct? 

Mr. DICKEN. This was satisfaction with their health plan, so I 

can’t speak to what satisfaction would be without the health plan. 

Mr. KRISHNAMOORTHI. Sure. 

And, Ms. Robinson, thank you so much for your testimony and 

investigating the issues related to the ACA. 

I presume that you didn’t look at waste, fraud, and abuse before 

the ACA was instituted, right? 

Ms. ROBINSON. Thank you for that question. 

We’ve done a lot of work looking at fraud, waste, and abuse in 

the Medicare and Medicaid and other HHS programs before the Affordable Care Act. But our jurisdiction is to look at programs of the 

Department, so if you’re asking whether we looked at, sort of, private insurance before the Affordable Care Act, we did not. 

Mr. KRISHNAMOORTHI. Right. 

Now, Mr. Siegel, I want to sincerely thank you for appearing before the subcommittee today. I know you run a small business and 

are taking valuable time out of your small business to be here 

today. As a small-businessman, I know that that is a big sacrifice 

on your part. 

I want to ask a few questions about your experience with the 

ACA. You testified that after you were laid off in 2012 you wouldn’t 

have had the ability to start your own business had it not been for 

the ACA. Can you explain why that is? 

Mr. SIEGEL. I wouldn’t have had the courage. And the reason I 

wouldn’t have had the courage is because the prospect of not having insurance, especially for my wife, is frightening. 

You can spend tens of thousands of dollars a year on medication 

for MS, even if you don’t have a problem with relapses and other 

problems, which we have been spared. And she was 53. She was 

52 or 53, whatever it was. So that is at least 12 years till Medicare. 

I can’t screw around with that. I can’t take a chance. She has to 

have insurance. 

And the private market in New York before the ACA, as I said, 

was incredibly expensive. It’s cheaper under the ACA than it was 

before. That’s not true of every State, but it’s true of New York. 

Mr. KRISHNAMOORTHI. You know, as a small-businessman myself, I understand the risks of going out on your own. We want 

more people to do what you did. We want people to go out on their 

own and create new businesses and new jobs. That’s how we grow 

our economy. Worries about health insurance, whether it is affordable, whether it will cover preexisting conditions, can hold prospective entrepreneurs back. 


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And the economic effects of repeal are not just anecdotal. According to The Commonwealth Fund, repealing the ACA would lead to 

the loss of 2.6 million jobs in 2019 alone, mostly from the private 

sector. 

Now, Mr. Siegel, can you tell the members of this committee directly about how the threat of repeal affects you and your family 

today? 

Mr. SIEGEL. If the ACA is repealed, I’m not sure how I would get 

insurance and if I could get it for my wife. And my kids, I don’t 

know, they are going to turn 26, 27 soon enough. And, you know, 

I’ll pay for them as long as I can get them insurance, but I don’t 

know. So it’s about that simple. 

Mr. KRISHNAMOORTHI. And what does that do to—you know, 

what are your anxiety levels right now? 

Mr. SIEGEL. I have not slept very well since the election, to be 

honest with you. 

Mr. KRISHNAMOORTHI. So it’s affected your health. 

Mr. SIEGEL. It’s affected my anxiety. I don’t know that it has affected anything else yet. We shall see. I hope not. 

Mr. KRISHNAMOORTHI. Now, Mr. Siegel, can you tell us a little 

bit about your business and how it’s grown since you started? 

Mr. SIEGEL. Sure. We are a small market research firm. We do 

mainly survey research on product development. And we have 

grown from essentially nothing our first year to this year—I’m not 

going to tell how much we make because we’re an LLC and that 

will tell you how much I make, but I made a good living this last 

year. Let me put it that way. 

Mr. KRISHNAMOORTHI. Great. 

Thank you. 

Mr. JORDAN. I thank the gentleman from Illinois. 

Ms. Robinson, in your opening statement, you talked about most 

States didn’t have any type of accurate accounting for how ACA 

dollars were allocated and what they got from the Feds. Something 

to that effect you said in your opening statement. 

Ms. ROBINSON. Thank you, Chairman. 

I think you’re referring to the work we did looking at the establishment grant program—— 

Mr. JORDAN. Yes. 

Ms. ROBINSON. —which looked at cost allocation. So if you’ve got 

a marketplace in the States that’s sharing a system, you need to 

allocate the costs between the funding for the establishment grant 

for the marketplace and other programs that may share the same 

system, such as the Medicaid eligibility—— 

Mr. JORDAN. And the States weren’t accurately accounting for all 

that. 

Ms. ROBINSON. Correct. In many of the situations we looked at, 

States were not accurately—— 

Mr. JORDAN. And was the inaccurate accounting, did it result in 

more Federal dollars coming to the State or less? 

Ms. ROBINSON. What it resulted in, often, was too much establishment grant funding going to the State. In some—— 

Mr. JORDAN. Oh, imagine that. They got more. They erred on the 

side where they got more. Imagine that. 


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Ms. ROBINSON. In some cases, however, some of that funding 

could be allocated to the Medicaid program. So we did recommend 

that CMS and the States work together to—— 

Mr. JORDAN. In your report, you also said there were insufficient 

payment controls that led to wasteful spending. You said CMS 

lacked controls to ensure that financial assistance payments were 

correctly calculated. And you said CMS lacked controls to ensure 

effectively that APTC payments were made only for the enrollees 

who paid their monthly premiums. 

It sounds like a lot of screwing up going on. 

Ms. ROBINSON. Chairman, we did find a number of 

vulnerabilities and internal control weaknesses in our work, yes. 

Mr. JORDAN. Yeah. 

And the GAO, you guys did a little—it looks like a little experiment here, where you had 15 fictitious folks, right, fictitious people 

applied for coverage. And how many of those 15 got coverage and 

got the subsidy and got credit for it all, Mr. Dicken? 

Mr. DICKEN. Right. So, for the open enrollment in 2016, we had 

15 fictitious applicants. All of those initially received coverage that 

would’ve been subsidized—— 

Mr. JORDAN. Every single one? 

Mr. DICKEN. Initially, yes. 

Mr. JORDAN. Wow. So they didn’t catch anybody who was trying 

to rig the game and mess with the system, did they? 

Mr. DICKEN. There was some documentation that was requested 

over time. So, over time, you know, one was not retained; it was 

terminated. But, initially, we did receive all 15 approvals for—— 

Mr. JORDAN. Even though some fictitious documents were also 

sent along after the initial entry, right? 

Mr. DICKEN. That’s correct. We—— 

Mr. JORDAN. Wow. So they were batting 1,000 in ripping off the 

taxpayer. 

Mr. Dicken, I’m just curious, not so much as GAO guy but as just 

a citizen who follows the press, are you familiar with the name 

Jonathan Gruber? 

Mr. DICKEN. Familiar with him as a healthcare economist, yes. 

Mr. JORDAN. Yeah. And do you remember, you know, some of the 

statements that he made back when this thing was—when they 

were passing this law and some of the statements that came from 

the administration? Do you remember some of those, for the promises that were made? 

Mr. DICKEN. I’ve seen some of Dr. Gruber’s research. I’ve—— 

Mr. JORDAN. Let me remind you of some of the things. I just 

want your comment if these actually turned out to be true. 

Many folks said back when this was being debated and initially 

passed, they said, if you like your plan, you can keep your plan. 

Was that an accurate statement? Did that turn out to be accurate? 

If you can give me some short answers, because I’ve got a lot of 

questions to ask you. 

Mr. DICKEN. So, certainly, there are dynamic changes, and so 

many newly covered people were covered through the exchanges. 

Some people that were previously covered through plans—— 

Mr. JORDAN. You’ve got to give me shorter answers than that. 

Mr. DICKEN. —did change to other plans. 


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Mr. JORDAN. Yeah, okay. That’s what I thought. 

And we also said, if you like your doctor, you can keep your doctor. Did that turn out to be true? Was that accurate for all Americans, like it was presented? 

Mr. DICKEN. Certainly, to the extent that individuals changed 

plans at different networks—— 

Mr. JORDAN. Yeah. Lots of people had to get new doctors. 

Did premiums go down, like we were promised? Have premiums 

gone down? 

Mr. DICKEN. Well, we’ve seen that—you know, it’s hard to compare premiums before and after. For a number of reasons, we’ve 

seen premium increases, I think as you mentioned—— 

Mr. JORDAN. Twenty-five percent. 

Mr. DICKEN. —in the most recent year, of 25 percent in the exchange. 

Mr. JORDAN. Yeah. So premiums didn’t go down on average 

$2,500 either, did they? 

Mr. DICKEN. We’ve not compared before and after, but premiums 

in the most recent year have gone up 25 percent. 

Mr. JORDAN. Do you remember when this thing was rolled out? 

Did the website work very well when this thing was first rolled 

out? 

Mr. DICKEN. So, certainly, there were a number of technical challenges and problems that were widely known—— 

Mr. JORDAN. And was the website secure? All this information, 

private information, was it secure at the time it was rolled out? Do 

you remember that? 

Mr. DICKEN. GAO has done work looking at and made a number 

of recommendations to try to improve the privacy and security—— 

Mr. JORDAN. Yeah, because it wasn’t secured. 

Have emergency room visits declined under the Affordable Care 

Act, as we were promised to do? 

Mr. DICKEN. I don’t believe GAO has evaluated, kind of, 

what—— 

Mr. JORDAN. I figured that was one you probably hadn’t looked 

at, but they’ve went up dramatically. 

And what about the co-ops, these co-ops that were created that 

were supposed to be, you know, just apple pie, wonderful, you 

know, be-all, end-all, save-all, 23 of them that were created, how 

have they done? 

Mr. DICKEN. Yeah, so we’ve evaluated those. There are five that 

are still being offered in 2017. 

Mr. JORDAN. Yeah. So 23 originally, and only 5 or so—another 

way of saying that is 18 have already went bankrupt, right? 

Mr. DICKEN. And one is in the process of trying to transition, 

but—— 

Mr. JORDAN. So I count nine false statements: like your plan, 

keep your plan; like your doctor, keep your doctor; premiums are 

going to go down, they’re going to go down on average $2,500, 

website won’t work, website’s not secure, emergency room visits declined, co-ops have went—18 of 23 have went bankrupt even 

though they were promised—and deductibles have actually increased dramatically when they were said they were going to decline. So nine false statements. 


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And now we find out—so we were misled. And now we find out 

when the plan’s actually put in place, most States don’t have an 

accurate accounting of how the dollars are spent, inefficient payment controls that led to wasteful spending. CMS lacked controls 

to ensure financial assistance payments were correctly calculated. 

CMS lacked controls to ensure effectively that APTC payments 

were made only for enrollees who paid their monthly premiums. 

And when you guys ran a little experiment and had 15 fictitious 

people, 15 made-up folks who signed up for it, they all got the subsidy. 

And yet we have people say, oh, this thing is wonderful, we’ve 

got to keep it. That’s just amazing to me. This thing has got to go. 

And that’s what we’re going to be working on here over the next 

several weeks, to put in a plan—I start from the simple premise, 

health care gets better and costs less when ObamaCare is gone. 

And that, to me, seems to be the direction we have to go. 

So, with that, I would yield to, if the gentlelady is ready, Ms. 

Norton. 

Well, we can go to Mr. Cummings, and then we’ll go to—— 

Mr. CUMMINGS. Would the gentleman yield? 

Mr. JORDAN. Well, actually—yeah. 

Mr. CUMMINGS. Let me ask you, President Trump has said that 

he is going to provide health care for everyone and that it would 

be cheaper.Can you tell us about that plan so that the American 

people will be aware? Are you aware of it, of how that’s going to 

work? Mr. Chairman? Chairman, I yield—— 

Mr. JORDAN. I thought you were asking our—— 

Mr. JORDAN. I’m asking you. 

Mr. JORDAN. I’m not sure what Mr. Trump had in mind. I don’t 

know what you have in mind sometimes when you make statements, and I don’t know what everyone has in mind when they 

make statements. 

But what I do know is what I just outlined, the false statements 

that were made when the Affordable Care Act was presented to the 

American people and—— 

Mr. CUMMINGS. Well, I reclaim my time. I reclaim my time. 

Mr. JORDAN. —all the fraud that the witness has said—— 

Mr. CUMMINGS. You’re not answering the question. I reclaim my 

time. Thank you. I just wanted to know so that the general public 

would know what the President’s talking about. 

I’d like to take a few minutes to discuss what we can expect our 

healthcare system to look like under a Trump administration. 

President Trump has claimed that his replacement to the ACA 

would provide, and I quote, ‘‘health care that is far less expensive 

and far better than the ACA,’’ end of quote. But based on the actions of President Trump, actions taken so far, the only thing that 

TrumpCare seems to be doing is creating chaos in the insurance 

market and leaving millions of people uncertain about their health 

care. 

On January 20th, President Trump issued an Executive order 

that directs Federal agencies to, quote, ‘‘waive, defer, and grant exemptions from or delay implementation of any provision of the act,’’ 

end of quote. 


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What this will mean for people with the ACA insurance isn’t entirely clear since the order is short on concrete details, but it does 

raise serious doubts about whether consumers, including those 

with employer-sponsored insurance, will continue to enjoy the benefits and protections they received under the ACA, such as no caps 

on annual and lifetime limits, free preventive care, and comprehensive coverage of essential health benefits. 

Mr. Siegel, as a small-businessman and an ACA plan enrollee, 

how does all of this uncertainty impact you and your ability to run 

your business? 

Mr. SIEGEL. As I said, I have not had slept well since the election. To the extent that I’m focused on that instead of focusing on 

our business, it takes time away. 

How do I put this? I don’t know that this new administration understands. And when people don’t understand, it makes it very 

hard to plan for the future at all, because you don’t know what 

they’re going to do. 

Mr. CUMMINGS. Yeah. 

The uncertainty is also affecting insurance companies, Mr. 

Siegel. The Urban Institute recently released findings from interviews with executives from 13 insurance companies that offer coverage in the individual market in 28 States. Most of the executives 

interviewed warned that repealing the individual mandate would 

drive up premiums, up to 20 percent more than currently expected. 

And some insurers warned that they might leave the market altogether. 

Now, Mr. Dicken, you have studied the individual insurance market closely, have you not? 

Mr. DICKEN. Yes, GAO has. 

Mr. CUMMINGS. And does it surprise you that insurers are wary 

of repealing fundamental aspects of the ACA without having a comparable replacement plan in place? 

Mr. DICKEN. Well, certainly, insurers in the next few months will 

be setting benefits and premiums for 2018 and so certainly need to 

understand the Federal and State rules that they’ll be working 

under. 

Mr. CUMMINGS. And so, in addition to creating instability in the 

insurance market and uncertainty among consumers, it appears 

that the Trump administration is taking steps to actively prevent 

people from enrolling in coverage. According to a recent Politico article last week, the Trump administration canceled TV advertisements for open enrollment that had already been placed and paid 

for, even though the last day to enroll wasn’t until today. 

But, Ms. Robinson, as you’ve stated in your written testimony, 

the IG’s central mission is to, quote, ‘‘protect the integrity,’’ end of 

quote, of the ACA and other Federal health programs. Do you plan 

to look into this issue? 

I think they reversed that now, right? In other words, they put 

the ads back up. 

Ms. ROBINSON. Thank you for that question. 

Mr. CUMMINGS. By the way, I was in my district on Monday telling my constituents to enroll. 

But go ahead. 


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Ms. ROBINSON. Thank you for that question. I don’t have that 

particular detail about this. 

Mr. CUMMINGS. Okay. 

Ms. ROBINSON. I’ve seen some of the same reports that others 

have seen. 

Mr. CUMMINGS. Even if the money that has been wasted on the 

ads that never aired is somehow recovered, it is still deeply concerning that the Trump administration would intentionally sabotage the final week of open enrollment in this way, especially since 

we know that young and healthy people tend to wait until the last 

minute to enroll. 

If this is any indication of the future of TrumpCare, we will need 

the IGs to remain vigilant in the oversight—in his oversight responsibilities, and, as the primary oversight body of the House, I 

hope that we will do the same. 

And so we will continue to look over this again. Health care in 

the great country called the United States should not be a privilege 

but a right. 

And, with that, I yield back. 

Mr. JORDAN. I thank the gentleman. 

The gentleman from Michigan is recognized. 

Mr. MITCHELL. Before I joined this esteemed body, I retired as 

the CEO of an education group. We had 650 employees. A fair 

number were part-time. Anybody who was scheduled more than 9 

hours a week on a regularly scheduled basis had health care. They 

had health care for themselves, and they could buy health care for 

their family relatively inexpensively. 

The Affordable Care Act, when that came into place and the requirements were finally rolled out by HHS, increased the cost for 

part-time employee health care by 50 percent year one for my company. 

So my question for Ms. Robinson or Mr. Dicken: Did you do any 

analysis when you looked at the fraud, the waste, at the immediate 

impact on health insurance premiums, never mind copays and 

deductibles, for privately sponsored healthcare programs and what 

the impact was in the first few years? 

Mr. DICKEN. We’ve not directly looked at the changes in employer-sponsored health premiums. There are some surveys that 

look at that by other organizations, but GAO has not reported on 

that. 

Mr. MITCHELL. Did HHS look at this issue? 

Ms. ROBINSON. We have not looked at that issue. Our focus is 

really on HHS dollars and the expenditure of HHS funds. 

Mr. MITCHELL. Well, but as my constituents view it, whether 

their money that they paid for premiums, whether it’s the employer 

paying for premiums, whether it’s their tax dollars that they pay 

the Federal Government, it’s all their money. So would it not make 

sense to look at waste as it’s viewed in terms of the immediate and 

then long-term impact on healthcare costs in America by looking at 

what suddenly the change in costs were? As I indicated, for our 

company it was dramatic, and a number of others I know of. 

Mr. DICKEN. Yeah, certainly, we’re glad to work with the subcommittee on looking at healthcare costs and trends in the markets. Certainly, employers—there have been longstanding increases 


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overall in health insurance costs, even for—Federal employees have 

seen increases in healthcare costs in recent years. 

Mr. MITCHELL. Let me change direction for a second question. 

There were concerns with those who are receiving subsidies or payments. Can you tell me how many people in year one received subsidies that were improper or determined to be inaccurate the first 

year? 

Ms. ROBINSON. So that’s a very important question. We don’t 

have the number of folks, but what we did look at was the risk to 

the programs of potentially weak controls on eligibility. So our 

work—— 

Mr. MITCHELL. Let me ask you, why—I mean, we’re subjected to 

audits as a company. Why would we not know how many people 

received subsidies that were found to be inappropriate and/or 

fraudulent, whatever term you want to put on it? How would we 

not investigate that and not know? 

Ms. ROBINSON. So, Congressman, my office does investigate when 

we get allegations of an improper person being in the marketplace. 

Our work initially set out to figure out whether there were adequate safeguards to prevent fraudulent or improper information 

from impacting the eligibility determinations. 

Mr. MITCHELL. So at this moment, we still don’t have either year 

one or any year since any idea of an approximation of the number 

of people that receive payments that we—they should not have? 

Ms. ROBINSON. My office does not have that information. 

Mr. MITCHELL. Does HHS, in general, have that? 

Ms. ROBINSON. I don’t know. 

Mr. MITCHELL. Do we—you lead me to believe, then, we don’t 

know how much those inappropriate payments total up to be to the 

taxpayers. Is that correct? 

Ms. ROBINSON. I do not have that information. 

Mr. MITCHELL. Mr. Dicken, do you have that information? 

Mr. DICKEN. No, but I will note that the GAO has recommended 

that HHS develop a fraud risk assessment to get at some of the 

questions that you are getting at, so they have an overall understanding of what the fraud risk potential is and how they can manage those risks. 

Mr. MITCHELL. I readily admit, as I say, I’m subject to freshman 

hazing here as a freshman Member of Congress, but I spent 35 

years in private business, and I have to say, Oh, my God. How is 

it that we don’t have the means by which to figure out those that 

we didn’t, and how much it has cost us here? We’re analyzing fraud 

and abuse. How do we not think about it was a problem? 

Ms. ROBINSON. Well, Congressman, I think you’re raising a really 

important question about transparency in government. And one of 

the things that we have been recommending to CMS and the marketplace is to look at things like having the right kinds of data to 

be able to figure these things out. And so, for example, in our work 

looking at the accuracy of the subsidies, what we—— 

Mr. MITCHELL. Well, let me stop you and ask a question. 

Ms. ROBINSON. Yeah. 

Mr. MITCHELL. But if we’re making a payment to a private carrier or somebody else, we certainly would insist on that kind of 


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transparency of them, and we would recover the money if it was 

improperly paid, wouldn’t we? 

Ms. ROBINSON. Yes, Congressman. 

Mr. MITCHELL. So we fail to undertake a basic function of the department of government is to make sure we’re not throwing money 

out of the window. 

Ms. ROBINSON. Well, Congressman, that’s why we’ve done the 

work. We’ve looked at the controls that CMS has on the accuracy 

of the payments, is to be able to make recommendations to 

strengthen those controls. 

Mr. MITCHELL. Thank you very much. Thanks very much. I yield 

back. 

Mr. JORDAN. I thank the gentleman. I think it’s a great line of 

questioning. We can’t get an answer to the number of individuals 

who got payment inappropriately, fraudulent payments, but we can 

probably conclude that anyone who attempted, who applied fraudulently, probably did get paid. And who can we conclude that? Because you all ran the experiment: 15 fictitious people, and you 

found that it wasn’t one who got paid, it wasn’t two, it wasn’t 10, 

it wasn’t 14; it was 15 out of 15. So Mr. Mitchell’s question is entirely appropriate, and one we need to get—think about that. If everyone, based on the little experiment you all ran where you found 

it was—that we’re batting 1,000, anyone who applied fraudulently 

may, in fact, have gotten money that they weren’t entitled to. And 

that is a concern for the tech—not to mention all the other problems with the ACA that we’ve talked about, all of the misleading 

statements, all the false statements, all the lies told to the American people before this thing was passed. So we’d like to get that 

number as quickly as possible. And I appreciate the gentleman’s 

questioning from Michigan. 

I now recognize the gentlelady from the District of Columbia. 

Ms. NORTON. Thank you, Mr. Chairman. I guess it’s been reported that this is the last day to sign up for the Affordable 

Healthcare Act, and people have been signing up in huge numbers. 

People are afraid of a big structural change and what effects it will 

have, not only on those who are part of the ACA, but, of course, 

we’re talking about a sixth of the economy, and how fooling with 

this aspect of it could have an effect on the economy itself. 

And in my district, and I represent the District of Columbia, a 

lot of people already have health care because they work for the 

Federal Government, but 100,000 D.C. residents would lose their 

insurance if the Affordable Healthcare Act were repealed, and the 

estimated cost to D.C. would be $1.1 billion. Now, that’s a city of 

700,000 people. Imagine what this means writ large across the 

country. 

I’m interested in, Mr. Siegel, because I think when most people 

think of the health care, of the Affordable Healthcare Act, they 

may not think of enrollees like Mr. Siegel, but the largest segment 

of enrollees in the non-group market is self-employed. So I’d be interested in your views on what effect guaranteed access to private 

insurance has had on the security of your business as a business. 

Mr. SIEGEL. I always had access. Affordable enrollment in coverage has made a huge difference, and the reason it makes—— 

Ms. NORTON. To your business? 


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Mr. SIEGEL. Yes. 

Ms. NORTON. To your business itself? 

Mr. SIEGEL. Well, I buy it on the exchange, so the business 

doesn’t buy it. But for the business, it makes a big difference, because it would not have me as a participant if it was not for the 

ACA. And we started out with three partners, and our youngest 

partner died after 6 months, and you cannot run a market research 

business with one person. So our business would probably not exist 

right now. That’s my guess. 

Ms. NORTON. Without the Affordable Healthcare Act. 

Mr. SIEGEL. That’s my guess. It’s counter-factual, right, so—— 

Ms. NORTON. So let’s look at the potential effects of the repeal 

on your family’s access, your business access, to affordable 

healthcare coverage. 

Mr. SIEGEL. New York is a State that will do something. I don’t 

know what. I do know that in New York, before the ACA, they 

had—private insurers had to take anybody, and that made our 

costs—but they—but you didn’t have to buy, so only people who 

needed it bought it, and so it made it expensive. My fear is we’ll 

go back to that, and that would—if I can get insurance at all, it 

will probably now be, and I don’t know, but I’m guessing $2,600, 

$2,700, $3,000 a month, because it was about $2,000 a month before the ACA, and so you’re going to see a pop back. And at that 

level, I’m going to have to find a job working for an employer. And 

I’m 61 years old, and in market research, that is not easy. And in 

any case, I’m tired of being a boss and I’m tired of having bosses. 

I love running a business with a partner I admire, serving clients 

that I like, and taking care of my family that way, and I don’t want 

to go back. 

Ms. NORTON. Mr. Siegel, finally, let me ask you about a plan that 

I read about in the Republican Study Committee Guide that would 

replace this long-standing tax exclusion for employer-based coverage with a standard tax deduction. Now, we know that would put 

health care out of the reach of lower brackets of Americans, but I 

don’t see how it would account for geography or age or health status. Do you have any view on such a replacement? 

Mr. SIEGEL. I don’t have any view on the technical side of it. I 

can tell you now that health insurance and healthcare coverage, according to our accountant, are something I can deduct, but I also 

know that that is not as good as what—— 

Ms. NORTON. What about a standard tax deduction? 

Mr. SIEGEL. I imagine I’d benefit from it, but I don’t know that 

my kids would. But what I was going to say is, you know, employer 

plans get a much better deal. And so just having a deduction for 

the private side, I don’t know what it would be. You make it as 

good as employers, maybe it has an effect, I don’t know, but if you 

don’t, definitely not. I’m not an expert on the tax system. I’m sorry. 

Ms. NORTON. Well, no one’s an expert on how this would work 

out, I can tell you that much. 

Thank you very much, Mr. Chairman. 

Mr. JORDAN. I thank the gentlelady. We’d now recognize the gentleman from Wisconsin. 

Mr. GROTHMAN. Sure. Mr. Dicken, I notice in some of the information we have here and in your initial talk, you told us a little 


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bit about the number of options Americans have as the number of 

insurance companies involved has dropped. Could you recite the 

numbers again for the last couple of years and the number of options? 

Mr. DICKEN. Sure. For plan options, that would be on the different metal tiers that are offered through the exchanges, to be silver or gold, we found that most consumers had six or more plan 

options. In the most recent years, the number of issuers that are 

offering plans have declined, and so we’ve seen that. HHS has reported that this year, 21 percent of consumers have plan options, 

but only from one issuer, one insurance company. 

Mr. GROTHMAN. Okay. So at 21, in essence, you have a monopoly, 

correct, 21 percent? 

Mr. DICKEN. For the exchanges that there will be different silver 

or gold plans, but just from the same insurer. 

Mr. GROTHMAN. And at this rate, how many, we don’t know yet, 

but how many plans do you think will be out there for 2018? 

Mr. DICKEN. Yeah. I think there’s a lot of uncertainty about what 

future years will bring. Certainly it’s—insurance companies, it’s 

been very concentrated, with many States having only one or two 

or three insurers having 80 percent of the market. 

Mr. GROTHMAN. It shot up about—it shot up from, like, 5 percent 

to 21 percent in one year, correct? 

Mr. DICKEN. I don’t have the early numbers, but it has increased 

that more—— 

Mr. GROTHMAN. Dramatically. 

Mr. DICKEN. —areas have only one issuer. 

Mr. GROTHMAN. Is there any concern that some areas will soon 

have no issuers? 

Mr. DICKEN. Certainly, you know, it would be important to make 

sure that consumers under the current system with the exchanges 

have plans that are available. You know, certainly, that’s a local 

decision—local decisions by the insurers in those areas. 

Mr. GROTHMAN. Right. But if we’ve gone down from three or four 

or five options to one option, it stands to reason that it’s entirely 

possible soon we’re going to have no options, right? 

Mr. DICKEN. That has not yet been experienced, but certainly a 

concern. 

Mr. GROTHMAN. Okay. And what effect on premiums has that 

had as the number of—as the competition is disappearing? 

Mr. DICKEN. Yeah. In general, you would expect that less competition would mean less pressure on keeping low premiums. 

Mr. GROTHMAN. And is that true, right? 

Mr. DICKEN. You know, we’ve not done a causal study looking at 

that, but that certainly would be the expectation. 

Mr. GROTHMAN. Premiums have shot up in this past year, correct? 

Mr. DICKEN. On average, about 25 percent increase. 

Mr. GROTHMAN. 25 percent, which is—and I would say one of the 

reasons they shot up may be is there is no competition, right? 

Mr. DICKEN. A range of issues for that as the experience of the 

exchanges has led some insurers to increase the premiums. 

Mr. GROTHMAN. Right. And can you tell us why the number of 

insurance companies keeps disappearing? 


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Mr. DICKEN. I think there’s a variety of reasons, a couple that 

have been mentioned today. Some of the plans that were available, 

such as co-op plans, have terminated operations, some large national insurers have changed the markets that they’re operating in, 

or left the exchanges. 

Mr. GROTHMAN. Can you let us know why they’ve left? I mean, 

there must be some reason. You know, a few years ago, they were 

apparently gung-ho and thought they could make a go of it, and 

now they can’t. What happened? 

Mr. DICKEN. Yeah. I think those are business decisions by the insurers as they decide what markets and what their experience has 

been. 

Mr. GROTHMAN. Well, they are businesses, but could you speculate for us why companies keep leaving the current market that 

was originally envisioned? 

Mr. DICKEN. Yes. Certainly, as they’ve learned more about the 

cost of individuals that they’re covering and their relative premiums in that market, some have made business decisions that 

they’re not going to compete in that market. 

Mr. GROTHMAN. So it would seem that over time, given the current framework, insurance companies cannot operate, correct, or 

they wouldn’t keep pulling out? And no new insurance companies 

are jumping in, are they, largely? 

Mr. DICKEN. There have been—we did look at new entrants and 

exits. We found that most of the exits were among smaller insurers. There were—there have been some new entrants into the market as well. 

Mr. GROTHMAN. Okay. Ms. Robinson, you looked at the grant 

funds, and reviews by the inspector general identified money that 

need to be refunded to the Federal Government, because it’s not 

spent in accordance to your requirements. What’s the status of 

your recommendations that money that was misspent be refunded 

to the Federal Government? 

Ms. ROBINSON. Thank you for your—that question. On the establishment grant funding, I believe most of those recommendations 

are still open and we are following up on that, but I think those 

are still open recommendations. 

Mr. GROTHMAN. Are they refunding the money? 

Ms. ROBINSON. Not as far as I know. 

Mr. GROTHMAN. What efforts are they making to refund the 

money, or is this just considered par for the course now? 

Ms. ROBINSON. So we worked with CMS to follow up on those 

recommendations. I don’t have at my fingertips, but I’d be happy 

to follow up with you on any details about with respect to the specific amounts that we’ve identified. 

Mr. GROTHMAN. Okay. And how many States does that include, 

do you know? 

Ms. ROBINSON. We looked at—if you just give me one moment. 

We looked at establishment grants at six States that we had—that 

we looked at. 

Mr. GROTHMAN. Okay. Were there problems in all six or—— 

Ms. ROBINSON. Yes. So we had problems in all six. We had one 

other that did not have any problems. 


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Mr. GROTHMAN. Okay. Well, six. One out of seven? Huh? Okay. 

Thank you. 

Mr. JORDAN. I thank the gentleman. 

The former chairman of the committee, we’re glad to welcome. 

The gentleman from California is recognized. 

Mr. ISSA. Thank you, Mr. Chairman. 

Mr. Dixon—Dicken, you know, we’re all watching the Affordable 

Care Act underperform, and we are all concerned that what it 

sought to achieve, one would say it at least partially achieved; 

there are millions of people on the plan, but let me go through a 

couple of comparisons, and they’re a little outside your briefing, but 

I think they’re well within your competence. 

You’re personally under FEHBP, right? 

Mr. DICKEN. That’s correct. 

Mr. ISSA. And you’re familiar with the programs that are offered, 

the 250-plus different options? 

Mr. DICKEN. Nationwide, there are many, yes. 

Mr. ISSA. So if we were to contrast the 11 million-plus people 

that are in FEHBP, they’re Federal employees, retirees, and their 

families, contrast the options between what you expect to have in 

2017 in the Affordable Care Act as it is, and what half the number 

of people, but the Federal workers and their families have. 

Mr. DICKEN. Right. About 8 million people covered through the 

Federal employees program, as you mentioned, nationwide, over 

200 plans offered. That includes some national plan offerings, 

mostly PPOs as well as local HMOs, that are available in specific 

markets. 

Mr. ISSA. Right. To include Kaiser, Blue Cross, all the major 

names? 

Mr. DICKEN. That’s correct. And so—and throughout those markets, Federal employees, retirees, and dependents can choose either 

from those national plans, the largest by far of which is the Blue 

Cross standard and basic options, which covers about two-thirds of 

enrollees. 

Mr. ISSA. And under the plan, if you go onto a COBRA because 

you leave the Federal workforce, you pay to whichever healthcare 

program you were in as you continue, right? 

Mr. DICKEN. COBRA would have continuation coverage with the 

individual paying the full premium, a smaller—— 

Mr. ISSA. Right. Which means at least in some cases, the 

healthcare providers accept a check from an individual? 

Mr. DICKEN. In the COBRA cases, yeah. I don’t know the actual 

transfer of money, but it would be coming from the individual. 

Mr. ISSA. But in all cases, essentially these are private companies who have made a decision to provide a program to whatever 

amount of people, if you will, any and all from the Federal workforce current or, in the case of COBRA, COBRA, that choose their 

plan, correct? 

Mr. DICKEN. They are private plans, yes. 

Mr. ISSA. And just going through a couple of points, they’re not 

gender discriminate, right? 

Mr. DICKEN. It’s available to all Federal employees that—— 

Mr. ISSA. But, I mean, they change the same rate regardless of 

age? 


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Mr. DICKEN. Same premium nationwide. 

Mr. ISSA. Right. So you take advantage of the pool, that you’re 

not worrying about whether you’re young or old, man or woman, 

the rate’s the same? 

Mr. DICKEN. It is one premium for all. 

Mr. ISSA. Right. And your 26-year-old child can stay on it? 

Mr. DICKEN. Up to age 26. 

Mr. ISSA. Or 27th birthday, whatever. 

Mr. DICKEN. It think it’s 26th, but—— 

Mr. ISSA. 26th birthday. And there’s no problem switching as a 

Federal worker from program to program on an annual basis, 

based on any preexisting conditions or any other discrimination? 

Mr. DICKEN. Yeah. During the open enrollment period or for special reasons, they can change plans. 

Mr. ISSA. Okay. So it’s fair to say that FEHBP with 200 and 

some, my number is 250, but a great many plans more than the 

Affordable Care Act in most areas, in fact, offers all the same protections to the consumer that the ACA handles, right? 

Mr. DICKEN. My understanding is that the plans meet the requirements of the Affordable Care Act. 

Mr. ISSA. Okay. And they come in all levels, from relatively 

stripped down to essentially the equivalent, the very large plans 

like the Postal plan, which is a pretty good one, and so on, right? 

Mr. DICKEN. They’re all comprehensive medical. Some are high 

deductible offerings, and some are HMOs, yes. 

Mr. ISSA. So I’ve taken you through this and taxed your expertise 

for a reason. Is there any reason that if the Affordable Care Act 

were to go away and a transition to enjoying the same programs 

offered to the Federal workforce to virtually everyone who now or 

has retired from the Federal workforce, is there any reason that 

that wouldn’t be viable, considering these are insurance companies 

that want access to those 8 million-plus people they now insure, 

they bid for it every year, and if the number were increased, both 

for individuals and small or even not small businesses, is there any 

reason to believe that the program inherently wouldn’t be able to 

serve the same purpose, especially considering at least a subset of 

FEHBP are, in fact, the same companies? 

Mr. DICKEN. Yeah. We—GAO has not kind of evaluated expanding the Federal employees program to other plans or offerings. It 

is an employer-based plan based on the group of Federal employees, retirees, and that’s kind of important for that risk pool, as 

there’s not risk adjustment and other issues, and so—— 

Mr. ISSA. Well, there is risk adjustment, because they bid annually based on the risk, right? 

Mr. DICKEN. It’s based on their experience, yes, but not—if different plans end up with different risks, that’s—— 

Mr. ISSA. Right. But if over time the Federal workforce gets 

older, sicker, whatever, they adjust? 

Mr. DICKEN. Yes. So it would be placed based on that plan’s experience. 

Mr. ISSA. Okay. So last question, if I may, Chairman. 

You know, it was not considered originally, but they are private 

programs, there are more plans, it enjoys all the same protections 

of the Affordable Care Act. So when people, and I’m not trying to 


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be partisan, I’m trying to be very open here against what do we 

do in the eventuality. There is no inherent reason that you couldn’t 

have the Federal Government ensure through these national contracts with local and not local companies, there’s no inherent reason that that couldn’t be offered as a viable alternative, recognizing 

that there is a risk pool change, but these companies start off with 

an incredibly desirable 8-plus million people that they’re not going 

to want to walk away from if others are allowed to join. Is that a 

fair question? And, again, we’re taxing your expertise for an opinion. 

Mr. DICKEN. It’s certainly a fair question. We’ve not evaluated 

kind of what the effects could be, either for new entrants to that 

or for the Federal—existing Federal employees program; certainly 

a lot of considerations as to the risk pools, as to individuals involved. Some plans have left FEHBP over time as well. And so 

there would, again, be business decisions by the insurers whether 

or not to participate in that. 

Mr. ISSA. Okay. Thank you, Mr. Chairman. I yield back. 

Mr. JORDAN. I thank the gentleman. We can do maybe a quick 

question or two from—does the gentlelady from D.C. have additional questions? 

How about the gentleman from Wisconsin? You want another 

minute or minute and a half? 

Mr. GROTHMAN. Oh, absolutely. 

Mr. JORDAN. Yeah. You’ve got another minute and a half. 

Mr. GROTHMAN. Minute and a half, that’s what I need. 

Mr. JORDAN. And then we’ll come back to the D side and then 

we’ll finish up here. 

Mr. GROTHMAN. Sure. Maybe if I can, I’ll even take 2 minutes. 

If you give me one and a half, I’ll take two. 

Mr. JORDAN. All right. 

Mr. GROTHMAN. Ms. Robinson, HHS, you’ve conducted several reviews of CMS’ management of the health and insurance exchange 

programs and identified vulnerabilities related to Federal contracting and oversight in CMS’s overall management and administration of the facilities. 

Through those case studies of the management and administration, what lessons have been gathered? 

Ms. ROBINSON. Well, thank you for the opportunity to talk about 

our case study work, where we did look across the management, 

and there were a number of lessons. Certainly the lesson around 

needing good acquisition strategies and good contract planning; lessons around needing clear leadership for projects; and a really important lesson that I think extends across, particularly for complex 

technological and policy projects, is really to integrate technology 

and policy staff and thinking and contractors and employed staff in 

working together without fragmentation and without silos. Certainly, when we saw that at CMS, it helped improve their management across the marketplace program. 

Mr. GROTHMAN. Thank you. 

One more question for Mr. Siegel. I know there’s some areas in 

which there’s robust competition, but there are other areas that we 

just heard that only 20—you know, 26 percent of America, you’ve 

only got one choice under ObamaCare. And given that this has fallVerDate Nov 24 2008 10:16 Aug 09, 2017 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 H:\26313.TXT APRIL

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en over time, like, maybe a few years earlier, they had three or 

four, now they have one, does it concern you for your fellow Americans, as the number of companies drop off, that it’s possible, maybe 

as early as next year, that there’ll be no options at all? Does that 

concern you on behalf of your fellow Americans as you watch under 

the current—— 

Mr. SIEGEL. Well, I only speak for myself. I don’t pretend to 

speak for my fellow Americans, but of course it concerns me. I am 

not in the insurance industry, so I’m not going to speculate why 

there is only one company in some places. I can tell you that in 

New York, which has a long tradition of robust regulation of insurance markets, and a commitment, in many ways, to providing insurance to as many people as possible, we, by and large, have pretty robust choices. I had a choice this year. I’m trying to envision 

the thing they gave us. I had a choice, I would guess, of somewhere 

between 12 and 20 plans. I can’t tell you exactly how many, because I can’t remember the big, wide 8–1/2 by 11, 11-by-14 thing 

that I saw. 

Mr. GROTHMAN. Okay. I’ll come back to Mr. Dicken one more 

time. Again, there are some people, and I fought it and I think everybody else up here has fought it, who say we ought to let 

ObamaCare continue a few more years, because as companies continue to get out of these markets, the thing is going to collapse on 

its own. And when you already see 26 percent of the areas have 

one insurance company compared to where we were a couple of 

years ago, common sense will tell you that if we just let this thing 

go as it is, there might be some markets that have no plan at all, 

and others will just have one plan and they’ll—and the rates will 

keep going up 25 or 26 percent, and we can just sit here and watch 

the train wreck and blame President Obama. 

I think almost every Republican has stepped forward and said, 

no, we cannot allow this train wreck to happen to the American 

people. But I’ll ask you again, if you could speculate, given the disappearance of insurance firms from the market, how much of 

America is only going to have one company, or maybe no company 

if we don’t act by 2019 or 2020? 

Mr. DICKEN. Yeah. Thank you. And I cannot speculate, but I will 

note that, you know, this is the fourth year, it has been dynamic 

in the exchanges, we saw some increases up to 2015 and then a 

decline in insurers, as you’ve noted. That’s a concern for the private 

health insurance market as a whole. As our work, required by the 

Affordable Care Act, indicated insurance markets are very concentrated, with often only one, two, or three large insurers having 

the predominance of the market. And so a competitive market, 

whether it is the exchanges or the insurance market overall, that 

is a challenging consideration going forward. 

Mr. JORDAN. Mr. Dicken, I think the gentleman’s point is the 

trend lines aren’t good, the pattern isn’t good. 2 years ago, 23 coops started, today there are 5; 18 of them went bankrupt. Three 

years ago, most exchange areas had five plans that you could 

choose from, today it’s down to one. You look at patterns, you look 

at the pattern you all did, 15 fictitious people apply, they all get 

subsidies. So all the trends, all the patterns in this law are terrible, 

and that’s our point, and I think that’s Mr. Grothman’s point. So 


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I appreciate his questioning, even though it was his first hearing 

and it was sort of a filibuster there in the second round, but we 

have—I’m kidding you, Mr. Grothman. We appreciate that. 

Mr. KRISHNAMOORTHI. Well, Mr. Chairman, can I have equal 

time, please? 

Mr. JORDAN. Yes. You’ve got all the time you need. 

Mr. KRISHNAMOORTHI. Great. Thank you so much. 

Are you aware, Mr. Siegel, that 11.5 million people, as of December 24, had enrolled in the ACA, and we are on record-breaking 

pace for the number of enrollees in the ACA in the coming year? 

Mr. SIEGEL. I was aware of that, yes. 

Mr. KRISHNAMOORTHI. And in your opinion, do you think that the 

fact that there were almost 40 million uninsured folks before the 

ACA and now there—it’s dramatically fallen is a positive trend line 

for America? 

Mr. SIEGEL. I think it’s a wonderful trend line for America. 

Mr. KRISHNAMOORTHI. And, sir, would you agree with me that 

there hasn’t been any contrary evidence presented today about the 

amount of waste, fraud, and abuse that existed in the private insurance market prior to the ACA? Isn’t that right? 

Mr. SIEGEL. I did not hear anything about private insurance 

fraud at all. 

Mr. KRISHNAMOORTHI. And would you also agree with me, sir, 

that there hasn’t been any contrary evidence presented that there 

would be millions of jobs lost if the ACA is repealed without a replacement, as my honorable colleagues on the other side propose to 

do? 

Mr. SIEGEL. I did not hear discussion of job loss at all. 

Mr. KRISHNAMOORTHI. And would you surmise that people in the 

employer market, who have today protections from discrimination 

against preexisting conditions and other similar protections, would 

lose those protections once the ACA is repealed? 

Mr. SIEGEL. I don’t know whether some States have protection, 

but if that was the end of Federal protection and your State didn’t 

step up, yeah, I think you’d be screwed. 

Mr. JORDAN. Term of art. 

Mr. KRISHNAMOORTHI. Thank you for that colorful—— 

Mr. SIEGEL. Sorry. I apologize if that’s a violation of etiquette. I 

didn’t mean that. I don’t do this every day, so—— 

Mr. KRISHNAMOORTHI. And that’s why you’re such a convincing 

witness. 

Mr. Siegel, what would you like to say to the chairman when he 

says it’s clear that the ACA has got to go? 

Mr. SIEGEL. I would say that if you think about health insurance—Representative Cummings said it should be a right. I don’t 

like ‘‘rights’’ talk, but I will tell you that I think it is a necessity 

in today’s world for any person to have adequate, affordable health 

care available to them, and in our country, we do it through health 

insurance, and we must have that if you want people to be able to 

live lives where they reach their potential, and, therefore, contribute as much as they can as citizens, as taxpayers, as employees, as business owners to our society. 

Mr. KRISHNAMOORTHI. The ACA has improved your life, correct? 

Mr. SIEGEL. The ACA made the life I have today possible, yes. 


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Mr. KRISHNAMOORTHI. Now, sir, I need to ask you a question 

about the creation of small businesses because of the ACA. Are you 

aware of others in your friend circle, family circle who similarly 

benefited from the ACA? 

Mr. SIEGEL. I don’t—to be honest with you, I don’t have a personal friend that I know of for sure started their business relying 

on the ACA for health insurance. I just don’t know. I have some 

friends who get their health insurance through the ACA as well, 

but they are not necessarily in business. 

Mr. KRISHNAMOORTHI. Got it. 

Mr. SIEGEL. So, you know, the honest answer to that is I don’t 

know. 

Mr. KRISHNAMOORTHI. Got it. Well, sir, I just want to thank you 

so much for your testimony today. 

Mr. SIEGEL. Okay. You’re welcome. 

Mr. JORDAN. I would just—just to close maybe say, look, I didn’t 

say it wasn’t a necessity. All I did was point out the facts. And the 

facts are there were all kinds of statements made to the American 

people 6 years ago about the Affordable Care Act that turned out 

to be false, turned out to be lies. And you don’t have to take my 

word for it, you can take the architect of ObamaCare, Jonathan 

Gruber’s word for it. He told us they misled the American people 

on all those statements, nine different statements. 

And now we have the ACA come along, it’s the law, and we see 

where things are going, as evidenced by what Mr. Issa and Mr. 

Grothman pointed out. We started off with five choices for consumers, we’re now down to one in lots and lots of places. We started out with 23 co-ops, we’re now down to five, because 18 of them 

went bankrupt. These guys didn’t look at the private market, they 

looked at taxpayer dollars because, that’s what’s involved here. 

These guys took taxpayer money and lost it. And we have all kinds 

of fraud going on, as evidenced by the study that they undertook 

where it was 15 for 15. 

Now, think about this: If you’re down to one insurer in an area, 

that obviously is going to drive up costs, so that’s a monopoly situation, and if you have fraud going on up there, that’s even more cost 

to the taxpayers. That’s the story of the ACA, not to mention the 

increased premiums, increased deductibles for families all across 

this country. And that’s why we’re looking to repeal this law, just 

like we told the voters we were going to do, just like we promised 

them that we would do, and just like they sent us here to do, and 

we need to do that. After all, there was an election where that was 

one of the most important issues. 

So with that, I want to thank our witnesses for being here, thank 

our members for participating. And we are adjourned. 

[Whereupon, at 3:30 p.m., the subcommittee was adjourned.] 

Æ 


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