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86–723 PDF 2014

OBAMACARE IMPLEMENTATION: STICKER SHOCK 

OF INCREASED PREMIUMS FOR HEALTHCARE 

COVERAGE 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

NOVEMBER 22, 2013 

Serial No. 113–78 

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

( 

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

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

Vacancy 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

STEPHEN CASTOR, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

Hearing held on November 22, 2013 ...................................................................... 1 

WITNESSES 

Mr. Dan Waters, Preesident, Dan Waters & Associates 

Oral Statement ................................................................................................. 7 

Written Statement ............................................................................................ 9 

Ms. Sherry Overbey, Director, Belmont Crisis Pregnancy Center 

Oral Statement ................................................................................................. 11 

Written Statement ............................................................................................ 13 

Mr. Joel Long, President, Gastonia Sheet Metal Services 

Oral Statement ................................................................................................. 15 

Written Statement ............................................................................................ 17 

Mr. Jason Falls, Owner, Falls Insurance 

Oral Statement ................................................................................................. 21 

Written Statement ............................................................................................ 23 

Mr. Tav Gauss, President, The Action Group Human Resources Solutions 

Oral Statement ................................................................................................. 27 

Written Statement ............................................................................................ 29 

APPENDIX 

Inserts for the Record, 2 Articles offered by Chairman Issa, and Excerpts 

from the Heritage Report on Healthcare Costs Under the ACA ...................... 46 

(1) 

OBAMACARE IMPLEMENTATION: STICKER 

SHOCK OF INCREASED PREMIUMS FOR 

HEALTHCARE COVERAGE 

Friday, November 22, 2013 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

WASHINGTON, D.C. 

The Committee met, pursuant to call, at 10:05 a.m., in the Gaston County Courthouse, 325 North Marietta Street, Gastonia, 

North Carolina, Hon. Darrell Issa [Chairman of the Committee] 

presiding. 

Present: Representatives Issa and McHenry. 

Also Present: Mr. Pittenger. 

Staff Present: Drew Colliatie, Professional Staff Member; Linda 

Good, Chief Clerk; Meinan Goto, Professional Staff Member; Mark 

D. Martin, Deputy Staff Director for Oversight; and Rebecca Watkins, Communications Director. 

Chairman ISSA. The Committee will come to order. 

As is the practice in the House of Representatives, every morning 

we begin our ceremony with the Pledge. Since we are here and not 

in the House, I have asked Congressman Pittenger to lead us in 

the Pledge. 

Will you all please rise? 

[Audience rises.] 

[Pledge of Allegiance recited.] 

Chairman ISSA. Please be seated. 

The Oversight and Government Reform Committee exists to secure two fundamental principles. First, Americans have a right to 

know that the money Washington takes from them is well spent. 

And second, Americans deserve an efficient, effective government 

that works for them. 

Our duty on the Government Oversight and Reform Committee 

is to protect these rights. Our solemn responsibility is to hold government accountable to taxpayers, because taxpayers have a right 

to know what they get from their government. It is our obligation 

to work tirelessly in partnership with citizen watchdogs to deliver 

the facts to the American people and to bring genuine reform to the 

federal bureaucracy. 

I regret that there are no Democrats here today. Mr. Cummings 

had initially said he would be able to make it and then said he 

could not. 

I would now ask unanimous consent that the gentleman from 

North Carolina, Mr. Pittenger, who is not a member of the comVerDate Aug 31 2005 13:37 Feb 24, 2014 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\86723.TXT APRIL
2 

mittee but a member of Congress in good standing, be allowed to 

participate in the hearing today. Without objection, so ordered. 

In a sense, I made my opening statement before we even began. 

In another sense, today is a day that no American can start his day 

without thinking that 50 years ago today, John F. Kennedy died in 

Dallas, Texas. I was 10 years old. He was only in his mid-40s. 

Medicare had not been created. Most of government spending 

disproportionately was on the military, more than half. Healthcare 

was important and talked about, but it was mostly veterans, Indian health; and quite frankly, after that, most healthcare was not 

delivered through federal means. Much has changed over those 50 

years. 

America has, on a bipartisan basis, established Medicare to secure healthcare for the elderly. We have expanded a number of 

other healthcare programs and three and a half years ago, President Obama signed into law the Patient Protection Affordable Care 

Act. We are not here today to question that Act or its validity. 

What we are here today is to review what is happening in light of 

its rollout. 

Our committee has primary jurisdiction over a number of areas, 

and you have seen it, you have seen us dealing with the failure of 

the website, which per se is not the failure of Obamacare, it is a 

contracting failure. And we will continue to work to try to reform 

the systems that deliver information from the federal government 

to all of you. 

At the same time, the rollout of the Affordable Care Act has had 

major problems. The most important one to me is the access to 

care. More than four and a half million Americans have lost the 

plans they have so far. That is about 44 people losing their plans 

for each one getting into an exchange under the Affordable Care 

Act. We need to do better. 

Under the Affordable Care Act, it was forecasted that rates 

would go down by $2500 per family. So far, they have gone the opposite way. We are here in North Carolina because it is one of the 

states with one of the higher raises in care. For many people, the 

Affordable Care Act also means not only higher initial payments, 

but higher deductibles. 

The President has responded to this ad launch, if you will, by 

proposing that people should be able to keep plans they already 

have. We will, as a committee, look into whether that is feasible, 

can we get people to be able to stay in plans they have, plans that 

cost less, plans that have lower deductible. This will require legislation, it will not be done alone by presidential action. But I believe 

that Congress, once they have heard all the facts, looked at viable 

legislation, worked with insurers to find out what they can do and 

maintain their financial integrity, with hospitals and other 

healthcare providers, what they can do—we will react. 

Today’s hearing is really about that. We know some of the problems, the most important of which is access and then affordability. 

Those are important issues that we are going to hear from our witnesses today and in the days to come. 

I want to thank our witnesses for being here today. I look forward to their testimony and I now recognize the distinguished genVerDate Aug 31 2005 13:37 Feb 24, 2014 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\86723.TXT APRIL
3 

tleman on this side from North Carolina, Mr. McHenry, for his 

opening statement. 

Mr. MCHENRY. Thank you, Mr. Chairman. And first of all, I 

would like to welcome you back to western North Carolina and to 

the town I grew up in, my hometown of Gastonia. And our host 

today, the Gaston County Commission, in their chambers here in 

Gastonia. 

It is a particularly special thing because I grew up just two miles 

from where we are sitting here with a big rambling family and 

what I saw in Gastonia and Gaston County is what most of the 

country has experienced with tough economic times. We just experienced it over a longer period of time with the loss of textiles and 

much of manufacturing in this country. So the town I grew up in, 

I saw declining wages, I saw less economic opportunity because 

high paid manufacturing jobs, textile jobs, were going overseas. So 

the loss of benefits, loss of pay is something very real to me because I lived it and saw it with my friends and neighbors growing 

up here in Gastonia. 

So it is of particular concern today when we are talking about 

the cost of health insurance and access to health insurance. Access 

and cost are often linked. So I brought Congress to North Carolina 

to understand the real impact of Obamacare on real Americans. 

And while the President is talking about administrative fixes 

and tech searches, what I am most concerned about and focused on 

are people. That cannot be lost in this whole thing about stats and 

statistics—the actual real people that are being adversely affected 

by this law. Now there are some folks that are benefitting from the 

law, but by and large, most folks are feeling the pain as a result 

of higher insurance costs. 

Here in the Tenth District, my constituents are struggling, they 

are struggling to understand why the health insurance policies 

they like are being canceled. They are struggling to make ends 

meet now that healthcare costs are going up two or three times 

what they were before. Ultimately, they are struggling because of 

broken promises of this administration under this healthcare law. 

Few states have been as hard hit by Obamacare’s broken promises as North Carolina. It was promised that signing up for 

healthcare will be as easy as shopping on Amazon or booking a 

flight on Kayak. Yet, through the first four weeks, only 1662 North 

Carolinians managed to select a plan on Healthcare.gov. 

The President promised that if you liked your health insurance, 

you could keep it under Obamacare. Yet, over 180,000 North Carolinians have received notices that their policies, the ones that they 

chose and liked, are being canceled. The President claimed that 

these issues are temporary and can be resolved. He said the 

website will soon be fixed, although the Administration’s definition 

of fixed is that one in five Americans who try to log on will still 

not be able to log on to the website. That is not acceptable. 

President Obama admitted he misled the American people when 

he said if you like your plan, you can keep it. Another administrative fix was in order to resolve that promise. 

Regrettably, nothing will fix the broken promise that has hurt 

the people of North Carolina the most. President Obama promised 

this law would bring down health insurance costs. But North CaroVerDate Aug 31 2005 13:37 Feb 24, 2014 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\86723.TXT APRIL
4 

linians are not seeing prices go down. They are seeing the complete 

opposite, as prices have simply gone up. Prior to the exchanges 

opening, Forbes magazine reported a study that estimated underlying premium prices for health insurance in our state would increase 136 percent on average. No administrative fix or tech search 

will resolve that troubling statistic that affects people. These exorbitant premium prices do not discriminate either. In North Carolina, it does not matter if you are a man or a woman, young or old, 

you are likely to see premium prices go up. 

Older North Carolinians in particular are hardest hit. Forbes reported the average premium price for women age 64 in North Carolina would increase over 180 percent. These folks are often early 

retirees or have lost their jobs, their well-paying, good-paying jobs, 

and yet are not eligible for Medicare yet. They are usually on fixed 

incomes and cannot afford to pay nearly double what they were 

previously paying for their health insurance. 

These are people like a constituent of mine, Roberta, here in 

Gastonia. She ended her career early to take care of her ailing 

mother. She had a policy that cost her $150 a month for health insurance, but it was canceled. The new Obamacare-compliant policy 

costs over $500 a month. She cannot afford that. 

There is Jonathan, in Iron Station, just up in Lincoln County. He 

has a fixed income of $950 a month. You may not know Jonathan, 

but we all know a Jonathan who is under this similar circumstance. His new insurance policy price tag is $350 a month. He 

cannot afford that. 

Tom, in Hickory, retired at age 62 due to a downturn in the economy and losing his job. His premiums jumped from 450 bucks a 

month to over $1200. He cannot afford that. He does not know how 

he is going to be able to get health insurance now and he said he 

is likely to go uninsured until he is eligible for Medicare in a couple 

of years. 

We all know a Tom. We all know a Tom, we all know a Roberta, 

we all know a Jonathan. This is about people. 

So when we talk about government policy in our discussion 

today, I think it is important that we think in those terms. And 

I am sure our witnesses here today, a great panel, will be able to 

talk more about this and how they are dealing with the day-to-day 

consequences of this failed healthcare reform. 

Now it is a particular honor to have a hearing from Congress 

anywhere outside of Washington. And today, as I said to Chairman 

Issa, that North Carolinians, even if we disagree, are a polite lot. 

Heck, we are Southern, cannot help it, can we? So even when we 

disagree, we can do it in an agreeable fashion. 

I appreciate the Chairman starting the hearing out with that 

tone because southern California has some of those same qualities 

as the real south, right? 

But if I may, Mr. Chairman, I do want to recognize our host and 

the distinguished elected officials we have here today. As I said, 

our county commissioners here in Gaston County have given us use 

of this chamber, and I want to thank the full county commission. 

But in particular, our two county commissioners that are here 

today—Mr. Tracy Philbeck and Jason Williams. Thank you. 

5 

And additionally, we have our Register of Deeds here in Gaston 

County, who is here today, Susan Lockridge, thank you. 

We also have State Representative Dana Baumgardner, is here 

today; former State Representative Mike Harrington; and our State 

Senator for Gaston County, Kathy Harrington. Thank you. 

And then finally, on a healthcare note, we have our hospital administrator for our local hospital here in Gaston County for our region, Doug Lockett—sorry—Luckett—sorry. Doug, thank you so 

much for being here. 

And then finally, I want to thank our Sheriff, who secures this 

courthouse for judges and for the public on a daily basis and serves 

our county in a very able fashion. Has been a distinguished public 

servant and I would consider him a friend, and that is Alan 

Cloninger. Thank you, Alan, for your service to our county and for 

hosting us here today. 

And with that, Mr. Chairman, I thank you for the generosity of 

your time and I yield back. 

Chairman ISSA. Thank you. 

Mr. Pittenger. 

Mr. PITTENGER. Thank you, Mr. Chairman. I do appreciate this 

time that you have yielded to me. 

Chairman ISSA. Well, thanks for letting us come to your district. 

Mr. PITTENGER. Well, I came to Mr. McHenry’s district. And I appreciate the courtesy that Congressman McHenry offered, and your 

coming here, it means a great deal to all of us in our region, that 

you would bring you and this committee to listen, to learn of the 

challenges, the difficulties, that are faced with the individuals and 

businesses and the complexities and the problems of Obamacare. 

While I do not sit on this committee, I do appreciate the impact, 

the effects that the Affordable Care Act is having on hard-working 

tax-paying Americans. 

This hearing will shed light, I am sure, on the problems that 

North Carolinians have faced as a result of the healthcare plan. My 

office, frankly, continues to receive a barrage of emails and phone 

calls every single day, of personal concerns that individuals have. 

Tom Mount is here today from my district. We were on a Google 

chat yesterday where he shared his experience. He has an IT background and business experience in terms of processing. And the 

real challenges that are out there, even affecting our personal information that can be exploited because it is not properly assessed 

and addressed on their system to date. 

We are aware that only 100,000-plus people have been able to 

process out their healthcare through the current system, while currently five million people have been denied their healthcare. Upwards to 10 million we expect to hear by the end of this year will 

be denied their personal healthcare. So these are very troubling. 

Congressman McHenry shared the numbers in North Carolina. 

Premiums are going up, you know, 200 percent on many healthcare 

plans. 

So all these are a basis for a real concern of why it is important, 

particularly in our state, to hold this hearing. 

I do realize that the promise that Mr. Obama made said that you 

could keep your healthcare plan if you wanted to, frankly appears 

to be very misleading and we need to understand the impact that 

6 

that statement has had on many people. Today, the American people and our state deserve to have their voice heard and your coming out today to these fine witnesses and all those who are here, 

to sense the real concerns, we appreciate your being here. We are 

your public servant and we are here to do the job for you. So thank 

you, Mr. Chairman, again, for allowing me to be here and for conducting this hearing. 

Chairman ISSA. Thank you, Rob. 

I now ask unanimous consent that the Manhattan Institute, a 

Published Study of State-by-State Analysis of the Impact of 

Obamacare Premiums be placed in the record. Without objection, 

so ordered. 

Additionally, I ask that excerpts from USA Today today and excerpts from the Heritage Report on Healthcare Costs under the Affordable Care Act be placed in the record. Without objection, so ordered. 

Additionally, I ask unanimous consent that all members may 

place additional and extraneous material in the record for up to 

five days after this hearing. Without objection, so ordered. 

Lastly, as I said before the hearing opened, I ask general leave 

that individuals present today may have up to five days to submit 

additional written material as a result of their attendance here, for 

the record. Without objection, so ordered. 

We now go to our distinguished panel of witnesses. 

Mr. Dan Waters is President of Dan Waters and Associates. Welcome. 

Ms. Sherry Overbey is Director of the Belmont Crisis Pregnancy 

Center. Again, welcome. 

Mr. Joel Long is President of the Gastonia Sheet Metal Services. 

I guess that is one of the remaining heavy manufacturers. Welcome. Thank you for being here. 

Mr. Jason Falls is owner of Falls Insurance. Again, thanks for 

your presence. 

And lastly, Mr. Tav Gauss is President of The Action Group 

Human Resource Solutions here in North Carolina. 

Pursuant to the committee rules, all witnesses must be sworn. 

Will you please rise and raise your right hands to take the oath. 

[Witnesses sworn.] 

Chairman ISSA. Please be seated. Let the record reflect that all 

witnesses answered in the affirmative. 

This is a field hearing. It is just as formal as anywhere else in 

Congress. One of the formalities that we observe is that your entire 

opening statements be placed in the record. However, we observe 

a five-minute rule and, to the greatest extent possible, equally enforce it against ourselves for each round of questioning. So when 

you see the light go from green to yellow, it’s just like here in 

North Carolina, you had better hurry, or else. 

[Laughter.] 

Chairman ISSA. When it gets red, if you are in the middle of a 

phrase, please finish it, but do not start a new subject. It will be 

placed in the record in its entirety. 

Additionally, during questioning, it is often possible if you have 

left something out of your opening statement to essentially answer 

it as part of a question. 

7 

And I will do the same for those of us on the dias. We may go 

multiple rounds, but our last question, you will have as much time 

to answer as is reasonable, but we will not ask another question 

after we have gone to red, until the next round, if necessary. 

So I want to thank you all for being here, and Mr. Waters, I am 

told that I kick off with you first. You are recognized for five minutes. 

WITNESS STATEMENTS 

STATEMENT OF DAN WATERS 

Mr. WATERS. Thank you, Chairman Issa. 

My name is Dan Waters and I’m President of Dan Waters and 

Associates in Hickory, North Carolina. I am a lifetime resident of 

Catawba County and a graduate of Lenoir Rhyne University with 

a degree in economics. I have served the people of Hickory as an 

insurance agent and broker for 33 years. 

During my tenure in the insurance industry, I have seen companies come and I have seen companies go. I have seen policies 

change and policies terminated. I have offered Basic Benefits, Basic 

Benefits with Extended Coverage, Basic Benefits plus Major Medical, and Comprehensive Major Medical. At no time did these benefits require 2700 pages of explanation, let alone 2700 pages that 

neither the clients, their agents or their Congressional Representative fully understand or have personally read. 

Now, agents and brokers are tasked with the challenging job of 

trying to explain this complex law to our groups and to individuals. 

Everywhere we turn, there is confusion, misinformation, questions 

about the programs offered, cost of premiums, tax ramifications 

and more. 

In order to prepare brokers and agents, they have been attending 

seminars, webinars, reading the NAHU Washington Updates, taking the required PPACA certificate course, better known as—we 

call it P–PACA. In addition, we have been keeping up with the latest technology tools for group clients as well as individuals. Our 

goal is to be able to communicate the benefits in an understandable 

way, quote the accurate premiums and in general allay the fears 

and concerns of our clients with regard to new plans. 

Some examples of these concerns are—I am hearing from my office on a daily basis like you have: 

I like my current plan. Why can I not keep it? 

Why do I have to pay for benefits I will never use such as maternity benefits, birth control, pediatric vision and dental, rehab services? 

How will I pay for higher deductibles I must have in order to 

make my plan affordable? 

Do I qualify for a subsidy? Why do I not qualify for a subsidy? 

Why is my health care premium so much higher than before? 

And then some say I don’t want to pay for insurance. Why is it 

not my right to choose without having a penalty? 

Do our current medical policies need to be changed in many 

ways? Some reasonable parties will agree that this is the case. Do 

we want to provide coverage for those who can’t afford it, but need 

it or want it? Yes, definitely. Should there be a way for Americans 

8 

with preexisting conditions to keep or get coverage at a reasonable 

rate? Yes, of course. Is the government mandated Affordable Care 

Act, requiring all policies meet the same minimum standards, regardless of the needs or stage in life, the answer? I would say from 

the reaction of my clients, that would be a resounding ‘‘no.’’ 

As soon as the ACA became law, PPACA, Obamacare, became 

law, our office phones were ringing with questions as to what it 

means for our clients, particularly our individual clients. After the 

cancellation notices were received, new premiums were announced, 

those calls and the frustrations of our clients increased exponentially, since clients found their monthly costs more than doubling. 

An example of what I am saying is my wife had a monthly premium of $396 with a $2500 deductible was canceled and will be replaced with a premium of $735 with a higher deductible. And as 

with many of our clients, she is choosing to go with a significant 

increase in her deductible in order to reach a reasonable cost. Since 

the recent announcement of the President that people could keep 

their current plans, a large portion of my individual clients are 

seeking to wait and do just that, if the laws permit. 

I fear that the mandatory ACA will be detrimental to my community as a whole. We have experienced an economic downturn in the 

last decade resulting in industries closing, a depressed housing 

market, an overall lowering of disposable income. While struggling 

employers are required to pay more in benefits, either they will be 

forced to reduce their workforce, contribute less to the employees’ 

health plans, or drop those plans altogether. Less income on the 

part of the business or the individual translates into less spending 

and less growth for our area. 

Thank you for your time to consider these important matters and 

for the opportunity to share my concerns. It is my hope that together we can come to a better solution that will allow healthcare 

to be fair, yet affordable, for employers and individuals without 

making it a burden to our society. 

Chairman ISSA. Thank you. 

Mrs. Overbey. 

[Prepared statement of Mr. Waters follows:] 

9 


Insert offset folio 1 here 86723.001

My name is Dan Waters and I am President of Dan Waters and Associates, Inc. in 

Hickory, North Carolina. I am a lifetime resident of Catawba County and a graduate 

of Lenoir Rhyne University with a degree in economics. I have served the people of 

Hickory as an insurance agent and broker for over thirty-three years. 

During my tenure in the insurance industry, I have seen companies come and 

companies go. I have seen policies change and policies terminated. We have offered 

Basic Benefits, Basic Benefits with Extended Coverage, Basic Benefits plus Major 

Medical and Comprehensive Major Medial Coverage. At no time did these benefit 

plans require 2700 pages of explanation. Let alone 2700 pages that neither the 

clients, their agents or their Congressional Representative fully understand or have 

personally read. 

Now, agents and brokers are tasked with the challenging job of trying to explain this 

complex law to our groups and individuals. Everywhere we turn there is confusion, 

misinformation and questions about the programs offered, cost of premiums, tax 

ramifications and more. 

In order to prepare, brokers and agents have been attending seminars, webinars, 

reading NAHU Washington Updates and taking the required PPACA certification 

course. In addition, we have been keeping up with the latest technology tools for 

group clients as well as for individuals. Our goal is to be able to communicate the 

benefits in an understandable way, quote accurate premiums and in general allay 

the fears and concerns of our clients with regard to their new plans. 

Some examples of the concerns I am hearing in my office on a daily basis are: 

1. Ilike my current plan. Why can r not just keep it? 

2. Why do I have to pay for benefits I will never use such as maternity, birth 

control, pediatric vision and dental or rehab. services? 

3. How will I pay for the higher deductible I must have in order to make my 

plan affordable? 

4. Do I qualify for a subsidy? Why do I not qualify for a subsidy? 

5. Why is my health care premium so much higher than before? 

6. I don't want to pay for insurance. Why is it not my right to choose that 

without a penalty? 

Do our current medical policies need to be changed in many ways? Most reasonable 

parties would agree that is the case. Do we want to provide coverage for those who 

can't afford it, but need or want it? Yes, definitely. Should there be a way for 

Americans with pre-existing conditions to keep or get coverage at a reasonable rate. 

Yes, of course. Is the Government Mandated Affordable Care Act, requiring all 

policies meet the same minimu m standards regardless of needs or stage in life the 

answer? I would say from the reaction of my clients that would be a resounding 

"no", 
10 


Insert offset folio 2 here 86723.002

As soon as the ACA became law, our office phones were ringing with questions as to 

what it would mean for our clients, particularly our individual clients. After the 

cancellation notices were received and new premiums were announced, those calls 

and the frustration of our clients increased exponentially. Many clients found their 

monthly costs more than doubling. As a personal example of what we were seeing, 

my wife's policy with a monthly premium of$396 was cancelled and replaced with 

one that would now be $735. As with many of our clients, she is choosing to go with 

a significant increase in her deductible in order to reach a reasonable cost. Since the 

recent announcement by the President that people could keep their current plan, a 

large portion of my individual clients are seeking to do just that. 

J fear that the mandatory ACA will be detrimental to my community as a whole. We 

have experienced an economic downturn in the last decade resulting in industries 

closing, a depressed housing market, and overall lowering of disposable income. 

When struggling employers are required to pay more in benefits either they will be 

forced to reduce their workforce, contribute less toward the employee health plan, 

or drop those plan altogether. Less income on the part of the bUSiness or the 

individual translates into less spending and less growth for our area. 

Thank you for your time to consider this important matter and for the opportunity 

to share my concerns. It is my hope that together we can come to a better solution 

that will allow health care to be fair, yet affordable, for employers and individuals 

without making it a burden to our SOCiety. 
11 

STATEMENT OF SHERRY OVERBEY 

Mrs. OVERBEY. I am one those who recently received an astronomical increase of my insurance rates from Blue Cross Blue 

Shield of North Carolina. As you can see, I am a woman and I am 

healthy. 

My monthly health insurance premium for 2013 is $395.60. Beginning in January 2014, my renewal rate will be $713.11. This 

amount of $713.11 is higher than my mortgage and my second 

mortgage combined. This amount will, in all likelihood, continue to 

rise every year. I also have a higher deductible and higher out-ofpocket amount, but, of course, I have maternity coverage and I also 

can get free birth control pills, which at age 58 I am sure I am 

going to need both frequently. 

[Laughter.] 

Mrs. OVERBEY. As we all know, President Obama on numerous 

occasions was telling the American people, ‘‘If you like your health 

insurance, you can keep it.’’ But we now know that the opposite 

was true. Now you can call this deception, deceit, falsifying information, fabrication, whatever. But the bottom line is no matter 

what nicety you give it, a lie is a lie is a lie. 

Our very own North Carolina Senator Kay Hagan was right 

there alongside Obama delivering the same message. Senator 

Hagan stated, and I quote, ‘‘People who have insurance they’re 

happy with can keep it. We need to support the private insurance 

industry, so that people who have insurance they’re happy with can 

keep it.’’ This is another lie. 

Women like me are being hurt by these lies and changes brought 

about by this unjust law. We now have fewer choices than we have 

ever had. 

I contacted my Blue Cross Blue Shield agent asking him what 

alternatives I have. His reply to me was, ‘‘No one is sure what’s 

happening.’’ He checked the subsidies amount and because I am 

married and my husband and I make just above the $62,040 

amount, I am disqualified. Oh, and by the way, if I were not married and I could live with my boyfriend, we could make $45,000- 

plus each, that’s $90,000-plus as a couple, and qualify for these 

subsidies in the Affordable Healthcare Act. And by the way, the 

name Affordable Healthcare Act is just a lie by virtue of the title 

itself. It should be called the Unaffordable Healthcare Act. 

This huge increase in my monthly insurance premium and outof-pocket expense and deductible does not supply any more coverage, nor does it provide better coverage. 

The American people did not ask for, nor vote for this 

unaffordable health—oh, excuse me, I mean Affordable Healthcare 

Act. 

For people not to have a choice in keeping their insurance, to be 

required to buy insurance they do not want and be fined for not 

doing so takes precious freedom away from every American. How 

Supreme Court Justice Roberts could have cast the deciding vote 

as constitutional is beyond any reasoning. 

For the first time in our government’s history through 

Obamacare and some exchanges, we will be paying for abortions 

with our tax dollars. We can now go into the safe, protective home 

12 

of the womb and kill an innocent baby by this healthcare law. That 

is another thing that is beyond any reasoning. 

If the same scenario were my car insurance, I’d be calling other 

companies, getting better rates and adjusting the coverage as necessary. Now, because of the 10 required government inclusions, I 

am paying an unfair price for less coverage. I did like my insurance 

coverage, most Americans do. Another lie that is circulating at the 

present time is that most Americans do not like their coverage. 

There is an old saying that goes, ‘‘Tell a lie long enough and it becomes the truth.’’ 

This is the foundation of Obamacare and Obama’s Administration, for that matter. President Obama wants his legacy to be 

Obamacare, this is what his whole presidential tenure was based. 

But the legacy is going to be Obamacare is a lie. We had the most 

wonderful healthcare system in the world until the President, for 

reasons of control, began dismantling it. 

As a woman, President Obama and Senator Kay Hagan have 

taken away my choice and with my choice, my rights and freedom. 

I have talked to other women who are in similar situations as I am 

and their policy was canceled altogether. I have friends who recently retired, their policies were canceled under the Affordable 

Healthcare Act. And others? Well, they cannot get on the website, 

they cannot afford the insurance, and they cannot afford the penalty for not having the insurance. 

The bottom line and the truth, which we will not hear from this 

President, is this has never been about healthcare. It is about control. Think about it. A majority of Americans had some healthcare 

coverage. Why not let those people keep it? Our taxes are going up 

anyway, who do you think is going to pay for Obamacare? Why not 

provide coverage for those who are without? This would be a winwin situation. Americans would be happy to keep their insurance. 

Those without insurance will be happy because they have coverage. 

That’s what makes sense if Obamacare had not been about control. 

But Obamacare is about control. What better way to control the 

lives of American people than through healthcare. It is the number 

one issue that concerns us all. It is the gathering of all kinds of 

information into one system about you and me. 

Thank you. 

Chairman ISSA. Thank you. 

Mr. Long. 

[Prepared statement of Mrs. Overbey follows:] 

13 


Insert offset folio 3 here 86723.003

Nov. 22, 2013 

Hello. Thank you for the opportunity to speak today and voice my concerns for the Affordable Health Care Act. 

I am one of those who recently received an astronomical increase of my insurance rates from Blue Cross Blue 

Shield of NC. As you can see I am a woman. I am healthy. I take no prescription medications nor over the 

counter meds. 

My monthly health insurance premium for 2013 is $395.60. Beginning in January 2014 my renewal rate will be 

$713.11. This amount of $713.11 is higher than my mortgage and second mortgage combined. This amount 

will, in all likelihood, continue to rise every year. I also have a higher deductible and higher out of pocket 

amount, but of course, I now have maternity coverage. I can also get free birth control pills which at age 58, I 

am sure I will need both frequently! 

As we all know, while President Obama, on numerous occasions, was telling the American people "If you like 

your health insurance, you can keep it." But we know now that the opposite was true. Now, you can call this 

deception, deceit, falSifying information, fabrication, whatever, but the bottom line is no matter what nicety 

you give it, a lie is a lie is a lie! Our very own NC Senator Kay Hagan was right there along side Obama 

delivering the same message. Senator Hagan stated 'People who have insurance they're happy with can keep 

it: "We need to support the private insurance industry so that people who have insurance they're happy with 

can keep it while also providing a backstop option for people without access to affordable coverage." This is 

another lie. (National Journal's Congress Daily 6/18/09). Women like me are being hurt by these lies and 

changes brought about by this unjust law. We now have fewer choices than we have ever had. 

I am thankful that Congressman Patrick McHenry voted against this law. 

I contacted my Blue Cross/Blue Shield agent asking what alternatives are available. His reply to me was, "No 

one is sure what is happening." He checked the subsidies amount and because I am married, and my husband 

and I make just above the $62,040 amount, I am disqualified. Oh, by the way, if I were not married, I could live 

with my boyfriend. We could make $45,000+ each, that's $90,000, and qualify for subsidies in the Affordable 

Health Care Act. Oh, and by the way, the name "Affordable Health Care Act" is a lie just by virtue of the title 

alone. It should be called the "Unaffordable Health Care Act." 

This huge increase in my monthly insurance premium and higher out of pocket expense and deductible does 

not provide any more coverage nor does it provide better coverage. 

The American people did not ask for nor vote for this "Unaffordable Health Care Act." (Excuse me, "Affordable 

Health Care Act.") For people not to have a choice in keeping their insurance, to be required to buy insurance 

that they do not want and be fined for not doing so takes precious freedom away from every American. How 

Supreme Court Justice Roberts could have cast the deciding vote as constitutional is beyond any reasoning. 

If this same scenario was my car insurance, I would be calling another company, getting better rates and 

adjusting the coverage if necessary. Now because of the ten required government inclusions, I am paying an 

unfair price for less coverage. I did like my insurance coverage. Most Americans do. Another lie that is 

circulating at this present time is that most Americans do not like their coverage. There is an ole saying that 

goes, "Tell a lie long enough and it becomes the truth." This is the foundation for ObamaCare and Obama's 
14 


Insert offset folio 4 here 86723.004

administration for that matters. President Obama wants his legacy to be ObamaCare. This is what his whole 

presidential tenure has been based. But the legacy is going to be, "Obamacare is a lie." 

We had the most wonderful health care system in the world until this President for reasons of control began 

dismantling it. 

As a woman, President Obama and Senator Kay Hagan, has taken away my choice and with my choice, my 

rights and freedoms. I have talked to other women who are in similar situations as I am or their policy was 

canceled altogether. I have friends who recently retired. Their policies were cancelled under the Affordable 

Health Care Act. And for others, well: 

They cannot get on the web site. 

They cannot afford insurance. 

They cannot afford the penalty for not having insurance. 

The bottom line and the truth which we will not hear from this President, is this has never been about health 

care. It is about control. Think about it, a majority of Americans had some type of health care coverage. Why 

not let those Americans keep it. Our taxes are gOing up anyway, who do you think is going to pay for 

Obamacare? Why not provide coverage for those without. This would be a win-win situation. Americans would 

be happy to keep their insurance. Those without insurance are now happy because they have coverage. That is 

what makes sense if Obamacare has never been about control. But Obamacare is about control. What better 

way to control the lives of the American people than through health care. It is the #1 issue that concerns us 

all. It is the gathering of all kinds of information into one system about you and me. 

President Obama in his rising to power has side stepped the Constitution, passed laws without congressional 

approval and use Executive Order powers more than any other President in the history of our nation. This is 

not about race. This race card argument is built on another lie. The people who play the race card forget that if 

this were about race; President Obama would never have been elected in the first place. This is about an inapt 

President, who pushes bad policies and when they fail, lie to the American people that it was not his fault. 

Americans have been patient and kind to this President. For any other President who has told as many lies and 

pushed the underhand polices that President Obama has, would have already been impeached by now. 

I am concerned for all women~ men, children and families who will suffer undue stress, financial hardship~ and 

lack of medical attention brought about from the failure of Obamacare. 

I sincerely thank you for this hearing today to voice and share my concerns. 
15 

STATEMENT OF JOEL LONG 

Mr. LONG. Good morning, Chairman Issa and members of the 

committee in attendance today. Thank you for taking the time to 

come to our neck of the woods to learn more about how the new 

healthcare law is impacting our day-to-day lives. Too many times 

leaders in Washington forget they represent real people with real 

challenges. You are to be commended for taking the discussion outside the Washington bubble. 

My name is Joel Long and I am the CEO of GSM Services/Gastonia Sheet Metal, Incorporated. We are a third generation heating, 

air conditioning, and commercial roofing company founded in 1927. 

My brother Steven and I own and operate this business and employ 

146 co-workers. 

I applaud your efforts today to hold this hearing on one of the 

most important issues facing the citizens of our nation. I cannot 

think of an issue that touches more people than healthcare. 

For the purpose of my remarks here today, I would like to ask 

that you not look at me as a business. I would ask that you instead 

look at me as a job creator. As such, I would further ask that my 

remarks be received as coming from someone who has worked to 

help create, build and improve the quality of life for those living 

in my community, as well as a provider for the foundation of a 

quality career for those who work in my company, my co-workers. 

I am the job creator who must live with the very decisions and 

policies Congress and the regulatory agencies establish which either improve or inhibit my ability to create jobs. I am the job creator who believes our government must be a partner for our mutual success. I am the job creator who believes the business community has been asking for many years to be treated as partners 

with lawmakers—not as the opposition. 

In my limited time, I would like to touch on two of the most important ramifications we are experiencing in the business world related to healthcare reform. 

Rising insurance premium costs. One of the most talked-about 

issues during the healthcare reform debate was that rising insurance premiums needed to be brought under control. I couldn’t agree 

more. But in my experience, that’s the difference between policy 

and the real world. For my company, while our rates have risen 

consistently over the last decade, we have maintained a strong 

partnership with our insurance company and co-workers, and believe our current insurance plan has evolved into a plan that is 

providing excellent coverage at affordable rates for our co-workers. 

I’ve included our 10-year history of rate increases. I’ve also included our current 2013 health insurance rates for you. 

In 2009, we transitioned to an HRA plan that allowed our co- workers to enjoy the low rates of a $10,000 deductible and also protect them and their families from large expenses in case of a health 

issue. Our plan is a partnership between GSM Services, our coworkers and our insurance company. GSM Services pays the first 

$1000 of our deductible, co-workers pay the next $2000 and we 

both split the next seven evenly. Total out-of-pocket expenses for 

our co-workers is $5500 per year per family in case of a large 

health event. Most of our co-workers never exceed the $1000 deductible GSM pays. 

16 

In our 2012 plan year, GSM had a potential HRA medical liability of $481,500 and we only paid $41,532. Our prescription benefit 

under the HRA had a liability of $72,000 and we only paid $1906, 

a testimony of our co-workers usage of 85 percent generics. Our 

total HRA potential liability was $553,500 and we paid out 

$43,438. Numbers do not lie. This is a testament to the effectiveness of this strategy for GSM and our co-workers. 

Our company, our co-workers and our insurance company were 

happy with this agreement, with this partnership. We were all successful, it was our plan. 

As of this date, we have been forced to change our renewal date 

from May of 2014 to December of 2013 to avoid the projected minimum rate increase of 30 percent as our current plan will no longer 

be offered by our insurance company next year. We believe this 

minimum will be closer to 50 percent under the current conditions. 

This early renewal is an attempt to delay our increase as long as 

possible in the hope that legitimate changes will be made in 2014, 

so companies like ours can continue to offer better and more affordable options to our co-workers. 

Confusion is my second part. There is no debate as to the confusion this new law has created, not to mention implementation. 

That said, we as businesses cannot operate on unknowns. We cannot plan or budget on what we do not know or do not understand, 

and as we work to understand the law, we now see the confusion 

of those who are charged with its implementation. The chaos of 

pricing, policy cancellations and quality has caused instability. As 

business professionals, instability and chaos are our enemies. We 

seek real numbers that we can anticipate. A sweeping policy 

change like healthcare reform should have been better planned and 

implemented. The lives that are impacted by the instability of the 

new law are not statistics, they are the lives of real people. 

Thank you for your time today. I applaud your attention to our 

needs as citizens of this great nation and ask that you fix this issue 

so that we can get back to the work of running our businesses and 

providing for our families. 

Thank you. 

Chairman ISSA. Thank you. 

Mr. Falls. 

[The prepared statement of Mr. Long follows:] 

17 


Insert offset folio 5 here 86723.005

Good moming, Chairman Issa, and members of the committee in attendance 

today. Thank you for taking the time to come to our "neck of the woods" to learn more 

about how the new health care law is impacting our day-lo-day lives. Too many times, 

leaders in Washington forget they represent real people with real challenges. You are to 

be commended for taking the discussion outside of the Washington "bubble." 

My name is Joel Long and I am the CEO of GSM Services/Gastonia Sheet 

Metal, Incorporated. We are a third-generation heating, air conditioning, and 

commercial roofing company founded in 1927. My brother Steven and I own and 

operate this business and employ 146 co-workers. 

I applaud your efforts today to hold this hearing on one of the most important 

issues facing the citizens of our nation. I cannot think of an issue that touches more 

people than health care. 

For the purpose of my remarks here today, I would like to ask that you not look at 

me as a business. I would ask that you instead look at me as a job creator. As such, I 

would further ask that my remarks be received as coming from someone who has 

worked to help create, build and improve the quality of life for those living in my 

community, as well as a provider for the foundation of a quality career for those who 

work in my company; my co-workers. 

I am the job creator who must live with the very decisions and policies Congress 

and the regulatory agencies establish which either improve or inhibit my ability to create 

jobs. I am the job creator who believes our government must be a partner for our 

mutual success. I am the job creator who believes the business community has been 

asking for many years to be treated as partners with lawmakers - not as the opposition. 
18 


Insert offset folio 6 here 86723.006

In my limited time, I would like to touch on two of the most important ramifications 

we are experiencing in the business world related to health care reform. 

Rising Insurance Premium Costs· One of the most talked about issues during the 

health care reform debate was that rising insurance premiums need to be brought under 

control. I couldn't agree more. But in my experience, that's the difference between 

policy and the real world. For my company, while our rates have risen consistently over 

the last decade, we have maintained a strong partnership with our insurance company 

and co-workers and believe our current insurance plan has evolved into a plan that is 

providing excellent coverage at affordable rates for our co-workers. 

GSM Services history of health insurance rate increases since 2004 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 

+1.08% 0.0% 14.6% 7.1% 5.0% 12.4% 10.0% 12.0% 0.0% 0.0% 

GSM Services 2013 Health Insurance Rates 

Employee Only $212.86 

Employee/Dependent $406.55 

Employee/Family $653.46 

(Rates/Per month) 

In 2011, we transitioned to an HRA Plan that allowed our coworkers to enjoy the 

low rates of a $10,000 deductible and also protect them and their families from large 
19 


Insert offset folio 7 here 86723.007

expenses in case of a health issue. Our plan is a partnership between GSM Services, 

our coworkers, and our insurance company. GSM Services pays the first $1,000 of our 

deductible, Co-workers pay the next $2,000, and we both split the next $7,000 evenly. 

Total out of pocket expense for our co-workers is $5,500 per year per family in case of a 

large health event. Most of our coworkers never exceed the $1,000 deductible GSM 

pays. 

In our 2012 plan year, GSM had a potential HRA medical liability of $481 ,500 

and we only paid $41,532. Our prescription benefit under the HRA had a liability of 

$72,000 and we only paid $1,906. (A testimony of our coworkers usage of 85% 

generics). Our total HRA Potential Liability was $553,500 and we paid out $43,438. 

Numbers do not lie! This is a testament to the effectiveness of this strategy for GSM 

and our co-workers! 

Our company, our coworkers, and our insurance company were happy with this 

agreement. With this partnership! We were all successful! It was our plan! 

As of this date, we have been forced to change our renewal date from May of 

2014 to December of 2013 to avoid the projected % increase in our rates as 

our current plan will no longer be offered by our insurance company next year. This 

early renewal is an attempt to delay our increase as long as possible in the hope that 

legitimate changes will be made in 2014 so companies like ours can continue to offer 

better and more affordable options to our coworkers. 

Confusion - there is no debate as to the confusion this new law has created ... not to 

mention its implementation. That said - we as a business cannot operate on 
20 


Insert offset folio 8 here 86723.008

unknowns. We cannot plan or budget on what we do not know or do not understand -

and as we work to understand the law, we now see the confusion of those who are 

charged with its implementation. The chaos of pricing, policy cancellations and quality 

has caused instability. As business professionals, instability and chaos are our 

enemies. We seek real numbers that we can anticipate. A sweeping policy change like 

health care reform should have been better planned and implemented - the lives that 

are impacted by the instability of the new law are not statistics, they are the lives of real 

people. 

The confusion of the unknown combined with the unexpected and extravagant 

increases in the cost of providing health care insurance are absolutely stifling my ability 

to create, provide and sustain jobs. Again, I am a job creator, and I have yet to 

understand how we as a nation can continue to state that we need to create more jobs, 

yet challenge, threaten, or even ignore the very mechanisms for job creation. 

Thank you for the time today. I applaud your attention to our needs as citizens of 

this great nation and ask that you fix this issue so we can get back to the work of 

running our businesses and providing for our families. 
21 

STATEMENT OF JASON FALLS 

Mr. FALLS. Good morning, Mr. Chairman and members of the 

committee. My name is Jason Falls and I am a licensed insurance 

professional in North Carolina. My purpose for testifying before 

you today is to share my understanding of how the Affordable Care 

Act is impacting individuals in our communities. In my role as an 

insurance professional, I discuss this impact almost daily. 

Residents of North Carolina have heard our President state that 

Healthcare.gov and the Affordable Care Act will reduce their premiums and improve their coverage. They have also seen a failed 

rollout of the website and an administration making changes to the 

law on a regular basis. These actions have caused confusion and 

concern by many. I have met with some that have opted to wait 

out 2014 and elect to pay the penalties, leaving them uninsured 

and vulnerable to financial ruin if they have medical needs. 

While the President’s words on November 14th gave a glimmer 

of hope to some, those individuals covered under the state and federal high risk pools, known as Inclusive Health in North Carolina, 

received notification that their coverage would cease on December 

31st as planned. Under her current coverage with Inclusive Health, 

Tina from Shelby pays a co-pay of $250 per month for a medication. Without the medication, her quality of life would be deeply diminished and could be life-threatening. Under the new plans offered under ACA guidelines, she would pay 25 percent of the retail 

cost of that medication, which is currently $28,000 a year, leaving 

her with a bill for one prescription of nearly $600 a month. That 

is in addition to her increased premiums. 

In North Carolina, people making less than the poverty level or 

more than four times the poverty level do not qualify for the subsidies that are supposed to make premiums for the new plans 

under Obamacare affordable. Lisa and Wayne have seen first hand 

how Obamacare will impact them when they ran the numbers. 

Wayne is covered under Medicare because of serious medical 

issues, including organ transplants, and was being checked for cancer at Duke Medical this past Wednesday. His condition requires 

them to be at Duke often, so it’s hard for Lisa to have a full time 

job. They make things work on just $9000 a year with the help of 

family, friends, and prayer. But that income is lower than the minimum of $15,510 required for a family of two to be eligible for subsidies. Without those subsidies, she can’t afford coverage and is not 

eligible for Medicaid or any other coverage. She can’t afford to 

cover herself under the new ACA-compliant plans, which have a 

higher premium than the plans offered in 2013. 

Several restaurants I have met with have canceled their employer-sponsored health insurance and will reduce the number of 

hours of their workers to avoid mandates. The employees are finding that coverage, even with subsidies, are higher than the employer plan that they were covered on. 

As an insurance professional, I am concerned with someone who 

chooses to ride it out without coverage. Some will, because of the 

higher premiums or confusion of the implementation of the Affordable Care Act. Others may, out of disdain of a government that 

forces individuals to purchase a product that the government designs under threat of financial penalty. For those that choose to 

22 

ride it out, the real risk is the fact that the ACA forces you to make 

a choice by the deadline, for this year, March 31st. If you opt out, 

you cannot buy coverage later in the year without a qualifying 

event. So if I choose no coverage for me and I have a serious medical condition during the year from an accident or disease, I run 

the risk of financial ruin for my family. The potential is far worse 

than the option the President touts—to just pay the penalty if you 

don’t want coverage. 

As someone with intimate knowledge of my industry, and as an 

American, I have serious concerns about Obamacare. What happens when Congress decides to work on our national debt—which 

they should—and the target is put on those subsidies. 

My purpose here today was to tell the story of my friends and 

neighbors. They are confused, concerned, mad and fed up. We can’t 

see the relationship between the value of the new plans and the 

dollars it takes from our families’ budget. For those committee 

members that understand these challenges, I thank you. For those 

that don’t, I invite you to spend the day with me as I visit with 

individuals and small businesses to see for yourself their concerns. 

I want to thank you for coming to our great state. I especially 

want to thank Chairman Issa for his leadership on the committee 

and our North Carolina Representatives that serve on this important committee, Congressman Patrick McHenry and Congressman 

Mark Meadows, as well as Congressman Pittenger, for being here 

today. You are all strong advocates for the residents of the state 

of North Carolina. 

Thank you for your time. 

Chairman ISSA. Thank you. 

Mr. Gauss. 

[The prepared statement of Mr. Falls follows:] 

23 


Insert offset folio 9 here 86723.009

Testimony of Jason Falls 

For the Committee on Oversight and Government Reform 

Hearings on the Affordable Care Act 

Gastonia, NC 22 November 2013 

Good morning Mr. Chairman and members of the Committee. My name is Jason 

Falls and I am a licensed insurance professional in North Carolina. My purpose for 

testifying before you today is to share my understanding of how the Affordable 

Care Act is impacting individuals in our communities. In my role as an insurance 

professional I discuss this impact almost daily. 

Residents of North Carolina are currently seeing commercials for Healthcare.gov. 

They have heard our President state that this website and the Affordable Care Act 

will reduce their premiums and improve their coverage. They have also seen a 

failed rollout of the website and the Administration making changes to the law on 

a regular basis. These actions have caused confusion and concern by many, 

especially those with serious medical issues or higher premiums. I have met with 

some that have opted to wait out 2014 and elect to pay the penalties, leaving 

them uninsured and vulnerable to financial ruin if they have medical needs. 

While the President's words on November 14, 2013 gave a glimmer of hope to 

some, those individuals covered under the State and Federal High Risk Pools 

(known as Inclusive Health) received notification that their coverage would cease 

on December 31 as planned. Under her current coverage with Inclusive Health, 

Tina from Shelby pays a co-pay of $250/month for a medication. Without the 

medication her quality of life would be deeply diminished and could be life 

threatening. Under the new plans offered under ACA guidelines she would pay 

25% of the retail cost of that medication which is currently $28,OOO/year, leaving 

her with a bill for one prescription of nearly $600/month. That is in addition to 

her increased premiums. 

In NC, people making less than the poverty level or more than four times the 

poverty level do not qualify for the subsidies that are supposed to make 
24 


Insert offset folio 10 here 86723.010

premiums for the new plans under ObamaCare affordable. Lisa and Wayne have 

seen firsthand how ObamaCare will impact them when they ran the numbers. 

Wayne is covered under Medicare because of serious medical issues, including 

organ transplants and was being checked for cancer at Duke Medical this past 

Wednesday. His condition requires them to be at Duke often, so it's hard for Lisa 

to have a full time job. They make things work on just $9,000/year, with the help 

of family, friends and prayer. But that income is lower than the minimum of 

$15,510 required for a family of two to be eligible for subsidies. Without those 

subsidies, she can't afford coverage and is not eligible for Medicaid or any other 

coverage. She can't afford to cover herself under the new ACA compliant plans, 

which are much higher than the plans offered in 2013. The answer from 

Healthcare.gov when I called them about her situation ... she will not have to pay 

the penalty. 

Others that see the true cost of the insurance plans question the stability of the 

program and if the subsidies will continue in the future. It is an understandable 

question when you see potential subsidies of $l,OOO/month or more. They 

realize that when they are faced with decreased or eliminated subsidies, they will 

be responsible for 100% of the cost of plans that in some cases provide coverage 

to them that may be unnecessary. Maternity coverage for all may sound good on 

the surface, but try explaining it to someone that has tried for years to have 

children, then to be told by doctors that they have a 0% chance of getting 

pregnant. Forced maternity coverage is a painful reminder and insult to their 

emotions and their pocketbook. 

Individuals that historically have had catastrophic coverage for themselves as a 

way to reduce premiums and "pay as you go" for routine medical bills are some of 

the hardest hit. They may not qualify for the subsidies and see significant 

increases in their premiums. Because of required coverage changes they could be 

faced with premiums that have doubled and really not want the forced coverage 

of the new plans. 
25 


Insert offset folio 11 here 86723.011

In meeting with small businesses in our area to discuss how they are coping with 

the Affordable Care Act I have found that many have developed strategies that 

contradict what the Administration has advertised. Several restaurants I have 

met with have cancelled their employer sponsored health insurance and will 

reduce the number of hours of their workers to avoid mandates. The employees 

are finding that coverage, even with the subsidies, are higher than the employer 

plan they were covered on. 

Several small proprietors have looked at the subsidy income requirements and 

will plan their business around those levels. One small business in Shelby, NC had 

a Modified Adjusted Gross Income last year of $64,000 and were hoping to 

expand business next year. The owners, husband and wife, now will limit their 

production and sales to under $62,000 in order to try to qualify for subsidies 

(which in their case are larger than the proposed planned loss of business). 

As an insurance professional, I am concerned when someone chooses to "ride it 

out" without coverage. Some will because of the higher premiums or confusion 

of the implementation of the ACA. Others may out of disdain of a government 

that forces individuals to purchase a product that the government designs, under 

threat of a financial penalty. For those that choose to "ride it out", the real risk is 

the fact that the ACA forces you to make a choice by a deadline ... this year, March 

31. If you "opt out" you cannot buy coverage later in the year without a 

qualifying event. So, if I choose no coverage now and develop a medical condition 

during the year from an accident or disease ... I run the risk of financial ruin for my 

family. The potential is far worse than the option the President touts ... just pay 

the penalty if you don't want the coverage. 

As an agent and resource for my clients and community, I will continue to help 

them understand how these changes impact their families. Just as I have for the 

past 14 years, I will explain coverage and work to find the best price I can for 

them. 
26 


Insert offset folio 12 here 86723.012

As someone with intimate knowledge of my industry, and as an American, I have 

serious concerns about "ObamaCare". Many of those making less than the 

poverty level already receive some level of government assistance. Now, those 

making up to four times the Federal Poverty Level will be receiving government 

assistance in the form of subsidies. The average incomes of many counties 

surrounding this hearing today are well within those income levels, meaning that 

they potentially will receive those government subsidies. What happens when 

Congress decides to work on our National debt, and the target is put on those 

subsidies? 

My purpose here today was to tell the story of my friends and neighbors. They 

are confused, concerned, mad and fed up. We can't see the relationship between 

the value of the new plans and the dollars it takes from our families' budget. For 

those Committee Members that understand these challenges, I thank you. For 

those that don't, I invite you to spend a day with me as I visit with individuals and 

small businesses to see for yourself their concerns. 

I want to thank you for coming to our Great State ... this is where the rubber 

meets the road, at our dinner tables and water coolers ... our churches and our 

schools. I especially want to thank Chairman Issa for his leadership on the 

committee and our North Carolina Representatives that serve on this important 

Committee, Congressman Patrick McHenry and Congressman Mark Meadows, 

both men are strong advocates for the residents of the State of North Carolina. 

Mr. Chairman and Committee Members, thank you for your time today. 
27 

STATEMENT OF TAV GAUSS 

Mr. GAUSS. Mr. Chairman, welcome to North Carolina, distinguished members of the committee. I have been asked to come here 

today to talk about the effects the Patient Protection and Affordable Care Act, also known as Obamacare, has had on businesses 

and individuals in areas of my state. 

I would like to make two comments to the people listening to 

this. Please read my entire testimony, especially my updates from 

my last testimony two years ago in Washington. And please know 

that I am a non-affiliated voter. I have disdain for both parties 

equally. 

[Laughter.] 

Chairman ISSA. Thank you. 

Mr. GAUSS. As you can see below, I belong to three national organizations that span North America. So I have asked some of my 

colleagues of 32 years to give me their input as well. I asked only 

for instances, good or bad, that they have firsthand knowledge of, 

no conjecture, no speculation, no pontification. 

I received multiple responses from Florida, California, Connecticut, Louisiana, North Carolina, South Carolina, Kentucky and 

Virginia and I have heard from others since my deadline for the 

testimony. I will say that I was given a deadline—we were all 

given a deadline of Wednesday, and I asked your staffer could we 

make it longer because things are apt to happen on a daily basis 

like they did this morning. So I don’t have that written in my testimony, we can talk about that later. 

There are two words that have been pervasive in everybody’s 

concerns—uncertainty and trust, or lack thereof. And our employees have added the word ‘‘fear.’’ 

When a person or a business has money to spend, they usually 

do not spend it without some degree of certainty as to what they 

will get in return. If they do not know what they’re going to get 

in return, they will not spend it, will not spend as much. 

Across the country, especially in my area, businesses are hesitant to invest in any people, plant, or equipment because they cannot be certain of the ultimate costs and returns on those investments. They are not hiring people because of the unknown cost of 

Obamacare and other issues coming from federal and state governments. North Carolina employers and employers in 12 other states 

also have the added burden of employment tax increases imposed 

on them to pay back money the states borrowed from the federal 

government as their state unemployment funds went dry during 

the last recession and its extended benefits period. 

There is one known fact. All of our costs for healthcare have got 

to go up because the plan is adding heretofore non-insured people, 

many of whom will not be making a significant contribution, if any 

at all, to the premiums paid to health insurers. As written now, the 

majority of that burden will be on the business community. And 

please refer to my two positions on two insurance companies. I do 

understand underwriting and insurance products. 

We’ve heard from others and these are direct quotes, either made 

directly to me or to my colleagues: 

‘‘We’re going to reduce head count below 50 people.’’ 

28 

‘‘Because I pay 100 percent of my employees’ health insurance 

premiums, I will take whatever raises I was going to give them and 

use them for their new health insurance premiums.’’ Note too, the 

health insurance is deductible expense for a group plan. The bonuses would have been taxed as income, so they’re taking income 

taxes and turning them into health insurance premiums. 

‘‘I am creating more part time positions that will be for 28 or 29 

hours per week and making sure my seasonal or part time help 

stays under 29 hours per week.’’ 

‘‘I plan to make some full time fully benefitted positions part 

time and non-benefitted.’’ 

‘‘The rules for a variable hour employee are too confusing, they 

are too subjective. 

People, myself included, have been asked by their clients to payroll people for their company, but for less than 30 hours a week. 

A company in southwest Florida has stopped paying for any employee’s share of health insurance until the numbers become more 

quantifiable. 

A staffing company in south Florida trying to do the right thing, 

tried to offer a plan this October and had 160 people eligible for 

the plan to begin October 1, 2013. Seventeen signed up because 

they had to pay premiums. 

And I will stop there, Mr. Chairman. 

[The prepared statement of Mr. Gauss follows:] 

29 


Insert offset folio 13 here 86723.013

November 19, 2013 

Mr. Chairman, distinguished members of the committee, I have been asked to come here today to talk about the 

effects The Patient Protection and Affordable Care Acti aka ObamaCare) has had on businesses and individuals in 

areas of my state. 

As you can see below I belong to three national organizations that span North America so I have asked some of my 

colleagues of 32 years to give me their input as well. I asked only for instances, good, or bad, that they have firsthand 

knowledge of. No conjecture or speculation nor pontification. 1 received multiple responses from Florida, California, 

Connecticut, Louisiana, North Carolina, South Carolina, Kentucky, and Virginia. I expect to hear from other states 

after the deadline for submission of my testimony passes on November 20, 2013. 

I not only spoke to business owners who spoke with their clients but with many of our employees as well. Two words 

have been pervasive in all of their concerns: 

Uncertainty and Trust, or lack thereof. Our employees and their friends have also used the word Fear, 

When a person or a business has money to spend they usually do not spend it without some degree of certainty as to 

what they will get in return. If they do not know they will not spend it. 

Across the country, especially in my area, businesses are hesitant to invest in any people, plant, or equipment 

because they cannot be certain of the ultimate costs and returns on those investments. They are not hiring people 

because of the unknown costs of Obama Care and other issues coming from the federal and state governments. 

North Carolina employers and employers in 12 other states also have the added burden of employment tax increases 

imposed on them to pay back money the states borrowed from the federal government as their state unemployment 

funds went dry during the last recession and it's extended benefits periods. 

There is one known fact, All of our costs for health care have got to go up because the plan is adding heretofore 

noninsured people, many of whom will not be making a significant contribution, if any at all, to the premiums paid to 

health insurers. As written now the majority of that burden will be on the business community, 

We have heard businesses say, among other things: 

1) "We are going to reduce headcount below 50 employees". 

2) "Because I pay 100% of my employees' health insurance premiums I will take what raises I was going to give 

to them and use them for their health insurance premiums." Note the health insurance is a deductible 

expense for a group plan, The bonuses would have been taxed as income, 

3) "I am creating more part time positions that will be for 28 or 29 hours per week and making sure my 

seasonal or part time help stays under 29 hours per week" 

4) "I plan to make some full time fully benefitted positions part time and non-benefitted." 

5) "The rules for a variable hour employee are too confusing" They are too subjective. 

6) People, myself included, have been asked by their clients to payroll people for their company but for less 

than 30 hours per week. 

7) A company in southwest Florida has stopped paying for any of the employee's share of health insurance 

until the numbers become more quantifiable. 

8) A staffing company in south Florida decided to do the "right thing" for their employees in October of 2013. 

They created a large group plan that was to be underwritten in 2013 under pre ObamaCare underwriting 

criteria. This included participation ratios. 

They had the plan written to provide minimal essential coverage and premium contributions that matched 

those maximums in those plans that would be in effect after January 1 2014. 

They had 160 eligible employees based on the look back provisions in the current law. Remember they still 

had a 75% participation of eligible employees because the plan was to start October 2013. All of these 

employees make $15.00 or more per hour, 

17 of the 160 eligible employees Signed up, Since the company did not meet the participation requirements 

they reverted back to small company status and the premiums they had quoted to all of their eligible 

employees under the proposed plan sky rocketed. Their employees are not happy, 
30 


Insert offset folio 14 here 86723.014

Pervasive among almost every individual we talked to was "I have no need for pediatric dentistry (no kidsLpediatric 

vision care, maternity coverage (tubes tied or vasectomy)" I am a man" birth control for a multitude of reasons, "I 

don't have breasts or ovaries" and whatever was added to the new plans that were not in their cancelled plans. 

Did I mention "uncertainty" above and fear of what their new premiums were going to be?" 

Almost as pervasive was the doubling of individual monthly premiums that were quoted prior to November 14 2013 

when the President made his announcement. Now that that has passed even if the get their old plan back they have 

fear that their premiums will be significantly higher than they were before they were cancelled. 

After I sent the required notices to all of my employees on October 1 2013 I got several comments like 

"Where is my insurance? It is not on this form ""why do I have to pay anything" "I have to pay WHAT?" 

IIwhere is my free care?1I I've worked 90 days where is my ObamaCarel" 

I would be remiss if I did not mention trust. Business people in general do not trust the IRS nor the current 

administration to administer ObamaCare correctly, to say the least. That is a fact. 

I could go on and on but I told you that I would testify to what I know to be fact and not based on conjecture, 

speculation, or economic and financial modeling. 

Thank you for this opportunity to put "a face" on the problems many of us have with the Affordable Care Act. 

Tav Gauss CEO 

The Action Gronp, 

252·237·3717 

E-Veriji; Employer Agcm 

800·529-8470 

\'\!ww.theactiongrouphr.com 

POBox 158 

Wilson North Carolina 27894-0158 
31 

Chairman ISSA. Thank you. 

And I’ll recognize myself for a first round of questions. 

Mr. Waters, have you ever seen another form of insurance that 

required that the pool, if you will, contain coverages that people do 

not want? For example, have you ever seen where somebody has 

life insurance and whether they are 18 or 80, they pay the same 

amount for that term life insurance? 

Mr. WATERS. No, I have not. 

Chairman ISSA. Mr. Falls, have you ever seen insurance like 

that? 

Mr. FALLS. No, sir, I have not. 

Chairman ISSA. Prior to the Affordable Care Act, did you do 

healthcare insurance—and Mr. Long, obviously you have dealt with 

this too—did you do insurance based on that or did you evaluate 

your pool and your insurance carriers evaluate the pool based on 

the unique characteristics of the pool? In other words, all of your 

160 employees, Mr. Long. 

Mr. LONG. We always pool, insurance is based on that pool, people pooled together as a group, group coverage. And so it would be 

approached in that manner. 

Chairman ISSA. But it was the actual pool that you had, your 160 

employees. 

Mr. LONG. The actual pool of employees that we had or that were 

going to be participating in the plan; yes, sir. 

Chairman ISSA. And I would like to follow up a little bit. Mr. 

Long, under the Affordable Care Act, if I understand your catastrophic insurance, because you have a high deductible that you 

and your company pay, is going to change. 

Mr. LONG. Yes. 

Chairman ISSA. Meaning you are going to pay more for an insurance that you almost never use, because in fact your company effectively pays apparently almost all of the coverage, between you 

and your employees, with the exception of the administrative cost 

of negotiating with hospitals for rates and the like; is that correct? 

Mr. LONG. Our plan, we are told, will go from the $10,000 deductible to the $5000 deductible, that will be what we will be focused on. And so, yes, we will have less choices and we will be in 

a different situation with that going forward. But we do pay—the 

way it works now, we do pay the majority of those bills, because 

most of our co-workers do not go above that $1000 deductible that 

we pay. And then on the rate side, we also—our rates, we pay 50 

percent when employees start with us, up to covering it fully in a 

10-year period. So even their rates are covered. 

Chairman ISSA. The reason I asked it is there has been a lot of 

discussion about these deductibles and co-pays. In your case, your 

employees were essentially at or below that $5000 level; weren’t 

they? 

Mr. LONG. Yes. 

Chairman ISSA. And the difference was what you chose to pay. 

But under the Affordable Care Act, if I understand correctly, they 

are taking away your, as an employer, your ability to pay that. And 

they are saying that it does not matter who pays it, the deductible 

has to be that amount, which in most cases, most people are comVerDate Aug 31 2005 13:37 Feb 24, 2014 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 C:\DOCS\86723.TXT APRIL
32 

plaining because their deductible went up in order to make it look 

more affordable. 

Mr. LONG. In our case—— 

Chairman ISSA. I just want to understand how it is affecting you 

and your choice to cover that on behalf of your employees. 

Mr. LONG. They are changing our formula without our input, and 

so now we will be in a—every employee in our company will be in 

a situation where we pay more for a different coverage, and we 

were already happy with our coverage. And so yes, our employees 

paid $5500 maximum, we paid $4500, but almost no employees 

ever got to that point. 

Chairman ISSA. Now Mr. Long, and I think for all the others that 

are insurance experts, if you will, apparently you have been working sort of best practices, same as Safeway and a lot of other much 

larger companies, to try to work with your employees to lower the 

cost of delivery of healthcare. Is that correct? You mentioned the 

85 percent generics and so on. Your plan allows for people to get 

non-generics if they need them, but encourages them to spend their 

money wisely; is that correct? 

Mr. LONG. Yes, sir. 

Chairman ISSA. One question—and I am going to be respectful 

of the limited time for each round. Is there anything in the Affordable Care Act that does the kinds of things that Mr. Long has been 

doing? In other words, what in the Affordable Care Act encourages 

the individual and/or the employer to drive down the cost of delivery of healthcare? Do any of you have any examples? 

Mr. FALLS. All I know is if somebody holds himself out as having 

one, then they do not know what they are talking about. 

Chairman ISSA. Well, that is an area that hopefully Congress 

will address, is the cost drivers, the things that Mr. Long has been 

working with his employees on. 

I will close by mentioning a couple of facts. On the Affordable 

Care Act, if you do not want insurance, as long as you are willing 

to pay a $5000 individual fine, up to, and a $12,500 family plan, 

up to; you can choose not to have insurance. The amazing thing is 

if you can pay that fine, then you can choose to pay your own 

healthcare over and above that. I have not quite figured that out. 

But I will note that every member of Congress, until next year, 

and every federal employee and their families, that is over eight 

million people, receive a program called FEHBP, the Federal Employee Healthcare Benefit. It is in fact reimbursed or paid for at 

72 to 82 percent by the federal government, depending upon whether you are a postal or non-postal worker. It does not age discriminate the way the Affordable Care Act is, and it has not changed 

to be, if you will, fully compliant with the Affordable Care Act. 

Oddly enough, the deductibles under the FEHBP are lower than 

under the new exchanges that the three of us as members of Congress, by law, have to go into. 

So I just want to put that into the record because you will be 

hearing, at least from this member, and from Lacy Clay, Congressman Clay of Missouri, that every American should have access to 

that FEHBP, something that everyone from the President down to 

your postal delivery man has, and that at a minimum, what we 

have as federal workers should be available to all Americans. 

33 

And with that, I go to Mr. McHenry. 

Mr. MCHENRY. Well, Mr. Chairman, I thank you for mentioning 

that. And I join you in supporting your legislation that enables all 

Americans to have the same health insurance that members of 

Congress and federal employees have. I think that would be a useful and positive step. And in fact, this is not some partisan idea. 

In fact, this is something you have long supported and I have been 

very supportive as well. 

Now, I want to address a question most folks—a lot of folks— 

have. Preexisting condition, discrimination against somebody who 

has a chronic condition. Mr. Waters, in the state of North Carolina, 

let us rewind two or three years ago. If someone came to you and 

they had a chronic condition, were you able to get them health insurance as a result of a North Carolina program? 

Mr. WATERS. There was a North Carolina program called Inclusive Health that was able to do that. And so I thought we were addressing the program pretty reasonably at that time. So, yes, North 

Carolina did a good job with that. 

Mr. MCHENRY. So Inclusive Health—— 

Mr. WATERS. Yes. 

Mr. MCHENRY. —which was a state-based initiative—— 

Mr. WATERS. That is correct. 

Mr. MCHENRY. —that helped individuals with chronic conditions 

or preexisting conditions get health insurance. 

Mr. WATERS. That is correct. 

Mr. MCHENRY. Okay. So we were able to do that prior to the Affordable Care Act or Obamacare’s passage. 

Mr. WATERS. That is correct. 

Mr. MCHENRY. Okay. So are you able to offer Inclusive Health 

for next year? 

Mr. WATERS. No. Inclusive Health has been terminated as of the 

end of December, so you cannot write it any more starting as of December 1st, it is over with. 

Mr. MCHENRY. And unfortunately that is a result of—— 

Mr. WATERS. Of Obamacare. 

Mr. MCHENRY. Okay. I just wanted to be clear about that. 

Mr. WATERS. That is correct. 

Mr. MCHENRY. So to say that someone with a preexisting condition could not get health insurance in North Carolina that is reasonably affordable is simply not the case. 

Mr. WATERS. Right. That is correct. 

Mr. MCHENRY. Thank you. 

Mrs. Overbey, I was taught by my mother to not ask a lady’s age, 

a woman’s age. But let me ask you, your prior insurance plan, did 

you have maternity coverage under that? 

Mrs. OVERBEY. No. 

Mr. MCHENRY. No. And you are required—your new plan requires you to have this? 

Mrs. OVERBEY. Yes. 

Mr. MCHENRY. Okay. Is that somewhat absurd? 

Mrs. OVERBEY. Well, yes, it is. I am not planning to have any 

more children and it is not possible. 

Mr. MCHENRY. Okay. Likewise, I heard from a constituent of 

mine named Pauline, who told me that coverage for her four year 

34 

old daughter for maternity care, she did not find appropriate either. 

Mrs. OVERBEY. Yes. 

Chairman ISSA. Will the gentleman yield? 

Mr. MCHENRY. Sure. 

Chairman ISSA. Was the gentleman aware that the men at the 

table also have to have maternity coverage under the law. 

Mr. MCHENRY. Well, you beat me to the punch. I was going to 

ask Mr. Long. 

[Laughter.] 

Mr. MCHENRY. I was going to ask Mr. Long if he intended to 

have children. 

Chairman ISSA. Personally. 

Mr. LONG. Personally? Probably not. 

Mr. MCHENRY. Okay. So this type of coverage that actually increases your cost is not helpful. 

Mrs. OVERBEY. No, it is not. 

Mr. MCHENRY. Okay. All right, just trying to understand this. 

And your premiums are currently? 

Mrs. OVERBEY. I currently pay $395.60. 

Mr. MCHENRY. Okay. 

Mrs. OVERBEY. And it is going to go to $713.11. That is my 

monthly premium. And of course my deductible and out-of-pocket 

and all that is going up too. 

Mr. MCHENRY. Okay. Mr. Long, the economy in Gaston County 

and Mr. Falls, the economy in Cleveland County, certainly hit a 

rough spot. But Mr. Long, as a result of Obamacare, will you be 

able to employ more people and pay higher wages than without it? 

Mr. LONG. I think that is yet to be certain. However, I know this 

will increase our cost. And so it can have nothing but a negative 

impact on our future and what we will do next year. There are 

other factors of course that come into hiring more employees and 

more co-workers, but there is no way this can help us. It is the 

exact opposite of the trend that we were heading on our cost for 

insurance. 

Mr. MCHENRY. Okay, so you would find that this would be a hindrance rather than—— 

Mr. LONG. This would stifle my ability to create more jobs, yes. 

Mr. MCHENRY. Okay. Mr. Falls. 

Mr. FALLS. We are seeing in Cleveland County, with a lot of our 

businesses there, are going to be scaling back, taking full time employees and putting those to part time employees, reducing the 

number of workers. So personally, I expect to see a spike in our unemployment rate in Cleveland County because of it. 

Mr. MCHENRY. So it would be a hindrance rather than a help to 

economic growth and more jobs. 

Mr. FALLS. That is correct. 

Mr. MCHENRY. Okay. Thank you all for your testimony. Thanks 

for your time today and I yield back. 

Chairman ISSA. Thank you. 

Mr. Pittenger. 

Mr. PITTENGER. Mr. Waters, thank you for your testimony. You 

mentioned your issues related to compliance. Give us some idea of 

35 

the hours or manpower as it relates to the additional compliance 

requirements of your business. 

Mr. WATERS. Virtually every day we start off with the telephone 

ringing and obviously the questions are the normal questions you 

ask, as I had mentioned before. And it is hard to explain over the 

telephone, we try to get people into our office to talk to them more 

about compliance and what is going on. 

I would say that there is—the time element that is involved that 

we have to do as far as insurance agents are concerned is that we 

had to pass a test—study for another four or five hours and then 

pass a test in order to qualify for PPACA, to sell the program and 

to understand it, which is okay, but every person in my office had 

to do that also, which takes a tremendous amount of time in order 

to do that. 

And then the technology part is changing rapidly, as you know. 

We have to have better equipment, better programs, in order to 

even—we have to get into the system to make sure that they are 

in compliance and they are meeting the numbers that they are supposed to meet in order to qualify currently for this program. 

So it is an ongoing saga as to what is—and I do not know how 

long this will go on, but it is an ongoing saga as to what it takes. 

Mr. PITTENGER. Well, currently, what percentage increase in 

compliance time is required, do you think, by your staff? 

Mr. WATERS. I would say it has increased 15 percent, 20 percent 

of my staff’s time. 

Mr. PITTENGER. A substantial amount. 

Mr. WATERS. Yes. 

Mr. PITTENGER. Thank you. 

Mr. Gauss, you made reference to uncertainty. You made reference to fear. These are major emotional words that bring into 

light the challenges that you anticipate unfolding ahead and what 

you do not anticipate, what you—the unknowns. Give us some idea 

of what would bring some sense of resolve or comfort to you. What 

would you like to see done, given where we are today in the context 

of the current legislation that is in front of us? If you were in our 

shoes, what would you like us to do? 

Mr. GAUSS. I would stop and then fix it, but do not try to fix it 

while it is still going. There is no doubt that there are some good 

things for some people in the Act. 

Underwriting, we are all going to share in the heavier expenses, 

there is no doubt about that. But you cannot—I think somebody 

from Congress said it is like trying to fix a flat tire while the car 

is running. If we tried to do that in business, our customers would 

go somewhere else. They would not buy our product, they would go 

buy product from somebody who knew what they were doing. Stop 

and fix it. 

Mr. PITTENGER. Okay. Mr. Long. 

Mr. LONG. Yes, sir. 

Mr. PITTENGER. Thank you for your testimony. You referred to 

yourself as a job creator. 

Mr. LONG. Uh-huh. 

Mr. PITTENGER. I understand that you have some 150 jobs that 

you are in some measure responsible for in this region. That is a 

significant amount. 

36 

Mr. LONG. Uh-huh. 

Mr. PITTENGER. You alluded to some, but I am trying to get a 

handle in terms of the ongoing effects of this healthcare plan. How 

do you believe that is really going to impede your growth of your 

business and that of other businesses that you are involved in? 

Where do you see the shortfalls? What keeps you up at night in 

terms of your ability to expand and your ability to grow? 

Mr. LONG. Well, in the Charlotte region, we are focused typically 

in a 50-mile radius of Gaston County, our work is, and so we are 

very fortunate to have Charlotte, that metropolitan area, that really drives our economy. 

Mr. PITTENGER. That is a great area. 

Mr. LONG. It is. It is a beautiful place, best place in the world 

to live. However, I believe that everything we are seeing from government, from a regulatory standpoint and this, the Affordable 

Care Act, is dampening our growth every day. With all the issues 

we face as a nation on our economic side with our government 

growing faster than the private sector, we need to grow out privately of our problems, so that we can have a broader tax base instead of raising taxes and raising cost of doing business. And this 

is just another way that our government is not being a good partner at the right scale. 

And so I think it will just negatively impact—and a lot of times, 

these regulations, the impact is hard to see on the surface, there 

are a lot of hidden costs and there is a lot of hidden impact of slower growth. You are trying to prove a negative and that is very difficult. 

Mr. PITTENGER. Mr. Falls, thank you for your testimony. 

You know, we get calls every day in our office, ‘‘what do I do 

now?’’ In your practice, can you shed some light on what you tell 

your customers, what they can do in light of the challenges that 

they face? What are the options, what advice can you give us? 

Mr. FALLS. Well, it is very confusing for my clients as well as the 

industry. Even as late as last week, when the President spoke, he 

changed direction on the industry as well. I have met with many 

people and talked to them about their subsidy options, talked to 

them about coverage without subsidies, the different plans that are 

out there, limited plans, less plans than we had in 2013. And even 

after meeting with them and talking to them about the direction 

to go, they will hear something on the news, they will hear from 

the President or they will hear something from the newsmen and 

they will make a phone call to me and say ‘‘I do not understand. 

Everything sounds different today than it did yesterday, and is 

there going to be any resolve to this.’’ And my answer is ‘‘I do not 

know.’’ 

Mr. PITTENGER. It is tough. 

I yield back. 

Chairman ISSA. We are going to a quick second round if you all 

can stay for that. I have just got a couple of questions. 

Mr. Long, as an employer of 160 or 146-plus, I guess you, your 

wife and a few others in the family, your brother. You have had 

insurance for a long time. 

Mr. LONG. Uh-huh. 

37 

Chairman ISSA. Did you have insurance when you were growing 

up? 

Mr. LONG. Sure. 

Chairman ISSA. Did your family do it for the previous generation? 

Mr. LONG. Yes. 

Chairman ISSA. Even the first generation, there was some consideration? 

Mr. LONG. You know, I am not sure, but I would—I am not sure 

we did, that first generation. 

Chairman ISSA. But for decades your family has provided it. 

Mr. LONG. Yes, decades definitely; yes, sir. 

Chairman ISSA. Now, I am going to ask an anecdotal question 

that I know the answer to, but if you do not, just say you do not, 

but in your experience, the companies that do not provide health 

insurance, particularly in your industry, they tend to be less than 

50, do they not? 

Mr. LONG. Yes, sir. 

Chairman ISSA. So, one of the things that always bothered me 

in the Affordable Care Act is we waived companies less than 50, 

when in fact, the vast majority of the companies in my recognition 

and in studies that have been done, the vast majority of companies 

that do not provide healthcare are these small, sometimes fly-bynight companies, sometimes just startup, well-intended. The Act 

waived providing it for the companies who least likely provided it 

while mandating the individual to have it. 

So in a strange, perverse way, the changes you are seeing, small 

competitors who are not providing healthcare and are not mandated to provide healthcare, do not see. Do you see that as anticompetitive if we are going to have a law and then we are going 

to waive for people who least likely provided healthcare? 

Mr. LONG. Of course, if that is the case with employers under 50. 

We believe insurance partnership with our employees is something 

we must do to hire incredible co-workers and to provide the services that we want—the level of service we want to provide. But if 

it is not even across the board, there is more and more chance of 

uneven competition. 

Chairman ISSA. Well, having been an electronics manufacturer, 

I agree that covering your employees gets you a better employee, 

to say the least. 

Mr. Gauss, the other thing that is in this Act is this idea that 

if you lower people to part time, particularly the restaurant industry and so on, you do not have to cover them. Does that make any 

sense to you, that the part time employee, the one least able to afford to pay the healthcare all by themselves is exempted no matter 

how large a company is? 

Mr. GAUSS. Not at all. In our industry as well as the restaurant 

industry and other seasonal part time industries, it may be very 

easy to take even someone who is making 32 hours or 34 hours 

down to 29 hours. You do not hear as much about it now because 

some large companies made the mistake of making that public 

about 18 months ago, so people have quit talking about the fact 

that they have actually done this. But they are doing it. 

38 

What I do not understand is my turnover is nine weeks in the 

staffing industry, which is okay for the staffing industry. And so 

the insurance underwriter underwrites my employee for nine 

weeks and then he goes somewhere else, whether it is to a permanent job, to another company, whatever, quits. All of a sudden, the 

insurance company has underwritten this guy for nine weeks and 

now he is gone. I cannot figure the accounting on that and neither 

can the IRS, by the way. They came to us and asked us. 

Chairman ISSA. One of the things about federal mandates is that 

we often pass them and then begin correcting them as soon as they 

are implemented. 

I guess my last question is a comment. I was in business for 

many years and as a member of the Chamber, we would have 

speakers. It has been about 15 years since the founder of Starbucks 

came to us and I might note that Starbucks is a part time employer. Most of the people that you see working at Starbucks are 

all part time. But they have provided proportional healthcare benefits. In other words, they pay a certain amount into a healthcare 

benefit for every employee, no matter how few hours, throughout 

their years. And I have got to be honest, that behavior is behavior 

I would like to have seen in the Affordable Care Act and I still 

would like to see. The idea that if people, someone has two part 

time jobs, their employer would be encouraged to pay in a portion 

to what ultimately would end up being combined. 

One of the things that I found in the Affordable Care Act that 

I do not understand is for the most part, individuals cannot—do 

not have a system where they can go to the exchange and have 

their employers each pay in a portion to it, if they are, for example, 

in your staffing situation. Do you want to address that? Because 

you have obviously looked at the fact that you have people that are 

going to be in individual accounts on the exchange, they are going 

to come to you for nine weeks and then going to go somewhere else. 

Is that right? 

Mr. GAUSS. Yeah. And I am going to step out on a limb and act 

like I know the answer to a question, but if I am not mistaken, proportionate contributions is forbidden under the Act. 

Chairman ISSA. That is my understanding too. 

Mr. GAUSS. I am probably wrong. 

Chairman ISSA. But again, Starbucks had a program that made 

sense long before there was a law. 

My time is expiring, but I—or expired. I just want you to understand that part of the listening session today is every one of us as 

members of Congress hopefully in a bipartisan House/Senate bicameral, will have an opportunity to see if we cannot make some 

of those fixes. One of the challenges, and I would ask you all, and 

for that matter, actuarials that may be listening to this, to weigh 

in on how it affects it. Because we realize that these changes also 

would have consequences for cost. But these are areas that I personally am concerned, that well-meaning employers, such as 

Starbucks over these many years, should be encouraged to continue 

doing what they are doing, not prohibited from it. 

Mr. McHenry. 

Mr. MCHENRY. Well, let me begin, you know, Mr. Long, your 

business is a competitive one, it is a service and the quality of what 

39 

you do matters a lot. But can you go out to the marketplace and 

just set your price? 

Mr. LONG. No, sir. 

Mr. MCHENRY. I asked this—you know, this is Congress we are 

talking to. 

Mr. LONG. Sure. 

Mr. MCHENRY. I just wanted to make sure. 

Chairman ISSA. You can set the price. The question is will the 

customer come. 

Mr. MCHENRY. Right. 

Mr. LONG. We can set any price we want, but that does not mean 

that we will get it. 

Mr. MCHENRY. Why? 

Mr. LONG. Because of open competition. 

Mr. MCHENRY. Competition. 

Mr. LONG. Competition is an incredibly wonderful thing. It 

makes us better. 

Mr. MCHENRY. So competition will set price. 

Mr. LONG. It makes us better, yes. 

Mr. MCHENRY. So if you have less competition—well, let us say 

you have more competition, right? Prices come down. 

Mr. LONG. Yes. 

Mr. MCHENRY. Okay. Well, Mr. Waters, you are in the health insurance business, right? How long you been in the health insurance 

business? 

Mr. WATERS. Thirty-three years. 

Mr. MCHENRY. Okay. So let us walk through this. I come to you, 

a small employer, and I say I would like to buy a health insurance 

plan—this is a couple of years ago. How many options do I have? 

Mr. WATERS. What we do is that we would run this through— 

we have about four or five carriers in our office, as it relates to how 

many we get in North Carolina, so we take four or five of the biggest carriers, we run that through the formula, our computer system, to try to find out which one of those gives you the best rate 

for what you are looking for. And then we go with that. 

Mr. MCHENRY. So let us say instead of four or five carriers, you 

have two. 

Mr. WATERS. Then that breaks down the competition to where 

the two carriers—— 

Mr. MCHENRY. Let me ask another question. We are sitting in 

North Carolina, but South Carolina is just a short, you know, 10 

minute drive from where we sit. 

Mr. WATERS. Sure. 

Mr. MCHENRY. Can I get a healthcare plan from South Carolina? 

Mr. WATERS. No, I would love to have South Carolina because 

there is some good competition there. 

Mr. MCHENRY. Right. So competition—and the reason why I talk 

about it is competition matters. 

So we go in the individual market in North Carolina, prior to 

Obamacare, we had 12 carriers. 

Mr. WATERS. Right. 

Mr. MCHENRY. Now, after Obamacare, going into next year, we 

have two—two. We have some counties, 61 out of 100 counties in 

40 

North Carolina, we only have one provider in the exchange. What 

does that do for competition? 

Mr. WATERS. No competition. 

Mr. MCHENRY. Does not pull down the price. 

Mr. WATERS. No. 

Mr. MCHENRY. Does not make things more competitive. And I 

say this because this is an important ingredient when we talk 

about healthcare reform, health insurance reform, more competition. So employers and individuals have more options. Right? 

I ask this because that competition matters. Mr. Waters, what is 

the main reason why people do not buy health insurance? 

Mr. WATERS. Primarily price drives the item. And then some people are looking for specific coverages, regardless of price. 

Mr. MCHENRY. Okay. 

Mr. WATERS. But price normally drives the item. 

Mr. MCHENRY. Price drives—I am sorry? 

Mr. WATERS. Drives the item that we are looking for. 

Mr. MCHENRY. Okay. So price drives—so this question about 

competition relates right back. 

Mr. WATERS. Right. 

Mr. MCHENRY. Okay. Now this is something, in this whole discussion, instead of simply me as a member of Congress saying I did 

not vote for the Affordable Care Act or Obamacare. Well, you have 

to be for something instead, right? And I support a comprehensive 

plan that would address this, would allow competition across state 

lines. Would you find that beneficial in your offerings? 

Mr. WATERS. I would find that beneficial, yes. 

Mr. MCHENRY. Okay. Now, so Mr. Long, in terms of your employees, now what are they looking for for their health insurance? 

I mean, you currently have a plan that you like, but unfortunately, 

in order to keep it, you are going to have to pay a whole lot more; 

is that right? 

Mr. LONG. Yes. We are not going to be able to keep it. It is going 

to change, our plan will change. 

Mr. MCHENRY. So you are not able to keep your current—— 

Mr. LONG. No, our plan will change next year. We just deferred 

that decision until December of next year. 

Mr. MCHENRY. Okay. So what does this mean for your employees? 

Mr. LONG. Our employees want the best coverage they can get 

for the dollars that they are willing to pay to protect their families 

in case of a healthcare problem. They do not want anything for 

free, but they do want good coverage at a reasonable cost and they 

want input into what they are receiving. They want choices. We 

need more choices instead of less choices. And I think all of us do. 

Mr. MCHENRY. Mrs. Overbey, would you like to have more 

choices in terms of your health insurance? Would you like to be 

able to make the choice on whether or not you purchase a policy 

that covers a procedure you are morally opposed to? 

Mrs. OVERBEY. Of course. I think that is what Americans want. 

We do not want to have to be forced to buy something that we do 

not have any choice in the matter. 

When I woke up this morning, I live in a capitalistic society, not 

a socialism society and I want to be able to make those choices, I 

41 

want to be able to have that competition. I want to be able to go 

and look because as an American citizen I have the freedom and 

hopefully the right to do that. And I want those rights to continue, 

to be able to do that. 

Mr. MCHENRY. So, you know, when I look at this, there are a lot 

of pledges made about this law. I think people have various opinions about it, but disappointment is the greatest word I hear 

from—most consistent word I hear from my constituents. 

And so I thank you for taking the time to testify today. I know 

it is a challenge to take time out of all of your busy schedules, but 

it means a lot that you would take the time to tell your stories. 

And I appreciate those in the crowd that have their statements 

that they want to share and place in the Congressional Record. We 

will—the Chairman has made that possible and I appreciate your 

willingness to tell your stories. What we want is greater coverage 

and care at a lower price. We want more competition and choice, 

not fewer or less. And so I think we are unified in that. 

And the fact is that the higher insurance prices under this law 

are not Republican increases or Democrat increases, they are increases that American families are bearing or trying to bear. So it 

is not a partisan question, it is just a practical question about the 

cost for families. 

And so, Mr. Chairman, thank you for holding this hearing and 

I yield back. 

Chairman ISSA. Thank you. 

Mr. Pittenger. 

Mr. PITTENGER. Thank you, Mr. Chairman. 

Mrs. Overbey, your points related to coverage that is not needed, 

the Cadillac plans, everybody buys the same, inside the same box, 

we hear that. In fact, I co-sponsor a bill with Congresswoman 

Ellmers, as I believe my colleagues do, that would restrict the coverage to those items that you need and that you would want. So 

hopefully, clearer minds will prevail and we will have a better policy come through that. 

I would direct my last comments or questions to Mr. Waters and 

Mr. Falls. 

From your experience in your insurance business, as you look at 

the required actuaries and the pool risk, what do you anticipate 

will occur as those who sign up through the exchanges, what will 

we have in terms of a risk pool? Will it be adequate, will it be balanced? Will it only embrace those who have a preexisting condition? 

As you look at the motivation for people who buy insurance—you 

know, the Congressional Budget Office said that the healthcare 

plan is unsustainable. Max Baucus, the Democrat Chairman in the 

Senate Banking Committee, said it is a train wreck. Well, this has 

some major implications, and so I think I would just like to know 

from your personal experience, what you would anticipate down the 

road as these pools are being assembled. 

Mr. FALLS. I would like to answer that question and also reference Congressman McHenry’s prior question on Inclusive Health, 

to give an example on how I think from experience this will happen. 

42 

Inclusive Health had a state option as well as had a federal option that was canceled earlier this year. It was no longer—you no 

longer can sign up on federal option. When that plan was first introduced, there was an influx of federal monies that was put into 

that plan, along with premiums being paid in by the people that 

elected to get on those plans. The premiums that were being paid 

in were not enough to cover the expenses of the plan and eventually those rates had to increase and that is the understanding that 

we—as insurance agents, that is what we were told the reason why 

they canceled that federal plan earlier this year rather than stopping it December 31st, along with the state plan. 

The other reason why this plan is being canceled, both the federal option and the state options, the requirement—one of the requirements to be eligible for those plans is you cannot be eligible 

for coverage anywhere else. Because the Affordable Care Act—essentially there are no health insurance questions on the applications for health insurance now—there are no health questions 

other than if you use tobacco or if you are pregnant. And that is 

just to determine—the question on pregnancy is to determine how 

many people you are going to count in your household. Because 

there are no health questions on that now, everything is based on 

income. 

The subsidies are out there, the lack of underwriting, as Mr. 

Gauss spoke to earlier, this is going to go—I believe this is going 

to go the way that most insurance policies that are not well 

thought out will go. And they will eventually either have to increase the premiums drastically or those plans will just have to go 

away. 

Mr. PITTENGER. This business model was based on the presupposition that those who are younger would also buy into it. Is it your 

experience that that age group buys into insurance at this time, 

will they fulfill their role in terms of the risk pool requirement? 

Mr. FALLS. The premise that the young people are going to be 

the salvation of this plan, I find is hard to believe. Whenever you 

have someone that is 30 years old or younger and they elect to take 

a plan, most 30 year olds or younger that I know just come out of 

college, in our area, make less than $45,960. That is the upper 

limit where you qualify for subsidies. So those premiums they are 

going to be paying in are not really going to be that significant in 

most cases and are not going to help the pool. 

Mr. PITTENGER. Thank you. 

Mr. Waters. 

Mr. WATERS. I would agree everything he said. I just recently 

saw a program that came out of Kentucky and the 4600 people that 

signed up, 25 percent—and they used zero to 30, I think it was 25 

percent of the people had signed up of that 4000. And then from 

30 to about 55, there was only 34 percent that had signed up, and 

from 35 to 64, I think it was 39 percent of the people had signed 

up. Obviously the older people need it, the younger people do not. 

Mr. PITTENGER. Well taken. 

That ends my questions. 

Mr. Chairman, thank you for coming here. It is a huge statement 

by you from our Congress to come to our region and I just really 

applaud the effort that you have made. 

43 

Chairman ISSA. Thank you. 

I want to thank all our witnesses today. I want to thank the audience for being an extremely good audience. 

I am going to close with a question for the record, for all of our 

witnesses, and this is also a question for anyone that may want to 

submit their comments. I did not vote for the Affordable Care Act 

for a number of reasons, but my own state, California, was working 

on a similar piece of legislation under then Governor Swarzenegger 

and I participated in it. So I have looked at employer and individual mandates which were considered in my state by a Republican governor. 

I ask only one question for our witnesses and anyone else who 

wants to comment. Had the federal government enacted the Affordable Care Act requirements, but made them only linked to the aid 

given by the federal government, either through Medicaid or 

through the subsidies, such that the states would have retained 

their entire right, and employers like Mr. Long, to have the 

healthcare they already had pursuant to their state commissioner 

and pursuant to the Tenth Amendment, would we be here today? 

Or would we have gold plans, platinum plans, whatever you want 

to call them, determined by the federal government under the system and they would be the only plans eligible for subsidies. And 

those needing or wanting subsidies would choose from those plans 

and they would be essentially, if you want the federal dollars you 

play by the federal rules, which we do in Washington all the time. 

We do it with highway funds and so on. 

But if we had not touched the state insurance commissioner here 

in North Carolina or any other state, so that plans like Mr. Long 

and plans like Mr. Falls and Mr. Waters sell would still be available to everyone who wanted to buy them, but perhaps not eligible 

for the subsidies, would we be here today? 

You can comment on that and other things because as Congress 

looks at how to perhaps make changes in the Affordable Care Act 

so that all Americans can have the promise of the President that 

if you like your healthcare, you can keep it, we can begin looking 

at the question of did we overreach and is that distortion of the 

market the reason we are seeing so many costs go up, rather than 

the outreach of government with a large chunk of money—it clearly 

was a large chunk of money for these subsidies—which in fact, I 

never found a subsidy per se to be the driver of healthcare costs 

going up. But I have found the rules under the Affordable Care Act 

perhaps be part of it here today and in other hearings. 

So I leave that as an open question for everyone and I appreciate 

the audience’s willingness to add to the dialogue today in writing. 

I thank our witnesses and we stand adjourned. 

[Whereupon, at 11:35 a.m., the Committee was adjourned.] 

(45) 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

46 

Æ 


Insert offset folio 15 here 86723.015

Inserts for the Record 

Article offered by Chairman Issa - Manhattan Institute, a Published Study of State-bY-State Analysis of 

the Impact of Obamacare Premiums: http://www.forbes.com!sites!theapothecarv!2013!11!04!49-

state-analysis-obamacare-to-increase-individual-market-premiums-by-avg-of-41-subsidies-flow-toelderly! 

Article offered by Chairman Issa - excerpts from USA Today on Nov, 22: 

http://www.usatoday.com!story!news!nation!2013!1l!21!affordability-obamacare-plans-varies-statecountY!3641821! 

Excerpts from the Heritage Report on Healthcare Costs under the ACA: 

http://thfmedia,s3,amazonaws,com!2013!pdflBG2852,pdf