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RESCUING AMERICANS FROM THE 

FAILED HEALTHCARE LAW AND 

ADVANCING PATIENT-CENTERED 

SOLUTIONS 

HEARING 

BEFORE THE

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, FEBRUARY 1, 2017 

Serial No. 115–1 

Printed for the use of the Committee on Education and the Workforce 

( 

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

committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

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(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

VIRGINIA FOXX, North Carolina, Chairwoman 

Joe Wilson, South Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn ‘‘GT’’ Thompson, Pennsylvania 

Tim Walberg, Michigan 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Elise Stefanik, New York 

Rick W. Allen, Georgia 

Jason Lewis, Minnesota 

Francis Rooney, Florida 

Paul Mitchell, Michigan 

Tom Garrett, Jr., Virginia 

Lloyd K. Smucker, Pennsylvania 

A. Drew Ferguson, IV, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Takano, California 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Donald Norcross, New Jersey 

Lisa Blunt Rochester, Delaware 

Raja Krishnamoorthi, Illinois 

Carol Shea-Porter, New Hampshire 

Adriano Espaillat, New York 

Brandon Renz, Staff Director 

Denise Forte, Minority Staff Director 

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(III) 

C O N T E N T S 

Page 

Hearing held on February 1, 2017 ......................................................................... 1 

Statement of Members: 

Foxx, Hon. Virginia, Chairwoman, Committee on Education and the 

Workforce ....................................................................................................... 1 

Prepared statement of ............................................................................... 6 

Scott, Hon. Robert C. ‘‘Bobby’’, Ranking Member, Committee on Education and the Workforce ............................................................................. 7 

Prepared statement of ............................................................................... 14 

Statement of Witnesses: 

Bollenbacher, Mr. Scott, CPA, Managing Partner, Bollenbacher and Associates, LLC, Portland, Indiana ..................................................................... 38 

Prepared statement of ............................................................................... 40 

Eddy, Mr. Joe, President and Chief Executive Officer, Eagle Manufacturing Company, Wellsburg, West Virginia ................................................ 24 

Prepared statement of ............................................................................... 26 

Schlaack, Ms. Angela, St. Joseph, Michigan .................................................. 32 

Prepared statement of ............................................................................... 34 

Troy, Mr. Tevi, PH.D., Executive Officer, American Health Policy Institute, Washington, DC ................................................................................... 17 

Prepared statement of ............................................................................... 20 

Additional Submissions: 

Adams, Hon. Alma S., a Representative in Congress from the State 

of North Carolina: 

Letter dated January 3, 2017, from Seven Children’s Groups .............. 130 

Bonamici, Hon. Suzanne, a Representative in Congress from the State 

of Oregon: 

Letter December 28, 2016, from AARP ................................................... 71 

Brat, Hon. David, a Representative in Congress from the State of Virginia: 

Chart: Hitting the Wall: When Health Care Costs are No Longer 

Manageable ............................................................................................ 96 

Courtney, Hon. Joe, a Representative in Congress from the State of 

Connecticut: 

Article: Is healthcare law really going into a death spiral? ................... 149 

DeSaulnier, Hon. Mark, a Representative in Congress from the State 

of California: 

Article: One in Five 2014 Marketplace Consumers was a Small Business Owner or Self-Employed ............................................................... 142 

Espaillat, Hon. Adriano, a Representative in Congress from the State 

of New York: 

Prepared statement of from Cuomo, Hon. Andrew M., Governor of 

New York ................................................................................................ 85 

Article: AAMC Statement on President Trump’s Executive Order on 

Immigration ........................................................................................... 92 

Chairwoman Foxx: 

Republican Subcommittee Assignments .................................................. 3 

Key Facts on Obamacare .......................................................................... 169 

Breaking Down the Uninsured ................................................................ 172 

Polis, Hon. Jared, a Representative in Congress from the State of Colorado: 

Letter dated January 4, 2017, from Hickenlooper, Hon. John, Governor of Colorado ................................................................................... 64 

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IV 

Additional Submissions—Continued 

Mr. Scott: 

Letter dated January 30, 2017, from the U.S. Department of Health 

and Human Services .............................................................................. 10 

Report: Highlighting the Progress of the Affordable Care Act .............. 46 

Prepared statement of from Pollack, Mr. Rick, President and CEO, 

American Hospital Association ............................................................. 172 

Takano, Hon. Mark, a Representative in Congress from the State of 

California: 

Letter dated December 6, 2016, from the American Hospital Association and Federation of American Hospitals ......................................... 79 

Thompson, Hon. Glenn ‘‘GT’’, a Representative in Congress from the 

State of Pennsylvania: 

Submission for the record ......................................................................... 156 

Mr. Troy: 

Briefing Paper: How the Implementation of the Affordable Care Act 

Will Affect Doctors ................................................................................. 112 

Questions submitted for the record by: 

Barletta, Hon. Lou, a Representative in Congress from the State 

of Pennsylvania ...................................................................................... 174 

Stefanik, Hon. Elise, a Representative in Congress from the State 

of New York ........................................................................................ 174, 176 

Responses to questions submitted for the record: 

Mr. Barletta ............................................................................................... 177 

Mr. Eddy .................................................................................................... 178 

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(1) 

RESCUING AMERICANS FROM THE FAILED 

HEALTHCARE LAW AND ADVANCING 

PATIENT-CENTERED SOLUTIONS 

Wednesday, February 1, 2017 

House of Representatives, 

Committee on Education and the Workforce, 

Washington, D.C. 

The committee met, pursuant to call, at 10:04 a.m., in Room 

2176, Rayburn House Office Building, Hon. Virginia Foxx [chairwoman of the committee] presiding. 

Present: Representatives Foxx, Wilson of South Carolina, Roe, 

Thompson, Walberg, Guthrie, Rokita, Messer, Byrne, Brat, Bishop, 

Grothman, Stefanik, Allen, Lewis, Rooney, Mitchell, Smucker, 

Scott, Grijalva, Courtney, Fudge, Polis, Wilson of Florida, 

Bonamici, Takano, Adams, DeSaulnier, Norcross, Blunt Rochester, 

Krishnamoorthi, Shea-Porter, and Espaillat. 

Staff Present: Bethany Aronhalt, Press Secretary; Andrew 

Banducci, Workforce Policy Counsel; Courtney Butcher, Director of 

Member Services and Coalitions; Ed Gilroy, Director of Workforce 

Policy; Jessica Goodman, Legislative Assistant; Callie Harman, 

Legislative Assistant; Nancy Locke, Chief Clerk; Dominique 

McKay, Deputy Press Secretary; James Mullen, Director of Information Technology; Michelle Neblett, Professional Staff Member; 

Krisann Pearce, General Counsel; Brandon Renz, Staff Director; 

Molly McLaughlin Salmi, Deputy Director of Workforce Policy; 

Alissa Strawcutter, Deputy Clerk; Olivia Voslow, Staff Assistant; 

Joseph Wheeler, Professional Staff Member; Tylease Alli, Minority 

Clerk/Intern andFellow Coordinator; Austin Barbera, Minority 

Press Assistant; Michael DeMale, Minority Labor Detailee; Denise 

Forte, Minority Staff Director; Christine Godinez, Minority Staff 

Assistant; Carolyn Hughes, Minority Senior Labor Policy Advisor; 

Kevin McDermott, Minority Senior Labor Policy Advisor; Richard 

Miller, Minority Senior Labor Policy Advisor; Udochi Onwubiko, 

Minority Labor Policy Counsel; Veronique Pluviose, Minority Civil 

Rights Counsel; Arika Trim, Minority Press Secretary; and Elizabeth Watson, Minority Director of Labor Policy. 

Chairwoman Foxx. Good morning. A quorum being present, the 

Committee on Education and the Workforce will come to order. 

Before we turn our attention to this morning’s hearing, I’d like 

to take care of an administrative matter. Today, both the Republicans and Democrats have completed assigning members to the 

CEWDOCROOM with DISTILLER

2 

subcommittees. I ask unanimous consent on behalf of myself and 

Ranking Member Scott to submit those assignments for the record. 

Hearing no objection, the subcommittee assignments are made. 

[The information follows:] 

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3 

CEWDOCROOM with DISTILLER


Insert offset folio 1 here 23826.001

VIRGINIA FOXX, NC 

Chairwoman 

MAJORITY- (2021 225-4527 

FAX- (202)225-9571 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE U.S, HOUSE OF REPRESENTATIVES 

2176 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6100 

Committee on Education and the Workforce 

Republican Snbcommittce Assignments 

l!Sth Congress 

February 1, 2017 

ROBERT C. "BOBBY" SCOTT, VA 

Ranking Member 

MINORITY- (202) 225-3725 

FAX -1202) 226-5398 

Subcommittee on Early Childhood, Elementary, and Secondary Education 

Todd Rokila, Indiana (Chairn1an) 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn "CiT" Thompson, Pennsylvania 

Luke Messer, Indiana 

David Brat, Virginia 

Tom Garrett, Jr., Virginia 

(open seat) 

Subcommittee on Health, Employment, Labor, and Pensions 

Tim Walberg, Michigan (Chairman) 

Joe \Vilson. South Carolina 

David P. Roe, Tennessee 

Todd Rokita, Indiana 

Lou Barlelta, Pennsylvania 

Michael D. Bishop, Michigan 

Rick W. Allen, Georgia 

Jason Lewis, Minnesota 

Francis Rooney, Florida 

Paul Mitchell, Michigan 

Lloyd K. Smucker, Pennsylvania 

A. Drew l'erguson, IV, Georgia 
4 

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Insert offset folio 2 here 23826.002

Subcommittee on Higher Education and Workforce Development 

Brett Guthrie, Kentucky (Chairman) 

Glenn "GT" Thompson, Pennsylvania 

Lou Barletta, Pennsylvania 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

Glenn Grothman, Wisconsin 

Elise Stefanik, New York 

Rick W. Allen, Georgia 

Jason Lewis, Minnesota 

Paul Mitchell, Michigan 

Tom Garrett, Jr., Virginia 

Lloyd K. Smucker, Pennsylvania 

(open seat) 

Subcommittee on Workforce Protections 

Bradley Byrne, Alabama (Chairman) 

Joe Wilson, South Carolina 

Duncan Hunter, California 

David Brat, Virginia 

Michael D. Bishop, Michigan 

Glenn Grothman, Wisconsin 

Elise Stefanik, New York 

Francis Rooney, Florida 

A. Drew Ferguson, IV,Georgia 

2 
5 

Chairwoman Foxx. Next, I recognize myself for an opening statement. 

I want to again say good morning to my colleagues and guests. 

I want to welcome our witnesses. We appreciate that you took time 

out of your busy schedules to be with us today. 

It is no coincidence that our first hearing is focused on our efforts 

to rescue Americans from a fatally flawed healthcare law and transition to a patient-centered system. There’s an urgent need to address the challenges facing working families and small businesses 

under ObamaCare, and that’s exactly what this hearing is about. 

For nearly seven years, Americans have struggled as they’ve 

seen their healthcare costs skyrocket, their plans canceled, and 

their choices and access to quality care diminished. That is why for 

nearly seven years Republicans have been fighting to provide the 

relief Americans desperately need. 

This has never been about politics. The fight to repeal and replace ObamaCare has always been about people. 

It has been about people like Steve from my congressional district. Steve resides in West Jefferson, and he and his wife are paying 225-percent-higher premiums than they were four years ago. 

Scott from Hickory, North Carolina, has had his healthcare plan 

canceled three times because of the law and today has access to 

only one insurance provider. Michael from Winston-Salem has an $800 monthly premium for him and his daughter, and their deductible is over $14,000. 

Terry, a 70-year-old retiree from Advance, is working part-time just to help pay his wife’s $900 monthly premium. 

These stories aren’t unique to North Carolina. Working families 

across the country are suffering under a failed government takeover of health care. 

Remarkably, the consequences extend beyond higher insurance 

costs and limited plan options to fewer jobs and suppressed wages. 

In fact, a recent study by the American Action Forum found 

ObamaCare has destroyed 300,000 small-business jobs and cost 

small-business employees $19 billion a year in wages. An estimated 

10,000 small businesses were even forced to close their doors because of the law’s burdensome regulations. 

All of these individuals, families, and small-business owners 

were promised far different. They were promised lower costs, more 

choices, and more competition. What they got was the exact opposite. 

The reality is the 2010 healthcare law is completely 

unsustainable. It’s collapsing as we speak. We cannot stand by as 

the law creates even more havoc in the lives of the American people. That’s why we’re on a rescue mission to deliver the relief people need, and this committee will play an important part in the 

process. We have already taken steps to repeal ObamaCare, and 

the Trump administration is actively working to stabilize health insurance markets. 

Once the law is repealed, there will be a stable transition to a 

patient-centered system. At least 4.7 million Americans have already been kicked off their healthcare plans under ObamaCare, 

and the last thing Republicans want is to disrupt more people’s 

coverage. 

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6 

We’re going to do this the right way. There won’t be a massive 

bill that no one has read and is jammed through Congress in the 

dead of night. Instead, we will tackle the challenges of our broken 

healthcare system through step-by-step solutions that provide 

lower costs, more choices, and protect the most vulnerable among 

us. 

We will put patients in control of their healthcare decisions. That 

means eliminating one-size-fits-all rules that drive up costs and restrict choices. All Americans should have the freedom to select a 

healthcare plan that meets their needs. 

After years of costly federal mandates, we will empower small 

businesses to band together and provide affordable coverage for 

their employees. Additionally, we will preserve employee wellness 

plans that have been under attack in recent years by Washington 

bureaucrats. 

Undoing the damage of ObamaCare and achieving real 

healthcare reform won’t happen overnight. We will continue to hold 

hearings just like this one, and we will continue to receive input 

from Governors, insurance commissioners, workers, and employers 

across the country. 

Today’s discussion is an important step in this process. We look 

forward to hearing from all of you on how we can provide a better 

way forward on health care for the American people. 

With that, I yield to Ranking Member Scott for his opening remarks. 

[The statement of Chairwoman Foxx follows:] 

Prepared Statement of Hon. Virginia Foxx, Chairwoman, Committee on 

Education and the Workforce 

It is no coincidence that our first hearing is focused on our efforts to rescue Americans from a fatally flawed health care law and transition to a patient-centered system. There is an urgent need to address the challenges facing working families and 

small businesses under Obamacare, and that’s exactly what this hearing is about. 

For nearly seven years, Americans have struggled as they’ve seen their health 

care costs skyrocket, their plans canceled, and their choices and access to quality 

care diminished. That is why for nearly seven years, Republicans have been fighting 

to provide the relief Americans desperately need. 

This has never been about politics. The fight to repeal and replace Obamacare has 

always been about people. It’s been about people like Steve from my congressional 

district. Steve resides in West Jefferson, and he and his wife are paying 225 percent 

higher premiums than they were four years ago. Scott from Hickory, North Carolina, has had his health care plan canceled three times because of the law, and 

today he has access to only one insurance provider. 

Michael from Winston-Salem has an $800 monthly premium for him and his 

daughter, and their deductible is over $14,000. Terry, a 70-year old retiree from Advance, is working part-time just to help pay his wife’s $900 monthly premium. 

These stories aren’t unique to North Carolina. Working families across the country are suffering under a failed government takeover of health care. Remarkably, 

the consequences extend beyond higher insurance costs and limited plan options to 

fewer jobs and suppressed wages. 

In fact, a recent study by the American Action Forum found Obamacare has destroyed 300,000 small business jobs and cost small business employees $19 billion 

each year in wages. An estimated 10,000 small businesses were even forced to close 

their doors because of the law’s burdensome regulations. 

All of these individuals, families, and small business owners were promised far 

different. They were promised lower costs, more choices, and more competition. 

What they got was the exact opposite. 

The reality is the 2010 health care law is completely unsustainable. It’s collapsing 

as we speak. We cannot stand by as the law creates even more havoc in the lives 

of the American people. 

CEWDOCROOM with DISTILLER

7 

That’s why we are on a rescue mission to deliver the relief people need, and this 

committee will play an important role in the process. We have already taken steps 

to repeal Obamacare, and the Trump Administration is actively working to stabilize 

health insurance markets. 

Once the law is repealed, there will be a stable transition to a patient-centered 

system. At least 4.7 million Americans have already been kicked off their health 

care plans under Obamacare, and the last thing Republicans want is to disrupt 

more people’s coverage. 

We’re going to do this the right way. There won’t be a massive bill that no one 

has read and is jammed through Congress in the dead of the night. Instead, we will 

tackle the challenges of our broken health care system through step-by-step solutions that provide lower costs, more choices, and protect the most vulnerable among 

us. 

We will put patients in control of their health care decisions. That means eliminating one-size-fits-all rules that drive up costs and restrict choices. All Americans 

should have the freedom to select a health care plan that meets their needs. 

After years of costly federal mandates, we will empower small businesses to band 

together and provide affordable coverage for their employees. Additionally, we will 

preserve employee wellness plans that have been under attack in recent years by 

Washington bureaucrats. 

Undoing the damage of Obamacare and achieving real health care reform won’t 

happen overnight. We will continue to hold hearings just like this one, and we will 

continue to receive input from governors, insurance commissioners, workers, and 

employers across the country. 

Today’s discussion is an important step in this process. We look forward to hearing from all of you on how we can provide a better way forward on health care for 

the American people. 

Mr. SCOTT. Thank you, Madam Chair. 

And I’d like to first, before we begin, introduce one new member 

who’s here, Adriano Espaillat, who represent New York’s 13th Congressional District. He wasn’t here when we introduced new members before. He represents the same district as the past chair of 

this committee, Adam Clayton Powell. He served in the State Senate and State Assembly in New York. 

We have another member, Carol Shea-Porter, who was appointed 

to the Committee. She is from New Hampshire and previously 

served on this committee. 

I’d like to welcome our witnesses and thank them for their testimony. This is our first hearing of the 115th Congress. Unfortunately, this hearing is part of a larger agenda to repeal the Affordable Care Act root and branch, despite the fact there’s no credible 

plan to deal with the chaos that repeal would create. 

I’d first like to remind our Republican colleagues once again 

where we were when we passed the Affordable Care Act. 

Healthcare costs were skyrocketing. If you lost your job or wanted 

to start a new business and had a preexisting condition, you were 

out of luck. Women were paying more than men. Seniors had no 

help for paying for prescription drugs when they landed in the notorious doughnut hole. The miners suffering from lung disease 

struggled to get access to health benefits because of complicated requirements that made it almost impossible to prove eligibility. And 

every year millions of people were losing their insurance altogether. 

The so-called damage caused by the Affordable Care Act includes 

women no longer paying more for insurance than men. The costs 

have gone up but they’ve gone up at one-half the rate that they 

were going up before. Those with preexisting conditions can get insurance at the standard rate. We’re closing the doughnut hole. We 

CEWDOCROOM with DISTILLER

8 

have helped miners get their benefits. And instead of millions of 

people losing their insurance every year, 20 million more people 

have insurance. And all Americans, even if they had insurance before, are enjoying consumer protections. Small businesses were exempt from virtually all of the mandates in the bill. 

And this progress will be reversed if the ACA is repealed. We 

know, for example, that 30 million Americans would lose coverage, 

with the vast majority in working families. Workers with job-based 

plans could lose out on ACA’s consumer protections, such as prohibitions against annual and lifetime limits. They could lose out on 

access to free preventive services which keeps the American workforce healthier and on the job. 

These meaningful protections have improved the lives of people 

around the country, protections that are being threatened. 

The collateral damage won’t stop there. The individual market 

could all but collapse if there’s a repeal without a credible replacement, making it likely that nobody will be able to buy insurance 

at an affordable rate. Costs for uncompensated care will skyrocket, 

but those costs won’t disappear. When people go to the hospital and 

don’t pay, those costs have to be paid by somebody. When we 

passed the Affordable Care Act, that cost was about $1,000 on a 

family policy, covering uncompensated care. Coal miners who now 

benefit from enhanced protections and benefits provided by the 

ACA could lose them. 

Now, another important item to both workers and employers: 

employment. Repeal would devastate communities around the 

country, particularly rural areas that already face employment 

challenges. The American Hospital Association and the Federation 

of American Hospitals sent a letter to congressional leaders warning of massive job losses if the ACA is repealed. The letter noted 

a specific threat to rural communities, pointing out that hospitals 

are often the largest employers in many communities. Estimates 

show that repeal would result in a loss of 2.6 million jobs almost 

immediately. 

Over the last seven years, we have heard a lot of complaints 

about the Affordable Care Act, but we haven’t seen a plan that 

would actually make things better. Just last week, our colleagues 

on the Budget Committee held a hearing where healthcare experts 

from the Urban Institute estimated that, if the GOP were to replace the ACA coverage expansion with tax credits at the inadequate level pushed by the new HHS Secretary nominee, the 

healthcare deductibles could skyrocket to $25,000 for individuals 

and $50,000 for family plans. 

Today, we are likely to hear about some other plans that, frankly, just won’t work or won’t do anything. And there’s no strategy 

or interest in protecting the millions of Americans who now benefit 

from the ACA. 

If a credible replacement plan were possible, we obviously would 

have seen it by now. But there’s no legislation pending that has 

significant support, and there’s no reason to believe that a replacement plan could be produced that would actually work. 

Now, some of the initiatives already taken by this administration 

have been proven to be counterproductive. For example, the administration took action to threaten the marketplace by pulling adverCEWDOCROOM with DISTILLER

9 

tisements for coverage in the final days of the open enrollment period. It is well-known that those who wait till the last minute tend 

to be younger and healthier. And fewer of them signing up just 

means higher premiums for everybody else. 

And I ask unanimous consent to insert into the record a letter 

sent by three ranking members of House committees with 

healthcare jurisdiction to the Department of Health and Human 

Services asking for further details on the impact of this decision. 

Chairwoman Foxx. Without objection. 

Mr. SCOTT. Thank you. 

[The information follows:] 

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10 

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Insert offset folio 3 here 23826.003

Mr. Norris Cochran 

Acting Secretary 

C!ongrt~~ of tbt Wniteb ~tatt~ 

~oust of .1\tprescntatibes 

~~asbhtgtou, ;~u::. 20515 

January 30, 2017 

U.S. Department of Health and Human Services 

200 Independence Avenue, SW 

Washington, DC 20201 

Dear Acting Secretary Cochran: 

We arc writing to request additional details regarding the Trump Administration's 

decision to halt adve1iising and outreach activities for Healthcare.gov in the final days of the 

open enrollment season, as well as to request information about the Administration's plans to 

continue Marketplace activities for the remainder of20! 7. We are deeply concerned that the 

Administration's seemingly intentional efforts to sabotage enrollment in the Affordable Care Act 

(ACA) Marketplaces will result in adverse risk selection, destabilize insurance markets, and send 

premiums skyrocketing. 

According to a report in the Washington Post, "the White House instructed the Centers 

for Medicare and Medicaid Services, which oversees much of the ACA's implementation, to 

withdraw all communications contracts, marketing plans, and advertising set for between 

Thursday and the end of January." 1 A Department spokesperson later confirmed that the Agency 

cancelled about $4-5 million in ads set to run over the final weekend before the close of open 

enrollment, and claimed that these cost savings "will be returned to the U.S. Trcasury.''2 

The White House's order could hamper overall enrollment in the Marketplaces, as the 

final deadline for open enrollment has in the past been the second-biggest day for signups 3 

Research has shown that the last week of open enrollment tends to draw younger enrollees, 

whose participation is critical to the stability of the Marketplaces and to keeping premiums 

affordable." The White I louse's efforts to suppress enrollment will therefore weaken the risk 

pool, resulting in greater costs for everyone. 5 

1 White House stops ads, outreach for last days of20!7 AC'A enrollment, Washington 

Post (Jan. 26, 20 17). 

2 Reversing course, 1hnnp administration will continue Obamacare outreach, Politico 

(Jan. 27, 2017). 

3 ld. 

4 !d. 

5 Former Obamacare executive: Here's why Trump killed enrollment ads jbr 

Healthcare.gov, CNBC (Jan. 27, 2017). 
11 

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Insert offset folio 4 here 23826.004

Mr. Norris Cochran 

January 30, 2017 

Page 2 

The suspension of outreach and enrollment activities prior to the closing of the 2017 open 

enrollment season, combined with the recent Executive Order instructing agencies to use their 

authority to waive, defer, grant exemptions t!·om, or delay provisions of the ACA, creates the 

distinct impression that the Administration is attempting to sabotage enrollment in the 

Marketplaces. We therefore urge you to ( l) reinstate the advertisements; (2) extend open 

enrollment for another two weeks, since enrollment may have been suppressed as a result of the 

Administration's decisions; and (3) take action to encoun1ge Marketplace enrollment and 

maintain the stability of the Marketplaces for 2017 and beyond. 

To better understand the Agency's recent decision to halt open enrollment advertising 

and outreach activities, as well as the Agency's plans to prepare for the next open enrollment 

season, we request that the Agency provide the following documents and information by 

February 13, 2017: 

I. Who within the White House instructed the Agency to halt the paid media? Who at 

the Agency was responsible for implementing this directive? Please provide all 

documents or communications relating to the decision to halt advertising prior to the 

end of the 2017 open enrollment season. 

2. Was any funding tor advertising, communications, and marketing plans for the 2017 

open enrollment season rescinded? If so, who provided the direction to do so? Please 

provide the General Counsel's analysis of the legality of this action. 

a. Did the Agency terminate, suspend or otherwise modify any contracts for 

services relating to advertising, communications, marketing, or outreach for 

the 2017 open enrollment season? If so, who provided the direction to do so? 

b. Please provide all documents and communications pertaining to any such 

terminated, suspended, or modit1ed contracts, and documents and 

communications pertaining to any proposed terminations, suspensions, or 

modifications of open enrollment contracts. 

c. Were any contracts terminated tor services that were already paid for but not 

yet provided? If so, please provide the basis upon which the vendor was 

asked not to render services already paid for by tax dollars. 

i. Please provide a copy of any such contracts, including the statement of 

work, the contract line item number (CLIN), and the name of the 

contracting officer. 

11. Please provide for each contract the dollar amount tor services not 

rendered at the Agency's request, and an expected date at which the 

payment tor these services will be returned to the U.S. Treasury. 
12 

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Mr. Norris Cochran 

January 30, 2017 

Page 3 

3. Does the Administration plan to keep the call center that assists consumers with 

questions open and appropriately staffed throughout 2017, for consumers who may 

have to enroll during a special enrollment period? 

a. Please provide a description of the expected staffing levels, and anticipated 

wait times, for the call center through the end of the year. 

b. Please provide a description of expected expenditures for the call center 

through the end of the year, a copy of the contract currently in terce for the 

operation of the call center, the name of the contracting officer, as well as any 

documents relating to any contract tem1inations, suspensions, and 

modifications. 

4. Does the Administration plan to keep Healtbcare.gov online throughout 2017 to allow 

consumers to find information regarding Marketplace plans? 

a. Does the Administration plan to continue to provide Healthcare.gov with the 

basic technical staff it needs to operate and maintain the website? 

b. Please provide a description of expected expenditures for technical support 

and operation of the website through the end of the fiscal year, a copy of the 

contract(s) currently in force, the name of the contracting ot1icer(s), as well as 

any documents relating to any contract terminations, suspensions, and 

modifications. 

5. Does the Administration intend to continue to award Navigator grants to provide high 

quality assistance to consumers to understand coverage options and financial 

assistance available at Healthcare.gov? If not, please explain why. 

a. When will the Administration begin the process of awarding grants? 

b. How many grants and what funding levels are expected? 

6. Please provide a description of the Administration's outreach and enrollment strategy 

for plan year 2018, including an itemized list of all planned expenditures related to 

advc1iising, marketing, communications and outreach. 

a. Please provide a copy of all contracts currently in force for such activities, the 

name of each contracting otlicer, and any documents relating to any contract 

terminations, suspensions, and modifications. 

b. The previous Administration undertook specialized, targeted efforts to reach 

young adults without health insurance, such as targeting young adults on 

social media, working with partner organizations, sending direct mail to 

potential enrollees, and encouraging insurers to contact young adults before 
13 

CEWDOCROOM with DISTILLER


Insert offset folio 6 here 23826.006

ivlr. Norris Cochran 

January 30. 2017 

Page 4 

they turn 26 to tell them about Marketplace coverage options. Please provide 

a description of the Administration's outreach and enrollment strategy for 

young adults aged 18-34 for the 2018 plan year. 

Additionally, we request a briefing to discuss the above questions at your earliest 

convenience. Your prompt assistance on this matter is appreciated. 

;r.t~.k Frank Pallone, Jr. 0 II' 

Ranking Member 

Sincerely, 

Cmnmittee on Energy and Commerce 

Robert 

<b~ C. "Bobby'' Scott 

Ranking Member 

Committee on Education and the Workforce 

cc: Dr. Patrick Conway 

Acting Administrator 

Centers 1(Jr Medicare & Medicaid Services 

7500 Security Boulevard 

Baltimore, MD 21244 

Ranking Member 

Committee on Ways and Means 
14 

Mr. SCOTT. Even President Trump’s recent immigration order not 

only runs afoul of American values and our Constitution, essentially creating a religious test for entry into the United States and 

denying due process, but it also has an impact on health care in 

the United States. The Association of American Medical Colleges, 

one of the many groups to express concern over the Executive 

Order, released a statement explaining that the Executive Order 

could disrupt education and research and have a damaging longterm impact on patients and health care. 

So we do have a few options moving forward. We could choose 

to move to a single-payer system, or we can improve upon the ACA. 

Going back to the days where a preexisting condition meant you 

couldn’t get insurance should not be an option. 

Now, since this is our first hearing in Congress, let me be clear 

about our shared priorities and the vision of Democrats on this 

committee. We are here to strengthen the economic security of 

Americans and to protect health care in this country. This is more 

that we need to do to improve access and affordability in health 

care, and Democrats are willing to work on a responsible improvement. 

If the goal is to replace, then repeal, we can work together. But 

you cannot count on our support if the first step is to create total 

chaos by repealing without any replacement in sight. 

In fact, Democrats are skeptical that there will ever be any replacement. We are reminded that the majority of the Republicans 

in Congress did not support Medicare. We know that over 60 votes 

have been taken in the House to repeal all or parts of the Affordable Care Act without any replacement in sight. And we have already missed the legislative deadline under the reconciliation. The 

two committees were given instructions to come up with changes 

in the Affordable Care Act, and they’ve missed that deadline. And 

so we’re skeptical that there will be any replacement if there is a 

repeal. 

So it is my hope that we can focus our efforts on the financial 

security of American families by working to improve health care instead of turning the clock backwards and ruining health care possibly for everybody. 

Thank you, Madam Chair, and I yield back. 

[The statement of Mr. Scott follows:] 

Prepared Statement of Hon. Robert C. ‘‘Bobby’’ Scott, Ranking Member, 

Committee on Education and the Workforce 

Thank you, Chairwoman Foxx. I would like to welcome and introduce the newest 

Democratic members to the Committee. 

Congresswoman Carol Shea-Porter represents New Hampshire’s first congressional district and is serving her fourth term in Congress, and I am pleased to welcome her back to the Committee. 

Congressman Adriano Espaillat represents New York’s thirteenth congressional 

district, the same district as the esteemed past-chairman of this Committee – Adam 

Clayton Powell, Jr. He previously served as a member of the New York State Senate 

and as a member of the New York State Assembly. 

Welcome to the both of you. 

I would now like to welcome our witnesses and thank them for their testimony. 

This is our first hearing in the 115th Congress and this hearing will likely lay out 

our Committee’s agenda for the coming weeks and months. Unfortunately, this 

hearing is also part of a larger agenda to repeal the Affordable Care Act, root and 

CEWDOCROOM with DISTILLER

15 

branch, despite the fact that there is no credible plan to deal with the chaos that 

this repeal will create. 

I’d first like to remind my Republican colleagues once again of where we were 

when we passed the ACA. Health care costs were skyrocketing and if you lost your 

job, or wanted to start a new business and you had a preexisting condition, you were 

out of luck. 

Seniors had no help paying for prescription drugs when they landed in the Part 

D ‘‘donut hole’’. Miners suffering from lung disease struggled to get access to health 

benefits because of complicated requirements that made it almost impossible to 

prove eligibility. 

Yes, the cost of health coverage remains a challenge for both employers and workers. But although costs in employer-provided health coverage have gone up, they 

have gone up much more slowly than they were prior to the ACA. Today, we are 

releasing a report that highlights all of the ACA’s benefits to the American people, 

particularly those with job-based health coverage, and why repeal is so dangerous 

for our country and families’ health and economic security. 

The ACA fixed many of these problems. Despite, Republicans’ nonstop attacks on 

the ACA, we have made great progress in improving the nation’s health care system. And because of those efforts, the rate of uninsured adults and the rate of uninsured children are at an all-time low. 

If my Republican colleagues continue on the course to repeal, we know that thirty 

million Americans will lose coverage, with the vast majority of those millions in 

working families. Workers with job-based plans could lose out on the ACA’s consumer protections – such as prohibitions on annual and lifetime limits. They could 

lose out on access to free preventive services which keeps the American workforce 

healthier and on the job. These are meaningful protections that have improved the 

lives of people in this country – protections that the Republicans are threatening 

to take away. And the collateral damage won’t stop there. The individual market 

will all but collapse, making it likely that nobody will be able to buy insurance at 

an affordable rate. Uncompensated costs will skyrocket and those costs won’t disappear – they will be absorbed by other payers. Coal miners, who now benefit from 

the enhanced protections and benefits provided in the ACA, could lose them. 

Another item of importance to both workers and employers is jobs. Repeal would 

devastate communities across the country, particularly rural areas that already face 

employment challenges. The American Hospital Association and the Federation of 

American Hospitals sent a letter to Congressional leaders warning of ‘‘massive job 

losses’’ if the ACA is repealed. The letter noted the specific threat to rural communities, pointing out that, ‘‘hospitals are often the largest employer in many communities.’’ Estimates show that repeal would result in a loss of 2.6 million jobs across 

all states almost immediately; while a third of those lost jobs would be in health 

care, the impact would be felt across industries. 

Over seven years we have heard a lot of complaints about the Affordable Care Act, 

but we have not seen a plan that would make things better. Just last week, our 

colleagues in the Budget Committee held a hearing where a health care expert from 

the Urban Institute estimated that if the GOP were to replace the ACA coverage 

expansion with tax credits at the inadequate levels pushed by HHS Secretary nominee Congressman Tom Price, health care deductibles could skyrocket to $25,000 for 

individual and $50,000 for family plans. Today, we are likely to hear about some 

of the old, discredited, and highly inadequate ideas around health reform. But there 

is no strategy or interest in protecting the millions of Americans who now benefit 

from the ACA. If a credible replace were possible, we would have seen it by now, 

and yet there is no legislation pending that has Republican support and there is 

no reason to believe that a replacement would actually work. 

Unfortunately, the conversation around health care has now taken on an even 

more troubling tone. The new Administration has taken action to threaten the Marketplace by pulling advertisements for coverage in the final days of the open enrollment period, making no secret about its intention to subvert Marketplace enrollment. I ask unanimous consent to insert into the record a letter sent by the three 

Ranking Members of the House Committees with health care jurisdiction to the Department of Health and Human Services asking for further details on the impact 

of this decision. 

Further, President Trump’s recent immigration executive order runs afoul of 

American values and our constitution by essentially creating a religious test for 

entry into the United States and denying due process to green card holders who 

have been unable to reenter the country. The impact of this order is being felt by 

communities across the country, and is particularly detrimental to students who 

wish to pursue their education in the United States. The Association of American 

Medical Colleges – one of the many groups to express concern over the executive 

CEWDOCROOM with DISTILLER

16 

order – released a statement explaining that the executive order could, ‘‘disrupt education and research and have a damaging long-term impact on patients and health 

care.’’ I trust that my colleagues on the other side of the aisle are as outraged as 

I am at the executive order, both because of its lack of humanity and its detrimental 

impact on the health care sector in this country. 

So we have a few options moving forward. We can choose to move to a single 

payer system or we can improve upon the ACA. Going back to the days where a 

preexisting condition meant you didn’t get insurance is not an option. 

Since this is our first hearing of the Congress, let me be clear about our shared 

priorities and the vision of the Democrats on this Committee. We are here to 

strengthen the economic security of Americans and to protect the health of this 

country. There is more that we need to do to improve access and affordably in 

health coverage, but setting the stage for a repeal vote that will take benefits away 

from hardworking Americans is irresponsible and morally reprehensible. Similarly, 

banning the best and brightest talent in the medical community from studying at 

our universities and practicing medicine in our hospitals is irresponsible and morally reprehensible. 

It is my hope that we can refocus our efforts to the financial security of American 

families, instead of turning the clock backward. Thank you. 

Chairwoman Foxx. Thank you, Mr. Scott. 

Pursuant to committee rule 7(c), all members will be permitted 

to submit written statements to be included in the permanent 

hearing record. Without objection, the hearing record will remain 

open for 14 days to allow such statements and other extraneous 

material referenced during the hearing to be submitted for the official hearing record. 

We will now turn to introductions of our distinguished witnesses. 

Dr. Tevi Troy is the chief executive officer of the American 

Health Policy Institute. Previously, Dr. Troy held numerous positions in the Federal Government, including serving as Deputy Secretary of Health and Human Services beginning in 2007, where he 

oversaw all operations, including Medicare and Medicaid, public 

health, medical research, food and drug safety, welfare, child and 

family services, disease prevention, and mental health services. 

Mr. Joe Eddy is president and chief executive officer of Eagle 

Manufacturing Company and will testify on behalf of the National 

Association of Manufacturers. In addition to his work at Eagle 

Manufacturing, Mr. Eddy also serves on the Advisory Board of the 

McDonough Center for Leadership in Business at Marietta College 

and the Foundation Board at West Virginia Northern Community 

College. 

Ms. Angela Schlaack is a widow, mother of two children, and a 

student at Siena Heights University pursuing a bachelor’s degree 

in Communications. She is an educated grief group facilitator at 

Lori’s Place in St. Joseph, Michigan. Lori’s Place serves children 

and adults who suffered a death or are dealing with anticipatory 

grief. She is active also in fundraising for the Leukemia and 

Lymphoma Society. 

Mr. Scott Bollenbacher is the creator and managing partner of 

Bollenbacher & Associates, LLC, a certified public accounting firm 

serving mainly small to midsize business in north-central Indiana 

and western Ohio. As a CPA, Mr. Bollenbacher provides accounting 

and tax services to clients in manufacturing, agricultural, retail, 

and professional services trades, as well as not-for-profits and individuals. Mr. Bollenbacher is testifying on behalf of the National 

Federation of Independent Business. 

I will now ask our witnesses to raise your right hand. 

CEWDOCROOM with DISTILLER

17 

[Witnesses sworn.] 

Chairwoman Foxx. Let the record reflect the witnesses answered 

in the affirmative. 

Before I recognize each of you to provide your testimony, let me 

briefly explain our lighting system. We allow five minutes for each 

witness to provide testimony. When you begin, the light in front of 

you will turn green. When one minute is left, the light will turn 

yellow. At the five-minute mark, the light will turn red, and you 

should wrap up your testimony. 

Members will each have five minutes to ask questions. 

Now I recognize Dr. Troy for five minutes. 

TESTIMONY OF TEVI TROY, PH.D., CHIEF EXECUTIVE OFFICER, AMERICAN HEALTH POLICY INSTITUTE, WASHINGTON, 

D.C. 

Mr. TROY. Chairwoman Foxx, Ranking Member Scott, and members of the committee, thank you all for the opportunity to testify 

today on the effects of the Affordable Care Act on large employers 

and their employees, as well as how to advance patient-centered solutions going forward. 

My name is Dr. Tevi Troy. I am CEO of the American Health 

Policy Institute, a nonprofit research organization focusing on employer-sponsored healthcare benefits. I also served, as you mentioned, as a senior White House aide in the George W. Bush administration and Deputy Secretary of HHS. 

While the public debate over the ACA appropriately focuses on 

the 20 million Americans who are receiving coverage through its 

exchanges, Medicaid expansion, and other provisions, the ACA also 

significantly and in many cases unnecessarily increased the regulatory requirements and burdens on employment-based health care 

that covers more than 177 million Americans. 

Too little attention has been focused on this important aspect of 

the law. In this time of transition on health care, it is important 

to protect those who have gained coverage under the ACA, but it 

is also a critical priority to protect those who are covered by employers. 

There is clear evidence that the ACA has both directly and indirectly increased the cost of employer healthcare benefits. In 2014, 

an American Health Policy Institute study found that over the next 

decade the cost of the ACA to large employers -- 10,000 or more 

employees -- will be about $4,800 to $5,900 per employee over a 

decade. 

My written testimony includes other studies showing how the 

ACA has increased employer costs, and I ask that they be submitted for the record. 

Furthermore, the regulatory burden the ACA imposes on businesses and individuals should not be underestimated. Since the 

ACA was enacted, 106 regulations implementing the law have been 

published. These regulations will cost the private sector more than 

$51 billion and require 173 million hours of paperwork in order to 

comply. These cost increases come from a number of ACA provisions that have a direct impact on employees and employers and 

on the cost of their health plans. 

CEWDOCROOM with DISTILLER

18 

Going forward, I believe that we should move toward a more patient-centered healthcare system and look to the private sector to 

lead transformation efforts. In order for the private sector to be innovative, it is imperative to protect the tax exclusion on employersponsored healthcare benefits as well as the ERISA preemption. 

For more than 60 years, employer-provided health benefits have 

been excluded, without limit, from income and payroll taxes. Over 

time, this benefit has helped make employer-sponsored care a basic 

building block of our healthcare system. Given the role of employersponsored health insurance in providing stability and coverage to 

so many Americans, making a substantial change to the tax treatment of employer-provided health care could cause a significant 

disruption. 

We strongly support the bipartisan effort to repeal the ACA’s 40- 

percent Cadillac tax on employer-sponsored health benefits and 

urge Congress to repeal this tax, along with other ACA taxes and 

fees. We have seen how problematic the tax approach is by its opposition from both business and labor. We are glad that the tax has 

been delayed until 2020 and hope to see it repealed soon. 

Reducing or eliminating the tax exemption on employer-sponsored health care would raise the same problems as the Cadillac 

tax. It would serve as a middle-class tax hike, drive up the health 

insurance costs for millions of American employees, and eliminate 

the strong incentives currently in place that constantly pressure 

large purchasers of health to demand more efficient, affordable, 

and effective health care from the marketplace. 

Getting rid of or reducing the tax preference would also harm efforts to maintain strong risk pools and to cover the maximum number of people. As we have learned from experience with the ACA, 

encouraging people to get coverage is a costly and challenging endeavor, and risk pools are difficult to maintain as well. Employers, 

however, are both good at getting people covered and at maintaining manageable risk pools. Public policy should aim to encourage 

these important goals. As economist Peter Nelson has said, ‘‘Employers do get people covered -- they very successfully get people 

covered.’’ 

A second key issue is the ERISA preemption. ERISA is the foundation of employer-sponsored health benefits, and we encourage 

you to strengthen the protections in the law. 

The longstanding preemption provision is vital to multi-state employers because it enables them to offer uniform, nationwide 

healthcare benefits at the lowest possible cost to employers no matter what state they live in. This leads to better benefit design and 

reduction in administrative costs through economies of scale, increased purchasing power, and greater innovation. Without it, an 

employer doing business in 50 different States would be required 

to comply with 50 different State healthcare laws, something that 

would make administrating a healthcare plan a complex nightmare. 

In conclusion, I appreciate the opportunity to testify here today 

about the importance of employer-sponsored coverage and its importance to our system. Going forward, our policy should not be to 

increase the burdens or costs on employers and the 177 million employees and dependents who get coverage through the employerCEWDOCROOM with DISTILLER

19 

based system but to encourage that coverage for the benefit of our 

system as a whole. 

Thank you for having me here today. 

[The statement of Mr. Troy follows:] 

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20 

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Insert offset folio 7 here 23826.007

"Rescuing Americans from the Failed Health Care Law and Advancing PatientCentered Solutions" 

House Education and the Workforce Committee Testimony by Dr. Tevi D. Troy 

Feb.1,2017 

Introduction 

Chairwoman Foxx, Ranking Member Scott, and members of the committee, thank you all for the 

opportunity to testify today on the effects of the Affordable Care Act (ACA) on large employers and their 

employees, as well as how to advance patient-centered solutions going forward. 

My name is Dr. Tevi Troy, and I am CEO of the American Health Policy Institute (AHPI), a non-profit 

research organization focusing on employer-sponsored health care benefits. I also served as a senior 

White House aide in the George W. Bush administration from March 2005 to July 2007 and Deputy 

Secretary of Health and Human Services from August 2007 until January 2009. 

AHPI is a non-partisan 501(c)(3) think tank, established to examine the impact of health policy on large 

employers, and to explore and propose policies that will help bolster the ability of large employers to 

provide quality, affordable health care to employees and their dependents. The ACA has catalyzed a 

national debate about the future of health care in the United States, and the Institute serves to provide 

thought leadership grounded in the practical experience of America's largest employers. 

While the public debate over the ACA appropriately focuses on the 20 million' Americans who are 

receiving coverage through its exchanges and Medicaid expansion, the Act also significantly, and in 

many cases unnecessarily, increased the regulatory requirements and burdens on employment-based 

health care that covers more than 177 million Americans'. Too little attention has been focused on this 

important aspect ofthe law. 

In this time of transition in health care, it is important to protect those who have gained coverage under 

the ACA, but it is also a critical priority to protect those who are covered by employers. Innovations in 

large employer-sponsored health care benefits are helping to significantly reduce health care costs for 

employees, retirees and their dependents- and leading the way for overall system reform. As health 

care reform moves forward, federal policies should leverage and encourage flexibility in employersponsored health care benefits to enable large employers to continue to make these innovations. Such 

policies will be critical for making the Nation's workforce healthier and more productive and making the 

overall American health care system more fiscally sustainable- thereby enhancing American global 

competitiveness. 

ACA Impact on Employer-Sponsored Health Care Benefits 

There is clear evidence the ACA has both directly and indirectly increased the cost of employer health 

care benefits. In 2014, an American Health Policy Institute study' found that over the next decade, the 

cost of the ACA to large U.S. employers (10,000 or more employees) will be $4,800 to $5,900 per 

employee, and over the same time period, the total cost ofthe ACA to all large U.S. employers will be 

$151 billion to $186 billion. 4 In 2012, an Urban Institute study' estimated the ACA would increase large 

employer (1,000 or more employees) health care costs by 4.3 percent, and mid-sized employers (101 to 

1,000 employees) costs by 9.5 percent. More recently, a survey" of employers by the International 
21 

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Insert offset folio 8 here 23826.008

Foundation of Employee Benefit Plans (IFEBP) found the ACA increased actual employer health care 

costs by an average of 5.8 percent. 

Furthermore, the regulatory burden the ACA imposes on businesses and individuals should not be 

underestimated. Since the ACA was enacted, 106 regulations implementing the law have been 

published. These regulations will cost the private-sector more than $51 billion' and require 173 

million• hours of paperwork in order to comply. Moreover, hundreds of guidance documents regarding 

the ACA have been published by various federal agencies since 2010. According to a recent American 

Action Forum study,' the cost of each ACA regulation published so far has averaged $426 million and 

required 1.6 million hours of paperwork. 

These overarching cost estimates come from a number of ACA provisions that have a direct impact on 

employees and employers and on the cost oft heir health plans. These provisions include benefit 

mandates such as coverage for adult-children up to age 26 as dependents; offering affordable coverage 

to part-time and seasonal employees; and the requirement for employers to cover 100 percent of a 

growing list of preventive services. Although these benefit mandates may be popular, they are not free, 

and are part of the reason employee health care costs are rising. Other direct ACA costs include the 

Patient Centered Outcomes Research Institute fee, and general ACA implementation and administrative 

costs associated with IRS reporting requirements. 

The ACA also imposes a number of health care supply-chain taxes that are passed on to employees and 

employers, such as the medical device tax, the annual fee on the manufacturers and importers of brandname drugs, and the health insurer tax for fully-insured plans. 

According to the Centers for Medicare & Medicaid Services, employer-sponsored health benefits 

cost10 $975.6 billion in 2016, or $5,697 per covered life. Direct and indirect ACA provisions likely 

increased the cost of employer-sponsored health benefits by 5.8 percent11 in 2016. This means the ACA 

likely cost employers $56.6 billion in 2016, or $330 per covered life. 

Moving Toward Patient-Centered Reform 

Going forward, we should move toward a more patient-centered health care system and look to the 

private sector for transformation. In order for the private sector to be innovative, it is imperative to 

protect the tax exclusion on employer-sponsored health care benefits as well as the ERISA preemption. 

For more than 60 years, employer-provided health benefits have been excluded, without limit, from 

income and payroll taxes. And over time, this benefit has helped make employer-sponsored care a basic 

building block of our health care system. Given the role of employer-sponsored health insurance in 

providing stability in coverage to so many Americans, making a substantial change to the tax treatment 

of employer-provided health care could cause a significant disruption. 

We strongly support repealing the ACA's 40 percent "Cadillac Tax" on employer-sponsored health 

benefits in the upcoming fiscal year 2017 Budget Reconciliation Bill and urge Congress to repeal this tax 

along with the other ACA taxes and fees. We have seen how problematic the Cadillac Tax's approach is 

to both businesses and unions. We are glad it has been delayed until 2020 and hope to see it repealed 

soon. 

2 
22 

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Insert offset folio 9 here 23826.009

Reducing or eliminating the tax exemption on employer-sponsored health care would raise the same 

problems as the Cadillac Tax: It would serve as a middle-class tax hike; drive up health insurance costs 

for millions of American employees; and eliminate the strong incentives currently in place that 

constantly pressure large purchasers of health to demand more efficient, affordable, and effective care 

from the marketplace. 

Getting rid of or reducing the tax preference would also harm efforts to maintain strong risk pools and 

to cover the maximum number of people. As we have learned from experience with the ACA, 

encouraging people to get covered is a costly and challenging endeavor, and risk pools are difficult to 

maintain as well. Employers, however, are both good at getting people covered and maintaining 

manageable risk pools. Public policy should be aimed at encouraging these important goals. As Peter 

Nelson, Director of Public Policy at the Center of the American Experiment has said, "Employers do get 

people covered- they very successfully get people covered." 12 

A second key issue is the ERISA preemption. The Employee Retirement Income Security Act of 1974 

(ERISA) is the foundation of employer-sponsored health care benefits and we encourage you to 

strengthen the protections in the law. The long-standing preemption provision is vital to multi-state 

employers because it enables them to offer uniform nationwide health care benefits at the lowest 

possible cost to employees no matter what State they live in. This leads to better benefit design, a 

reduction in administrative costs through economies of scale, increased purchasing power, and greater 

innovation. Without it, an employer doing business in 50 different states would be required to comply 

with 50 different state health care laws, something that would make administering a health care plan a 

nightmare. 

America's employers strongly believe that as Congress considers moves forward with health care 

reform, steps should be taken to strengthen the ERISA preemption, which provides the framework for 

the health care coverage on which millions of Americans depend. 

In conclusion, I appreciate the opportunity to testify here today about the importance of employer 

sponsored coverage and its importance to our system. Going forward, our policy should not be to 

increase the burdens or costs on employers and the 177 million employees and dependents who get 

coverage through the employer based system, but to encourage that coverage for the benefit of our 

system as a whole. 

Thank you for having me here today. 
23 

CEWDOCROOM with DISTILLER


Insert offset folio 10 here 23826.010

1 "20 Million People Have Gained Health Insurance Coverage Because of the Affordable Care Act, New Estimates 

Show," Department of Health and Human Services, March 3, 2016. Available at: 

https: /(www. h hs.gov I a bout/ n ews/2016/03/ 03/2 0· rn ill ion -peopi e·h ave-gain ed-h ea It h ·ins u ranee-coverageC. Barnett and Marina S. Vornovitsky, "Health Insurance Coverage in the United States: 2015," U.S. Census 

Bureau, Table 1, September 2016. 3 Tevi D. Troy and D. Mark Wilson, "The Cost of the Affordable Care Act to Large Employers," American Health 

Policy Institute, April 2014. Available at: 

5 "Implications of the Affordable Care Act for American Business," Urban Institute, October 2012. Available at: 

ljjJp;J.f.!!:!yy_w. urban .org/ sites/ de fault/files/ a !fresco I publication -pdfs/ 412 6 7 5 -I rn pi ications-o f -the-Affordable-Care-

"2016 Employer-Sponsored Care: ACA's Impact," International foundation of Employee Benefit Plans, 2016. 

Available at: http://www.itebp.org/pdf /aca-i mpact -su rvey-2016.pdf 7 Sam Batkins, "$1.8 Billion in Costs," American Action Forum, October 24, 2016. Available at: 

'Tara O'Neill Hayes, "The Regulatory Burden of the Affordable Care Act," American Action Forum, January 27, 

2016. Available at: lJ.!!lllliwww.americanactionforum.org/weekly-checkup/the-regulatory-burden·of-the· 

"National Health Expenditures and Selected Economic Indicators, Levels and Annual Percent Change: Calendar 

Years 2009-2025," Centers for Medicare and Medicaid Services. Available at: b_ttp://www.cms.gov/Research-

"2016 Employer-Sponsored Care: ACA's Impact," International Foundation of Employee Benefit Plans, 2016. 

Available at: http:l/www.ifebp.org/pdfi.ilca-impact-surv~016.pdf 

12 "Getting Beyond Employer-Sponsored Health Insurance: Some Fitful Starts," The American Enterprise Institute, 

March 31, 2016. Available at: https:(/www.aei.org/events/getting-beyoncl·employer·.:&onsored-health-insurancesome-fitful-start;;L 

4 
24 

Chairwoman Foxx. Mr. Eddy. 

TESTIMONY OF JOE EDDY, PRESIDENT AND CHIEF EXECUTIVE 

OFFICER, EAGLE MANUFACTURING COMPANY, WELLSBURG, 

WEST VIRGINIA, ON BEHALF OF THE NATIONAL ASSOCIATION OF MANUFACTURERS 

Mr. EDDY. Thank you. Good morning, Chairwoman Foxx, Ranking Member Scott, and distinguished members of the committee. I 

thank you for the opportunity to appear here today before you and 

for holding this hearing. 

My name is Joe Eddy, and I am president and CEO of Eagle 

Manufacturing Company in Wellsburg, West Virginia. I’m currently on the board of directors of the National Association of Manufacturers, also known as NAM, and also serve on their Small and 

Medium Manufacturers Group. The NAM is the Nation’s largest industrial trade association and a voice for more than 12 million men 

and women who make things here in America. 

Eagle Manufacturing Company is a family-owned business established in 1894. We employ approximately 195 employees and are 

a prime manufacturer of safety cans, safety cabinets, secondary 

spill containment products, poly drums, and material-handling 

products. At Eagle, we design and manufacture all of our own products. We are a respected brand name across the world for consistent quality and value, and all of our products are still made in 

the United States. 

Manufacturers have a proud tradition of providing health insurance for their employees. At Eagle, our tradition has been to cover 

100 percent of medical costs. We have done this because it’s the 

right thing for our employees and our community. No government 

policy or mandate leads us to provide this generous benefit. We 

often hear that people specifically want to come to work at Eagle 

because of our reputation for taking care of our employees. We live 

by our mission statement: Protecting people, property, and the 

planet. 

Unfortunately, the last few years under the Affordable Care Act 

have made it more difficult to live up to our own standards. Rising 

healthcare costs have forced us to make some difficult choices, and 

the ACA has further limited our options. 

In 2009, prior to the ACA, we were paying about $13,500 per 

year per employee, and by 2013 those costs increased to over 

$15,800 per year per employee. The additional taxes, paperwork, 

fees, and mandates of the ACA cost us nearly $1,000 per year per 

employee. As much as we work to keep costs down, our plan now 

costs over $22,800 per year per employee. 

We do not think that our benefits are excessive. They are necessary to attract, retain, and maintain a strong, quality, and 

healthy workforce. And I am not alone. Ninety-eight percent of 

NAM members offer health insurance to employees, and the cost of 

health care remains a top business concern for both large and 

small manufacturers. These rising healthcare costs impact all facets of any company: hiring new workers, maintaining competitive 

pay rates, making capital investments, as well as our decisions in 

researching and developing new products. 

CEWDOCROOM with DISTILLER

25 

Part of the challenge that the ACA ushered in was the paradigm 

shift in healthcare choices available to manufacturers and other 

businessowners. More specifically, the insurance that we had for 

more than 10 years was no longer available. Many of our employees had to find new doctors, and we had to learn to manage an entirely new system. Furthermore, the new product we purchased 

was more expensive, driving our healthcare costs up that year an 

additional $4,000 per year per employee. 

Unhappy with the outcomes of this change, we switched carriers 

again to another insurer. We are hopeful that our situation has 

stabilized, but businesses such as ours need flexibility and competitive options so that we can always find the best and most cost-effective plan for our employees. 

Perhaps the most challenging part of the ACA is the effect that 

it’s had on our employer-employee relations. As I mentioned earlier, Eagle has 195 employees, but it should be noted that 150 of 

those are unionized through the United Steelworkers Union. We 

have traditionally had a strong relationship with the union and our 

employees. However, last year, during contract negotiations, for the 

first time in our history, we had to negotiate a cost-sharing arrangement with the union. The union members now have to contribute $35 per pay, or $910 per year, towards monthly healthcare 

premiums. As you would imagine, those were not easy negotiations, 

tending to break down the trust and partnership that we had established through the many years between the company and our 

employees. 

The years following the passage of the ACA have been costly, disruptive, and distracting from the things that we are really good at 

doing as manufacturers. Moreover, the dose of uncertainty delivered to us over seven years ago still has not been fully resolved. 

Eagle is very proud of our 123 years in West Virginia, manufacturing innovative, quality products for our customers. As a leader 

in the Wellsburg community, we strive to provide healthcare benefits that allow for a strong, healthy workforce, but it is a struggle 

given the limits, restrictions, and mandates of the Affordable Care 

Act. 

I know that my struggle is not unique and that many manufacturers across the country are facing the same challenges. I very 

much look forward to working with you to find a workable solution 

that will help control outrageous costs and provide the flexibility 

for employers to continue to provide the benefits their employees 

deserve. 

Thank you for inviting me to testify before you today, and I am 

happy to answer any questions. Thank you. 

[The statement of Mr. Eddy follows:] 

CEWDOCROOM with DISTILLER

26 

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Insert offset folio 11 here 23826.011

NATIONAL ASSOCIATION OF 

Manufacturers 

Testimony 

of Joe Eddy 

President and CEO 

Eagle Manufacturing Company 

On Behalf of the National Association of Manufacturers 

Before the U.S. House Committee on Education and the Workforce 

115th Congress 

Rescuing Americans from the Failed Health Care Law and Advancing PatientCentered Solutions 

February 1, 2017 
27 

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Insert offset folio 12 here 23826.012

TESTIMONY OF JOE EDDY, PRESIDENT AND CEO, EAGLE MANUFACTURING COMPANY 

ON BEHALF OF THE NATIONAL ASSOCIATION OF MANUFACTURERS 

BEFORE THE U.S. HOUSE COMMITTEE ON EDUCATION AND THE WORKFORCE 

Hearing on Rescuing Americans from the Failed Health Care Law and Advancing 

Patient-Centered Solutions 

FEBRUARY 1, 2017 

Good morning Chairwoman Foxx, Ranking Member Scott and distinguished 

members of the committee. Thank you for the opportunity to appear before you and for 

holding this hearing today. 

My name is Joe Eddy, and I am president and CEO of Eagle Manufacturing 

Company in Wellsburg, West Virginia. I am on the Board of Directors of the National 

Association of Manufacturers (NAM) and also serve on its Small and Medium 

Manufacturers Group. 

The NAM is the nation's largest industrial trade association and a voice for more 

than 12 million men and women who make things in America. The NAM is committed to 

achieving a policy agenda that helps manufacturers grow and create jobs. 

Manufacturers appreciate your attention to the burdens of the Affordable Care Act (ACA) 

that are impacting the competitiveness and growth of manufacturers around the nation. 

My story is not unique; it is one of many experiences that manufacturers have 

experienced over the past several years. 

2 
28 

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Eagle Manufacturing Company is a family-owned business established in 1894. 

We employ 195 employees and are a prime manufacturer of safety cans, safety 

cabinets, secondary spill containment products, poly drums and material-handling 

products. At Eagle, we design and manufacture all of our own products. We are a 

respected brand name for consistent quality and value, and all of our products are 

"Made in the USA" We supply nearly every industrial and commercial sector: 

contractors, manufacturers, utilities, military, professional, government, printing, 

chemical, fabricators, transportation, textile mills, automotive, agricultural, medical, oil 

and gas and electrical. In 2015, Eagle received the NAM's Sandy Trowbridge Award for 

Excellence in Community Service, and last year, Secretary of Commerce Penny Pritzker 

awarded us the President's "E" Award for Exports, the highest recognition any U.S. 

entity can receive for making a significant contribution to the expansion of U.S. exports. 

Manufacturers have a proud tradition of providing health insurance for their 

employees. More than 98 percent of NAM members offer health benefits to their 

employees. At Eagle, our tradition has been to cover 100 percent of medical costs for 

our employees. We have done this because it's the right thing to do for our employees 

and our community. No government policy or mandate leads us to provide this generous 

benefit. We often hear that people specifically want to come to work at Eagle because of 

our reputation of taking care of our employees. We live by our mission statement: 

"Protecting People, Property and the Planet." 

Unfortunately, the past few years under the ACA have made it more difficult to 

live up to the standards we have set for ourselves. Rising health care costs have forced 

us to make some difficult choices, and the ACA has further limited our options. In 2009, 

prior to the ACA, we were paying about $13,500 per year per employee, and by 2013, 

those costs increased to more than $15,800 per year per employee. At that time, I was 

3 
29 

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tasked with specifically looking at the added costs to the company resulting from the 

impacts of the ACA because our health care costs were on the rise and posing a risk to 

the company's financial health. The taxes, paperwork, fees and mandates cost us 

almost $1 ,000 per year per employee, and this does not include the hiring of an 

additional human resources professional who specifically manages health care and all 

the new requirements. As much as we work to keep costs down, our plan now costs 

more than $22,800 per year per employee, so we are at even more risk if the "Cadillac" 

tax is not repealed. In addition, as a fully insured company that works directly with 

insurance brokers to purchase employee health plans, we are exposed to the health 

insurance tax in 2018. 

We do not think our benefits are excessive; they are necessary to attract, retain 

and maintain a strong, quality and healthy workforce. Unfortunately, the cost of health 

care remains a top business concern for both large and small manufacturers based upon 

quarterly survey results conducted by the NAM that focus on manufacturing sentiment. 

While the overall business outlook is improving, there has been limited relief in sight to 

address escalating health care costs. Since being added to the NAM survey two years 

ago, it has been listed as a primary business concern each quarter. Rising health care 

costs impact all facets of any company-hiring new workers, maintaining competitive 

pay rates and making capital investments as well as researching and developing new 

products. 

Part of the challenge that the ACA ushered in was the paradigm shift in health 

care choices available to manufacturers and other business owners. Options that were 

once available to us became more limited over time. More specifically, the insurance that 

we had for more than 10 years was no longer available. It put a whole new meaning to 

the oft-repeated words of the previous president, "If you like your health care plan, you 

4 
30 

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can keep it." Many of our employees had to find new doctors, and we had to learn to 

manage a new system. Furthermore, the new product we purchased was more 

expensive, driving our health care costs up an additional $4,000 per year per employee. 

Unhappy with the outcomes of this change, we switched carriers again to another 

insurer. We are hopeful that our situation has stabilized. Businesses such as ours need 

flexibility and competitive options so that we can always find the best and most costeffective plan for our employees. 

But the most challenging part of the ACA is the effect it has had on our 

employer-employee relations. As I mentioned earlier, Eagle Manufacturing has 195 

employees, but it should be noted that 150 of those are unionized through the United 

Steelworkers Union. We have traditionally had a strong relationship with the union and 

those employees. However, last year during contract negotiations, for the first time, we 

had to negotiate a cost-sharing arrangement with the union because of the untenable 

rise in health care costs facing Eagle. It was a difficult choice, and I am proud that for the 

competitiveness and well-being of the company, the union agreed. Employees now 

contribute $35 per pay period ($91 0 per year) toward monthly health insurance 

premiums. As you would imagine, those were not easy negotiations. It broke down the 

trust and partnership between the company and our employees. For our non-union 

employees, we now have to charge $50 per pay period ($1 ,200 per year) for their coshare. 

The years following ACA passage have been costly, disruptive and distracting 

from the things we are good at doing as manufacturers. Moreover, the dose of 

uncertainty delivered to us more than seven years ago still has not been fully resolved. 

We look forward to working with you to help address these mounting issues, and I 

appreciate the opportunity to share my experiences on behalf of my company and other 

5 
31 

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manufacturers. In speaking for myself and others, we urge Congress to focus its efforts 

on solutions that will successfully eliminate the costliest and most problematic aspects of 

the ACA. The challenges ahead-a continued escalation of health care costs paid by 

employers and employees through the anticipated "Cadillac" tax on comprehensive 

health plans, an excise tax on medical devices, a health insurance tax and other 

administrative burdens-all demand immediate and thoughtful attention from Congress. 

Eagle is very proud of our 123 years in West Virginia, manufacturing innovative, 

quality products for our customers. As a leader in the Wellsburg community, we strive to 

provide health care benefits that allow for a strong, healthy workforce, but it is a struggle 

given the limits, restrictions and mandates of the ACA. I know that my struggle is not 

unique and that other manufacturers around the country are facing the same challenges. 

I very much look forward to working with you to find workable solutions that will 

help control outrageous costs and provide the flexibility for employers to continue to 

provide the benefits their employees deserve. Thank you for inviting me to testify before 

you today, and I am happy to answer your questions. 

### 

6 
32 

Chairwoman Foxx. Thank you very much. 

Ms. Schlaack, you are now recognized for five minutes. 

TESTIMONY OF ANGELA SCHLAACK, ST. JOSEPH, MICHIGAN 

Ms. SCHLAACK. Good morning, Chairwoman Foxx, Ranking Member Scott, and the members of the committee. Thank you very 

much for inviting me to attend the session today. 

My name is Angela Schlaack, and I am originally from central 

Texas but have been a longtime resident of St. Joseph, Michigan. 

I’m here today to share with you a little bit about how the Affordable Care Act has impacted my life and the lives of my family. 

Never could I have imagined the life-changing events that would 

bring me here today. 

In November 2013, my husband, Michael Schlaack, suddenly had 

three days of extreme fever, headaches, and sweating. Michael was 

diagnosed with the most aggressive form of acute myeloid leukemia, and he had mere days to live. He was 44, exercised, did not 

smoke, got routine medical checkups, and had no prior health 

issues. 

He was admitted to the University of Chicago Medical Center’s 

Leukemia Intensive Care Unit that night, as our local hospital does 

not have the ability to treat this type of disease. 

The University of Chicago is about 90 miles from our home, and 

the distance created an additional hardship on our lives. This diagnosis meant he was forced to take an extended leave from work, 

as living with AML is a full-time job in itself. His employer, Whirlpool Corporation, was supportive and, thankfully, very generous in 

their benefits. Little did we know at that point the cost of treating 

leukemia and how valuable our health insurance would be. 

The only cure as of now for AML involves chemotherapy and 

donor stem cell transplant. Not only were we responsible for Michael’s medical expenses, but patients are also responsible for those 

of their donor. 

After six weeks of chemotherapy to keep the leukemia under control and preparation for transplant in place, Michael was able to 

return home for a few weeks before returning for another minimum 

six weeks inpatient. In those weeks at home, we still had to return 

to his hematology oncologist two to three times per week. At this 

point, we were beginning to realize the financial magnitude of what 

treatment for leukemia entails. Our bills were exceeding a million 

dollars already. 

Within three months of his stem cell transplant, Michael’s leukemia relapsed with a vengeance. At this point, the only options 

were clinical trial therapies. We spent the next four months in and 

out of the hospital in Chicago, and he needed blood transfusions 

every few days. One bag of blood, which he was receiving multiple 

units of per week, was over $1,500 each. In addition to the 20 or 

so prescriptions he was taking, the constant trips for doctor visits 

to Chicago, we still had to maintain our household financially. 

With the extreme physical, mental, and emotional stress that 

came with this journey, one thing we did not have to worry about 

was the fact that we knew our insurance would not cut us off after 

any lifetime maximum. Hoping Michael would survive, we knew, 

CEWDOCROOM with DISTILLER

33 

despite this now preexisting condition, he would stay covered and 

not be discriminated for something he had no control over. 

The provisions of the Affordable Care Act kept us from filing 

bankruptcy and losing what we had built up in our over 20-year 

marriage. The expenses incurred in a matter of 10 months were 

nothing any health savings account could properly fund. We had 

peace of mind knowing Whirlpool’s insurance would take care of us. 

In September 2014, Michael died at age 45 of AML. As I had 

been a full-time caregiver to him, in addition to trying to maintain 

some normalcy for our family, I was not employed. I was a stayat-home mom to our then-10-year-old daughter. Our young adult 

son was in graduate school at the time and was entering the Peace 

Corps after graduation. Whirlpool graciously covered the three of 

us under their insurance for the rest of the calendar year. 

Though offered COBRA benefits beginning in 2015, the premiums were beyond anything I could afford. I was able to take advantage of something I never expected to need, the healthcare marketplace. 

Knowing I needed to continue to provide for myself and daughter 

from here on out, I decided to go back to college to complete my 

degree. Having access to the marketplace gave me the ability to 

provide excellent coverage for us at an extremely low monthly rate 

and not have to return to work yet simply to have the benefit of 

health insurance. We were able to keep our same doctors, and 

while dealing with our grief and this new life, the ability to have 

full coverage, including mental health benefits, was one less worry. 

Though I am just a common person from a small town in the 

Midwest, I know my experience with devastating health issues and 

having my whole world turned upside down in the blink of an eye 

is not uncommon, and anyone can be one illness away from losing 

everything they have. Our bills were nothing a health savings account could have remotely covered. Had Michael survived, he 

would have had a major preexisting condition. And being that AML 

has genetic links, our family is at risk for facing similar situations 

down the road. 

The Affordable Care Act has helped keep my life moving forward. 

It’s given me the ability to continue a healthy life with access to 

routine care and without worry that one hospital admission could 

cost me everything. 

I implore you to please consider the benefits that the Affordable 

Care Act has provided. Whether through an employer or the marketplace, everyone deserves that peace of mind. 

Thanks for your willingness to hear my voice. 

[The statement of Ms. Schlaack follows:] 

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34 

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Insert offset folio 17 here 23826.017

Good morning Chairman Foxx, Ranking Member Scott, and the members of the 

Committee. Thank you very much for inviting me to attend this session today and share with 

you some of my story that has greatly impacted my life. My name is Angela Schlaack and 

though I am originally from central Texas, I am a long-time resident of Saint Joseph, Michigan, a 

lovely beach community on the shores of Lake Michigan. 

The reason I am here today is to share with you a little about my recent experience with 

unforeseen medical issues and how the Affordable Care Act has impacted my life and the lives 

of my family. Never could I have imagined the life changing events that would bring me here 

today. 

In November 2013, my husband Michael Schlaack had three days of extreme headaches, 

fever, and sweating. Just days before he had been on his usual 5 mile walk on the beach, had 

been busy with his supply chain job at Whirlpool Corporation, and our life was quiet and routine. 

Knowing something just was not right, he went to his physician and unsure of what was wrong, 

he ordered blood work. Within hours we were given the diagnosis. Michael had leukemia. Due to 

the extreme white blood count level, the doctors realized he had mere days to live and he was 

admitted to the University of Chicago Medical Center's leukemia Intensive Care Unit that night 

as our local hospital does not have the ability to treat this type of disease. Thus began our 

journey that no one ever saw coming. Michael was the picture of health. He was 44, exercised, 

did not smoke, got routine medical check ups, and was never sick. 

After further tests were done at the University of Chicago, it was determined that Michael 

had one of the very most aggressive types of Acute Myeloid Leukemia (AML). The life 

expectancy for his diagnosis is grim and the chance of recurrence is high. The only cures as of 
35 

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now for AML involve chemotherapy and stem cell transplants, what were formerly more 

commonly known and processed as bone marrow transplants. Michael was initially an inpatient 

from the night of his diagnosis lor six weeks in preparation for his stem cell transplant. Though 

the University of Chicago hospital is about 90 miles from our home, we were grateful to be in 

such good care, despite the distance that created an additional hardship on our lives. His 

diagnosis also meant he was forced to take an extended leave from work. Living with AML is a 

lulltime job in itself. His employer, Whirlpool Corporation, was supportive and thankfully, very 

generous in their benefits. Little did we know at that point the cost of treating leukemia and how 

valuable our health insurance would be. 

Stem cell transplant therapy requires a donor and fortunately a great match was found for 

Michael from a young man in Germany. Not only are we responsible for Michael's medical 

expenses, patients' are also responsible for their donor's medical expenses. After six weeks of 

chemotherapy to keep the leukemia under control, having the preparation for stem cell transplant 

in place, Michael was able to return home tor a few weeks before returning for another minimum 

of six weeks inpatient. In those few weeks at home, we still had to return to his hematology 

oncologist two to three times per week. Around this time is when the first medical bills started 

rolling in to us. We were very thankful that his employer considered him a fulltime employee 

and our insurance stayed intact. At this point we were beginning to realize the financial 

magnitude of what treatment for leukemia entails. Our bills were exceeding a million dollars 

already. 

Unfortunately within three months of his stem cell transplant, Michael's leukemia 

mutated around the donor's cell and the disease was back with a vengeance. At this point the 

only options are clinical trial therapies. We spent the next four months in and out ofthe hospital 
36 

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Insert offset folio 19 here 23826.019

in Chicago for fevers, doctor visits, and blood transfusions every few days. A simple bag of 

specially processed blood, which he was receiving multiple unit of per week, was over $1500 

each. Cancer does not discriminate between economic abilities. In addition to the 20 or so 

prescriptions he was taking. the constant trips tor doctor visits to Chicago, we still had to 

maintain our household financially. With the extreme physical, mental, and emotional stress that 

came with this journey, one thing we did not have to worry about was the fact that we knew our 

insurance would not cut us off after any lifetime maximum. In looking forward and with hopes 

that Michael would survive, we knew despite this now pre-existing condition, he would stay 

covered tor the rest of his life and not be discriminated for something he had no control over. 

The provisions of the Affordable Care Act kept us from filing bankruptcy and losing everything 

we had built up in our over twenty year marriage. The expenses incurred in a matter of l 0 

months was nothing any health savings account could properly fund. To this day I am eternally 

grateful for the peace of mind we had knowing Whirlpool's insurance would take care of us. 

In September 2014, Michael died at age 45 from AML. I had been a stay at home mom 

for the past 10 years to our then 10 year old daughter and young adult son who was in graduate 

school at the time. Whirlpool graciously covered us under their insurance for the rest of the 

calendar year. As [ had been a fulltime caregiver to Michael in addition to trying to maintain 

some normalcy for our children, I was not employed. I found myself as a young widow with a 

child still at home. Thankfully I still had access to insurance for all of us, including my son who 

was still under 26 years old. He had signed on to join the Peace Corps immediately after 

graduating and again, thanks to the ACA, knowing he was still covered under the employer's 

policy was just that much more of a relief to me. 
37 

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Insert offset folio 20 here 23826.020

Though offered COBRA benefits beginning in 2015, the premiums were far beyond 

anything I could afford. At that point I was able to take advantage of something I never expected 

to need, the healthcare marketplace. My income was comprised of a pension from Michael's 

employer, life insurance, and social security benefits. Knowing I needed to continue to provide 

for myself and daughter frcim here on out, I decided to go back to college to complete a degree 

that I never had. Having access to the marketplace for our insurance gave me the ability to 

provide excellent coverage for my daughter and myself at an extremely low monthly rate and not 

have to return to work just yet simply to have the benefit of health insurance. We were able to 

keep our same doctors and while dealing with our grief in this new life we had, being able to 

have full coverage including mental health benefits was one less worry. 

Though I am just a common person from a small town in the Midwest, I know my 

experience with devastating health issues and having my whole world turned upside down in the 

blink of an eye is not uncommon. I realize anyone can be one illness away from losing 

everything they have. Our bills were nothing a health savings account could have remotely 

covered, had Michael survived he would have had a major pre-existing condition forever, and 

being that AML has genetic links, our family is at risk for facing similar situations down the 

road. The Affordable Care Act has helped me keep my life moving forward. It has given me the 

ability to continue a healthy life with access to routine care and without worry that one hospital 

admission could cost me everything. I implore you to please consider the benefits that this 

Affordable Care Act has provided to every single person in the United States. Whether through 

an employer or the marketplace, everyone deserves that peace of mind. 

Thank you tor your willingness to hear my voice. 
38 

Chairwoman Foxx. Thank you very much. 

Mr. Bollenbacher, you’re recognized for five minutes. 

TESTIMONY OF SCOTT BOLLENBACHER, CPA, MANAGING 

PARTNER, BOLLENBACHER & ASSOCIATES, LLC, PORTLAND, 

INDIANA, ON BEHALF OF THE NATIONAL FEDERATION OF 

INDEPENDENT BUSINESS 

Mr. BOLLENBACHER. Good morning, Chairwoman Foxx, Ranking 

Member Scott, and members of the committee. My name is Scott 

Bollenbacher, and I’m a managing partner of Bollenbacher & Associates, a CPA firm serving individuals and small-business clients, 

most of which are family-owned. 

I started the business in 2004 with six employees serving 400 clients. We have grown to 11 full-time employees and six part-time 

employees serving 1,600 clients. I am pleased to be here on behalf 

of the NFIB to discuss how the ACA has impacted our business 

and our clients at today’s hearing. 

As a small business, we are a close-knit family. Our employees 

are much more than employees; they are our friends. We care deeply for them. We care for their families. We want to provide for 

them -- provide benefits and help in any way we can. We know that 

our success as a business depends on our team. Most of our employees have been with us for 10 or more years. 

From 2004 to 2014, our firm maintained a high-deductible health 

insurance plan accompanied by a health savings account. The firm 

paid the entire premiums and funded up to $3,000 per year to the 

employees’ HSA. This plan worked well for the business and our 

employees. We saved tax-preferred funds for predictable and unforeseen medical expenses. 

In late 2014, we learned that our policy no longer qualified under 

the ACA because it did not cover the essential health benefits package, specifically pediatric dental coverage. I requested the benefit 

be added but was unable to do so, and we lost our plan. 

We did not know what to do, and we had little time to choose 

a new option, but we explored all the available options with a consultant. We considered purchasing insurance through the SHOP 

exchange. However, the plan would have cost over 50 percent more 

than our previous plan with less coverage. We considered dropping 

health insurance altogether and increasing the employees’ salary to 

help them purchase insurance on their own. IRS restrictions made 

this very difficult. We considered a healthcare sharing ministry 

called Medi-Share, and we considered self-insuring. 

The only feasible option at the time was a partially self-funded 

plan. I believe our firm was the smallest group they accepted at the 

time. The premiums were similar to our previous plan, but the coverage was not as good. It carried a higher deductible and did not 

cover vision care. It did not cover my family doctor. 

We have maintained this coverage for two years. In the fall of 

2016, we learned that our carrier no longer wanted to offer selffunded health plans to small businesses, so they proposed to raise 

our premiums by 156 percent. We could either pay the increase or 

leave. We left. Essentially, our plan was canceled again. As with 

most small businesses, we must watch our expenses. A 156-percent 

increase is not possible. 

CEWDOCROOM with DISTILLER

39 

Once again, we worked with our benefit consultant to explore all 

options. Shopping for the right plan is complicated for us because 

the firm is close to the Indiana and Ohio border. Our employees 

live in both states. We must find a policy that is accepted by doctors and hospitals on both sides of the state line. 

We finally settled on another fully insured plan at a 78-percent 

increase. It was our only available option. Most of our employees 

liked the HSA option we maintained for 12 years, but this plan is 

not HSA-eligible. 

The experience has been frustrating and stressful. The increases 

and cancellations are unsustainable for a small business like ours. 

Many clients experience similar disruption with premium increases and plan cancellations: 

A church could no longer provide three ministers with tax-preferred money to purchase coverage in the individual market due to 

IRS guidance. The pastors ended up purchasing coverage on the individual exchange that was twice as expensive because they did not 

qualify for a subsidy. 

A cabinet manufacturer with 25 employees could no longer contribute the entire premium to their employees after a 44-percent 

increase to their 2017 plan. 

A pallet manufacturer with 110 employees who could neither af- ford the $500,000 insurance nor the $70,000 employer mandate 

penalty was forced to terminate 80 employees and subcontract 

some of the work. 

A farmer couple who earns just above the subsidy had to pay a 

38-increase after their plan was canceled. 

And a single, female businessowner suffered a policy cancellation, forcing her onto the individual exchange marketplace, where 

her premiums doubled without a subsidy. 

I want you all to know what’s going on in the real world with 

average Joes and Janes. We work very hard. I brought a picture 

of our team today so that you see that we’re real people. We’ve 

been hurt badly by the cost increases caused by the ACA and request your assistance in fixing this. As you consider repealing and 

replacing ACA, I encourage you to focus on lowering the costs and 

increasing flexibility for small businesses. 

Thank you again for allowing me to share my story today, and 

I’m happy to answer any questions. 

[The statement of Mr. Bollenbacher follows:] 

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40 

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Testimony of Scott Bollenbacher, 

House Committee on Education and the Workforce 

February 1, 2017 

Rescuing Americans from the Failed Health Care Law and Advancing Patient-Centered 

Solutions 
41 

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Good morning, Chairwoman Foxx, Ranking Member Scott, and members of the 

Committee on Education and the Workforce, My name is Scott Bollenbacher, I am a 

Certified Public Accountant (CPA) and the managing partner of Bollenbacher and 

Associates, a CPA firm serving individual and small business clients, most of which are 

family owned, 

I started the business in 2004 with six employees serving 400 clients, We have grown 

to 11 full-time employees and six part-time employees serving 1,600 clients, Even 

though we are in the middle of our busy season, I felt this issue is so important that I 

accepted the invitation to testify. I am pleased to be here on behalf of the National 

Federation of Independent Business (NFI B) to discuss how the Affordable Care Act 

(ACA) has impacted our business and our clients at today's hearing, 

NFIB is the nation's leading small business advocacy organization, Founded in 1943 as 

a nonprofit, nonpartisan organization, NFIB's mission is to promote and protect the right 

of its members to own, operate, and grow their businesses, NFIB represents about 

325,000 independent business owners located throughout the United States, 

As a small business, we are a close-knit family, Our employees are much more than 

"employees!' They are our friends, We care for them deeply, We care for their 

families, We want to provide for them, provide benefits, and help them any way we 

can, We know that our success as a business depends on our team, Most of our 

employees have been with us for ten years or more. 

From 2004 to 2014, our firm maintained a high-deductible health insurance plan 

accompanied by a health savings account (HSA), Many of our clients maintained a 

similar benefit The firm paid the entire premium and funded up to $3,000 per year into 

employees' HSAs, This plan worked well for the business and our employees, We 

saved tax-preferred funds for predictable and unforeseen medical expenses. 

During that period, our premiums increased eight to twelve percent annually, These 

premium increases impacted raises and rates but were manageable, 

In late 2014, our benefits consultant informed us that our policy no longer qualified 

under the ACA because it did not cover the entire Essential Health Benefits package, 

specifically pediatric dental coverage, Despite the lack of children on the plan, I 

requested adding that benefit but we were unable to do so, We lost our plan. 

We did not know what to do and had little time to choose a new option, but we explored 

all available options with our consultant 

No Good Options 

1) We considered purchasing insurance through the Small Business Health Options 

Program (SHOP) exchange, However, that plan would have cost over 50 

percent more than our previous plan with less coverage, 

2) We considered dropping health insurance altogether and increasing employees' 

salaries to help them purchase insurance on their own, IRS restrictions made 

this option difficult 

3) We considered a health care sharing ministry called Medi-Share, 

4) We considered self-insuring. 

2 
42 

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The only feasible option at the time was a partially self-funded plan with a $25,000 stop 

loss policy. I believe our firm was the smallest group they accepted at the time. Selffunding came with increased compliance responsibilities and increased risk, but it 

seemed like the best option. The premiums were similar to our previous plan, but the 

coverage was not as good. It carried a higher deductible and did not cover vision care. 

It did not cover my family's doctor. We maintained this coverage for two years. 

In the fall of 2016, our benefits consultant informed us that our carrier no longer wanted 

to offer self-funded health plans to small businesses, so they proposed to raise our 

premiums by 156 percent. We could either pay the increase or leave. We left. 

Essentially, our plan was canceled again. 

As with most small businesses, we must watch our expenses. A 156 percent increase 

was not possible. Once again, we worked with our benefits consultant to explore all 

options. 

Shopping for the right plan is complicated for us because the firm is close to the 

Indiana-Ohio border, and our employees live in both states. We must find a policy that 

is accepted by doctors and hospitals on both sides of the state line. 

We finally settled on another fully-insured plan at a 78 percent premium increase. It 

was our only available option. Most of our employees liked the HSA option we 

maintained for 12 years, but this plan is not HSA eligible. 

The experience has been frustrating and stressful. The increases and cancellations are 

unsustainable for small businesses. 

Similar Client Experiences 

I don't know of any clients who were uninsured previously. Many clients suffered plan 

cancellations, forcing them into the exchange marketplace. Some anecdotes include: 

• A church could no longer provide three ministers with tax-preferred money to 

purchase coverage in the individual market due to IRS guidance. The pastors 

ended up purchasing coverage on the individual exchange that was twice as 

expensive because they did not qualify for a subsidy. 

• A cabinet manufacturer with around 25 employees could no longer contribute the 

entire premium to their employees after a 44 percent increase for their 2017 plan. 

• A pallet manufacturer with 110 full-time equivalent employees, who could neither 

afford the $500,000 insurance costs nor the $70,000 employer mandate penalty, 

was forced to terminate 80 employees and subcontract out some work. 

• A farmer couple, who earn just above subsidy-eligibility, had to pay the entire 38 

percent increase after a plan cancellation at the end of 2014. 

• A single female small business owner suffered a policy cancellation, forcing her 

into the individual exchange marketplace where her premiums doubled without a 

subsidy. 

I want you all to know what is going on in the real world with "average Joes and Janes." 

We work hard every day. I brought a picture of our team so you can see we are real 

people. We have been hurt badly by the cost increases caused by the ACA and 

request your assistance in fixing this issue. 

3 
43 

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Insert offset folio 24 here 23826.024

As you consider repealing and replacing the ACA, I encourage you to focus on lowering 

costs and increasing flexibility for small businesses. Thank you again for allowing me to 

share our story today. I am happy to answer any questions. 

4 
44 

Chairwoman FOXX. Thank you very much. 

Thanks to all of our witnesses. 

And now we’ll recognize members for five minutes of questioning, 

and I’ll begin with Dr. Roe. 

Mr. ROE. Thank you, Dr. Foxx. 

And, first of all, Ms. Schlaack, I want to offer you my condolences 

for your loss. Two years ago today, I was sitting home with my 

wife, who was dying of cancer. So, certainly, my sympathy goes out 

to you and your family, and I share your grief. 

Ms. SCHLAACK. Thank you. 

Mr. ROE. You know, we had a promise from the administration, 

when we started debating the Affordable Care Act, to increase access and lower cost. And I think certainly everybody agreed with 

that. I know on our side of the aisle I did. And you all don’t know 

me, but I’m a doctor that practiced medicine for over 31 years before I ran for Congress. 

And so what did we get? We got some increased access, but at 

what cost? And I know at our local hospital at home, 60 to 70 percent of the uncollectible debt -- now, it’s a billion-dollar healthcare 

system -- are people with insurance. 

And, certainly, we agreed on the preexisting conditions -- everybody on this dais agreed with that -- and lifetime limits. I think 

that certainly was something that we all agreed on, because health 

care is more sophisticated and costs more money than it used to. 

And we created this incredibly complex plan. And I said this 

seven years ago in an article I wrote. I could have done threefourths of what the ACA did in two paragraphs. And I’ve just heard 

the data that once again proved that. Mr. Scott pointed out that 

20 million people who weren’t covered are. Over half of them are 

Medicaid. We could have expanded Medicaid and allowed 26-yearolds to stay on their parents’ healthcare plan. That would have covered, along with the 5 million people, almost, who lost their insurance, including me -- I had perfectly good healthcare insurance and 

lost it and had to go on the ACA. You ended up with 80 percent. 

All these regulations and things that these three witnesses have 

talked about could have been avoided easily. 

In my own state, almost as many people pay a penalty, a tax, 

a fee, whatever Judge Roberts labeled it, as get a subsidy. And for 

the people who get a subsidy, it’s a good deal. The problem with 

it is there are millions of other people out there with small businesses who are being harmed by this. 

I was a mayor of my local community before I got elected, and 

we had to pay a $180,000 fee so that insurance companies would 

stay in the market. Eighteen of the 23 co-ops, one in the state of 

Tennessee, went broke to the tune of billions of dollars of costs of 

-- really, no health care got provided. Just the taxpayers were on 

the hook for this. 

And I can tell you flatly, we went through this over 20 years ago 

in our state, healthcare reform. I could have written the epitaph 

of what’s happening. We don’t do something, we cannot not do 

something, because no one is going to be able to afford health insurance coverage any longer if we don’t. I mean, Bill Gates won’t 

be able to buy a health insurance policy. When you’re talking about 

CEWDOCROOM with DISTILLER

45 

$22,000, that makes you not competitive with other people in foreign countries, and eventually you will lose your business. 

And, Mr. Bollenbacher, you mentioned one of the things you 

want to do is go across the state lines. I have a city in my district, 

Bristol, Tennessee/Virginia. I mean, the center street of that, one 

side you’re in Virginia, one side you’re in Tennessee, but you can’t 

purchase health insurance. 

Mr. Scott mentioned there are no plans. There are. I’ve written 

one, and it has 130 cosponsors. It’s been submitted, and we’ll have 

some version of that. 

What I want to know from you all at the dais is what can we 

do, what would you expect us to do. When we rewrite this policy, 

what could we do to help you lower the cost and increase access, 

which was the premise of the ACA to begin with? 

Anyone can take it. 

Mr. TROY. I’ll step in. Thank you for your statement, Mr. Roe. 

So we believe that the way to approach this is to try and 

incentivize the purchase of health care by lowering costs overall. 

What the ACA did, as you so cogently said, was to increase the 

costs for everyone and subsidize a select few. I think a better approach would be to try and make it cheaper overall to reduce costs. 

And there have been a number of Republican plans that have 

done this: the HSAs, health savings accounts, purchase across 

State lines, tort reforms, and association health plans that would 

allow people to get the tax benefits not just through their employer. 

And a combination of those things have been scored by the Congressional Budget Office as having the effect of reducing overall 

premiums. 

Mr. ROE. And Ms. Schlaack mentioned -- I use a health savings 

account and have since the day they came out. And for most people 

-- for her, she’s right; it would only have covered part of the cost 

of that, not this astronomical cost. But for most of the care, it 

would work just fine. 

And the cost of the ACA -- a personal testimonial. I had major 

back surgery in September of this year. I looked at all the bills I 

got for the doctor, for the hospital, for the anesthesia, the MRIs, 

all of that. At the cost of the ACA, they still made money on me 

this year. My premiums were that expensive. And so I can pay 

that, but the average person where I live in rural Appalachia, 

which is what I represent, cannot. 

With that, I’ll yield back. 

Chairwoman FOXX. Mr. Scott, you’re recognized for five minutes. 

Mr. SCOTT. Thank you, Madam Chair. 

Madam Chair, I’d like unanimous consent to enter into the 

record a report prepared by the committee staff on the Democratic 

side showing the benefits of the Affordable Care Act. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

CEWDOCROOM with DISTILLER

46 

CEWDOCROOM with DISTILLER


Insert offset folio 73 here 23826.073

What's at Stake for 

Working Fa1nilies? 

Highlighting the Progress of the Affordable Care Act 

[ ~-\,·. !Jou\·e Commif!r:e on Edutalion and the fi(!10J(;rcr 

! N!nuarr2017 

INTRODUCTION 

'l'!te Patient Pn!t('ction <Hlcl.\fl(m:!ahl<· (:are 

.\ct 1\CX. :-.ignccl into bw on ~larch 

2010, wa~ cu.tctnl to irnpron~ ami expand 

<tccess to health in'lnance J(H· all.\mcricans. 

i11:-.urancc - atHl al~o cn·atcs ;1 :, brkctp!ac(' 

whl'rc indiYidual'> :wd bmi!ics can compare 

pun·h;l.'>l' coverage 

\\.hcthcr workers acces:-. 

in tlw ah::wnn· of thi'> n·quiH·nwnL If Lnnilic:-. 

and indiYidual~ wail until they get 

th;lt dri\·co. ('()\ts up !(n· 

tlw ,\C.\\ that f'\"('1'~ 

in-,uwncc and the unin~urcd rate is the lmH:~l 

on record.'·' :\Ion' ~peciflcally, the unin~mt'd 

ra!c ha-, dropped from l ()3 percent in :?0 l 0 

to H.G percent today.~ Thi" i"' a tmly hi.~tuiit 

could not buy health in>.unmcc through 

\\'ith the as:-;istarJcc of tax creclib, 

thcsc workers and others nm 

COrl'>Ulll(T protection pmyisiom or the ACA 

For example. 

both 
47 

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Insert offset folio 74 here 23826.074

SOME OF THE WAYS WORKING 

FAMILIES WITHJOB-BASED 

COVERAGE BENEFIT FROM THE ACA 

Access to health insurance remains a popnlarjoh-bascd hcndit lllr both workers and 

t"mploycrs. By rccogT1izing the importance of employer-prm·idt•d insuranet\ the ,\CA 

strcngthcns,ioh-bascd con:ragc f(}r the more than L->5 rnillion Americans \vho arc already 

cm·crccl tl1rougl1 their ctnplo)·crs. "• 

The ACA provides that: 

- Young adults can stay on a parent's plan until age 26 

- There are no limits on care 

- Doctor-recommended wellness visits and preventative care are now covered 

without cost sharing 

- Insurance companies are required to spend premium dollars on health expenses 

- Prohibitions on long waiting periods before coverage kicks in 

Democrats in Congress remain connHittcd to fi1ll implementation of the .l\CA and haYc 

oW.Tcd ways to improve the lcm~ including increasing quality of carr and making health 

sctYices CY('fl rnore afl;xdahlc f(w AnlCrica \;working finni!ies. 

This report highlights ten of the most impmtant ways in \\·hich the ;\C.r\ has impnwcd the 

lives of hard working. \mcrican:-; and their f;1milics. The report also illustrates \\·hy cfl'ons to 

repeal the ,\C:\ arc dangerous fhr students, [uniLic:->, and working proplc. Lastly. it oullincs 

\\·ays in \\"hich \\"Orking- Eunilies ,,·ithoutjob-hased health insurance. bendit limn access to 

comprehcnsi\l' cO\lTagc in !he :\Iarkctplacc. 
48 

CEWDOCROOM with DISTILLER


Insert offset folio 75 here 23826.075

1 Strengthening Health Coverage Rights 

and Protections for Working Fam.ilies 

Before tlw .\G:\, many Lunilic:; :itmggkcl to nl<Hl'-1gc 

chronic health conditions that required rcguhu· or 

cxpcnsiw treamwnt. .\1! too often, bmi!ics would 

·'c;tp nul'-· hilling an anm1<d or liktime limit<~! inn on 

bcndib. Aller the cap. working pcopk mmmonly r;m 

out or health rare hcndit~ <tnd were ldl to pay fill· the 

~cnlc~·s they de~pcratdy nn'd\'d. Thi" kd tn flnanci,ll 

instiibility l(n m;my bmilic~. whu were t(m:t'd to make 

tllugh d1tlin·..,, '>uch a" wh('ther to pay fl1r health em~ or 

p<~y rent 

IIowe\Tt; t111dcr the .\C.\'s elimination of liktinw and 

am1u:d bmdit caps, working pc(1pk ··including tho.~c 

w-ithjnh-ha~l'd in';urancc- arc prntcctcd fl·nm thc~c 

cowrage limih. \\'orkn'> ill'{' nm1· ~;d(·guardcd h-nr11 

i!Kltrrillg Ulln'a'-<lnabk out-of-pocket CX!Wll:W"-, \\"lli(·h 

can lw financially crippling f(lr many fi1milics. cspt-cially 

tho~c ~trugglin)! to nuke end~ meet \1hik nYm·crin~ 

liYml ;1 m;~jor health i.~.~uc \\'hik aHI:mbhility of 

coverage is ~tili ;1 coJH-crn f(lr ~onw \\orker~ and 

( :ongrcss can do more in thi<:. area, the impn1\"cmcnts 

TH<-lde throug-h the :\(:.·\provide important protections 

i(>r bmili('" \ritbjob-lla:..c<l cm·cmgc. Rqlt';tline; the 

A(:.\ wn11ld ~trip ;tw<ty tlw prnt('ttiom tll<lt bend it so 

many l:\milics <~cross dw coulltr;: now. \\'ithout the 

, \CA our nation's \mrkcrs woul< llw susceptible to 

p.tying nulimited costs !in·t1wir lw:1lth nm'. 

Repeal of the ACA would leave 

working people susceptible 

to paying unlimited costs for 

health care. 

-Sue, Powell, WY 

MomsRising~Healthcareisalifesaver"Storybook 
49 

CEWDOCROOM with DISTILLER


Insert offset folio 76 here 23826.076

Putting Money Back into the 

Pockets of Working People 

Thanks tn <I provision in t!w ;\li{mlabk Can· r\n .. \mcricaus han' aln·ady san·d 

:)9 bi!lioJJ dollars in 1lw limn of r{'hatcs Jl·om imuntnl'(' companies. If an in.-.uranc(' 

company i"n't spcndin~ at !t'd<;t BO pnccnt .Ji5 pcrcmt in the large group rnarke(i of' 

premium dolbrs on quality mcdic;tl can\ they arc required to send sonw money b;wk to 

bmilics.r, This protection ha.~ put money dir\'ct!y hack into llw poch·h of \mrking people 

when their imuranrc company spt'Uch too much m01wy on administratin· costs such 

as marketing, advertising, and exenltivc bonuses·· and not enough on artlm! health car{' 

expenses. \\'ith the ;\C,\ in place. consumers g-<"1 a rdMtc check or some other f~mH of 

p;1ymcnt fi·om their insurer. Tht~ ;_·onccpt is simple: health insurance premiums ~hould 

pay f()r anu;d hc:c1lth-rdated CXJX'Hse-... 

\\'hilc m,my \Vorking hmllic.~ continue to !it(T 

challenge" with health car(' cu~b d!Hl rost-

\haring, ::uch ;\';deductible-.. and co-p;tymcuts. 

the prog;-rcs-; '\T h<lW m.tde under the ACA is 

quite !llt'<tllin~ful. lt i" dmt· (\l mm'C f(wi\·ard, 

not hackwatd. in addn::ssing thc:-.c a!brdahility 

cha!!('ng('S. IC Republican:-. succcssftdly rqw.tl 

the ,-\CA, this progrc:,s \\·ill he rolled hack 

eroding tran:.parcncy in !wa!th coYnagc 

and undoing the rcquircnwnt th<Jt health 

premiums lw mcd !(lr hc<dth benefits and 

quality of care. Repeal or th{' ACA means 

insurance cmnpanie.~ \\·ill mwc ag-ain he <<hk ro 

uv· workers' hard-(·arncd mom·y on fri\·olous 

cxpcnsi·s, taking n:; hack to th(' day:-~ \dH"n 

Americans have 

in the form of rebates. 

insurer;-; could o.;pcnd <tn <'nnrmom arnouut of premium dollars on CEO bonu~i·-.;, 

instead of workin~ Eunilin · health C<HT, 

Repeal would take us back to the days when insurers 

spent a huge chunk of premiums on CEO bonuses, 

instead of working families' health care. 
50 

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Insert offset folio 77 here 23826.077

3 Enabling Financial Security for 

Young Workers 

~!any young people olkn find thcmsdws in di!Ilcnlt Jimmcia1 positions hcf(m· they establish 

their place in the workllirCc. For example, many young adulb h8\'(' ~tucknt loan debt and other 

financial dcn1anch "!Ht!l a:- rent, tnmsportation, and li\·ing cxpcmcs.. Bcfim· the.\( :A, they had 

!irni1cd in'>urancc options. ka\·ing tlwm at t!w cdg·c of flnancial risk when bcnl with illness just 

when they are about In begin adulthood. 

Howi'Wr. the :\C \ changed thi-;. The law has a !lowed 

b.! million young adult::: to ohtain or remain on their 

parents' health plans until the age of 2G. Young adults 

qnal.i{\· i<1r tl!is CO\"<"'rage n·cn if they arc not liYing with 

their pan·nt."! ... \llm,·ing dependents und{'r the age of 2G 

to rcnMin on tlwir parents' health care plan.c:. c~>tablis]w.; 

important protection-; Jlx young adults, including 

collcg(' studcms and recent gradwuc.'-. as they prcp;;m· 

to enter the \VOrk!(lrCL The hendit also pn1vides peace 

of mind and rcducnlllnanciat strain llx many parents, 

Bctifrc the ,\C.\, approximately 30 JWrcent of young 

adults were uninsured. than one in 

im· of a!lthc uninsmed. Th;mks tu the new age 2G 

pn>\1-.,iuu ,. ;dong witlt tl1c other covcn1gc CXfXHhion 

pro\·isiuns in the ,\CA- the uninsmTrl rate <lmOl12; 

youm:,· <ldults ag('.'- 19-25 has Cd!cn by more th;m .lO 

perccntY Thi~; expansion i., important f(lr young <tdults 

who need co\·cragc, and in .c,uwraL younger and 

hcalthil'r enrollee<; abo hdp to keep lwalth insurance 

cmh dovm f(H· C\'cry\l!H'. 

- Patricia, Morgantown, WV 

MomsRising"Healthcareisalifesaver"Storybook 

Enhanced cowragc options g-ive young- pcopk much~ needed stability and peace of mind while 

they arc making hc1lth, cmTt: and financial ckci,iuns that will impact their li\'Cs fbr decades to 

mme. Ir Rqmblicaus :.uccess!'u!ly repeal the ,\C, \, young peopk will haw limited health can' 

nptions that cmdd pw their health. finance;,, and even their careers at ri~k. 

Repeal limits options for young people, which could put 

their health, finances, and even their careers at risk. 

----- - --

Demnmtl( Staff of the U.S. House Committe<> on Edutation and the Workfol(e 
51 

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Insert offset folio 78 here 23826.078

4 Controlling Health Insurance Costs 

-for Working Families 

hJr (hades, working b.milic~ \Wl"l' hit hard b~ the risinQ,: cU"-h of health cow rage. Iucrca:-;ingl~: 

people ]Mid nwrc and more I;Jr plans with ks" gencnHt" lwndlt..;.q \\'bile the co\t uf he,dth 

iusm.ulc c ba~ continued to iucrc,t\t\ ~iucc t!w cnannwut of the AC.\ the ntc nf gmwth lin· 

prcmimm lns gone up hy less 

th;m lulf the rate dt<lt it wa:. 

bd(m· the ];\\r w;t<..: cn:wtccL Tile 

cost growth in cmployer~ba~cd 

('mTrage ha.\ :tctually decreased. 

relieving the financial burden 

many hard-wnrking .\mcrican<> 

~·xpcricncc when cka!ing with 

their health t·an· I<~ \\'orkcr:. enjoy 

this ~!cm-cd cost growth on top of 

added cmlstmwr protcC!iom, such 

c\S the elimination of <Hlntml or 

lil(•tinw caps. 

The m·crage pn•mimn kn· 

employ('r~pnl\'ickd l~unil~ 

cm·uag·c rnw only >l. ·I prrcent in 

20 l () ""compared tn illl <1\"l'ragc 

annual rate of 7.9JHTCclH in 

1000-20 1 0. 11 Thi:-. cltYn',h<' in 

pn·mium growth mc;m<.. woJ king 

Growth in Premiums for Employer-Based 

Family Coverage 

AnnuaiNominaiPern:ntGrowth 

t:unilics are ~pmding ks<.. on health in.-.:.ur;UH"(' premium'> than tlwy wuuld han· if tht .\G·\ had 

J111t h('cn enacted. In Lwt, t!w Council tlr Economic ,'\(1\'isiT" ha'> l(nmd th,tt C1miliL'S are s<ning 

mon· tll<lll S3,000 <I ~c,u hl"l<IU~I' of tht' ~lowed pcmium growth.:' :\C,\ nvcdl \\otlld tlm:;atcn 

tlw pn>gTc<:s rnadc in cntm\J!lin.g the co'>t or iw,1!th insurance on many lnds. Repeal wmlld ,d'>o 

incn·;ts\' the lllunlwr nl' jlt'tlpk witll\l\l( imur<'tnn· :md ('.~cabte the co"t of uncmnp('!JS:Ited em\'. 

Repeal threatens the progress made in controlling the cost 

of health insurance, increasing the number of uninsured and 

escalating the cost ofuncompensated care. 
52 

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Insert offset folio 79 here 23826.079

5 Creating a Healthier Workforce 

Orw of the tnO\t important ekmcnt.:; of the .\C,\ is it<; robust f(xus on pn'Ycntion. The, \CA expanded 

<H'Cf'>'> to fl-ee prcwntiYc sen icc.~ with no co~pa;.- !In· 137 million :\nwricam, induding 5:) millinn \\·omen 

;md 28 million children.· 1 Simpl;.-; thi-; m{'ans th«t if b.milics go to th(' doctor {(w a prewntiw service. 

such a.~ annual phy<>i(·a!s or hl(1otl pn·~'>ttrC ~crcvning..,, they won't pay a p\'nny. Bc/(m~ the A C.\. the 

cost of prcH'nliw care could dissuade many, \nwricnh !i:\mJ getting important screening'>. But now, 

the ~hare of adult~ \\'ho report f()rgoing ,t needed Yisitw th1; donor !)('caww or the cost of ha" dropped 

\ignif1cmtly aLTOS\ the country and more people arc· taking aclY<mtage of routine checkups. 1 1 

This !lxus Oil prevention 

CHl keep wurkvrs hca!th); 

wltilc S<t\i.ng them 

moncy. 1

··, Incrca~ing 

access to prcn'ntiw· em• 

decrease" the likelihood C1C 

di~ability; and indiYichmls 

'":ho arc healthier enjoy 

increased producti\'ity on 

t!w job, generating- higher 

incomt's !(Jr tlwmsdws 

and their fitmilics. 1

" 

R<'srarch has shO\m th<ll 

more than 90 pnccnt 

Productivity losses !inked to 

absenteeism cost employers 

(or $1,685 per employee). 

People going to work 

when they're sick (presenteeism) 

accounts for nearly 

of worker illness. 

• • • 

of employers link good hc<tlth to high t'mploycc producti\·lty and perfi1rnunn'. 17 This i~ a \\·in Ex 

both emp!oync;. >d10 hcndlt from a hcahhiu ~md rntHT :.tabk workf(m·c. and \\"Ork~T:., who can 

Slay healthy \\'hik proYiding f()f their bmilics. Rqw<ll of the '\C.\ cmbngcrs \mrkcr:-i ;!Ct.T'-'S to rrce 

pn'\'cntin· S<'tYiccs and rnay !()nT wmh'r~ to fix<'go important doclor \1~it~ and screening<>, sacrificing 

their health ;md pmdncti\'ity in the process. In ~hort, rqwal o!' the ACA put~ th<' ht'ahh uf dw 

Anwric;:m \\-orkfurrc <tt risk 

Repeal puts the health ofthe American workforce at risk. 
53 

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Insert offset folio 80 here 23826.080

6 Helping Working People Afford Coverage 

\ \.hik cmploycr~sponsorcd insmanet' i:., an important hcndlt l(w those who haw· access to it, 

tlw ~brkctpbcc creates a c:oycragc option !()r those \\ho don't. If workcrs'jnbs do not olkr 

affordable or adequate health em crage, worker;-, haw the option to pmt'h;tv: an insurance phn 

in the .\lark('tplacc ;md ran potentially benefit li"'<)nl a tax credit to help pay their premiums. The 

\larketpbcv cnwcs additi()nal options fC1r workers and their J;·unilies to ~lfl(ml wwragc. It also 

cHmurag<·<:.joh mobi!it) and cmrcprcneurship. ,\sa rc~ult of the .\C,\\ ~1arkctplarc, those who 

,m· ~df l'tnplo)('c] haw better and more options. In ~Ol ~.one of c\·cry !iv<· cnn;;unH'f'S- wdl owr 

one million people in tot;tl ·· \\ ho purcha;;cd ~darkctplac(' cow-rage wa~ scl!:.cmploycd. a small 

hu-;incs~ mvnn. nr both.'/ 

According to the Crban 

lm1itu!c, BO percent of llw 

indi\iduab \\ ho rccci\r 

premium tax credits l(n· 

~·on'r.l.gc in liH' ).farkctpbcc 

are cmp!o~wl ''' , \ho, the 

\'<1'>1 m:~jmity ur thmc who 

buy ).I ,nh'tpb ·e coverage 

get flnanci;d help- in 

2017, more than gin 10 

:..Iarkctplacc consumer<; will 

dmmthcrost 

The !.larkctplacc cxi."ts to fill 

an important gap coY<Tagc 

lf1r \\orkcr" and i1~ stability is 

Working Families Caught in Repeal Crossfire 

Percent ofThose Who lose Coverage 

and are in Working Families 

Percent of Children Who lose Coverage 

and are in Working Families 

importanti(H· workers. employer:;. and the overall insurance market alike. lf Republicans succeed 

in repealing tiw ,\Cr\, thi.~ \m1dd co!lapsr' the:\ !ark<·tvlan· and financial a~o.ist<nJCe f(>r indi\·iduab: 

and Lunilies, taking a\\ ay <:l!l(mlalM !wallh Cdll' optiom ll·om workn:,. 

Repeal would collapse the Marketplace and financial 

assistance for individuals and families, taking away 

affordable health care options from workers. 
54 

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7 Improving the Quality of Coverage 

-for Families 

In order to keep people hca!thi,-r, the Ae\ created health c:wc quality impron-mcnt programs, including 

programs aimed at prn·m6ng costl~~ unnecessary, and <lYoidabk hospital n'admis,~ions. Between April :20 l 0 

aud ).fay ~~0 15, appwximatdy :)6:),()00 reachni<.<;iom were pn:w·ntcd, compared to the year prior 

to the pas<;agc or the .\fl{Jtdablc That cqH<ttcs to 56.).()()0 in-:.tali(('S \\·here a patient aYoidcd 

having to go into the hospital:" This notable reduction in hospital rcadmis~ion~ docs more than sayc 

taxpayers' rnmwy through reduced health care spending--it has improved tbc quality of care f()r patients. 

Improved lw;tlth care 

quality 1s irnportant Ew 

both workers and !heir 

bmi!y nwrnher:.. Tlw 

<;takes tln' Jlartinilarly 

high lix \Yorkers who 

rnu~t baLHHT the 

demand.<.; or C\rcgi\·ing: 

\\·ith their outside 

nnplo~"rm:nt. Fix 

<'X<llllpk, if a rhild or 

parent i~ sick, a worker 

may ured to stay home 

fium work !o provide 

Lire to that family 

mcmhc1: l·{n· tho"e 

\\-orker:- who ;m' al"o 

the primary carcgi\"<'1: 

<;laying ill lwnw may 

National Medicare Readmission Rates Started to Fall in 2012 

,,l4.5 . 

hayc an impact on t]wirjob pcr!(mnamT nr limit their availability to k('ep a rcgubr \\Ork ~chcduk. Repeal 

nC th!.' .\( :. \ Lhrc<llCll'i the qualit: imprU\'CllWllh that h:l\'C prcwntcd t!wusand~ oC UIHHXCS~ary and costly 

uwdical complicatitms .. \t the <.;mlc time, lTJW<Iling the.\(:,'\ would place Ullllt'C<'s-.ary (irMncial ~!res\ Oll 

\\01 king Ctmitie.-. by f(m·ing tlwm to choo:>c work owr the health uf their [unily member,; a choice no onr 

-.hould h;1\'(' w make. 

Repeal places unnecessary financial stress on working families by 

gambling with their health and the health of their family members. 

'" 
55 

CEWDOCROOM with DISTILLER


Insert offset folio 82 here 23826.082

8 Creating More Job Flexibility 

Prior to tlw ,\( :.\, inchidu;tl~ '-'lruggkd to accc'is 

afl(mlahk CO\'(Tagc if t!w) lost thci1 job or lmt access to 

their cmpln)Cf~JWO\'idcd health plan. }.Lmy wmkn." klt 

"locked in" to jobs, due to the lack of afl(H"Clahk lwa!th 

care option:, out;,idc of the insurance ('0\Tt"<H!,l' prm·idcd 

by 1 heir cmp!ny('f. Thi-, kd to indllciencics in the labor 

markC'l --worker:- ->Ulycd in job." where they \1·c:rc not 

"atisficd or ,,-]wre their "kills were not !lilly u~cd became 

tlwy could not alf(xd to go \dthout their crnployer's 

h('ahh insunmn' plan:'' 

Thanks to the .\CA, tlH' problem of 'job-lock" has 

i1nprowd ~i~'lliliccllltly lwcau:,c \mrkcrs lu\·c lw<clltll 

care option'> oubidc of their cmploy\'rs through the 

.\[arketp!a(·e~. '

1 'l'hi'> lll('allS tl1at Jnilliol\S of ,\Jneril'<Hl'> 

with pn·-cxi-.;tin~ he<tlth condition:-. uo lom;vr hmT 

to worry about going; \\·ithout CO\'CLtgc if they want 

to k;nT theirjob~, reduce their liour~, or ~t.tn llt'W 

hu..,incssl'."i. \\'orb·rs \\'ho rccoe;niic th,tt their 'ikills may 

lw lwHn usvd in ,m cntr('prnlCHri,il cm·ironnwu! nm\· 

han' the l!cxibi!ity tu make Gln'\'l' ckci.~ion~ without 

kar that they \\illlo-.c \itallwa!th ctrc lwneht-.. 2

-, 

Some workers can choose to inn'st more time in their 

Llmilic\ and Cl.rccrs. Pil!Tllb or young children hm·c the 

option to work part-time or tcmpnra1ily k;t\'C the labor 

market in order to :-pend more time with their kick 

Older ,mrkcn may take mkant<1gc of the opportunity 

to retire cady hclllw tb\"y ate eligible i(Jr _:..ln\icarc. [f 

tlw .\( :1\ i~ n:pcakd. tllis freedom goes a\Vil~. Workers 

~ par1icubrly those \\hn han' pn·~('Xi'-aing conditiom -

\\·illlw robbed of llw fll':-;:ihllit\·tn make choiccc; based 

un wh<ll i~ be~\ i()r their CllWT~ and bmilic~. 

- Article Excerpt, Modern Healthcare, 

Repeal robs workers of the oecemb,28,1o16 

freedom and flexibility to make 

choices based on what is best for their careers and families. 
56 

CEWDOCROOM with DISTILLER


Insert offset folio 83 here 23826.083

9 Improving Health Benefits for 

our Nation's Coal Miners 

'llH' 15lack I Jnlg Benet its Act pnl\'idcs lnontllly i!Jn>mc 

and lH'<llth utrc bcJJcl1ts to m<~l miner~ \\"ill! black lungdist'<lV\ an ilhKs\ camcd by t!w inhalation of coal mine 

du:-.L "l'llisdis<:a~(· ill1J>ait'i h.m~ftnKtion. w!tidl ca11 kad 

ln disability and pn·maturc dcath.i'· Bd!xcthc .\C.\. 

maJJycbiT\·ingnlincrs>\llnappliccl [()r black lung 

b('llCfits were (knicd lxndits due to dw high burden or 

prOIJfofdigillility. ~['he,\(:"\ rcimt:ltecl a ]Jn's1nnption 

or cligibilityofhcndits !(xmitwr:-; who \mrkcd at kast 

L) years in underground or comparable surface 

wining, and tl1osc who Sllfli:·r ti·om a totally di~<lhling 

rc\viratnry imp.tinnmt. The ACA abo gT<lll\('d 

dr·ccascd n-llncrs' sm·vi\'ors em automatic entitknwnt to 

hcw·lit.~ if dw miner was digibk to wcciw them . \.s ,t 

result of tlw i\C,\, <t .\ur\'ivnrisnolongT-rn-quircd to 

prow tlmt tlK miJH'f {h'<l chw to ]Jbt·khmgdi:-.c<lsc. 

:\anwdallcr!(mncrScmtor Rohcn Byrd .\\Y.\.\·who 

ardl'l1tly atkocatcd t(w coal miner::, thc:w pnlYi~iom · 

conlrnon!)· knmqJ ~IS llw "Byrd A.:tnt'JlChlli'llls·' ·· 

rcmO\ c(! barrio~ tlMt cnnllnincrs amlth(·ir Cm1ilics' l1ml 

flccd in securing bcndit~ by ~hifling the h1 mlcu of proof 

;_m·ay lfom tl1c em! mincr,wl1o worked much oC thi·ir 

liw-.;itlnlining·to milti11g companies. 

:..Lu1y Jnorc Jltilters receive bcndit;; today tl1anb 

10 Byrd .\mcltdmcm~ in the .\C.\. [f the law is 

rq;cakd. miner:)' ;·md sun;ivors· eligibility f()r bcndiL~ 

will h('s.la~hl'd. Rqwalim;dw .\.(:,\ \vill reduce the 

liability br coal operators ;md in:-un·r·"· at tlw rxpcnse 

of disabkd coal miller~ and their bmilies --

j('()panli.r.ilt~tll<' lwah!l att(! fitMll<'i<tllwll<"lits m\cd to ill 

cokll minn" and their survi\'or~. -Danny, Cumberland, KY 

CorrespondenceSenttotheEducationandtheWorkforce 

Committee Minority Staff 

Repeal jeopardizes the health and financial benefits owed to ill 

coal miners and their survivors. 
57 

CEWDOCROOM with DISTILLER


Insert offset folio 84 here 23826.084

10 Creating a Better Econom.y for 

Working People 

how Lhc .\C.\ would impact job-;. In 

·'cconomi.~ts are warning: that the tax hiko~, 

[.\CAJ blll \\·ill only accckratt Anwrica\jobs crisis.";; 

The .\mcricnl I Iu'>pit;d .\\~ociatiun ,md 

(:j)llQ}'i''iS.i(lll:J kadcr-; \\-<1nlil1,\:;1lf. "tna:-.S.iYCjO]l ]()SSC<,' 

threat to rural conHnunitic:.. pointing onl that 

Estinmte~ ~how that repeal \I'Otdd result in a 

would be in hc;llth em· impac\ would he kh ;Kross mo-;t industric~. ,. 

Repeal of Both Premium Tax Credits and Medicaid Expansion: Potential National impact 

Repeal threatens jobs in every state and every 

Congressional district. 
58 

CEWDOCROOM with DISTILLER


Insert offset folio 85 here 23826.085

CONCLUSION 

In the JH'arly sewn years since its pas,qg(\ the AC.:\ has done much !O 

imp row the qu;1lit ~; acn·ss. ;.md aHbnlahility of health can· in America, The 

. \CA, building Oll tbc cmploycrwsponsmwl in:;.mance system. has expamhl 

lwalth cm·(T<tge to :ZO million ,UrwJican~ and den('ascd the unin~nrcd ratl' 

to ltistoricaHy lm\·!cvds. \\ l1cthcr ;l\U'S'>in~· their cowragc through t!l<'ir 

('mployns or in the ::\Iarkctp!ac<', worker~ HOW lwudit fi·om mort' afl(mbhle 

and lwttcr {jtMlity C()Y('\<Ig(· . 

.~\n·cs'> to fl·cc pn'\'t'TH,ltiYc sen in·s and prohibitiolls !!11 annual and lif(~titnc 

bend it caps mc.t!l more, \nw1icans can now M"C<'S'> much needed, ,md Dl\cn 

lif(·:qving, care. Financial as"i~tancc provided through the ).. Luh·tplacc and 

slowed cost growth in cmployn-b:wxl cm'crage pwrniums ha'i made h(~alth 

care cm·cTage more <1Wmhbk. Rcquin.'mcnts in the :\CA that insurer~ uow 

u'>e p<lymcnt<: !br medical co~ts instead of ("Xcc~siw owrlwad, ha\'e put more 

motH.'Y back into the pockets of m<my ,\nwricans. Ptm~<.iom de\ig1wd to 

clccrci\:-;(' the number of hospit:·ll rcmlmis~ions ha\T al'io impro\'cd the qtdity 

of health em·. The , \C:\ has pro\·idcd more con·ragc options so worker<;, 

including ymmo_ adults, haw· increa~cd financial security ,md job llcxibilit;,: 

.\nd our economy a-; a \lhnk benefits fl"Om <1 hc;dthin~ moH' productive 

\\'orkf(llCC. 

Despite thi~ demonstrable progr('s.~. th('rc i-; more \HJrk w do. \\"hilc :wcking 

to repeal the. \CA. Republicans lmv<" bikcl to ofkr a pbn that ntatche<.. the 

comprcbcn::.in.' approach or dw AC:A and cmurl"s that Americans han: arceso; 

to qm!ity conTagc . .-'\.~ Republicans continue \l-ith their d!{Jrh to repc;d the 

. \C.-\, they not only jeopardi1:e dw :-;i,~'llificant progre~s nMde under the b\1; 

blH ;1J::;.q dJn'(l{('ll (O 111akc millions or ,\rncriC<ll1S \\OJ'~(' off them hcf(Jrc its 

pas<>agc .. \mctica's fi1milic~ and \101king people d("'<'IYC b·ttn: .\'ow ic: tlw 

time to 'npport ch;m~vs 1hat impnwe the law and incrca~(·lwahh care acrc~s 

,md allim\ahillty I(Jr childn-11. Eunilin, and \\'orkin~ pcopk·. 
59 

CEWDOCROOM with DISTILLER


Insert offset folio 86 here 23826.086

What's at Stake for Working Families? 

How Repeal of the Affordable Care Act Threatens the Health & 

Economic Security of Working Families 

Additional Graphic Sources 

Costs for Working Families 

the Council of Economic Ad\'isers. :.Jew D<~ta Shmv that Premium Growth inEm20lti, available at: lntps://f)baJnawlJitehO\tse.ar5 Creating a Healthier Workforce 

Fmmdatinn, available at: llttp://w\vw.cdcfi)tl!ldatiou.org/busincsslhe,,dthy-wockli»Te-l<<li>gTaphlc 'underlying data sourenl in line 

l!-turns: The .i\ledicare 

at: hHJl://kfi(Jrg/medifumlcrlyin~ data ~oun:cd in lint') 

Care :\ct will bring 

hnnMtww>nnd<'>nhcaltlwan·.con>hotl9 Improving Health Ben~its for our Nation's Coal Miners 

Story obtained thruugh cmrcspuHdence ~ent directly to Educ,nion1hc \\'mk!l1rce Committee 

\Iinoritv Stall 

10 Creating a Better Economy for Working People 

Chart gcnerat;·d by tht' Commomvea!th Fund, Repealing Ft'd('ral Health RdOrm: Economic and Em20!7, available at: http://www.commonwealthftt!td.org/-

De mow tit 5tJI! oft he US 11 1

JU\P (vmmittre o~ fdurat1on and tht WMI<:fone 
60 

Mr. SCOTT. I’d like to ask all the witnesses if any support a total 

repeal of the Affordable Care Act without any credible replacement. 

Anybody? 

Let the record reflect that nobody volunteered. 

Does anybody propose -- we have a mandate that individuals buy 

coverage. Do any of the witnesses propose to eliminate that individual mandate? 

Mr. TROY. I don’t think the individual mandate is effective, sir. 

And then, also, on your previous statement, I want to make sure 

that it’s the -- we oppose the repeal without any alternative, but 

I think there will be an alternative. 

Mr. SCOTT. Okay. Well, if you eliminate the mandate for individuals, could you cover those with preexisting conditions? 

Mr. TROY. I think there are a number of proposals that look at 

covering people with preexisting conditions, especially those who 

maintain continuous coverage, and then also having high-risk pools 

to address those people, if it’s designed correctly. 

Mr. SCOTT. Has that ever worked anywhere, covering those with 

preexisting conditions, without an individual mandate? 

Mr. TROY. We are obviously going into new places in health care 

and new directions, so I’m not aware of any -- 

Mr. SCOTT. Well, that’s not a new direction because they tried it 

in New York, and when the Affordable Care Act came in, the individual prices in the individual market were cut 50 percent. The 

Governor of Washington State has indicated they tried it in Washington, and they had to repeal the whole thing because nobody 

could buy insurance if you didn’t have the individual mandate. So 

it’s not real new. 

Now, some of the witnesses have talked about the costs going up 

since the Affordable Care Act. We didn’t hear much about the costs 

going up before the Affordable Care Act. 

If the witnesses could present, Mr. Eddy and Mr. Troy, what 

your cost increases were the 10 years before the Affordable Care 

Act, I would appreciate to see that. Because all the studies have 

shown that the cost increases since the Affordable Care Act have 

been on average about half of what the increases were before. 

Could you provide that for us? 

Mr. TROY. Yes. We actually prepared that, sir. From 1999 to 

2005, employer-provided healthcare costs for family coverage were 

increasing by an annual average of about 11.1 percent. 

From 2006 to 2010, we saw a number of steps by employers to 

reduce costs, including the implementation of CDHPs, consumer-directed health plans, wellness programs, and other benefit plan innovations. And, as a result, the annual increase dropped to 4.8 percent -- still high, but much lower. 

And then in the intervening period from 2010 to 2016, the annual increase has been 4.7 percent. And this reflects the net costs 

increases and decreases from the ACA and additional cost savings 

innovations by employers. And we believe that without the cost increases by the ACA that 4.7 percent figure would be even lower. 

So it is absolutely true that costs have been going up over time, 

and we’re looking for ways to continue to moderate those costs 

through innovative programs. 

CEWDOCROOM with DISTILLER

61 

Mr. SCOTT. Okay. Well, if you could show us that 11 percent, because that’s consistent with what most increases were before the 

Affordable Care Act. And the 4 percent is consistent with what 

most of the -- closer to what the increases have been since the Affordable Care Act. So complaining about the costs going up without pointing out 

that they were going up a lot faster before the Affordable Care Act 

tends to be a little misleading. 

Some of the plans that have been referred to point out that you 

can reduce costs, but all of those plans appear to just shift the cost 

to the patient by cutting benefits, that the patient’s going to be just 

as sick, probably going to get the same kind of treatment, just have 

to pay more. 

Ms. Schlaack, can you say where you would be without the Affordable Care Act? 

Ms. SCHLAACK. I’d probably still be paying bills from three years 

ago. My daughter and I wouldn’t have been able to afford any 

health insurance if we wouldn’t have had the marketplace to go to. 

Where my COBRA payments were going to be $1,000 a month for 

the two of us, with the marketplace our premiums were under $100 

a month. We had deductibles that were possibly $500 a month the 

first year, and the second year they were lowered. 

We very well could have been bankrupt from well over the million dollars that my husband’s medical expenses racked up in, 

again, just 10 months’ time. 

Mr. SCOTT. You mentioned the lifetime cap. What did you mean 

by that? 

Ms. SCHLAACK. I know prior to the ACA, some insurance companies, once you hit a million dollars, you could be penalized and not 

be able to get insurance ever again. And had he survived, he 

could’ve possibly not ever been able to get coverage from anyone. 

Chairwoman FOXX. The gentleman’s time has expired. 

Mr. Walberg, you’re recognized for five minutes. 

Mr. WALBERG. Thank you, Madam Chairman, and I appreciate 

this hearing. 

Of course, what we desire is that people, in general, across the 

spectrum, be covered and have better opportunities for health care. 

We appreciate the fact that some have had good results, but we 

want to do this for all. And so we need to take this seriously here. 

Dr. Troy, you cited several studies in your testimony predicting 

that the ACA would increase the cost of offering coverage for large 

employers. These studies were conducted in 2012, 2014, and even 

2016. Has this prediction come to be? 

Mr. TROY. Thank you for that question, sir. 

So two points on that. First, number one is the study in 2012 and 

our study in 2014 that I mentioned that would increase costs 

$4,800 to $5,900 for an employee over a 10-year period, these were 

numbers that were produced by teams, benefit teams, at large employers that were reflecting what the CEOs and CFOs were looking 

at in making their determinations. So it is very important to look 

at those projections in saying that these affected how employers 

looked at the plans going forward. 

The second thing, there has been a recent study that found large 

costs associated with general ACA administrative costs, reporting 

CEWDOCROOM with DISTILLER

62 

disclosure and notification costs, costs associated with benefit plan 

design changes related to the ACA, costs of adjusting benefits to 

keep up with the ACA affordability requirements, and PCORI fees. 

So those are some of the biggest recurring costs. 

One cost that has not come to fruition at this point is the Cadillac tax, which was delayed in a bipartisan effort, which we applaud, and would impose extremely large costs on employers if it 

were to be instituted going forward. And so we would like to see 

its repeal. 

Mr. WALBERG. So, basically, costs did increase, as you suggested 

in the studies. What were the biggest contributing factors to those 

increases? 

Mr. TROY. So I mentioned a number of those, so I’ll be a little 

more specific. 

So the H26 dependent coverage, which I recognize is popular, one 

company said that it could cost about $69 million over 10 years. 

Another one estimated about $56 million over 10 years. 

In terms of the transitional reinsurance fee, estimated cost of 

$15.3 million from 2014 to 2016. 

One-hundred percent coverage of prevention services and other 

benefit mandates, one company said that this would cost them 

about $36.5 million over 10 years. 

And, again, the big five are the ACA administrative costs, the reporting disclosure and notification costs, the costs associated with 

plan design changes, the costs of adjusting benefits, and the PCORI 

fee. 

Mr. WALBERG. Okay. These are things we need to work on. 

Mr. Eddy, thank you for your testimony, and it’s admirable that 

your company traditionally paid 100 percent of the medical costs 

for your employees. And it was your desire to continue doing that, 

as a good number of businesses I’ve interviewed in my district as 

well, who literally at times with tears in their eyes, with their insurance agent sitting next to me, talked about what this would 

mean to them, to change a process that they felt they wanted to 

continue because of the family, as they called it. It was the right 

thing to do. 

It’s understandable that it was not sustainable under ACA. And 

it’s no surprise that your colleagues in the manufacturing business 

continue to cite the cost of health care as a top business concern, 

according to the National Association of Manufacturers. 

Could you tell the committee more about the difficult choices 

ACA forced you to make in breaking with the tradition of providing 

this type of coverage for your employees? 

Mr. EDDY. Yes, sir. Thank you, Congressman. 

You know, the difficult decisions really started with the implementation of the ACA during the tough times of a really bad recession, and it couldn’t have been a more worse time. And the decisions that we’ve had to make, now we seem to focus more on how 

we’re going to try to manage things like hiring people that we need 

and, you know, how soon people have to retire now. Every decision 

that we make now revolves around the costs and the uncertainties 

really afforded to us by the Affordable Care Act. So the tough thing we had to do -- we always like to try to take 

care of our employees, and that’s not only with good salary but also 

CEWDOCROOM with DISTILLER

63 

good benefits. We’ve always had that as a company philosophy. 

Asking them to participate in health care, as you said, it has really 

disrupted the relationship between management and union, management and the salary group, as well, because they pay more than 

the union does for their health coverage now. It’s just a matter of 

trying to keep them accountable and realize the additional burdens 

that we’ve had to take on here. 

Really, the bad part for the union and the company is I truly believe we could have added another 20 to 25 people in the last five 

to seven years if we didn’t have the additional burden of the Affordable Care Act. I’m not sure where the increases would have 

taken, but we didn’t see the major increases. 

Now, as an employer, we look for flexibility. That’s all we can ask 

you, as you’re working on the ACA, to give us some more flexibility 

as an employer, as well as options. And without that, the uncertainty going forward, it really delays any options for hiring people, 

developing new products. It’s really created a major burden. 

Thank you for your question. 

Chairwoman FOXX. Thank you. 

Mr. WALBERG. Thanks for your response. 

And my time has expired. 

Chairwoman FOXX. The gentleman’s time has expired. 

Mr. Polis, you’re recognized for five minutes. 

Mr. POLIS. Thank you, Madam Chair. I thank the chairwoman 

for yielding and the witnesses for coming. 

We’re here today to discuss the Affordable Care Act and its repeal. This committee has held a number of hearings in this area, 

in particularly to highlight the dangers of repealing the Affordable 

Care Act without a replacement that improves and builds upon it. 

Of course, I would note that the title of the hearing is somewhat 

deceptive. It’s called ‘‘Rescuing Americans from the Failed 

Healthcare Law and Advancing Patient-Centered Solutions.’’ Obviously, we hope that we can move forward in way to improve upon 

the healthcare law and leave something in its place that’s better. 

It has been six years since the law passed. Before the passage 

of the Affordable Care Act, about 48 million Americans had no insurance, and now that number has fallen to 28 million. For the 

first time, being a woman is no longer a preexisting condition; a diagnosis in childhood doesn’t preclude coverage as an adult; and 

cancer survivors can’t be sent a bill for their radiation after hitting 

their coverage ceilings for the year. As was indicated in the testimony, medical bankruptcies can be avoided. The statistics bear 

that out as well. 

In my home state of Colorado, I’d like to submit a letter from our 

Governor Hickenlooper urging this body to protect healthcare coverage for 600,000 Coloradans. Without objection, Madam Chair, I’d 

like to add that to the record. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

CEWDOCROOM with DISTILLER

64 

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Insert offset folio 30 here 23826.030

COLORADO 

'Gov. John Hickenlooper 

January 4, 2017 

The Honorable Kevin McCarthy 

Majority Leader 

U.S. House of Representatives 

H-107, U.S. Capitol Building 

Washington, DC 20515 

Dear Majority leader McCarthy, 

In response to your letter from December 2nd, we urge you to protect health care 

coverage for the over 600,000 Coloradans that have gained coverage under the Affordable 

Care Act. We simply cannot support efforts to repeal current law without a plan to 

immediately protect Coloradans. 

We share your commitment to putting patients first, and Coloradans have a history of 

coming together to improve health care. In 2008, our bipartisan, blue ribbon commission 

on health care reform made key recommendations, many of which have now been 

adopted by state and federal policymakers. Colorado's Accountable Care Collaborative 

program is saving money and improving the quality of care in our Medicaid program. 

Bipartisan efforts to expand Medicaid and create our state-based marketplace have driven 

coverage to historic levels. Our offices of the State Innovation Model and eHealth 

Innovation are helping to make it as easy to access mental health care as it is to see your 

primary care doctor, while making sure your health records are accessible to you no 

matter where you seek care. 

Colorado's businesses and their employees have benefited from slower growth in health 

care costs that have resulted from the Affordable Care Act. When more Coloradans are 

uninsured, the costs of uncompensated care are borne by employers, as providers must 

raise their prices and insurers pass these costs on to businesses and their employees. 

Since the passage of the Affordable Care Act, annual increases in premiums and out of 

pocket costs for employer sponsored insurance have been cut in half nationally. As a 

result of expanding Medicaid, Colorado has added an additional 31,000 jobs and household 

earnings are up more than $600 a year. 

136 State Capitol, Denver, CO 802031 P 303.866 24711 F 303.866 20031 www colorado gov/governor 
65 

CEWDOCROOM with DISTILLER


Insert offset folio 31 here 23826.031

Because of the progress Colorado has made, repealing the Affordable Care Act without an 

immediate replacement may be disastrous. In the wake of "repeal and delay," Colorado's 

individual health insurance market may collapse, as insurance companies abandon our 

market in the face of market uncertainty. Over 160,000 Coloradans, including 27,000 

children, who receive coverage through our public exchange, Connect for Health 

Colorado, wilt be without protection. 

In response to your questions, we welcome conversations about giving states additional 

flexibility to improve health care for our citizens. Our state has had discussions about 

Section 1332 waivers and believe that such waivers could be vehicles to drive innovation 

at the state level. Coloradans have discussed potentially using such a waiver to align 

income eligibility rules between Medicaid and our state-based marketplace or to 

eliminate the "family glitch." Unfortunately, greater flexibility cannot make up for a lack 

of funding. Should the federal government pull back Its financial commitments, we 

simply cannot afford to make up the difference. 

We are interested in discussing new and innovative ideas for improving the Medicaid 

system. Coloradans are striving to lower costs and improve health by making sure that 

patients get the right care, in the right setting, at the right time. Our state is in the 

process of improving upon its successful Accountable Care Collaborative program, an 

innovative approach to Medicaid that focuses on data driven, coordinated primary care. 

We look forward to continuing an open collaboration with our federal partners that will 

grant Colorado the flexibility to move this program into the next phase. 

At the same time, we are concerned that block grant and per capita cap proposals will 

make it difficult to maintain coverage and benefits for Coloradans over the long term. 

Many proposals would force us to make impossible choices in our Medicaid program. These 

proposals would shift the cost of providing health care to Colorado's most vulnerable 

c!tlzens on our limited state budget or force us to make difficult cuts. We should not be 

forced to choose between providing hardworking older Coloradans with blood pressure 

medication or children with their insulin. 

We have heard from countless Coloradans who are concerned about the future of their 

health care. More than 100 groups representing all64 of our state's counties, businesses, 

patients, people with disabilities, consumers, doctors, hospitals, insurers and others have 

asked us to protect the progress we have made on coverage, access, and quality. They 

agree that the ACA should not be repealed without a clearly identified and carefully 

considered replacement plan in place. They have asked us to reject proposals that put 

vulnerable populations at risk and shift costs onto our state. 

We stand ready to work with you, in a bipartisan manner, to improve upon the advances 

we have made and continue to protect Coloradans. We look forward to discussing these 
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issues with you in person and attending your convening of Governors and Commissioners on 

this topic later this year. Feel free to contact the Governor's Senior Health Policy Advisor, 

Kyle Brown (kylem.brown®state.co.us; 303·866-5361),with any questions. 

Thank you for your efforts to improve the health of Coloradans and all Americans. 

Sincerely, 

q~~ Governor 

Marguerite Salazar 

Commissioner of Insurance 
67 

Mr. POLIS. And I would also like to share a couple stories as well. 

A few weeks ago, Elizabeth Robinson, a constituent of mine, 

called my office in Boulder. She works as a homeless navigator for 

Boulder Municipal Court. For Elizabeth, the expansion of Medicaid 

that Colorado and 31 states took advantage of has been absolutely 

critical for serving the homeless population with which she works. 

She urged me specifically to oppose repealing the law because of 

the dramatic consequences to the most vulnerable. 

I also received an email from Dorothy, who shared her story. 

She’s from Louisville, Colorado, 63 years old, self-employed, earns 

less than $20,000 a year. Thanks to the subsidies on the individual 

marketplace, she finally has coverage that’s affordable as she waits 

for her Medicare eligibility. 

Elizabeth is an advocate, Dorothy is a patient, but both of them 

believe strongly the Affordable Care Act is working for them. 

My first question is for Ms. Schlaack. 

According to January reports from The Commonwealth Fund, re- peal would cost $54 million in gross State product and $1.8 million 

for Michigan alone in local and state tax revenues. 

In addition to your personal responsibilities, are you also concerned about this negative fiscal impact on your State the repeal 

would produce? 

Ms. SCHLAACK. Well, sure, Michigan being a lot of manufacturing 

facilities that struggle as it has been for a while. Also, like, the 

area where I live is right on Lake Michigan, and it’s a heavy tourist economy. And when people don’t have jobs, they don’t have 

extra money to spend, and the tourist economy is going to suffer. 

And the small community where I live, a lot of it is based around 

tourism. 

Mr. POLIS. Thank you. 

And, Dr. Troy, I appreciated in your written testimony where you 

said it’s important to protect those who’ve gained coverage under 

the ACA. What concerns me is the CBO has made clear that repealing the ACA would cause over 30 million Americans to lose 

their insurance. 

Would your organization oppose legislation that doesn’t maintain 

those coverage gains made by the Affordable Care Act in some way, 

shape, or form? 

Mr. TROY. Thank you, Congressman, for the question. 

As I said earlier in my testimony, I do believe it is important to 

protect the 20 million who have coverage via the ACA. I think the 

CBO study suggests that just if you repeal it and do nothing in its 

place, you would have a number of people without coverage, and 

I think that would be a problem. 

So we want to build on the existing building blocks of American 

health care, the successful ones, such as employer-sponsored care, 

and make sure that we can expand coverage and maintain coverage 

for all. 

Mr. POLIS. So I think you said it would be a problem if it didn’t 

maintain that coverage. Is that what you said? 

Mr. TROY. We absolutely would like to maintain coverage levels, 

yeah. 

Mr. POLIS. Mr. Eddy, you mentioned some of the -- this is on the 

pay-for side, the way that the Affordable Care Act was paid for. 

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68 

You mentioned in particular the so-called Cadillac tax. There’s 

other aspects, like a tax on unearned income, medical device tax. 

I’m not aware of your organization’s position on all of those, but 

certainly you’ve made it clear you oppose the Cadillac tax. 

Do you have other ideas for how to pay for an ACA replacement? 

And whatever takes the place of it, have you put other potential 

pay-fors on the table that are acceptable to you? 

Mr. EDDY. No, Congressman, I have not seen anything else that’s 

-- 

Mr. POLIS. Does your organization propose any, or do you simply 

oppose the current ones? 

Mr. EDDY. There are some provisions of the ACA that -- 

Mr. POLIS. Pay-fors, pay-fors. The ways that it’s paid for. The 

revenues. 

Mr. EDDY. Well, I don’t support the fact that it’s a mandate and 

has to be paid with penalties if not. And I understand why there 

are the mandates and the health insurance industry fees. The fees 

are really what -- the pay-fors, the additionals -- 

Mr. POLIS. Right. 

Mr. EDDY. -- where that amount could have gone to health coverage for our employees. 

Mr. POLIS. My time has expired, but, in concluding, I would just 

say, you know, it’s fine to oppose particular ways of paying for it, 

like fees and certain taxes, but, obviously, something has to be paid 

for. So maybe you can put, in the future, some on the table -- we’ll 

be happy to submit that to you in writing after the hearing -- as 

to how you would like to pay for the replacement for the ACA. 

And I yield back the balance of my time. 

Chairwoman FOXX. The gentleman’s time has expired. 

Mr. Rokita, you’re recognized for five minutes. 

Mr. ROKITA. I thank the chairwoman. 

I also thank the witnesses for your testimony today. I learned a 

lot from each of you. 

I want to start by commenting on some of the comments made 

by the Ranking Member, a dear friend of mine, Mr. Scott, who 

talked in his opening statement about a Budget Committee hearing. I happen to be an officer on that committee. And I just want 

to say, while I don’t dispute that there was some testimony given 

at that committee hearing along the lines of what Mr. Scott was 

talking about, the overwhelming testimony last week in the Budget 

Committee was that -- and these were experts in the field of health 

care and the economy and both -- was that ObamaCare was roundly criticized, that, in fact, if it was left to go on, it would implode, 

that the fact that you had another major government control in 

people’s lives only meant that costs were going up and choices were 

going down. 

So that was the takeaway from the Budget Committee witnesses 

last week when we examined this. And it’s not any different than 

the other examinations we’ve had on ObamaCare over the last several years. 

Mr. Scott also talked about some misleading figures, about the 

increase in costs and whether or not the increase in costs actually 

went down with ObamaCare or whether, if we didn’t have 

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69 

ObamaCare, the costs would’ve continued to increase at a higher 

rate. 

What I find to be misleading about the 6 years or so that we’ve 

had ObamaCare is statements like this: If you like your doctor, you 

can keep your doctor. That, in fact, is wrong. If you like your 

healthcare plan, you can keep your healthcare plan. That, in fact, 

is wrong. There are over 1,000 counties in the United States right 

now that have one choice on the exchange for a healthcare provider. In fact, it’s gotten worse. 

Then the cost was told to us to not be more than $2,500 per family or something along those lines. And, of course, we’ve blown 

through that figure almost immediately. 

So where are we today? 

I’d like to recognize my fellow Hoosier, Mr. Bollenbacher. I’m 

glad to see you here. I’m very familiar with your area of the State 

from when I served as Indiana Secretary of State. 

Can you explain a little bit about how a small accounting firm 

owner from northern Indiana winds up testifying before this committee on this issue? Did you ever think that would be the case? 

And can you go into a little bit more detail? 

Mr. BOLLENBACHER. Thank you. 

In the fall of 2016, we received a renewal for our health insurance of 156 percent, and it just blew me away. Many of my clients 

-- I was expecting a 40- to 50-percent increase based on the number 

my clients had been receiving. When I received 156, I just shook 

my head. I had no idea what we were going to do. 

My team members are my family. You know, I want to care for 

them, I want to take care of them. So I wrote a letter to President 

Obama just explaining to him about our 156-percent increase. And 

I sent that also to the NFIB, and they contacted me to come speak 

today, which I’m grateful for. 

Mr. ROKITA. Well, you’re not alone. I mean, in Indiana alone, 31 

percent of small businesses offered coverage in 2010, and by 2015, 

the most recent year that I could find data, only 23 percent of those 

same businesses were able to offer coverage, a decrease of 26 percent in the number of offerings. 

And your reason, just to be clear for the record, for this reduced 

coverage among small-business owners? 

Mr. BOLLENBACHER. The costs have been increasing. It’s just increasing out of control. 

Mr. ROKITA. When you described how your insurance was canceled the first time, you said there were some less ideal options. 

One of those was Medi-Share, I heard from your testimony, and 

some other things. Could you go into a little bit more detail there? 

Mr. BOLLENBACHER. We looked at a number of options. MediShare is called a church plan. I have a number of clients that have 

gone to that. It’s usually a half or a third of what even on the exchange it would cost them. And that was one of the options that 

we looked at. 

Mr. ROKITA. But that’s not working? 

Mr. BOLLENBACHER. For those clients that have gone to MediShare, they are still on it. It is working for them. 

Mr. ROKITA. Okay. Thank you. 

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70 

And then, Mr. Troy, I think with the 30 seconds I have remaining, I’d just like to ask you, at the risk of this committee losing jurisdiction over the issue, why do employers have to be involved in 

the insurance market? I mean, I understand the history and all 

that, but why couldn’t if we changed or modified the Tax Code 

could we not incentivize individuals to enter directly into a competitive marketplace? Why does the employer have to be involved? 

Mr. TROY. I don’t think the employer has to be involved per se. 

I just think that is the way the system has evolved, and to change 

it precipitously would be to cause large disruptions. As we saw 

with the Affordable Care Act, the disruptions are often quite problematic. Somebody mentioned the 5 million people who lost their 

individual plans via the ACA. 

So I think the best way to go forward is to try and avoid disruptions and focus on what is working. And you have 177 million people getting health care through employers. If you were to disrupt 

that, the government would have an even larger hole to fill in 

terms of covering people. 

Chairwoman FOXX. The gentleman’s time has expired. 

Ms. Bonamici, you’re recognized. 

Ms. BONAMICI. Thank you, Chairwoman Foxx and Ranking Member Scott. 

And thank you so much to all of our witnesses for being here 

today and testifying. 

I wanted to just follow up on what Mr. Rokita said about employer-provided health care. And also Dr. Roe mentioned, as well, 

that insurance costs make us noncompetitive with other countries. 

And I want to point out that that’s not necessarily a function of the 

Affordable Care Act. I was born in Detroit, Michigan, many years before the Affordable Care Act. And everyone knew in Detroit, Michigan, that if you 

make something in Detroit or if you go across the bridge and make 

it in Windsor, Ontario, you have very different cost considerations, 

because in Windsor, Ontario, they don’t have employer-provided 

health care, because Canada, like basically every other industrialized country, has universal health coverage. 

So it’s not necessarily a function of the Affordable Care Act that 

healthcare costs are making us unaffordable. And if we want to 

have a conversation about that in another hearing, I’d welcome 

that. 

Madam Chairwoman, I ask unanimous consent also to insert into 

the record a letter from the AARP supporting the Affordable Care 

Act and expressing concerns about the effects of repeal. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

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Insert offset folio 33 here 23826.033

Real Possibilities 

December 28, 2016 

Dear Representative: 

601 NW Washli's:Jlon, DC 20049 

?.02-434·7?11 1-888-0UR·A/\RP 1-888-687-2277 TTY·1-87J.434-7598 

'vV\\'W.Clarp org tw1tter @aarp fi1cebook .::omiaarp youtube <'om/ae~rp 

On behalf of our nearly 38 million members in all 50 states and the District of Columbia, 

Puerto Rico, and U.S. Virgin Islands, I am writing to express our views on health care 

reform. AARP supports the Patient Protection and Affordable Care Act (ACA) because 

on balance it addresses health care priorities that are important to all Americans age 50 

and older: protecting and improving Medicare's benefits and financing; providing 

access to affordable quality coverage; preventing insurers from engaging in 

discriminatory practices; lowering prescription drug costs; providing new incentives to 

expand home and community based services; and strengthening efforts to fight fraud, 

waste, and abuse. As Congress considers legislation to repeal and replace the ACA, it 

will be important for any health care legislation to include older Americans' priorities. 

Medicare 

Our members and other older Americans believe that Medicare must be protected and 

strengthened for today's seniors and future generations. The average senior, with an 

annual income of under $25,000 and already spending one out of every six dollars on 

health care, counts on Medicare for access to affordable health coverage. We will 

continue to oppose changes to current law that cut benefits, increase costs, or reduce 

coverage for older Americans. 

According to the 2016 Trustees report, the Medicare Part A Trust fund is solvent until 

2028 (11 years longer than pre-ACA), due in large part to changes made in ACA We 

urge you to maintain provisions in current law that have strengthened Medicare's fiscal 

outlook without shifting costs to beneficiaries or cutting benefits, including savings from 

provider payments and Medicare Advantage plans, the 0.9 percentage point Medicare 

Part A payroll tax on earnings of higher-income workers (incomes more than 

$200,000/individual and $250.000/couple), and the fee for the Part B trust fund on the 

manufacturers and importers of branded drugs. Together, these provisions of the 

health law have improved Medicare's fiscal outlook without harming beneficiaries. 

With this in mind, lowering prescription drug costs for seniors by closing the Medicare 

Part D coverage gap, or "doughnut hole," also remains a critical priority for AARP. The 
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ACA would eliminate the coverage gap in 2020. Since 2010, more than 11 million 

Medicare beneficiaries have received over $23.5 billion in savings while they were in the 

coverage gap. The average savings has been $2,127 per beneficiary. 

In addition to the ACA provisions above, we urge Congress to further help those 

enrolled in Medicare with high drug costs. For example, any new legislation could also 

provide the Secretary of Health and Human Services with the authority to negotiate drug 

prices on behalf of millions of Medicare beneficiaries to further ensure that seniors can 

afford the prescription drugs they need. Further, similar to what existed prior to 

Medicare Part D, drug manufacturers could be required to provide Medicare with the 

same rebates or discounts that Medicaid receives for prescription drugs purchased by 

beneficiaries who receive the Medicare Part D Low-Income Subsidy. 

In addition to lowering drug costs, any health care changes should maintain Medicare 

improvements such as cost-free access to preventive benefits and additional steps to 

crack down on fraud, waste, and abuse. 

AARP also supports efforts to reduce health care costs over time, including many of the 

payment and delivery system reforms designed to improve quality and make Medicare 

more efficient. Among these is giving the Secretary authority to test, evaluate, and 

expand new payment and delivery models. Complete repeal of the ACA could 

undermine Medicare's ability to innovate and adapt, as well as undermine health care 

providers' ability to implement high-value, quality care in the new Medicare 

reimbursement system. Additionally, while we did not support enactment of the 

Independent Payment Advisory Board, we do strongly support its requirements that 

Medicare savings not come on the backs of seniors through higher cost-sharing or cuts 

in benefits. 

We also strongly urge efforts to improve Medicare's low-income programs, such as 

raising asset limits that perversely penalize people who did the right thing by saving a 

small nest egg for retirement, as well as ensuring assignment to prescription drug plans 

that meet their needs. In addition, we objected to the ACA's provisions to freeze the 

Part Band Part D income-related premium thresholds --which penalize both work and 

savings and, like the Alternative Minimum Tax, will increasingly tax middle-income 

earners over time - and urge that the thresholds at least be indexed. 

Prescription Drugs 

Older Americans use prescription drugs more than any other segment of the U.S. 

population, typically on a chronic basis. In 2015, retail prices for 268 brand name 

prescription drugs widely used by older Americans increased by an average of 15.5 

percent. In contrast, the general inflation rate was 0.1 percent over the same 

period. For older adults, affordable prescription drugs are critical in managing their 

chronic conditions, curing diseases, keeping them healthy and improving their quality of 

life. 

2 
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AARP urges that any changes to the health law retain an approval pathway for less 

expensive generic versions of biologic drugs, and modify the provisions in current law 

that force consumers to wait 12 years or more for these important products. Biologic 

drugs can cost tens of thousands of dollars a year. Longer waits for less expensive 

versions cost both taxpayers and consumers billions of dollars we cannot afford, and 

may force consumers to forgo needed drugs because of costs. A more rapid 7 -year 

exclusivity pathway would improve health and bend the cost curve for 

everyone. Congress should also consider reducing barriers to better pricing competition 

worldwide by allowing for the safe importation of lower priced drugs. We also support 

prohibiting agreements between brand and generic manufacturers that delay timely 

access to affordable drugs. 

Private Insurance Market 

Beyond Medicare, we are concerned that many of our members and other older 

Americans age 50-64 could be adversely affected by changes in the health insurance 

market. About 6.2 million older Americans currently benefit from improvements in the 

individual insurance market, including 3.3 million who receive subsidy assistance. 

Affordability of premiums and cost-sharing is essential to the success and long term 

sustainability of health reform. Critical to that goal is prohibiting insurers from charging 

older Americans unaffordable rates because of their age. The current law's 3:1 age 

rating -- already a compromise that requires uninsured older Americans to pay three 

times more than younger individuals, even though their incomes are not significantly 

higher-- should be retained in any new legislation. Prior to the ACA, many insurers 

were permitted to use ratings of 5:1 or higher. Maintaining 3:1 age rating is a critical 

consumer protection for older Americans age 50-64 to ensure that they will have access 

to affordable coverage. 

In addition to limits on age rating, a strong combination of insurance market reforms, 

broad risk-pooling, restrictions on gender discrimination, subsidies, and cost-sharing 

limits are needed to make coverage affordable and accessible. We strongly support 

maintaining existing insurance market rules relating to guaranteed issue and 

prohibitions on preexisting condition exclusions. In addition, AARP believes the ban on 

annual and lifetime coverage limits is essential. AARP also urges Congress to keep 

children on their families' policies until the age of 26. Any legislation should also require 

ongoing assessment of afford ability and provide for stricter limits on age rating or 

enhanced subsidies if coverage proves to be too costly for older Americans. 

Medicaid and Long-Term Services and Supports 

Medicaid is the only safety net for millions of children with disabilities, adults and seniors 

in need of critical long-term services and supports. We urge you to keep this vital safety 

net in place. 

We are concerned that efforts to block grant or cap Medicaid funding will endanger the 

health, safety, and care of millions of individuals who depend on the essential services 

3 
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provided through this program. Furthermore, caps would likely result in overwhelming 

cost-shifts to state governments unable to shoulder the costs of care without sufficient 

federal support. As Congress considers changes to Medicaid, we urge that states be 

afforded enhanced flexibility to access funding for generally more cost-effective home 

and community-based services in the same way they can access nursing home funding 

In addition, the ACA provided states with new options and enhancements to existing 

provisions to provide home and community-based services. We urge that any health 

law changes retain and enhance these provisions to enable more individuals to receive 

services in their homes and communities rather than costly institutional care. 

Finally, Congress could further help seniors and other Americans with long-term care 

costs by returning the medical expense itemized deduction threshold from 10 percent to 

7.5 percent of adjusted gross income. The tax increase caused by the higher threshold 

has fallen disproportionately on the sick - even those at more moderate income levels 

-especially since the deduction provides help to those with large medical costs that 

often include expensive long-term care costs. 

We look forward to working with you to ensure we maintain a strong health care system 

that strengthens Medicare, ensures insurance market protections, controls costs, 

improves quality, and provides affordable coverage to all Americans. If you have any 

questions, please feel free to contact me, or have your staff contact Joyce A Rogers, 

Senior Vice President, Government Affairs at (202) 434-3750. 

Sincerely, 

Jo Ann C. Jenkins 

Chief Executive Officer 

4 
75 

Ms. BONAMICI. The AARP also mentioned in the letter that Medicaid is the only safety net for millions of children with disabilities, 

adults, and seniors in need of critical long-term services and supports. 

I want to point out that, in Oregon, the Kaiser Family Foundation estimates that more than 546,000 Oregonians could lose coverage if the ACA Medicaid expansion is repealed. Also, in Oregon, 

we have been doing some great innovations with care. We have 

CCOs improving care and reducing costs with patient-centered primary care homes. It’s really working well to provide that preventive care. 

And I’ve heard from hundreds of constituents in Oregon. In fact, 

thousands showed up recently at a townhall meeting that I did 

with our Senators about this issue. They’re terrified about losing 

their coverage. 

And Debra from Rainier shared her story with me. She called my 

office. She’s worried that she’s going to lose her care if the ACA is 

repealed. She’s in the final stages of pancreatic cancer. She’s not 

yet eligible for Medicare. She’s worried that her cancer will prevent 

her from obtaining coverage without the Affordable Care Act. So 

she’s spending her remaining time advocating for those who have 

benefited from health reform and doing what she can to prevent 

the repeal of this important law. 

And I know her fears are shared with millions of Americans in 

districts all across the country. And I hope my colleagues will keep 

her, as well as you, Ms. Schlaack, in mind as we debate this repeal. 

And, Ms. Schlaack, thank you so much for being here to share 

your story. I know it’s not easy to come forward and talk about 

something so personal. 

But you mentioned that the type of leukemia your husband was 

diagnosed with has genetic links so your family might be at risk. 

Can you discuss how the repeal might affect your family if individuals with preexisting conditions are no longer protected under the 

ACA? And if you might mention, what would a high-risk pool do? 

Do you think that’s an acceptable alternative for your family? 

Ms. SCHLAACK. No, not -- I mean, a high-risk pool, not at all. I 

mean, actually, the University of Chicago continues to work with 

samples from my husband to further educate themselves. And I’ve 

learned from my own family about some of the genetic links. 

And being that I have a young daughter who previously was almost a preexisting condition for being a female, the thought that 

30, 40 years down the road, if she sees the same thing, she won’t 

possibly have the choice of buying prescriptions or paying for groceries. 

Ms. BONAMICI. Thank you, and I hope we can keep your story 

and others in mind. 

Mr. Eddy, you stated in your testimony your business had experienced some significant challenges as the health coverage you offered your employees changed, but you are hopeful your situation 

is stabilized. So can you talk a little bit about how the repeal of 

the Affordable Care Act without a credible alternative would affect 

your current situation? 

There’s a lot of uncertainty now. I know the President has said 

there’s going to be insurance for everybody. I don’t know how that 

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76 

plan would work. We haven’t seen that yet. But how would the uncertainty of repeal and replace, how would that affect your business 

and business owners like you? 

Mr. EDDY. Thank you, Congresswoman. 

For the answer to that, I will reference a study that the NAM 

has completed called ‘‘Shaping Up.’’ The NAM took a hard look at 

the challenges as well as the opportunities for employers concerning healthcare insurance coverage. They were really looking at 

three broad themes with that: controlling costs, such as eliminating 

burdensome taxes and paperwork; expanding coverage options, 

such as providing flexibility for employers to cater their health insurance options; and access to better information in the form of improved healthcare IT and information sharing. 

I think that document would maybe tend to give some additional, 

broader perspective than my own personal. I think that I would 

reference that, and that would be made available to you. 

Ms. BONAMICI. Thank you, Mr. Eddy. 

And I see my time has expired. Thank you, Madam Chairman. 

Chairwoman FOXX. Thank you. The gentlewoman’s time has expired. 

Mr. Guthrie, you are recognized for five minutes. 

Mr. GUTHRIE. Thank you, Madam Chairman, for the recognition. 

Thank you all for testifying. I appreciate you all being here. 

And, Mr. Bollenbacher and Mr. Eddy, you mentioned in your testimony about your small businesses. And I have heard from families in my district. Right when we first got back to the session, a 

lot was going on in January, and I got a call, my office got a call 

from a young lady. And I called her back. I wanted to talk to her 

personally. And she has a special needs son, and she was really 

concerned -- and she’s on the exchange in Kentucky -- extremely 

concerned about the idea that she might lose her health care as a 

lot of stuff has been reported. So I wanted to assure her, we’re 

going to have a transitional plan and an ability for her to move forward. 

But then we started talking about her plan. In Owensboro, Kentucky, on the exchange, you have one insurance choice. She said 

her husband works for a small business, less than 50 people, didn’t 

get health care now through that business, had to go on the exchange, only one choice. Her child has special needs. We have great 

physicians in Kentucky, all over our state, but there was a particular physician for her child’s needs in Cincinnati at the Children’s Hospital and he was not in network. 

So we started walking her through, after we talked about you’re 

going to be able to continue your current coverage, the things that 

we want to do in our replacement plan that will have her have better coverage. One is, well, if it’s a small business, associated health 

plans for small business will have better opportunities to provide 

health insurance, if she can buy out-of-state plans, if she needed 

a doctor in Ohio, because they had special skills for her child. 

So we started walking through that, and she became more confident as we moved forward that we can improve the situation that 

she’s in instead of being stuck in an exchange with one plan. 

But my question. So I’ve actually put the Employee Protection Act 

that would allow small businesses, because what we are going to 

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77 

do with small business -- because the people who are really trapped 

in this are people that are single employers, small businesses trying to buy on the individual market or small market. And what I 

want in this bill, and I want to see how this would help you, that 

you could actually offer pre-ObamaCare plans, pre-ACA plans. If 

you could go back and offer a plan like that to your employees, 

would that help you? 

I think, Mr. Bollenbacher, you’re a smaller business, I believe. 

Mr. BOLLENBACHER. Yes, sir. It sure would. We feel like we have 

no options right now. We have a cookie-cutter plan that we have 

to pick, and that’s it. And before the ACA, we had the ability to 

pick the plan that best fit our particular needs. 

Mr. GUTHRIE. Mr. Eddy. 

Mr. EDDY. Yes, Congressman, we run into the same issues. We 

are in the northern panhandle of West Virginia, so we are about 

a mile from Ohio and five miles from Pennsylvania. 

One of the issues as far as going backwards is the fact that we 

don’t have several of the carriers that used to represent West Virginia. The ACA has weakened and some of them have actually 

been taken over. So our options now are somewhat limited to three 

carriers in the northern Ohio Valley. And we would like to maybe 

move some of the provisions back that would give us more options 

and flexibility that we talked about. So, yes, that would be important. 

Mr. GUTHRIE. And we think what we want to propose will give 

her more options for her son, and that’s what we hope to certainly 

accomplish. 

Mr. Bollenbacher, I think Mr. Rokita -- I was out but just coming 

back -- asked you about a letter that you sent to the President. Can 

you talk about the response you got on the letter -- or from the administration? I didn’t expect him to personally respond, but from 

the administration what did you? 

Mr. BOLLENBACHER. Sure. A month or so after I sent the letter, 

somebody from the SHOP Marketplace called me, just to talk about 

the plans that they had available on the SHOP network, which 

really wasn’t any benefit to us. 

Mr. GUTHRIE. Okay. Well, thanks. 

And then, Dr. Troy, in your testimony you mentioned that innovations in large employer-sponsored healthcare benefits helped to 

reduce healthcare costs for employees, retirees, and dependents. 

Can you share with the committee some of the ways employer coverage is reducing costs? 

Mr. TROY. Thank you. So as I was saying earlier, that we were 

seeing reductions in employer-sponsored costs in that period, 2006 

to 2010, before the ACA went into effect, and it was a result of program design changes and plan design changes on the part of employers, which included the implementation of consumer-directed 

health plans, wellness programs, which have been shown in many 

cases to reduce costs and actually improve the health of employees, 

which is really what we are trying to get at, and other significant 

plan innovations. 

And, again, combined, these really dropped the annual increase 

from 11.1 percent in the period before 2006 to from 2006 to 2010 

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78 

ployers could reduce costs even further in the years ahead. Employers are now taking this issue very seriously. 

Mr. GUTHRIE. Thank you. 

Thank you, Madam Chair. I yield back my time. 

Chairwoman FOXX. Thank you so much. 

Mr. Takano, you are recognized for five minutes. 

Mr. TAKANO. Thank you, Madam Chair. 

Madam Chair, before I begin, I would like to ask unanimous consent to insert into the record a letter from the American Hospital 

Association and Federation of American Hospitals raising grave 

concerns with repealing the Affordable Care Act. Chairwoman FOXX. Without objection. 

[The information follows:] 

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American 

~ Hospital 

Association® 

December 6, 2016 

The Honorable Paul Ryan 

Speaker 

U.S. House of Representatives 

U.S. Capitol Building, H-232 

Washington, DC 20515 

The Honorable Nancy Pelosi 

Minority Leader 

U.S. House of Representatives 

U.S. Capitol Building, H-204 

Washington, DC 20515 

The Honorable Mitch McConnell 

Majority Leader 

U.S. Senate 

U.S. Capitol Building, S-230 

Washington, DC 20510 

The Honorable Charles Schumer 

Minority Leader-Elect 

U.S. Senate 

322 Hart Senate Office Building 

Washington, DC 20510 

Dear Speaker Ryan, Majority Leader McConnell, Minority Leader Pelosi and Minority Leader-Elect 

Schumer: 

The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) 

stand ready to help as the Congress and new Administration take shape and develop the health agenda 

moving forward. As you know, hospitals and health systems provide essential medical services and 

assume a critical public health and safety role across the nation in every single state and congressional 

district. 

We appreciate your commitment to ensuring access to affordable health care for all Americans. 

We also recognize that the 115'11 Congress is committed to a thorough reconsideration of the Patient 

Protection and Affordable Care Act (ACA). At the same time, we value statements you have made 

about the importance of protecting health care coverage- a goal we strongly support. Health coverage 

is key to ensuring patients have access to the care they need. 

According to reports, it appears that the Congress is moving to reconsider the ACA in the early 

days of the new year without enacting accompanying legislation specifically guaranteeing similar 

coverage for those who will lose it. If that approach is taken, we respectfully urge you to also include 

in such legislation the prospective repeal of funding reductions for Medicare and Medicaid hospital 

services for patient care that were included in the ACA for purposes of helping fund coverage for the 

insured. Specifically, we seek your support for the restoration of the Medicare hospital inflation 

update, as well as Medicare and Medicaid Disproportionate Share Hospital (DSH) payments that 

support those facilities that take care of high volumes of uninsured, poor and disabled Americans. 
80 

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December 6, 2016 

Page 2 of3 

Restoring these cuts for the future is absolutely essential to enable hospitals and health systems to 

provide the care that the patients and communities we serve both expect and deserve. 

ACA repeal and replace legislation sponsored by Department of Health and Human Services 

Secretary-nominee Tom Price is an example of providing a "clean slate," which would protect 

hospitals from destabilizing cuts that would jeopardize access to high-quality services. In contrast, The 

Restoring American's Healthcare Freedom Reconciliation Act of2015 (H.R. 3762), which passed the 

Congress, and was ultimately vetoed by President Obama, effectively repealed the coverage and many 

other funding provisions of the ACA, but left in place hundreds of billions of dollars in cuts to 

payments for hospital services originally intended to help fund the coverage that the bill would repeal. 

Further, we want to bring to your attention critically important information that we hope will 

inform the deliberations on ACA repeal and replace. Today, we are releasing two reports prepared by 

the health care economics consulting firm Dobson I DaVanzo on hospital payment cuts that require the 

attention of policymakers. The first analysis estimates the tinancial impact, tl·om 2018 - 2026, on 

hospitals of repealing the ACA under H.R. 3762 without any replacement. Dobson I DaVanzo finds 

that the loss of coverage under H.R. 3762 would have a net negative impact on hospitals of$165.8 

billion, after accounting for the restoration of the Medicaid DSH cuts that H.R. 3762 

contemplates. Dobson I DaVanzo also finds that hospitals would lose $289.5 billion in inflation 

updates if the payment cuts in the ACA are not restored. Finally, Dobson I DaVanzo finds that the full 

restoration of the Medicare and Medicaid DSH payment reductions would amount to $102.9 

billion. Losses of this magnitude cannot be sustained and will adversely impact patients' access to 

care, decimate hospitals' and health systems' ability to provide services, weaken local economies that 

hospitals help sustain and grow, and result in massive job losses. As you know, hospitals are otten the 

largest employer in many communities, and more than half of a hospital's budget is devoted to 

supporting the salaries and bene tits of caregivers who provide 24/7 coverage, which cannot be 

replaced. 

As Dobson I DaVanzo point out in their analysis, the total net losses hospitals would suffer 

under repeal is nearly 100 percent more than the hospital reductions in the Balanced Budget Act of 

1997 (BBA). which was the largest ever reduction in federal payments tor services provided by 

hospitals tor patient care. In tact, due to these extreme cuts, hospitals had to cut back staft: services, 

education, research, investments in new technology, and modernization and upgrading of aging 

facilities. As a result of this overreach. Congress was compelled to pass several subsequent measures 

to remediate the BBA 's damage. These measures were enacted under both Democratic and Republican 

administrations. The Dobson I DaVanzo report cautions that "this magnitude of cuts would threaten 

hospitals' ability to serve their patients and communities." 

The second Dobson i DaVanzo analysis estimates the cumulative federal payment reductions to 

hospital services that have been imposed through other Congressional and Executive Branch actions 

subsequent to and independent of the i\CA. These cuts alone total another $148 billion from 20 I 0-

2026, and come on top of the ACA cuts. 

As you can appreciate, the cuts detailed above will create challenging and potentially 

unsustainable financial circumstances that could ultimately reduce patients' care options. And they 

highlight only part of the problem. A recent analysis by the Congressional Budget Office (CBO), titled 
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December 6. 2016 

Page 3 of3 

"Projecting Hospitals' Profit Margins Under Several Illustrative Scenarios: Working Paper 2016-04, " 

also should give policymakers pause as they consider the future of hospital care. The September 2016 

report found that, even accounting for the benefits of ACA coverage expansion (which is at risk of 

repeal), nearly half of all hospitals- between 40 and 50 percent are likely to suffer negative margins 

in 2025. The results could be devastating to hospitals and our patients. 

As you begin reconsideration of the ACA, we want to be a constructive partner in this 

discussion. We strongly believe that any repeal legislation must be accompanied by provisions that 

protect the coverage for those currently receiving such protection. However, if that is not the 

legislative path to be pursued, then it is vital that such legislation provide a true clean slate and also 

include repeal of the reductions in payments for hospitals services embedded in the ACA specifically 

the substantial reductions to hospitals' annual inflation updates and the cuts to Medicare and Medicaid 

DSH payments. If the coverage associated with the ACA disappears, the importance of these payments 

would be heightened they are vital in helping defray the costs of treating our most vulnerable 

patients. 

In addition, restoring these cuts is consistent with Congressional action aimed at repealing a 

variety of ACA-related taxes that were imposed to help fund coverage expansion. It stands to reason 

that, if the funding and cost of the ACA is repealed, all sources of funding for that legislation, 

including cuts to payments for hospital services, should be rolled back as well. 

We want to reiterate our commitment to working with you on legislation that achieves our 

shared goal of improving America's health care system through patient-centered care, and believe 

strongly that empowering Americans through health coverage is key to success. 

Thank you for your consideration of our views. 

Sincerely, 

Is/ 

Richard J. Pollack 

President & CEO 

American Hospital Association 

Is/ 

Charles N. Kahn 

President & CEO 

Federation of American Hospitals 
82 

Mr. TAKANO. Thank you, Madam Chair. 

I’m disappointed that my colleagues are yet again seeking to undermine a law that has helped millions of Americans get health 

coverage while creating a more just and compassionate healthcare 

system for hundreds of millions more through consumer protections. 

Before I get to my questions, I want to speak briefly about the 

impact of the Affordable Care Act on my constituents. When I took 

office in 2013, a quarter of my constituents were uninsured. By 

2015, the uninsured rate was cut in half to less than 12 percent, 

and nearly 90,000 people were newly insured. 

People like my constituent and childhood friend Heather Froehly. 

Heather had a preexisting condition, and for years before the ACA 

she was priced out of the insurance market and denied coverage. 

She contacted me during the first enrollment period in 2014 to let 

me know that she had successfully purchased a plan and was 

thrilled to be covered for the first time in years. The law’s subsidies 

ensured here coverage was not only accessible but affordable. 

Soon after, Heather was diagnosed with stage two breast cancer. 

In the following months she underwent treatment, and I’m happy 

to report Heather is now cancer free and doing well. Heather has 

told me without hesitation that the Affordable Care Act saved her 

life. Had she not been able to obtain coverage, she would not have 

been able to go to that appointment where the doctors first discovered her cancer. She was fortunate to catch the cancer before it 

progressed further. I don’t want to think what she would have done 

without the ACA. 

Now, we know the costs of repealing the ACA: 30 million people 

will lose their insurance, including nearly 5 million Californians. It 

would cost my State nearly 150,000 jobs. But more than that, we 

know that stories like Heather’s or Ms. Schlaack’s can be found in 

every district represented here today. Democrat and Republican 

districts share the same predicament. 

Cancer does not recognize red states and blue states. We have 

to take off our partisan blinders and acknowledge where the ACA 

has succeeded and where it must be improved. And I hope we can 

agree that it would be a terrible mistake to repeal a law that has 

saved so many American lives. 

Now, Ms. Schlaack, first of all, I want to thank you for your courage this morning and sharing your family story. And I’m incredibly 

sorry for our loss and appreciate your willingness to speak here 

today. 

Now, my colleagues on the other side of the aisle seem to be in 

a great rush to repeal a law that insures millions of Americans and 

that they have any access at all to lifesaving care. And it seems 

in their illogical haste to score political points and make good on 

an ill-informed promise to repeal the ACA that they have ignored 

the impact of their actions, especially for families who are dealing 

with a significant healthcare crisis. 

Can you help us understand what it must be like for those families, on top of the deep concern for their loved one’s health, to be 

scared about Republican attempts to dismantle a law that is working to ensure that they maintain lifesaving care? Can you help us 

understand? 

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83 

Ms. SCHLAACK. Thank you. 

Well, like I had mentioned before, I mean, when you’re going 

through this treatment, whether you’re the patient or caregiver or 

family friend, your focus is on wellness. And the bills keep coming 

in regardless of what’s going on, and the fact that you don’t have 

to worry about whether you’re going to be covered or not is one less 

worry. 

Mr. TAKANO. Tell us more about the annual or lifetime caps, the 

fact that there were no caps annually. 

Ms. SCHLAACK. Right. 

Mr. TAKANO. How would that have affected you and your husband? 

Ms. SCHLAACK. Well, for instance, my husband had to have -- in 

a 10-month period he had 12 bone marrow biopsies. Those are four 

grand apiece. Blood transfusions multiple times a week. An ambulance arrived from our house to the hospital, which happened three 

times, $2,000. This is not counting the doctors, the medical staff, 

the hospital admissions. Easily before he was even halfway through 

his treatment would have maxed out a lifetime million-dollar maximum like it used to be. 

Mr. TAKANO. So this consumer protection was key. And if I had 

more time, I would want to ask Mr. Eddy and Mr. Bollenbacher 

whether their policies had any lifetime or annual caps and that 

might have made them more affordable to them. But I don’t have 

the time. My time expired. So I don’t want to yield back, but my 

time has expired. 

Chairwoman FOXX. Thank you very much. 

Mr. Rooney, you are recognized for five minutes. 

Mr. ROONEY. Thank you, Chairwoman Foxx, and thank the witnesses for being here today. I’ve got questions for Dr. Troy and Mr. 

Eddy. 

People throughout southwest Florida have expressed many of the 

frustrations shared here today. According to Forbes magazine, an 

average 64-year-old woman in Lee County, Florida, has seen her 

insurance premiums and costs jump 135 percent. Under these exchanges, due to the failure of competition, most southwest Floridians now have one choice for their health insurance. Many of them 

are on a fixed income. 

So my question for Dr. Troy is, if the failed experiment of 

ObamaCare continues as is, what chance do our average southwest 

Floridians have to see their healthcare costs go down? 

Mr. TROY. I am, too, sir, concerned about the lack of choices on 

the ACA exchanges, and we are having an increasing number of exchanges with only one option, as you were saying. The cost trend 

suggests that the chance for the average Floridian of seeing cost reductions under the ACA are very low. 

Mr. ROONEY. Thank you. 

Mr. Eddy, thank you for being here as well. Glad to see another 

businessperson here who has firsthand experience with this disaster on our employees. 

According to the American City Business Journals, Lee County, 

Florida, is the third-best place for small businesses. Employer mandates have prevented many of our small-business owners from hiring new employees. And as I think you’ve mentioned as well, many 

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84 

have had to reduce the hours worked to deal with the cost increases of ObamaCare. 

Can you share with us some insights on how the employer mandates have curbed jobs and wage growth? 

Mr. EDDY. Yes, Congressman. Thank you. 

The obvious first one is the cost. As it restricts our hiring capability, the costs per year, if you look at just the costs related to the 

mandates and the health insurance industry fees, those two alone 

really represent about three full-time equivalent employees for us. 

The restrictive parts of the ACA really, as I said earlier, dictate 

a lot of different business decisions that we make, including capital 

investments. Looking to the future, we have to, any time we make 

a capital investment for growth, we have to hire and plan on hiring 

new employees. 

So this has, as I said, become one of our most critical decisionmaking parts. And it’s not just the costs and fees, it’s the future. 

It’s the uncertainty. The Cadillac tax, for example, is of critical concern because of our -- the curve on the costs right now by 2018 

would possibly put us into that 40 percent additional tax rate. 

So it’s fully encompassing, to say the least, for all of our business 

decisions. 

Mr. ROONEY. Well, I appreciate that response. Like I say, I’m an 

employer too, and I’m used to satisfying customers, as you are. And 

maybe we ought to think about a system that puts the patient first, 

patient-centric care, where they get to make the choice instead of 

a top-down government mandate. What do you think about that? 

Mr. EDDY. I can tell you, I’m no healthcare expert, but without 

change -- and I want everybody to know that we are all compassionate to the needs of the people. That’s why we employ and try 

to take great care of our employees. But I’m very concerned about 

the long-term sustainability of health care in general if we don’t 

make a major change. I’m supportive of that, yes. Thank you. 

Mr. ROONEY. Thank you very much. 

Again, thank you all for being here. 

And I yield back. 

Chairwoman FOXX. Thank you very much. 

Mr. Espaillat, you’re next for five minutes. 

Mr. ESPAILLAT. Thank you, Madam Chair. 

Dr. Troy, I appreciate in your written testimony that you stated, 

and I quote, ‘‘It is important to protect those who have gained coverage under the ACA.’’ However, I am concerned that about 30 million individuals are projected to lose health insurance if the ACA 

is repealed. Specifically, New York State Governor Cuomo, Andrew 

Cuomo, has stated that over 2.7 million New Yorkers would lose 

coverage, with Republicans offering no guarantee to protect this 

coverage. 

I ask for unanimous consent to include Governor Cuomo’s statement announcing the impact of the ACA repeal on the record. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

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For Immediate Release: 1/4/2017 GOVERNOR ANDREW M. CUOMO 

GOVERNOR CUOMO ANNOUNCES IMPACT OF POTENTIAL AFFORDABLE CARE ACT 

REPEAL IN NEW YORK 

Over 2. 7 Million New Yorkers Would Lose Coverage 

Estimated State Budget Impact of $3.7 Billion 

Counties Across New York Would Lose Over $595 Million in Direct Spending 

New York Residents Would Lose $250 Million in Health Care Savings Tax Credits 

Governor Andrew M. Cuomo today announced the impact of potential repeal of the Patient 

Protection and Affordable Care Act on health care coverage of New Yorkers and the state 

budget. If the repeal of the Affordable Care Act were enacted, an estimated 2.7 million New 

Yorkers would lose coverage and New York State would experience a direct state budget 

impact of $3.7 billion and a loss of nearly $600 million of federal funding that goes directly to 

counties, which they use to help lower property taxes. 

"The cost of a repeal of the Affordable Care Act, to state and local budgets and to the New 

Yorkers who depend on its health care coverage, is simply too high to justify," Governor 

Cuomo said. "Since its implementation, the Affordable Care Act has become a powerful tool to 

lower the cost of health insurance for local governments and New Yorkers, and it is essential 

that the federal government does not jeopardize the health and livelihoods of millions of working 

families." 

The NY State of Health exchange has successfully cut the percentage of uninsured New 

Yorkers in half, from 10 percent to 5 percent. It has also significantly expanded eligibility and 

access to health coverage, allowing hundreds of thousands of previously uninsured New 

Yorkers to achieve economic and healthcare security. Based on current enrollment levels, the 

repeal of the Affordable Care Act would result in over 2.7 million New Yorkers losing health 

coverage. The estimated number of individuals at risk of losing coverage, based on current 

enrollment levels, is broken down by counties below: 

~ !Individuals at Risk of Losing I County Coverage 

i-j --A-Ib-an....:.y--j 25,552 

I ~AI_Ie-=--ga_n'-y· __ li-----·--------c:-:-4::-,608 I Bronx I 300,012 I Broome --~r--------------,-20-.·2-c--3--1 

I Cattaraugus I 8,310 I Cayuga li--------7-,6-6-51 

I Chautauqua I 15,270 
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I Chemung I 9,160 

I Chenango I 5,184 

I Clinton I 7,787 

I Columbia I 6,827 

I Cortland I 4,606 

I Delaware I 4,461 

I Dutchess I 25,074 

I Erie I 93,403 

I Essex I 3,660 

I Franklin I 5,110 

I Fulton I 6,038 

I Genesee I 5,074 

I Greene r 4,971 

I Hamilton I 522 

I Herkimer I 6,932 

I Jefferson I 10,955 

I Kings I 540,320 

I Lewis I 2,932 

I Livingston I 4,972 

I Madison I 5,861 

I Monroe I 75,512 

I Montgomery I 5,473 

I Nassau I 133,324 

I New York I 218,937 

I Niagara I 21,287 

I Oneida I 24,781 

I Onondaga I 45,682 

1---ontar:;o-- I 9,355 

I Orange I 37,851 

I Orleans I 4,522 

I Oswego I 12,568 

I Otsego I 5,785 

I Putnam r 7,006 

I Queens-! 493,058 

I Rensselaer r- 12,540 I 

I Richmond I 56,882 

I Rockland I 38,526 
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I Saratoga r- 16,340 

I Schenectady I 16,056 

! Schoharie I 3,079 

I Schuyler I 2,065 

I Seneca I 3,145 

I St. 

Lawrence I 11,063 

I Steuben I 10,039 

I Suffolk I 152,631 

I Sullivan I 9,668 

I Tioga I 4,560 

I Tompkins r 7,827 

I Ulster I 19,850 

I Warren I 6,796 

I Washington I 6,689 

I Wayne _l 9,354 

I Westchester I 91,844 

I Wyoming I 3,700 

I Yates I 2,515 

I Total I 2,715,807 --

The estimated direct state budget impact of the repeal is $3.7 billion. New York's counties have 

been able to use the additional federal Medicaid funding through the Affordable Care Act, which 

goes to directly to counties and helps to lower property taxes. A repeal of the Affordable Care 

Act would result in a total loss of $595 million in funding, A county by county breakdown of the 

allocated annual funding that each county would lose is available below, based on the most 

recent year: 

I County I 2016-17 Funding 

I Albany I $4,738,862 

I Allegany I $786,300 

I Broome I $3,049,122 

I Cattaraugus I $1,211,333 

I Cayuga I $1,098,606 

I Chautauqua ,----- $2,443,709 I 

I Chemung I $1,491,573 

I Chenango I $686,373 

I Clinton l $1,292,531 
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I Suffolk I $18,310,813 

I Sullivan I $1,439,822 

I Tioga I $589,433 

I Tompkins I $1,015,126 

I Ulster I $2,935,566 

I Warren I $787,632 

I Washington I $746,252 

I Wayne r- $910,595 

I Westchester I $15,243,258 

I Wyoming I $382,781 

I Yates I $282,426 

I Upstate Total I $162,405,572 

I New York City Totalj $433,294,428 

I 

New York State 

I Total $595,700,000 

George Gresham, President, 1199SEIU United Healthcare Workers East, said, "New York's 

healthcare workers see the positive impact of the Affordable Care Act every day. Our patients 

are able to access preventative care instead of coming to emergency rooms in states of 

advanced illness. Our employers have reduced losses from uncompensated care. Our friends 

and relatives are relieved of the fear that getting sick equals financial ruin. Repealing the 

Affordable Care Act without an adequate replacement would have immediate and devastating 

consequences for millions of our fellow New Yorkers and for state and local budgets. We 

applaud Governor Cuomo's leadership in educating New Yorkers about costs and are proud to 

stand with him to advocate for the health all New Yorkers," 

Greater New York Hospital Association President Kenneth E. Raske said, "These deeply 

troubling numbers are only the tip of the iceberg if the Affordable Care Act is repealed. It will 

also severely harm the hospital community. 27 hospitals across New York State are on a 'watch 

list' for financial stress and many more both public and private face similar fiscal challenges. 

Repealing the Affordable Care Act without an immediate and adequate replacement plan will 

make things dramatically worse for safety net hospitals and the vulnerable communities they 

serve. I applaud Governor Cuomo for his leadership and look forward to working with the 

bipartisan members of the New York Congressional delegation to ensure that the health care of 

all New Yorkers is protected." 

Bea Grause, President of the Health care Association of New York, said, "In addition to 

providing care to those in need, hospitals are major employers in communities all across the 

state. Repeal of the ACA could have tremendous consequences for the delivery of healthcare 

and also in terms of jobs and economic activity. It's imperative that Congress be mindful of this 

reality. I'm pleased to join the Governor in this important effort to protect New Yorkers." 
90 

Mr. ESPAILLAT. Dr. Troy, I appreciate that in your written testimony, you stated that employers, and I quote, ‘‘however, are both 

good at getting people covered and maintaining manageable risk 

pools. Public policy should be aimed at encouraging these important goals.’’ You also mentioned the risk pools are difficult to maintain. Employer risk pools for the chronically ill is a central tenet 

of Speaker Ryan’s ‘‘A Better Way’’ paper. 

I would like to know how you will separate the healthy from the 

ill. And considering that high-risk pools are more expensive to buy 

by consumers, more expensive to administer, and generally provide 

less coverage, how do you propose to implement these high-risk 

pools without taking a real hit on consumers and patients across 

the country? 

Mr. TROY. Thank you, sir, for your question. And as a native 

New Yorker, I congratulate you for your joining Congress and joining the committee. 

In terms of risk, managing risk is a crucial part of how to handle 

any possible healthcare plan going forward. It’s a crucial part of 

healthcare reform. One of the things about employers and why I 

said in my testimony that they are good at managing risk is that 

they have large pools of people who work for them and therefore 

the risk pools generally tend to be better. You don’t have the same 

kind of options such as you have in the ACA exchanges in which 

you have the young and healthy people choosing not to participate. 

And we, too, have evidence that the percentage of the young people 

in the ACA exchanges are younger than needs to be to maintain 

an acceptable risk pool. So I think -- 

Mr. ESPAILLAT. Aren’t they generally more expensive to buy? 

Aren’t they more expensive to administer and provide less coverage? 

Mr. TROY. Are you saying employer-sponsored plans? No, we 

have not found that to be -- 

Mr. ESPAILLAT. High-risk pool. 

Mr. TROY. We have not found that to be the case. 

In terms of high-risk pools, the idea is to minimize the number 

of people who would be in them. And that’s why employer-sponsored health care is an important building block, as would be, perhaps, association health plans that would allow other people to join 

what are effectively risk pools by joining with their civic organization or their union or their religious organization and then get the 

tax-preferred benefit. So the idea is to minimize the number of people in high-risk pools. 

But, yes, of course, you are right that the specific high-risk pools 

that these programs that would establish, the specific high-risk 

pools programs would establish are more expensive because we’re 

dealing with a group by its nature that is high risk. The idea is 

to minimize the number of people in those pools. 

Mr. ESPAILLAT. Dr. Troy, the Trump administration’s recent immigration executive order has made it impossible for many foreignborn physicians and students to enter the United States. On your 

blog in December 2013, you discussed the worrisome expected doctor shortages. And in 2012, while a fellow at the Hudson Institute, 

you wrote a piece that commented on the physician shortage that 

this country already faces. 

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91 

As a healthcare policy matter, does it make sense for the administration to make it more difficult for the United States to meet the 

health needs of our population by restricting the number of doctors 

we recruit and train? 

Mr. TROY. Thank you very much for that question. As a 

healthcare policy nerd, I guess, as you said, who wrote this paper 

four years ago, I’m flattered that people are reading the paper, and 

I hope it has an important public policy impact. I absolutely think 

that we do have concerns about a doctor shortage. I’ve always been 

in favor of an immigration system that works to bring in people 

who are willing to work and willing to help improve our economy, 

and I worked in the Bush administration on the immigration reform plans that would have helped bring more doctors into the 

country. 

Mr. ESPAILLAT. So you support an exemption for doctors and 

healthcare professionals from those countries that are currently 

being hit with the ban? 

Mr. TROY. I would like to see our immigration policy have plans 

to allow more doctors to come into the country, absolutely. 

Mr. ESPAILLAT. Madam Chair, the statement from the Association of American Medical Colleges expresses deep concerns about 

this new immigration policy. I ask unanimous consent to insert this 

in the record. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

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Press Releases 

Monday, January 30, 2017 

AAMC Statement on President Trump's 

Executive Order on Immigration 

AAMC (Association a/American Medical Colleges) President and CEO Darrell G. Kirch, MD, 

issued the following statement regarding President Trump's executive order on immigration: 

''The nation's medical schools and teaching hospitals are dedicated to promoting a diverse and 

culturally competent health and biomedical workforce that supports improvements in health care, 

breakthroughs in medical research, and, ultimately, improved and equitable health for all 

patients. 

We are deeply concerned that the Jan. 27 executive order will disrupt education and research and 

have a damaging long-term impact on patients and health care. 

The AAMC strives to ensure medical education and training is accessible for students and 

physicians from all backgrounds. The United States is facing a serious shortage of 

physicians. International graduates play an important role in U.S. health care, representing 

roughly 25 percent of the workforce. Current immigration pathways-including student, 

exchange-visitor, and employment visas-provide a balanced solution that improves health care 

access across the country through programs like the National Interest Waiver and the Conrad 30 

J-1 Visa Waiver. In the last decade, Conrad 30 alone has directed nearly 10,000 physicians into 

rural and urban underserved communities. Impeding these U.S. immigration pathways 

jeopardizes critical access to high-quality physician care for our nation's most vulnerable 

populations. 

Our ability to attract top talent from around the world also enriches the research laboratories at 

medical schools and leaching hospitals that are working toward cures and has helped position the 

U.S. as a global leader in medical research, strengthening our economy and bolstering the 

public's health. Because disease knows no geographic boundaries, it is essential to ensure that we 

continue to foster, rather than impede, scientific cooperation with physicians and researchers of 

all nationalities, as we strive to keep our country healthy. 

The AAMC is committed to a workforce that serves all patients and urges the administration to 

carefully consider the health care needs of the nation." 

The Association of American Medical Colleges is a not:for-profit association dedicated to 

transfimning health care through innovative medical educalion. culling-edge patient care, and 
93 

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groundbreaking medical research. Its members comprise al/147 accredited US. and 17 

accredited Canadian medica! schools; nearly 400 major teaching hoclpitafs and health clystems, 

including 51 Department of Veterans Affairs medical centers; and more than 80 academic 

societies. Through these institutions and organizations, the AAMC serves the leaders of 

America's medical schools and teaching hospitals and their nearly 160.000faculty members, 

83,000 medical students, and 1!5, 000 resident physicians. Additional information about the 

AAJfC and its member medical schools and teaching ho.1pitals is available al11'11'1!".aamc.org. 
94 

Chairwoman FOXX. And the gentleman’s time has expired. 

Mr. ESPAILLAT. I yield my time. 

Chairwoman FOXX. Mr. Brat, you’re recognized for five minutes. 

Mr. BRAT. Thank you very much, Madam Chairman. 

Thank you all very much for being with us today. 

I’m on the Budget Committee, and so I like to kind of zoom in 

on the mandatory spending problem this country faces, and a lot 

of that is going to be impacted by increasing healthcare costs over 

the years. And so that’s where I’m headed. 

And so we all appreciate the concerns shared across the aisle on 

uninsured, the costs. We want to get it right. But the amazing 

thing I never hear and that the media, unfortunately, never covers 

is the impact on our children with the programs, Medicare, Social 

Security, et cetera, going forward. So I’ll just share a few facts. 

And then I don’t know whether you all have this in your planning horizon or not, because it is 10 to 20 years off. But just the 

basic fact, everyone -- I taught economics for a 18 years -- everyone 

wants everything in the short run, right? I mean, utility maximization, et cetera, and we’re pushing stuff off when it comes to the 

debt, et cetera. So in Virginia, healthcare costs are going up by 20 

percent, and that’s pretty typical. Some States, 50 or more percent 

increase in premiums. So, number one, is that sustainable? 

Two, Kaiser recently has come out with just the standard pre- mium rates, about $17,000 for a family of four in Virginia or across 

the country. That’s just the new family of four premiums, $17,000. 

Is that sustainable? 

Average family income in my counties is about $65,000 for family. Family income 65, 17 health care. Is that sustainable? 

Deductibles are over 5,000 typically now for silver, bronze plans, 

right, not just high deductible. It is across the board. Is that sustainable? 

And then my commentary is what I know is not sustainable. So 

currently we are 20 trillion in debt. And if you go out to CBO, the 

trendline is in 10 years we’re going to add another 10 trillion. Likely, we’ll be at 30 trillion in debt. When does the bond market call 

that in? Is that sustainable? I don’t think it is. 

The flip side of that is what’s driving that debt? A lot of the pressure is coming from the mandatory spending programs. Medicare 

and Social Security are both insolvent in 15 years, roughly speaking. In 50 years, it’s not clear whether our kids will have those programs at all. 

And healthcare costs are, of course, probably the main driver of 

those programs, of Medicare, Social Security, Medicaid, veterans, et 

cetera. And I haven’t heard enough analysis of that. This is a huge 

ethical issue and an ethical tradeoff of current generations versus 

the next generation. So everyone’s talking about what we would all 

like right now, but the facts look to me, with Medicare and Social 

Security insolvent in 15 years and maybe nonexistent in 50 years 

when our kids retire, is anyone taking that into account? 

And so what goes with that, the main graph out at CBO also 

shows in 10 years all Federal revenues will go only to mandatory 

spending programs, right? So all Federal revenues will only go to 

mandatory spending programs, Medicare, Social Security, Medicaid, Bush prescription drug plan, et cetera. Right? So that means 

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95 

there’s no money left for the military, education, transportation, everything we believe in across the aisle. 

And the mirror image of that same statement, that there’s no 

Federal revenues left, is the deficit in 10 years is expected to be 

$1.2 trillion, which fully funds the discretionary budget, right? So 

we will be deficit financing the entire discretionary budget in 10 

years. 

So this is just CBO facts, most of it related to mandatories. And 

I just want to open it up to your comments. Why don’t we just work 

down the -- Dr. Troy, why don’t you lead off, just on the sustainability. And, sorry, I’ve left you probably with probably way too little time. 

Mr. TROY. That’s, fine, sir. I will be brief. 

We have a chart that we’ve prepared. It’s called ‘‘Hitting the 

Wall,’’ and it talks about the period from 2025 to 2030 when we’re 

going to have Medicaid spending hit over a trillion dollars. All of 

the baby boomers will have retired. The Medicaid trust fund, as 

you say, will be insolvent. And we are very concerned about all 

those trends going forward. 

We are also concerned about recent public policy which puts 

more people onto government-sponsored healthcare programs and 

fewer on private programs. So we would like to see more reliance 

on this employer-sponsored care as a way to address these issues 

going forward. And I would like to submit that chart for the record. 

Mr. BRAT. Right. Thanks. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

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AMERICAN 

HEALTH 

POLICY 

INSTITUTE 

Hitting the Wall: When Health Care 

Costs are No Longer Manageable 
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American Health Policy I nstitutc (AHPI) is a non-partisan 

50l(c)(3) think tank, established to examine the impact of health 

policy on large employers, and to explore and propose policies that 

will help bolster the ability of large employers to provide quality, 

affordable health care to employees and their dependents. The 

Affordable Care Act has catalyzed a national debate about the future 

of health care in the United States, and the Institute serves to provide 

thought leadership grounded in the practical experience of 

America's largest employers. To learn more, visit 
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Contents 

Introduction .............................................................................................. ! 

Government Programs ............................................................................. 2 

Employee Affordability ........................................................................... .4 

Employer Plans ......................................................................................... 5 

When Will American Health Care Hit the Wall? ................................... 6 

Conclusion ................................................................................................ 7 

Endnotes .................................................................................................... 8 
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"(f"something cannot go on forever, it will stop." Economist Herbert Stein, 1916-1999 

Introduction 

Relying on any system to continue requires that such a system is sustainable. If it is not, 

then, as the late economist !lcrb Stein has said. ''it \Viii stop." In stopping. however, such a 

system will impact those who rely on it and assume that it wi!l continue. History is replete with 

examples of permanent seeming systems that eventually went away: The Roman and Ottoman 

empires, and the Soviet Union. This trend has moved into today's age with once seemingly 

permanent institutions folding-including the massive wave of major hospitals closures across 

the U.S.; the recent closing of colleges such as Sweet 13riar College. a women's college 

established in 190 l; and even U.S. military bases. fOrts, posts and sanctions around the world, 

including the fifteen bases that the Pentagon recently announced that will close between 2018 to 

2021. Even the biggest and strongest institutions are subject to extinction. 

When it comes to health care, 87% of Americans arc dependent on one of two seemingly 

permanent systems: 33% of Americans rely on a variety of government programs, including 

Medicare. Medicaid. and the new Affordable Care Act exchanges. And 54% get the health care 

from employer sponsored health insurance. which today covers over 169 million Americans. 

Despite all of the tumult in U.S. health care over the past few years. employer sponsored health 

insurance (ESI) has remained a reliable constant ESI provides health coverage to a majority of 

Americans, and a majority of them tell pollsters they are satisfied their current means of health 

care coverage. 

That said, it is clear that changes arc coming to both government programs and to ESI, and 

they are coming as a result of a variety of pressures H1cing American health care. These 

pressures have been long in building. hut many of them are reaching a state where they will 

eventually force fundamental changes. The American health care system could potential handle 

or absorb any one challenging trend, but in combination they may be too much to bear. The 

concurrent strains in both ESt and governmcnt~run programs, which combined cover or 

subsidize the vast majority of Americans. could leave millions of Americans without any 

affordable health care options. 

This paper will examine some of these pressures. and look at independent estimates ofvvhen 

each of them will be reaching a crisis point. According to these analyses, each system will be 

facing its own crisis in a narrow window of time, specifically the years between 2025 and 2030. 

The fear is that the convergence of these negative trends in a short window of time could lead 

employers and the federal government to make drastic changes to their health care delivery 

models, which in turn will lead to other changes in the health care system, as previously covered 

individuals scramble to find alternative ways to secure comparable benefit levels, Should all of 

these problematic trends converge in a short period of time. it is possible that the American 

health system will at that point be hitting the \ValL 
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Elements of Hitting the Wall: 2025-2030 

2025: Medicaid costs surpass $1 trillion per year 

2025: Worker to retiree ratio dips below 3:1 

2025: 53 percent of private sector employees who are heads of families will face an 

average family premium and deductible that will consume 9.5 percent or more of the 

family's income 

2025: Fewer than 20 percent of workers will receive health care through their 

employer, (Ezekiel Emanuel prediction) 

2029: All of the baby boomers are 65 and older 

2030: The Medicare HI trust fund is depleted 

2031: Cadillac Tax hits Average value plan 

Government Programs 

A large component of the upcoming challenge we are facing is a demographic one. The 

various federal health care spending programs face enormous long-term unfunded liabilities. 

These liabilities will be coming due as the baby boomers continue to retire for the next decade 

and a half. There were about 76 million baby boomers born between 1946 and 1964, the peak 

baby boom years. These baby boomers are turning 65 at a rate of about 10.000 a day. By 2030, 

18 percent of the population will be over 65. which is up from about 13 percent today. 1 All of 

these aging and retiring baby boomers will place additional pressure on our already 

overburdened health system, in a number of ways. First the sheer number of people on 

Medicare \'>'ill be a problem as the ratio of taxpayers per benefidary shrinks. Second, the elderly 

tend to have higher health costs than the non~elder!y, meaning that overall health spending will 

be going up as welL 

The Congressional Budget Office (CBO) projects that spending per enrollee in federal health 

care programs will continue to increase at a faster pace than per capita GDP over the next 25 

years. While the growth rate of spending per Medicare beneficiary is projected to remain very 

low over the next few years as many relatively healthy boomers retire and have lower medical 

care utilization, these costs are projected to increase gradually through 2039, as a large number 

of boomers hit their end of life costs in the next 10 to 20 years. 2 Come 2039, at the peak of the 

growth rate of Medicare spending, America's oldest baby boomers \\ill be 94 years old. At that 

point, many of them will be relying on costly long term and end of life health care costs. 
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Another problem with the large number of pending retirees is the \vay in which we finance 

our entitlement programs. The federal government uses a ''trust fund'' fiction in which current 

tax dollars are used for federal spending programs, but are also assigned to cover future 

entitlement obligations. This system can work as long as contributors significantly outnumber 

recipients. But as baby boomer retirements shrink that taxpayer per beneficiary ratio. the trust 

funds stat1 to run out, and soon. 

The trust fund bankruptcies begin not with the retirement programs but with a disability 

program. The federal disability insurance program, \Vhich covers benefits for II million 

Americans, has been running an annual deficit of more than $23 bil!ion per year since 2010, and 

its trust fund will be exhausted in 2016.3 At that point disability benefits will have to be cut by 

19 percent...\ The program currently has a $1.2 trillion unfunded obligation that will eventually 

have to be made up by cutting benefits, raising taxes, or both. 5 

The retirement programs follow in the 2030s. In 2023, the Medicare program begins to 

regularly spend more than it takes in, and by 2030 the Medicare HI trust fund is depleted.6 At 

that point. the federal government faces a stark choice: reduce benefits by IS percent, or raise 

taxes to cover the shortfall. Medicare currently has a $28.5 trillion unfunded obligation. 7 

In 2022, the Social Security program begins to spend more than it takes in, and by 2034 the 

Old Age Survivor Insurance trust fund is deplctcd. 8 At that point, the federal government faces 

an even starker choice: reduce Social Security benefits by 25 percent, or raise taxes to cover the 

shortfall. 9 Social Security currently has a $9.4 trillion unfunded obligation. 10 

The retirement programs are not the only programs in trouble. Medicaid and ACA subsidies 

are growing faster than the economy as welt. Over the next ten years (2016 to 2025), ACA 

subsidies will cost $895 bi!!ion. 11 Medicaid, which is covering the bulk of the nev'r'!y insured 

under the ACA, wi!l see its expenditures double the next decade, rising from $541 billion 

today to more than $1 tril!ion annually by Overall, federal health spending will come 

close to doubling as a share ofGDP by 2039. In this period, all other federal spending, with the 

notable exception of interest on the debt, is expected to shrink. 13 

Unsustainable long term spending will have real implications for the country. Medicaid is a 

shared responsibility program. The tedcral government pays for a majority of the spending. but 

the states pick up a big share as welL As a result. over a quarter of a !I state spending goes to 

Medicaid. making it the largest single expenditure in state budgets on the aggregate. This means 

that Medicaid spending will be crowding out other state spending, on roads, public satCty, and on 

education. One of the reasons that tuition at state schools is twice what it was in the 1980s is 

because of Medicaid spending. As Catherine Rampel! wrote in The New York Times, tuition 

hikes result from the Ja~t that ·•Struggling states have to prioritize other mandatory spending, like 

Medicaid.'' 1

..\ 

Beyond the Medicaid problem, some states that have established ACA exchanges are 

experiencing higher than expected costs as \VeiL The costs of the IT systems that run the 

exchanges, especially, arc heavy cost burdens on states. In order to be self-sustaining, some 

states have turned to the federal government to take on these functions. while others arc getting 

creative vvith dealing with these costs. For example, in her budget, Rhode Island Gov. Gina 

Raimondo recently proposed a new fee-3.8 percent for qualified health plans (QHPs) and 1 

percent for Small Business Health Options Program (SHOP) plans-to help cover the 

exchange's administrative costs. The state legislature is expected to vote on the proposal by July 

I, 2015Y New York State has found that it has insufficient ti.mds for pay for the expected $150 
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million annual costs of its state run exchange, As a result, Governor Andrew Cuomo proposed a 

$69 million tax to pay for the costs of the exchange, Unsurprising!y, the New York State 

legislature was unhappy with the proposal, but the fact remains that the exchanges impose even 

higher costs on already strained state budgctsY' 

Employee Affordability 

Government's financial challenges are only one aspect of the looming health care financing 

crisis, Individual Americans are 11nding that their costs arc becoming less and less affordable, 

even for those in employer sponsored health care, The AtTordable Care Act established an 

alTordability metric for health insurance. and determined that premiums 9,5 percent of 

income should be considered ·'unaffordablc." The problem \vith this is that it docs 

not consider deductib!es along with premiums. When dcductib!cs are folded in. 37 percent of 

private sector employees who are heads of families will face the prospect ofunaffordablc health 

coverage by 2020. By the year 2025, a majority of private sector employees will fall into the 

unaffordable category. as 53 percent \Vill surpass the 9.5 percent threshold in both premiums and 

deductibles. 17 These figures not\vithstanding. it should be remembered here that fc\v Americans 

would consider spending 9.5 percent of their income on health care as something that they can 

afford. 

Public opinion polls back up these estimates, demonstrating the level of uncertainty families 

face regarding the costs of health care. According to a New York Times/CBS poll, 46 percent of 

Americans t!nd basic health care affordability to be a hardship for them and their family. Two 

years ago. this was at 36 percent. 18 A Gallup poll corroborates the finding, as 41 percent of 

Americans report dissatisfaction with their current cost of health care, 19 Although employees arc 

generally more satisfied with the cost of their coverage, over 23 percent arc dissatisfied \Vith the 

premiums they pay, and 27 percent are dissatisfied with the dcductibles they pay \Vhen receiving 

care, 20 

Both the costs of and the worries about health are on the rise for Americans in employer 

sponsored plans. These plans, which have long been the backbone of our health system, are 

becoming less and Jess affOrdable to average Americans and their families. As the prospect of a 

majority of recipients finding employer sponsored health looms larger, the pressure wi!l build to 

find some kind of alternative for these employees. 

Unfortunately. public policy is pushing employer plans in the opposite direction, toward less 

generous plans. The i\CA 's Cadillac Tax was sold as a plan to hit only the highest value health 

plans. but it is increasingly hitting plans held by middle income earners. Already, 62 percent of 

employers are finding that the Cadillac Tax, or excise tax, is having an impact on their health 

care strategy, according to a recent Towers Watson survey. 21 In addition, the Cadillac Tax will 

have a creeping impact, as it will be impacting more and more plans as time goes on. In 2031, 

even an cost family health plan will likely cross the Cadillac Tax threshold. At that 

point, there likely be few if any high value plans, as employers will reduce the value of their 

health care offerings to avoid being hit \Vith the 40 percent penalty imposed by the Cadillac Tax. 

Furthermore, it is very much an open question whether at that point employer sponsored plans 

will be considered affordable at ali. 22 
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Employer Plans 

From the employer perspective. they are facing larger and larger costs for providing health 

care. While employers have to absorb some of these increased costs, the costs also get passed on 

to employees. According to a 2014 Kaiser Family Foundation and Health Research & 

Educational Trust study. the overall rate of inflation since 1999 was 43 percent. During the same 

period, \\orkers earnings increased 54 percent, health care premiums rose I 91 percent. workers 

contributions to premiums increased 212 percent. This premium increase does not even include 

co-pays and dcductibles.:n 

In addition to the rising cost of health overall, there is also the issue of costs imposed on 

employers by the ACA. According to an analysis of over 100 internal large employer estimates, 

the ACA is imposing additional costs of between $4,800 and $5,900 per employee over a 10 year 

period. Over that I 0 year period. these marginal costs due to the ACA add up to somewhere 

bet\veen $163 million and $200 million per large employer. and between $151 billion and $186 

billion for large employers as a wholc. 24 There is a question of whether ESI is built to last in 

today's tumultuous health policy environment A recent S&P Capital [Q analysis estimates that 

90 percent of American employees who currently receive health insurance through their 

employers could be shined to individual health insurance and government exchanges by 2020. 25 

Even an architect of the law, Ezekiel Emanuel, has predicted a similar shift and has gone so far 

to say that by 2025. fewer than 20 percent of workers \viii receive health care through ESI.26 

Despite predictions that employer sponsored health insurance will no longer be the norm by 

the end of this decade, America's health care system as currently configured relies heavily on 

employers to pay for health care. and there vvould be significant disruptions were employers to 

bow out over such a short time period. Thus, many employers remain committed to continuing to 

provide health care to their employees, retirees. and dependents. albeit through different 

strategies and benefits models. 

Employers are trying to cope with both higher overall health costs and newly imposed 

marginal costs, but despite their best efforts, employer health care costs per covered life arc still 

rising at twice the rate of inflation. While Consumer Directed Health Plans, or CDHPs, have 

shown some effectiveness in reducing health cost<>, 82 percent of large U.S. employers have 

already made the shift to CDHPs. meaning that the limits of this cost control option are being 

reachedY Similarly, we!lness programs, with \Vhich many employers have also experimented, 

do not appear to have the capacity to address long term health costs on their own. While many 

employers and employees alike have found them helpful, wcllncss programs in and of' 

themselves cannot solve the problem. Some recent research has even questioned how much 

return these programs can provide. As Health Affairs summarized its view of latest research on 

wellness plans, ·'those changes arc not large enough, and the relationship bet\veen health risks 

and spending too weak, to result in reduction of health care cost. let alone in return of 

investmt!nt."2g 

As a result of this combination of cost pressures and the lack of effective tools to deal with 

them, U.S. employers are looking to change their relationship with their employees with respect 

to health care. and there is now evidence that employees themselves would be amenable to 

accepting such changes. According to a study hy the Employee Benefit Research Institute 

(EBRI), only 40 percent of employees want to continue along the same health care path they are 

on today. 19 } lowevcr, 40 percent want to be able to choose their health plan and are \Villing to 

provide additional resources, above what their employer pays, ifnecessary. 30 Another 20 percent 
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want a lump sum payment from employers to allow them to pick their health coverage on their 

own,31 What this means is that 60 percent of employees arc looking for some new kind of way 

to get affordable health coveragc.32 And U.S. employers are actively seeking \vays to find those 

new options. 

When Will American Health Care Hit the Wall? 

These troubling trends. in our tlscal situation. in health care affordability. in employer 

sponsored care. appear to be reaching crisis point in roughly the same period. between 2025 and 

2030 (\·ee chart). It is no coincidence that the completion of the retirement of the baby boomers 

takes place in that same period: the worker to retiree ratio 3.99 nmv, dropping to 2.67 by 2030, 

\Viii be exacerbating our fiscal woes. 33 

Actual Projected 

Demographics, hO\vevcr, are not the sole source of the emerging problems. Public policies 

lie at the heart of many of our challenges: when it goes into effect in 2018, the excise tax will 

inccntivizc employers to reduce the value of health plans to stay under the tax's threshold; the 

ACA includes a host of marginal costs on employers that raise costs on employers and 

employees alike; relying on Medicaid to expand health coverage burdens overly strapped state 

budgets; and unrealistic entitlement program payouts threaten the fiscal viability of not only our 

entitlement programs, but of the U.S. as a whole. 
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Conclusion 

Fortunately, \vhilc demographic realities arc largely immutable, but public policies can be 

changed. The excise tax that will be impacting more and more health plans over time has not yet 

gone into etTect. Perhaps it can be changed or eliminated before 2018, \vhen it is scheduled to 

begin. Solving the excise tax will reduce, but not eliminate, some of the marginal costs that 

employers tace, which could in turn limit the extent to which employers exit the system. As for 

our entitlement programs, the crisis may be staring us in the face, but it is still not too late to 

make real changes to future payment policies that could stave off a potential fiscal collapse. 

Whatever happens in the years ahead. it is safe to assume that big changes are afoot. 

Government policies will likely change--but government is not the only place that such change 

can or will occur. Employers. fully understanding the marketplace power of the covered lives 

included in their respective plans. are already beginning to explore market-based remedies to the 

cost explosion. Both \\ith respect to government policy and these market-based remedies the real 

question faced in this is \Vhcthcr the changes will be planned out and thought through, or 

\\hether the changes be reactive after disaster strikes. 

To face these challenges. policymakcrs need to do two things. With respect to the public 

sector, there is still enough time to make changes no\v to shore up the public sector programs 

upon which an increasing number of Americans rely. To do this, po!icymakers need to stop 

making unrealistic promises and need to work to get outlays in line \Vith available 

revenue. From the private sector perspective, policymakers should recognize that ESI is going to 

be changed and that public policy needs to support the ability of the private sector make the 

required changes. Wise policies would foster and encourage creative market-based remedies that 

will benefit employees, employers, the tCderal treasury and our entire economic system. Such a 

reformed ESI system can ensure that employers are still actively involved in providing health 

care to their employees and not turning that burden over to the public sector. 
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1 Baby Boomers Retire, Pew Research Center, December 29, 2010 http://www.pewresearch.org/daHynumber/baby·boomers-retire/ 

1 CBO, July 2014, What are the Causes of Projected Growth in Spending for Social Security and Major Health Care 

Federal Old-Age and Survivors Insurance and Federal 

Disability Insurance Trust Funds, July 28,2014, pg. 3. 4 The 2014 Annual Report of the Board of Trustees of the Federal Old~Age and Survivors Insurance and Federal 

Disability Insurance Trust Funds, July 28,2014, Tables IV.A2 and IV.B2 

s The 2014 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal 

Disability Insurance Trust Funds, July 28, 2014, Table IV.BS. 

0 2014 Annual Report of the Boards of Trustees of the Federal Hospital insurance and Federal Supplementary 

Medical Insurance Trust Funds, July 28, 2014, Table !1!.85 and pg. 7. 7 2014 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary 

Medical insurance Trust Funds, July 28, 2014, Table V.F2. 

s The 2014 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal 

Disability Insurance Trust Funds, July 28, 2014, Table !V.A1 and pg. 60. 

9 The 2014 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal 

DisabiHty Insurance Trust Funds, July 28, 2014, pg. 60. 

10 The 2014 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal 

Disability Insurance Trust Funds, July 28,2014, Table IV.B5. 

2015 to 2025, CBO, March 2015, 

12 National Expenditure Projections, extrapolated out to 2025. 13 CBO July 2014, Long-term Budget 14 Catherine Rampell, 'Why Tuition Has Skyrocketed at State Schools," New York Times, March 2, 2012. 

http://economix.blogs.nytimes.com/2012/03/02/why-tuition-has-skyrocketed-at-state-schools/?_r=O 

151nside Health Insurance Exchanges, Volume 5 Number 4, April 2015 

Kills Cuomo's New York Post, March 31,2015, 

17 Institute estimates based on Census Bureau data and Kaiser Family Foundation data projected out to 2040. 

E!lsabeth Rosenthal, The New York Times, December 

19Andrew Dugan, "As ACA Takes Effect, Majority OK With Personal Hea!th Costs," 2014. 

20 Adele Shartzer and Sharon K. Long, QuickTake: Nonelderly Workers with Nonfinancial 

Less Satisfied with Financial Aspects, Urban Institute, Health Reform Monitoring 

Survey, September 4, 21 2014 Health Care Changes Ahead Survey: Emerging Factors Influencing Employer-Sponsored Health Care 

http://www.towerswatson.com/en/lnsights/IC-Types/SurveyCare Excise Tax on U.S. Employees and Employers," 
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n National Business Group on Health and Towers Watson, "191

h Annual Towers Watson/National Business Group 

on Health Employer Survey on Purchasing Value in Health Care," 2014. Although 82 percent of employers offer a 

CDHP, just 32.6% of employees are enro!!ed in one, and just 30% of employers offer only a CDHP plan to their 

employees. 

:>s Soeren Mattke, "When It Comes to The Value of We!!ness, Ask About Fairness Not Just About Effectiveness," 

Health Affairs, March 18, 2015, httc> //rn.hroaltloaffairs.org/bl<>g/l'Ol~i/03/18/wfren -it-cor~es-to-the-valce-r>f29 Paul Fronstin and Ruth Helman, Views on Employment-Based Health Benefits: Findings from the 2014 Health 

and Voluntary Workplace Benefits Survey, Employee Benefit Research Institute, Notes Vol. 36, No.2, February 

2015. 

30 /d. 

31/d. 

32/d. 

30Workers Per Retiree: 1950-2050, http://www.econdataus.com/workers.html 
108 

Mr. BRAT. Mr. Eddy, please. 

Mr. EDDY. Yes. I think I would refer back to the concern about 

sustainability not only of the healthcare plan, but also of the tax 

base if this continues to damage small companies. A large part of 

the tax base, has to be remembered, comes from the small businesses. As our friend Adam Smith said, there’s only three ways to 

create new wealth in any culture: agriculture, manufacturing, and 

resource extraction. And a lot of those companies that support 

those industries are small businesses now. So without change, I 

really am concerned about our sustainability even with the tax system. Thank you. 

Mr. BRAT. Thank you for bringing in Adam Smith. 

Thank you all very much. 

Chairwoman FOXX. Thank you very much. 

Mr. Grijalva, you are recognized for five minutes. 

Mr. GRIJALVA. Thank you very much, Madam Chair. 

I think it’s important, kind of, to remind as we deal with ACA 

and have this discussion in this panel -- and thank you for being 

here -- and as we stumble or edge toward TrumpCare in the foreseeable future, it’s important to remember that there were 60-plus 

votes for repeal in this House. And at the time it was a messaging 

vote. Now reality bites, that we have issues to deal with and how 

do we keep commitments that, perhaps, are contradictory to even 

some of the testimony that I read from the witnesses here today. 

For example, President Trump said that he wanted health care 

for everyone, he mentioned that, and that he wanted it to be great, 

affordable care for everyone. The commitment not to touch Medicare and not to touch Social Security. Congressional leaders on the 

Republican side have talked about dealing with the popular parts 

of ObamaCare, no prohibition of preexisting conditions, no gender 

discrimination in terms of costs, preventive mandated examinations for wellness issues, no maximum caps, sons and daughters remain until they’re 26. 

And Mr. Troy, Mr. Eddy, those two are doable in your professional, learned experience, to do what the President said had to be 

done and to keep the essential programs that are popular with the 

public? That’s why the public is demanding a replacement, just not 

merely a repeal. Are they doable at all? 

Mr. TROY. Thank you for the question, sir. 

First of all, I’d like to state that I am not a spokesperson for the 

Trump administration or the Obama administration. 

Mr. GRIJALVA. Nobody is. That’s not the point here. 

Mr. TROY. And I was happy to reclaim my First Amendment 

rights when I left government 7 years ago. 

But I would like to make the point that there are a number of 

serious plans that would reduce the overall cost of premiums on average according to CBO analysis, and I think that is the best way 

to go forward in order to incentivize people to purchase health care 

on their own without subsidies for some and an overall mandate. 

Thank you. 

Mr. GRIJALVA. Yeah. Let me follow up, if I may. 

Mr. Troy, part of what you also hear is that we have to eliminate 

the mandate, we have to eliminate the subsidy, we have to eliminate the medical device tax, high-end fees and taxes, and we have 

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to eliminate issues that are revenue generation that allow many of 

the important things, like Indian health care that’s part of the Affordable Care Act, that would go out the window. Community 

health centers and the trust fund established for community health 

centers that are essential in rural America and in poor America for 

services, those would all go out the window. 

So how can on a wish that costs of premiums will go down, when 

in reality the balance of revenue and program offerings under ACA 

are intrinsically tied together? How do you eliminate all the revenue generation and still have a program? 

Mr. TROY. So we do oppose elimination of many of the taxes, including the Affordable Care Act, the Cadillac tax in the Affordable 

Care Act. In terms of CBO projections being a wish, that is how 

public policy is made. We make projections based on what CBO assumes that the policies will do and that’s how they’re voted on. And 

I was pleased to see that this one particular CBO study showed 

that the costs would be reduced if a number of these programs in 

totem would be put together to lower the costs on individuals and 

their premiums. 

Mr. GRIJALVA. I’m sorry, Mr. Eddy, but if you have any comment 

on either one of those points. 

Mr. EDDY. Thank you, Congressman. 

I really tell myself I should have no comment here, but what I 

would like to say is I think we’ve all learned a good bit about what 

works and what doesn’t work in the last five years, six, seven years 

of ACA. You know, from my standpoint as a small-business owner, 

I would hope that there could be a balance created between this 

group, actually, to work towards what does work better. I have no 

answer for you on that, though. Thank you. 

Mr. GRIJALVA. I appreciate it. 

I yield back, Madam Chair. 

Chairwoman FOXX. Thank you very much. 

Mr. Bishop, you’re recognized for five minutes. 

Mr. BISHOP. Thank you, Madam Chairwoman, and thank you for 

the opportunity to be a part of this committee hearing today. 

Thank you to all the panelists. A special thank you to Ms. 

Schlaack, a fellow Michigander. Also, I want you to know as a parent, husband, my heart goes out to you and your family. I do want 

you to know that your testimony here today makes a difference. 

And oftentimes people don’t think that, but your being here today, 

your personal story makes a difference, and I want to thank you 

for that. 

Higher premiums and uncovered out-of-pocket expenses for the 

most part are devastating families and entrepreneurs and everyday 

Americans of all backgrounds. The ACA has caused cancelled policies, rising costs, poor coverage, and lack of choices for families, 

business owners, and employees alike. 

Many Americans simply can’t afford health insurance. In fact, in 

2015, 8 million Americans chose to pay the individual mandate tax 

penalty rather than to purchase insurance at all. 

I hear from constituents every day and business owners. I have 

spent the last couple of years traveling the state. And just reflecting what I’m seeing in Michigan, plans in Michigan exchanges saw 

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110 

change rates will jump nearly 17 percent in Michigan regardless of 

what Congress does this year. Insurers are leading the exchanges, 

private practices are folding over, and our doctors are being forced 

into retirement because they cannot afford the cost to stay in practice to comply with all of the incredible regulation. 

Nationally, those who currently have a plan under the exchange 

can expect an average premium increase of 73 percent, while individuals who are now just joining will see a 96 percent increase in 

premiums. The average cost to the new consumer in the individual 

market is expected to rise $1,800 per year. 

We often hear, as we absolutely did here today, the argument 

that if ObamaCare isn’t implemented, costs would rise anyway. 

And I know, Dr. Troy, you’ve answered that question on more than 

one occasion. And just building on what Mr. Guthrie had asked 

you, as a healthcare policy expert, can you tell me -- obviously, 

prices would continue to increase. But would the cost of health care 

increase at the same rate under the previous system but for the 

implementation of ObamaCare? 

Mr. TROY. So the healthcare inflation rate continues to be higher 

than the overall inflation rate. There has been some moderation in 

the healthcare inflation rate. So it’s still higher than overall inflation in the last couple of years. CBO has looked at this and wondered what the effect of -- or the cause of this was. It looked at the 

ACA as one possibility, but it said that the biggest factor was the 

lingering effects on the recession in terms of moderating the 

healthcare inflation rate. Also, some of the premium hikes that we 

have seen in the last couple of years in the ACA exchanges suggest 

that new studies going forward might find even higher rates. 

And then the other thing I would say is that employers have 

done a lot of work in recent years to try and bring the down costs. 

And we’ve seen some improvement in the costs in employer-sponsored care even as they face the additional effects of the ACA costs. 

Mr. BISHOP. Okay. We could have a lot of this conversation for 

many days. 

Doctor shortage. You just were asked -- you were just brought 

into that discussion as well, the fact that the current immigration 

plan may have an impact on that. But can you share with me the 

extent to which the result of rising costs on the current practitioners and the current costs with regulation compliance has an 

impact on the number of our doctors, especially those freestanding 

specialists who are leaving the practice of medicine? 

Mr. TROY. I’m glad you raised that, because that study that I 

wrote back at Hudson Institute in 2013 did talk about the cost of 

the Affordable Care Act on our medical profession and suggested 

that we might have problems filling the number of doctors we need 

as a result of the costs imposed by the ACA, but also the lack of 

discretion imposed on doctors of the ACA. Doctors want to see that 

they actually have the ability to make decisions, and the more their 

decisions are constrained, the less likely they are to go into the profession. 

Mr. BISHOP. What exactly is, what’s the biggest regulation that 

doctors face that is causing the most consternation among the practitioners that’s making them leave the practice almost overnight? 

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111 

Mr. TROY. So I hear a lot of doctors complain to me about the 

electronic medical records and the way that it forces them to look 

at the screen instead of at the patient. And when you look at the 

patient, that’s when you get to make better decisions about the patient’s health. But I would, also, I know we’re short on time, I 

would ask that entire paper that I wrote about the ACA’s impact 

on doctors be submitted for the record. Thank you. 

Mr. BISHOP. Thank you very much, Dr. Troy. 

And I yield back. 

Chairwoman FOXX. If the gentleman from Michigan would like, 

we can insert that study into the record. 

Mr. BISHOP. I would. And I move to admit that to the record. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

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Hudson Institute 

101515th Street, NW 

6th Floor 

Washinb'ton, DC 20005 

www.hudson.org 

Hudson Institute 
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''The Secretary Shall'' 

How the Implementation 

of the Mfordable Care Act 

Will Mfect Doctors 

By 

Tevi Troy 

May 2012 

©Hudson Institute 2012 
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Introduction 

Two years ago, President Barack Obama signed the Affordable Care Act (ACA), a law 

purportedly designed to increase access to health care and to "bend down" the health care cost 

curve. The last two years have seen a great debate over the impact and potential impact of that 

law, especially in the areas of coverage, affordability, and quality of care. Most of the discussion 

on this topic, though, remains in the speculative realm, as the law is not scheduled to be 

implemented until2014, and certain aspects of the implementation will be ongoing until 2019. 

Furthermore, the law has been subjected to a series of political and legal challenges that have 

generated uncertainty about the law's prospects within the health industry and at the state level, 

where much of the implementation is slated to take place. 

Despite these uncertainties, the Department of Health and Human Services (HHS) has begun the 

long and arduous regulatory process involved in implementing any new law, and has already 

issued over 12,000 pages of regulations elaborating on the original2,700-page law. 1 More pages 

are of course expected to follow, but the initial wave of implementing regulations has already 

given us an insight into how the new law will impact one of the most crucial actors in any health 

reform effort: doctors. 

There are over 850,000 physicians in the United States, and they play a crucial role in the 

administration of health care as caregivers, patient counselors, administrators, and policymakers. 

There are eighteen physicians in the Congressional GOP Doctors Caucus alone. As research 

scientists, doctors are in the front lines of identifying diseases and potential cures. Moreover, 

they hold a special status in the minds of the public. According to a recent report in National 

Journal, even in this era of tremendous cynicism and distrust, the American people continue to 

place great faith in doctors, giving them high marks on ethical standards and trustworthiness. 2 

1 Chris Jacobs, "Obamacare Creating Thousands of Jobs. For Bureaucrats." Senate Joint Economic Committee, April 

17, 2012. 

2 Margot Sanger-Katz, "Why Do We Trust Doctors?" National Journal, April 26, 2012, 

http://www.nationaljournal.com/features/restoration-calls/why-do-we-trust-doctors--20120426. 

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The attitude of the medical profession toward the ACA and the statements and actions of 

individual doctors as the law begins to be implemented will therefore bear great weight in the 

minds of the public. 3 

For this reason, it is worth examining how the health law will affect doctors and their 

participation in the system, paying special attention to the views and reactions of doctors 

themselves. A full summary of the new health law would take many more pages than available 

for this paper, 4 but the broad strokes are as follows. 

The Obama health law would: 

Cover 32 million additional Americans-16 million via Medicaid; 

Increase regulation of insurers, including coverage requirements for individuals and 

mandates on services; 

Create a mandate requiring individuals to purchase insurance; and 

Create new Health Insurance Exchanges in which individuals not covered by employersponsored insurance will purchase policies. 

Funding for the $800+ billion cost of the ACA will come mainly via new taxes and Medicare 

reductions. While this list gives a sense of what the law is trying to accomplish, it does not really 

convey the ways in which the law will actually operate, and particularly how the law would 

aflect physicians. This is because the implementation process creates a great deal of discretion 

lor appointed and career federal officials to determine the exact shape of the law's final 

requirements. The word "secretary'' appears nearly 3,000 times in the 2, 700 page bill, most 

frequently referring to regulatory implementation requirements that will have to be undertaken 

by the HHS Secretary (currently Kathleen Sebelius) and appointed or career staff. As former 

3 Although the American Medical Association (AMA) publicly declared its support for the ACA, many individual 

doctors disagree, as this paper will demonstrate. 

4 A full summary is available at http://www.kff.org/healthreform/upload/8061.pdf. 

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HHS Secretary Michael 0. Leavitt said of the new law, "It puts more power than is prudent in 

the hands of one person, and it is not an answer to our national health-care crisis.'' 5 

According to the Robert Wood Johnson foundation initiative Changes in Health Care Financing 

& Organization, a representative list of"The Secretary shall ... " requirements includes the 

requirements that the Secretary: 

• Promulgate regulations defining the young adults who can now remain under their 

parents' insurance policies; 

• Develop standards for usc by insurers in compiling and providing information for 

enrollees that accurately describe benefits and coverage; 

• Develop reporting requirements, in consultation with quality experts, for use by insurers 

with respect to benefits and provider reimbursement structures that improve health 

outcomes, prevent readmissions, improve patient safety, and implement wellness and 

health promotion activities; 

• Collect and make publicly available reports of insurers' minimum loss ratios and adjust 

the ratios to avoid destabilization of the individual insurance market; 

• Establish a process for an annual review of unreasonable increases in premiums for 

health insurance coverage; and 

• Establish, in consultation with the states, a mechanism, including a website, through 

which individuals may identify affordable health insurance options within their state; and 

develop a standardized format for the presentation of coverage option information to 

individuals. 6 

Incredibly, the bill's powers arc not limited to the broad macroeconomic issues described above. 

They also regulate a wide range of medical areas in minute detail, extending their reach even to 

one of the most personal arenas: the dentist's chair. Section 4102 of the ACA, for example, 

states: "The secretary shall develop oral healthcare components that shall include tooth-level 

surveillance." As Secretary Leavitt describes it, the mandate for tooth-level surveillance would 

5 Michael 0. Leavitt, "Health reform's central flaw: Too much power in one office," Washington Post, February 18, 

2 011, http://www. washington post .com I wp-dyn I cont entl a rticlel2 011/02I17IAR2011021705824. html. 

5 '"The Secretary Shall ... :' The Challenge of Implementing Health Reform's Affordability Provisions," Changes in 

Health Care Financing & Organization, April 2010, http://www.hcfo.org/publications/%E2%80%9C-secretaryshaii%E2%80%A6%E2%80%9D-challenge-implementing-health-reform%E2%80%99s-affordability-provisions. 

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require "a clinical examination in which an examiner looks at each dental surface, on each tooth 

in the mouth."7 

The above sample is only a tiny percentage of all of the areas in which HHS has discretion under 

the new law. This discretion leads to additional uncertainty, beyond the political uncertainty 

about whether the law will indeed be implemented. There is already considerable evidence that 

doctors are nervous how the ACA will affect their incomes, their access to technologies, and 

their ability to practice medicine. According to a survey by the Doctors Company, sixty percent 

of physicians felt that the health care law will have a negative impact on overall patient care. 

Only twenty-two percent were optimistic in this regard. Furthermore, fifty-one percent felt that 

the law would have a negative impact on their relationships with their patients. 8 In addition, a 

survey by the Physicians Foundation found that fifty-seven percent of young doctors are 

pessimistic about the future of health care, and thirty-four percent of them attribute their 

gloominess to the ACA. 9 These troublesome numbers raise questions about how and whether 

doctors will participate in the new system. 

Nature of Physician Concerns 

Perception affects reality, and so if doctors feel that the Affordable Care Act will harm them and 

their ability to interact with patients, that will be problematic for the doctors, the patients who 

trust and rely on them, and the system as a whole. But reality shapes reality as well, and the more 

important question than that of physician concerns is that of the reality of what the ACA will do. 

Doctors want to know which areas of the bill are most likely to affect them and which aspects of 

7 Michael 0. Leavitt, "Health reform's central flaw: Too much power in one office." 

'"The Future of Health Care: A National Survey of Physicians," Survey by The Doctors Company, February 29, 2012, 

http://www.thedoctors.com/ecm/groups/public/@tdc/@web/documents/web content/con id 004676.pdf?utm 

source=Newsletter&utm medium-Email;utm campaign=FHCP. 

9 Anna Yukhananov, uNext generation of doctors sees gloomy future/1 

Reuters, April11, 2012, http://www.reuters.com/article/2012/04/11/us-usa-health-surveyidUSBRE83AOZH20120411. 

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their practices the new law will affect. The answers to these questions will determine whether the 

concerns demonstrated in opinion surveys will change as the law is implemented, or whether 

they will harden or even worsen in the months ahead. The answers to these questions, especially 

from analysts who share the physician perspective, will also provide insight into the next key 

issue: if doctor concerns are indeed justified, what will be their likely response to the 

implementation of the new health care law? 

1. Reimbursement 

Doctors, like most people, tend to be economically rational actors. There is of course a certain 

altruism involved in the decision to become a care-giving actor, but economic elements will 

always play a key role in the decision-making process. From the economic perspective, doctors' 

top concern raised by the Obama health care law is in the area of reimbursement rates. The 

reimbursement question usually centers on the Sustainable Growth Rate (SGR). The proposed 

cut in reimbursements would hit doctors hard, imposing initial cuts of over twenty percent. 10 

Without going into its long and complicated history, the SGR is an expected rate cut that the 

Centers for Medicare and Medicaid Services is by law supposed to impose on doctors in order to 

get Medicare spending under control. Because of the likelihood that doctors would balk if the 

SGR were to go into effect, Congress-which created the SGR in the first place-undoes the 

SGR every year so that doctors will not have to experience the cut. This annual legislative dance, 

known as the "doc fix," gets more expensive and more difficult each year because the SGR is 

built into the budget baseline. Congress, in other words, counts on the SGR savings in its longterm budget prognostications while at the same time knowing that it will not realize those 

savings. 

10 Robert Moffit, "Obamacare and its Impact on Doctors," Wall Street Journal, June 19, 2010, 

htto: If on I in e. wsj .com fa rti cle/58 10001424052 7 48 70412 29045 7 531521352 5018390. htm I. (Note: article originally 

appeared in Physicians News Digest). 

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This problem gets more difficult because the "doc fix" has to be paid for, which means that the 

savings must come from somewhere, and the Obama health law has reduced the number of 

options for finding additional budgetary savings. This means that the Obama health law has 

made fixing the SGR even more difficult than it has been in the past, something doctors 

recognize and do not appreciate. 

Even President Obama's top aides and advocates for his health care plan recognize that the 

reimbursement question is a serious issue for doctors. In a 20 I 0 article for the Annals of Internal 

Medicine that touts the Obama health law and its impact on physicians, three administration 

architects of the plan, Nancy-Ann DeParlc, Dr. Ezekiel Emanuel, and Dr. Robert Kocher, 

acknowledge the uphill battle the administration faces in selling its new law to the physician 

community: "The uncertainty surrounding the sustainable growth rate policy is a distraction and 

potentially a barrier for some physicians to embrace the Affordable Care Act." 11 

In addition to the "distraction" of the SGR, there is also the issue of the growing Medicaid rolls. 

While the Obama health law will cover an additional 32 million Americans, 16 million of those 

newly covered Americans will get their coverage through Medicaid, according to the 

Congressional Budget Office. Doctors are well aware that Medicaid reimbursement rates are 

lower than those they get from privately insured patients. In fact, according to Moffitt, 

''physicians in Medicaid are paid 56 percent of private payment.'' This reduced reimbursement 

rate is the reason that Medicaid patients oflen have difficulty finding a doctor. Imposing these 

lower reimbursement rates on a growing number of patients will likely have the impact of 

exacerbating access issues in the future. 12 

11 Robert Kocher, Ezekiel J. Emanuel, Nancy-Ann M. DeParle, "The Affordable Care Act and the Future of Clinical 

Medicine: The Opportunities and Challenges," Annals of Internal Medicine, August 23, 2010, 

h tto://www .ann a Is .org/ content/ ea rly/201 0/08/2 3/0003-4819-15 3-8-201010190-002 7 4.1.fu II. 

12 Moffit, 11 0bamacare and its Impact on Doctors.11 

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2. Practice of Medicine 

Beyond economic issues, physicians worry that the new law will interfere with their practice of 

medicine, and in a variety of ways. To begin with, there is a generalized concern about decision 

making being taken from doctors and having medical decisions made instead by government 

officials. Doctors worry about the imposition of"uniformity of practice," the establishment of 

strict guidelines that fail to permit individual doctors to make decisions based on their in-person 

interactions with patients. As Dr. Saul Greenfield writes in the Wall Street Journal, "every 

physician must, at some point in the patient-care process, make decisions and take responsibility 

for them. And unless the doctor does so, the outcomes will be compromised.'' 13 While the fear of 

practicing medicine by committee is a long-standing concern among doctors, there are a number 

of provisions in the new health law that bring the prospect of committee-based medicine much 

closer to reality. 

The main concern on this front has been the IPAB, or the Independent Payment Advisory Board. 

This fifteen-person board, selected by the President and confirmed by the Senate, will be charged 

with trying to control Medicare spending by making payment and practice decisions. This 

approach, which will make government decisions that are in almost all cases not then subject to 

Congressional oversight, has many doctors extremely nervous. As Drs. Jason Fodeman and 

David Gratzer describe it, "This unelected body will have the unprecedented ability to singlchandedly change the allocation of health care resources should Medicare spending exceed 

medical inflation-which, for the record, it consistently does. lPAB's recommendations, 

incidentally, are beyond congressional reach unless overturned by a supermajority of 

Congress." 14 

13 Saul Greenfield, "In Defense of Physician Autonomy," Wall Street Journal, September 7, 2010. 

14 Dr. Jason Fodeman and Dr. David Gratzer, "Obamacare: One year later. Stripping patients and doctors of 

authority over care," The Washington Times, March 22, 2011, 

http://www.washingtontimes.com/news/2011/mar/22/obamacare-one-year-later-98975456/print/. 

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A related worry is in the area of comparative effectiveness research (CER). President Obama 

famously described his view ofCER's potential in July 2009 when he said: "lfthere's a blue pill 

and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay 

half price for the thing that's going to make you well?" A host of commentators have explained 

that this description vastly oversimplifies an enormously complex endeavor. Still, the Obama 

administration remains committed to pursuing CER and dedicated over $1.1 billion to this type 

of research in the 2009 stimulus bill. The concern with CER is that it could lead to hard and fast 

rules dictating the practice of medicine, thereby limiting doctors' ability to practice as they see 

fit. A similar concept, that of Least Costly Alternative (LCA), could have a similar impact, 

although thus far the courts have limited the ability of the Centers for Medicare and Medicaid 

Services (CMS) to employ LCA. Still, MedPAC-thc Medicare Payment Advisory 

Commission-often looks at LCA as a means for cost controls, and the new law's cost will 

increase the need for cost controls. Such a policy would not only affect physician choice, but also 

perhaps limit access to newer technologies. As noted, the courts have thus far blocked this 

approach, but the potential for its employment remains another consideration for physicians in 

making decisions about their future. 

Another common concern stems from the ACA's creation of Accountable Care Organizations 

(ACOs). A COs aim to depart from the strict fee-for-service model that docs drive up costs, and 

try to use the concept of bundling payments as a way of getting costs under control. It is a 

concept that has had bipartisan support in the past, and is seen by many as a promising path 

forward. Unfortunately, !-HIS's first attempt at writing this rule was so restrictive that it put 

medical institutions at risk of losing money if they participated and failed to gain the anticipated 

savings. This and other restrictions scared off medical institutions, and, according to Politico's 

Lester Feder, "the I 0 medical groups participating in a Medicare pilot program that paved the 

way for the ACO program declared that none would participate if the rule were not substantially 

modificd." 15 

"J. Lester Feder,"Health Reform Rule Spooks Providers," Politico, May 24, 2011, 

http://dyn.politico.com/printstory.cfm?uuid-SBF19DDC-13F3-41Al-9AAD-85COE8E1CC16. 

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After this poor uptake, the administration then rewrote the rule in a way that increased 

participation to some degree. Still, many physicians remain understandably skeptical about 

participation because of the way in which HHS initiaily approached the issue, as well as the stiiiimperfect nature of the revised version. As Sarah Kliffreports in the Washington Post, even with 

the new rule, willing participants "report little change in how they deliver care: The ones who 

felt confident enough to participate were already delivering integrated care and, with the start-up 

costs of administering the program, arc not certain they'll see significant savings." 16 

A COs and the IPAB have received most of the attention when it comes to new institutions that 

will impact the practice of medicine, but they are far from the only ones. According to a 

report by Senators Tom Coburn and John Barrasso, both physicians, the $10 billion Center for 

Medicare and Medicaid Innovation is another source of worry for doctors. The report, which 

cites a Congressional Research Service memo to Coburn, demonstrates that the legislation 

authorizing the center gives the HHS Secretary and the CMS administrator enormous power not 

only to experiment with new payment and delivery systems, but also to impose the results of the 

experiments without external checks on those resu Its. 

Coburn and Barrasso note that CRS found "no references in [the law 1 to any external reviews or 

checks on the CMS" in evaluating the results of their experiments. Not only wiil patients lack 

judicial and administrative review if they object to the center's demonstration projects, but 

doctors will as well. According to Coburn and Barrasso, "health care providers are also legally 

prohibited from contesting the Secretary of Health and Human Services' (HHS) use of new 

payment models." The Center for Medicare and Medicaid Innovation appears to be one more 

way in which the healthcare law will interfere with the practice ofmedicinc. 17 

16 Sarah Kliff, "Why the Business of Health Care Will Never Be the Same," The Washington Post, March 25, 2012, 

http://www.washingtonpost.com/blogs/ezra-klein/post/health-reform-at·2-why-american-health-care-will-neverbe-the-same/2012/03/22/giQA7ssUVS blog.html#pagebreak. 

17 "Warning: Side Effects," report by Senators Tom Coburn and John Barrasso, March 20, 2012, 

http: 1/www .coburn .senate. gov /publicfindex.cfm ?a=Files.Serve&Fi le id=98be1143-f556-469d-91af -4213946fcf2f. 

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Impact: How Doctors Will React 

Interfering with the way that doctors practice can potentially have an even bigger impact than 

economic questions on doctor participation and satisfaction. If doctors cannot practice as they 

wish, it raises the question of whether they will practice. As Dr. Mark Siegel has noted, because 

of the anticipated changes in health care, "To stay in business under ObamaCare, doctors will 

have to adjust. Some will sec fewer patients themselves and hire nurse practitioners to help carry 

the load; others will work part-time and supplement their income elsewhere. Many will join 

groups or become salaried employees of hospitals or clinics." As problematic as these scenarios 

are, Siegel is most pessimistic about the fate of lone practitioners, whom he suggests "are going 

to become harder and harder to find, at least, ones who'll take your insurance." Many of them, he 

predicts, "will join the growing group of 'boutique' doctors who' II only see patients who pay 

cash up front." While the relatively small number of patients of those boutique doctors may be 

pleased with the service, large numbers of doctors opting out of insurance will only exacerbate 

the access challenge faced by everyone else. 18 

Another factor driving doctors to change their behavior is the increased complexity of practice 

under the new law. The ACA will introduce a much greater level of legal compliance 

responsibilities, increasing the difficulty and expense of maintaining a private practice. The drive 

to provide quality care for more patients, at less expense but with more paperwork, will make 

practice much more burdensome for all physicians, especially those in private practice. 

Decreased reimbursements for the same services will make private practices less financially 

viable. Not surprisingly, a recent survey of over 2,400 physicians found that nearly eighty 

percent believe the reform will "erode the viability of the private practice model," with twenty18 Marc K. Siegel, "ObamaCare: Flight of the MDs," New York Post, December 10, 2010, 

http://www.nypost.com/f/print/news/opinion/opedcolumnists/obamacare flight of the mds 2zWYU1R9DYG4K 

6dJ8oj8gP. 

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eight percent reporting they believed the private practice model was "a dinosaur soon to go 

extinct." 19 

Signs of this trend are already visible. Recent reports by the consulting firm Accenture found that 

doctors are increasingly backing away from individual practices and are joining larger groups, 

particularly hospitals, which have both more leverage with insurers as well as more staff to 

handle the increasing paperwork burdens. As a result, the percentage of doctors owning their 

own practices is dropping, and expected to continue dropping, from almost half in 2005, to fortythree percent in 2009, and to a projected one-third in 2013?0 This is exactly the kind of trend 

Senator-physicians Tom Coburn and John Barrasso warned against in March 2010, predicting 

that the Obama health law, as a result of its complexity and attempted cost-savings, "could 

accelerate the trend of physicians leaving private practice to work in a centralized hospital 

setting."21 

Leaving private practices is one problem, but at least the doctors would still he practicing. A 

further concern is whether certain doctors would practice at all under the bureaucratic constraints 

and rejiggered economics of the new law, or if enough would continue to practice to meet the 

increased demands of the new health law, especially since we are already facing a looming 

physician shortage. As the Association of American Medical Colleges has noted, by 2020 we 

will already need an additional91,500 more than we are currently projected to have-45,000 

from primary care and 46,500 surgeons and specialists. 22 While of course the AAMC has an 

19 "Health Reform and the Decline of Physician Private Practice," The Physicians Foundation, Oct. 2010, 

http://www.physiciansfoundation.org/uploadedFiles/Health%20Reform%20and%20the%20Decline%20of%20Physi 

cia n%20Private%20Practice. odf. 

20 "Physician Employment Trends Will Force Payers, Hospitals and Vendors to Revise Business Strategies, According 

to Accenture Survey," Accenture study, June 13, 2011, 

http://newsroom.accenture.com/article display.cfm?article id~S220. 

21 Tom Coburn and John Barrasso, "Grim Diagnosis," October 26, 2010, 5, 

http://barrasso.senate.gov/public/ files/FinaiGrim.pdf. 

22 Association of American Medical Colleges Fact Sheet: "Physician Shortages to Worsen Without Increases in 

Residency Training," https://www.aamc.org/download/150584/data/physician shortages factsheet.pdf. 

11 
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interest in promoting the idea of physician shortages, their study shows the mentality of many in 

the medical field. Reports by the American Academy of Family Physicians (AAFP) came to 

similar conclusions, foreseeing a shortage of nearly 40,000 family physicians by 2020. 23 Other 

predictions are even more dire, with estimates of the shortage reaching 200,000 within the next 

eight years. 24 

In addition to the question of practicing, there is the question of how doctors will practice. Will 

they create new pathways for cures, or will strict guidelines stifle their creativity? Another 

motivation for doctors, which can result in financial reward as well as the altruistic satisfaction 

of advancing medicine, is the ability to help in the innovation process. Doctors serve at the 

intersection of research and practice, and provide valuable feedback and guidance to life science 

companies about both products and needs. Doctors have also been known to invent a variety of 

products as well, from off-label uses to glidescopes and new vascular catheters. Unfortunately, 

the alphabet soup of governmental or quasi-governmental groups and approaches created by the 

Obama health law-including A COs, IPAB, LCA, and CER-increases the concerns of 

government interference with innovation. These restrictive initiatives could not only affect the 

development of medical technology, they could also deprive doctors themselves of the freedom 

needed to create new products. 

23 Janice Lloyd, "Doctor Shortage Looms as Primary Care Loses Its Pull," USA Today, August 18, 2009, 

http://www. usatoday .com/ n ews/h ea lth /2 009-08-17 -doctor-gp-sh ortage N. htm. 

24 Dennis Cauchon, "Medical Miscalculation Creates Doctor Shortage," USA Todoy, March 2, 2005, 

http://www.usatoday.com/news/health/2005-03-02-doctor-shortage x.htm. 

12 
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Conclusion 

As the implementation of the Obama health law continues, the ways in which the Obama 

Department of Health and Human Services interprets the law will have far-reaching implications 

for the supply, practice structure, and flexibility of physicians for many years. As this paper 

shows, a significant number of physicians themselves are extremely concerned about these 

implications, and both perception and reality will shape how doctors practice medicine in the 

years to come. Many of these changes, while worrisome, are predictable, and government 

officials and health care administrators alike can make certain adjustments to prepare for the 

expected consequences. Many others, however, are less predictable, and it is unrealistic to expect 

officials to be able to react to them. The unknowables include the possibility that the supply of 

doctors cannot meet the demand, or that dedicated professionals may lose the incentive or 

flexibility to create new cures, or that talented individuals choose not to pursue medical training 

at all. If these outcomes occur, we may never know what the ultimate consequences might be, 

and who will be left waiting for the treatment or the cure that never comes. 

13 
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About the Author: 

Tevi Troy is a Senior Fellow at Hudson Institute, and a writer and consultant on health care and 

domestic policy, whose commentary has appeared in major media outlets including the 

Washington Post, Wall Street Journal, Commentary, National Affairs, Politico, National Review, 

and The Weekly Standard. He is also a frequent commentator on outlets such as CNN, Fox 

News, PBS' NewsHour, and the Bill Bennett Radio Show. Troy is the author of Intellectuals and 

the American Presidency: Philosophers. Jesters, or Technicians (Rowman & Littlefield). 

In 2007, he was unanimously confirmed by the U.S. Senate as the Deputy Secretary of the U.S. 

Department of Health and Human Services. As Deputy Secretary, Troy was the chief operating 

officer of the largest civilian department in the federal government, with a budget of$716 billion 

and over 67,000 employees. In that position, he oversaw all operations, including Medicare, 

Medicaid, public health, medical research, food and drug safety, welfare, child and family 

services, disease prevention, and mental health services. He served as the regulatory Policy 

Officer for HHS, overseeing the development and approval of all HHS regulations and 

significant guidance. In addition, he led a number of initiatives at HHS, including implementing 

the President's Management Agenda, combating bio-terrorism, and public health emergency 

preparedness. He also sponsored a series of key conferences on improving HHS' role with 

respect to innovation in the pharmaceutical, biomedical, and medical device industries. Troy has 

led U.S. government delegations to Asia, the Middle East, Europe, North America, and Africa. 

Troy has held numerous other high-level positions, including Deputy Assistant and Acting 

Assistant to the President for Domestic Policy, Deputy Assistant Secretary for Policy at the 

Department of Labor, Policy Director for Senator John Ashcroft, and Domestic Policy Director 

for the House Policy Committee. 

Troy has a B.S. in Industrial and Labor Relations from Cornell University and an M.A. and 

Ph.D. in American Civilization from the University of Texas at Austin. 

About Hudson Institute: 

Hudson Institute is a nonpartisan policy research organization dedicated to innovative research 

and analysis promoting security, prosperity, and freedom. 

Founded in 1961 by Herman Kahn, Hudson challenges conventional thinking and helps manage 

strategic transitions to the future through interdisciplinary and collaborative studies in defense, 

international relations, economics and trade, philanthropy, society and culture, technology, 

science and health, and law. With offices in Washington and New York, Hudson seeks to guide 

public policy makers and global leaders in government and business through a vigorous program 

of publications, conferences, and policy briefings and recommendations. 
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Forging ideas 

that promote 

security, 

prosperity, 

and freedom 
129 

Chairwoman FOXX. Ms. Adams, you’re recognized for five minutes. 

Ms. ADAMS. Thank you, Madam Chair, and thank you, Ranking 

Member Scott, for hosting today’s hearing. 

And thank you to all of the panelists. 

Much of what has been discussed today includes the impact of 

ACA on the health and economic security of our country. Repealing 

it would take away vital health insurance, as we’ve heard, for nearly 30 million Americans, and with more than 129 million Americans with preexisting conditions would be denied coverage. 

Madam Chair, I’d like to ask unanimous consent to enter into 

the record a letter from seven children’s groups. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

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January 3, 2017 

The Honorable Mitch McConnell 

Majority Leader 

U.S. Senate 

Washington, DC 20510 

The Honorable Paul Ryan 

Speaker 

U.S. House of Representatives 

Washington, DC 20515 

The Honorable Chuck Schumer 

Minority Leader 

U.S. Senate 

Washington, DC 20510 

The Honorable Nancy Pelosi 

Minority Leader 

U.S. House ofReprcsentatives 

Washington, DC 20515 

Dear Majority Leader McConnell, Speaker Ryan, Minority Leader Schumer, and 

Minority Leader Pelosi, 

As organizations dedicated to improving the health and well-being of children, 

adolescents, and pregnant women, we urge you to keep the unique needs of children in 

mind as you consider the future of the Affordable Care Act (ACA) and ensure that any 

changes do no harm to children. Thanks to Medicaid, the Children's Health Insurance 

Program (CHIP) and the ACA, ninety-five percent of children in the United States have 

health coverage- an historic high.' Children must not lose ground: any health reforms 

must build on achievements already made to further improve coverage for children. We 

look forward to working with you to ensure no child is worse off as changes to our health 

care system are contemplated, and that we can work together to make even more progress 

for children. 

As you consider the future of the ACA, we ask that you adhere to at least the two 

following principles: 

Put children first and adopt a "do no harm to children" standard. Over the past 50 

years, it has been clearly demonstrated that there are strong economic reasons to preserve 

and protect children's health coverage. The return on investment is high. Children with 

health coverage are more likely to attend school, graduate from high school, go to 

college, and become healthier adults, with higher taxable earnings than uninsured 

children. Identifying and treating conditions early, before they become expensive longterm liabilities, is effective. As you consider any changes to the Affordable Care Act, we 

urge you to commit to the guiding principle that these changes must not leave children 

worse off. Consistent with the '·do no harm to children" standard it is also essential that 

there be no structural changes to Medicaid that would negatively impact the 

comprehensive and affordable coverage the program provides to children. 

Any repeal of the ACA must be accompanied by passage of a full, immediate 

replacement that meets the needs of children and their families. A repeal without a 

replacement will lead to large disruptions to the health insurance market and significantly 

higher burdens on families and communities. Children will be directly impacted by the 
131 

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repeal of affordable coverage options. The Congressional Budget Office (CBO) 

estimates that in the absence of a replacement package, 22 million people will lose 

coverage by 2019. In faet, it is estimated that repealing the ACA without a full 

replacement would leave more people uninsured than before the ACA was passed. 11 The 

American Academy of Actuaries also recently warned that delaying the effective date of 

repeal to give time to develop a replacement would not assure stability of the market and 

could result in "spiraling premiums, insurer withdrawals from the individual markets, and 

loss of coverage for millions of Americans." 

In addition to the four million children who would lose coverage as a result of repeal, 

millions more would be negatively impacted by their parents losing coverage. Research 

clearly shows that children are better off when their parents have health insurance 

coverage.' 11 The disruption to the health insurance market overall and the loss of health 

care dollars will also impact jobs and divert important state and local resources that 

support other systems, such as education, that are critical to ensuring children are ready to 

drive our future economy. 

The children's advocacy community stands united in calling on Congress to prioritize the 

needs of children by protecting their coverage in any efforts to repeal the ACA or reform 

the health care system. Any attempt to repeal the ACA without immediately enacting a 

replacement that leaves no child worse off could jeopardize the health of our nation's 

children. Under your leadership, Congress must reaffirm its commitment to ensuring a 

stable health care system for all Americans and build on the gains that have been won for 

children and families, without interruption, and without losing ground. 

Sincerely, 

American Academy of Pediatrics 

Children's Defense Fund 

Children's Dental Health Project 

Children's Hospital Association 

Family Voices 

First Focus 

National Association of Pediatric Nurse Practitioners 

i Alker, J. and Chester. A .. Georgetown University Center for Children and Families, "Children's Health 

Coverage Rate Now at Historic High of 95 Percent," October 2016, available at 

http:llcc[gcorgetown.cdu/wp-contentluploads/20 16111 /Kids-ACS-update-11-02-l.pdf 

"Blumberg, Linda J., Matthew Buettgens, and John Holahan, "Implications of Partial Repeal of the ACA 

through Reconciliation." Urban Institute, December 2016. 

http:iiW\\W.urban.orglrescarch/publication/implications-partial-rcpcal-aca-through-rcconciliation 
132 

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"'Center for Children and Families (2014). ·'Medicaid Expansion: Good for Parents and Children," 

Georgetown University Health Policy Institute. hllp://ccLgcorgclown.edu/wpcontcnt/uploads/20 13/12/Expanding-Covcragc-l(lr-Parents-1 Iclps-Childrcn-20 !3.pdf 
133 

Ms. ADAMS. Thank you very much. 

Ms. Schlaack, first of all, you’ve experienced a terrible tragedy. 

Again, I want to add my thought and sympathy to you and your 

family and commend you for having the strength to share your 

story. 

You describe in detail the impact of ACA in terms of coverage 

both for your daughter and your son, and in your testimony you 

mention that having ACA allowed you to have coverage for your 

daughter without having to quickly go back to work simply to get 

the benefit of health insurance. 

So it does sound like ACA allowed you to be flexible with deciding when to go back to work after your husband’s death. Is that 

the case? 

Ms. SCHLAACK. That’s correct. 

Ms. ADAMS. Okay. I also want to raise with you, you know, oftentimes with great personal tragedy comes the need to access mental 

health services. Under ACA, more individuals have access to such 

services. As someone who has experienced personal tragedy and 

currently working with those who have, how important is that 

mental health service, such as grief counseling, how important is 

that to be accessible and covered under health plans? 

Ms. SCHLAACK. Thank you. Not only for myself to be able to effectively parent and continue on with my life, but also for my 

daughter. 

It is statistically shown that children who suffer a loss of a parent or live with a parent with a serious illness often have difficulty 

processing that, and it then translates into school issues, behavioral issues beyond their young years, well into college, making not 

necessarily the best choices. And the fact that she and I are both 

able to continue with counseling, therapy for our own mental 

health has been invaluable because it is a very expensive service 

that we couldn’t have afforded otherwise. 

Ms. ADAMS. Okay. And so after actually working in this field, you 

believe it’s important for other families to access it as well? 

Ms. SCHLAACK. Very much so. I work with groups, peer groups, 

and many times that’s not quite enough. A lot of times, especially 

children don’t want to talk about things like this with their parents, with someone in their home, and they need a third party who 

they can express what they’re feeling and help them work through 

the emotions that they often don’t even understand. 

Ms. ADAMS. Right. Okay. Thank you. 

So you talked about your son -- or you mentioned it in your written testimony -- who was able to stay covered under an employersponsored plan after serving in the Peace Corps. What has it 

meant to him to have the coverage a young adult starting out in 

the world? 

Ms. SCHLAACK. Well, as he was right out of -- he finished his 

bachelor’s program, went straight to a master’s program, as we 

were able to continue to cover him then, so he didn’t have to work 

full time and go to school. And then in the interim, between graduating and starting the Peace Corps, which he did have full coverage from the government as a Peace Corps employee, but then 

once that service was up, he transitioned back into the U.S., his 

benefits stopped. 

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134 

And until he was able to attain his own full-time employment, 

which thankfully he does have, I was able to keep him covered. So 

it was one less thing that he -- because, frankly, the medical care 

he could get in Mongolia where he was serving wasn’t exactly stellar, and he was able to come back and have the coverage he had 

in the past and before he started out on his own as an independent 

adult. 

Ms. ADAMS. Thank you. And as his mom, I know you have peace 

of mind. 

Thank you very much. I yield back, Madam Chair. 

Ms. SCHLAACK. Yes. Thank you. 

Chairwoman FOXX. Mr. Byrne, you are recognized for five minutes. 

Mr. BYRNE. Thank you, Madam Chairman. 

Lady and gentlemen, thank you for being here today. 

Most people expect to get their health insurance through their 

employer. Most people work for small businesses. So the topic 

we’ve been talking about today and the impact on small business 

is a big deal. 

I represent southwest Alabama. We don’t have too many big employers. Virtually everybody works for a small business. Between 

2015 and 2016, for the urban county in my district, Mobile County, 

the increase for small businesses for their insurance premiums is 

14 percent. That turns out to be about $2,000 per employee in 1 

year. For small businesses, that’s a big hit. 

And, Mr. Bollenbacher, I’m informed that you actually had a 156 

percent increase and that you wrote President Obama about that. 

So I would like to ask you, sir, did you hear back from President 

Obama? Have you received any subsidy from the Federal Government to help you with that increase? And if you don’t receive a subsidy and you get an increase of that magnitude, what do you, as 

a small-business owner, what do other small-business owners that 

you work with, what do you all do with that? 

Mr. BOLLENBACHER. Yes. I don’t think my microphone is working. 

Chairwoman FOXX. Turn on your mike, please. 

Mr. BOLLENBACHER. Yes. I did write a letter to President Obama. 

Mr. BYRNE. Did you hear back? 

Mr. BOLLENBACHER. I had somebody call me from the healthcare 

marketplace to the SHOP. 

Mr. BYRNE. Did you hear back from the President that you wrote 

to? 

Mr. BOLLENBACHER. No, I did not, but 156 percent increase is 

not feasible. 

Mr. BYRNE. Did you get a subsidy to help you with it from 

ObamaCare? 

Mr. BOLLENBACHER. No. 

Mr. BYRNE. So how do small-business people deal with an increase with like that, if the President won’t talk to him or write 

him back and won’t give him a subsidy like he had given in other 

parts of the program? 

Mr. BOLLENBACHER. What we were forced to do is look at options, and there were no good options. Basically, there was one 

plan that we ended up having to pick, which was a 78 percent inCEWDOCROOM with DISTILLER

135 

crease. I’ve had other companies, other clients I work with, have 

dropped their insurance altogether. They just cannot afford it. 

They’ve laid people off to get under the full-time employee equivalent. 

Mr. BYRNE. And maybe, Dr. Troy, Mr. Eddy, make you all can 

answer this for me. As a result of this, have we seen a decline in 

the number of businesses and employees working for small businesses that have insurance? Have small businesses just said, 

‘‘Look, we can’t afford it’’? 

Mr. TROY. I’m not aware of statistics on that specifically, but I 

do know there are concerns among small businesses. And I’ve 

heard stories, including by some of your colleagues today, about 

limitation of hiring by small businesses as a result of the ACA. 

Mr. BYRNE. How about you, Mr. Eddy? 

Mr. EDDY. Again, I agree with Dr. Troy. I don’t have any specific 

statistics, but I know how it affects us, and it curtails our hiring 

capabilities as well as our capital investments, which lead to additional hiring. So we plan, as long as we can afford, to cover our employees with as much coverage as we can. You know, with the high 

deductibles that we have today and the continuing uncertainty in 

the future costs, I’m not sure how long that will be able to be sustained. Thank you. 

Mr. BYRNE. Mr. Bollenbacher, I’m sorry you didn’t hear back 

from the President of the United States. You wrote him. You’re a 

citizen of this country. You have a legitimate concern. And you had 

a right to get a response. He’s not President anymore, so there’s 

nothing we can do about that. 

Madam Chairman, I really do worry about what’s going to happen to all these employees in America that work for small businesses and want to get their health insurance, expect to get their 

health insurance through their employer, and their employers have 

just gotten to the point where they can’t afford it. 

And so the employers are left with one or two choices. Either 

they continue to pay the high cost of this, in which case they’ve got 

to figure out a way to recoup that somewhere else, and my fear 

there is there will be less hiring, fewer jobs; or we figure out a way 

to get some real relief to small businesses by getting this incredibly 

expensive burden off of them and let small businesses do what 

they’ve done through the history of this country, which is grow and 

prosper and hire and provide benefits and good wages to the people 

of America. 

And I yield back. 

Chairwoman FOXX. The gentleman yields back. 

Ms. Shea-Porter, you’re recognized for five minutes. 

Ms. SHEA-PORTER. Thank you. 

And, Ms. Schlaack, first, let me say I’m sorry for your loss, and 

I understand how challenging it is when there’s somebody in your 

family, because I had a family member who had decided -- he was 

a registered nurse, and he decided that he wanted to do ministry 

with music. He’s a gifted musician, and he wanted to go to nursing 

homes and work with Alzheimer’s patients. And so he was able to 

do that with the Affordable Care Act. And then shortly thereafter, 

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136 

able Care Act saved his life, because he had access to treatment. 

So while our outcome was certainly better, it was a terrifying time. 

I am also concerned about small businesses, and so I urge my 

colleagues on the other side to work with us to help to reduce the 

costs and figure out more. The fact that we haven’t been able to 

work together I think is a tragedy. 

But since the Affordable Care Act began expanding access to 

health insurance in my home State of New Hampshire, 63,000 people who didn’t have it before have gained that peace of mind that 

we have all been talking about and the financial security that coverage provides. Now, their coverage and many others is at risk. 

Despite the fact that Republicans have had seven years to come 

up with a so-called replacement plan, the current plan looks like 

repeal and collapse. Insurers make decisions over the coming 

months about whether to offer plans for next year and you’re still 

hearing the story, the dog ate my homework. The stakes cannot be 

higher. 

If congressional Republicans go down this road, the Urban Institute estimates that 118,000 people in my State alone could lose 

coverage and 30 million nationwide. Just yesterday, the Economic 

Policy Institute released a report that repeal would cost 4,600 jobs 

in New Hampshire. This wouldn’t just erase the gains that we’ve 

made, that would send us backward, and I don’t believe anybody 

wants to go backwards here. 

My constituents are deeply concerned, and rightfully so. I’d like 

to read some testimony from two of them. First is Jameson from 

Somersworth, New Hampshire, who shared this, and I quote: ‘‘The 

ACA gave me the opportunity to purchase affordable health care 

when I needed it most. It allowed me to get the medical service I 

needed without me going into more debt or standing up time after 

time after time just waiting in the emergency room. Although I’m 

not a profitable insurance policyholder, I surely am a grateful one. 

Repealing the ACA would be inhumane, irresponsible, and outright 

foolish.’’ 

And there’s Jack from Rollinsford, New Hampshire, who said 

‘‘Before the ACA, I was uninsured due to a preexisting genetic condition and high medical costs, struggling to afford even the most 

basic tests to keep myself healthy. Today, I have great affordable 

coverage and the help I need to live a long, productive life.’’ 

So my question to you, Dr. Troy is, today’s hearing concerns the 

quote, unquote, ‘‘failed health law.’’ What benchmarks would you 

allow Jameson and show Jameson and Jack to defend your allegation the healthcare law has failed in New Hampshire and around 

the country? The uninsured rate? Average medical debt? The number of plans that have comprehensive substance abuse treatment? 

The number of issuers offering coverage in our individual market? 

Because all of those have shown dramatic improvement. 

You work with numbers. Are there any statistics you could show 

Jack and Jameson about access to coverage and care in New 

Hampshire that could possibly support the idea that this law has 

somehow failed to improve health care for my constituents? 

Mr. TROY. Thank you very much for that question. 

I believe and I’ve written that there are three basic metrics for 

judging whether the law is a success. Number one is coverage. 

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137 

While you say that the law has increased the number of people covered, that is absolutely true, more people are covered subsequent 

to the ACA, but, A, not as many as the law said it would or CBO 

projected that it would cover. And we still do not have the level of 

universal coverage that I believe that we should strive for in this 

country. 

Number two is costs. President Obama said that the law would 

reduce costs, bring down costs for individuals, bend the cost curve 

down. As Dr. Brat was saying earlier, our long-term costs are still 

quite high, and we’ve seen very high increases in the premiums at 

the exchanges in recent years. 

And then the third, and I think really the key question that will 

determine whether the American people believe the law is a success, is President Obama’s promise if you like your health care you 

can keep it. And we have seen disruptions in the individual markets that some people have not had the coverage they had previously as a result of the ACA. 

And then there are questions that the costs we were talking 

about throughout this hearing imposed on employers. And if employers are changing the health care they’re providing as a result 

of the costs of the ACA, then the answer to the question of that 

is no. 

Ms. SHEA-PORTER. Okay. Well, let me stop you there, because I’m 

running out of time. But first of all, the fact that the coverage isn’t 

100 percent but so much closer hardly seems a reason for you to 

complain. It seems to me you would want to say, well, that’s wonderful, we’ve expanded coverage and let’s do even better and get 

100 percent. 

And your second point, where the costs have not dropped, can 

you point out anything anywhere, starting from your sale of your 

home or whether you rent or whether you buy groceries, anywhere 

where the costs have dropped? We all know that the rate of increase has dropped. And you, yourself, introduced some of those 

numbers earlier in your testimony. 

So I’m not sure what you’re saying here. If you’re saying that I 

didn’t get everything I wished for, and that’s how it sounds here, 

I didn’t get everything I wished for yet, what would be the purpose 

of going backwards and taking away when you’ve acknowledged 

that the increase of people who are covered went much higher? 

What is wrong here? 

Chairwoman FOXX. Ms. Shea-Porter, your time has expired. And 

we’ll ask Mr. Troy to submit his answer for the record. 

Mr. TROY. I will. 

Ms. SHEA-PORTER. Thank you. And I yield back. And I would 

very much appreciate an answer to that. And thank you. 

Chairwoman FOXX. Mr. Allen, you’re recognized for five minutes. 

Mr. ALLEN. Thank you, Madam Chair. 

And, again, I appreciate the panel participating today. I, too, 

have learned a little bit about what you’re dealing with. 

Just 2-1/2 years ago I sat in your seat, Mr. Eddy, as a small business and dealing with not only the economy but the increase in 

benefit costs and stagnant wages, which is still a major problem. 

I think that probably, too, we should understand that really health 

insurance benefits came out of the business community. In fact, it 

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138 

exploded during World War II when there were wage controls and 

the war board allowed the companies to extend benefits, health 

benefits and other benefits, to compete for employers. And, of 

course, now the government is heavily involved. 

And we know that, again, costs are increasing. In fact, I have 

met with lots of groups that are involved in the markets. And, of 

course, the health insurers are getting a little bit -- well, they’re 

getting a bad rap because they are blamed for the increase. But I 

know for a fact that most of them submitted certain reforms to the 

administration that would drive down costs and they were totally 

ignored. 

And that brings me to my point here that I want to make today. 

And, again, I don’t know if this is the first time you’ve testified 

here in Congress, but you obviously see the very partisan part of 

what -- in fact, I’m ashamed of it, really, of what happens here that 

we can’t come together. We can send somebody to the moon, but 

we can’t come together and do what’s right for the American people, and that’s sad. 

But we’re going to work on it. We’re going to continue to work 

on it. Your testimony is very important to us, and we thank you 

for that. 

With that, again, you’ve listened to us, and we’ve listened to you. 

Dr. Troy, I would like to start with you, and just we’re getting to 

the end of this. Can you summarize in your mind where you see 

us going and what’s best for the American people? 

Mr. TROY. Thank you for that question, and I applaud your call 

for bipartisanship. Before the ACA, every piece of major social welfare legislation in this country had passed on a bipartisan manner, 

and that’s one of the reasons that these laws were accepted and the 

American people moved on subsequently. When you have a law 

passed in a unipartisan manner, you have this situation where 

there’s continued contentiousness about the law seven years later. 

I would like to see some kind of bipartisan reform going forward 

so that it would be more lasting. I would like to see it along the 

lines of what we were talking about earlier in terms of building on 

the basic building blocks of American health care, which includes 

employer-sponsored care, which covers 177 million people, but also 

works to reduce the overall costs, thereby incentivizing people to 

purchase it on their own and not having to do it via mandate. 

Thank you. 

Mr. ALLEN. Now, what’s important about what you said there is 

incentivize. I learned that in the business world, that the best way 

to get the production from your workforce is to give them incentives to do these things rather than mandates. 

Mr. Eddy, do you have any comments about how to solve this? 

Mr. EDDY. I’d be in Congress if I had the ability to solve it. 

Mr. ALLEN. Well, that’s the reason I’m here. I’m not sure I’m getting anywhere. 

Mr. EDDY. As I said, I depend on you all to work together to do 

this. 

But along with the repeal of the taxes, I’d like to see us consider 

reducing some of the reporting requirements. The mandates generate a lot of reporting requirements, a lot of compliance issues. 

CEWDOCROOM with DISTILLER

139 

Also, the greater flexible. I’d like to see the proposals and see options and flexibility improved. 

Thank you. 

Mr. ALLEN. Ms. Schlaack, my heart goes out to you for your loss. 

Ms. SCHLAACK. Thank you. 

Mr. ALLEN. What is your recommendation knowing that we’re $20 trillion in debt. And you’ve got a child. I have 12 grandchildren. How do we do this? 

Ms. SCHLAACK. Again, fortunately, I’m on this side and not yours 

-- your side of this table, I’ll put it. 

But, I mean, to have a productive, efficient workforce you need 

healthy, happy employees, mentally and physically. And I know it’s 

dollars and cents, but it comes down to loyal, healthy employees 

that you can count on to be at work and to maintain their job. 

Mr. ALLEN. Let the record show that maybe was the most important thing that was said here today at this hearing. 

Mr. Bollenbacher. 

Mr. BOLLENBACHER. I believe for small businesses we need options. We need flexibility. We need more than one choice to provide 

for our employees. 

Chairwoman FOXX. The gentleman’s time has expired. 

Mr. ALLEN. I yield back. 

Chairwoman FOXX. Mr. DeSaulnier, you’re recognized for five 

minutes. 

Mr. DESAULNIER. Thank you, Madam Chair. 

Let me start at the beginning, just agreeing to the comments by 

my friend from Georgia and by the chair. It would be wonderful if 

we could approach this more in a problem-solving perspective, acknowledging that we have philosophical differences as to how to accomplish that. And I say that from the perspective of being a smallbusiness owner for over 35 years. 

Mr. Bollenbacher, I hesitate to use this phrase, but I feel your 

pain. I owned restaurants in the bay area for a long time. And before the ACA, one of the problems I had was the cost, that it was 

going up. So for my employees, who I was able to pay 100 percent 

of their costs, I found situations before the ACA where I had a 

manager come to me in tears because she couldn’t afford the copay. 

I contributed the copay. 

So when we compare this and Dr. Troy, I would like to go back 

to the ranking member’s comments and how we get to a perspective of more problem solving in a bipartisan fashion as you affirmed would be preferable. 

But in addition to owning a small business, Ms. Schlaack, I also 

have great empathy for your perspective as a survivor, so far, of 

incurable blood cancer. I, fortunately, had insurance that I paid for, 

that has helped me pay for the very large costs for my treatment. 

I will say, and I’d be curious about your experience, but perhaps 

just personally, as to the question about electronic records. There’s 

somewhat of a joke about those of us who have gone through treatment, and I tease my oncologist that I see more of his back as he 

looks at my CAT scans and my blood. But he will say, but that’s 

where the information is. 

So understanding that there’s a process to introducing technology 

and understanding that we should have done it faster when it 

CEWDOCROOM with DISTILLER

140 

came to electronic records, there’s still a long term and a shortterm benefit for me. I’m an example of it. 

And at some point, a wonderful book, ‘‘Rise of the Robots,’’ where 

they talk about automization. And for specialists in the medical 

field, I always ask when I go out to research facilities: How much 

is the oncologist in my case interpreting the results of my examinations and how much is a computer interpreting it and telling him 

or her what the diagnosis should be and what the treatment should 

be? And what I always get is over the course of time the computer 

is doing more and more of that work. 

So to Dr. Troy, to follow on the ranking member’s, if we’re going 

to be rational about this, more than opinion, an opinion, even research that’s based on a biased perspective, from my experience it 

would be better to look at where other similar examples have 

worked historically and where they work right now. 

So in the industrialized world, one of the reasons I was so supportive of ACA and supportive of universal health care and Medicare for all, is that that’s my perspective of who we compete with. 

And most of those countries that we compete with, their percentage 

of costs of health care is smaller than their GDP than the U.S. and 

their outcomes have historically been better -- Mongolia not included in this, by the way. 

So the ranking member’s question about if your theories are in 

play right now and practiced in a similar industrialized community, where is it? What can we learn from that? And why can we 

be so certain that your suggestions will worked when they are applied to a very complex country? 

And I’ll just say, lastly, from my perspective having been very involved in the implementation in California when I was in the legislature, we had huge struggles. We continue to have huge struggles. 

We worked with the California NFIB. We delayed some of the requests in the mandates on small businesses. As a small-business 

person, I wanted to make sure that they didn’t incur undue burden, as my friend from Alabama said. 

So in the short time left, maybe you could just elucidate a little 

bit on your response from the ranking member. If you’re going to 

be rational and evidence based and rely on as much empirical, nonbiased research as possible from either perspective, it would suggest to me that we go to places that have implemented health care, 

dealt with this, and either from your perspective, being more market based or more driven closer to universal health care, where has 

it worked and where hasn’t it? 

Mr. TROY. Thank you very much for your question. I certainly try 

to avoid the word ‘‘certainty’’ when it comes to public policy, because I think it behooves us to have modesty in our approaches and 

not be completely certain about anything about the previous policies or going forward. 

One of the reasons we spend more on health care is that we are, 

in many ways, a more generous country. We spend dollars until the 

last minute of life in ways, and some of these countries, some of 

our Western allies do limit treatments at the last hours of life in 

ways that we don’t. 

The results are certainly mixed. To some degree, we do have 

lower life expectancy, but part of that is unfortunately due to highCEWDOCROOM with DISTILLER

141 

er road deaths and higher gun deaths. So there are other factors 

at work. 

I don’t have the perfect plan in another country. I have seen 

some positive results from Singapore, which does have people have 

some kind of catastrophic plan and also combines it with some kind 

of has that can be transferred generation to generation, and that 

has showed some impact in moderating healthcare costs. But, 

again, Singapore is a small homogeneous country, and obviously, 

we are a very large heterogeneous one. So it is, obviously, a difficult public policy conundrum. 

Mr. DESAULNIER. Thank you, Dr. Troy. 

And thank you for indulging me, Madam Chair. I have some articles on the Treasury report issued on January 12 that I would like 

to submit for the record. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

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Treasury Notes 

Home »Connect with Us »Treasury Notes Blog >>One in Five 2014 Marketplace Consumers 

was a Small Business Owner or Self-Emploved 

One in Five 2014 Marketplace Consumers was a Small 

Business Owner or Self-Employed 

By: Adam Looney and Kathryn Martin 

1/12/2017 

Independent Workers Are Almost Three Times More Likely To Rely on Afarketplace Coverage 

than Other Workers 

Today, Treasury released a report with new data on sources of health insurance coverage for small business 

owners and self-employed workers. These data show that the Affordable Care Act (ACA's) Health Insurance 

Marketplaces are playing an especially crucial role in providing health coverage to entrepreneurs and other 

independent workers. 

Prior to the Affordable Care Act, workers without employer-sponsored health insurance often lacked options for 

affordable coverage. Not only did high uninsured rates impede access to care and worsen financial security, but 

the risk of ending up without health insurance coverage prevented some individuals from striking out on their 

own. Experts considered '

1

job lock," or individuals' need to stay in an employment situation to maintain health 

coverage, a significant impediment to entrepreneurship. To help address these challenges, the ACA's Marketplaces 

were designed to offer portable health insurance coverage to small business owners and other independent 

workers, a growing segment of the economy. 

One in five 2014 Marketplace consumers was a small business owner or self-employed 

New data included in today's Treasury Department report on alternative work arrangements show that small 

business owners and self-employed workers are taking advantage of the opportunity to purchase health coverage 

through the Marketplaces.! I lin 2014, 1.4 million Marketplace consumers were self-employed, small business 

owners, or both, indicating that about one in five 2014 Marketplace consumers was a small business owner or selfemployed. Indeed, among the 5.3 million workers who purchased Marketplace coverage for themselves (excluding 

their children or non-working spouses), about 28 percent were workers whose income was not primarily earned 

from wages paid by an employer. 

In fact, small business owners and self-employed individuals were nearly three times as likely to purchase 

Marketplace coverage as other workers. Nearly 10 percent of small business owners and more than 10 percent of 

gig economy workers got coverage through the Marketplace in 2014. Among small business owners and other 

independent workers, those with annual incomes below $65,000 were the most likely to rely on the Marketplace 

for health insurance. Middle- and lower-income Americans who buy coverage through the Marketplace are eligible 
143 

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for tax credits to help keep coverage affordable. About 65 percent of small business owners and 69 percent of all 

self-employed or independent workers have incomes below $65,000. 

Between 2014 and 2015, the number of people who signed up for Marketplace coverage increased by around 50 

percent. And enrollment increased further in 2016, and is poised to rise again in 2017. Marketplace coverage 

among independent workers has almost certainly risen as well. HHS is also partnering with outside companies that 

support freelance workers1 entrepreneurs/ and start-ups to reach more independent workers with information 

about Marketplace coverage and financial assistance. 
144 

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Geographic patterns in small business owners' and independent workers' health coverage 

Today's report includes detailed state-by-state data on Marketplace participation among entrepreneurs and 

independent workers. In all 50 states and D.C., thousands of small business owners and independent workers 

bought Marketplace coverage in 2014. Of note: 
145 

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The ten states with the highest share of small business owners relying on the Marketplace for coverage were 

Vermont, Idaho, Florida, Montana, Maine, California, New Hampshire, Washington, D.C., Rhode Island, and North 

Carolina. 

The 10 states with the largest number of small business owners with Marketplace coverage were California, 

Florida, Texas, New York, Georgia, North Carolina, Pennsylvania, Michigan, Washington, and Virginia. 

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Adam Looney is the Deputy Assistant Secretary for Tax Analysis at the U.S. Department of Treasury. Kathryn Martin 

is the Acting Assistant Secretary for Planning and Evaluation at the U.S Department of Health and Human Services. 

! J! The Treasury report defines small business owners as Schedule C filers whose business activities (measured by expenses and gross receipts) 

exceed certain de minimis thresholds (a minimum of $5,000 of business expenses and either $15,000 of gross receipts or $10,000 of business 

expenses). Self·emp!oyed workers are defined as mdivlduals who earn at least 85 percent of their earnings from operating a sole· 

proprietorship. "G1g economy workers" are those whose self·employment income derives in part or !11 whole from activities conducted through 

an online platform. 

Posted in: Affordable Care Act 
146 

Chairwoman FOXX. Mr. Grothman, you are recognized for five 

minutes. 

Mr. GROTHMAN. Okay. Mr. Bollenbacher, you are kind of what I 

think was going to happen until the ACA stepped in. You are somebody who, the way it is described, for a relatively small employee 

-- what, 11 employees over there? -- you are doing a great job of 

managing your costs. 

I’d like to know what your costs per employee was or did you feel 

you had your costs per employee under control with a combination 

of HSAs and giving some money toward your employees? 

Mr. BOLLENBACHER. Yes, I do. We were seeing increases, you 

know, 8 to 12 percent. The health savings accounts the employees 

really liked. They were able to save money to put away for those 

future unexpected claims. It was manageable for us to continue 

that. 

Mr. GROTHMAN. And your costs were still going up 8 or 9 percent? 

Mr. BOLLENBACHER. I’m sorry? 

Mr. GROTHMAN. Your costs were still going up 8 or 9 percent? Or 

you felt you got your costs under control with a combination of 

HSAs and -- 

Mr. BOLLENBACHER. Yes, sir. 

Mr. GROTHMAN. Okay. So you were happy to live with the 8 or 

9 percent. 

Mr. BOLLENBACHER. A lot better than 156 percent. 

Mr. GROTHMAN. Okay. And is that after the ACA kicked in or before? 

Mr. BOLLENBACHER. The 8 to 12 percent was before. We were 

seeing 156 percent last year. 

Mr. GROTHMAN. Right. Okay. 

I’ll go to Mr. Eddy. There are a variety of problems that business 

has. And I don’t know whether I caught how you’re handling your 

healthcare costs. But could you give us in general the type of plan 

you were offering your employees before the ACA kicked in? 

Mr. EDDY. It was a common plan with a thousand dollars for a 

single and a thousand-dollar deductible for the family plan. As I 

said, it was about $13,500 per year for the family plan. I’m not 

sure how to describe the plan, but it was full coverage. We paid the 

entire amount of the plan for our employees. 

Mr. GROTHMAN. Okay. Do you know, and I guess this is either 

for you or Mr. Bollenbacher, have you or other people involved in 

NFIB -- are you with NAM? Is that what you’re involved with? 

Mr. EDDY. Yes, I’m here with NAM. 

Mr. GROTHMAN. Right. Stories of employees being conscious or 

other employers being conscious of both a desire to hold employees’ 

hours below 30 hours or employees conscious of the cliffs in which 

they’re going to lose their subsidies? Have you heard stories like 

that? 

Mr. EDDY. Well, I’ve heard the stories, but we don’t -- you can’t 

experience that. That’s not something that I think is pretty common. 

Mr. GROTHMAN. Okay. 

Mr. BOLLENBACHER. Yes, sir. I’ve been dealing with that almost 

on a daily basis where my self-employed clients, the farmers, the 

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147 

pastors at churches, where they’re right at that cutoff, and it’s a 

cliff. And if they go over that cliff, they may pay $7,000 or $8,000 

back, and it hurts them badly. 

Mr. GROTHMAN. Bingo. I’m glad you’re a CPA. Because that’s 

what we want. At first I was thinking I was asking you as an employer. But I’m not asking you as an employer. I’m asking you as 

a CPA. So you see that your customers, the people you fill out tax 

returns for, are conscious of the fact that they cannot make more 

money. Or, in other words, they are maybe artificially holding 

down their compensation to make sure that they don’t hit the cliff. 

Mr. BOLLENBACHER. Absolutely. It’s a big number for most of my 

clients. 

Mr. GROTHMAN. Okay. And do you find employees sometimes 

conscious of that as well? 

Mr. BOLLENBACHER. Not as much as the self-employed. But, yes, 

I have had individuals where they’re an employee, they get a paycheck, maybe they sell some stock, and it puts them over the cliff, 

and all of sudden they owe $2,000 or $3,000 back that they weren’t 

expecting. 

Mr. GROTHMAN. Okay. Mr. Troy, you talked about the different 

taxes out there. I think you talked about the -- oh, the Cadillac tax 

and that sort of thing. And you advocate repealing them. But what 

would happen if we repealed them? Would that make ObamaCare 

that much more fiscally impossible? 

Mr. TROY. I do believe that the Cadillac tax does not bring in 

nearly as much revenue as the CBO or the JCT, Joint Committee 

on Taxation, suggests it would. I think that the Affordable Care Act 

has a lot of spending itself. And so if the committee goes forward 

and the Congress goes forward with repealing it, along with the 

taxes, then it wouldn’t make the ACA more fiscally responsible, but 

it would reduce both the costs and some of these revenues from 

taxes. 

Mr. GROTHMAN. I guess the point I’m trying to make is if we repeal the taxes, the money is going to have to come from somewhere 

else, Right? 

Mr. TROY. If you maintain the ACA as it is, but just minus taxes. 

But I don’t think that’s a working plan on the table. 

Mr. GROTHMAN. Right. But that is what would happen. I mean, 

when people talk about continuing the ACA, if you continued the 

ACA and got rid of these harmful taxes, the money would have to 

be made up from somewhere else, correct? 

Mr. TROY. As with any program, yes. 

Mr. GROTHMAN. All right. Okay. Thank you for -- 

Chairwoman FOXX. Thank you. The gentleman’s time has expired. 

Mr. Courtney, you’re recognized for five minutes. 

Mr. COURTNEY. Thank you, Madam Chairman. 

So at midnight last night this enrollment period for 2017 came 

to a close. This morning I checked in with the folks in Hartford 

about how the final numbers came in. The answer that came back 

is that we just about pretty much held steady in terms of last 

year’s enrollment. It was a little bit of a dip, partly because they 

didn’t use insurance agents to help with enrollment, which they’re 

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148 

going to reverse that for next year. That was a bad move they 

made. But nonetheless, I mean, it pretty much held steady. 

And I make that point just because we’ve heard a lot of talk 

today and over the last few weeks about whether or not the law 

is in a death spiral. There was an interview recently that was reported with the American Academy of Actuaries, which I think we 

would all stipulate doesn’t have a partisan bone in its body, about 

whether or not in fact there is a death spiral going on, and Cori 

Uccello, the organization’s senior health fellow, answered, ‘‘I don’t 

see any evidence of that happening right now. The problem with 

the argument,’’ according to Uccello, ‘‘is that ObamaCare’s enrollment is actually holding steady and not dropping off.’’ And we 

know that from the national exchange as well. A death spiral is 

when people really start running towards the exits, and it just concentrates the sickest in the pool. And as Uccello points out, the age 

distribution for 2017 is pretty much holding steady. 

In my district, which we’ve driven the uninsured rate down to 

3.6 percent, I think it’s almost the lowest of any member’s district 

on this committee, and that’s because of a grassroots effort with libraries, community health centers, hospitals, insurance agents up 

until last year, who really just flooded the zone in terms of trying 

to get people help and assistance that took place. 

And I would just share this, because as a former employer I 

think the description of your problem is exactly the sore spot that 

we need to address, Mr. Bollenbacher. But, frankly, it is not a monolithic story that’s out there. 

Willimantic Waste, which is a trash hauler in my district, they 

have about 200 employees, I got a letter from the HR director who 

indicated to me, and I’ll just read it quickly, ‘‘I was skeptical about 

the claims that the ACA would help level out the cost of our company-sponsored health plan. But the numbers have come in, and 

over the past three years we have seen a decrease or no increase 

in our premiums every year. 2015, minus 2 percent. 2016, minus 

1 percent. 2017, zero percent.’’ 

And, again, I’m not saying that to diminish your comments. But 

the fact is it is really not monolithic that’s out there. And what we 

ought to be doing is focusing on questions about whether to have 

a reinsurance mechanism, which was in the bill and unfortunately 

got stripped. It was part of the Republican Medicare Part D plan 

as a way of leveling off premiums through that. Very successful. 

We use it for flood insurance. 

Again, and this is coming from Connecticut where we have a lot 

of insurance companies, that’s the biggest weakness that they identify in terms of why the 2017 spike increased. But Standard and 

Poor’s even then said it appears to be just a one-year phenomenon. 

So, Madam Chairwoman, I would like to submit this story from 

the Academy of Actuaries, as well as Willimantic Waste paper for 

the record. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

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Is healthcare law really going into a 'death 

spiral'? 

By Peter Sullivan- 01/24/17 06:00AM EST 779 

630 

©Greg Nash 

It's a central part of the GOP argument against ObamaCare: The Affordable Care Act is in a 

"death spiral" and on the verge of collapse, Speaker Paul Ryan (R-Wis.) and other Republicans 

argue. 
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Congress must act now to repeal and replace the law, the Speaker argues, because the system is 

already collapsing. 

"You have to remember the law is in what the actuaries tell us [is] a death spiral," Ryan said at a 

press conference this month. ''So we've got to intervene to prevent this from getting worse." 

If the healthcare law is in a death spiral, it increases the need to repeal and replace it, since it 

suggests that health insurance markets will collapse without government action. That's why it is 

a key argument for Republicans. 

Yet non-partisan healthcare groups that have studied the law say that while it has some serious 

problems and faces challenges, they do not see it as collapsing into a death spiral. 

The American Academy of Actuaries is a prime example. 

The group, which represents the people who analyze data for insurance companies, says there is 

no evidence that ObamaCare is in a death spiral or that it is on the verge of collapse. 

"I don't really see evidence of that happening right now," said Cori Uccello, the organization's 

senior health fellow. 

The idea is that rising premiums are making it more likely that healthy people will drop their 

coverage, despite the mandate for keeping insurance. 

That will in turn cause a further spike in premiums, as insurers would be forced to cover a sicker 

group of enrollees. 

Under the death spiral scenario, the healthcare system then falls victim to a vicious cycle in 

which more and more healthy people drop out, causing premiums to rise and rise until insurers 

pull out of the market entirely. 

The problem with the argument, according to Uccello, is that ObamaCare's enrollment is 

actually holding steady and not dropping off. 

The latest administration figures show 8.8 million people have signed up for 2017 coverage, 

slightly higher than the 8.7 million at the same point last year. 

"Enrollment seems to be holding fairly steady, as well as the age distribution," Uccello said. 

"These things are not indicative of a premium spiral." 

Premiums did increase sharply, with an average rise of25 percent for coverage in 2017. 

But a report from analysts at Standard & Poor's in December found that 20 I 7 was a "one-time 

pricing correction" and premium increases for 2018 would be "well below" that amount. 
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"Obviously, 2016 is not a death spiral," said Deep Banerjee, an S&P analyst and one of the 

authors of the report. "We don't think 2017 will be a death spiral either." 

A majority of those on ObamaCare- 85 percent- receive subsidies to help pay for their 

premiums. As a result, those people don't have to pay much if any ofthe rise in their premiums, 

though the cost for the federal government would go up. 

"The way that current federal premium subsidies are set up, they largely would protect the 

market from heading into a death spiral for the subsidized population," said Erica Coc, a partner 

in the healthcare practice at McKinsey & Company. 

It's not that the health care law docsn 't have problems. 

In addition to rising premiums, Ryan and other Republicans have pointed out that several large 

insurers dropped out of ObamaCare markets last year because of financial losses. 

The Kaiser Family Foundation tlnds that 32 percent of counties will have just one insurer 

offering ObamaCare coverage in 2017, compared to seven percent of counties in 2016. 

But those problems are different from saying the law is collapsing in a death spiral. 

Democrats argue that improvements could be made to fix issues like a lack of competition in 

some areas. They want a government-run "public option" to increase competition and more 

tlnancial assistance to make insurance more affordable. 

Ryan and other Republican leaders have pointed to the death spiral argument to justify their push 

to repeal the law. 

When a cancer survivor who credited his life to ObamaCare asked Ryan at a CNN town hall this 

month why he wanted to repeal the law, Ryan responded in part by saying the status quo is 

unsustainable. 

"The problem with ObamaCare: the actuaries call it a death spiral," Ryan said in his response to 

the man. He also argued there are better ways to help people with pre-existing conditions, like 

high-risk pools. 

He then added: "We have to step in and rescue people from the collapse of this law." 

Many insurers have indeed been losing money in the ObamaCare markets, and some have 

dropped out altogether, reducing choices for people. But the S&P report found that the situation 

is improving, not getting worse. More insurers will report profits in 2017, the report found, and 

another year or two of improvements will lead to more reaching their financial targets. 

·']t still isn't a profitable line of business for most insurers, but what this indicates is that there is 

a way to make this work," Banerjee said. 
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Some analysts think Republican repeal efforts actually could make things worse. 

Uccello, for example, warned that repealing the mandate could actually bring about a death 

spiral, since the Congressional Budget Office has estimated that it could raise premiums by 20 

percent. 

She also noted that uncertainty around what Congress will do could hurt the market. 

"Uncertainty is not something that bodes well," she said. "Insurers need to know what's going 

on.~' 
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101812016 

Congressman Courtney, 

Thank you for passing the ACA back in 2011 When it was first passed, business people were concerned about 

the law and how it would affect healthcare costs in our state. As a human resource manager for a local 

company with 285 employees, I was skeptical about the claims that the ACA would help level out the cost of 

our company sponsored health care plan. But the numbers have come in and over the past three years, we 

have seen a decrease or no increase in our premiums every year. 2014-15: -2.0% 2015-16: -1.0% and 2016-

17 0.0% .I believe the decreases were due in part to the competition in the health care marketplace that the 

ACAcreated 

Some people have told me that the ACA is not working because of this issue or that issue. I remind them that 

the ACA was the framework for the US health care system. New healthcare issues ( deductibles, types of 

covered care, costs) can now be addressed within that framework that President Obama and you created. It 

will take time for those issues to rise to the surface but when they do, the issues will be addressed. 

Thank you for your hard work on this piece of legislation. 

John DeVivo 

Willimantic Waste Paper 

Willimantic CT 
154 

Mr. COURTNEY. Thank you. 

And just to go back to -- I mean, one bipartisan ray of hope here 

is on the Cadillac tax. As many know, we teamed up last year on 

a bipartisan basis, pushed it back to 2020. A bunch of us did it 

back in 2010 and pushed it out to 2018. But nonetheless, I mean, 

there is, again, a strong feeling that this is a really totally inefficient way of trying to accomplish some type of goal, which is really 

just to shift costs to businesses and employees. 

And I would just say, Dr. Troy, I mean, you point out that the 

CBO study, it really is not a traditional tax analysis. It’s assuming 

an income windfall that will happen as employers don’t incur as 

much costs in terms of paying higher premiums. I just wonder if 

you could comment in terms of really -- there really is no study 

that has ever really demonstrated that sort of backboard basket 

that they’re describing, is it? 

Mr. TROY. Thank you so much for that question, Mr. Courtney, 

and I would like to applaud you for your bipartisan efforts to eliminate the Cadillac tax. Thank you for that. 

We have done a number of studies at the American Health Policy 

Institute about the deleterious impact of the tax, and we looked 

very carefully at this question of how much revenue it would supposedly raise. In doing so, we found that not only would it not 

bring in as much revenue as the CBO and the JCT projected, but 

also that to the extent that it is imposed and employers are trying 

to reduce costs in reaction to it, that the reduced costs are not necessarily going to employees as the CBO study projects or assumes. 

We talked to employers, and 71 percent said that it would not lead 

to increased wages. So I just think it’s on unfounded assumptions. 

Thank you for your leadership. 

Mr. COURTNEY. Thank you. H.R. 173, and I think we could do it 

on the consent calendar if it was brought up tomorrow. Thank you. 

I yield back, Madam Chairman. 

Chairwoman FOXX. Thank you very much. 

Mr. Thompson, you’re recognized for five minutes. 

Mr. THOMPSON. Madam Chair, thank you for this hearing. 

As someone who arrived in Washington to serve in January of 

2009 when this original -- and I won’t say it was even a debate. 

I came here with 28 years of healthcare experience, nonprofit community healthcare experience. In my time off, I volunteered as an 

EMT, showing up at the homes of my neighbors at all times of the 

day and night -- or mostly the night when I was home -- to respond 

to healthcare needs. 

And there was no debate in 2009. In fact, those of us who came 

here, and there was a lot, my good friend from Tennessee, Dr. Roe, 

came here as a physician, there was a lot of us with healthcare experience. A lot of friends across the aisle who had great experience. 

None of us were welcomed to the table. And we wound up with this 

very partisan legislation that was shoved down the throats of the 

American people. 

So I appreciate this hearing. I think this is a part of a dialogue 

that we have had for some time with the American people, but also 

among ourselves. I respect that there are differences. But the fact 

that we are proceeding in a way with transparency to do better. 

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155 

I happen to believe that our Nation’s healthcare policy should be 

one that promotes the healing and the health of all Americans 

without hurting millions. And that’s not what we have today. 

And I also believe this debate should be conducted based on 

facts, not fear. So I really caution all my colleagues, and especially 

those across the aisle that I’ve heard just in the past few days, it’s 

been about the fear, driving the fear. That doesn’t help this process. 

One of the things I heard was that we have no plans. And so I 

want to -- I’m going to be offering this, request unanimous consent 

for the record. But this is a submission for the record I have. This 

is a compilation of replacement plans or improvement plans or 

whatever you want to call it, plans for health care. 

Just some of the titles on this first page: Patient Freedom Act, 

Obamacare Replacement Act, A Better Way: Our Vision for a Confident America. It’s more of a vision. Patient Choice, Affordability, 

Responsibility and Empowerment Act. H.R. 5284, the World’s 

Greatest Healthcare Plan Act. That was creative, I guess, in title. 

Empowering Patients First Act, which by the way, was a version 

of something that I had cosponsored back in 2009, before the Affordable Care Act came out of the back offices here in Washington, 

and that’s been introduced in both the House and the Senate. And 

the American Health Care Reform Act, which actually the prime 

author of that is my good friend from Tennessee, Dr. Roe, that he 

referenced. That’s page one of six. 

So I request unanimous consent to present this, a list of detailed 

plans on how to reform the health sector for Members of Congress. 

Some of these are from Presidential candidates, some scholars and 

think tank community, and other top conservative thought leaders. 

Chairwoman FOXX. Without objection. 

[The information follows:] 

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156 

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Insert offset folio 56 here 23826.056

Submission for the Record 

House Committee on Education and the Workforce 

"Rescuing Americans ft·om the Failed Health Care Law and Advancing Patient-Cmtered 

Solutions." 

I<ebruary 1, 2017 

Submitted by: Glenn 'GT' Thompson, Member of Congress 

Below is a list of detailed plans on how to reform the health sector from Members of Congress, 

presidential candidates, scholars in the think tank community, and other top conservative thought 

leaders. 

Patient Freedom Act: Better Choices for Affordable Health Care 

- Sens. Bill Cassidy (R-LA) and Susan Collins (R-ME) 

Obamacare Replacement Act 

-Sen. Rand Paul (R-KY) 

A Better Way: Our VisiortfQI a_Confident America 

- Speake1· Paul Ryan, the House of Representatives GOP 

Patient Choice, Aflordability, Responsibility, and Empowerment Act 

-Sen. Richard Burr, Sen. Orrin Hatch, Rep. Fred Upton 

H.R.5284 World's Greatest Healthcare Plan Act of2016 

-Rep. Pete Sessions (R-TX), Sen. Bill Cassidy (R-LA) 

E,mpoweri.J.l..!Lf.atients First Act, H.R. 2300 

- Rep. Tom Price 

Empowering Patients First Act, H.R. 2300 (Compani_on to Rep. Price's House bill) 

-Sen. John McCain, Sen. David Perdue 

The American Health Care Reform Act, H.R. 265:3, 

-Rep. Phil Roe, Republican Study Committee 

1 
157 

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RSC Task Force Submission, H.R. 2653 K~.Y Principles 

-Republican Study Committee 

.S~ll,_ \:_'l~iQy_Maps a J>Jan to Overhaul Obamacare 

- Sen. Bill Cassidy 

The Anti-QJ:ny;naCa:re Recovery PLa11 

-Sen. Ben Sasse 

2016 Presidential Candidates 

Health Care: The Conserv<:~tive Plan for 21st Centmy 

-Gov. Jeb Bush 

My Pla_ll To Fix Health Care 

-Sen. Marco Rubio 

Prescri]2tion for Empowerment: We the People 

-Dr, Ben Carson 

A Conservative Approach to Better Health Care 

- Gov. John Kasich 

Healtheare Reform to Make America Great Again 

Donald Trump 

Obamacare Is Failing. Here's What We Should QQ 

- Carly Fiorina 

The Day One Patient Freedom Plan: My Plan to Repeal and Replg_cc ObamaCarQ 

- Gov. Scott Walker 

The Freedom and EmpowQrment Plan 

-Gov. Bobby Jindal 

2 
158 

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Analysis 

First Look at the Republican Platform on Health Care 

-Joe Antos, American Enterprise Institute 

Untying the tax knots of the Bush Health Plan 

-Tom Miller, American Enterprise Institute 

On Health Care, Walker and Rubio Offer Obamacare Lite 

-Michael Cannon, Cato Institute 

Bernie Sanders' Single-Payer Health Care Plan Would fnsrease Federal Spending By At Least 

$2? TrjJlipn 

- Avik Roy, Manhattan Institute 

-Thomas Miller, American Enterprise Institute 

Think Tank Community 

Replacing ObamaCare with Consumer-Centered Health Reforms 

-Grace-Marie Turner, Conservative Reform Network 

Ideas for the New Administration:. Four Urgent Healt[c(:flre Reforms 

-Paul Howard, Manhattan Institute 

The Fiscal Policv Context for a Conservative Refotm Agenda 

-James C. Capretta, Conservative Reform Network 

Improving Health and Health Care: An Agenda for JS.s;_form 

3 
159 

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- Antos, Capretta, Chen, et al., American Enterprise Institute 

Here's How to Create a ~9tter Health Policy Than Obamacare 

-Sally Pipes, Pacific Research Institute 

Transceding Ol:JlliJ1ll_CJ!l~ 

-A vii{ Roy, Manhattan Institute 

Paving the Way to Full Repeal 

-William Kristol and .Jeffery H. Anderson, 2017 Project 

Best of Both Worlds 

-Bhattacharya, Chandra, et al., American Enterprise Institute 

Wh,Sln Obamacare Fails 

- Thomas Miller, American Enterprise Institute 

How To Get A Health Care System That Answers To The }'atient 

-Grace~ Marie Turner for The Heritage Foundation 

Room t9 Gro_w,_"Health-care reform to lower costs and_improve access and quality" 

James C. Capretta, Young Guns Network, now COJtse1-vative Reform 

Networl{ 

Constructing an Alternative to Obamaeare; Key Details for a Practical Replacement Program 

- James C. Capretta, American Enterprise Institute 

Memo for the Movement: Repeal ang_Replace 

- Conservative Action Project 

How to Replace Oban1aCare 

-James C. Capretta and Robert Moffit 

Let States Exchange Obamacare For Something Better 

4 
160 

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-Doug Badger 

After Repeal ofObamacare: Moving to Patient-Centered, Market: Based Health Care 

The Heritage Foundation 

The Critics At:e Wrong About the Future of Free Market Health Care 

-Doug Holtz-Ealdn and Avik Roy 

A Republican Alternative To ObamaCare 

-John C. Goodmanl Goodman Institute 

-John C. Goodman and Peter Ferrara, Duke Center for Health Policy & 

Inequalities Research 

Other 

Jax Deductibility As A Regressive Federal Subsidy 

- Uwe Reinhardt, Health Affairs 

Are HSAs the Key to Making Obamacare Work? 

-Cyril Tuohy, Insurance News Net 

Companies Form New Alliance to Target Health-Care Costs 

-The Wall Street Journal (American Health Policy Institute) 

Why Section 1332 Could Solve the Obamacare Impasse 

-Stuart Butler, Brookings Institution 

Capping The Tax Exclusion Will Not Destroy Employer Health Insurance 

-Joe Antos 

Forget Insurance. These Delaware Docs Only Take Fees 

5 
161 

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-The News Journal, Delaware Online 

Tithing for Healthc_are 

-The Hill 

People could save a lot of money on health care-if only they knew how to use health savings 

accounts 

-Michael A. Fletcher, The Washington Post 

After King v. Burwell: Next Steps for the Affordable Care Act 

-Linda J. Blumberg and John Holahan, The Urban institute 

6 
162 

Mr. THOMPSON. Thank you, Madam Chair. I really do appreciate 

that. 

I have some questions. I have some concerns in terms of access. 

My observation is just because you have coverage doesn’t mean you 

have access to health care. And I think that was the flaw of the 

Affordable Care Act. It focused on health insurance, not health. 

And I just look at premiums and -- I’m sorry, deductibles. I mean, 

we can look at it all differently. But the deductibles, which we really haven’t talked about today. 

It was reported to me about a constituent I have that was recently diagnosed with cancer, that because his deductibles are so 

high today, dramatically higher than what they were, grew faster 

than what they should have, he’s made a conscious decision not to 

pursue care or treatment because when he looks at that annual deduction, at his age, he would really like to be able to pass something along to his children and grandchildren. That’s an awful situation that we have put that individual in with these deductibles. 

And, again, you can have a card in your purse or your wallet that 

says you have coverage, but do you really have health? 

So I like this debate we’re having, and I look forward to it. And 

I’ve managed to use all of my time, but Dr. Troy, you mentioned 

innovation and flexibility in employer-sponsored benefits can help 

reduce the cost of health care for employees, retirees, and dependents. Can you give me just one example of that innovation? 

Mr. TROY. Sure. So just one example, right now I have been 

working with a group of employers on something called the Health 

Transformation Alliance. This is a collection of over 30 employers 

who are working together, sharing data, looking at how to proceed 

based on actual facts and data -- we talked about that here in the 

panel -- in a way to improve the health of employees. And then 

they’re going to go forward with a pharmaceutical initiative, a medical network initiative. And based on the data that they come together with, in order to get better results and better costs. 

Mr. THOMPSON. Thank you, Chairwoman. 

Chairwoman FOXX. The gentleman’s time has expired. 

And I recognize now, Mr. Mitchell, who’s been very patient. 

Mr. MITCHELL. Thank you, Madam Chair. 

Actually the witnesses have been very patient, and we should 

commend you for your endurance if nothing else. Thank you for 

being here. 

I am from Michigan. We have 15 counties that have one insurance carrier right now. Another 25 have only two. Eighty percent 

of the plans in Michigan are much narrower now in terms of providers than they were in 2007. 

Dr. Troy, is there any mechanism within the ACA or any hope 

within ACA that situation will improve in Michigan, which is, in 

fact, a national phenomenon as well? Do you see anything coming 

out of ACA that could possibly fix that? 

Mr. TROY. I don’t see anything coming out of ACA that would fix 

that. I mean, ACA is kind of a static thing right now, and the conversation right now is not about putting something, a new mechanism into ACA that would lead to those improvements that you’re 

seeking. 

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163 

Mr. MITCHELL. I’m not sure we could identify a new mechanism 

which would cure that. But, yes, I don’t see anything there either. 

Before I joined this esteemed body, I was the CEO of a midsize 

company, not a small company, a little larger than yours. The impact, however, was similar in that year one, health insurance costs 

are going to go above 50 percent in year one, not quite 157 percent. 

Question for the two employers in the group. How did you manage the cost increase within your price and your operating structure? How did you manage that cost? I doubt you were able to pass 

that on down the chain. How did you manage that? 

Mr. EDDY. Again, the timing couldn’t have been worse. As was 

stated, I’ve been with the company 21 years now, and I started as 

the new CEO, president and CEO, on January 1, 2009. I’d heard 

a lot about the potential for the Affordable Care Act coming. We 

saw our premiums, our deductibles, you know, the mandates, the 

costs. Again, I’m not sure how you manage without -- with uncertainty. I mean, you know, one of my sayings to my management 

group is, as we lose control, increase your options. Okay? And ACA 

took all of that away. So that really took one of my management 

philosophies away. 

But when you’re looking at annual increases in the mandates 

and the health care, the health insurance industry fees, you know, 

3 percent per year of our premium costs increasing, 2.5 percent per 

year from the mandates changes. And these have continued. It’s 

not a one-time increase. These are annual increases. 

Mr. MITCHELL. Were you able to just pass those costs along, Mr. 

Eddy, to your consumers? 

Mr. EDDY. We have not had the ability to increase our prices for 

the last five or six years because we haven’t seen any GDP growth, 

so our company hasn’t grown but maybe 2.5 to 3 percent on average. That’s in revenues. Our profitability is down significantly. 

With the increase in the mandates and insurance and taxes and 

fees is one thing, but the others are the increases in premiums. It’s 

taken away, as I said, I would like to have grown significantly 

more than we have. We have had the ability to increase our international markets, but we haven’t been able to do that as fast as 

we would like to. 

Mr. MITCHELL. Another question, Mr. Bollenbacher or Mr. Eddy. 

We talked a little bit briefly, a colleague talked about deductibles. 

We haven’t talked about much of that here. I know I’ve seen the 

deductibles go wild for myself and the people close to me. What’s 

been your experience in terms of deductible costs, the increases of 

the last several years? 

Mr. BOLLENBACHER. The deductibles I’m seeing have increased 

from 5 to 8, up to 12,000 recently. 

Mr. MITCHELL. In your opinion, I mean, you’re close to your employees, does that adversely impact their willingness or ability to 

actually access care? I agree with my compatriots that health insurance doesn’t mean you can access health care these days. What 

impact does it have on your employees? 

Mr. BOLLENBACHER. It definitely does. It’s a big hurt for them. 

Mr. MITCHELL. Mr. Eddy, any feedback on that? 

Mr. EDDY. Well, we’re a little different. Again, we have a fully 

employer-funded HRA, the Health Reimbursement Accounts. So it’s 

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164 

a little different for our employees. We still cover 100 percent of the 

deductible. 

Mr. MITCHELL. That’s admirable and not commonplace, I don’t 

think. 

Mr. EDDY. Again, it’s admirable, and it creates a lot of challenges, and we know it’s not sustainable. 

Mr. MITCHELL. Thank you. 

And I’ll yield back, Madam Chair. Thank you very much. 

Chairwoman FOXX. Thank you very much. 

Mr. Lewis, you’re recognized for five minutes. 

Mr. LEWIS. Thank you, Madam Chair. I’m so glad we’re talking 

about employer-sponsored care today and the effects the ACA has. 

I do want to talk a little bit about the individual market that has 

been hit the hardest. If, in fact, you look at Minnesota, it’s been 

hit the hardest. The State of Minnesota had to just do an emergency $310 million subsidized premium plan. We’ll call it that. So 

when we look at what repeal and replace might look like or repeal 

and repair or fix might look like, we know what the status quo 

looks like. 

Before I came to Congress, I was a sole proprietor like many of 

your member businesses. I went through three insurers in 5 years. 

My premiums tripled to the point where we were paying $2,200 a 

month for a $10,000 deductible. A lot of folks here have said health 

insurance is not health care access, and that’s certainly true. Has 

that been the experience of some of your members? 

Mr. BOLLENBACHER. Yes, it has. And I would add that before the 

ACA most of my clients had insurance, if not all of them had insurance, and many of them have been dropped from their insurance 

and been forced to go in the marketplace. 

Mr. LEWIS. Let’s talk a little bit about the employer-sponsored 

market, because it hasn’t just been the individual market. The 10 

essential wellness benefits, the minimum amount of coverage that 

came down from the ACA so that you as business men and women 

had to buy this particular plan that the ACA dictated. Repealing 

some of those, Mr. Eddy, would that solve some of the problem, repealing some of those mandates? 

Mr. EDDY. I believe that it would, Congressman, yes. Again, that 

is one of the options that we’re looking to improve upon, having 

that as maybe another option that we can choose from. 

Mr. LEWIS. You know, this committee and this Congress is dedicated to making certain no one slips through the cracks. We’re 

going to have high-risk pools or some mechanism for people with 

preexisting conditions. But I want to get your take on portability 

and how that applies to people who have that very real problem of 

preexisting condition and can’t get coverage. 

When people get their insurance at work and they work 30 years 

or 25 years, and then they get a little older like me and a little 

sicker, and then they lose their job, they’re thrown into that individual market, and now they’re trying to buy insurance for the first 

time and telling the insurance industry, well, I’m going to have a 

lot of claims here, but I’m just starting my premiums. If we could 

unlock some of that tax advantage from the corporate side to the 

individual side, would it increase portability and solve some of that 

problem? 

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165 

Dr. Troy, go ahead. 

Mr. TROY. Yes, as I was saying in my testimony earlier, that 

some of the Republican plans call for something along the lines of 

association health plans, which would allow individuals to band together and purchase health care in a tax-preferred way in mechanisms other than just through their employer. That would include 

your civic organization, your religious organization, perhaps your 

union. And I think that would help unlock the job lock you’re talking about and also provide possible additional portability. 

Mr. LEWIS. Mr. Eddy. 

Mr. EDDY. Obviously I think it’s a good thing to be able to have 

portability supportive of the preexisting, you know, not having preexisting conditions. So, yeah, I think that would help tremendously. 

Mr. LEWIS. And of course the best way for people to be able to 

afford health care is to have a good, robust, productive job. And to 

the degree that these sorts of regulations, including the ACA, have 

hindered the economy and hindered your ability and your members’ 

ability to employ people, that has a real impact on health care access too, does it not? 

Thank you all. I yield back my time. 

Chairwoman FOXX. The gentleman yields back. 

We were expecting Mr. Smucker, I believe. And there he is. 

Mr. Smucker, you’re recognized for five minutes. 

Mr. SMUCKER. Thank you, Madam Chair. 

I appreciate the testimonies from all of you. I can tell you businesses in my community, I’ve been out throughout the last year 

during a campaign talking to individuals and businesses, and then 

just recently during one of our weeks back in the district met with 

a few businesses, the Affordable Care Act and the impact on health 

insurance in their organizations and for their employees is top of 

the list in terms of their concerns about issues that will impact 

their ability to continue to do business as they have in the past. 

They’re very worried -- I’m thinking of one husband and wife who 

own a company, about 15 employees, who see their employees as 

a family, and then being able to help provide for their medical 

needs is an important part of sort of how they feel about their employees and the makeup of the company. 

And so I’m glad that this is a top priority for us here, and I look 

forward to building a better healthcare system, working with everyone here to build a system that will work for everyone. 

Dr. Troy, as you know, ERISA is the backbone of the employersponsored healthcare system that we’re talking about. Since 1974, 

it has allowed multistate employers to offer uniform benefits to 

their employees across the Nation, reducing costs and allowing for 

innovation. ERISA’s preemption of State laws is a key component 

in the law and one that you said needs to be strengthened. As we 

consider reforms to the healthcare system, how would you recommend the committee strengthen the ERISA preemption? 

Mr. TROY. Thank you very much for that. A good question. 

First of all, ERISA significantly reduces administrative costs by 

allowing multistate employers who self-insure to offer a uniform 

set of health benefits that are generally not subject to the 50 different State laws. So in terms of strengthening it going forward, we 

have been concerned about the increase in State fees and taxes on 

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166 

self-insured health employer benefits in recent years. Some States 

have imposed fees on healthcare claims of self-insured employers, 

including Alaska, Kentucky, Maryland, Massachusetts, Rhode Island, Vermont. 

So we’re concerned about those kinds of taxes going forward, and 

we want to make sure that as we talk in the ACA repeal and reform effort about ways to use State flexibility, which I applaud, 

that we make sure that we still maintain the ability for employers 

to have better ERISA preemption. 

Mr. SMUCKER. Thank you very much. I appreciate that. 

And, again, I’m very much looking forward to working with my 

colleagues and this committee, with the chair, and with other 

Members of the assembly to rebuild an effective healthcare system 

where everyone can have access to the health care that they need 

at a price that they can afford and with the doctor that they 

choose. 

Thank you. 

Chairwoman FOXX. Do you yield back? 

Mr. SMUCKER. I do. 

Chairwoman FOXX. Thank you very much. 

Well, even though I think I have the very best questions, I saved 

mine to the end so that if people want to be going other places, 

they can do that since I know I’m going to be here until the end. 

So I want to say again thank you to all of our witnesses for being 

here. 

Mr. Bollenbacher, yours is a story we’ve heard over and over 

again. The healthcare coverage you had as a small business before 

ACA was working for your company and what your employees 

wanted. However, the ACA forced you out of that coverage -- several times, in fact, as you’ve described -- and added costs and burdens of lesser coverage. 

Can you tell us what your employees liked about the previous 

coverage that you’re not able to offer them today because of this 

failed law? 

Mr. BOLLENBACHER. The plan we had before met their needs. It 

was affordable. They really liked the health savings account feature. Most of my employees are fairly young, fairly healthy, and 

they were able to put money away. As an employer, we put in up 

to $3,000 per year to their accounts. Even when one lady had a 

baby, she had money in her has to help pay for that, so she had 

no money out of pocket. 

Chairwoman FOXX. So it sounds as though what they liked is 

having control, more control over their healthcare dollars and their 

healthcare costs than is available to anyone under the ACA? 

Mr. BOLLENBACHER. Yes, ma’am. That’s correct. 

Chairwoman FOXX. That’s wonderful. Thank you. 

Mr. Eddy, you mentioned in your testimony that one of the most 

challenging aspects of the ACA is the effect that it’s had on your 

employee-employer relationship. Most employers fiercely protect 

that relationship and do not want to do anything to harm it. Can 

you talk about how the ACA forced this tension between you and 

your employees? Did your employees understand that it was the 

ACA and the Federal Government placing new requirements and 

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167 

costs on the company that was forcing you to make difficult decisions? 

Mr. EDDY. Of course I tried to educate our employees, but more 

specifically our United Steel Workers Union, that their best interests as always are our best interests and that we try to take care 

of them. 

The tension obviously arose when we were trying to negotiate an 

increase -- or actually not an increase, but for the first time ever 

that they would have to copay a little bit. And with that, they 

know because I told them that it was ACA, but they look to us to 

take care of them. So from their standpoint, it was a company responsibility to take care of that. 

We have had a situation where for years since I’ve been the 

CEO, I see every employee on the floor on their birthday, as well 

as many other days during the year, and they were impressed with 

that. But after the negotiations on our last contract and having to 

implement, and even with the staff rep agreeing to it, a little bit 

of copay, again, $35 per pay, there were several folks that felt that 

we let them down. And explaining to them that the cost increases 

were not -- we couldn’t sustain as a company, obviously the union 

agreed to it. But we also had to increase their pay rate over the 

life of the contract 4 years to help offset those costs. So it cost us, 

but, again, we were trying to incorporate more accountability for 

them. 

Chairwoman FOXX. Thank you. 

Dr. Troy, there were some comments made about other societies 

in the world these days who provide, quote, ‘‘free health care’’ to 

their citizens. And you mentioned Singapore being a rather homogenous society, much smaller than we are. We’re often compared to 

Switzerland. I don’t know the exact population of Switzerland, 7 

million people or something; Canada, 35 million people. We have 

about 300 million people. 

Is there any other similar culture to ours that provides free 

health care, quote, ‘‘free health care’’ to its citizens. 

Mr. TROY. Look, we are a unique Nation. I am a proud believer 

in American exceptionalism, and I know that we are different. We 

have also tried to be more reliant on private sector health care and 

market. We are not completely there because it’s a mixed system. 

So I think it is hard to compare our approach to different countries 

and say we should adopt, let’s say, the British model or the Canada 

model. Even though we are close friends with those nations, we 

have different systems, and I don’t think their systems would work 

if imported here. 

Chairwoman FOXX. Thank you very much. 

I would like to thank again our witnesses for taking the time to 

testify before the committee today. Other members have said to 

you thank you and that being here does make a difference, and I 

would like to say that to you also. 

I would now like to recognize Ranking Member Scott for his closing remarks. 

Mr. SCOTT. Thank you, Madam Chair, and thank you for having 

this hearing. It gives us an opportunity to flesh out many of the 

problems. This one witness said we all want less cost and more 

flexibility. We have a plan, the Affordable Care Act, where the costs 

CEWDOCROOM with DISTILLER

168 

have gone up, but the studies have shown the costs have gone up 

at about one half the rate they’ve been going up before. People with 

preexisting conditions can get insurance at the standard rate. 

There are no lifetime or annual caps on coverage. Women aren’t 

paying more than men. And instead of millions of people losing 

their insurance every year, 20 million more people have insurance 

than they did. 

There are improvements we know we can make. We could insert 

a public option so in those States where the competition isn’t what 

it should be, you would at least have an opportunity to buy the 

equivalent of a Medicare card. Or you can go to a single-payer plan, 

which would get the health care out of the employer costs. There 

are a lot of things we can do. 

But we still have complaints about the present situation, but it’s 

hard to debate when there is no credible alternative. One thing 

that is conspicuously omitted is, well, what could we do better? We 

have heard about the problems with small businesses. We didn’t 

hear about the horror stories of small businesses if one of your employees happened to have diabetes or you had extremely high costs, 

you were unlikely to get affordable health care under the old days. 

Now you can get it at the standard rate. 

But what is the alternative? We haven’t heard that. We have 

seen some initiatives taken by this administration that have been 

counterproductive. We had an executive order right after the inauguration which essentially suggested a repeal of the Affordable 

Care Act without details, causing great concern and confusion in 

the insurance market. We have the executive order on immigration 

which, as many of the hospital associations have indicated, disrupts their ability to get students and professionals from other 

countries. We had the ads pulled at the last minute, making it 

more likely that the healthy, younger enrollees might not get the 

word and might not enroll. That just increases the costs for everybody. 

So we have a lot of work to do. But until we have some credible 

alternatives, it’s hard to have a coherent debate. I would just hope 

that we would agree that we’re not going to do any repealing until 

we have a replace ready to go, and if that is the discussion, we 

have something to talk about. But if the idea is to repeal and inject 

total chaos in the insurance market, making it likely that nobody 

can buy insurance, we’re not going to be very cooperative in that 

effort. 

So, Madam Chair, thank you for having the hearing and allowing 

these issues to be voiced. 

Chairwoman FOXX. Thank you, Mr. Scott. 

I also am going to enter into the record some facts about our situation before the Affordable Care Act and during the Affordable 

Care Act, key facts on ObamaCare and health care. There have 

been so many numbers tossed about here. Your members, you’ve 

just said 20 million more people have gotten health insurance, but 

your Members have thrown around the number 30 million are 

going to lose their insurance. So it’s a little difficult to keep track 

of all of these numbers that are being thrown around. But I do intend to put a fact sheet into the record today. 

[The information follows:] 

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Key Facts on Obamacare 

1/23/2017 

• 25% average increase in premiums this year for the millions of 

Americans trapped in Obamacare HealthCare.gov exchanges 

(Source: HHS) 

• Nearly 1/3 of US counties have only 1 insurer offering exchange 

plans (Source: Kaiser Family Foundation) 

• 4.7 million Americans kicked off their health core plans by 

Obamacore (Source: Associated Press) 

• $1 trillion in new taxes, mostly falling on families and job 

creators (Source: Senate Budget and Finance Committees) 

• 18 Failed Obamacare Co-Ops out of 23, which were 

established as an alternative to the pubic option, have 

collapsed, costing taxpayers nearly $1.9 billion and forcing 

patients to find new insurance. (Source: House Energy and 

Commerce Committee) 

• $53 billion in new regulations requiring more than 176,800,000 

hours of paperwork (Source: American Action Forum) 
170 

Chairwoman FOXX. Forty-eight million Americans did not have 

health care before the Affordable Care Act. I happen to have the 

numbers on that, and I’ll be entering that into the record. I think 

I just heard you say again that there are no credible alternatives, 

and yet Mr. Thompson just sat here five minutes ago and presented six pages of bills that have been presented as credible alternatives. So I think we have to constantly do fact-checking around 

here to give the real facts about what’s happening. 

Ms. Schlaack, I want to say, along with my colleagues, that we’re 

sorry for your loss. But I was very intrigued in your comments that 

all of the examples you used about the great coverage that you got 

came under your employer-sponsored health care as a result of 

your husband’s terrible illness and not as a result of the ACA, and 

yet it was implied that the coverage that you got came under the 

ACA. So we all want to share our concern and support for you in 

your loss. But I noted that in your written testimony, as well as 

in your spoken testimony. 

So I do think that the hearing today has been helpful and I think 

has brought out a lot of good information about the negative impact 

of the ACA, particularly on working people in this country. That’s 

where I think the real problem has been. And I would like to thank 

you all for coming again and tell you that we look forward to working with you on an alternative to this. 

And with that I -- 

Mr. SCOTT. Madam Chair, may I make a brief comment, just 

very brief, because I think Ms. Schlaack’s comment was she had 

employer-based coverage as well, but her husband died. 

Ms. FOXX. Right. 

Mr. SCOTT. She lost the employer, but had the marketplace as 

the safety net. 

Chairwoman FOXX. Thank you very much for that clarification, 

Mr. Scott. 

There being no further business, the committee stands adjourned. 

[Additional submissions by Mrs. Foxx follow:] 

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Breaking Down the Uninsured 

Uninsured1 

Non-Citizens2 

Eligible for Public Programs3 

Higher Income (+$84,108/yr/ 

Only Temporarily Uninsured5 

American citizens, lower income, 

long-term uninsured 

Sources 

1 U.S. Census Bureau Current Population Survey 

45.7m 

-9.5m 

-12m 

-7.3m 

-9.1m 

7.8m 

2 Health Insurance Coverage: Characteristics of the Insured and Uninsured Populations in 

2007, Congressional Research Service 

3 National Institute for Health Care Management Foundation analysis of data from the 

March 2007 Current Population Survey 

4 National Institute for Health Care Management Fmmdation analysis of data from the 

March 2007 Current Population Survey 

5 1999 and 2002 National Survey of America's Families (nonelderly population) 
172 

[Additional submission by Mr. Scott follows:] 

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Press Release 

Statement on President Trump's Executive Order on 

Immigration 

Rick Pollack 

President and CEO 

American Hospital Association 

A strong health care workforce is critical to ensuring patient access to high-quality care. 

However, we are concerned that, without modification, President Trump's executive order on 

immigration could adversely impact patient care, education and research. 

We are hopeful that the Administration will find solutions to preserve patient access to medical 

and nursing expertise from across the globe, ensuring care is not disrupted. 

Hospitals and the patients we serve often rely on international collaboration among clinicians to 

advance care, and an efficient visa program is essential to their success. We rely on a diverse 

workforce to deliver the care patients and families need. We will work with the Administration 

to come to a solution that patients can continue to rely on for their care. 

About the AHA 

The AHA is a not-for-profit association of health care provider organizations and individuals that 

are committed to the health improvement of their communities. The AHA is the national 

advocate for its members, which include nearly 5,000 hospitals, health care systems, networks, 

other providers of care and 43,000 individual members. Founded in 1898, the AHA provides 

education for health care leaders and is a source of information on health care issues and trends. 

For more information, visit the AHA website at www.aha.org. 
173 

[Questions submitted for the record and their responses follow:] 

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April 28, 2017 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE U.S. HOUSE OF REPRESENTATIVES 

2176 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6100 

Mr. Scott Bollenbacher, CPA 

Managing Partner 

Bollenbacher & Associates, LLC 

9 I 5 North Meridian Street 

PO Box 702 

Portland, IN 47371 

Dear Mr. Bollenbacher: 

ROI!fRTC 'fiOSSV'SCOH.VlRG!NIA 

Ril'li>PigMamU!t 

Thank you, again, for testifying at the Committee on Education and the Workforce hearing 

entitled "Rescuing Americans ti·om the Failed Health Care Law and Advancing Patient-Centered 

Solutions." 

Please find enclosed additional questions submitted by Committee members following the 

hearing. Please provide written responses no later than May 12,2017, for inclusion in the official 

hearing record. Responses should be sent to Callie Harman of the Committee staff, who can be 

contacted at (202) 225-7101. 

We appreciate your continued contribution to the work of the Committee. 

Sincerely, 

u Jil5t~V (AA ~{>( Virginia Poxx 

Chairwoman 

Enclosure 

CC: The Honorable Robert C. "Bobby" Scott, Ranking Member, Committee on Education and 

the Workforce Committee 
174 

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Rep. Barletta (P A) 

I. Mr. Bollenbacher, you know as well as anyone that President Obama's health care Jaw is 

a law that was built on false promises. Many Americans are now paying more for less. 

As a former small business owner, I know that employers want to offer their workers 

competitive benefits. It's how you keep good employees. I've heard from a constituenta farmer- who is also of this mindsct. He values his employees and their hard work, and 

respects their contributions by paying for their healthcare premiums himseiC This was, of 

course, before 2013. Aller passage of the legislation, the Obama Administration issued 

guidance preventing him from doing so directly. Instead, he must augment their 

salaries. As a result, they are subject to payroll tax on the supplement. He is effectively 

being punished for doing what is right for his employees. 

This is a theme that has pervaded our government for the past eight years. Time and 

again, we have seen federal bureaucrats implement flawed policies that ignore the reality 

that small employers across the country are doing the right thing, and have been for 

years. Again, employers know: it's how you keep good employees. 

fortunately, the House and Senate passed the 2!'t Century Cures Act last year, which has 

since been signed into law. Included in the measme is a provision that allows small 

employers to offer a tax-preferred qualified health reimbursement anangemcnt, or HRA, 

to cover premiums. This is a good first step, but, we must work harder to make it easier 

and less costly for individuals like my constituent to provide the benetits that their 

employees deserve. 

What other recommendations would you suggest as we work toward this goal? 

Rep. Stefani!' (NY) 

1. Mr. Bollenbacher, like many of your employees who cross state lines from home to work 

and back, many ofrny constituents live in New York, work in Vermont and cross the 

state line each day. It's important to me that individuals have the flexibility to purchase 

the coverage that they need and want, whether in New York, Vermont, Indiana or even 

Ohio. 

Has the lack of health plans that meet your employees' unique needs negatively affected 

the ability of your business to compete on the job market? 

Can you elaborate on the difficulties you have faced trying to find a plan that covers your 

employees that live and work in two difterent states? 
175 

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April 28, 201 7 

Mr. Joseph Eddy 

President & CEO 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE U.S. HOUSE OF REPRESENTATIVES 

2176 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6100 

Eagle Manufacturing Company 

2400 Charles Street 

Wellsburg, WV 26070 

Dear Mr. Eddy: 

R.Oil~RTC •eoesy·scoTT, VIRGINIA. 

H~r,l;h"JM"wbe< 

Thank you, again, for testifying at the Committee on Education and the Workforce hearing 

entitled ''Rescuing Americans from the Failed Health Care Law and Advancing Patient-Centered 

So!utionS. 11 

Please Jlnd enclosed an additional question submitted by a Committee member following the 

hearing. Please provide written responses no later than May 12, 2017, for inclusion in the official 

hearing record. Responses should be sent to Callie Harman of the Committee staff, who can be 

contacted at (202) 225-710 I. 

We appreciate your continued contribution to the work of the Committee. 

lPt-1~-~y 

Virginia l'oxx 

Chairwoman 

Enclosure 

CC: The Honorable Robert C. "Bobby" Scott, Ranking Member, Committee on Education and 

the Workforce 
176 

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Hcp. Stefani!< (NY) 

1. Mr. Eddy, in your testimony you mentioned how expensive and onerous the ACA has 

been for a small business owner like yourself. My family has owned a small wood 

products business for many years and always prided itself on providing a robust and 

generous benellts package to our employees until it was cancelled in 2013 because of the 

ACA and the business had to get a more expensive plan that covered less. Unfortunately, 

the ACA led us to cancel that coverage/that coverage was cancelled due to the ACA for 

the llrst time in om history. 

Can you tell me how the ACA has affected your ability to provide coverage for your 

employees? 

How has this law has affected your ability to attract and retain highly-skilled employees 

for your business? 
177 

[Responses to questions submitted for the record follow:] 

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SCOTT 130LLENBi\CIIER ANSWER FOR REPRESENTATIVE BARLETTA"S QUESTION 

FOR TilE RECORD: 

Small employers did routinely utilize direct payment or reimbursement arrangements to help 

employees purchase individual market coverage. NFIB Research Foundation estimated 16 

percent of small businesses utilized a reimbursement arrangement to help employees purchase 

health insurance on their own in 2015, which was after the prohibition date took effect. Many 

employers were unaware of the prohibition. Jn my experience, churches utilized these 

arrangements to assist with pastors· health insurance premiums. The arrangement worked well 

for both the pastors and the churches. 

To improve these arrangements, l recommend li fling or removing the $4,950 individual!$! 0,000 

ramily contribution caps because premiums arc more than these cap thresholds. 

or the Administration could also allow lor a Special Enrollment Period (SEP) 

Reimbursement Arrangements (IIRJ\s). i\ special SEP would be helpiitl because the 

21st Century Cures i\ct was enacted (12/13/16) so close to the open enrollment deadline 

(01/31/17) that few small businesses knew about the restoration of the arrangements and 

eliminations of the penalties. Treasury and TRS did not issue any regulations or guidance before 

the open enrollment deadline. 

SCOTT BOLT.EN!li\CIIER ANSWER TO REPRESENTATIVE STEFANIK'S QUESTION 

FOR TilE RECORD: 

We treat our employees like ii1mily and do our best to work out f(ll' their needs, but tinding a 

policy that is on both sides of the border docs add another variable that other linns may 

not need to We must lind a that is accepted by doctors and hospitals on both 

sides of the state line. This broader requirement clitninatcs certain plans from 

consideration by our firm. but we shopped around to different insurance agents sec whether 

multiple options existed. 

Af'ter ~rvc lost our insurance in the f~lll ol'20161 1 contacted three to provide quotes. They 

all came back with the same policy and the only dil'fcrcnccs were So, 

basically, we had only one choice. I reel it would be so much more beneficial to both employees 

and companies if they had more than once choice. 

9! '5 N. Mt'ridi~m .Stn:<.:t • EO. Box 702 • Portland, lN 17:371 

Phone: 260.72(;/i207 • Tol! Free: SRR.492.2445 • h1x: 260.726.4678 • www.ballc-cpa.com 
178 

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~ 

EAGLE 

EAGLE MANUFACTURING COMPANY 

Protecting People, Property & the Planet 

May 31, 2017 

The Honorable Virginia Foxx, Chairwoman 

Committee on Education and the Workforce 

U.S. House of Representatives 

2176 Rayburn House Office Building 

Washington, DC 20515-6100 

RE: Response to Representative Elise Stefanik 

Dear Chairwoman Foxx: 

Thank you for the invitation to testify before your Committee on Education and the 

Workforce at the hearing entitled "Rescuing Americans from the Failed Health Care Law and 

Advancing Patient-Centered Solutions." I am responding to additional questions as submitted 

by your Committee member Representative Elise Stefanik (NY), as follows: 

Can you tell me how the ACA has affected your ability to provide coverage for your employees? 

And, how has this law affected your ability to attract and retain highly-skilled employees for your 

business? (Rep. Elise Stefamk) 

At Eagle, we are proud of our long-standing tradition of covering 100% of medical costs for 

our employees, not because of government mandates or policies, but because it is the right 

thing to do for our employees and our community. Unfortunately, the past few years under the 

ACA have made this prior commitment financially impossible to continue at the present time. 

The ACA, with its taxes, fees and regulatory requirements, now costs our company an 

additional $1,000 annually per employee. In addition, the ACA has significantly increased our 

annual healthcare costs from $13,500 per employee in 2009 (before the ACA), to over $26,500 

per employee for 2017. 

With nearly 200 employees, this additional cost and rate of increase is neither affordable nor 

sustainable, and adversely affects our company's financial status to a serious degree. In order 

to continue to cover our employees, for the first time in the company's history we were forced to 

seek concessions from our union and salaried employees for a co-payment of a small 

percentage of their healthcare costs ($40/pay for union and $75/pay for salaried personnel). As 

small an amount of co-pay as this appears, it still has acted to negatively impact the trust and 

partnership between the company and our employees. 

Like most other manufacturers, our number one business concern is the dramatic increase 

in healthcare costs, which clearly is a factor concerning decisions on hiring new workers, 

retirements, maintaining competitive pay rates, and expenditures for capital investments for 

new machinery and new product tooling. As a further result of these major cost increases, the 

ACA has limited our competitive carrier options, and has reduced our flexibility in plan designs. 

Overall, the ACA has been a costly, disruptive and distracting legislative program which 

severely hampers our company from accomplishing the things relating to our manufacturing 

industry. 

Safety Cabinets • Safety Cans • Spill Containment • Poly Drums • Material Handling 

2400 Charles Street, Wellsburg, West Virginia 26070 

P/304-737·3171 F/304-737-1752 sales@eagle-mfg.com www.eagle-mfg.com 
179 

[Whereupon, at 1:01 p.m., the committee was adjourned.] 

Æ 

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Page 2 

Because our company continues to have one of the best healthcare programs for 

employees in the area, we do not have much difficulty attracting and retaining highly-skilled 

employees. However, this comes at a great cost to the company, and as noted above, is no 

longer something that we can sustain even on a short-term basis. Therefore, as we are forced 

to increase co-pays, reduce quality of coverage, and limit our employee's healthcare options in 

the future, we expect that our ability to attract and retain quality employees will ultimately 

become much more of a business concern. Obviously, having a healthcare program that 

attracts potential highly-skilled employees will continue to create significant challenges. 

I trust that the above perspective helps to address the specific issues raised by 

Representative Stefanik. Please thank her for her important and relevant follow-up questions. 

Again, I appreciate the opportunity to present the concerns of not only Eagle Manufacturing 

Company, but also manufacturers throughout our state and country with regard to the negative 

impact of the ACA. 

All the best, 

Joseph C. Eddy 

PresidenUChief Executive Officer