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THE EFFECTS OF THE PRESIDENT’S 

HEALTH CARE LAW ON INDIANA’S 

CLASSROOMS AND WORKPLACES 

HEARING 

BEFORE THE

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD IN INDIANA, SEPTEMBER 4, 2014 

Serial No. 113–64 

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

( 

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

committee.action?chamber=house&committee=education 

or 

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

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(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Thomas E. Petri, Wisconsin 

Howard P. ‘‘Buck’’ McKeon, California 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Tom Price, Georgia 

Kenny Marchant, Texas 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Scott DesJarlais, Tennessee 

Todd Rokita, Indiana 

Larry Bucshon, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Mike Kelly, Pennsylvania 

Susan W. Brooks, Indiana 

Richard Hudson, North Carolina 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

George Miller, California, 

Senior Democratic Member 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

Rush Holt, New Jersey 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Timothy H. Bishop, New York 

David Loebsack, Iowa 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Mark Takano, California 

Juliane Sullivan, Staff Director 

Megan O’Reilly, Minority Staff Director 

SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS 

DAVID P. ROE, Tennessee, Chairman 

Joe Wilson, South Carolina 

Tom Price, Georgia 

Kenny Marchant, Texas 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Scott DesJarlais, Tennessee 

Larry Bucshon, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Mike Kelly, Pennsylvania 

Susan W. Brooks, Indiana 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

John F. Tierney, Massachusetts, 

Ranking Member 

Rush Holt, New Jersey 

Mark Pocan, Wisconsin 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Rube ́n Hinojosa, Texas 

David Loebsack, Iowa 

Joe Courtney, Connecticut 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

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C O N T E N T S 

Page 

Hearing held on September 4, 2014 ....................................................................... 1 

Statement of Members: 

Roe, Hon. David P., Chairman, Subcommittee on Health, Employment, 

Labor, and Pensions ..................................................................................... 1 

Prepared statement of ............................................................................... 3 

Statement of Witnesses: 

Defabis, Mark, President and Chief Executive Officer, Integrated Distribution Services, Plainfield, IN ................................................................. 49 

Prepared statement of ............................................................................... 51 

Forkner, Tom, President, Anderson Federation of Teachers, AFT Local 

519, Anderson, IN ......................................................................................... 17 

Prepared statement of ............................................................................... 19 

Lamar, Nate, International Regional Manager, Draper Inc., Spiceland, 

IN ................................................................................................................... 60 

Prepared statement of ............................................................................... 62 

Shafer, Mike, Chief Financial Officer, Zionsville Community Schools, 

Zionsville, IN ................................................................................................. 5 

Prepared statement of ............................................................................... 8 

Stone, Robert, Director of Palliative Care, IU Health Bloomington Hospital, Bloomington, IN .................................................................................. 54 

Prepared statement of ............................................................................... 57 

Snyder, Tom, President, Ivy Tech Community College, Indianapolis, IN ... 11 

Prepared statement of ............................................................................... 13 

Tanoos, Danny, Superintendent, Vigo County School Corporation, Terre 

Haute, IN ....................................................................................................... 23 

Prepared statement of ............................................................................... 27 

Wolfe, Dan, Owner, Wolfe’s Auto Auction, Terre Haute, IN ........................ 45 

Prepared statement of ............................................................................... 47 

Additional Submissions: 

Bucshon, Hon. Larry, a Representative in Congress from the State of 

Indiana: 

Clay Community Schools, letter, dated Aug. 5, 2014 ............................. 34 

Messer, Hon. Luke, a Representative in Congress from the State of Indiana: 

Community School Corporation of Southern Hancock County, letter, 

dated Sept. 3, 2014 ................................................................................ 78 

Mr. Tanoos: 

Letters to the Internal Revenue Service ................................................. 31 

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(1) 

THE EFFECTS OF THE PRESIDENT’S HEALTH 

CARE LAW ON INDIANA’S CLASSROOMS AND 

WORKPLACES 

Thursday, September 4, 2014 

U.S. House of Representatives 

Subcommittee on Health, Employment, Labor, and Pensions 

Committee on Education and the Workforce 

Washington, D.C. 

The subcommittee met, pursuant to call, at 10:00 a.m., in Greenfield City Hall, 10 South State Street, Hon. David P. Roe, [chairman of the subcommittee] presiding. 

Present: Representatives Roe, Bucshon, Brooks, Messer, and 

Rokita. 

Staff Present: Janelle Belland, Coalitions and Members Services 

Coordinator; Molly Conway, Professional Staff Member; Zachary 

McHenry, Legislative Assistant; Brian Newell, Communications Director; Eunice Ikene, Minority Labor Policy Associate; Amy Peake, 

Minority Labor Policy Advisor. 

Chairman ROE. A quorum being present, the Subcommittee on 

Health, Employment, Labor, and Pensions will come to order. 

Good morning, everyone, and welcome to today’s hearing. I would 

first like to take a moment to thank our witnesses for joining us 

here to discuss this important issue. I would also like to extend our 

appreciation to the members and staff of the Greenfield City Government for hosting our hearing and thank the citizens of this 

great city for their hospitality, especially Mayor Fewell. The mayor 

and I had an opportunity to speak beforehand. 

Phil Roe is my name, from northeast Tennessee, and I was the 

mayor of a small town, a little bit larger than Greenfield, about 

60,000 people, Johnson City, Tennessee, and I feel very at home in 

City Chambers. I spent 10 years on the planning commission. I 

spent six years as a city commissioner and was also mayor of the 

city. You have a beautiful city here. 

Just let me explain to you, it is not usual that we have field 

hearings outside Washington. But this is the fifth one of these that 

I have chaired, and I believe it is very important. Being a local official, I think the best government brings the government to the people, and I have made a real effort, and you should be honored, as 

I am honored to be here, to have this in your community, to have 

an official hearing of the U.S. Congress. I want to thank all of you 

all for being here today. 

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Before I joined the Congress, I spent more than 30 years practicing medicine in rural Appalachia. As a physician, I have experienced firsthand a health care system that is the envy of the world 

and one that has helped improve the lives of countless men, 

women, and children, but I also learned our health care system 

isn’t perfect. 

One of the problems with the American health care system is it 

costs too much, it is too bureaucratic, and there are far too many 

families that lack access to the care they need. Health care reform 

has long been an urgent national priority. It is one of the reasons 

I decided to run for Congress. Unfortunately, the President’s health 

care law is not the right prescription for reform. In fact, it is making many of these challenges worse. 

Under the President’s plan, health care costs are going up, not 

down, and full-time jobs are being destroyed, not created. One of 

the things that struck me when I was preparing for this hearing, 

I have been in Congress, this is my sixth year, and the committee 

prepares a hearing memo for us. As I was reading the first paragraph of this hearing memo it said employer-sponsored health insurance is the predominant source of coverage for individuals and 

families. 

According to the Kaiser Family Foundation, approximately 150 

million Americans and 66 percent of workers are covered by employer-provided health plans. When I started in Congress six years 

ago, that number was 160 million of our friends and neighbors and 

62 percent. So we have lost—10 million of our citizens have lost— 

health insurance coverage in the last six years. It is unbelievable. 

The harmful consequences are playing out in communities across 

the country. 

The Federal Reserve Bank of Philadelphia recently surveyed 

area businesses to learn how the law is affecting their workplaces. 

Approximately 18 percent of businesses said they are cutting jobs 

and employees, and another 18 percent said they were shifting 

more workers to part-time hours. Additionally, a majority of employers are changing their health plans because the law is passing 

more costs onto employees. Federal Reserve authorities in Atlanta 

and New York report similar findings. 

The law is hurting not only our businesses, but our classrooms 

as well. Higher costs, fewer full-time jobs, lost wages—these are 

problems that are plaguing schools nationwide. A survey by the 

College and University Professional Association for Human Resources found many institutions are passing more health care costs 

onto their employees. Students will ultimately lose as schools grapple with the law’s added costs and burdensome mandates. 

Our children and working families deserve better. It is clear that 

we need to set aside the President’s health care law and start over 

with real reform that will lower costs and expand access. I want 

to do a shout-out for Todd, Mr. Rokita, who is sitting to my right. 

He served on a committee with me formed by the Republican Study 

Committee, which I chaired, to write the American Health Care Reform Act, which he was very instrumental in, and I want to thank 

you for the work that you did, the Republican alternative. 

In the meantime, we need to take responsible steps that will provide relief to schools and workplaces. That is precisely what the 

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House of Representatives is determined to do. I want to thank my 

colleague, Representative Luke Messer, for helping lead this important effort. 

Before I turn it over to Luke, I want to just do an introduction 

to the panel. I feel really fortunate to work with these four great 

men and women that are on this panel. 

Dr. Larry Bucshon is a good friend, a fellow physician from 

Evansville, Indiana. I have been to his community for a hearing. 

Susan Brooks, I have now been to Indianapolis to meet with the 

Indiana Medical Society. I feel like I ought to be a property owner 

there. 

[Laughter.] 

Chairman ROE. But, she is a terrific addition. And obviously 

Luke Messer, who I have just mentioned, and Mr. Rokita. We all 

work on the Education and the Workforce Committee. We all have 

a passion for education. I personally am a 23-year public school 

attendee. I have never been to a private school, and for some young 

guy like me who was raised on a farm in rural Tennessee to be 

able to go to college and medical school, it was because of a great 

public education system, and I absolutely am committed to that. 

That is the opportunity that most of us have. 

I now yield the remainder of my time to Mr. Messer, and I will 

say I have great respect for him because he married a lovely young 

woman from my district, Greenville, Tennessee. 

[Laughter.] 

Chairman ROE. Mr. Messer? 

Mr. MESSER. Everybody in this crowd that knows Jennifer knows 

I over-achieved in that department, no question about it. 

[Laughter.] 

Mr. MESSER. Thank you, Mr. Chairman. I want to thank all my 

Indiana colleagues for being here today. I want to welcome you all 

to Greenfield. It is great to look out in the crowd and see so many 

friends out there. I knew when we were looking for a location to 

have this hearing, Greenfield was going to be a great place to do 

it. Thanks to everyone for taking time out of your busy schedules 

to participate in today’s hearing. 

I want to especially thank Mayor Chuck Fewell and the Town of 

Greenfield for hosting this event today. On behalf of everyone here, 

witnesses too, I thank Chuck for bringing doughnuts. 

This hearing will allow school leaders and business owners to 

share their perspectives about how the President’s health care law 

is impacting them. 

I want to thank Chairman Roe again for convening the hearing 

and for leading the effort, with Committee Chairman Kline, to 

highlight the negative impact of the President’s health care law. 

Congress needs to hear directly from those who have been forced 

to make difficult decisions as a result of the law’s employer mandate, which requires employers to provide expensive governmentapproved health care or face steep fines. Put simply, the Federal 

Government should not be taxing schools and small businesses to 

pay for the President’s health care law. It is just not right. And if 

we really care about our economy and our nation’s future, we will 

do something about it. 

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Dave Adams, the Superintendent of Shelbyville Central Schools, 

first brought this issue to my attention early last year. He said the 

employer mandate will cost his schools $794,000 annually. Bob 

Yoder, Assistant Superintendent of Southern Hancock School Corporation, estimated its price tag at $450,000 per year. Unfortunately, their stories are not unique, and you will hear some of 

those stories today. 

That is why I have introduced legislation to exempt schools from 

this onerous provision. We can’t fund the President’s health care 

law at the expense of education. 

Small businesses are being harmed, too. Businesses statewide 

have been forced to reduce worker hours and scale back their workforce to balance new budget constraints imposed by the law. That 

is why I have introduced legislation that will exempt most small 

businesses from this tax, too. It is also why I support legislation 

that would restore the full-time employee equivalent to the traditional 40-hour threshold as well. 

Nate LaMar, the International Regional Manager of Draper, Incorporated, in Spiceland, rightly notes that the law’s fees and taxes 

don’t stop with the employer mandate. 

There are strong feelings about the President’s health care law 

on both sides of the aisle. I respect those views, and I respect the 

views of those who believe deeply that it is the best way to address 

the challenges in our health care system. I would hope that most 

would agree, however, that our nation’s school children and hourly 

workers should not be forced to pay the price of this law. 

Thank you, Mr. Chairman, and I yield back the balance of my 

time. 

Chairman ROE. I thank the gentleman for yielding. 

Pursuant to Committee Rule 7(c), all members will be permitted 

to submit written statements to be included in the permanent 

hearing record. Without objection, the hearing record will remain 

open for 14 days to allow such statements and other extraneous 

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

It is now my pleasure to introduce our first panel of distinguished witnesses. 

Mr. Mike Shafer is a Certified Public Accountant and currently 

serves as the Chief Financial Officer for Zionsville Community 

Schools in Zionsville, Indiana. Mr. Shafer has been CFO of the 

Zionsville Community Schools since April of 1998. 

Welcome, Mr. Shafer. 

Mr. Tom Snyder is President of Ivy Tech Community College in 

Indianapolis, Indiana. Ivy Tech is the largest institution of higher 

education in Indiana and the nation’s largest singly accredited 

statewide community college system. 

Welcome, Mr. Snyder. 

Mr. Tom Forkner is the President of Anderson Federation of 

Teachers, AFT Local 519 AFL–CIO of Anderson, Indiana. Mr. 

Forkner has been teaching at Anderson Community Schools since 

1976 and has been President of Anderson Federation of Teachers 

since 2010. 

Welcome, Mr. Forkner. 

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And Mr. Danny Tanoos is a Superintendent of Vigo County 

School Corporation in Terre Haute, Indiana. Mr. Tanoos has been 

an employee of the Vigo County School Corporation for 35 years 

and has served as Superintendent of the Schools for the last 17 

years, and that must be a record because I think the average 

school superintendent in America is three years. 

[Laughter.] 

Chairman ROE. So my congratulations, or condolences, I am not 

sure which. 

[Laughter.] 

Chairman ROE. Before I recognize you to provide your testimony, 

let me briefly explain our lighting system. You have five minutes 

to present your testimony. When you begin, the light in front of you 

will turn green. With one minute left, the light will turn yellow. 

When your time has expired, the light will turn red. At that point, 

I will ask you to wrap up your remarks as best you are able. We 

won’t cut you off, but try to wrap up your thoughts. And after everyone has testified, members will each have five minutes to ask 

questions. 

Mr. Shafer, you are recognized for five minutes. 

STATEMENT OF MIKE SHAFER, CHIEF FINANCIAL OFFICER, 

ZIONSVILLE COMMUNITY SCHOOLS, ZIONSVILLE, INDIANA 

Mr. SHAFER. Thank you, sir, and thank you to all the distinguished congressmen and congresswomen— 

Chairman ROE. Mr. Shafer, could you move that mic a little bit 

closer to you? 

Mr. SHAFER. Yes, sir. Thank you to the Chairman and to all the 

distinguished congressmen and Congresswoman Brooks for the opportunity to testify today about the effects of the President’s health 

care law in Indiana’s classrooms. 

My name is Mike Shafer. I am the Chief Financial Officer for 

Zionsville Community Schools in Zionsville, Indiana. Zionsville 

Community Schools is a suburban school district of some 6,200 students located in Boone County, Indiana, on the northwest corner 

of the Indianapolis metropolitan area. Our school district is a perennial leader in academic achievement in the State of Indiana, 

consistently ranking in the top three public school districts in the 

state as measured by various standardized test scores, graduation 

rates, college placement rates, and all other objective measures of 

student performance. 

However, our academic successes do not equate to the level of 

funding our schools receive. In fact, Zionsville Community Schools 

receives one of the lowest amounts of funding per pupil of any public school district in the state. As a result, the Patient Protection 

and Affordable Health Care Act has had and continues to have a 

severe and disproportionately disruptive effect on our high performing school district. 

We have identified three categories in which these negative effects have occurred in our school district. There is the impact on 

our students, the impact on our employees, and the impact on the 

school district itself. These intertwined and interactive effects, 

taken together, are serious and now appear to be increasing in 

their severity over time. 

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In 2013, as the provisions of the PPACA became better known 

and their ramifications started to become clear, we grew concerned 

about the impacts on our schools. Public school districts, including 

ours, commonly employ instructional aides, cafeteria workers, nonlicensed substitute teachers, sports coaches, and various other categories of support positions for 30 hours or more per week during 

the school year. 

Bluntly stated, public school districts across the nation commonly 

did not then and do not now offer health insurance coverage to the 

employees in those categories because the cost of offering coverage 

is beyond the budgetary means of most school districts to do so. 

School districts, including ours, realized then that the effect of the 

PPACA would be to choose between paying enormous amounts of 

excise taxes to the IRS under the provisions laid down in Section 

4980H of the Internal Revenue Code for employer responsibility 

payments or incurring budget-busting costs to provide highly subsidized affordable health insurance for these employee groups, or 

be forced to reduce the work hours allowed for each of these employees to less than 30 hours per week. 

For Zionsville Community Schools, we found that the cost we 

would incur should we fail the eligibility tests of the law and incur 

the excise tax penalty would be between $1.25 million and $1.6 

million, with these amounts increasing in the future. The alternative of providing the coverage and subsidizing it for the employees to the degree required to meet the 9.5 percent affordability test 

would cost approximately $1.17 million in insurance premiums. All 

of these amounts would have fallen directly on our already overly 

strained general fund budget. In the end, we concluded that making a choice between these alternatives was no choice at all but in 

reality was a Hobson’s Choice. We could only ensure the financial 

viability of the school district and the continued ability of the 

school district to deliver quality education to children if we reduced 

our support staff hours of work. 

This is why we are compelled to say today that the PPACA is directly affecting our students. The employees of the school district 

are there to serve our students. The services provided by these employees to school children has been reduced because we were forced 

to reduce the number of hours of services of our classroom aides, 

who actively supplement the instruction provided by our teachers. 

If you are a six-year-old learning to read in Zionsville and you 

need extra help, you will still get help, but the school personnel 

providing that help will be busier and will go home sooner than 

was the case in the past, and realistically you may not get quite 

as much help as you would have. 

If you play on the girls’ softball team at the middle school, you 

got a new coach. The former coach was successful, respected, and 

a great role model, but he wasn’t allowed to coach anymore because 

that would put him over 29 hours per week. 

If you are a special needs student, for whom stability is an important part of maintaining your success at school, we can no 

longer guarantee the continuity for many of you that we once had. 

As workers find they cannot survive on 29 hours per week, our 

turnover rate has increased dramatically. 

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The PPACA’s effects on our employees should be obvious at this 

point. Reducing the affected employee groups’ hours decreased 

their pay by 10 to 20 percent. This worked a real economic hardship on these hard-working Indiana taxpayers. Given that approximately 150 employees had their hours cut, and not-to-exceed caps 

were placed on over 200 others, the impact on the employees is one 

which is felt throughout the homes and businesses of our community. 

In terms of the effects on the school district itself, the effects 

have been far reaching. In addition to the concerns about the effects on our students and our employees, we have found we are 

now facing major issues with employee recruitment and retention 

in affected employee groups. We also have incurred significant new 

costs. For a handful of our most severe special needs students, we 

found that having aides or attendants with reduced hours just did 

not and could not work. As a result, we did create one new employee group for those cases. This new group, because of the number of hours they were needed, is being offered insurance subsidized by the school district, with an annual cost for this coverage 

of nearly $70,000 for this group. 

While the bulk of the negative effects of the PPACA on our 

school corporation are generated by the IRS’ ‘‘30 hours is full-time’’ 

rule, there are certainly other negative effects that the school district is experiencing. Last July, we were required to file an IRS 

form and pay the PCORI fee. Later this year we will be paying the 

reinsurance fee. Together, these fees will exceed $65,000 for us. 

Frankly, the idea that public school districts should use tax dollars to pay fees to subsidize big insurance companies is wrong. In 

our case, $65,000 is more than the cost of a teacher for a year. 

With our growing enrollment, we needed more teachers. We 

struggled and scraped to come up with enough money for the number of teachers we could. When we look at a class of students in, 

say, second grade, we find that class size could have been lower in 

at least one of our elementary schools by a significant number if 

we could have afforded one more teacher, but the money for that 

one more teacher instead is going to pay the fees under the 

PPACA. 

I will also mention that although the 30-hour rule is our primary 

concern, we also have future concerns about the record-keeping and 

reporting requirements. We are concerned about whether or not the 

staff we have is adequate for that. We do not want to hire more 

clerical help or bookkeepers, more accountants, more consultants, 

and take money out of the classrooms to do so. 

Thank you for your time and kind attention today, and for your 

service to our nation. 

[The statement of Mr. Shafer follows:] 

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Chairman ROE. Thank you, Mr. Shafer. 

Mr. Snyder, you are recognized for five minutes. 

STATEMENT OF TOM SNYDER, PRESIDENT, IVY TECH 

COMMUNITY COLLEGE, INDIANAPOLIS, INDIANA 

Mr. SNYDER. Thank you, Mr. Chairman, for the opportunity to 

speak on behalf of Ivy Tech Community College, its 200,000 students, and its nearly 8,000 faculty and staff. And thank you for 

continuing the discussion on the effect of the current health care 

law and its impact on the classroom. 

Our focus at Ivy Tech, as it is for the 1,000 community colleges 

across the country, is to employ faculty and to educate tens of thousands of students for future careers. The community college structure, unique to the United States, is also our country’s most affordable and accessible option for higher education. The U.S. is behind 

in educational attainment. If we are to close the gap, we need community colleges more than ever. 

Let me be specific about Indiana. We have one statewide community college. We are the largest such college in the U.S., serving 

those 200,000 students at over 100 locations. We are open admissions, serving a very complex student body, some entering college 

for the first time one year after high school, sometimes 20 years 

after high school, some seeking a career change, and others starting at the community college and then transferring to a four-year 

school. 

Among Indiana’s public higher education institutions, Ivy Tech 

has more than half of all Pell Grant recipients and more than half 

of the African American students. For many of our students, Ivy 

Tech may be their best chance in life to get the education needed 

for today’s workforce. 

One of the keys to our success is our adjunct faculty team of 

more than 4,000. Most are practitioners in their field who bring 

real-life, real-time experience into the classroom. It helps our students to be truly career-ready when they complete. Adjunct faculty 

also expose local business and industry to the community college. 

Moreover, most of these adjuncts are often the very individuals we 

consider when we have full-time positions to fill. In fact, in the last 

four years, we have placed more than 500 adjuncts into our 1,500 

full-time positions. 

Let us reaffirm that Ivy Tech is a supporter of quality health 

care for all citizens, but we do need to highlight some of the serious 

concerns that we have with respect to certain provisions of the new 

law. 

A key part of our strategy to keep tuition affordable is to operate 

within a model that utilizes adjunct faculty for over 50 percent of 

our instruction. The Affordable Care Act has caused us to carefully 

manage the hours of teaching that we can offer. We now limit 

classroom time to 12 hours to provide an additional 15 hours of 

preparation for the in-classroom work. Our funding is very limited. 

This does not allow us to absorb this unfunded mandate such as 

health care for the employee if they do reach the 30-hour limit. We 

would have to put such costs on the backs of students by increasing 

tuition. And as a result, many of those who are at the lowest income levels would not be able to afford college. 

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Another alternative suggested is to find more adjunct faculty, but 

this creates another problem. There is clearly a lack of additional 

credentialed faculty with Master’s degrees in English, Master’s degrees in Math, and Master’s degrees in Advanced Manufacturing. 

We are, in fact, canceling classes because of this. And despite having qualified adjuncts who could step in and teach another course 

or two, we are not in a position to allow them to do that. 

Because of the unique role of the adjunct in the community college, the end result may mean less access for students nationwide. 

The 30-hour rule impacts us in two other ways. We had planned 

to expand the advising role for adjuncts, critical to retention. However, the new law has made this very difficult to implement. And 

professional development for adjuncts is on hold until we create a 

new IT system, a costly statewide system that would track these 

4,000 adjuncts statewide across all of our locations. 

We at Ivy Tech are about ensuring we are able to provide the 

best educational product and at the same time protect the jobs of 

our adjuncts. The goal is to increase educational attainment across 

our nation, but I fear the reverse. These changes will only increase 

the cost of higher education and decrease attainment. 

In closing, the 30-hour rule puts the burden on a segment least 

able to benefit from it or afford it. We hope you will give careful 

consideration to its revision. We thank you for the opportunity to 

present our case. 

[The statement of Mr. Snyder follows:] 

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Chairman ROE. Thank you, Mr. Snyder. 

Mr. Forkner, you are recognized for five minutes. 

STATEMENT OF TOM FORKNER, PRESIDENT, ANDERSON FEDERATION OF TEACHERS, AFT LOCAL 519, ANDERSON, INDIANA 

Mr. FORKNER. Thank you. Good morning, Mr. Chairman and 

members of the subcommittee. My name is Tom Forkner. I am the 

president of the Anderson Federation of Teachers, an affiliate of 

the American Federation of Teachers, AFL–CIO. 

Thank you for this opportunity to discuss the many positive effects of the President’s health care law on our state. First and foremost, I am pleased that more than 132,000 Hoosiers have already 

enrolled in a Marketplace plan and now have access to affordable, 

accessible, and high-quality health care. 

Our local represents about 450 certified teachers and about 100 

noncertified custodians, school secretaries and maintenance workers in the Anderson Community Schools. All of our members are 

provided health insurance through our collective bargaining agreement. 

There are about 100 classroom aides and 100 food service workers who work in the school system, but are not part of our local. 

Many of the classroom aides work in special needs classrooms, 

where they help the teacher by working one-on-one with special 

needs students. Sadly, neither the classroom aides nor the food 

service workers are offered health insurance by the school system. 

Prior to the implementation of the Affordable Care Act, or ACA, 

classroom aides and food service employees worked about 33 hours 

per week. In the fall of 2013, we joined administrators in discussions to assess the impact of the ACA on the school system. Instead 

of embracing the new law’s fundamental purpose, to provide highquality health care to uninsured Americans, school representatives 

focused solely on how they could avoid the Act’s requirement to 

provide coverage for all employees working 30 or more hours per 

week. 

Their shortsightedness led them to pursue a plan to cut the 

hours of the non-represented classroom aides and food service 

workers to 29 hours or fewer to circumvent the ACA’s employer 

mandate. By reducing the total number of hours they worked, the 

system avoided any responsibility to provide them with insurance 

coverage or pay any of the ACA fees. 

While classroom aides’ wages of $75 per day or $13,500 a year 

were maintained, food service workers, who earn between $11.10 

and $15.50 per hour, or $11,588 to $15,660 a year, actually experienced a cut in pay when their hours were lowered from about 33 

per week to 29. These groups of workers had to get health care 

through either a spouse, a second job that provides insurance, or 

the Federal Exchange. 

While we have no right to bargain over the wages, hours, and 

working conditions of these employees, we argued that the intent 

of the ACA was to expand health insurance coverage and urged the 

system to reconsider its position. We made this recommendation 

with the full understanding that if the system included these 200 

employees in our plan, claims costs would likely increase and put 

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pressure on our premiums. But we believe that this is the right 

thing to do and that an employer-sponsored plan can provide better 

benefits for our fellow employees than what is offered under an exchange. 

Moreover, we have so much confidence in our joint health care 

committee that we believe we can always work together to solve 

complex problems and keep health care costs as low as possible. 

I know that many employers complain about the imposition of 

the reinsurance fee and the patient-centered outcomes research fee 

on their budgets. However, my experience as a local president has 

taught me that our system doesn’t retain costs but instead shifts 

them to employees or short-changes student services. So I imagine 

that the imposition of these fees on health plan sponsors will eventually result in some combination of less pay and more work for 

our educators and will detract from the high-quality education that 

all of our students need and deserve. 

Let me end by sharing a story that illustrates the consequences 

of not providing aides and cafeteria workers with access to health 

care. This summer a very talented, mid-career special needs classroom aide told me that he was resigning from the school system because he found a job with higher pay and health insurance. He said 

that he loved the children he worked with every day and wanted 

to stay in the system but could not afford to pass up a job with 

more money and health care. While the system hired a new aide 

to replace my colleague, this is not always the case. Moreover, the 

cut in hours from about 33 per week to 29 per week means that 

the students miss out on about 45 minutes of classroom attention 

per day. 

In special needs classes, the presence of an aide enables teachers 

to complete their lessons for the day while meeting the needs of 

their students with disabilities. If the aide is not there and a student requires assistance, the teacher must stop teaching to do what 

is needed to help that student re-engage in that day’s lesson. These 

types of disruptions negatively affect student learning and the 

learning environment. 

Thank you again for letting me share my views on the importance of the ACA based on the experience of my members, all 

school employees, and the students we serve in Anderson. 

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Chairman ROE. Thank you, Mr. Forkner. 

Mr. Tanoos, you are recognized for five minutes. 

STATEMENT OF DANNY TANOOS, SUPERINTENDENT, VIGO 

COUNTY SCHOOL CORPORATION, TERRE HAUTE, INDIANA 

Mr. TANOOS. Thank you, Chairman Roe and members of the subcommittee, for the opportunity to speak today and give testimony. 

A special thank you to Congressman Bucshon for his continued 

support on this topic over the course of time. 

My name is Danny Tanoos, and I am fortunate to serve as Superintendent of the Vigo County School Corporation in Terre 

Haute, Indiana. Our school system is the fifth largest school system in the State of Indiana. 

My comments today will focus on how the employer shared responsibility penalties under the Patient Protection and Affordable 

Care Act impact our great school system. 

On April 23, 2013, I traveled to Washington, D.C., to provide 

public comments to the Internal Revenue Service and the U.S. Department of the Treasury on the proposed rule regarding employer 

shared responsibility penalties. I informed the panel that the 

shared responsibility provisions under the Patient Protection and 

Affordable Care Act would hurt children and substantially undermine the quality of education that we can provide in our public 

schools. Similar comments were made during the hearing by Rick 

Allen, superintendent of Southeast Dubois County School Corporation, and Kathy Friend, the Indiana Association of School Business 

Officials representative. 

In addition to our public comments, representatives of Indiana 

public schools sent approximately 130 letters to the IRS, and I 

have those with the presentation to give to you today, and the 

Treasury expressing similar concerns. I am submitting those letters 

with my testimony today. 

I very much wish that I could report to you today that the IRS 

and the Treasury respectfully considered our comments. I also wish 

that I could point to a detailed response in the IRS final rule addressing the issues that we presented. Unfortunately, I cannot. The 

IRS dismissed our pleas in a single sentence in the 277-page final 

regulations. I continue to be gravely disappointed that the IRS 

failed to acknowledge and address our concerns. 

Today, I am here to provide specific examples of employees in my 

school district who have been hurt by the prospect of employer penalties under the Patient Protection and Affordable Care Act. I appeal to this committee to find a bipartisan solution to fix this significant, ongoing problem that is negatively impacting schools 

across Indiana. 

The principal of Consolidated Elementary School in Terre Haute, 

Suzanne Marrs, reports that one of the school’s bus drivers is in 

desperate need of another job to supplement her family’s income 

after her husband lost his job. Mrs. Marrs wanted to offer the bus 

driver an aide position; however, she could not because the school 

has imposed, and we have, a 29.5-hour cap on hours for classified 

employees. 

Combining the bus driver position with the classroom aide position would have pushed this particular employee over 30 hours per 

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24 

week. Mrs. Marrs stated that the employee is a ‘‘hard working lady 

who is dedicated to her job. I was very sad to have to turn her 

down, when I know she would have been an excellent fit for our 

students.’’ 

This is a picture of that employee. She has a face, she has a 

name, and she is hard-working and dedicated. I know her. 

Our Director of Facilities, Support, and Transportation, Mr. 

Fennell, tells me that his staff believes that the Affordable Care 

Act works against them. His bus drivers previously were allowed 

to work up to 39 hours per week. However, as a result of the potential penalty, these bus drivers are restricted to 29 hours per week 

and cannot take field trips, academic trips, or athletic trips to earn 

more money. Instead of working for our school corporation, these 

bus drivers have to obtain other employment if they wish to work 

extra hours. 

The most significant impact is on our special needs students. 

These students need and want consistency. It is difficult for a student with autism or special needs to get comfortable with a driver 

and for the driver to understand all the needs of the student. It is 

best for our special needs students to have the same bus driver for 

their special needs and for their routes. 

Unfortunately, we now must split the route between two drivers. 

By using different drivers for the same route, our special needs students are subject to constant change, which is uncomfortable for 

our special needs students and not in their best interests. 

Faithful, dependable workers have been penalized due to the Affordable Care Act. One of our 20-year special education teaching 

assistants, Nancy Icenogle—and this is Nancy—has worked very 

hard and rarely misses work. This has negatively impacted her potential as an employee. Nancy has worked taking tickets at our extracurricular activities. She counted on this extra money in her 

budget for taxes, insurance, and to assist her at-risk grandchildren. 

Now she can no longer work the extracurricular activities because 

the extra hours put her over the limit. 

At Farrington Grove, the prospect of the employer penalty 

prompted the school to reduce both Debbie Lane and Amanda 

Lyttle from 6.5 hours to 6 hours per day. Both individuals previously assisted the school with dismissal supervision. Both are single parents with limited to no child support for their children. The 

reduction in hours results in the reduction in pay, which directly 

impacts their ability to provide for their children. 

That is the employee working with one of our students, who can 

no longer do so. 

Last winter, we had to charter a bus to transport 40 needy children from Farrington Grove Elementary School to Terre Haute 

South for a Christmas Party. Our own bus drivers were not permitted to drive for the field trip due to being over the 30 hours. 

Forty children nearly lost out on numerous Christmas gifts due to 

a transportation issue. The bus cost the school more than $300 to 

transport the kids less than five miles away. 

Sarah Gore, the principal at Otter Creek Middle School, told me 

about how the 30-hour threshold created an unnecessary emotional 

disruption for a special needs student. Ms. Guy is an educational 

assistant in the functional classroom. As a result of the Affordable 

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Care Act, her hours were reduced to 6 hours per day. Accordingly, 

it is now necessary for another educational assistant to serve the 

children in the functional classroom for the remainder of the day. 

One particular child did not adjust well to the change and has 

struggled. 

The principal at Ouabache Elementary School has the same situation. Mr. Quade is trying to put himself through college, work, 

and raise a toddler. Mr. Quade is an educational assistant, and he 

loves his job. He wants to stay in education for his career. He also 

wants to put in time volunteering and helping the kids. However, 

he can no longer come to family nights and evening events to support the kids because of the hour restrictions, and this is a picture 

of him. Struggling to find another job is very difficult for Mr. 

Quade. 

At Sarah Scott Middle School, the hours for educational assistants had to be staggered to cover the day. Different staff members 

now have to be utilized to staff the nurse’s office. Some students 

are dropped off at school very early in the day so their parents can 

get to work, but the school is unable to test students, for instance, 

for blood sugar until 7:45 in order to reduce the hours. 

Hillary Shepard has had to stop coaching cheer and dance due 

to do the hours, which she has worked. They put her over the limit. 

Others have had to stop working at after-school activities such 

as ball games and detentions, which allowed them to earn more 

money. 

We had a secretary at Otter Creek, Debby Davis, who took tickets at the ball games for years. Due to the potential employer penalties, she is no longer able to take tickets. She knows our students; she knows our families. She can no longer do this. 

Lonnie Sapp has been coaching football at Terre Haute South 

High School for 20-plus years. He wanted to be our alternative educational placement individual. He would have been a great addition 

to our staff. He is a positive role model for our students. He was 

unable to perform both positions due to hour restrictions. When we 

told him this, he had tears in his eyes. I talked to Lonnie personally. In fact, I talked to every one of these employees personally. 

He needed the position and wanted to be with our students. He 

had to choose, and he chose to do football and be a Kelly substitute 

through Kelly Services. 

The 30-hour threshold devalues the worth of a person. Our employees love their jobs and love kids, and when they are told that 

they can no longer contribute, it makes them very sad. The consequence of the Affordable Care Act is that many of these people 

feel demoralized because they can no longer contribute as they 

have in the past. 

The experience of Vigo County School Corporation is not unique. 

Almost all school systems in the State of Indiana are experiencing 

the same issues. On behalf of the Indiana children, I urge you to 

fix the employer shared responsibility penalty to allow our very 

good and dedicated employees to get back to work. 

And I go back to this picture. Would President Obama, the IRS, 

or anyone want this particular person to have to not work during 

the day two jobs in our school system; iroder to go out and get a 

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night job and leave the family alone without having a mother in 

the house? I would say no. 

Thank you. 

[The statement of Mr. Tanoos follows:] 

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Chairman ROE. Mr. Tanoos, thank you very much. 

Without objection, the letters to the IRS are admitted to the 

record. 

[The information follows:] 

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[Extensive material was submitted by Mr. Tanoos. The submission for the record is in the committee archive for this hearing.] 

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Chairman ROE. I now recognize Dr. Bucshon for five minutes. 

Mr. BUCSHON. Thank you, Mr. Chairman, and thank you, all of 

you, for your valuable testimony on behalf of your institutions. It 

is greatly appreciated. 

I am a health care provider. Before I came to Congress I was a 

practicing cardiovascular and thoracic surgeon for 15 years, the 

last 12 of which were in Evansville, Indiana. And as a health care 

provider, my goal is to have every citizen in our country have access to quality, affordable health care in a timely manner regardless of your zip code in our country. So that is the end goal. 

Unfortunately, that goal is not going to be met by the Affordable 

Care Act. The Congressional Budget Office has said that by approximately 2025, over 30 million Americans will still be uninsured, even after the law is fully implemented. 

Why is that? Many personally choose not to be insured. The 

other reason is when you are seeing next year the projections about 

the costs on the insurance exchanges, we are expecting, many are 

expecting a double-digit increase in addition to the fact that the deductible levels we have heard in testimony—it is not my opinion— 

as high as $6,000 to $8,000 per family deductible on the exchange 

policies, and I would argue you don’t have health insurance if you 

have to pay $6,000 to $8,000 out of your pocket every year. Most 

people can’t afford that. 

Indiana is in the process of trying to get the Federal Government 

to approve Healthy Indiana plan as a way to expand health care 

access to all of our citizens. I support Healthy Indiana plan because 

I support the states’ abilities, all of our states, to innovate and look 

for ways to improve the way that we provide health coverage to our 

disadvantaged and low-income citizens. 

And I am hopeful that the U.S. Federal Government will give our 

state the opportunity to use this innovative way to cover everyone 

to improve the coverage percentage in our state. It has already 

been used as a pilot program. It has been shown to be successful 

at decreasing cost. It has also been shown successful at encouraging individuals to properly access the health care system. What 

I mean by that is skip preventive health care services and see a 

physician rather than going to the very high-cost emergency room 

care for non-emergency purposes. 

With that, I would also like to quickly outline what Congress has 

already done, and a number of our colleagues. Our colleague, Todd 

Young from the 8th District, introduced H.R. 2575, the Save American Workers Act. This legislation, in fact, would change the definition of the full-time employee from 30 hours to 40 hours per week. 

The bill passed the House this April by a vote of 248 to 179, and 

18 of the Democrat members voted for that. 

Of course, Congressman Messer has introduced his bill, H.R. 

4775, concerning the classrooms, and that is why we are here 

today, to discuss that. 

We have also passed H.R. 2667 by Tim Griffin, 264 to 161, to authorize the employer mandate delay that the President has done 

administratively, and he threatened to veto the bill, calling it unnecessary. 

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33 

ana and many others, which would delay the individual mandate 

for one year to give individuals and families the same relief employers received from the delay of the employer mandate. It passed 

251 to 174. 

So Congress is aware of these issues and we are doing what we 

can to try to convince the United States Senate to at least have a 

discussion about what we have passed and try to find common 

ground. 

With that, Danny Tanoos, I want to ask you, traditional privatesector businesses may have the flexibility to adjust the cost of their 

products to cover these increasing costs. Can you discuss this with 

us briefly? What kind of flexibility, if any, does a school system like 

yours have to help cover the extra cost? 

Mr. TANOOS. Thank you, Congressman. We have zero. I mean, 

you can’t increase the cost of textbooks or fees on students. We 

refuse to do that if we could. Fifty-six percent of our students are 

on a fee-reduced lunch. We are a district that is in need to help 

all of our students with all kinds of things, like clothing and food. 

To be able to charge them more would be inappropriate. So, no, we 

don’t have that. We are not able to increase the price of any product like a business might be able to. 

Mr. BUCSHON. And, Mr. Snyder, you discussed this briefly. At Ivy 

Tech, what would your option be to cover the increased costs? 

Mr. SNYDER. We have estimated that with 4,000—one of the 

issues we have is that we have the advantage of being a statewide 

institution. But under the law, it means we have to track every 

hour and every location. So it really negates the strength that we 

have as a statewide institution, and we said we had 1,000 people 

at risk of being covered by health care, that would be $10 to $15 

million that would have to be passed on to students because the 

students are the only flexible place of doing that. That would 

amount to perhaps as much as a 20 percent increase in tuition, just 

not affordable for our students, most of whom are on Pell. 

Mr. BUCSHON. Thank you. That is the critical part that both of 

you have just mentioned, is what would happen with these costs. 

School districts like Vigo County can’t do anything. Ivy Tech would 

have to increase the cost to their students, which may then eliminate some low-income individuals from the ability to get an education. 

Mr. Chairman, I am going to introduce a letter from Clay County 

Community Schools, unanimous consent to introduce this letter to 

the record concerning their position on the Affordable Care Act and 

how it affects their schools. 

Chairman ROE. Without objection, so ordered. 

[The information follows:] 

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Mr. BUCSHON. I yield back. 

Chairman ROE. I thank the gentleman for yielding. 

Mrs. Brooks, you are recognized for five minutes. 

Mrs. BROOKS. Thank you, Mr. Chairman. I would also like to 

thank my colleague, Mr. Messer, for holding this hearing. 

As we just heard from Congressman Bucshon, an issue that came 

up I think was a common theme in all of your testimony was the 

issue with respect to the 30-hour-work-week being determined now 

under the Affordable Care Act as full-time employment. I am very 

proud that our colleague, Todd Young from Indiana, did, and it has 

passed the House, the Save American Workers Act, which would 

change the definition of full-time from 30 hours to 40 hours, and 

we certainly hope that the Senate would take that up. 

But I think, as you all have talked about the 30 hours being the 

critical piece, I am the daughter of a school teacher and coach and 

the sister of a teacher, and I am very proud of what—I have been 

at the Zionsville School District. I have also been at the Anderson 

School District, and I am very proud of what our school districts 

are trying to do with very, very limited budgets. 

So I am very curious, Mr. Shafer, as the CFO of the Zionsville 

School, with the small budget that you receive relative to other districts, has the United States Department of Education provided 

you any guidance or any help as to how to fund these shortfalls 

when your school district is faced with these huge fees imposed by 

the Affordable Care Act? 

Mr. SHAFER. Well, I would have to say that they have not. The 

school district itself actually receives the least amount per capita 

in Federal aid through the various Federal Title 1, Title 2, and 

Title 3 programs of any school district in the state, just as it is 

near the bottom in SAFE funding. Most of those are also based on 

the same types of formulas and would give us the same result. The unfunded mandate to pay $1.6 million under employee responsibility payments are the only alternative to offer insurance to 

the cost of the better part of $1.25 million is a historically huge unfunded mandate for us, one that we simply have no ability to handle whatsoever that left us with the one and only one solution, 

which was to reduce our employees. We had to choose between reducing the hours of those employees who we can reduce. The other 

alternative for us would have been simply to lay off enough teachers to generate enough savings to pay those fees. When you start 

talking about $1.6 million, you are talking about 27 teacher jobs. 

We can’t do without one teacher that we have now. We certainly 

can’t do without 27. So we had to find a different way that would 

cover that cost for us, or at least eliminate that cost. That was reducing hours under the 30-hour rule. And no, we received no help 

from any Federal agency in looking at other ways to do that. 

Mrs. BROOKS. Thank you. 

Mr. Tanoos, you mentioned that the IRS issued a one-statement 

response to your 130 letters in the testimony that you provided. Do 

you recall what that response was? 

Mr. TANOOS. Basically, no. I mean, it was never going to change 

it. The bad part about it, Congresswoman Brooks, is that they said 

they would get back with us after our testimony in April, that they 

would get back with us in just a couple of months, and it took them 

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nearly six months. We had to go to Congressman Bucshon to go 

over to the IRS and Treasury to try to get a response. School systems were waiting for that answer and never got it. When we did, 

it was just that one sentence. It was a basically condensed ‘‘can’t 

do it.’’ 

Mrs. BROOKS. So the Federal Government has not helped in any 

way in alleviating the challenges that you are facing. 

Mr. TANOOS. I think they have actually hurt us in the sense that 

what they have done is not only reduced it to a 30-hour work week, 

but also you can’t count a school calendar year as the year of work. 

It has to be the school year or a two-week break period is all you 

can count. So you can’t count those employees. If you had counted 

over 365 days, it would have been a lot different. But they narrowed that down to just the calendar of a school year. 

Mrs. BROOKS. And so I am going to next turn to you, Mr. Snyder, 

whom I actually used to work for as General Counsel at Ivy Tech 

Community College, so this is an unusual circumstance to have you 

here, but I am thrilled. As Dr. Roe said, we still work for you as 

taxpayers, and also as a resident of Anderson. But I know that Ivy 

Tech certainly is always incredibly creative, having worked there 

from ’07 until ’12, in trying to solve problems on behalf of the students. But one of your biggest challenges by having so many adjunct faculty, which is required, and also they provide tremendous 

value in the classroom. A lot of students I talk to loved their adjunct faculty because they had such incredible experiences in the 

workplace that they could bring in. 

But you have talked about the challenge in finding credentialed 

faculty, and often the credentialed faculty would travel from one 

campus to the other. Can you talk a bit further about how that is 

impacting student success? How is that impacting students’ ability 

to get the classes they need, students’ ability to have access to that 

kind of expertise? 

Mr. SNYDER. Yes. Let me say that is a very important issue. But 

let me lead in to say, particularly for the people in Indiana who are 

watching this hearing, it is actually quite—we are very proud of 

what you have done both for Ivy Tech and for Congress. It is very 

unusual to have four very important congressmen all from one 

state on a committee like this. I think for the people in the audience this is not very usual, and to have this powerful assembly, including our chairman from Tennessee, it is very important. 

The adjunct has a very unique role in community colleges across 

the country who do what we do. They are like citizen professors. 

They have a day job. They usually have other things that they can 

do; in many cases, not relying on us for health care coverage, relying on us to really expand their life and let them teach as much 

as they would like to as an avocation and a vocation. 

So this has been very constraining for us, particularly with the 

fact that you have a campus, a new campus in Shelbyville, and a 

campus in New Castle. We have to have a system where we have 

to report to the IRS where these people are teaching. It is going 

to be quite laborious. And then there is this issue of a look-back 

period that is in the law, which means also there is administrative 

cost. 

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I think the administrative cost we have not even captured, and 

I think that is something that, as we look forward to trying to get 

people across the aisle to look at, we need to understand that as 

well as the out-of-pocket cost to the individual who is restricted 

from teaching. 

Mrs. BROOKS. Thank you. 

Mr. Chairman, my time is up. I yield back. 

Chairman ROE. I thank the gentle lady for yielding. 

Next is Mr. Messer. 

Mr. MESSER. Thank you, Mr. Chairman. Again, I want to thank 

everybody for their participation in the committee. I thank the 

chairman for traveling up from Tennessee and helping the Chamber of Commerce here in Greenfield last night with a dinner in 

town. I appreciate that. 

You know, as the president alluded to, it is unique to have four 

members of one state on a committee, on any committee, let alone 

a committee like Education and the Workforce, and then to have 

four members that are so active and willing to travel around the 

state to come here, all great friends and great champions for education in our state. I think it is a tremendous opportunity for our 

state to have my colleagues with me on this committee. 

I do see a few other dignitaries. It is a room full of dignitaries. 

But I see state Representative Randy Frye, Senator Mike Crider. 

I appreciate you all being here. 

I want to point out the biggest dignitary in the room to me is 

my mother, Chris Messer, who just came in after the opening testimony. 

I appreciate the testimony of all of the leaders who are here 

today. 

I do think it is important to say that all of us on this committee 

believe the status quo in health care is not acceptable, and we all 

recognize that costs around the country are spiking. We all recognize that with problems like preexisting conditions and other areas, 

something had to be done. 

We are here today, though, to talk about the President’s health 

care law and the real-world impacts of that law, as Dr. Bucshon 

shared. We all agree that every American should have access to 

high-quality, affordable health care. The problem is that when the 

President’s bill has moved from intention to results, what we see 

instead are spiking costs around the country, in many of the communities I represent a reduction in access to health care, and it has 

hit schools particularly hard. 

So one of the questions I have for the three school system leaders—and there is no trick question here. I am just trying to get this 

all on the record together. 

Mr. Shafer, could you tell me again your estimated impact of the 

cost of the Affordable Care Act on your school system? 

Mr. SHAFER. Yes. The employer responsibility payments we estimated at $1.6 million. The alternative to that would have been for 

us to offer coverage to those employees we weren’t covering. We estimated that cost at approximately $1.17 million. 

Mr. MESSER. President Snyder, on your school system? 

Mr. SNYDER. We have at risk about 1,000 faculty. We pulled back 

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pocket loss of income. The cost of insuring them we estimate exceeding $10 million per year. 

Mr. MESSER. Mr. Tanoos? 

Mr. TANOOS. Thank you. Ours would be $6 million to insure all 

of our employees. 

Mr. MESSER. Six million dollars? 

Mr. TANOOS. Yes, sir. 

Mr. MESSER. And if you chose to absorb that expense rather than 

reduce hours in the way you described, how would you pay for that 

in your school system? 

Mr. TANOOS. There is a money tree in back of our school house— 

[Laughter.] 

Mr. TANOOS. We would pick it off of there. 

[Laughter.] 

Mr. TANOOS. We would not be able to. I mean, we have worked 

very hard to run our school system as a successful business, and 

we have our cash balance to a nice amount to be able to treat our 

employees fairly. We would not be able to give raises. We would go 

in the red and eventually be taken over by the State of Indiana. 

Mr. MESSER. And, of course, the ultimate person who pays the 

bills for your school system— 

Mr. TANOOS. Yes, sir. 

Mr. MESSER.—is the taxpayer. 

Mr. TANOOS. Yes, sir. 

Mr. MESSER. President Snyder? 

Mr. SNYDER. We were just roughing out the number. We have a 

very low-cost degree, a nursing degree, that you can get for under 

$10,000. The cost for that nursing degree would go up by $1,500 

to $2,000. 

Mr. MESSER. It would come out— 

Mr. SNYDER. It would have to come out of the pocket of the student. 

Mr. MESSER. For your students. 

Mr. Shafer? 

Mr. SHAFER. As I said earlier, the only way that we could have 

raised that much money within our budget to not cut hours would 

have been, in fact, to lay off teachers. We estimate that we would 

have had to lay off approximately 27 teachers, which is nearly a 

10 percent reduction, which is just simply undoable for us to maintain any kind of educational quality. 

Mr. MESSER. And, of course, you have limitations on your ability 

to raise property taxes. But ultimately, if you absorb those fees, 

that million dollars would have come out of the Zionsville taxpayer. 

Mr. SHAFER. One way or another. 

Mr. MESSER. Yes, one way or another. 

You know, to me this is in some ways a complicated issue, but 

in other ways very simple. There is no free lunch, as you said. 

There is no money tree here. We all share the goal of trying to provide affordable health care to every American. But at a time when 

schools are already cash strapped, it makes no sense to put this additional mandate on our schools. It is not fair to try to balance or 

pay for the President’s health care on the backs of our schools and 

our students, and if we really care about them, we need to do something about it. 

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I appreciate your courage and your testimony today in highlighting this important issue. Thanks. 

Chairman ROE. The gentleman yields back. 

Mr. Rokita, you are recognized for five minutes. 

Mr. ROKITA. Well, I thank the Chairman. 

It is good to be back here on this side of the state. It is good to 

see so many friends and familiar faces. I haven’t seen some of the 

audience since I served as Indiana Secretary of State, but thanks, 

Luke, for organizing us here. 

I will admit, though, a couple of months ago I was a little further 

down the road seeing Thomas the Tank Engine— 

[Laughter.] 

Mr. ROKITA.—with Kathy and the kids, and that was fun in its 

own right. 

Dr. Roe, thanks for chairing this hearing today. I appreciate your 

leadership and everything you do. 

Picking up on what Luke mentioned and what Mr. Snyder mentioned, yes, it is excellent to see so many Hoosiers on this panel. 

You know, this committee has jurisdiction, one of only three committees that has jurisdiction over health care in Congress, and of 

course we do a lot of education issues generally as well. In fact, 

Susan and Luke are also on a committee that I chair, kindergarten 

through 12 education. Of course, this committee, the full committee 

has jurisdiction over a lot of Indiana and the nation’s business regulations. 

So, in a way, I am not surprised that so many Hoosiers serving 

in Congress are on this committee because I think, in a lot of ways, 

it is the leading, cutting-edge practices that we have here in this 

state that is really going to lead to a turnaround for our entire nation. At least that is the hope, and it is going to start with the leaders here that I have a privilege of serving with. 

Indiana simply is a great place to work, and then we have a balanced approach to regulations and so forth, and we are not 

ideologues or activists when it comes to trying to decide how these 

regulations should look. In fact, on the whole, I can tell you just 

from my serving in the state in public office for 12 years in this 

state, we trust people. We believe in family. We believe in communities. We believe in neighborhoods. We believe in school systems 

and our ability to solve our problems and not being reliant on some 

Federal Government program, much the same being as Dr. 

Bucshon talked about. 

I will also say, Dr. Roe, when I was cutting the lawn or—excuse 

me—cutting the grass last night—around here we say cutting 

grass, not mowing the lawn, I am not sure how it is in Tennessee— 

at about sunset I came upon a nest of yellow jackets. So I am 

pumped full of yellow jacket venom right now. So, number one, I 

am glad that we have two doctors on the panel. Number two, I 

mentioned this to somebody else when I came in, I want to be very 

clear with you, it is not the yellow jacket venom that is going to 

cause these comments and these questions. I just don’t like the law 

because of the things I said earlier. 

So with that, let me go to Mr. Forkner, if I can. I hear a lot about 

unions, and not just teacher unions but unions generally, trying to 

get waivers from the Affordable Care Act. But I am confused with 

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your testimony because you say you embrace Obamacare, but you 

are also providing your own insurance because you want insurance 

to be there. 

So, which is it? Are you going to fully embrace Obamacare, or are 

you going to try to provide your own, or would you go for a waiver 

if you had the opportunity? And what do you think about unions 

who have tried to get a waiver under Obamacare? 

Mr. FORKNER. Our position in Anderson is we have a very strong, 

self-funded insurance program. 

Mr. ROKITA. That is good enough. So that is good for you, the 

union. 

Mr. FORKNER. Yes, and we think it is strong enough, and we 

think we have a good enough working relationship that we would 

embrace bringing in those employees that don’t have insurance. 

Mr. ROKITA. Okay. So that is not the private sector but at least 

a private entity, the union, going after and solving its insurance 

problem, right? 

Mr. FORKNER. Yes. 

Mr. ROKITA. So you would be for others doing that, too. 

Mr. FORKNER. If they have the resources. 

Mr. ROKITA. Right. But if they don’t have the resources, or they 

are just not the same as yours and different from the requirements 

of Obamacare, whether it be the 30-hour work week effect or 

whether it be maternity coverage for 45-year-old males, if it is not 

your insurance or something that you think is as good as your insurance, then you would prefer people be on Obamacare. You said 

you embraced Obamacare. 

Mr. FORKNER. Yes. 

Mr. ROKITA. So I want to understand why you might think that 

it is better, Obamacare. In your estimation you can judge for others 

what is best for them, like Obamacare. 

Mr. FORKNER. I can only speak for what I know, and that is 

school systems. 

Mr. ROKITA. But you are the president of a union, right? 

Mr. FORKNER. Yes. 

Mr. ROKITA. Or you are an officer in a union. Okay. I guess I am 

just confused by the testimony, and I don’t want to say it is hypocritical. I just want to get some clarification on what you believe. 

I mean, do you think that Obamacare is best for people, or do you 

think people making their own decisions about their health care is 

best for them? 

Mr. FORKNER. I think that the Obamacare law, if carried out, is 

a good law and would provide health care for people who drastically need it. 

Mr. ROKITA. So you, at that point, upon full implementation— 

and my time has expired, but upon full implementation of 

Obamacare, you would cease and desist your own program, health 

care program? 

Mr. FORKNER. I don’t think we have to. 

Mr. ROKITA. Thank you. My time has expired. 

Chairman ROE. I thank the gentleman for yielding. 

I will now yield myself five minutes. 

First of all, I thank the panel, and I thank you all in the room. 

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er yesterday before I got on the plane to celebrate her 92nd birthday. 

[Laughter.] 

Mr. MESSER. I won’t tell you my mom’s age, but she is not 92. 

[Laughter.] 

Chairman ROE. Well, when I am home, I typically don’t tell anybody her age. I just tell everybody she was born in 1922. She gets 

mad when I say how old she is. 

[Laughter.] 

Chairman ROE. I was the only one on the panel—and I think you 

can certainly understand why it is a privilege to work with these 

four members – not from Indiana. It truly is. I gave up a medical 

practice to run for the U.S. Congress because I care deeply about 

this country. I am a U.S. military veteran, a physician, and I 

thought it is time for physicians— just regular citizens—to stand 

up and go to Washington, not career politicians, and I truly wanted 

to work on health care. 

I read the Affordable Care Act, all 2,700 pages of that bill. I have 

read every bit of it. I have not read the over 20,000 pages of rules 

that go along with implementing this, and that is something I want 

to get into with the panel in just a moment. It is unbelievable 

when you try to then implement this particular plan. Let me go 

over a little bit of it. 

The way we Americans get our insurance is through our jobs. It 

used to be 160 million of us did. About 60 percent of those are selfinsured, like Mr. Forkner’s plan is probably self-insured. The city 

I ran as a mayor was self-insured. The others just have an individual policy through their job or on their own. So the ERISAbased plan, that is how we covered insurance. 

Then we have about 47 million of our citizens are on Medicaid, 

about 47 million are on Medicare. 15 or 16 percent of us are uninsured. So we did all of this for people who were uninsured, this incredibly complicated scheme. And as I listened right here, remember, the plan was to decrease cost and increase coverage. 

What has happened is, just listening to these folks right here, we 

have increased the cost of them providing the insurance coverage, 

taken away some of their flexibility, and not another person has 

been covered. I tried to hear did anybody else get covered here; the 

answer was no, nobody did. 

I have similar stories in my hometown where substitute teachers 

are being reduced to three days a week and have lost income because of this. And why? Because education budgets are strained. In 

the State of Tennessee where I live, we don’t have a state income 

tax. We have personal property taxes and sales taxes. That is how 

we run our state business, on a few fees. That is all we have. So 

we can’t force people to buy more goods and services. 

One of the things I want to talk about to help pay for this 

scheme, the Affordable Care Act, is the reinsurance fee. I found 

this unbelievable that we took major insurance companies, and 

then we went to people, Mr. Forkner, just exactly like you represent, that are in the individual self-insured market, and what we 

did to them, for every person—not for every policy but for every 

person—there is a $63 fee. 

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One company that came into my office, that is going to cost them 

$100 million this year, of which they get absolutely nothing for, 

nothing. What that money goes to is to indemnify to be sure that 

major insurance companies don’t lose money. How awful is that? I 

mean, that was unbelievable when I heard that. The costs are all 

passed back down to us, the consumer. We are ultimately going to 

pay it. 

So what we have done to make this care affordable, we call it, 

is we have narrowed the doctor panels to where many plans don’t 

have the doctors you want on there, we have increased the out-ofpockets, and we have increased the co-pays. Let me give you an example in my community. 

I was on the faculty of the medical school for 30 years in my community. We have a hospital there where now, 40 percent of the uncollectable debt are people with insurance. And why? Because if 

you have a $10,000 out-of-pocket and you make $35,000 a year, it 

might as well be $100,000 if you are out-of-pocket. You can’t pay 

that. So we have got to have something different. 

I want to go on, Mr. Shafer. My time is limited. I want you to 

talk about the 9.5 percent affordability. So the government decides 

what is affordable, not the person, the individual. Can you go into 

that a little bit? 

Mr. SHAFER. Yes. The 9.5 percent affordability which, of course, 

has now been indexed to 9.56 affordability, is a threshold that we 

would have to meet for any coverage that we provide to our employees. There are penalties for missing the 9.5 percent threshold 

also built into the law. 

Chairman ROE. A tax. 

Mr. SHAFER. Yes, a tax essentially, an excise tax. If we were to 

miss the 9.5 percent, our numbers say that we would lose another 

$400,000 for penalties for that, as well as the other numbers I 

mentioned. We think that is unacceptable. Again, that translates 

into seven more teachers a year that we would have to give up to 

be able to pay that tax. 

We feel like that as a public entity, we have said to the taxpayer 

we are taxing you through your sales tax, your income tax, your 

property tax for money for education. We are taking this money 

from you to educate your children. Oh, no, wait a minute, now we 

are going to turn around, take the money we have taken from you 

for educating your children. Instead we are going to send it to the 

Federal Government for them to forward to insurance companies 

while, in the meantime, your children suffer from the lack of this 

money being used in the classroom, as was promised to you. We 

think this is a major problem. 

Chairman ROE. I thank you. 

My time is limited. I want to finish by saying that I personally 

have never seen a Republican or a Democrat heart attack in my 

life. I have never operated on a Republican or a Democrat cancer 

in my life. It is a people problem, and we should have sat down, 

and let me share some frustration. 

We invited the Democrats, by the way. This is not a Republican 

feel-good meeting. The Democrats were invited to be here also and 

chose not to come. 

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We offered 80 amendments to that health care bill in 2009. I had 

10, myself. I went to the Rules Committee. Not one of those amendments was ruled in order to be heard on the House floor. We were 

totally shut out of the argument, the debate. That is wrong. This 

has got to be a bipartisan solution because it affects every American citizen. 

The last thing I want to say is that what the government decided 

was what you buy. Never before in American history has the government said you must buy this, and this is what you must buy 

or you will be penalized. You have to buy a health care plan that, 

at minimum, has ambulatory patient services, has emergency services, hospitalization, maternity, and newborn. And let me assure 

you, being the father of three grown, married children, I don’t need 

maternity services. I would jump off the top of the courthouse if I 

thought I was going to have to have maternity services again. 

[Laughter.] 

Chairman ROE. Mental health and substance use—if I stay in 

Congress much longer, I may need that one. 

[Laughter.] 

Chairman ROE. Including behavioral health treatment, prescription drugs, rehabilitative services and devices, laboratory, preventive and wellness services, chronic disease, pediatric services, including dental and vision care. I mean, before, we got to pick out 

what we bought and what we could afford as a family. Now the 

government has decided that, and that is one of the reasons that 

the cost has gone through the roof is to provide all that. 

I want to thank the committee, a terrific job you all have done 

here today. I thank you for taking the time preparing this and 

being here. 

Before we dismiss this first panel, I want to do something I normally don’t do during a hearing, but we are on the road. You know, 

I just got back from Vietnam about two months ago, a trip there, 

and I am a Vietnam-era veteran. If there are any veterans here, 

I want them to stand, or if they are standing already, hold your 

hand up. 

I want to thank you for your service because without you, we 

could not have this meeting today. 

[Applause.] 

Chairman ROE. Thank you for your service to our great nation. 

I will dismiss this panel and take a five minute break and be 

right back with the second panel. 

[Recess.] 

Chairman ROE. It is now my pleasure to introduce our second 

panel of distinguished witnesses. 

First, Mr. Dan Wolfe is the Owner of Wolfe’s Auto Auctions in 

Terre Haute, Indiana. Since 1980, Mr. Wolfe has served as Vice 

President, Chief Operating Officer, and General Manager of Wolfe’s 

Auto Auctions. 

Thank you, Mr. Wolfe, for being here. 

Mr. Mark DeFabis is the President and Chief Executive Officer 

for Integrated Distribution Services, Inc., in Plainfield, Indiana. Integrated Distribution Services, Inc. provides integrated and 

logistical services and specializes in retail and direct consumer fulfillment and transportation management. 

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Welcome. 

Dr. Robert Stone is the Director of Hoosiers for a Commonsense 

Health Plan in Bloomington, Indiana. Dr. Stone is also the State 

Coordinator in Indiana for Physicians for a National Health Program and teaches at Indiana University School of Medicine as an 

Assistant Clinical Professor of Emergency Medicine, and is Director 

of Palliative Care since 2012. 

Welcome, Dr. Stone. 

Mr. Nate LaMar is the International Regional Manager for Draper, Inc., in Spiceland, Indiana. Mr. LaMar has been with Draper 

for over 15 years serving as International Regional Manager and 

the Government Relations Manager. 

Welcome, Mr. LaMar, and thank you for your service to our 

country. 

Before I recognize you to provide your testimony, let me briefly 

explain our lighting system again. You have five minutes to 

present your testimony. When you begin, the light in front of you 

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

When your time has expired, the light will turn red. At that point, 

I will ask you to wrap up your remarks as best you are able to. 

After everyone has testified, members will each have five minutes 

to ask questions. 

With that, Mr. Wolfe, you are recognized for five minutes. 

STATEMENT OF DAN WOLFE, OWNER, WOLFE’S AUTO 

AUCTION, TERRE HAUTE, INDIANA 

Mr. WOLFE. Thank you, ladies and gentlemen, for letting me be 

here. You already know who I am. I am Dan Wolfe, so I won’t bore 

you with my resume. 

Our family has been in business for 55 years. We have been in 

the auto auction business for 40 years. We employ 232 people, 64 

full time, 168 part time. Those numbers are down from 2008 due 

to the recession but are rising and will rise again. 

We offer health insurance to our full-time employees, although 

not affordable by today’s standards of our government. The current 

plan is $1,500 deductible, with a $5,000 out of pocket. The cost of 

that to our business is roughly $2.42 per employee per hour, up to 

as high as $3.23, and that depends on the work week and how 

many hours they work. 

To meet the proposed guidance of not to exceed 9.5 percent of income, that cost would move to $2.87 per hour, up to $5.15 per hour 

per employee, representing an 18 to 59 percent raise in cost per 

hour. Where is this affordable? 

To lessen this cost, there are alternatives. We can move to a plan 

that offers the government minimum, with a $5,000 deductible and 

$10,000 out-of-pocket expense, which would lower the cost to $2.42 

per hour, as high as $3.46 per hour per employee. Still, this represents a raise anywhere from zero to 42 percent. For that coverage, many will not be able to afford the $5,000 or the $10,000, 

and their next step would be bankruptcy. 

All the while, raises will not be forthcoming due to the rising cost 

of employment. Employees will be looking for greener pastures, always looking everywhere else, and we hire full-time employees to 

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ple. We focus our energies mainly on customer service and quality 

of work. 

Currently, over 17 percent of our full-time employees have been 

employed over 10 years, and many of those over 20. These employees get annual raises and bonuses, and that is not to mention the 

15 family members who dedicate their lives to this business, a family business. 

Other options would be to drop current health insurance and 

offer nothing, therefore sending current employees to the pool and 

causing our businesses to pay penalties as high as$140,000 per 

year, non-tax-deductible. That would call for other options. We 

would have to cut other expenses, employees, whatever it took, to 

make up that $140,000 non-tax-deductible money. 

Now, keep in mind these numbers are ever changing because we 

still don’t know, when this act becomes an act, when it is going to 

happen, whether it is ’14, ’15, ’16. Everything is a moving spectrum 

to us. We spend a lot of time on this trying to figure out exactly 

what it is going to cost us, and that entails money and time spent 

that we could spend otherwise making good business decisions and 

raising people’s pay, and also just enjoying a better life. 

Is our health care system in need of reform? In my opinion, yes. 

Is this the answer? In my opinion, no. How do you cut medical and 

insurance costs without attacking the good old free enterprise system that America was founded on? 

Both costs are high but, to some degree, they are warranted. If 

we are to spend money on an already over-blown budget we currently have in Congress, why not spend it on incentives for the 

economy and job creation? 

In closing, I would urge Congress and the President to look closely at the burdens already imposed upon Americans today with rising utility costs, fuel costs, and general goods and services. Why 

not have incentives for businesses to employ more and pay higher 

wages, so Americans can afford insurance? The threat of small 

businesses lost and, more importantly, jobs and the quality of life 

lost looms large. Just put America back to work. 

[The statement of Mr. Wolfe follows:] 

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Chairman ROE. Mr. Wolfe, thank you very much. 

Mr. DeFabis, you are recognized for five minutes. 

STATEMENT OF MARK DEFABIS, PRESIDENT AND CHIEF EXECUTIVE OFFICER, INTEGRATED DISTRIBUTION SERVICES, 

PLAINFIELD, INDIANA 

Mr. DEFABIS. Thank you. Chairman Roe and distinguished members of the subcommittee, thank you for inviting me to testify 

today. My name is Mark DeFabis and I am the President of Integrated Distribution Services, Inc., a third-party logistics provider in 

Plainfield, Indiana, where we employ 72 full-time individuals and 

100 to 150 seasonal and part-time unskilled workers. 

Prior to the implementation of the Affordable Care Act, IDS was 

experiencing annual premium increases in the 10 to 17 percent 

range. 

Over 50 percent of our employees smoked. Most did not utilize 

a primary care physician and accessed health services through either the emergency room or an immediate care facility. Many also 

had chronic conditions such as high blood pressure, high cholesterol 

or diabetes but were not taking maintenance drugs. It became obvious that if we were to control our health care costs, we would need 

to address the health of our workers. For that reason, we implemented a wellness program designed to improve the health of our 

employees, which in turn would reduce our premiums. 

Our wellness program offers annual health screenings and incentives to employees to stop smoking, obtain and see a primary care 

physician, and use maintenance drugs for chronic conditions. Over 

80 percent of our employees participate in our wellness program, 

and the outcomes have been dramatic. We have reduced the number of smokers by over 60 percent, reduced the number of claims 

related to serious preventable health issues, those with chronic 

treatable conditions are now on maintenance drugs, and we have 

seen better awareness by all employees of the benefits of exercise 

and healthy eating. 

In 2009, the last year before the implementation of the ACA, our 

wellness program and its success translated into a 5.28 percent increase in our healthcare premiums with no change in benefits, 

proving that IDS could control the cost of our health care by improving the health of our employees. 

Unfortunately, that correlation no longer exists under the ACA. 

Since the implementation of the ACA, IDS and our employees have 

seen our healthcare premiums increase 76.64 percent. This increase would have been greater had we not mitigated it by raising 

deductibles 20 percent and maximum out-of-pocket expenses 17 

percent. Since September of 2012, 5 percent of our annual premium 

increase has been due to taxes and fees imposed by the ACA, which 

our insurer must collect and pay on our behalf. 

In summary, since the ACA took effect, our company and employees have seen premiums increase dramatically while deductibles 

and out-of-pocket costs have been raised, all during a period when 

the overall health of our employees has improved. 

As we prepare for the impact of community rating on our underwriting beginning in 2015, it is clear that the relative health of our 

employees will have no direct impact on our health care costs, leavCEWDOCROOM with DISTILLER

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ing us no choice but to evaluate whether to continue to invest in 

our popular and effective wellness program. I fear that the implementation of community rating will result in even more dramatic 

increases on top of the 76.64 percent that we have already experienced. 

I want to commend the State of Indiana for allowing insurers in 

the individual and small group market to delay community rating 

through grandmothering, also known as transitional relief, and I 

hope that the insurers will continue the grandmothering by exercising that option through 2015. I have spoken to business acquaintances of mine in states such as Virginia which have not delayed community rating, and they have seen increases between 80 

and 90 percent. 

From the experience of IDS, I can say that the Affordable Care 

Act is anything but affordable for our employees and our company. 

As I mentioned, IDS has between 100 and 150 seasonal and parttime workers. These unskilled workers come to us through various 

private staffing companies and/or community organizations such as 

Goodwill Industries. While at our facilities these individuals work 

in excess of 30 hours per week. As a result of the ACA, these staffing companies and community organizations will be faced with either reducing the number of hours these individuals work or will 

have to provide health insurance to comply with the ACA. 

I have had conversations over the last two years with our staffing companies, and they still cannot provide me with an estimate 

of the impact this will have on their workforce. One thing I have 

been told is that whatever the cost impact to our staffing providers, 

it will be passed on to us in the form of higher rates. This could 

result in our staffing costs increasing as much as $250,000 per 

year. 

Every company in the third-party logistics industry, which employs hundreds of thousands of part-time and seasonal workers, is 

facing this same no-win situation. The ACA’s arbitrary establishment of a 30-hour work week as full time does not reflect the real 

world and is ultimately harmful to all small businesses and the unskilled workers for whom we provide jobs. 

Largely overlooked are the hidden costs associated with the ACA 

and its reporting requirements. The recently released IRS draft 

forms for health coverage information reporting combined with the 

compliance reporting to determine full-time employees are not only 

confusing but are cumbersome to complete. Much of the information cannot be gathered with current automated payroll systems 

and will require many hours of manual work to compile the required data. I am concerned that this is only the beginning. As it 

becomes ever more apparent that the goals of the ACA are not 

being met, businesses will be asked to provide increasingly detailed 

reporting without any consideration for the increased cost. 

Thank you for your time today. As a small business owner, both 

myself and my industry are happy to work with our elected officials 

on this important topic. 

[The statement of Mr. DeFabis follows:] 

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Chairman ROE. Thank you, Mr. DeFabis. Thanks very much for 

your testimony. 

Dr. Stone, you are recognized for five minutes. 

STATEMENT OF ROBERT STONE, DIRECTOR OF PALLIATIVE 

CARE, IU HEALTH BLOOMINGTON HOSPITAL, BLOOMINGTON, INDIANA 

Dr. STONE. Thank you. Good morning, Mr. Chairman and members of the subcommittee. Thank you for the opportunity to testify 

today. 

My name is Robert Stone. I am an M.D. I was born and raised 

in Evansville and have practiced medicine in Bloomington for the 

past 31 years, including 28 years working in the Emergency Department. 

A doctor in the ER is on the front line of American medicine. 

There is nowhere to hide. Everything good and bad about our 

health care system is in plain sight. 

I can’t tell you how many times I have seen a guy limp in and 

tell me how he had fallen a few days earlier. His ankle is still swollen and not getting better. I examine it. I probe the sore spots and 

say I am worried it could be broken. I say we need an x-ray. He 

says, ‘‘Doc, I can’t afford an x-ray, I don’t have any insurance.’’ 

What is an x-ray going to add to his bill? At least $200. No wonder 

he walked on it for a few days. 

Then there is diabetes. It is not simple to take care of, and the 

cost of the medication is bad enough, but it is the test strips used 

in the glucose monitors, those are the expense that adds up and 

cuts into people’s budgets. 

It is commonly believed that if you have a serious condition like 

diabetes, you must qualify for some sort of insurance, but that is 

not true. Our best estimate is that there are around 75,000 diabetics in Indiana with no health insurance. I have seen this many 

times. At first they thought they were coming down with a cold. 

Then they started vomiting. They ran out of test strips and were 

afraid to take their insulin for fear of dropping their blood sugar 

too low, but when they got to the ER they were near death with 

a sugar over 500. For lack of a 50-cent test strip, they spent a 

$10,000 night in the ER. 

The incidence of diabetes in Indiana is higher than the national 

average, which is not surprising since 30 percent of our adults are 

obese. We rank 41st nationally in overall health and 45th in infant 

mortality. That is shameful. We are less healthy than our neighboring states of Ohio, Michigan, and Illinois, but have traditionally 

done a little better than Kentucky to the south. Kentucky is catching up to us now because they have cut their percentage of uninsured dramatically by taking full advantage of the Affordable Care 

Act. 

Some people say there are those who don’t deserve health care. 

I disagree. Everyone deserves health care. I have been heartened 

to find support from Governor Pence. Listen to the language he has 

been using over the past four months. 

‘‘I have long believed that a society may be judged not only by 

how it deals with its most vulnerable, but also by how it comes 

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alongside those often forgotten working people who are striving 

every day for a better life.’’ 

‘‘Low-income, working Hoosiers lack access to the kind of quality 

health insurance that their better-off neighbors enjoy. Many Hoosiers cannot access affordable coverage and live in uncertainty.’’ 

‘‘Hoosiers have long cherished the principle that we must love 

our neighbor as ourselves, that we must not walk by on the opposite side of the road when our neighbors are hurting and in need.’’ 

In these words, I hear an implicit understanding of the failure 

of our current system to meet the needs of too many, and an acknowledgement that government must take a larger role in guaranteeing access to health care. 

Make no mistake, Governor Pence is no friend of the Affordable 

Care Act. But he has done the right thing by moving forward to 

expand Medicaid through the ACA under the title of HIP 2.0. 

Mr. Messer, it appears that you too are a sworn opponent of the 

Affordable Care Act, but you have supported Governor Pence on 

Medicaid expansion, and I commend you for that. However, I want 

to address some of the misleading points in your editorial on August 26th, ‘‘Congress Coming to Greenfield,’’ or at least I fear they 

are misleading. 

You imply that Hoosiers purchasing coverage through the health 

insurance exchanges will see their premiums rise sharply. To start 

with, insurance premiums have been rising much faster than 

wages or inflation for decades. This trend is much older than the 

ACA. Last Friday the Associated Press reported ‘‘Indiana residents 

will have more than triple the number of health insurance plans 

to choose from when the Federal insurance exchange enrollment 

period starts in November,’’ and this is according to the Indiana 

Department of Insurance. And according to the Indiana Department of Insurance, they are predicting in Indiana premiums are 

going to rise 5 percent this year. That is quite different from the 

13 percent that you wrote. 

Likewise, employers have been cutting hours of part-time workers to avoid paying benefits for years. Mr. Messer, you claim that 

the Congressional Budget Office predicts that the ACA will ‘‘push 

as many as 2.3 million people out of the workforce over the next 

seven years.’’ Way back in February, the Washington Post refuted 

that number in an article titled ‘‘What the CBO Report on 

Obamacare Really Found.’’ Under Congressional questioning, ‘‘CBO 

director Douglas Elmendorf confirmed that, in reality, his report 

suggests Obamacare will reduce unemployment.’’ 

This is my family’s experience: my son, daughter, and son-in-law 

are all covered under the Exchange. The cost of all three policies 

is less than what we paid for my son alone last year. 

I will wrap up. 

There is an elephant in the room that no one is talking about. 

The real fear in this room today is not that the ACA is somehow 

going to ruin this country. It is the fear that the members here, 

including Mr. Messer, have that as the ACA goes forward, as people understand it and are helped by it, they are going to want to 

go further, not back. They don’t want health care taken away from 

them. The elephant here, the real fear, is that as people come to 

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appreciate the ACA, they are going to vote against politicians who 

are trying to repeal it and take it away from them. 

I went to medical school to take care of people. We need to figure 

out how to take care of everyone. 

Everyone. 

It’s that simple. 

[The statement of Dr. Stone follows:] 

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Chairman ROE. Thank you, Dr. Stone. 

Mr. LaMar, you are recognized for five minutes. 

STATEMENT OF NATE LAMAR, INTERNATIONAL REGIONAL 

MANAGER, DRAPER INC., SPICELAND, INDIANA 

Mr. LAMAR. I wanted to start by thanking my congressman, 

Luke Messer, for scheduling this field hearing here in the district. 

It is great to see that he and fellow Hoosiers, Congressman 

Bucshon and Congresswoman Brooks, serve on this subcommittee, 

and that they are joined today by Congressman Rokita, who serves 

on the larger Education and the Workforce Committee. I would also 

like to thank Congressman Roe for scheduling this field hearing in 

Indiana. We greatly appreciate it. 

In addition to serving as International Regional Manager for 

Draper, I also manage Government Relations there and serve as 

President of Henry County Council. My employer, Draper Inc., was 

founded in 1902, is privately held, and is currently in the fourth 

and fifth generations of ownership by the same family. 

Draper is a manufacturer of audiovisual products, window coverings, and athletic equipment. With just over 500 employees, 

Draper is barely into the medium-sized category of companies. 

Draper is the largest private-sector employer in Henry County, Indiana, and is the third-largest employer in our county overall. 

Draper is a fine example of corporate social responsibility, as it 

established an on-site health clinic in 2006 for employees and their 

dependents who participate in Draper’s health insurance plan, 

along with a wellness program. Having an employee health clinic 

so conveniently located has reduced lost work hours. In addition, 

in early 2014, Draper received a national award as the Healthiest 

Workplace in America, for which Congressman Messer recognized 

us on the floor of the U.S. House of Representatives. The Draper 

Health Clinic even served as a model when Henry County government and the New Castle Community School Corporation jointly 

established an employee health clinic more recently. 

Admittedly, I am no expert on health insurance or human resources. However, I learned the facts that I am about to share with 

you today from Draper’s Director of Human Resources, Karl Dick. 

The three most noticeable areas in which the Affordable Care Act 

has affected Draper financially are coverage for employees’ children 

up to age 26; the Patient-Centered Outcomes Research Institute, or 

PCORI; and the transitional reinsurance fee. 

One by one. Coverage for employees’ children up to age 26 caused 

our insurance rates to go up by default when it was added. But this 

mandate begs the question: What incentive do the so-called ‘‘young 

invincibles’’ have to sign up for health insurance when they can remain on their parents’ plan? 

The Patient-Centered Outcomes Research Institute’s, or PCORI, 

purpose seems to be to determine whether the Affordable Care Act 

works. It is funded by the PCORI fee, which cost Draper $893 in 

2013, $1,830 in 2014, and who knows how much in 2015. As there 

is currently no sunset provision for the PCORI fee, it could last indefinitely, and rise indefinitely. 

As for the transition reinsurance fee, on January 15, 2015, Draper will owe $63 per covered member, meaning both covered employCEWDOCROOM with DISTILLER

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ees and their dependents, per year. This will amount to somewhere 

around $75,000, based on our 2014 membership. For 2015, and presumably payable on January 1st of 2016, it will be $44 per member. Based on current enrollment, that would be about $52,000. 

The transitional reinsurance fee for 2016 has not yet been determined. The program pays insurers in the individual market that 

covers high-risk individuals. Draper gets nothing for paying this 

fee. 

In addition to these three most salient financial burdens for 

Draper, mandatory 100 percent preventive services have also increased our health insurance costs. Draper will likely be hit with 

the excise Cadillac tax, but it is not yet definite. As a result, Draper has already and will begin to take more aggressive action with 

our health plan designs in order to avoid this tax. The Affordable 

Care Act seems to be a government mandate to treat your employees well, just not too well. We cannot directly pass on the costs of 

the excise Cadillac tax to employees, but our HR Director’s guess 

is that any impacted company will reconsider wage increases or 

other employment-related costs to indirectly cover the cost increase 

due to the additional tax. Draper is strongly enforcing that its parttime employees’ annualized averages cannot exceed 30 hours per 

week. 

The ACA’s reporting mandates will absolutely bury our Human 

Resources Department. For example, the IRS’ draft forms 1095B 

and 1095C mandate that a company the size of Draper must report 

every covered individual’s name, Social Security number, and date 

of birth every year. The forms must be filed electronically for companies with over 250 employees, such as Draper. However, there is 

no guidance or process yet established to explain how to do this. 

It is unclear if the information can be downloaded directly into the 

form or if our HR Department will have to manually enter the information and just send the form back electronically. In addition, 

the final version of forms 1095B and 1095C are not yet available. 

Our HR Department’s worst fear is that the final versions will be 

made available on December 15, with a December 31 deadline for 

submission. 

In conclusion, our HR Director told me that the Affordable Care 

Act is not as horrendous as originally thought, but the increased 

costs are a negative, and the IRS 1095 forms are a paperwork 

nightmare. 

Thank you again for scheduling this hearing, and thank you for 

your service to our country. 

[The statement of Mr. LaMar follows:] 

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Chairman ROE. Thank you very much, Mr. LaMar. I never could 

figure out why anybody would jump out of a perfectly good airplane 

like you have. 

[Laughter.] 

Chairman ROE. Dr. Bucshon, you are recognized for five minutes. 

Mr. BUCSHON. Thank you, Mr. Chairman. 

I want to thank Dr. Stone for pointing out our Indiana health 

care data. I did the same on a statewide health care tour that Dr. 

Tim Brown, who is a state representative and chairman of the 

Ways and Means Committee for the state, did this past spring and 

summer, and agree that we have some challenges in Indiana which 

we need to address, and that is what we are all here to do, to try 

to figure that out. 

I would also like to say that on the rate issue that has been 

brought up, the promise was the Affordable Care Act would decrease rates and make things more affordable. So any increase of 

a cost under the Affordable Care Act is a broken promise. 

The other thing is that in actual fact, when you look at what the 

American people think about the Affordable Care Act, it is less popular today than it was the day it was passed. Why is that? Because 

it is starting to hit people, like many of you, directly. 

So I think that is why you are seeing a bipartisan discussion in 

Washington. I am disappointed we don’t have some of our colleagues from the other side that were invited to the hearing to be 

here today because it is a bipartisan discussion on how to deal with 

some of these very important issues and how we deal with that. 

As far as job loss and unemployment, the CBO actually said that 

people now have the ability to choose not to work and be dependent 

on a government program. Hence, we will be losing people out of 

the workforce voluntarily, choosing not to work because now they 

have the ability to depend on the rest of us that do to subsidize 

their health care. In my view, that is not the right approach, to discourage employment. 

With that said, Mr. Wolfe, I am going to ask you, your testimony 

says you prefer to hire full-time employees to promote longevity 

and maintain quality customer service, which is very true in any 

business. How has the employer mandate, or the projected employer mandate depending on when it comes into law, impacted 

your ability to hire full-time employees? And have you hired more 

part-time employees instead of full-time employees since the Affordable Care Act or what you see is happening under the Affordable Care Act in the future? 

Mr. WOLFE. Well, we have added employees, and there is a constant turnover because of our particular situation. 

Mr. BUCSHON. Right. 

Mr. WOLFE. And our full-time employees have been burdened 

with more overtime hours because who wants to be there 48 hours 

when they don’t have to be? Before they were enjoying 40, 41, 42, 

something like that. Now we have to put the overtime on them so 

we don’t put 28 to 30 hours on everybody else, or above that 28, 

30-hour barrier. 

So, yes, we have employed more people, but we are seeing more 

turnover. If they can find a full-time job, of course, they are going 

to move on to them. I wish them all the best. But I am seeing more 

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people that are holding down two jobs, getting 25 or 26 hours and 

having to juggle those hours just so they can— 

Mr. BUCSHON. Anybody who has a business, whatever that business is, whether it is health care, whether it is an auto auction, 

knows that turnover and retraining of employees is a huge expense 

because your employees who already work there, they have to 

spend their time training new people, and you can see this especially in hospitals, like nursing departments and others, if you have 

any transition. So, you can see the impact that will have on your 

business. 

The other thing I wanted to mention that you mentioned is getting people back to work. This past weekend I did the National Republican Saturday address, and the focus of that is what has been 

done already in the House as it relates to getting people back to 

work. 

The best solution for many of our issues is getting people in 

solid, good-paying jobs. Tax reform, regulatory reform, 40 jobs bills 

that we see as potential job-creating bills that have not been acted 

on in the United States Senate, many of which there are many bills 

that were sponsored by the Democrats, over 30 of them in other 

areas that are sitting on the table in the United States Senate. 

So when you hear people saying Congress and looping us all in 

together, I would encourage you to look at the facts. I think getting 

people back to work is one of the best ways we solve our health 

care problem. 

And then I will make a final statement on health care. Again, 

as a physician I want everyone to have access to quality, affordable 

health care. Dr. Stone is on the front lines. I have been there in 

the ER. I know exactly what he is talking about. It is not right. 

It is not fair. But again, in my view, the Affordable Care Act is not 

going to be the solution to solve that problem. It doesn’t address 

cost. Cost is the issue. If we don’t address cost, no matter how 

much insurance you provide for people, we can’t sustain our system 

if we can’t control the cost. 

So, Mr. Chairman, I yield back. 

Chairman ROE. I thank the gentleman for yielding. 

Mrs. Brooks, you are recognized for five minutes. 

Mrs. BROOKS. Thank you, Mr. Chairman, and thank you to everyone representing small businesses, and to you, Dr. Stone. 

One of the things that I think you all talked about in some parts 

were the wellness of your employees and your staff and how important that is to try to provide and encourage and incentivize 

wellness opportunities. Certainly, that helps keep folks out of coming to Dr. Stone’s ER if employees are well and take care of themselves. 

But also, one of the other things that I know small businesses 

particularly struggle with is the certainty or the uncertainty of the 

future and how do you plan. As many multi-generational businesses, you haven’t been successful by not doing a lot of planning 

for the future. I think what I heard today is that there has been 

a lot of uncertainty that the law has created as to what are your 

expenses going to be with respect to your planning for the future. 

I guess I would just like to start with you, Mr. Wolfe, and actually talk to the business owners about how is this impacting your 

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planning for the future. You certainly talked about the fact that 

you aren’t able to provide—obviously, everyone wants to provide, 

particularly long-term, great employees, raises and promotions and 

so forth. How is the implementation of the Affordable Care Act affecting the certainty for your business planning? 

Mr. WOLFE. On our end, we have spent numerous hours, just the 

family, talking about how we are going to handle it. With the uncertainty of this plan or this Act, we have no way of knowing. We 

have tried to figure out if we are better off to pay the current employee and just offer nothing. I think we are going to end up going 

to one year, when it finally becomes an act or becomes active, we 

will spend one year, and we may have a debt on that is unreal. We 

could be looking at $140,000 in our company that is non-tax-deductible. Or we can go with the plan and find out later on that so 

many went into the pool. There is so much uncertainty with us. We 

have spent, like I say, the family has spent a lot of time talking, 

and we really have no answers as of yet. 

Mrs. BROOKS. Okay. Thank you. 

Mr. DeFabis, how are you planning, and can you talk a little bit 

more about your wellness program and what you see for its future, 

which has provided so many terrific results so far? 

Mr. DEFABIS. Well, as with any business, you look at your total 

cost of employees, and the less control we have over our health care 

costs, that unknown, we can’t make decisions about hourly raises 

and those kinds of things because you don’t know how much of the 

overall cost of your employees can be eaten up by health care anymore. I think that is what we saw the big benefit of in the wellness 

program, is we had, at least for a period of time, we were able to 

control ourselves what that increase was, and we then could take— 

okay, now that we have X amount available for employees’ total 

cost of an employee, you could make an hourly increase. Now we 

are not able to make that planning, and we are having to wait and 

look for other ways that reward employees. 

Mrs. BROOKS. I know that a lot of logistics companies like yourselves use a lot of staffing companies for the seasonal and the part 

time. Did those employees, those part-time folks, did they actually 

take advantage of your wellness program as well? 

Mr. DEFABIS. Those that are eligible have. The staffing agencies 

that we use, some of them offer programs with that regard. But 

again, trying to engage those staffing agencies and some of the notfor-profits that we are using to supply that worker to us, to say 

what are their plans, are they going to offer coverage, and what 

will that coverage look like; and if so, are there controllable areas 

that they are going to try to address? At this point, there really 

isn’t any definitive answer at all other than whatever that cost is 

going to be, it is going to get passed on to us. 

Mrs. BROOKS. Mr. LaMar, congratulations to Draper for being 

one of the healthiest companies in America, let alone Indiana. As 

we heard from Dr. Stone, Indiana has a long way in going in improving the health of our citizenry. So I want to applaud all of the 

companies for putting a focus on that. But what are you seeing 

with respect to the costs of the Affordable Care Act and how it is 

going to affect your wellness program, which obviously is one of the 

best in the country? 

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Mr. LAMAR. So far, according to our HR Director, the wellness 

program, he doesn’t foresee a threat to it. 

Mrs. BROOKS. Good. 

Mr. LAMAR. However, the facts that we have started our own onsite health clinic, there are some concerns about that. He says for 

the near term we should be safe for the health clinic, but long term 

it is just unfortunate that Draper, a good example of a company 

that has done the right thing by its employees by trying to establish an on-site health clinic, why should we be burdened with additional costs to subsidize those companies who have not done the 

right thing? That is the concern. 

And as far as your question goes regarding staffing and planning, we have had to increase our usage of staffing firms, thirdparty staffing firms, whereas in the past we just offered temporary 

hires direct employment via Draper. 

Mrs. BROOKS. Thank you. 

My time is up. I yield back. 

Chairman ROE. I thank the gentle lady for yielding. 

Mr. Messer, you are recognized for five minutes. 

Mr. MESSER. Thank you, Mr. Chairman. 

Thank you to our panelists. 

I want to start by asking a question of the employers. You can 

tell from your testimony that the people you work with are people 

you care about, and it is indicative, frankly, of the businesses I see 

throughout my district, the employers that work with their employees and, frankly, feel responsible for their well-being and their 

lives. 

So again, not a trick question, just to try to group this together 

on the hearing record. I will start with Mr. Wolfe. As the Affordable Care Act has moved forward over the course of the last year 

or two, have you seen costs of health care, your ability to provide 

access to high-quality health care for your employees, and has the 

cost gone up or the cost gone down? 

Mr. WOLFE. We were informed just—September is our policy 

date. So it went up. There was a 6 percent increase. 

Mr. MESSER. Six percent. 

Mr. DeFabis, your reference? 

Mr. DEFABIS. As I referenced, our cumulative increase over the 

time since the implementation of the ACA started is over 76 percent. At this point, we have been given no indication that rate of 

increase is going to be decelerating. 

Mr. LAMAR. At the beginning of the ACA, Draper had a low-deductible plan for everybody. However, it launched a high-deductible 

health savings account plan at the time. Those who signed up for 

the high-deductible HSA plan had their premiums locked in for a 

three-year period. That would have been 2010, 2011, and 2012. 

However, the premiums went up in 2013 and 2014. 

Mr. MESSER. Okay. Of course, for those individual consumers, 

their deductible was much higher and an expensive out-of-pocket 

potentially. 

Mr. LAMAR. And I forgot to mention, for 2014 we launched a 

third program which is an even higher deductible HSA plan, an 

$8,000 family deductible, and then the plan that most employees 

are on is the $4,000 family deductible. 

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Mr. MESSER. And I applaud the use of health savings accounts. 

It is an Indiana innovation, founded by Pat Rooney, Golden Rule, 

and I think that part of the solution of what we needed, we look 

at a way to try to bring health care costs under control. 

I will turn to Dr. Stone. I certainly appreciate your work on the 

front lines. While we may disagree, I respect your opinion and applaud your willingness to come and be here and speak publicly 

today. 

I would say in your testimony you assert that ‘‘some people say 

there are those who don’t deserve health care.’’ I am frankly aware 

of no one who believes that. That is not my position. I don’t think 

it is the position of anybody here on the panel today. 

You do correctly note that I very much oppose the President’s 

misnamed Affordable Care Act. There were real problems with our 

health care system before the law was enacted. Unfortunately, the 

law leaves too many of those problems unsolved, and it makes 

health care more expensive for too many people. 

My fear is that this law will not work. For too many, it is already 

not working. And by the time its most ardent supporters realize 

the damage that has been done, the price of cleaning up the mess 

will be too high, both financially and in terms of helping those people, who will have been hurt the most, people like students and 

hourly workers. 

You cited some questions about how high premiums are going 

up. I can tell you on an anecdotal basis I have talked to nobody 

who says their premiums are going down. You talk to a lot of people who are seeing premiums spike. 

As Dr. Bucshon mentioned, the debate about how the President’s 

health care law is littered with broken promises that were made 

to justify its enactment. One example, the President said the bill 

could save families $2,500 in coming years. Clearly, that has not 

happened. 

Some proponents like yourself say that—you essentially argue 

that costs would have gone up more than they have without the 

law, and frankly I think for the average consumer that is just not 

good enough. 

You mentioned the question about whether 2.3 million people 

will be pushed out of the workforce in the next seven years. It is 

a line from the CBO. In testimony, you are right. In committee, 

there was a discussion about whether some workers will decide, so 

they can keep the President’s subsidies and, frankly, keep their 

wages artificially depressed, whether they will work less. It essentially sounds like you are heralding the health care law could 

incentivize people to work less and be more dependent on their 

Federal subsides. I prefer to incentivize work, personal responsibility, and self-reliance over government dependence. 

You mentioned the elephant in the room. If I have a little time— 

oops, I am out of time. 

Chairman ROE. It’s okay, go ahead. 

Mr. MESSER. Okay. I want to ask just a couple of quick questions 

because, to me, the real elephant in the room is that the rising cost 

of health care itself is one of the primary reasons so many people 

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based reforms that will expand access to affordable health care, not 

just massively redistribute wealth to the few. 

So here are a few examples. I think Indiana has been an incredible model on medical malpractice reform, driven by Governor 

Bowen in the 1970s. Would you support a sort of national approach 

to medical malpractice reform that would mirror the kinds of success we have had here in Indiana? 

Dr. STONE. Well, I might be able to surprise you with my answer 

on that. 

[Laughter.] 

Mr. MESSER. Maybe you agree. 

Dr. STONE. I am no expert on malpractice, but I have not seen 

any of the national bills on medical malpractice that were I 

thought quite as good as what we have in Indiana. Indiana is typically ranked as one of the five best states in terms of medical malpractice. And I will perhaps surprise you again. I come from a family of lawyers, both my grandfathers, my father, my older brother, 

and my sister-in-law. So I am kind of the black sheep as the only 

doctor around. But I will tell you that I have friends who are trial 

lawyers, but the trial lawyers have a lot of power in the Democratic 

Party, and I worry about the effects of a national bill that might 

not be as good as what we have in Indiana. 

So here is one case where I am all for states’ rights. Let’s keep 

our Indiana bill. 

Mr. MESSER. Two other quick things, doctor, with your permission, Chairman. Would you support greater price transparency so 

health care consumers can get the most bang for their buck? One 

of the real challenges we face is it is hard for consumers to know 

what the price is and what the quality of the care provided is. 

Dr. STONE. Boy, this price transparency thing is a really complicated problem, and I don’t fully understand—I wish I did—why 

it is so hard to get price transparency. But in most of my years 

working in an emergency department, we were an independent 

group that contracted with hospitals. We had our own billing company, and we were under a lot of restrictions. We would sign a contract with Anthem, and then we had to sign a confidentiality agreement. We could not report what we were being reimbursed. So it 

is a very complicated problem. 

It sounds like it would be easy. The Time magazine article last 

year, ‘‘Bitter Pill,’’ talked about the incredible differences in 

charges. 

I am not a policy expert, but from a policy perspective I am not 

sure how you really make that happen, but I would be interested 

in looking at it. 

Mr. MESSER. Of course, to make markets work, we have to know 

what the price and quality is. 

This is probably going to be the easiest one, and then I will let 

it go, okay? But I do think it is important, and it is something we 

can do to make a difference. Would you support streamlining 

health care delivery models in cracking down on waste, fraud, and 

abuse in the system? 

Dr. STONE. Sure, of course. 

[Laughter.] 

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Mr. MESSER. There is much that can be done beyond what has 

been done with the Act. 

Thank you very much. 

Chairman ROE. Would that be ‘‘Do you still beat your wife?,’’ one 

of those kinds of questions? 

[Laughter.] 

Mr. MESSER. That one was easy. 

Chairman ROE. Mr. Rokita, you are recognized for five minutes. 

Mr. ROKITA. I thank the Chair, and I thank Mr. Messer for his 

questions. They are along the same lines, the same kind of questions I had. 

I do want to make sure the record is clear that the doctor is not 

for waste, fraud, and abuse. I appreciate that very, very much. 

[Laughter.] 

Mr. ROKITA. I also appreciate very much the private-sector testimony that we had here today, and I am going to have some questions for you all. But in this time when you turn on the news and 

you hear elected leaders, especially at the national level, decry 

companies and individuals being successful and making a profit, I 

want to be on record congratulating you for your profitability, for 

being good at what you do, for so many reasons, but chief amongst 

them is the fact that if you are not making a profit, then no one 

has a job. I say that here just so we don’t lose sight of that as a 

state and a nation. Thank you for what you do. 

Now, we talked earlier, and I think it was Dr. Bucshon who did 

a nice job of listing out what I would term the piecemeal approach 

that we have been able to take in Congress so far in getting some 

reforms, many of them technical in nature, 30 hours versus 40 

hours, to the health care law. Certainly, none of that has passed 

the Senate, and it certainly won’t be signed by the President I don’t 

imagine, but we did some good work getting those things out. 

But we have to also, I think, make sure we are keeping our eye 

on the ball in terms of repealing this in a holistic fashion, not because none of us want to see a better system—we certainly do— 

but so that we can get to what could be. And what could be in a 

lot of ways are found in those 80 amendments that Nancy Pelosi 

would not hear back in 2010 or 2009 when this Affordable Care Act 

was passed in the dead of night, a multi-thousand-page bill that no 

one read, and now we are suffering, as the majority of the testimony here clearly indicates that we are suffering under. 

What could be, with 135 co-sponsors already, is a comprehensive 

bill that goes into transparency, mandates it, very heavy on that 

Indiana innovation mentioned earlier called Health Savings Accounts. It incentivizes it. Right now, under Obamacare, health savings accounts, the idea that you can empower your employee to 

make better health care decisions to drive down costs, Mr. DeFabis, 

is effectively outlawed. The opposite is incentivized under 

Obamacare. It is effectively outlawed, if not severely limited. 

So what we are talking about in the comprehensive sense is empowering the individual, trusting the individual, your employees, 

from the richest citizen to the simplest of us, knowing that we can 

make better health decisions for ourselves than some one-size-fitsall, government run, government controlled system. 

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Let me put that in a little bit of an example. Think about any 

one of your employees. Think about the examples that the doctor 

made, that $200 x-ray that fellow couldn’t afford. With a Health 

Savings Account, with a pool of money, even if it is government 

funded, they could use to make better health care decisions, that 

man would have shopped that x-ray, would have found the best 

deal using his skill set that is so natural to all of us as Americans, 

and that is consumerism, right? 

We can go down the streets of Greenfield and I think, if I remember right, there is still a Firestone, still a Goodyear? There is a 

Burger King and McDonald’s. We can find the best value. Each of 

us knows how to do that. And not every transaction in health care 

is an emergency. Some are, like if these bee stings had gone the 

wrong way last night, I wouldn’t go to the Internet, I would go to 

the emergency room. 

But a majority of our health care decisions and transactions are 

not emergency. So let’s trust people, not some government bureaucrat or some utopian searching person who is, yes, well-meaning, 

wants to help people—sure, we all do—but thinks they can do it 

best for the rest of us. 

So with the time I have remaining—I usually don’t pontificate 

like that, but I wanted to get that on the record because I think 

that is the synthesis of the testimony I have heard today, at least 

the majority of it. 

Health savings accounts. Has your company, Mr. Wolfe, had any 

experience with them or be willing to try that, the idea that you 

can actually incentivize your— 

Mr. WOLFE. We are actually exploring that right now. We have 

two insurance companies working with us to see if they can lessen 

the burden. 

Mr. ROKITA. Right. Thank you. 

Mr. DeFabis, did you have— 

Mr. DEFABIS. Yes. We have a high-deductible plan with HSA, 

and I can say since we have implemented that, it was a change, 

a major change for our employees, but I think if you were to go 

back and ask them now, I think everybody likes it. Now, it is interesting to see the dynamic that happens because they do share information amongst themselves: ‘‘Where are you buying your medication? Where are you going?’’ It has been a pleasure to see that 

when they have been empowered that way. 

Mr. ROKITA. Let’s trust that empowerment. 

Mr. LaMar? 

Mr. LAMAR. We have the high-deductible HSA plan for quite 

some time now, but the consumer transparency that you mentioned, that is something that our HR department has undertaken 

for about two years now. We contract with a third-party firm who, 

if you need an MRI or an even more serious procedure, a 

colonoscopy or what have you, this firm will go out and shop it for 

you to find the cheapest rate throughout east central Indiana, and 

then it will strongly recommend that an employee go to the low 

bidder. Employees are not mandated to do that. They are not 

forced to do it, but they are just strongly encouraged to do that, to 

keep our overall premiums down. 

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Mr. ROKITA. And it looks like in that sense there may be a new 

cottage industry developing. 

Mr. LAMAR. Exactly. 

Mr. ROKITA. That would be helpful to the economy, too. 

My time is surely expired. But in the spirit of Congressman 

Messer taking liberties— 

[Laughter.] 

Mr. ROKITA.—let me take a little bit less of a liberty, Mr. Chairman, and just finish with a statement. 

I know Mr. Pence. I know the governor. I consider him a friend. 

I probably think he would pop out of his seat if he was still up 

here, based on Dr. Stone’s characterization of his comments. But 

the Healthy Indiana plan, which is what the Medicaid waiver is all 

about, central to that, surely you know, is the health savings account. Again, here is an example for the simplest of us Hoosiers, 

by empowering them with decision-making capability, trusting 

them to make better value decisions, better than any Federal Government program or state-administrated program could, we are 

able to cover so far 40,000 more Hoosiers, people who really needed 

it. That goes to our shared goal of helping everyone get the health 

care they do deserve without adding to the Indiana budget. 

Let’s capitalize on that. Let’s use examples like that in trusting 

ourselves more than a one-size-fits-all program. 

I yield back. 

Chairman ROE. I thank the gentleman for yielding. 

I am going to reminisce just a moment as a medical educator and 

tell you all a short story. My first pediatric in-hospital rotation was 

at St. Jude’s Children’s Hospital in Memphis, Tennessee, where I 

went to medical school, and it had been opened about six or seven 

years at that time. At that time, 90 percent of those children who 

went in there I knew who I started an IV on would not survive. 

They died. Today, 90 percent of those children live. 

I don’t want to take a step backwards in that other direction. I 

am telling you, when the Lord walks on the earth again, the first 

step will be at St. Jude’s Children’s Hospital. It is a wonderful 

place. All children are treated for free regardless of their ability to 

pay. Their parents are put up. And you the citizens make that possible through donations. I don’t want to see that medical research 

take a step back. 

In my own community where we have a medical school, and I 

was on the original faculty of that school, with the Affordable Care 

Act, because Medicare payments to hospitals have been cut, we 

have lost 50 primary care residency slots. Hospitals pay above the 

cap, and there is an amount of money that Medicare will pay to 

help educate us as doctors. We have lost 50 of those. That is 500 

doctors that won’t get trained in tri-cities Tennessee. 

Our hospitals lost 800 jobs, high-paying jobs with health benefits, 

retirement plans, and futures, I might add. We used to think you 

could have a future in medicine. It is the most uncertain time I 

have seen in my lifetime in health care. What we did with this 

plan, with the Affordable Care Act, we took a part of the health 

care system that was working fairly well—we just heard of two 

people who had very innovative ways to help hold their costs down, 

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73 

and we have taken that away from them. Washington has taken 

that away. 

They were figuring it out. I have heard that same story with 

BAE. When I was the mayor of Johnson City, we put a wellness 

program in, a self-insured plan, held our costs down. With community rating, that is going to be gone now. 

Now, are there going to be some beneficiaries? Sure. There are 

going to be people who couldn’t get health insurance before who 

can now. There is no question there are going to be some winners, 

but I think there are a lot more losers, as we have heard today. 

This theme, I have heard it all over the eastern United States 

when I have held these forums. It is the same exact theme. Did we 

need health care reform? Absolutely we needed health care reform. 

We needed it. And what Mr. Rokita was saying is that we don’t 

trust individuals. 

The government, the Federal Government, I do, because the simplest decision in the world—health care decisions ought to be made 

between a physician and the patient and that patient’s family, not 

the insurance company, and certainly not the Federal Government. 

Let me tell you, when people tell you can’t shop for health care, baloney. Americans are the best shoppers in the world. We will drive 

across five lanes of interstate to get gas two cents a gallon cheaper. 

So I know good and well we will shop when we are talking about 

thousands of our own dollars. 

In my own practice, we have 450 employees. I have a health savings account. By far the majority, 85 percent, elected—we said you 

could have either plan. Mr. DeFabis, you learned exactly the same 

thing. The employees talked. They found out that they could have 

it better—it was better for them when they made those decisions, 

and 85 percent of the people we insure now in our practice use a 

health savings account. 

What Mr. Rokita was talking about was a bill—and it sounds 

like Dr. Stone would support most of it. I wrote H.R. 3121. Mr. 

Rokita was very much a part of it, a 182-page bill to put people 

in charge of their health care, not somebody else. And until I am 

responsible for the bill, you are not going to look the same at it as 

if I paid $20 and everything else is covered. Hey, if I had—Mr. 

Wolfe, if I had car-buying insurance and had a $25,000 deductible, 

I am driving a Bentley. I have never been in a Bentley. I am not 

driving a Honda. 

So you see what I am saying? We have to be responsible for that 

or we will never get in control of our costs. There is enough money 

in the American health care system to cover everybody. I have no 

doubt about that. There is. It is just the way it is distributed right 

now is not very good. 

In my state, 19 percent increase. My own insurance for my family went up with the Affordable Care Act 75 percent. I can pay that. 

I don’t like it when my wife writes the check, but I can afford to 

do it. A lot of people cannot afford to do that, and they will do without. For the people who are working in these jobs—we had the educators here—who are working five days a week as a substitute 

teacher, not only do we cut their hours with this and the folks at 

schools can’t get any more money in there without raising taxes on 

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the senior citizens and other people who are least able to pay, not 

only do we do that, then we fine them when they don’t buy it. 

Think about that. We take their jobs away, their hours away, 

and then we have the audacity to have you pay a fine. 

Now, I want to pass along a little tidbit of information that you 

can use however you want to. This is a personal choice you have 

to make, but I read the bill. I would recommend everybody do that 

who voted for it. That didn’t happen. But in the bill, there are no 

criminal or civil penalties if you don’t pay the fine, the tax. They 

can’t garnish your wages. The only thing the government can do to 

get your money is if you over-pay your taxes. 

I told that young woman I talked to this week who had lost her 

job, I said it is between your own conscience whether you over-pay 

your taxes or not. If I were you, I would under-pay them this year 

so the government couldn’t get their money from you. I think that 

is the most unbelievable thing in the world is to put a business in 

a position where they have to cut your hours and then fine you 

when you can’t buy something they force you to buy. Unbelievable. 

I think my time has expired. I want to thank the panel. You all 

have done a tremendous job, both panels. 

Mr. Snyder, before I finish, I want to commend you because I 

think community colleges are absolutely critical in allowing an educational opportunity to people who can’t. In Tennessee this year, 

we passed the Tennessee Promise, where every single high school 

graduate can go to a technical school or a community college for 

free. So no longer will the cost be something that a young person 

has to endure and have these huge debts when they get out. 

So I think you are right on, and I want to encourage you to continue to find innovative ways to make it affordable for young people. 

I want to thank our witnesses again. 

Does anybody have a closing comment? 

Dr. Bucshon? 

Mr. BUCSHON. Just briefly, Mr. Chairman. Again, one of the reasons I ran for Congress is because I have been in the ER, like Dr. 

Stone, and I have had patients that had pre-existing conditions 

that worked their whole lives and couldn’t get insurance, and I also 

know that if you are going to try to solve what I consider maybe 

one of the biggest issues of our generation—how we get everyone 

to have affordable, quality health care and access—that certainly 

physicians in government should be part of that discussion to give 

our perspective. 

That is why, I think along with Dr. Roe, and we have 14 or so 

other M.D.s, I do think it is important to be part of the discussion, 

and I would encourage everyone out there who is listening or who 

is in the crowd that has the ability, regardless of whether you are 

in health care, to please engage on this issue and give your perspective, not only health care providers but business people, individual citizens. We need your help, and by ‘‘we,’’ I mean the people 

who are your elected officials, to help us solve this problem. 

I yield back. 

Chairman ROE. Mr. Messer? 

Mr. MESSER. I just want to thank the Chairman, thank my colleagues, thank our panelists, and thank everybody here from IndiCEWDOCROOM with DISTILLER

75 

ana State’s congressional districts, both here in Hancock County 

and neighboring counties as well. 

Chairman ROE. Thank you. 

Mrs. Brooks? 

Mrs. BROOKS. Thank you, Mr. Chairman, for coming to Indiana 

and for holding this hearing. 

As a freshman member of Congress, I have been a bit overwhelmed by the number of phone calls, emails, and letters that are 

written to a member of Congress’ office. I will tell you that the 

number-one issue is health care. That is the number-one issue that 

we hear from constituents. So while sometimes a lot of people get 

tired of us continuing to talk about the Affordable Care Act, I will 

tell you it is still top of mind not only for families and individuals, 

and how they are impacted, but also our medical providers. 

We have, I believe, the best medical providers in the world, and 

we want to make sure that we continue to be the most innovative 

and the best medical and health care system in the world. So that 

is, I think, why we have continued, and I want to applaud you for 

keeping attention on this critical issue, because I too do not believe 

that the Affordable Care Act got it right and we have to fix this. 

And I yield back. 

Chairman ROE. Mr. Rokita? 

Mr. ROKITA. Thank you, Chair. 

Like Congresswoman Brooks, the top of mind for my constituents 

in Indiana’s 4th District, which goes all the way from the southern 

line of Lake County, the Kankakee River, down through Logansport, Lafayette, Kokomo, all the way to Greencastle, this is the 

issue. It certainly is not stale, and I think leadership demands that 

we lead on what could be. 

So again, I encourage, like Dr. Bucshon said, everyone in the audience, everyone within earshot, let us know your opinion, let your 

opinion be heard, and not just to your congressman or congresswoman, but to that person walking out of church. Maybe get out 

of your comfort zone a little bit, someone you might not otherwise 

talk to about these kinds of issues. This is not just a health care 

issue; it is a political issue. It is political in the sense of who is 

going to run your life. Everything we do around Washington, D.C., 

really comes down to that. 

Get out of your comfort zone, because if you are listening to this 

right now, if you are here in the audience or by some other telephonic method, besides any other addictions or afflictions you have, 

you are leaders and you are needed. You have a sphere of influence, and people will listen to you, whether your opinion is along 

the lines of Dr. Stone or along the lines of the majority of other witnesses here today. 

It is going to be up to the people to solve this problem, so that 

is where the focus has to be. Can we do a better job about managing our lives, or are we better off giving it to a subset of us to 

manage them for us? I certainly believe the former. 

But like I said in the beginning, I am very proud to be a Hoosier 

and very proud of what the state has done. And because of the civil 

discourse from everyone here today and some of the ideas that 

were brought up and some of the testimony that we heard, I am 

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even prouder to leave this dais as a Hoosier. So thank everyone for 

your continued leadership. 

I yield back. 

Chairman ROE. I thank the gentleman for yielding. 

Once again, I just wanted to spend a minute or two reminiscing 

about 2009. We had nine physicians on the Doctors Caucus, which 

I co-chair. There are 15 of us now. And not one of us was asked 

one thing about the health care bill. I found that astonishing. I 

thought somebody cared about what I thought. It turned out they 

didn’t, and it was unbelievable to me that you could have spent 

over 30 years in health care, along with 20 years in health care reform called TennCare. 

We had tried to reform our health care system in Tennessee, 

called TennCare, and I had almost 20 years’ experience with that. 

I really wanted to help and be part of the solution. I was totally 

shut out of that debate. 

As I said just a moment ago, health care is not political. It astonishes me that it is Democrat and Republican. It is unbelievable. It 

is about providing health care, and there is nothing any simpler. 

There is no simpler economic transaction in the world than a patient coming to see me, me providing a service, and somehow there 

is a little remuneration that takes place. It is not complicated. 

We have spent a billion dollars on healthcare.gov, and let me 

give you an example. I now have one full-time staff member who 

just tries to help people navigate that. One quick example, a young 

woman called at about six weeks pregnant, and she was having her 

third baby—second baby. She got to the healthcare.gov website and 

got stuck there and couldn’t move along. 

I am not going to tell you the whole story. Four exchanges between our Tennessee Medicaid and healthcare.gov, and on my election day, August 7th, I am on the phone for two hours working on 

this young woman. I asked the question, I realize I have been out 

of the operating room and out of delivering babies for a little while. 

By the way, I delivered almost 5,000 babies, and it helps to get 

elected if you have delivered your own voters. I found that out. 

[Laughter.] 

Chairman ROE. But I asked the question. I said, has the human 

gestation changed from 280 days yet, or is it still the same? And 

they sort of laughed, but I said, no, I am serious, because this patient is due in two weeks. I became worried about her. 

We got her health coverage through healthcare.gov two weeks before she was to have this baby, which was breach and she had to 

have a—so she was having complications. And guess what? Because of our state laws, when she went in to see the provider, he 

thought she had neglected her baby and they called Social Services 

and the young woman was afraid she was going to lose her baby. 

That is how crazy this has gotten. 

We need to get some common sense back into health care and get 

a lot of these bureaucrats out of it and thousands of pages and get 

it back between just doctors and patients and simple things like 

that. Dr. Stone has dealt with this for 30 years, and he is trying 

to figure out a way to best do it. I appreciate it and applaud you 

for that. 

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I want to finish by saying there are some common themes I have 

heard today, and those are from our educators, the continuity of 

care for special needs kids, extra-curricular activities like sports 

and field trips and things like that. Quite frankly, I have held a 

large employer roundtable, manufacturing roundtable in the last 

week, and one of the things those employers are looking for is those 

soft skills that you learn in athletics—show up on time, give your 

best effort. Those are very important skills. And the band. All of 

those things that kids learn how to do, to be there on time, that 

works well in the workplace. 

I have heard about less classroom attention. I don’t think anybody thinks that is a better idea today. 

By the way, for any of you educators that are out there, I want 

to set the record straight. You hear every year how terrible you are 

when compared to Lichtenstein and Norway and whatever. Here 

are the facts. There are almost 100,000 school systems in the 

United States. If you take our schools with 10 percent poverty or 

less, and poverty is defined by free and reduced lunch, we have the 

highest 15-year-old test scores in the world, bar none, period. 

It is a problem with poverty, not our educators. They are doing 

a great job. So if you know an educator, pat them on the back. 

They feel kind of beat down right now with all that is going on, 

at least they do in my state. 

Reporting requirements, they are unbelievable. Right now, Mr. 

Wolfe, they don’t know what they are. Every business up here 

doesn’t know exactly. That adds cost to their business and uncertainty to their business, new fees and taxes. This reinsurance fee 

where you make sure big, powerful, wealthy insurance companies 

don’t lose money is mind-boggling when this city right here—I 

guarantee you, the mayor of this city is going to have to provide 

a check from people who pay taxes here to pay that reinsurance 

fee, of which he will get nothing for it, the people who are recipients will get nothing for it, higher turnover rates because people 

need full-time work. 

I have learned a lot today. I have heard a lot of good things and 

certainly appreciate working with my four great colleagues here. 

I want to thank our police officers who are here today and with 

us. I want to thank you all for your service. You put your life on 

the line every day. I know as a mayor, when I would drive by a 

car with one of you guys pulling somebody over, I would say a little 

prayer for you because you do very dangerous work, and I thank 

you for that work, making our communities safer. 

I thank all of you all for being here and attentive. This has been 

a great audience. We are going to keep doing this dog and pony 

show on the road because I like to get out among the people where 

the common sense is because, I can tell you, inside 395 and Washington, D.C., the oxygen ain’t right. 

[Laughter.] 

Chairman ROE. With no further business, the committee stands 

adjourned. 

[Applause.] 

[Additional Submission by Mr. Messer follows:] 

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[Whereupon, at 12:34 p.m., the subcommittee was adjourned.] 

Æ 

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