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87–589 2014

PPACA IMPLEMENTATION FAILURES: ANSWERS 

FROM HHS 

HEARING 

BEFORE THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

OCTOBER 30, 2013 

Serial No. 113–90 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

(III) 

C O N T E N T S 

Page 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 2 

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

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, prepared statement .................................................................................. 49 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, prepared statement .......................................................................... 88 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

prepared statement .............................................................................................. 88 

WITNESSES

Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services ......................................................................................................................... 5

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

Answers to submitted questions ...................................................................... 147 

SUBMITTED MATERIAL

Report entitled, ‘‘Exposing the Anti-Obamacare Sabotage Campaign,’’ dated 

September 2013, by the Center for American Progress Action Fund, submitted by Mr. Pallone .......................................................................................... 90 

Documents submitted by Mr. Lujan ...................................................................... 115 

Document binder ...................................................................................................... 120 

(1) 

PPACA IMPLEMENTATION FAILURES: 

ANSWERS FROM HHS 

WEDNESDAY, OCTOBER 30, 2013 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

WASHINGTON, DC. 

The committee met, pursuant to call, at 9:02 a.m., in room 2123, 

Rayburn House Office Building, Hon. Fred Upton (chairman of the 

committee) presiding. 

Present: Representatives Upton, Hall, Barton, Whitfield, 

Shimkus, Pitts, Walden, Terry, Rogers, Murphy, Burgess, 

Blackburn, Gingrey, Scalise, Latta, McMorris Rodgers, Harper, 

Lance, Cassidy, Guthrie, Olson, McKinley, Gardner, Pompeo, 

Kinzinger, Griffith, Bilirakis, Johnson, Long, Ellmers, Waxman, 

Dingell, Pallone, Eshoo, Engel, Green, DeGette, Capps, Doyle, 

Schakowsky, Matheson, Butterfield, Barrow, Matsui, Christensen, 

Castor, Sarbanes, McNerney, Braley, Welch, Lujan, Tonko, and 

Yarmuth. 

Staff Present: Clay Alspach, Chief Counsel, Health; Carl Anderson, Counsel, Oversight; Gary Andres, Staff Director; Ray Baum, 

Senior Policy Advisor/Director of Coalitions; Mike Bloomquist, General Counsel; Sean Bonyun, Communications Director; Matt Bravo, 

Professional Staff Member; Megan Capiak, Staff Assistant; Karen 

Christian, Chief Counsel, Oversight; Noelle Clemente, Press Secretary; Paul Edattel, Professional Staff Member, Health; Brad 

Grantz, Policy Coordinator, O&I; Sydne Harwick, Legislative Clerk; 

Brittany Havens, Legislative Clerk; Sean Hayes, Counsel, O&I; 

Kirby Howard, Legislative Clerk; Alexa Marrero, Deputy Staff Director; Nick Magallanes, Policy Coordinator, CMT; Carly 

McWilliams, Professional Staff Member, Health; Brandon Mooney, 

Professional Staff Member; Gib Mullan, Chief Counsel, CMT; Katie 

Novaria, Professional Staff Member, Health; Monica Popp, Professional Staff Member, Health; Andrew Powaleny, Deputy Press Secretary; Chris Sarley, Policy Coordinator, Environment & Economy; 

Heidi Stirrup, Health Policy Coordinator; John Stone, Counsel, 

Oversight; Tim Torres, Deputy IT Director; Tom Wilbur, Digital 

Media Advisor; Jessica Wilkerson, Staff Assistant; Ziky Ababiya, 

Minority Staff Assistant; Phil Barnett, Minority Staff Director; 

Stacia Cardille, Minority Deputy Chief Counsel; Brian Cohen, Minority Staff Director, Oversight & Investigations/Senior Policy Advisor; Hannah Green, Minority Staff Assistant; Elizabeth Letter, 

Minority Assistant Press Secretary; Karen Lightfoot, Minority 

Communications Director and Senior Policy Advisor; Karen Nelson, 

Minority Deputy Committee Staff Director for Health; Stephen 

2 

Salsbury, Minority Special Assistant; Roger Sherman, Minority 

Chief Counsel; and Matt Siegler, Minority Counsel. 

Mr. UPTON. Good morning, everyone. Good morning. 

Secretary SEBELIUS. Good morning. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Energy and Commerce Committee welcomes the 

President’s point person on health care, Secretary Sebelius, as part 

of our continuing oversight of the healthcare law, and we look forward to a thoughtful conversation on a number of issues, including 

transparency and fairness. 

Over the months leading up to October 1 launch, the Secretary 

and her colleagues at HHS repeatedly looked us in the eye and testified that everything was on track, and despite the numerous red 

flags and lack of testing, they assured us that all systems were a 

go. But something happened along the way. Either those officials 

did not know how bad the situation was, or they did not disclose 

it. And sadly, here we are now 5 weeks into enrollment, and the 

news seems to get worse by the day. 

HealthCare.gov was down last night at 5 o’clock p.m. It was also 

down on Monday, and it crashed last weekend. And even this 

morning when we attempted to view the site before the hearing, we 

were hit with an error message. 

But this is more than just a Web site problem. That was supposed to be the easy part, remember? Americans were assured that 

their experience would be similar to other online transactions, like 

purchasing a flight or ordering a pizza, and that their sensitive 

personal information would always be secure. But after more than 

3 years to prepare, malfunctions have become the norm, and the 

administration has pivoted from saying they’re on track to setting 

a new target date of November 30th. And for those few Americans 

who have successfully applied, will the Web site glitches become 

provider glitches come January 1st? 

Americans are scared and frustrated, and this situation should 

rise above politics. Many folks at home watching us today have 

spent hours or even days trying to sign up. They continue to take 

time away from work or loved ones, but have made little progress, 

and soon they may worry about being on the wrong side of their 

government, facing potential penalties. 

I recently spoke to a woman from Buchanan, Michigan, who was 

excited to sign up, but has since become very disillusioned after 

spending hours on the phone and Web site with little success. 

There are also millions of Americans coast to coast who no doubt 

believed that the President repeated promises that if they liked 

their plan, that they would be able to keep it, no matter what. 

They are now receiving termination notices, and for those who lose 

their coverage, they like—they may be losing their faith in their 

government. 

Today’s hearing is about fairness for the American people who 

are losing their coverage or seeing their premiums skyrocket as 

high as 400 percent. This hearing is also about transparency. While 

the administration continues to boast the number of Americans 

that have applied, they intentionally withhold precise enrollment 

3 

numbers. Why? These numbers are critical to fully understand the 

status engaging the progress of implementation. 

Lead contractor CGI testified only last week that they had the 

data, but needed the administration’s permission to release it. We 

asked the Secretary on October 8th for those figures, but we still 

have not received a response. We hope to get one today. The American people deserve answers as well as the peace of mind that 

promises will be kept. The Secretary has an opportunity today to 

embrace transparency and start restoring the public’s faith in the 

administration and the government. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

The Energy and Commerce Committee welcomes the president’s point person on 

health care, Secretary Sebelius, as part of our continuing oversight of the health 

care law. We look forward to a thoughtful conversation on a number of issues including transparency and fairness. 

Over the months leading up to the October 1 launch, the secretary and her colleagues at HHS repeatedly looked us in the eye and testified that everything was 

on track. Despite the numerous red flags and lack of testing, they assured us that 

all systems were a go. 

But something happened along the way—either those officials did not know how 

bad the situation was, or they did not disclose it. Sadly, here we are, now five weeks 

into enrollment, and the news seems to get worse by the day. Healthcare.gov was 

down last night at 5:00 p.m. It was also down on Monday, and it crashed last weekend. And even this morning when we attempted to view the site before this hearing, 

we were hit with an error message. 

But this is more than just a Web site problem—that was supposed to be the easy 

part. Americans were assured their experience would be similar to other online 

transactions like purchasing a flight or ordering a pizza and that their sensitive personal information would be kept secure. But after more than three years to prepare, 

malfunctions have become the norm and the administration has pivoted from saying 

they are ‘‘on track’’ to setting a new target date of November 30. And for those few 

Americans who have successfully applied, will the Web site glitches become provider 

glitches on January 1? 

Americans are scared and frustrated, and this situation should rise above politics. 

Many folks at home watching us today have spent hours or even days trying to sign 

up. They continue to take time away from work or loved ones but have made little 

progress, and soon they may worry about being on the wrong side of their government, facing potential penalties. I recently spoke to a woman from Buchanan, Michigan, who was excited to sign up, but has since become disillusioned after spending 

hours on the phone and Web site with little success. There are also millions of 

Americans coast to coast who no doubt believed the president’s repeated promise 

that if they liked their plan, they’d be able to keep it ‘‘no matter what.’’ They are 

now receiving termination notices, and for those who lose the coverage they like, 

they may also be losing faith in their government. 

Today’s hearing is about fairness for the American people who are losing their 

coverage or seeing their premiums skyrocket as high as 400 percent. This hearing 

is also about transparency. While the administration continues to boast the number 

of Americans that have ‘‘applied,’’ they intentionally withhold precise enrollment 

numbers. Why? These numbers are critical to fully understanding the status and 

gauging progress of implementation. Lead contractor CGI testified last week that 

they had the data, but needed the administration’s permission to release it. We 

asked the Secretary on October 8 for those figures, but still have not received a response. We hope to get one today. 

The American people deserve answers as well as the peace of mind that promises 

will be kept. The secretary has an opportunity today to embrace transparency and 

start restoring the public’s faith in the administration and government. 

4 

# # # 

Mr. UPTON. I yield to my colleague, the ranking member of the 

committee, Mr. Waxman. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

I am pleased Secretary Sebelius is here today. She’s here to discuss the Affordable Care Act. Just like with Medicare Part D, the 

launch of the new Web site has not gone well, but just like Medicare Part D, the early glitches in this rollout will soon be forgotten. 

A lot of the discussion today will focus on that Web site. This is 

an important issue, and I want to learn what the Secretary can tell 

us about the problems being experienced and how they will be 

fixed. 

But we should keep this issue in perspective. The Affordable 

Care Act is working. It has been improving the health security of 

millions of Americans for the past 3 years. Because of the Affordable Care Act, more than 7 million people on Medicare have saved 

more than $8 billion on their prescription drugs. More than 100 

million Americans have access to free preventive coverage and no 

longer face lifetime limits on their coverage. Over 10 million Americans have received rebates from insurance companies. And, finally, 

this January, the worst abuses of insurance industry will be halted. 

Never again will a family be denied coverage because their child 

has a chronic health condition. Never again will individuals see 

their premiums shoot up because they got sick or faced an unexpected medical expense. Never again will a woman have to pay 

twice as much as a man for the same insurance. 

That is why allowing insurers to continue offering deficient plans 

next year is such a bad policy. The law says that all plans except 

those that were grandfathered in 2010 must meet the new consumer protection standards. If we don’t enforce this policy, insurance companies can continue offering flimsy coverage that disappears when people actually need it. And no one should want 

that. 

It is understandable that there will be a focus today on what 

isn’t working, but we must also remember what is working. The 

health insurance plans that are being offered in the exchanges are 

good plans; their premiums are much lower than expected. Sixty 

percent of the uninsured individuals shopping in the new marketplaces will be able to get coverage for less than $100 per month. 

Half of the young adults will be able to get coverage for less than 

$50 per month. And since Congress adopted the Affordable Care 

Act, healthcare costs across the whole economy have grown at their 

lowest level in decades. 

The success of the Affordable Care Act is due to the efforts of 

many people, but one individual more than any other is responsible 

for all the good that has been accomplished, and that is our witness 

today Secretary Sebelius. 

So I would urge my colleagues to stop hyperventilating. The 

problems with HealthCare.gov are unfortunate, and we should investigate them, but they will be fixed, and then every American 

will finally have access to affordable health insurance. 

Thank you, Mr. Chairman. 

Mr. UPTON. Thank you. 

5 

Before we swear in Secretary Sebelius, I want to clarify Energy 

and Commerce Committee practice for the swearing in of witnesses. The committee typically has two types of hearings, oversight hearings and hearings that focus on legislation and policy. 

Secretary Sebelius, for example, has testified previously before our 

committee to discuss issues related to the HHS budget or other policy matters. As is the case with all policy witnesses, Secretary 

Sebelius was not required to take the oath prior to testifying. 

Today’s hearing is different. It is an oversight hearing. It is a 

long-standing committee practice to swear in all witnesses at oversight hearings, whether they be private citizens or Cabinet Secretaries. 

Mr. WAXMAN. Mr. Chairman, I thank you for your comments, 

and I just want to join you in simply explaining that swearing in 

of a witness before an oversight committee hearing has always 

been under oath. That is a standard procedure of this committee 

when we’re conducting an oversight hearing. So it may seem 

strange to have the Secretary of Health and Human Services have 

to be sworn in, but all witnesses in an oversight hearing are sworn 

in, and that is our procedure. 

Mr. UPTON. Thank you. 

So I would now like to introduce our witness for today’s hearing. 

The Honorable Kathleen Sebelius is the Secretary of the Department of Health and Human Services. She was appointed to this position in April of 2009, and was sworn in as the 21st Secretary on 

April 28th, 2009. 

So I will now swear you in, if you would rise. 

As Ranking Waxman and I just discussed, the committee is holding an investigative hearing, and, when doing so, have had the 

practice of taking testimony under oath. 

Do you have any objection to testifying under oath? 

Secretary SEBELIUS. No, sir. 

[Witness sworn.] 

Mr. UPTON. You are now under oath and subject to the penalties 

set forth in Title 18, section 1001 of the U.S. Code. 

You may now give a 5-minute summary of your written statement. Welcome again, and thank you for being here. 

TESTIMONY OF HON. KATHLEEN SEBELIUS, SECRETARY, U.S. 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

Secretary SEBELIUS. Well, thank you, Chairman Upton. 

Mr. UPTON. You got to use that mic. You don’t know how many 

people want to hear you this morning. 

Secretary SEBELIUS. Thank you, Chairman Upton, Ranking 

Member Waxman, members of the committee. 

I left my position as Governor of Kansas 4 1⁄2 years ago for the 

opportunity to continue work I’ve been doing for most of my over 

35 years of public service; to expand the opportunities for all Americans regardless of geography, or gender, or income to have affordable health coverage. During my years as a State legislator, as an 

elected insurance commissioner, as head of the National Association of Insurance Commissioners, and as a two-term Governor, and 

now as HHS Secretary, I have worked on that effort that I care 

deeply about. 

6 

There are still millions of Americans who are uninsured as well 

as underinsured, people who have some coverage at some price for 

some illness, but have no real protection from financial ruin and 

no real confidence they’ll be able to take care of themselves and 

their families if they have an accident or an illness. And for them 

a new day has finally come. 

In these early weeks access to HealthCare.gov has been a miserably frustrating experience for way too many Americans, including 

many who have waited years, in some cases their entire lives, for 

the security of health insurance. I am as frustrated and angry as 

anyone with the flawed launch of HealthCare.gov, so let me say directly to these Americans, you deserve better. I apologize. I’m accountable to you for fixing these problems, and I’m committed to 

earning your confidence back by fixing the site. 

We’re working day and night and will continue until it’s fixed. 

We’ve recently added new management talent, additional technical 

expertise, and a new general contractor to identify, prioritize, and 

manage fixes across the system in two broad categories: performance, which deals with speed and reliability; and function, which 

deals with bugs and problems in the system. 

Our extensive assessment has determined that HealthCare.gov is 

fixable, and I want to just outline a couple of the improvements 

we’ve made to date. We now have more users successfully creating 

accounts. We can process up to 17,000 account registrations per 

hour, or nearly 5 per second. Instead of some of the users seeing 

a blank screen at the end of the application process, they can now 

see whether they’re eligible for financial assistance and make more 

informed decisions. Because we’ve improved performance, customers can now shop for plans quickly; filtering plans takes seconds, not minutes. Users are getting fewer errors and timeout messages as they move through the application process. And the system has been strengthened with double the size of servers, software that’s better optimized, and a high-capacity physical database 

which replaces a virtual system. 

The chairman referred to outages this weekend and again yesterday, and I would suggest to the committee that if you read the 

statement of Verizon, who hosts the cloud service, it is the Verizon 

server that failed, not HealthCare.gov, and it affected not only 

HHS, but other customers. 

We still have a lot of work to do. We have a plan in place to address key outstanding issues. It includes fixing bugs in software 

that prevented it from working the way it’s supposed to, and refreshing the user experience so folks can navigate the site without 

encountering error messages, timeout, and slow response times. 

And by the end of November, we’re committed that the vast majority of users will be able to review their options, shop for plans, and 

enroll in coverage without the problems way too many have been 

experiencing. 

But consumers are using the site every day and continue to do 

so, and problems are being solved, but we know that we don’t have 

a fully functioning system that consumers need and deserve. We 

are still at the beginning of a 6-month open enrollment which extends through the end of March, and there’s plenty of time to sign 

up. Just to put it in perspective, the average open enrollment for 

7 

an insurance plan is 2 to 4 weeks. The new marketplace has a 26- 

week open enrollment, and those who enroll by December 15th will 

be able to access their benefits on day one. 

Even with the unacceptable problems with HealthCare.gov, 

which we are committed to fixing, the Affordable Care Act by any 

fair measure is working for millions of Americans who are benefiting from new health security, young adults, Americans living 

with preexisting health conditions, seniors on Medicare. The 85 

percent of Americans who already have health coverage are protected with new rights and benefits. The 15 percent of our neighbors and friends who are uninsured have affordable new options in 

a competitive market. And cost growth for health care is lower 

than it’s been in years. 

Millions of Americans are clearly eager to learn about their options and to finally achieve health security made possible by the 

Affordable Care Act. My commitment is to deliver on that promise. 

Thank you, Mr. Chairman. 

Mr. UPTON. Well, thank you very much. 

[The prepared statement of Secretary Sebelius follows:] 

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Mr. UPTON. I appreciate you being here this morning, and we 

worked with our leadership to see that we don’t have votes on the 

House floor this morning so we won’t be interrupted. I appreciate 

your time for sure. And in an effort to allow every Member to ask 

a question, we’re going to be reducing the time for questions to be 

just 4 minutes so that hopefully we can get through all the Members that are here. And I’m going to be pretty fast with the gavel, 

let me just say. So we’ve got plenty of questions, so let’s try and 

get through them. 

You know, I think everyone in America remembers the President’s words: ‘‘If you like your healthcare plan, you can keep it. Period.’’ Under the Affordable Care Act, insurance policies that were 

in effect on March 23rd, 2010, when the law was enacted, would 

be grandfathered. Then a few months later, despite the President’s 

word, you all at HHS helped promulgate a new reg that in your 

own review showed that it effectively could deny perhaps as many 

as more than 50 percent, maybe even higher, of those holding individual policies, the right to renew their own insurance plan. 

And I would guess that there are a lot of us on this panel today 

that are hearing from angry and confused constituents, who are 

now being forced to go onto an inept Web site, whether they like 

it or not, to shop for a new replacement policy. They’re finding premiums often more than 100 percent what they were paying before, 

some even as high as 400 percent, as I’ve heard from, and rising 

deductibles as well. 

So when was the President specifically informed of the regulation 

change? And, if so, was it pointed out that this totally undermines 

his biggest selling point? 

And I would note that on the screen in the statement that he 

made more than 3 years after the regulation change was promulgated, the President said again, ‘‘So the first thing you need to 

know is this: If you already have health care, you don’t have to do 

anything.’’ 

So he’s been on the same page from the very start, yet the regulations changed months after the bill was enacted that are now 

causing perhaps millions of Americans to be denied the ability to 

renew their individual coverage. 

Why was that change made, and did the President know it? 

Secretary SEBELIUS. Well, Mr. Chairman, there was no change. 

The regulation involving grandfathered plans, which applied to 

both the employer market and the individual market, indicated 

that if a plan was in effect in March of 2010 stayed in effect without unduly burdening the consumer with reducing benefits and 

adding on huge costs, that plan would stay in effect and never have 

to comply with any of the regulations of the Affordable Care Act. 

That’s what the grandfather clause said. 

The individual market, which affects about 12 million Americans, 

about 5 percent of the market, people move in and out, they often 

have coverage for less than a year, a third of them have coverage 

for about 6 months, and if a plan was in place in March of 2010, 

and again did not impose additional burdens on the consumer, they 

still have it. It’s grandfathered in. 

Mr. UPTON. But why not let the consumer decide whether they 

want to renew it or not? Why were regulations promulgated in the 

17 

summer of 2010 that then undermined the ability for those folks 

to re-sign up, which is one the reasons for the large number of cancellation notices? 

Secretary SEBELIUS. There were no regulation change. We outlined the grandfather policy so people could keep their own plan. 

We then began to implement the other features of the Affordable 

Care Act. So if someone is buying a brand new policy in the individual market today or last week, they will have consumer protections for the first time. Many people in the individual market are 

medically underwritten. That will be illegal. Many women are 

charged 50 percent more than men. That will be illegal. You cannot 

again eliminate someone because of a preexisting health condition, 

you can’t dump someone out or lock someone out. 

So those provisions—but if, again, a plan is in place and was in 

place at the time that the President signed the bill, and the consumer wants to keep the plan, those individuals are grandfathered 

in, and that’s happening across the country in the individual market. 

Mr. UPTON. We’re learning, in fact, that folks who did have a 

plan who liked it, in fact, are being told that it’s canceled in the 

last—my time has expired. Let me yield to the ranking member 

Mr. Waxman for 4 minutes. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

I had to smile at your line of questioning because everybody expected this hearing was about the Web site. That’s all we’ve been 

hearing about is the Web site. 

But that’s not the only complaint we’ve been hearing about since 

the Affordable Care Act was adopted. We were told by our Republican friends that millions of jobs would be lost, and, in fact, there 

have been a gain of 7 million jobs. They said that the costs for 

health care would skyrocket, and, in fact, the opposite is true. They 

said there would be a massive shift to part-time jobs, and the evidence doesn’t support that. They said tens of millions will lose their 

insurance, but, in fact, everybody in this country is going to have 

access to health insurance because they won’t be discriminated 

against. They said that it would explode the deficit, and yet all the 

reputable organizations, like the Congressional Budget Office, have 

told us that it’s going to save us $100 billion over 10 years. 

So we’ve had a litany of objections from the Republicans about 

the Affordable Care Act, which has driven them to such a frenzy, 

they even closed the government. 

So now we have you before the committee. And you’re being 

asked—I suppose later you’ll be asked about the Web site. But let 

me pursue this question about individuals who have gotten notices 

that they’re going to have their individual insurance policies canceled. They’ll be able to get another plan, won’t they? 

Secretary SEBELIUS. Actually, it’s the law that they must get another plan. Continuous coverage is part of the law. 

Mr. WAXMAN. So—— 

Secretary SEBELIUS. And that wasn’t the case in the past. 

Mr. WAXMAN. So the Affordable Care Act, we’re going to end the 

worst abuses of insurance companies, we’re going to create consumer protections in the marketplace that they will be able to buy 

a policy even if they’ve been sick in the past, that women won’t be 

18 

charged more than men, that we’re not going to let insurance companies deny coverage because of preexisting conditions, and we’re 

not going to let them put these lifetime caps. And there will be an 

essential benefit package, so you’re not just buying some things 

and not having other things covered, you’re going to have the minimum that everybody should have: prescription drugs, mental 

health coverage, doctors and hospitals. 

Are these important consumer protections? 

Secretary SEBELIUS. Well, I would say, Mr. Waxman, they’re very 

important. As a former insurance commissioner, I can tell you that 

the individual market in Kansas and anywhere in the country has 

never had consumer protections. People are on their own. They 

could be locked out, priced out, dumped out, and that happened 

each and every day. So this will finally provide the kind of protections that we all enjoy in our healthcare plans. As part of a group, 

as part of a plan that has prenegotiated benefits, we enjoy that 

kind of health security. And individuals buying insurance on their 

own, farm families, entrepreneurs mom-and-pop shops, young 

adults have never had that kind of health security. 

Mr. WAXMAN. Well, now they’re going to have this health security. And most of the plans, as I understand it, that they’re no 

longer going to be able to keep don’t meet all the standards of the 

law. 

Secretary SEBELIUS. Well, again, I think you may have heard Pat 

Geraghty from Florida Blues, who was on some of the Sunday 

shows, and he talks about the fact that the Florida plans want to 

keep their customers. They have new plans to offer. They feel that 

a lot of people, and these are Mr. Geraghty’s words, will have a 

much better plan at a similar or lower cost; 50 percent of these 11 

to 12 million people qualify for a subsidy, qualify for some financial 

help purchasing insurance for the first time ever. 

Mr. WAXMAN. The bottom line is that people with good coverage, 

like Medicare, Medicaid, employer coverage, can keep that. People 

with grandfathered plans in the individual market will be able to 

keep it. But if insurance companies sold you a new, modified health 

insurance policy after the date of the enactment that does not meet 

the law’s standards, then those people will be able to go into the 

exchange and buy a real solid health insurance plan that won’t discriminate against them or anybody else. I think that’s a good result, I’m pleased with it, and I think most people will be as well. 

Mr. UPTON. Gentleman’s time has expired. 

The chair would recognize the vice chair of the committee Ms. 

Blackburn. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

Madam Secretary, before, during, and after the law was passed, 

the President kept saying, ‘‘If you like your healthcare plan, you 

can keep it.’’ So is he keeping his promise? 

Secretary SEBELIUS. Yes, he is. 

Mrs. BLACKBURN. OK. What do you say to the 300,000 people in 

Florida you just mentioned or to the 28,000 in Tennessee that cannot get health insurance, their plans are terminated? Is he keeping 

his promise to them? 

Secretary SEBELIUS. Well, first of all, Congresswoman, they can 

get health insurance. They must be offered new plans, new options, 

19 

either inside the marketplace, or if they don’t qualify for a financial 

subsidy, they can shop in or out of the marketplace. 

Mrs. BLACKBURN. What do you say to—— 

Secretary SEBELIUS. They absolutely will have new coverage. 

Mrs. BLACKBURN. What do you say to NBC News, who says millions are going to lose their coverage? 

Secretary SEBELIUS. In all deference to the press corps, many of 

whom are here today, I think that it’s important to be accurate 

about what is going on, and I would defer again to the president 

of the Blues plan. People will have ongoing coverage, they will be 

offered new plans—— 

Mrs. BLACKBURN. Madam Secretary, let me tell you something—— 

Secretary SEBELIUS [continuing]. In the market right now will 

qualify—— 

Mrs. BLACKBURN. What do you say to Mark and Lucinda in my 

district who had a plan, they liked it, it was affordable, but it is 

being terminated, and now they do not have health insurance? 

Secretary SEBELIUS. Insurance companies cancel individual policies year in and year out. They are a 1-year contract with individuals. They are not lifetime plans. They are not an employer plan. 

Your constituents will have lots have options in the market. 

Ms. BLACKBURN. It’s what they wanted and I will remind you, 

some people like to drive a Ford, not a Ferrari, and some people 

like to drink out of a red Solo cup, not a crystal stem. You’re taking 

away their choice. 

Let’s put the screen shot up. 

I want to go to the cost of the Web site and talk about the Web 

site. This is what is happening right now with this Web site. We’ve 

had somebody in the back trying to sign on. It is down. It is not 

working. 

Last week I asked for the cost from each of the contractors that 

were with us last week. So can you give me a ballpark of what you 

have spent on this Web site that does not work that individuals 

cannot get to? What is your cost estimate? 

Secretary SEBELIUS. So far, Congresswoman, we have spent about $118 million on the Web site itself, and about $56 million 

has been expended on other IT to support the Web. 

Ms. BLACKBURN. OK. Would you submit a detailed accounting of 

exactly what has been spent? And when do you expect constituents 

to stop getting these kind of error messages? 

Secretary SEBELIUS. Again, I talked to the president of Verizon 

over the weekend on two occasions. Verizon hosts the cloud, which 

is not part of the Web site; it is a host for a number of Web sites. 

Mrs. BLACKBURN. Right. 

Secretary SEBELIUS. The Verizon system was taken down Saturday night into Sunday. It was down almost all day Sunday. They 

had an additional problem that they notified us about yesterday, 

and it continues on. So I’d be happy to talk to the president of 

Verizon and get him to give you information about the Web site. 

Ms. BLACKBURN. Let me come back to that, because I want to get 

to this issue of exactly who was in charge of this project, because 

you’re now blaming it on the contractors and saying it’s Verizon’s 

fault. 

20 

So let me ask you this: Did you ever look at outsourcing the role 

of the system integrator? And obviously you did not, from the contractors that we had last week. You all—they had several different 

people, whether it was you, or Gary Cohen, or Michelle Snyder, or 

Henry Chao, that they thought were in charge. So who is responsible for overseeing this project? Is it you or your designee? 

Secretary SEBELIUS. Let me be clear, I’m not pointing fingers at 

Verizon, I’m trying to explain the way the site operates. We own 

the sites. The site has had serious problems. I know that—— 

Ms. BLACKBURN. Who is in charge, Madam Secretary? 

Secretary SEBELIUS. The person now in charge as an integrator 

is QSSI, one of our—— 

Ms. BLACKBURN. Who was in charge as it was being built—— 

Secretary SEBELIUS. The CMS team was in charge up until—— 

Ms. BLACKBURN. At that team, who is the individual—— 

Secretary SEBELIUS. Michelle Snyder is the—— 

Mrs. BLACKBURN. Michelle Snyder is the one responsible for this 

debacle. 

Secretary SEBELIUS. Well, excuse me, Congresswoman, Michelle 

Snyder is not responsible for the debacle. Hold me accountable for 

the debacle. I’m responsible. 

Mrs. BLACKBURN. OK. Thank you. I yield back. 

Mr. UPTON. The chair recognizes Mr. Dingell from the great 

State of Michigan. 

Mr. DINGELL. Thank you for your courtesy. I have a few questions I’ll be asking on behalf of the Congresswoman Shea-Porter, 

but I’ll do that by writing. I ask unanimous consent that I be prepared to revise and extend my remarks. 

Mr. UPTON. Without objection. 

Mr. DINGELL. Mr. Chairman, I would like to begin by thanking 

you, welcoming the Secretary to a room in which her distinguished 

father, former Governor of Ohio, served for so many years. 

I begin my questions by quoting from an expert for whom I have 

enormous respect. He said as follows: ‘‘As I mentioned earlier, the 

new benefits and its implementation are hardly perfect. Rather 

than trying to secure and to scare and confuse seniors, I would 

hope that we could work together as we go through the implementation phase to find out what is wrong with the program and if we 

can make some changes to fix it. Let us do it, and let us do it in 

a bipartisan fashion. It is too big a program and is too important 

to too many people to do that. But having said that, it does appear 

that it is working. Let us admit it, you know, and not keep beating 

a dead horse.’’ My beloved friend Mr. Barton, who I think gave us 

the beginning of our efforts today. 

Madam Secretary, I’ve seen reports of consumers receiving plan 

cancellation notices from their insurance companies saying that 

plans are no longer available. Does the ACA require insurance 

companies to discontinue the plans that people had when the law 

was passed, yes or no? 

Secretary SEBELIUS. Not when the law was passed if the plans 

have not changed. No, sir. That’s the grandfather clause. 

Mr. DINGELL. Now, that’s because the plans that existed prior to 

the passage of the law are grandfathered in, as you have said. 

Secretary SEBELIUS. That’s correct. 

21 

Mr. DINGELL. So if an insurance company is no longer offering 

a certain plan, that’s because that insurance company made a decision to change their policies, and that caused them to take away 

the grandfathered status from the insurance purchaser; is that 

right? 

Secretary SEBELIUS. That is correct. 

Mr. DINGELL. Now, Madam Secretary, I want you to submit for 

the record a statement of what it is we can do about insurance 

companies that run around canceling the policies of their people. 

And I don’t have time to get the answer, but I want to get a very 

clear statement from you as to what you can do so we can take 

some skin off some folks that have it coming. 

Secretary SEBELIUS. Again—— 

Mr. DINGELL. Madam Secretary, it’s my understanding that 

these decisions of a business character are most common in the individual insurance market, and that much turnover already exists 

and existed prior to the enactment of the legislation. 

Secretary SEBELIUS. That’s correct. 

Mr. DINGELL. Is that correct? 

Secretary SEBELIUS. Yes, sir. 

Mr. DINGELL. Is it correct that 35 to 67 percent of the enrollees 

in the individual market leave their plan after 1 year for different 

reasons? 

Secretary SEBELIUS. A third are in about less than 6 months in 

the individual market, and over 50 percent are in for less than a 

year, yes, sir. 

Mr. DINGELL. Now, in the cancellation letters which move around 

from the insurance companies, some insurance companies are suggesting an alternative plan at a higher price. Do they have the 

right to do that? 

Secretary SEBELIUS. Well, they have a right to do that, sir, but 

consumers have a right to shop anywhere to compare plans, and 

they have choices now that they’ve never had before and some financial assistance coming their way for about 50 percent of those 

people. 

Mr. DINGELL. And they have no right to enforce that—— 

Secretary SEBELIUS. Oh, absolutely not. 

Mr. DINGELL [continuing]. Demand on the insurance—— 

Secretary SEBELIUS. No one is rolled over into a plan. And, in 

fact, individuals for the first time ever will have the ability to compare plans, to shop, and to make a choice inside or outside the 

marketplace. 

Mr. DINGELL. Looks to me like the insurance companies are trying to inflict on their customers the view that this is their right, 

and that this is the only option available to them; is that correct? 

Secretary SEBELIUS. Well, I think that insurance companies 

would like to keep their customers. Having said that, customers for 

the first time have a lot of choices because they can’t be locked out 

of the—— 

Mr. DINGELL. Companies have no right to enforce that view on 

the customer. 

Secretary SEBELIUS. There is no rule that says you have to stay 

with your company or you have to be rolled over. 

Mr. DINGELL. And you don’t have to believe them—— 

22 

Mr. UPTON. Gentleman’s time has expired. 

Mr. DINGELL [continuing]. When they come forward and tell you 

that you’ve got to buy a particular policy; is that right? 

Secretary SEBELIUS. Absolutely. 

Mr. UPTON. Gentleman’s time has expired. 

The chair would recognize the gentlemen from Texas Mr. Barton. 

Mr. BARTON. Thank you, Mr. Chairman. Before I ask my questions, we have a former member of the committee on the Democrat 

side from the great State of Kansas in the audience, Mr. Slattery. 

And we’re glad to have you. 

And, Madam Secretary, we’re glad to have you, too. 

Secretary SEBELIUS. Thank you, sir. 

Mr. BARTON. There is a famous movie called The Wizard of Oz, 

and in The Wizard of Oz, there was a great line. Dorothy, at some 

point in the movie, turns to her little dog Toto and says, ‘‘Toto, 

we’re not in Kansas anymore.’’ Well, Madam Secretary, while 

you’re from Kansas, we’re not in Kansas anymore. Some might say 

that we are actually in The Wizard of Oz land, given the parallel 

universes we appear to be habitating. Mr. Waxman and most of 

those on the Democrat side think things are great. You, apparently, 

although you did apologize, and you have said it’s a debacle, you 

also seem to think that the Affordable Care Act is great. Well, myself and others have a different view. Ultimately the American people will decide. 

Now, last week, when the contractors were here, I focused my attention on the apparent lack of privacy in the Web site. 

If we’ll put up the first slide that I had last week, if we can. 

This is what’s public, Madam Secretary, and it’s basically a disclaimer that says that any unauthorized attempt to upload information or change information on the Web site is prohibited. It really doesn’t say anything about privacy. But you do have to accept 

that in order to go forward with the application. 

The next slide shows what’s not public. This is in the source 

code. We tried to determine this morning if it was still in the 

source code, but it’s been pointed out the Web site is down. 

This is much more, what I would say, frightening to me. It says 

you have no reasonable expectation of privacy regarding any communication or data transiting or stored on the information system. 

At any time and for any lawful government purpose, the government may monitor, intercept, search and seize any communication 

or data transiting or stored on the information system. Any communication or data transiting or stored on this information system 

may be disclosed or used for any lawful government purpose. 

Cheryl Campbell of CGI Federal said she was aware of it, but 

said that it wasn’t her responsibility to put that in the source code. 

Were you aware of it, and was it your responsibility to put this in 

the source code? 

Secretary SEBELIUS. Mr. Barton, I did not put things in the 

source code. I can tell you it’s my understanding that that is 

boilerplate language that should not have been in this particular 

contract because there are the highest security standards are in 

place, and people have every right to expect privacy. 

Mr. BARTON. All right. Now, the last time we could check, this 

was still there. You’re given almost unlimited authority under the 

23 

Affordable Care Act to administer it. Will you commit to the committee and to the American people that, one, you do want to protect their privacy; and, two, you will take this out, fix it, make sure 

that it doesn’t have bearing on people that try to apply through the 

Web site? 

Secretary SEBELIUS. Yes, sir. And we have had those discussions 

with CGI, and it is under way. I do absolutely commit to protecting 

the privacy of the American public, and we have asked them to remove that statement. It is there in error, it needs to be taken 

down, and we should be held accountable for protecting privacy. 

Mr. BARTON. Well, thank you, Madam Secretary. I sincerely appreciate that, and I’m sure the American people do, too. 

My last question, or it’s really a comment. I’ve introduced H.R. 

3348, which says let’s make this system voluntary for the first 

year, since we’re having so many problems, and let the American 

people decide. What that means is if people choose not to participate, they would not be charged the penalty for nonparticipation. 

Would you support such a reasonable approach to this while we 

work out the problems in the system? 

Secretary SEBELIUS. No, sir. 

Mr. BARTON. OK. Well, that’s an honest answer. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. BARTON. Thank you, Madam Secretary. 

Mr. UPTON. Chair would recognize the gentleman from New Jersey Mr. Pallone. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I know we’re not in Kansas, but I do believe increasingly we’re 

in Oz because of what I see here. So this ‘‘Wizard of Oz’’ comment 

by my colleague from Texas, I think, is particularly apropos given 

what we hear on the other side of the aisle. 

I don’t know how you keep your cool, Madam Secretary, you 

know, with this continuous effort on the part of the GOP to sabotage the ACA, to scare people, and bring up red herrings. And I 

think that this privacy issue is another red herring, and I’m going 

to ask you a question about that. 

But before that I just wanted to say, this whole idea that’s being 

brought up today that somehow, you know, policies are being canceled, and people don’t have alternatives, it’s just another red herring. You know, what I think my colleagues on the other side forget 

is that this is not socialized medicine; this is, in fact, private insurance in a competitive market. And if I’m an insurance company, 

and all of a sudden everyone else is selling a better policy with better benefits at a lower price, I can’t continue to sell a lousy skeletal 

policy that doesn’t provide benefits and costs more because I’ll be 

out of the market. 

And so that’s what’s happening here. Insurance companies are 

canceling lousy policies with high prices because they can’t compete, and that’s what’s going to happen when you have a private 

insurance market, which is what we have here. We don’t have a 

government-controlled system; we have private markets. So I just 

wanted to make that point. 

But I have to drill down on what Mr. Barton said here. You 

know, before reform, the individual insurance market was dysfunctional, premiums would shoot up if people got sick, their coverage 

24 

could be canceled if they had a preexisting condition, and they did 

not have secure quality coverage. Now, I’ve heard my Republican 

colleagues say that patient health information will be at risk in 

this application process, and this is flat out false. In fact, the ACA 

makes a giant leap forward for protecting health information by 

taking it completely out of the insurance application process, by 

banning discrimination based on preexisting conditions. 

Mr. Barton, again, is raising this red herring, just like the cancellation of insurance, by talking about privacy. But, Madam Secretary, prior to the ACA, when people applied for insurance coverage, did insurers make them provide a long, detailed, and basic 

medical history, but now, because the law bans discrimination 

based on preexisting conditions, individuals will not have to have 

provide this information in their applications? So regardless of this 

clause, please comment on the privacy issue and why it’s irrelevant. 

Secretary SEBELIUS. Well, Mr. Pallone, in the past any individual 

American who was in an employer-based coverage, in government 

coverage like the ones we enjoy, in Medicare, in Medicaid, in the 

VA, a whole variety of plans, that’s about 95 percent of insured 

Americans, had no medical underwriting, had group protections, 

had consumer protections. The people who were outside that consumer-protected space were individuals buying they own coverage 

in an individual market. Medical underwriting, demanding health 

records, and often going through extensive doctor interviews and 

getting health records was a standard for that market. Pricing 

could vary widely depending on gender, depending on health condition. People could be denied coverage, and were frequently. 

That’s the market that is currently being reformed with consumer protections. If a person had a policy in place in March of 

2010, liked that policy, and the insurance company made no 

changes to disadvantage the consumer, those policies are in place, 

you keep your plan, you like it, and that goes on. 

For the people who, though, had a medically underwritten policy, 

were paying more than their neighbor because they happened to be 

female, could not get their health condition for a fixed hip written 

into their insurance plan, they will have a new day in a very competitive market. Twenty-five percent of the insurers are brand new 

to the market, and they are offering competitive plans. 

Mr. PALLONE. Mr. Chairman, could I just ask that this document—— 

Mr. UPTON. Sure. Put it in the record. Without objection. 

Mr. PALLONE. Thank you. 

[The information appears at the conclusion of the hearing.] 

Mr. UPTON. The chair would recognize Mr. Hall. 

Mr. HALL. Thank you, Mr. Chairman. 

Madam Secretary, I think Congresswoman Blackburn asked you 

about the Federal Government, how much they spent today, and 

they are spending some money as we speak, aren’t they? It’s down 

right now, isn’t it? You projected ongoing problems. 

Secretary SEBELIUS. I’m sorry, sir. I’m having a hard time hearing. What was the—— 

Mr. HALL. She asked you how much it had spent today, and I’m 

asking what you expect to pay in addition to that on repairs that 

25 

the Web site’s going to require, and they’re requiring them as we 

speak here. So those are things you projected, you knew they would 

happen, and they will happen. But you surely looked ahead, and 

you have some estimate of what is going to happen. 

Secretary SEBELIUS. Yes, sir. 

Mr. HALL. And going to cost. 

Secretary SEBELIUS. For our two major contractors, who are 

QSSI, a subsidiary of United, and for CGI, there are obligated 

amounts. For CGI, who is in charge of the entire application, there 

has been $197 million obligated, and that is to last through March 

of 2014. And as I said before, about $104 million has been expended in that obligated amount. 

Mr. HALL. I’m going try to be here in 2014 to be sure that your 

testimony is correct, OK? 

I’m just joking with you. 

Secretary SEBELIUS. OK. 

Mr. HALL. Were you born in Kansas? Meade, Kansas? 

Secretary SEBELIUS. I was not. I was born in Cincinnati, Ohio. 

I married a Kansan and went to Kansas. 

Mr. HALL. All right. I was in third grade there, and I thought 

I saw you on a tricycle there one day. 

Secretary SEBELIUS. Well, it was an illusion. 

Mr. HALL. Let me ask you a question. Have you ever rejected a 

financial bill from one of the contractors? Have you ever? 

Secretary SEBELIUS. Have I ever—— 

Mr. HALL. Rejected a financial bill from one of them. 

Secretary SEBELIUS. Sir, again, our—— 

Mr. HALL. Well, I guess you can say yes or no. 

Secretary SEBELIUS. Our accounting office does a routine audit 

and review of every bill that comes in before they do it. I do not 

personally. I want to be very accurate about I don’t personally pay 

contracts, negotiate contracts. By law and by precedent, that’s really illegal for someone who isn’t a warranted contract officer to engage in the debate or discussion around Federal contracts. 

Mr. HALL. How much has the administration spent on the exchanges in total; not just HealthCare.gov, but all of the exchanges? 

Secretary SEBELIUS. I’m sure—— 

Mr. HALL. How difficult is that figure to give me or if you can’t 

give—— 

Secretary SEBELIUS. I would like to get it to you in writing very 

quickly. 

Mr. HALL. Madam Secretary, I don’t know how much time I’ve 

got left, but I’d like to talk about a couple of businesses in my district who are struggling with how to move forward. One is a manufacturer, and one is in the pet boarding and training business. One 

has 85 employees, and the other has 56. Here’s some quotes from 

some of their recent letters. 

‘‘The situation we’re in is we would have to pay $170,000 in penalties under Obamacare. This is another example of the government picking winners and losers. We are the losers. There’s no way 

I can be competitive if I have to raise my prices to cover $170,000. 

Here are my options: Do not pay the penalty, raise my prices, and 

go out of business, 85 people lose their jobs; layoff 35 employees 

26 

who don’t have to pay the penalty, and move more production to 

this country. Reduce 35 jobs.’’ 

And here’s a quote from the other: ‘‘Since our high-labor, lowmargin business cannot afford to pay for insurance for our employees, we’re faced with either closing our business, perhaps through 

bankruptcy, so there are heavy financial obligations that would 

continue whether we operate or not; fire enough employees to get 

under 50 employees limits and close some of our business. Even if 

we close the location, we cannot escape many expenses such as 

rental agreements.’’ 

What am I supposed to tell these people? 

Secretary SEBELIUS. Well, sir, I think that in the employer market, about 95 percent of all American businesses are exempt from 

any kind of requirement to cover employer-employee insurance, 

and they are outside the law. They continue to be outside the law. 

But they will have some new options for those who want to cover 

their employees, and some new tax credit possibilities. 

For large employers, about 96 percent of them already cover 

their employees. And, as you know, the penalty that your constituents refer to is not a penalty that is imposed in 2014. It is being 

discussed with businesses about what kind of information is exchanged, and it will take place in 2015. 

Mr. HALL. I thank the—— 

Mr. UPTON. Gentleman’s time has expired. 

Mr. HALL. He’s going to use the gavel on me if you don’t hush. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. HALL. I yield back my time. 

Mr. UPTON. The chair would recognize the gentlelady from California Ms. Eshoo. 

Ms. ESHOO. Thank you, Mr. Chairman. 

Welcome, Madam Secretary. You’re a distinguished woman. You 

have distinguished yourself and your State, the offices that you’ve 

held, and now working for the American people, and I salute you 

for it. 

I want to really congratulate my Republican pals for being absolutely 1,000 percent consistent. You love what’s wrong with the 

Web site, and you detest what’s working in the Affordable Care 

Act. And I think that that is on full display here. 

But let’s get back to the Web site, because that’s what the hearing is about. It’s my understanding that November 31st is a hard 

date for having everything up and running. Do you have—now, 

HHS did testify in September that they were 100 percent confident 

that the site would be launched and fully functional on time on October 1st. That didn’t work. Do you have full confidence in this new 

hard date? 

Secretary SEBELIUS. Congresswoman, I can tell you that the assessment that we have made is that it will take until the end of 

November for an optimally functioning Web site. I know that the 

only way I can restore confidence that we get it right is to get it 

right. So I—I have confidence, but I know that it isn’t fair to ask 

the American people to take our word for it. I’ve got to fix this 

problem, and we are under way doing just that. 

Ms. ESHOO. But are you confident that—I think I said November 

31st, which is—— 

27 

Secretary SEBELIUS. I thought it was a trick question. 

Ms. ESHOO [continuing]. Does not exist. But November 30th. You 

have confidence in November 30th? 

Secretary SEBELIUS. I do. 

Ms. ESHOO. Is there any penalty to QSSI or CGI for not delivering on what they promised? 

Secretary SEBELIUS. Well, I think the—as you can see, we have 

a—obligated funds for a contract. We certainly have not expended 

all these funds. And we expect not only the CMS team, but our 

contractor partners to fulfill their obligations and—— 

Ms. ESHOO. But if they fail to fulfill their obligations—I don’t 

know what’s in the contract—is there a penalty? 

Secretary SEBELIUS. There isn’t a built-in penalty, but I can tell 

you that paying for work that isn’t complete is not something that 

we will do. 

QSSI, as you know, has taken on a new role as integrator. The 

hub that they built and have in operation is working extremely 

well not only for the Federal exchanges, but all the State-based 

markets are using the hub. And that’s why we had confidence in 

their ability to actually take this next role on and coordinate the 

activities moving forward, which have to be driven with a very 

clear set of outcomes, very accountable timelines and deadlines, 

and they will be helping to manage that process. 

Ms. ESHOO. On the issue of security, there was a security breach 

that arose recently, that I read about at any rate. And what I think 

is very important here, because the issue of privacy has been 

raised, and I think that that has been answered, because, very importantly, there isn’t any health information in these systems, but 

there is financial information. 

So my question to you is has a security wall been built, and are 

you confident that it is there, and that it will actually secure the 

financial information that applicants have to disclose? 

Secretary SEBELIUS. Yes, ma’am. I would tell you that there was 

not a breach. There was a blog by a sort of skilled hacker that if 

a certain series of incidents occurred, you could possibly get in and 

obtain somebody’s personally identifiable—— 

Ms. ESHOO. But isn’t that telling? Isn’t that telling? 

Secretary SEBELIUS. And we immediately corrected that problem. 

So there wasn’t—it was a theoretical problem that was immediately fixed. 

I would tell you we are storing the minimum amount of data because we think that’s very important. The hub is not a data collector. It is actually using data centers at the IRS, at Homeland Security, at Social Security to verify information, but it stores none 

of that data. So we—— 

Ms. ESHOO. Thank you. 

Secretary SEBELIUS. So we don’t want to be—— 

Mr. UPTON. The gentlelady’s time has expired. 

The chair recognizes Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

Welcome, Madam Secretary. 

Madam Secretary, before I start my questions, the Washington 

Post gave the administration and the President, yourself, four 

Pinocchios on this whole debate of if you like the insurance you 

28 

have, you can keep it. Would you recommend to the president that 

he stop using that term? Wouldn’t that be helpful in this debate? 

Secretary SEBELIUS. Well, sir, I think he used the term at the 

time that the law was passed, and he continued to say—— 

Mr. SHIMKUS. And as of September 26th also, so—— 

Secretary SEBELIUS. That is why we wrote the grandfather—— 

Mr. SHIMKUS. So the answer is you don’t buy—you don’t believe 

that The Washington Post, and therefore—— 

Secretary SEBELIUS. Well, I haven’t read The Washington Post. 

Mr. SHIMKUS. Well, we’ll hand this down to you—— 

Secretary SEBELIUS. Thank you. 

Mr. SHIMKUS [continuing]. So you can see it. Have you ever 

shopped, I know you have, but this is at a grocery store with a coupon? 

Secretary SEBELIUS. Yes. 

Mr. SHIMKUS. Have you ever used a coupon? 

Secretary SEBELIUS. Yes. 

Mr. SHIMKUS. So the coupon gives you the terms and conditions 

of when you go to the checkout to get whatever is off the price of 

the goods. When you all added the ‘‘See Plans Now’’ option, you, 

in essence, gave the searcher, in essence, a coupon based upon 

what they’re seeing there. The desire was, let people know what 

the price is; however, as the news reported, and I followed up in 

last week’s hearing, was that if you are under 50 years old, you get 

quoted the price of someone who is 27. If you are older than 50, 

could be 64, you get quoted a price of someone who is 50 years old. 

Isn’t that misleading? 

Secretary SEBELIUS. Well, sir, the learn side of the Web site, 

which has been up since actually late 20—— 

Mr. SHIMKUS. So that is truthful, then? If you quote a price—— 

Secretary SEBELIUS. It is clearly a hypothetical situation that allows people to—— 

Mr. SHIMKUS. OK. On the ‘‘See Plans Now’’ option, are you saying this is a hypothetical? That is not what it says on the site. It 

says this is the price when you put in your age. And if your age 

is 49, it quotes you as if you are 27. 

Secretary SEBELIUS. Sir, the only way someone can get an accurate information about their price is to get their individual—— 

Mr. SHIMKUS. Let me ask you another—— 

Secretary SEBELIUS [continuing]. Eligibility determined. 

Mr. SHIMKUS. When did you decide to use this below 50 at 27 

and above 50 at 50 years old? When did you make that decision? 

Secretary SEBELIUS. That was decided by the team as we put 

up—— 

Mr. SHIMKUS. By who? Who made the—— 

Secretary SEBELIUS. I will get you that information. 

Mr. SHIMKUS. The problem with the whole debate is you all won’t 

tell us who made the decision. 

Secretary SEBELIUS. I can tell you I did not design the site. 

Mr. SHIMKUS. So who? 

Secretary SEBELIUS. I will get the—— 

Mr. SHIMKUS. Well, who made the decision on the 27-year-old 

quote for someone who is 50? 

29 

Secretary SEBELIUS. I just said I will get you that information, 

sir. 

Mr. SHIMKUS. Thank you. Let me go to—because it is misleading, 

and the White House insists it didn’t mislead the public, and of 

course, we find out that you did. Let me finish on this debate. It 

is another transparency issue. If someone, a constituent of mine or 

someone in this country, has strongly held pro life views—— 

VOICE. Oh, here we go. 

Mr. SHIMKUS [continuing]. Can you commit to us to make sure 

that the Federal exchanges that offer that is clearly identified and 

so people can understand if they are going to buy a policy that has 

abortion coverage or not? Because right now, you cannot make that 

determination. 

Secretary SEBELIUS. Sir, I—I don’t know. I know exactly the 

issue you’re talking about. I will check and make sure—— 

Mr. SHIMKUS. Here’s—— 

Secretary SEBELIUS [continuing]. That—— 

Mr. SHIMKUS. OK. Thank you. 

Secretary SEBELIUS [continuing]. Is clearly identifiable. 

Mr. SHIMKUS. Well, here’s—— 

Secretary SEBELIUS. You’re saying—— 

Mr. SHIMKUS. Here’s our request. Can you provide for the committee the list of insurers in the Federal exchange who do not offer 

as part of their package abortion coverage? 

Secretary SEBELIUS. I think we can do that, sir. 

Mr. SHIMKUS. Well, you should be able to do it. 

Secretary SEBELIUS. I—— 

Mr. SHIMKUS. So—— 

Secretary SEBELIUS. I just said—— 

Mr. SHIMKUS. No. You said if we can do it. 

Secretary SEBELIUS. No. I think we can do that, is what I said. 

Mr. SHIMKUS. I think or I know we can do it? 

Secretary SEBELIUS. Sir, I can’t tell you what I don’t know firmly 

right now. I know that is the plan. I will get that information to 

you. I—— 

Mr. UPTON. Gentleman’s time has expired. 

The chair recognizes Mr. Engel from New York. 

Mr. ENGEL. Well, thank you, Mr. Chairman. 

Madam Secretary, I appreciate your coming today to answer 

questions about the Affordable Healthcare Act. 

You know, my Republican colleagues’ actions here remind me a 

story I read when I was a little boy, and that is the story of Chicken Little, who ran around yelling, ‘‘The sky is falling. The sky is 

falling,’’ but unlike Chicken Little, my Republican colleagues are 

actually rooting for the sky to fall. 

Republicans are holding this hearing today under the auspices of 

an investigative hearing, as if they want to get to the bottom of 

what went wrong with the Web site in order to help fix it. 

But I don’t think, Madam Secretary, there’s one person in this 

room who is naive enough to actually think that the Republicans 

want to see this law work. They voted over 40 times to repeal the 

law. They shut down the government and threatened to force a default in order to stop it. They’re rooting for failure. 

30 

Madam Secretary, can you tell us what would be the impact on 

Americans’ health insurance if Republicans had been successful in 

their efforts to defund or repeal the Affordable Care Act? 

Secretary SEBELIUS. Well, I think that the estimates of the Congressional Budget Office is that would have increased the deficit by 

about $110 billion in the first decade and close to a trillion dollars 

in the second decade. We know that we have 42 or 43 million 

Americans without health insurance at all, some of them Medicaid 

eligible and some in the—over the Medicaid eligibility. Thirty governors so far, Republicans and Democrats, have declared their support for moving ahead with Medicaid expansion, but absent that, 

the Affordable Care Act, those folks would be without any kind of 

health security. 

And in the private market, what we know is it takes a real toll, 

but I’d say the biggest issue is not just the financial toll, not the 

community toll, not the country toll, which is significant. I have a 

good friend who runs the cancer center at the University of Kansas. I was with him and cancer researchers recently, and he said 

that if you get a cancer diagnosis, you are 60 percent more likely 

to live 5 years and beyond if you have insurance than if you don’t. 

I think that’s a pretty powerful statement for why we need affordable healthcare for all of our citizens. 

Mr. ENGEL. Well, thank you. The Republicans have not been able 

to defund or repeal it, but they have denied requested funding. 

They’ve raised specious arguments about death panels and socialized medicine. And they’ve worked to intimidate groups that could 

help the implementation effort. There has been the spreading of 

misinformation about the cost of coverage, we hear some of that 

today, and to actively dissuade the uninsured from seeking coverage. 

So, Madam Secretary, how have these tactics impacted your ability to implement the Affordable Care Act? 

Secretary SEBELIUS. Well, I don’t think there’s any question that 

a lot of people need a lot of information. I think it’s one of the reasons we had millions visit the site, try to visit the site. It’s why I 

am so frustrated and disappointed that the site is not fully functional and why I’m so committed to getting it functional, because 

clearly there is a demand. We need to get information to people 

about the law. This is the law. This is not any longer a debate. It 

was a law passed by both Houses of Congress, signed by the President of the United States, upheld by the Supreme Court. The president was reelected. It is the law, and people have benefits and 

rights under that law, and we’ve got to get that information so they 

can make good choices for themselves and their families. 

Mr. ENGEL. Well, thank you. It is the law, and frankly, I find it 

disconcerting that my Republican colleagues have done nothing but 

root for this law to fail for the last 3 and a half years, and now 

there’s a big show here of being upset at problems with the Web 

site, of keeping people from signing up for coverage fast enough. 

So I would just say to my colleagues on the other side of the 

aisle, you’re really on the wrong side of history here. The Web site 

will be fixed and millions of Americans will be able to get quality 

affordable health insurance coverage through the Affordable Care 

Act. 

31 

And, again, I thank you for being here today, Madam. 

Mr. UPTON. Mr. Pitts, chairman of the Health Committee. 

Mr. PITTS. Thank you, Mr. Chairman. Welcome, Madam Secretary. 

Secretary SEBELIUS. Mr. Pitts. 

Mr. PITTS. Have you personally tried to register or enroll on the 

Web site? 

Secretary SEBELIUS. Sir, I created an early lite account so I 

would see the prompts that were coming to people who were interested. I did work my way to the application feature fairly early on, 

but frankly, I have affordable healthcare, so I didn’t try the eligibility. 

Mr. PITTS. No. I just wondered if you’d been through the process 

that millions of Americans are having to go through. 

Madam Secretary, the initial Web site crashes appear to be 

largely a result of the decision to prevent browsing of the plans. 

CGI Federal testified at our hearing last week that they had designed the Web site to allow users to browse and compare plans before having to create an account. Ms. Campbell told us that 2 

weeks prior to the October 1st launch, they were told to turn off 

the browsing feature. Were you aware in September that this decision was made? 

Secretary SEBELIUS. Sir, I wasn’t aware of that particular decision. That was made by the CMS team. I was aware that we were 

paring back some features to not put additional risk on the Web 

site. It seems—— 

Mr. PITTS. And who made that decision? 

Secretary SEBELIUS [continuing]. Ironic at this point. 

Mr. PITTS. Who made that decision? 

Secretary SEBELIUS. Administrator Tavenner made that decision. 

Mr. PITTS. And do you know why that was made? 

Secretary SEBELIUS. Yes, sir. Because we were anxious to get the 

Web site up and running and functional, which we clearly have 

failed to do to date, although I would suggest the Web site has 

never crashed. It is functional but at a very slow speed and very 

low reliability and has continued to function. 

Having said that, they pared down some of the features, feeling 

that it would be better to load them in later. One was the shopand-browse feature, another was the Spanish version of the Web 

site, and the Medicaid transfers. All three of those issues—— 

Mr. PITTS. All right. 

Secretary SEBELIUS [continuing]. Were pared down in September—— 

Mr. PITTS. Thank you. 

Secretary SEBELIUS [continuing]. To not load the system. 

Mr. PITTS. Thank you. 

Last week, CGI Federal and QSSI testified that CMS was responsible for end-to-end testing and that they believed that months 

of testing would have been preferable to 2 weeks. Do you believe 

that 2 weeks was enough time to complete testing of the entire system? 

Secretary SEBELIUS. Clearly not. 

32 

Mr. PITTS. And when were you made aware of the result of the 

test, including the one where the system collapsed with only a few 

hundred users? 

Secretary SEBELIUS. Sir, leading up to the October 1st date, we 

had regular meetings with not only a team at CMS but administrators involved. I was made aware that we were testing, and as we 

found problems, we were fixing those problems. And I think there 

is a CGI report at mid-August identifying some problems. And between August and October, that became the punch list for CGI to 

fix those problems. That’s why you test. 

Mr. PITTS. Now, in the Washington Post, on October 21st, there 

was an article that said about a month before the exchange opened, 

a testing group of 10 insurers urged agency officials not to launch 

the site, because it was riddled with problems. Were you aware in 

September that insurers recommended a delay in the launch of the 

exchange? 

Secretary SEBELIUS. I was not aware that they recommended 

delay. I know everyone was concerned that there were risks and 

there were likely to be problems with a brand new integrated insurance system. I don’t think anyone ever estimated the degree to 

which we’ve had problems in the system, and certainly the contracting partners did not. 

Mr. PITTS. And did HHS respond to the insurers’ recommendation to delay the launch? 

Secretary SEBELIUS. Sir, I wasn’t in the meeting. I don’t know 

what occurred in the meeting—— 

Mr. PITTS. Can you find out—— 

Secretary SEBELIUS [continuing]. And I don’t know who they 

talked to. 

Mr. PITTS [continuing]. And answer that question for us? 

Secretary SEBELIUS. Sure. I will get back to you. 

Mr. PITTS. Thank you. 

Thank you, Mr. Chairman. 

Mr. UPTON. Mr. Green. 

Mr. GREEN. Thank you, Mr. Chairman. 

Madam Secretary, thank you for taking time to be here today. I 

represent parts of eastern north Houston, Harris County, and our 

district has one of the highest uninsured rates in the country. Even 

worse, we have one of the highest rates of people who have jobs but 

don’t receive their insurance through their employer. It’s for this 

reason that I believe Houston would be a good place for you to 

come and spread the word about the tremendous benefits of the Affordable Care Act, however, we learned your offices—you’re unable 

to attend because of scheduling conflicts. And hopefully we can 

have an agreement that sometime in the future you will come to 

the fourth largest city that probably has the highest number of uninsured in a metropolitan area. And, of course, we’re in the State 

of the Texas, that has the highest uninsured in the country. 

It’s important to me and our constituents to get it right, and 

that’s why I share your and the President’s disappointment the 

Web site is not working as planned. November 30th is not soon 

enough. Many of my constituents have been waiting for years to be 

able to purchase health insurance, and we owe it to them to get 

33 

the marketplaces up and running. The contractors have not served 

our country well and should fix it or not be paid. 

Now we’re hearing about the cancellation letters being sent by 

insurance companies to their customers notifying them that their 

plans are no longer offered. 

Are these Americans losing their healthcare coverage because of 

the Affordable Care Act, or is it because these plans were changed 

after the enactment of the act? 

Secretary SEBELIUS. I would say it’s the latter, sir. If a plan was 

in place since the enactment of the act, no one would have received 

a cancellation letter. 

Mr. GREEN. So if somebody in America had an insurance plan before the act and the President was correct, if you like what you 

have, you could keep it. 

Secretary SEBELIUS. Yes, sir. 

Mr. GREEN. The plans were changed, and so now they have to 

comply with the new law. 

Secretary SEBELIUS. They could either choose to be grandfathered and keep the same plan, which meant the same benefits. 

And actually the regulation allows insurance companies to charge 

medical inflation, plus the trend line, so they didn’t have to charge 

the same price; they could increase it. They could increase copays, 

they could increase coinsurance. What they couldn’t do is cancel 

benefits that the policyholder relied on, they couldn’t disadvantage 

the policyholder. But if that plan is in effect, absolutely, it is still 

in effect. 

Mr. GREEN. OK. But some of these millions of letters we’re hearing about are probably because their plans changed after—— 

Secretary SEBELIUS. Well, absolutely. And, again, in the individual market, plans change every year. 

Mr. GREEN. Yes. 

Secretary SEBELIUS. Insurers design new products. 

Mr. GREEN. Even in the small business market, that happens. 

These plans are not allowed now because they’re completely inadequate; they don’t offer the minimum essential benefits. Is that 

correct. 

Secretary SEBELIUS. That is correct. 

Mr. GREEN. OK. And having been a State legislator, and I know 

as Governor of Kansas, I assume every State has some type of minimum mandated benefits that they have for their health insurance 

plans. 

Secretary SEBELIUS. They do, but it applies, again, sir, in the 

past usually to the group markets, where 90 percent of covered 

Americans get their policies. This market has always been the Wild 

West. 

Mr. GREEN. OK. 

Secretary SEBELIUS. They didn’t have protections. 

Mr. GREEN. The Americans who received those letters from their 

companies about cancellations, they’re eligible to purchase plans on 

the exchange? 

Secretary SEBELIUS. Or out of the exchange. Individuals who 

aren’t interested in some kind of financial help can go outside the 

exchange, inside the exchange. Their insurer can offer them plans. 

They have choices they’ve never had before. 

34 

Mr. GREEN. And because of the benefits of the Affordable Care 

Act, 80 percent of their premium dollar will come back to them. 

Secretary SEBELIUS. That’s correct. 

Mr. GREEN. OK. 

Secretary SEBELIUS. That’s correct. 

Mr. GREEN. And that’s not true. And I know it’s not true in 

Texas, but I don’t know any States that have that 80 percent requirement. 

Secretary SEBELIUS. Well, no State had it, I would suggest, in 

that kind of broad base prior to the Affordable Care Act. So it’s an 

80/20—— 

Mr. GREEN. Let me give you an example of one of the plans I 

found out during case work a few years ago. A large company provided $25,000 maximum benefit for their employees in the year. 

Most of employees didn’t know about it, and—until this one constituent found out that she had cancer, and the bill ended up being 

$300,000. And so that’s some of those plans that are not being allowed to be sold now. Is that correct? 

Secretary SEBELIUS. Well, not only would the plan have a limit 

on out-of-pocket cost per year, it will have a limit on a lifetime outof-pocket cost, and it will take away the notion that you would run 

out of your coverage in the middle of a treatment, which a lot of 

plans do. 

Mr. GREEN. I know I’m out of time, but it’s like buying a car. It 

may look good, but if it doesn’t have a motor, it’s no good to have 

that car. So that’s why the Affordable Care Act has—— 

Secretary SEBELIUS. You save a lot of gas, but it doesn’t get you 

anywhere. 

Mr. UPTON. The gentleman’s time has expired. 

The gentleman from Oregon, Mr. Walden. 

Mr. WALDEN. Thank you very much, Mr. Chairman. 

Governor, Secretary, we’re delighted to have you before the committee. You and I both know how important this issue is to all 

Americans that we get it right. So I hope you can appreciate we’re 

trying to understand what we missed along the way, and one of the 

things that bothered me was the letter that was sent from your 

agency to the GAO back in June 6th. And I’ll read in part, it said, 

‘‘We’re in the final stages of finalizing and testing the IT infrastructure that will support the application enrollment process. 

HHS is extremely confident that, on October 1, the marketplace 

will open on schedule and millions of Americans will have access 

to affordable, quality health insurance.’’ 

I’m just an average guy from a small town in Oregon. When I 

read that, it tells me you believed everything was good to go, the 

testing was in place and we should have full confidence everything 

would work. Correct? 

Secretary SEBELIUS. That’s the letter I signed, yes, sir. 

Mr. WALDEN. Yes. Actually—— 

Secretary SEBELIUS. Or whoever. 

Mr. WALDEN [continuing]. It was signed by your assistant. 

Secretary SEBELIUS. Yes. 

Mr. WALDEN. But—— 

Secretary SEBELIUS. Yes. 

35 

Mr. WALDEN [continuing]. The same point. And so I went into 

this believing in your response, your agency’s response to GAO that 

things were ready to go, we should have full confidence, because 

when somebody uses the word ‘‘extremely confident,’’ it tells me 

you’re extremely confident. 

Second piece. Then when we had the testimony from the witnesses last week, I asked them about the end-to-end testing and 

what the industry standard would be, and they said it really 

should have been months, especially for a project of this magnitude, and yet we heard it was only 2 weeks. Now, in August, GCI 

told CMS in their report—— 

Secretary SEBELIUS. CGI. 

Mr. WALDEN. I’m sorry. CGI. Thank you. On August 9th, that 

there was not enough time in the schedule to conduct adequate 

performance testing. Did that make its way all the way to you, and 

do you think there was adequate time? 

Secretary SEBELIUS. Sir, clearly, as I’ve said before, we did not 

adequately do end-to-end testing. The products were not locked and 

loaded into the system until the third week in September. Each of 

the component parts—— 

Mr. WALDEN. Right. They—— 

Secretary SEBELIUS [continuing]. Was tested—— 

Mr. WALDEN. They told us that. 

Secretary SEBELIUS [continuing]. Validated, independently validated—— 

Mr. WALDEN. And so all of those—— 

Secretary SEBELIUS [continuing]. But end-to-end—— 

Mr. WALDEN. I’m sorry. All those worked, though, right? They 

told us last week that their individual modules were tested and 

met specification. Do you concur with that analysis, based on what 

you know? 

Secretary SEBELIUS. I do concur with the testing that was done, 

yes. 

Mr. WALDEN. OK. So it really was the end-to-end, which is why 

some of us thought we should delay until it could be done right, 

to avoid this very collapse that now is upon us. And I realize not 

everybody agreed to that. 

The second piece here gets back to the Washington Post, which 

I realize you haven’t had, and I understand, a chance to read this 

morning, but the four Pinocchios about the President repeatedly 

saying if you have a plan, you will keep a plan. We all heard that 

to mean, I’ve got a plan with a company, I’ll continue to have it 

even if they make minor changes, when in fact your own rules as 

written said, no, that really isn’t what’s going to happen. If minor 

changes are made, that means the plan changed; that means you 

don’t get it. 

Secretary SEBELIUS. Well, sir, that isn’t true. The rules did not 

say what you just suggested. And I think the estimate given that 

there would be turnover in the market was really an outside projection. It wasn’t our rules. It was a snapshot of what happens in 

the market, that plans change so—— 

Mr. WALDEN. Sure. 

Secretary SEBELIUS [continuing]. Dramatically—— 

Mr. WALDEN. Every year. 

36 

Secretary SEBELIUS [continuing]. Over time, that the estimate 

was they wouldn’t be—not because of our rules, but because of insurance companies’ business decisions—— 

Mr. WALDEN. Well, but you set up—— 

Secretary SEBELIUS [continuing]. Marketing plans. 

Mr. WALDEN [continuing]. What those market rules looked like 

they have to comply with, correct? 

Secretary SEBELIUS. Only if they chose not to grandfather the 

policy. That’s the—— 

Mr. WALDEN. But that meant they couldn’t make any changes. 

Secretary SEBELIUS. Any grandfathered polices stayed in place 

still would be in place—— 

Mr. WALDEN. Right. But not if they made—— 

Secretary SEBELIUS. None of these rules apply. 

Mr. WALDEN. But if they made any change—— 

Secretary SEBELIUS. No. They could make changes in pricing. 

They could make changes in benefits. They couldn’t dramatically 

disadvantage the consumer, but they could have trend lines. 

They—they had a wide corridor to make sure that the—a similar 

plan—so if a consumer liked the plan, the plan, if it stayed in 

place—— 

Mr. WALDEN. So here’s what—the practical implication, I’ve got 

letters from constituents all over my district who have gotten letters from their insurers who say because of Obamacare, they’re no 

longer going to be in the individual market, or at least with that 

plan in the individual market. And the result is this person from 

Cove, Oregon, said, I was paying $600 a month for a $3,000 deductible. Now it costs me $800 a month for a $5,000 deductible. I’ve got 

others here I’ll put in the record. A woman whose job, she had 40 

hours, now down to 29, neither has health insurance nor enough 

income to live on her own because of the way this law is getting 

implemented. 

I realize my time’s expired. 

Mr. UPTON. The gentlelady from Colorado, Ms. DeGette. 

Ms. DEGETTE. Thank you very much, Mr. Chairman. 

And thank you, Secretary, for being with us today. 

I want to follow up on a couple of those questions that Mr. Walden was asking you about CGI. As you know, Chairman Issa last 

night released this document, a monthly project status report from 

CGI last night. It looks to me it’s sort of a technical document that 

has a punch list of outstanding open issues, and some of them do 

highlight items that upon first read seem to be alarming. For example, one of the entries that, due to the compressed schedule, 

there’s not enough time built in to allow for adequate performance 

testing. And this certainly in retrospect sounds bad, but the day of 

the document that Chairman Issa released is September 6th. And 

then, on September 10th, 4 days later, CGI came in to this committee and testified under oath, quote, ‘‘CGI Federal is confident it 

will deliver the functionality that CMS has directed.’’ And we’re— 

we’re trying to figure out, or at least I’m trying to figure out how 

CGI is now coming in and saying, you know, we warned everybody 

that this wasn’t going to be ready, when they came in and directly 

told me that they would be ready to launch on October 1st. 

37 

So it kind of raises the question how these statements can be reconciled. One explanation is that CGI was lying to this committee. 

I think that’s unlikely. Another is that CGI thought that the items 

flagged in the report were like a punch list that could be addressed. 

So here’s my question to you, Madam Secretary. Was CGI telling 

your department the same thing that they told the committee on 

September 10th, that the company was confident that its programs 

would be ready? 

Secretary SEBELIUS. Congresswoman, all of the contractors testified here in September and again, I think, last week before this 

committee, and the testimony was fairly similar, that they were 

ready to go in September. They were asked in—last week if they 

had suggested that we should delay the launch date. Each of them 

said no. I think the chairman asked those questions. 

Ms. DEGETTE. So they never asked you to delay the launch date? 

Secretary SEBELIUS. They did not. And, frankly, I think it is not 

valuable at this point—— 

Ms. DEGETTE. Right. 

Secretary SEBELIUS [continuing]. To do a lot of pointing blame, 

fixing the blame. What I want to do is fix the problem. 

Ms. DEGETTE. And so do I. 

Secretary SEBELIUS. I think we need the whole team to move 

ahead—— 

Ms. DEGETTE. But—— 

Secretary SEBELIUS [continuing]. And we will report back regularly. 

Ms. DEGETTE. Right. But we’re relying on these contractors—— 

Secretary SEBELIUS. I understand. 

Ms. DEGETTE [continuing]. To fix this. And so that goes to my 

last question, which is, Mr. Zients has now come in, and he says 

the site is going to be functional for the vast majority of users by 

the end of November. Is that right? 

Secretary SEBELIUS. That’s correct. 

Ms. DEGETTE. And given what CGI told us, and the other vendors, do you believe that that is correct? Do you believe it will be 

pretty much ready to go by the end of November? 

Secretary SEBELIUS. I do. And I think that we are making improvements each and every day. It is easier to use now than it was 

2 weeks ago. It is way from where we need it to be—— 

Ms. DEGETTE. So it’s not like it’s all going to be fine by the end 

of November. It’s beginning to improve already. Is that your testimony? 

Secretary SEBELIUS. It is a continuous process, as Web sites are. 

Patches are made, fixes are made on an ongoing basis. 

Ms. DEGETTE. Thank you. 

Secretary SEBELIUS. And as we find issues, like Congresswoman 

Eshoo talked about, we are fixing them in real-time. 

Ms. DEGETTE. And you’re going to guarantee, yes or no, that people will have privacy when they go on this site? 

Secretary SEBELIUS. Absolutely. 

Ms. DEGETTE. Now, I just want to say one last thing. I was on 

the Washington Journal program where callers call in this morning, and I had a man, Max, call in, and he said he got one of those 

letters from the insurance companies that his insurance was canVerDate Nov 24 2008 13:09 Aug 15, 2014 Jkt 037690 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-90 CHRIS
38 

celled, so what he did is he went onto the Web site and he—under 

the Federal exchange, and he found a better plan, and now he’s 

going to sign up. So I would hope that that’s what everybody would 

be able to do. 

And I thank you, Mr. Chairman. 

Mr. UPTON. Mr. Terry. 

Mr. TERRY. Thank you, Mr. Chairman. 

And I’m pleased to hear that the Web site will be fully operational by the end of November. And would you be able to—would 

you come back to our committee so we could see if that’s actually 

accomplished and how it was accomplished? 

Secretary SEBELIUS. I will make every effort to do that. 

Mr. TERRY. OK. You were Governor and State insurance commissioner in Kansas. And I reached out to our State insurance commissioner and Governor and found out that they have absolutely no 

data about Nebraskans who have either tried to enroll or enroll. As 

you know, Nebraska is one of the States that opted not to do their 

own exchange and rely on the Federal exchange. So it’s interesting 

to me that neither our insurance commissioner nor the Governor’s 

office had any data about Nebraskans and enrolling in these plans. 

I also asked our insurance commissioner if they knew who the 

navigators were and whether they had to apply to be certified or 

licensed, in essence like an insurance agent would be. And they 

told me they have no clue who’s been authorized by HHS to be a 

navigator and work with people in Nebraska. So this is concerning 

to me, so I’m going to ask you a few questions along this line. 

First of all, do you have data on how many people in general in 

the United States have tried to enroll in a plan through this Web 

site? 

Secretary SEBELIUS. No, sir. We do not have any reliable data 

around enrollment, which is why we haven’t given it to date. 

Mr. TERRY. All right. Or have any data on how many people have 

tried to enroll but, because of the problems, have not been able to 

accomplish that? 

Secretary SEBELIUS. No, sir. I can tell you I met with insurers 

last week, and one of the priority fixes is the so-called 834s, the 

document that—— 

Mr. TERRY. OK. 

Secretary SEBELIUS [continuing]. Sends an individual’s name—— 

Mr. TERRY. The—— 

Secretary SEBELIUS [continuing]. To a company and verifies it. 

Mr. TERRY. But—— 

Secretary SEBELIUS. That is one of the systems that is not working. 

Mr. TERRY. I appreciate that. And the contractors I asked specifically about the information of how many people have tried to enroll 

and enroll, and they say that they do have those numbers, but 

can’t tell us that because of a contract with HHS saying that 

they—they’re gagged on that information. 

Secretary SEBELIUS. I would suggest—— 

Mr. TERRY. So could I—— 

Secretary SEBELIUS [continuing]. That the numbers are not reliable according to the—— 

Mr. TERRY. Well, I tell you what—— 

39 

Secretary SEBELIUS [continuing]. Insurance agents and according 

to us. 

Mr. TERRY. What my question is going to be, though, will you, 

on the record right now, authorize them to give us those numbers 

and let us determine whether those are reliable? 

Secretary SEBELIUS. No, sir. I want to give you—— 

Mr. TERRY. All right. 

Secretary SEBELIUS [continuing]. Reliable, confirmed data from 

every State and from the Federal marketplace. We have said that 

we will do that on a monthly basis by the middle—— 

Mr. TERRY. So—— 

Secretary SEBELIUS [continuing]. Of the month. You will have 

that data, but I don’t want to turn over anything that is not confirmed and reliable, and that’s what we’ll do. 

Mr. TERRY. Well, but that data out there exists, and—— 

Secretary SEBELIUS. Sir, I would—— 

Mr. TERRY [continuing]. You will not let us have it now. 

Secretary SEBELIUS. I would tell you right now it is not reliable 

data. According to the insurance companies who are eager—— 

Mr. TERRY. Well, the—— 

Secretary SEBELIUS [continuing]. To have customers, they are not 

getting reliable data all the way through the system. 

Mr. TERRY [continuing]. Number of people—— 

Secretary SEBELIUS. It’s one of the real problems that we have. 

Mr. TERRY [continuing]. That have clicked on and tried to get it 

or enrolled, I’m not asking about what they enrolled in or whether 

they came in and said they were 65 and were quoted something 

that they were 27 years old. That should be a pretty reliable number just—— 

Secretary SEBELIUS. The system—— 

Mr. TERRY [continuing]. On the surface, so would you—— 

Secretary SEBELIUS [continuing]. Isn’t functioning, so we are not 

getting that reliable data. Insurers—— 

Mr. TERRY. All right. 

Secretary SEBELIUS [continuing]. Who I met with said that that 

is the case. We know that there’s 700,000 applications that have 

been—— 

Mr. TERRY. The reliability of that data certainly flies in the face 

of the testimony from the contractors. 

All right. I yield back. 

Mr. UPTON. Ms. Capps. 

Mrs. CAPPS. Thank you, Mr. Chairman. Thank you, Secretary 

Sebelius, for your presence here today and your testimony. 

While I, too, am frustrated with the flawed rollout of 

HealthCare.gov, I do appreciate your longstanding commitment to 

improving the health care options for all Americans and in fixing 

this Web site quickly. 

I think it’s important to note that in my home State of California 

and other States as well, the new exchange marketplace, we call 

it Covered California, is working. And rates, constituents are finding that rates are as much as 29 percent less than those that they 

found on the marketplace last year. I’m thankful my constituents 

now have this option. 

40 

And as I look around to implementation nationwide, it seems 

clear to me that political decisions in individual States have really 

made the difference for consumers. The governors and legislators, 

State legislators that embraced this law are delivering for their 

communities, but those elected who are trying to ignore the opportunities presented and continue to throw up roadblocks both here 

in Congress and in State legislators should not now seem surprised 

that there are significant bumps along the way. 

This seems to me to be completely disingenuous. Having embraced the law since open enrollment began October 1st, Californians have started nearly 180,000 applications, with more beginning every day. 

I know my time is limited, but I want to have a second to mention a conversation I had just last night with a telephone town hall 

to my district on the central coast of California. One of the first 

callers I heard from was a mother from Santa Barbara, her name’s 

Meryl, and she wanted to tell me the story of her son. Her son is 

28 years old and he had been paying $425 a month for his insurance before the Affordable Care Act. She was happy to report that 

he has already applied through Covered California and has found 

a policy that works better for him and has all the essential health 

benefits covered, which his former policy did not, and now will only 

cost him $109 a month. This is significant savings for Meryl’s son, 

and this is a story that’s being repeated at least in California often. 

So there are millions of residents in many States who have now 

set up their own Web sites and marketplaces. In those States, tens 

of thousands of people are now as we speak signing up for coverage, and this is demonstrating that the Affordable Care Act is 

working. 

In New York and Washington, over 30,000 people have enrolled; 

in Oregon, over 50,000 people have been enrolled; Kentucky, 31,000 

people have been enrolled. We could go on and on. The success of 

the State exchanges, which is where this is meant to be implemented, shows how badly this law is wanted and needed, how 

much it will be of help to so many people who want quality, affordable health care. 

So my three quick questions to you are this, Madam Speaker: 

What is your assessment of how this first month has gone in the 

States that are running their own marketplaces, which this Congress intended that the Affordable Care Act work? 

Secretary SEBELIUS. Well, everything we hear from the Statebased markets is that they are doing well. They have not submitted 

data yet. We, again, are working with them around a monthly 

schedule so that they will confirm Medicaid data and enrollment 

data, and we’ll see the real numbers at the end of the month and 

make sure that the—they’re available to the public, but everything 

we hear is that they see the same demand, they are eager to enroll 

folks, and that that is going smoothly. 

Mrs. CAPPS. And what do you think this success shows about the 

demand and the interest for affordable health insurance on the 

part of constituents? 

Secretary SEBELIUS. Well, I don’t think there’s any question that 

in spite of a series of roadblocks and blockades and a lot of misinformation driven by about a $400 million marketing campaign last 

41 

year, Americans are eager to see what their benefits may be under 

the law, what their opportunities are, how to get health security 

for themselves and their families. And we want to make sure that 

they see those benefits. The Web site is one of the ways to do that. 

The call center, on-the-ground enrollment, personal outreach are a 

variety of ways. 

And I would tell your colleague, Mr. Congressman, I’d be happy 

to get you the list of the Nebraska folks who are on the ground. 

It’s available easily. It’s public record. So I’d be happy to send it 

to you so you can share it with your insurance commissioner and 

governor. 

Mr. TERRY. Thank you. 

Mr. UPTON. The gentlelady’s time is expired. The gentleman from 

the great State of Michigan, Mr. Rogers. 

Mr. ROGERS. Thank you. I thank you, Madam Secretary, for 

being here. A short time, I’ll get through some questions here if I 

can. 

Is it your testimony that every night to try to increase the 

functionality of the system, you’re hot swapping codes? So my understanding is that between 2 and 4, write new code, put it into 

the system. Yes or no? 

Secretary SEBELIUS. Clearly I am not hot swapping code. There 

is a—— 

Mr. ROGERS. No, no. 

Secretary SEBELIUS [continuing]. Technical team that periodically—— 

Mr. ROGERS. You’re in charge of the operation that hot swaps 

code on functionality. You’re trying to improve the functionality. 

Yes? 

Secretary SEBELIUS. Yes. 

Mr. ROGERS. So that happens every night. Yes? 

Secretary SEBELIUS. No. I don’t think it does happen every night. 

It happens periodically during the hours of 1:00 and 5:00, but it is 

not a nightly feature. 

Mr. ROGERS. Great. Has each piece of that code that’s been introduced into the system been security tested? 

Secretary SEBELIUS. That’s my understanding, yes, sir. And 

the—— 

Mr. ROGERS. Each—— 

Secretary SEBELIUS [continuing]. Testing—— 

Mr. ROGERS. Each piece of that code has been tested. Yes or no? 

Secretary SEBELIUS. I could not—I don’t know—— 

Mr. ROGERS. OK. That’s a—— 

Secretary SEBELIUS [continuing]. But I can tell you that security—— 

Mr. ROGERS. That’s a much safer answer, trust me. 

Secretary SEBELIUS [continuing]. Is an ongoing operation, that as 

code is loaded, you need to retest over and over and over again. So 

whether it’s pre-tested, I can’t tell you. 

Mr. ROGERS. All right. 

Secretary SEBELIUS. I know—— 

Mr. ROGERS. You need to pre-test the code. 

Secretary SEBELIUS [continuing]. It is simultaneous—— 

42 

Mr. ROGERS. Has any end-to-end security tests been conducted 

since HealthCare.gov went live on October 1st, yes or no? 

Secretary SEBELIUS. My understanding is there is continuous 

testing as the temporary authority to operate calls for. 

Mr. ROGERS. Yes or no, has an end-to-end security test been conducted since HealthCare.gov went live, yes or no? 

Secretary SEBELIUS. I will find out exactly what testing they’re 

doing. I know they’re doing simultaneous testing as new code is 

loaded. 

Mr. ROGERS. Are there any end-to-end security tests run after 

every new piece of code is put in—I’m not talking about testing the 

code now. I’m talking about an end-to-end security test—— 

Secretary SEBELIUS. I can tell you how—— 

Mr. ROGERS [continuing]. That covers across the boundaries. 

Secretary SEBELIUS [continuing]. Frequently it’s done—— 

Mr. ROGERS. Well, I can tell—— 

Secretary SEBELIUS [continuing]. But I will get you that information from my techs. 

Mr. ROGERS. I can tell you they’re not, and I’d be interested to 

hear why not. 

If you’d go to Tab 2 quickly in your book, I’m going to read three 

things—— 

Secretary SEBELIUS. I’m sorry. What book, sir? 

Mr. ROGERS. You have to tab there that if you go toTab 2, right 

there—well, while you’re looking, I’ll read. It’s dated September 

27th and it is to Marilyn Tavenner. Let me just read a couple of 

pieces here. There are inherent security risks with not having all 

code tested in a single environment. Finally, the system requires 

rapid development and release of hot fixes and patches, so it is not 

always available or stable during the duration of the testing. 

Secondly, the security contractor has not been able to test all of 

the security controls in one complete version of the system. 

And if you look in the first part, which is most troubling of all, 

it says, due to system readiness issues, the security control assessment was only partly completed. This constitutes a risk that must 

be accepted before the marketplace day one operations. 

And so let me tell you what you did. You allowed the system to 

go forward with no encryption on backup systems. They had no 

encryption on certain boundary crossings. You accepted a risk on 

behalf of every user of this computer that put their personal financial information at risk because you did not even have the most 

basic end-to-end tests on security of this system. 

Amazon would never do this, ProFlowers would never do this, 

Kayak would never do this. This is completely an unacceptable 

level of security. And here’s the scary part: We found out after the 

contractors last week that an end-to-end test hadn’t been conducted 

on security, not functionality, because if it’s not functioning, it’s not 

secure. You are ongoing hot patches without end-to-end tests. The 

private contractors told us it would take a very thorough 2 months 

just for an integrated end-to-end security test that I’ll tell you has 

not happened today. Why? Because you’re constantly adding new 

code every night to protect the functionality of the system. You 

have exposed millions of Americans because you all, according to 

your memo, believed it was an acceptable risk. Don’t you think you 

43 

had the obligation to tell the American people that we’re going to 

put you in the system, but beware, your information is likely to be 

vulnerable? Would you commit today, Secretary, to shut down the 

system and give an end-to-end security test so that these Americans—— 

Secretary SEBELIUS. No, sir. 

Mr. ROGERS [continuing]. Could have their information? 

Secretary SEBELIUS. If you read the memo—— 

Mr. ROGERS. Oh, I have read it. 

Secretary SEBELIUS [continuing]. It goes on to say that weekly 

testing of our Brda devices, including interface testing, daily, weekly scans are going on. This is a temporary authority—— 

Mr. ROGERS. Candidly, that’s not what the memo says—— 

Secretary SEBELIUS [continuing]. A temporary—— 

Mr. ROGERS [continuing]. Number one—— 

Secretary SEBELIUS. It does. 

Mr. ROGERS [continuing]. And number two, the contractors will 

tell you this is—— 

Mr. WAXMAN. Mr. Chairman, a point of order. 

Mr. UPTON. The gentleman—— 

Mr. WAXMAN. I think the witness ought to be allowed to answer 

what was a speech by the colleague, because he’s raised a lot of 

issues. 

Mr. UPTON. If the gentlelady will answer, we’ll move—— 

Mr. ROGERS. You mean there’s—— 

Mr. UPTON [continuing]. We’ll move—— 

Mr. ROGERS [continuing]. Giving speeches here today? That’s 

shocking. 

Mr. UPTON. Does the Secretary wish to respond briefly? 

Secretary SEBELIUS. Sir, I would just say this document is a document signed by Administrator Tavenner which discusses mitigation strategies for security that are ongoing and upgraded, and an 

authorization to operate on a permanent basis will not be signed 

until these mitigation strategies are satisfied. It is underway right 

now, but daily and weekly monitoring and testing is underway. 

Mr. ROGERS. Mr. Chairman, there are people using this system 

today, and she’s just admitted again the system isn’t secure nor 

has it been—— 

Secretary SEBELIUS. I did not say that, sir. 

Mr. WAXMAN. Mr. Chairman, she didn’t admit that. You said it, 

but she didn’t say it. 

Mr. UPTON. Gentleman’s time is expired, Mr. Doyle. 

Mr. DOYLE. Thank you, Mr. Chairman. Madam Secretary, welcome. Those of us who fought for this law, who voted for this law 

have a vested interest in its success, and the concerns that you 

hear expressed on this side of the panel are real, because we want 

to see Americans get health care. I think it’s somewhat disingenuous for my colleagues on the other side of the podium here to have 

this faux anger and this faux concern over a bill that they absolutely want to fail and have rooted for its failure and have voted 

over 40-some times to repeal this bill, never putting an alternative 

plan on the floor for the American people, but just to simply say 

they want to make sure this plan doesn’t succeed. 

44 

And I think their real fear is that the plan will succeed and the 

American people will learn of the real benefits of this plan, not the 

propaganda campaign that’s gone on by the Republicans for the 

last 3 years. 

Madam Secretary, I think one of the keys to the success of this 

plan is that we get young people to enroll in this plan, and I have 

some questions about some enrollment concerns. Now, I understand that you’ve said approximately 700,000 people have applied 

for coverage via the HealthCare.gov and the State exchanges. Is 

that—— 

Secretary SEBELIUS. They’ve completed an application. 

Mr. DOYLE. Right. Which is different from enrollment. 

Secretary SEBELIUS. That’s correct. 

Mr. DOYLE. So my question is, are you expecting—I know you 

don’t have exact numbers yet, but are you expecting a large number or a small number of enrollments during the first month? What 

are your thoughts on that? 

Secretary SEBELIUS. Well, our projections prior to launch were always that there would be a very small number at the beginning. 

We watched the Massachusetts trend, which started slowly and 

built. I think there’s no question that given our flawed launch of 

HealthCare.gov, it will be a very small number. 

Mr. DOYLE. Yes. I mean, in the Massachusetts plan, I think the 

first month, it was 123 people signed up, less than 1 percent of the 

overall first year enrollment in that first month. And we saw the 

same kind of numbers in Medicare Part D the first month of open 

enrollment back in 2006. 

Madam Secretary, young Americans are the most likely age 

group to be uninsured, and a lot of us are concerned that because 

of the problems that we’ve been having with the Web site, that a 

lot of these young folks may not come back on. You know, they 

have very short attention spans. I’ve got four kids that all work on 

the Internet, and if they can’t get something in 5 minutes, they’re 

on to something else. 

What do we do and what plans are in place by your department 

to encourage young people to go back and revisit that site and to 

make sure that we’re getting young people looking at that site and 

accessing it? 

Secretary SEBELIUS. Well, step number one is fix the site, because we don’t want people to be invited back and then have a bad 

experience a second time around. I think that’s absolutely right. 

The site is particularly important to tech savvy younger generation 

folks, who we need to enroll. I think that we have—so fixing the 

site is step one, and step number two is getting information to folks 

that the law even exists. A lot of young people haven’t followed this 

dialogue for the last 3–1⁄2 years or been paying attention—— 

Mr. DOYLE. Yes. I think we need a real—— 

Secretary SEBELIUS [continuing]. And think they don’t need 

health insurance. 

Mr. DOYLE [continuing]. A real marketing campaign and we need 

to really reach out to—— 

Secretary SEBELIUS. Yes. 

Mr. DOYLE [continuing]. Young people—— 

Secretary SEBELIUS. We intend to do that. 

45 

Mr. DOYLE [continuing]. Especially at the end of November, 

when you say this site is going to be working a lot better, to make 

sure they’re checking that site out. 

Secretary SEBELIUS. You bet. 

Mr. DOYLE. One of my four kids is self-employed. He’s 33 years old. He’s paying about $140 a month right now for a Blue Cross 

plan. He’s eligible for a subsidy. We browsed that site. He’s going 

to be able to get coverage for about half of what he’s paying right 

now. And that’s good news for us, because I think my wife is paying his premiums, so I think we’re going to save the money. 

Secretary SEBELIUS. Well, I would—— 

Mr. DOYLE. But I think it’s important—we had to prod him to 

go on that site and enroll. And I think for a lot of young people, 

they’re not going to do it unless it’s easy, so it’s important we get 

that fixed. Thank you. 

Secretary SEBELIUS. I agree. 

Mr. UPTON. Dr. Murphy, chairman of the Oversight Subcommittee. 

Mr. MURPHY. Thank you, Madam Secretary, and welcome. You 

had mentioned that the people who did technology on the Web site 

made a number of mistakes. You mentioned Verizon. When we had 

them before our committee last week, they said it wasn’t their 

fault, they were told, but then HHS, there were some problems 

there. 

Secretary SEBELIUS. Sir, Verizon wasn’t involved in the Web site. 

Mr. MURPHY. I—— 

Secretary SEBELIUS. Verizon hosts the cloud. 

Mr. MURPHY. Right. With the data. 

Secretary SEBELIUS. I just need to clear that up. 

Mr. MURPHY. I understand that. 

Secretary SEBELIUS. They were—not the Web site. 

Mr. MURPHY. But they had a role, CGI had a role, over companies, et cetera. I’m just curious in this process, what decisions did 

you make that affected this, for better or worse, in terms of the 

data, the ease or problems with the moment and being able to 

track how many people are actually enrolled? 

Secretary SEBELIUS. My decisions, specifically to design the Web 

site, I was not involved. I am prohibited to choose contractors. We 

go by the—— 

Mr. MURPHY. OK. 

Secretary SEBELIUS [continuing]. Federal procurement, and I got 

regular reports on exactly what was done and how it was—— 

Mr. MURPHY. What about the part with regard to getting data 

in terms of how many are people even enrolled or trying to enroll? 

Did you have any decisions in that process? 

Secretary SEBELIUS. Again, the application process at this point 

does not work end-to-end very well—— 

Mr. MURPHY. Right. I understand it doesn’t work. That’s obvious. 

Secretary SEBELIUS [continuing]. And we do not have reliable 

data about the end—— 

Mr. MURPHY. I’m just trying to find out if you had asked them 

to say, look, I’m in charge of this. I’m going to want a regular report. How many people have tried to enroll, how many people have 

enrolled. Have you—did you ask that question in the plan? 

46 

Secretary SEBELIUS. We have prioritized for our contractors that 

specific fix. And believe me, the insurance companies are eager for 

us to get reliable data to make sure—— 

Mr. MURPHY. I’m just trying to—— 

Secretary SEBELIUS [continuing]. That their data matches ours, 

and that is not there yet. 

Mr. MURPHY. I appreciate that. I’m just trying to find out if 

you’ve told them that was part of the plan and what they’re doing. 

Real quick. We’re hearing from thousands of people who have 

had their policies cancelled. In fact, I heard from one insurer in 

Pittsburgh that just cancelled 30,000 individual policies. Now, they 

said they expect 50,000 to 30,000 to enroll in the exchange plans. 

Just so you know, to date so far the number of people who have 

signed up for their plan is 10, 10. 

Now, I’m concerned a lot of these individuals and their families 

aren’t going to be make it by January 1, so I’m wondering, do you 

know how many families will not have been able to keep their insurance by January 1? Do you have any matrix that can help you 

understand what that number’s going to be? 

Secretary SEBELIUS. Sir, by law that has been in place for a 

while at the State level, insurance companies must give their customers a 90-day notice about a policy change—— 

Mr. MURPHY. Right. 

Secretary SEBELIUS [continuing]. Or a plan cancellation, 90 days. 

Mr. MURPHY. I’m just wondering if you have a mechanism 

whereby you will know. Is something built into the system whereby 

you be—— 

Secretary SEBELIUS. Will I know if your constituent signed up for 

an individual plan? No. 

Mr. MURPHY. People across America. And do we know how many 

policies will be cancelled or be enrolled? I mean, is it 1,000? 10,000? 

1 million? 5 million? Do we know? 

Secretary SEBELIUS. We know that in the individual market, a 

number of the plans being sold are not grandfathered and are not 

currently meeting the law. Those notices have gone out. We know 

that there are about 12 million people in the individual market. A 

number of them have grandfathered plans, a number of them have 

plans which meet the essential health benefits. So I can try to get 

those numbers. 

Mr. MURPHY. Well, let me put a face on that. A person named 

Paul wrote to me and says, I’m supposedly one of the families that 

this act was supposed to help, but it’s in fact hurting more, would 

make it harder for my family to live. We will have less money for 

food and other essential items. I have a wife and four children to 

take care of. Another person wrote, I had a 2013 plan, which if you 

include the premiums and out-of-pocket, total liability was $5,300. 

For 2014, the same program liability is $9,000. Single mom writes, 

I want to convey I’m one of the millions of people who’s having 

their health insurance cancelled because it does not meet the 

standards of Obamacare. I liked my insurance. I especially liked 

the price, and now I’m being forced to sign up for something that 

will be way more expensive. As a single mom who is self-employed, 

I’m worried about how I’m going to pay my bills. 

47 

I hope you have a mechanism to track who these people are, that 

she’s not eligible for other subsidies, but the costs are really going 

to be driving her down. 

Secretary SEBELIUS. Well, sir, again, I would suggest that there 

is no requirement that any of those consumers sign up for a plan 

suggested by their company at a higher price. They have now options—— 

Mr. MURPHY. But if a plan changes—— 

Secretary SEBELIUS [continuing]. Without health underwriting, 

without pre-existing conditions, with some guarantees around how 

much out-of-pocket costs that—— 

Mr. MURPHY. She’s searching around, and she can’t find a plan 

she can afford. 

Secretary SEBELIUS [continuing]. They never had before. 

Mr. MURPHY. She can’t find a plan she can afford. 

Mr. UPTON. The gentleman’s time is expired. The gentleman 

from North Carolina, Mr. Butterfield. 

Mr. BUTTERFIELD. Mr. Chairman, before my time begins, I have 

a parliamentary inquiry. 

Mr. UPTON. Yes. Go ahead. 

Mr. BUTTERFIELD. Mr. Chairman, I’m always sensitive to committee decorum, and before I do it this morning, I want to ask 

unanimous consent that I be allowed to display the Democratic 

Twitter handle. 

Mr. UPTON. Go right ahead. 

Mr. BUTTERFIELD. Hearing no objection. Thank you. 

Secretary Sebelius, thank you so very much for coming today. I 

would like to ask you about the document that my Republican colleagues have just released. This document is an authority to operate memorandum, to operate the federally-facilitated marketplace 

for 6 months and implement a security mitigation plan. This document, as I understand it, describes security testing for 

HealthCare.gov. It says that security testing of the marketplace 

was ongoing since its inception and into September of this year. In 

fact, it says that, quote, throughout the three rounds of security 

control assessment testing, all of the security controls have been 

tested on different versions of the system. 

That’s good news, but the bad news is that it goes on to say that 

because of system readiness, a complete security assessment of all 

the security controls in one complete version of the system were 

not tested. 

This document indicates that CMS postponed a final security assessment screening, but in its place, CMS did put in place a number of mitigation measures, and it concluded that these measures 

would mitigate any security risk. 

Question: Are you familiar with this document? 

Secretary SEBELIUS. Yes, sir. 

Mr. BUTTERFIELD. Is it correct that this document recommends 

implementing a dedicated security team to monitor, track, and ensure the mitigation plan activities are completed? 

Secretary SEBELIUS. Yes, it does. 

Mr. BUTTERFIELD. Now, is it correct that this document recommends monitoring and performing weekly testing on all border 

devices, including Internet-facing Web servers? 

48 

Secretary SEBELIUS. More than recommended. It’s underway. 

Mr. BUTTERFIELD. Is it correct that this document recommends 

conducting daily and weekly scans? 

Secretary SEBELIUS. Yes, sir. 

Mr. BUTTERFIELD. Does this document recommend conducting a 

full SCA test on the marketplace in a stable environment? 

Secretary SEBELIUS. Yes, sir. 

Mr. BUTTERFIELD. Is it correct that this document recommends 

migrating the marketplace to CMS’s virtual data center environment in the first quarter of next year? 

Secretary SEBELIUS. Yes, it does. 

Mr. BUTTERFIELD. My understanding is that an independent security expert, the MITRE Corporation, is performing security testing on the code that powers the Web site on an ongoing basis. Is 

that correct? 

Secretary SEBELIUS. That is correct. And MITRE did an assessment of the system, gave us a preliminary report. They are in the 

process of posting their final report. That did not raise flags about 

going ahead, and the mitigation strategy was put in place to make 

sure that we had a temporary authority to operate in place while 

the mitigation was going on, and then a permanent authority to operate will be signed. 

Mr. BUTTERFIELD. Finally, do you have confidence in these and 

other measures you are taking to protect the security of Americans’ 

personal information? 

Secretary SEBELIUS. I do, sir. 

Mr. BUTTERFIELD. Thank you. This is the third time you said it 

during the hearing, and we believe you. Thank you. 

What you’re telling us is that these remedial actions and the ongoing security testing from MITRE are protecting the security of 

the Web site. That’s a message that is important for the public to 

hear. My Republican colleagues do not want this Web site to work. 

I am convinced of that. They want to block the ACA at all costs 

and even shut down the government to stop the law. 

For the last 4 years, they have taken every glitch, every simple 

glitch and hiccup in the law and tried to exaggerate its significance, and that’s happening today and it’s so disappointing. 

Thank you, Mr. Chairman. I yield back. 

Mr. UPTON. Dr. Burgess. 

Mr. BURGESS. Mr. Chairman, I wonder if I might make a unanimous consent request also. 

Mr. UPTON. Yes. Go ahead. 

Mr. BURGESS. I would like to request unanimous consent that my 

opening statement, which we were not allowed to give could be 

made part of the record for this hearing. 

Mr. UPTON. No. Without objection. 

Mr. BURGESS. And further, I do have a number of questions. 

Many have come from constituents. I’d also like to be able to submit those as questions for the record. 

Mr. UPTON. Without objection. 

[The prepared statement of Mr. Burgess follows:] 

49 

PREPARED STATEMENT OF HON. MICHAEL C. BURGESS

The Affordable Care Act is quickly becoming the poster child for the failure of big 

government. It’s a stunning train wreck that is coming down the tracks toward us. 

Since the law was passed in 2010 this Committee has repeatedly questioned the 

officials from the Department of Health and Human Services (HHS), the Center for 

Medicare and Medicaid Services (CMS), the Treasury Department, and the White 

House. I was told, time and time again, by all of these officials that the ACA would 

‘‘definitely’’ be ready to go live on October 1, 2013. 

On February 16, 2011, the former director of the Center for Consumer Information and Insurance Oversight (CCIIO), Mr. Steve Larsen, assured me everything 

would work on Day 1: 

Mr. {Burgess.} You are betting on all this stuff working. 

Mr. {Larsen.} I think we are going to flip the switch and the lights are going to 

go on. 

On April 18, 2013, Kathleen Sebelius, Secretary of Health and Human Services, 

sat before the Energy and Commerce Committee and told me: 

Dr. {Burgess.} They are to go live online on October 1st. And I guess the question 

on everyone’s mind this morning is, will you be ready? 

Secretary {Sebelius.} Yes, sir, and the exchanges—— 

Dr. {Burgess.} I will take that as a yes. 

Secretary {Sebelius.} Open enrollment will start October 1st. The exchanges will 

be up and running on January 1st. 

Dr. {Burgess.} Are you talking about work around plans? 

Secretary {Sebelius.} No, we are not. We are moving ahead. We have the federal 

hub on track and on time. We are moving ahead with the marketplaces that we will 

be individually responsible for and we’re working very closely with our state partners on their plans and their time table for the state based marketplaces. 

Dr. {Burgess.} So the federal hub will be available?Secretary {Sebelius} Yes. 

The following week, on April 24, 2013, Gary Cohen, the current director of CCIIO, 

testified before theEnergy and Commerce Committee: 

Dr. {Burgess.} The Secretary was here last week and I asked her about contingency plans and she said there are no contingency plans. Everything will be ready. 

So which is it? Everything will be ready or you are planning for contingencies? 

Mr. {Cohen.} Everything will be ready but we are also planning for anything that, 

when we go into operation, if the situations come up that we need to address, we 

will be ready to address those situations and make sure that the experience for 

American consumers is as seamless and as good as it can be. 

On August 1, 2013, Marilyn Tavenner, the current CMS Administrator, testified 

before the Energy and Commerce Committee: 

Dr. {Burgess} When can Texans expect to go online and be able to get information 

about how expensive coverage will be in the exchange? 

{Ms. Tavenner.} So the information about what is available in the exchange will 

be available to them October 1. 

And just a little over one month ago, on September 19, 2013, days before the Exchanges were scheduled to go live, Gary Cohen, CCIIO Director, testified before the 

Energy and Commerce Committee again: 

Dr. {Burgess} Will the enrollment process be ready October 1 of this year? 

Mr. {Cohen.} Consumers will be able to go online, they will be able to get a determination of what tax subsidies they are eligible for, they will be able to look at the 

plans that are available where they live, they will be able to see the premium net 

of subsidy that they would have to pay, and they will be able to choose a plan and 

get enrolled in coverage beginning October 1. 

Yet, here we are, 30 days after October 1 and the American people are still waiting to see a fullyfunctional law. The failures of the healthcare.gov Web site are just 

the beginning of the dysfunction that is to come as the implementation of President’s signature law moves forward into 2014. After spending hundreds of millions 

of dollars the American people deserve some concrete answers and not empty political posturing. 

In addition to the hearings this Committee held to question Administration officials, I had private meetings with Jay Angoff, former CCIIO director and later senior adviser to Sebelius; Nancy Deparle, former Director of WH Office of Health Reform; Henry Chao, Deputy Chief Information Officer; and Steve Larsen, former 

50 

CCIIO director. It seems I was having the meetings the Secretary was supposed to 

be having. 

Despite the array of public and private meetings with officials from the range of 

agencies involved in implementing the President’s health care law, I still do not 

have the answers to questions about the law’s basic functionality. At this point, I’m 

not even sure who is in charge of this program because no one knows what is going 

on. Unless someone is willing to admit that there are problems, how can we ever 

hope to fix it? 

# # # 

Mr. BURGESS. And ask the Secretary for her attention to those 

so we could get answers, because they, after all, are important 

questions. OK. Thank you, Mr. Chairman. 

It just came to my attention that on CNN’s Web site, that the 

site was hacked just last week. And I will be happy to make this 

available to you. I don’t think the—— 

Secretary SEBELIUS. The CNN Web site? 

Mr. BURGESS. CNN ran a story that the HealthCare.gov Web site 

was hacked last week. And, again, I will get this to you, and would 

appreciate your response to that. 

Mr. Terry had asked a question about he wanted to get the information about the number of people who had signed up. You said 

you wouldn’t provide that, because it wasn’t accurate. Would you 

provide us with the number of people who have been able to enroll 

on the telephone? The President gave an 800 number during his 

speech. Could we get a number of people who have enrolled on the 

telephone? 

Secretary SEBELIUS. No, sir. We do not have reliable enrollment 

data. We will have that to you by the middle of November, as we 

committed to. We are collecting State data, we are collecting telephone data, we are collecting paper data, we are collecting Web site 

data. We want it to be reliable—— 

Mr. BURGESS. OK. 

Secretary SEBELIUS [continuing]. And accountable, and that’s 

what we will have. 

Mr. BURGESS. Reclaiming my time. The telephone data doesn’t 

seem that it would be that difficult to compile since the number is 

likely quite low. Now—— 

Secretary SEBELIUS. The telephone goes through the system, sir. 

Dr. BURGESS [continuing]. You have, or the President designated 

a, I call him a glitch czar, Jeffery Zients. And you’re familiar it was 

his appointment to oversee—— 

Secretary SEBELIUS. I asked him to serve in this capacity, yes, 

sir. 

Mr. BURGESS. Many of us on the Subcommittee of Oversight Investigations in Energy and Commerce were not as comforted as you 

by that selection, because if you will recall, Mr. Zients’ history with 

this subcommittee it not great. He was involved with Solyndra. We 

asked him to come and talk to us about Solyndra in 2011. He refused, requiring a subpoena to be issued by this subcommittee. 

Will you commit to making Mr. Zients available to our subcommittee for our questions? 

Secretary SEBELIUS. Congressman, you are welcome to ask Mr. 

Zients to come before the committee. He is volunteering his servVerDate Nov 24 2008 13:09 Aug 15, 2014 Jkt 037690 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-90 CHRIS
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ices to us for a period of time. He has been appointed by the president to start in January as the head of the National Economic 

Council. He was the deputy director at OMB for management and 

performance. I am thrilled that he is willing to take on this assignment and help us drive the management, but—— 

Mr. BURGESS. Again, his appearance here will be important. 

Now, a lot of people are asking if the President’s words leading 

up to this law, if they matter. And the statement in The Washington Post today edited the President’s statement to say, if you 

like your health care plan, you will be able to keep your health care 

plan if we deem it adequate. That seems like a more operational 

statement, and especially if you go back just a few years into the 

Federal Register, and I’m quoting here from the Federal Register 

from July 23rd of 2010, just a few months after the law was signed, 

the interim rule for dealing with the grandfathering written into 

the Federal record, because newly-purchased individual policies are 

not grandfathered, the Department expects that a large population 

of individual policies will not be grandfathered, covering up to and 

perhaps exceeding 10 million people. 

I hope the President was apprised of that before he made these 

statements, because clearly his statement wasn’t operational. 

Secretary SEBELIUS. Again, that’s an insurance company choice. 

And that was a snapshot—— 

Mr. BURGESS. But—— 

Secretary SEBELIUS [continuing]. Of what the market looks like. 

Dr. BURGESS [continuing]. Your—— 

Secretary SEBELIUS. The President made it clear, and our policy 

was to put—— 

Mr. BURGESS. In—— 

Secretary SEBELIUS [continuing]. A grandfather clause in both 

employer-based coverage and in—— 

Mr. BURGESS. Right. But in the—— 

Secretary SEBELIUS [continuing]. Individual coverage. 

Mr. BURGESS. [continuing]. Federal Register, those were the comments that were recorded. Now, I do have to—— 

Secretary SEBELIUS. No. This isn’t a government takeover of anything. These are private insurance plans—— 

Mr. BURGESS. I do have to ask you this. 

Secretary SEBELIUS [continuing]. Making private decisions. 

Mr. BURGESS. I do have to ask you this: You serve at the pleasure of the President, we’re all aware of that, but we have had many 

of your employees here in front of this committee, and you do have 

to ask yourself, are they just being purposely misleading, or are 

they really not that smart? So I’m going to ask you this morning, 

for the sake of the future of health care in this country, will you 

please ask for the resignation of Gary Cohen, because he’s repeatedly come to this committee and misled us? 

Secretary SEBELIUS. I will not, sir. 

Mr. UPTON. The gentleman’s time has expired. 

Mr. WAXMAN. Mr. Chairman, a point of personal privilege. I just 

think the record ought to be clear about Jeffrey Zients. He was invited with less than a week’s notice to come before this committee. 

He couldn’t make it that day. He asked for some other day. He 

went to OMB and had nothing to do with the Solyndra contract, 

52 

and he did come before us and talk about it, but his sole role was 

to represent OMB. And I don’t think he ought to have any—there 

ought to be any disparagement of Jeffrey Zients. He’s a very wellregarded public servant. 

Mr. UPTON. The gentleman’s statement will stand. Ms. Matsui. 

Ms. MATSUI. Thank you, Mr. Chairman. Welcome, Madam Secretary. Now, we all agree the Web site problems must be resolved, 

as this country invented and developed the Internet and the concept of the Web sites, so there are high expectations. The fact that 

the hired private contractors could not build a ready Web site in 

nearly 3 years is inexcusable, and after its fix, I hope the administration will hold those at fault accountable, but we can’t lose sight 

of the big picture that when this is all said and done, every American will have affordable quality health insurance and health care. 

This is the goal, I believe, of all Democrats and Republicans. 

The ACA’s working in California, and it’s working in my district 

in Sacramento, and I just want to tell you about a letter I got from 

a constituent: 

‘‘Dear Congresswoman Matsui, as a self-employed contract employee, I’ve had individually purchased health insurance for 11 

years now, insurance that has gone up every year, sometimes more 

than once; insurance that wouldn’t let me add my daughter when 

my ex-husband stopped his insurance policy that covered them 

both; insurance that I have underused for fear they would drop me; 

insurance that has just dropped me anyway because they decided 

they will no longer offer individual plans. This could have happened to me at any time. I’m so grateful the Affordable Care Act 

provisions make it possible to get health insurance beginning in 

January for me and my daughter. 

‘‘As all this is happening, I have finished graduate school and 

started my own business. Slowly but surely, things are happening, 

and I expect to be hiring my first employees in the next 6 months. 

The provisions of the ACA are helping me in this, too. I can clearly 

see what it would cost me to provide health benefits for my future 

employees, understand these costs and build my business plan accordingly.’’ And that is just one of the letters I received. 

Now, I’ve also heard from my colleagues on the other side of the 

aisle complain again and again about how health care reform is increasing health care costs, but the empirical evidence shows something quite different. The recent trends in Medicare spending 

growth are really quite remarkable. Medicare spending growth is 

at historically low levels, growing by less than one half of 1 percent 

in fiscal year 2012, following slow growth in 2010 and 2011. The 

same is true on the private side of health care. Personal consumption expenditures on health care, everything from health insurance, 

to drugs, to hospital care rose by just over 1 percent in the past 

year. This is the slowest increase in nearly 50 years. 

Madam Secretary, what does this data tell us about what has 

happened to health care costs since the ACA became law? 

Secretary SEBELIUS. Well, Congresswoman, you’re absolutely 

right. In the last 3–1⁄2 years since the President signed the Affordable Care Act, we have seen a great slowdown in the extraordinary 

cost increases year in and year out for health care, in the Medicare 

plan, in the Medicaid plan, in private insurance, and in underlying 

53 

healthcare costs, which affect every American. Some of that is to 

do with some of the features that are currently in place around different care delivery and different payment systems that we are 

helping to drive, given the tools that we have, with the Affordable 

Care Act: more quality outcomes, trying to prevent hospital readmissions, looking at hospital-acquired infections, medical homes 

that prevent people in the first place or help them stay healthy in 

their own homes and in their own places. 

Ms. MATSUI. So it’s true that the private insurance costs are 

growing at the slowest rate in decades also; is that true? 

Secretary SEBELIUS. That is true. 

Ms. MATSUI. Am I also correct that ACA premiums are coming 

in even lower than predicted by experts like the CBO? 

Secretary SEBELIUS. Well, they’re on average about 16 percent 

lower than was estimated that those premiums would be. And 

that’s the premium, not accounting for the number of uninsured or 

underinsured Americans who will then qualify for financial help. 

Since they don’t have employer coverage, they get some help from 

the taxpayers paying for that coverage. 

Ms. MATSUI. Thank you, Madam Secretary. 

Mr. UPTON. Dr. Gingrey. 

Mr. GINGREY. Thank you, Mr. Chairman. 

Madam Secretary, when you spoke at the Democratic National 

Convention in Charlotte last September, one of the first statements 

you made about the Affordable Care Act was, quote, ‘‘But for us 

Democrats, Obamacare is a badge of honor, because no matter who 

you are, what stage of life you’re in, this law is a good thing. First, 

if you already have insurance you like, you can keep it.’’ And I end 

the quote. 

I’d call this a red hearing that misled voters, intentional or not. 

Now, perhaps had you known that millions would lose their coverage, families would face financial disaster, as one constituent recently told me, or that the exchange rollout would be plagued by 

a multitude—multiple delays we’ve seen, you would not consider it 

such a badge of honor. 

The fact is your words and those of the President as he campaigned last year that ‘‘if you already have insurance you like, you 

can keep it’’ seems to be directly refuted by the millions of cancellation notices already sent to Americans just in the past few weeks. 

Whether your statement was inaccurate, or, as Mr. Hoyer said yesterday, not precise enough, it does strike me that millions of individuals who, by listening to speeches like yours, voted believing one 

thing now find themselves without coverage and are now scrambling to find coverage in a marketplace that offers more expensive 

plans with fewer options. 

In response to my constituents’ calls for help, I created a portal 

on my Web site—no patches or fixes needed—that allows those who 

have experienced problems to reach out and tell me about their 

personal experiences. In just the last few days, my office has received dozens of complaints regarding increases in their monthly 

premiums. I received one such notice from a mother in her early 

fifties, who just received a notice that not only will her insurance 

premium double, but she will also have to switch insurers to keep 

her doctors due to the effect of the Affordable Care Act. 

54 

Can you imagine receiving notices like this? I can tell you that 

just in my district, the 11th of Georgia, many more are experiencing this situation. Madam Secretary, this is akin to telling seniors that in a few weeks their Medicare coverage will be dropped, 

or their premiums would double. Now, I know that neither you nor 

the administration would ever advocate for such a policy, yet here 

you are subjecting those currently in the individual market to such 

government intervention. And I would hope that you would agree 

with me in recognizing that these increases are a heavy hardship 

on my constituents, on all of our constituents, Republicans or 

Democrats. 

Now I’ll get to my questions. You know the healthcare law included a hardship exemption from the individual mandate, yet the 

administration has failed to finalize the application form for the 

hardship exemption 3–1⁄2 years after we passed this law. As of 

today can an individual apply for a hardship exemption from the 

individual mandate on HealthCare.gov, yes or no? 

Secretary SEBELIUS. I don’t know—— 

Mr. GINGREY. I do. It’s no. 

On October 15, Politico reported that if the online system for getting into Obamacare coverage is rickety, the system for getting out 

of the mandate doesn’t even exist yet. HHS says it will take another month at least for the administration to finalize the forms for 

the hardship exemption from the individual mandate. 

Why has it taken 3–1⁄2 years to finalize a simple application form 

for an exemption from the individual mandate? 

Secretary SEBELIUS. Well, sir, as you know, the individual mandate is not in place until next year. We have made it very clear 

that if somebody is Medicaid eligible in a State that doesn’t choose 

to expand Medicaid, they will be exempted from—— 

Mr. GINGREY. My last question. An estimated 16 million people 

in the individual market have or will receive cancellation notices 

stating their health insurance coverage does not meet minimum 

coverage requirements of the Affordable Care Act. The bill specifically grants you, Madam Secretary, the power to determine the criteria for a hardship exemption. Will you provide all of these individuals a hardship exemption since the Affordable Care Act has 

taken away their plan? Will you do that? 

Secretary SEBELIUS. No, sir. And I think those numbers are far 

from accurate. Ninety-five percent of Americans who have health 

insurance will be in a continuous plan, Medicare, Medicaid, employer-based, VA, 95 percent. Five percent, who are in the individual market, a portion of those 5 percent, a portion of them, 

about 12 million people, a fraction of those 12 million, will have a 

plan that doesn’t meet the criteria and has not been grandfathered 

in. They are indeed receiving notices. Many of those individuals, 

half of them, will be eligible for financial help getting a new plan, 

and they have many more choices in the marketplace. So we will 

not have a blanket exemption for them. 

Mr. GINGREY. Sounds like a hardship to me, Madam Secretary. 

Mr. UPTON. Gentleman’s time has expired. 

Mrs. Christensen. 

Mrs. CHRISTENSEN. Thank you, Mr. Chairman. 

55 

And thank you, Madam Secretary, for being here. And thank you 

for all that you and your staff at HHS has done in implementing 

the Affordable Care Act to ensure that it would provide the many 

benefits that children, to women, to Medicare beneficiaries, and to 

ensure security to those who already have insurance as well as 

lower costs. 

Of course, the biggest complaint has been about the application 

and the enrollment Web site, but we have heard over and over 

from you that those are being addressed. But you would recall, and 

I know my colleagues would recall, that Congressman Rush and I 

have always been concerned about those who do not have Internet 

access, those who are uncomfortable using the Internet and would 

not use it. So I just wanted to just remind everyone that there are 

other avenues for enrolling, either by telephone or by paper, either 

alone or with the help of a certified, you know, application assistant. 

But my question goes to one of the rumors that’s been circulating. There are many rumors about how the Affordable Care Act 

has affected part-time workers. And some of my colleagues on the 

other side claim that the companies are moving workers to parttime jobs because of the healthcare reform law, and that low-wage 

workers are being detrimentally affected. And I understand why 

these claims are being made, as just another part of the ongoing 

effort to undermine the law. Would you take a few minutes to just 

set the record straight on the ‘‘part-time’’ issue? 

Secretary SEBELIUS. Certainly. Ninety-five percent of businesses 

in this country are small businesses, under 50 full-time employees, 

and there is no responsibility that any of those employers have to 

provide health coverage for their employees. On the other hand, 

there are now tax credits available for some of the smaller employers who want to offer coverage to actually come into the marketplace. 

For the other businesses, the businesses hiring 50 or more, there 

is a standard that says an employee is considered full time if he 

or she works 30 hours a week, and that really came from a market 

snapshot with help from the Small Business Administration of 

where employee benefits were in the private market based on 

hours of work, what was a part-time or a full-time employee. 

What we know about the economic data is the high point of parttime workers was in 2008 and 2009, at the height of the last recession. It has been decreasing each and every year. There is no data 

to support the fact that there is an uptick based on the impending 

Affordable Care Act. I am sure that there may be some individual 

employers making some business decisions about how many workers they want full time and how many part time, but I can tell you 

there is no economic data or employment data that supports the 

notion that this is an effect of the law. 

Mrs. CHRISTENSEN. So, in fact, it’s my understanding that parttime workers are at the lowest percentage of workers in many, 

many years right now. And—— 

Secretary SEBELIUS. Well, and for the first time, as you know, 

Congresswoman, part-time workers will have options for affordable 

health coverage. They’ve never had that before. They’ve never had 

options in the marketplace. They’ve never had some help purVerDate Nov 24 2008 13:09 Aug 15, 2014 Jkt 037690 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-90 CHRIS
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chasing coverage for themselves and their families. Their full-time 

colleagues have, but they have not. So they will have options. 

Mrs. CHRISTENSEN. And just to be clear, I had another really 

long question, but the last part of it, it would be fair to say that 

at every point along the way, you expected this Web site to work 

based on everything that you had been told by the contractors up 

until that point. 

Secretary SEBELIUS. Well, I expected it to work, and I desperately want to get it working. 

Mrs. CHRISTENSEN. More than anyone else, I am sure. 

Secretary SEBELIUS. I can’t tell you how frustrated I am, and we 

are committed to fixing it. And the only thing that I think builds 

back the confidence of the public is fixing it. 

Mrs. CHRISTENSEN. Thank you, Mr. Chairman. 

Mr. UPTON. Gentlelady’s time has expired. 

Mr. Scalise. 

Mr. SCALISE. Thank you, Mr. Chairman, for holding the hearing. 

And thank you, Secretary Sebelius, for being with us. 

Last week when the contractors that built the system were here, 

I had asked them all under oath if they had actually delivered the 

system they were contracted to build, and all four of them answered ‘‘yes.’’ So I want to ask you, did the contractors deliver the 

system that you contracted them to build? 

Secretary SEBELIUS. I don’t think I can accurately answer that 

question. What we know is we have a system that doesn’t function 

properly. 

Mr. SCALISE. We definitely know that. 

Secretary SEBELIUS. As we fix things, we will know more about 

what is broken along the way, and I’ll be able to—— 

Mr. SCALISE. So would someone in your office—somebody in your 

office oversaw this implementation and received the product. 

Secretary SEBELIUS. That’s true. 

Mr. SCALISE. And they either said, this is the product we contracted and paid hundreds of millions of dollars to build, or it 

wasn’t. Does somebody in your office have the ability to—— 

Secretary SEBELIUS. Well, I think that we can say that the products tested, individually verified, individually function—— 

Mr. SCALISE. But clearly it was an integrated system. 

Secretary SEBELIUS. They don’t work well together. And—— 

Mr. SCALISE. Well, but I used to write programs for a living. I 

developed software products for a living. If you’re developing an integrated system, it’s irrelevant if one isolated component works by 

itself, but when you plug it in together it doesn’t work, that’s a system that doesn’t work. 

One of the questions I had and others had, somebody in your 

agency made a decision weeks, literally weeks, before the deployment to change the system instead of going from a browser ability 

where somebody, just like on Kayak or just like on Amazon.com, 

could go shop for products, look at prices before they purchased, 

which is how consumers are used to doing this. You all made the 

decision to change it around and gather all their information first 

before you could let them see prices. Was that you who made that 

decision? 

Secretary SEBELIUS. No, sir. 

57 

Mr. SCALISE. Was that Ms. Tavenner? 

Secretary SEBELIUS. It was Ms. Tavenner and a team who looked 

at not imposing additional risks on the system. 

Mr. SCALISE. Did that team make the decision because they 

knew once people actually saw the prices—and we’re getting reports from all of our constituents of dramatically higher prices than 

what they were expecting. Did you make the decision because you 

knew that when they saw the prices, they might not want to buy 

the products, so you wanted to gather their information first? 

Secretary SEBELIUS. Sir, first, I did not make the decision. I was 

informed about the decision. We did it in—— 

Mr. SCALISE. Did you agree with the decision? 

Secretary SEBELIUS [continuing]. September rolling off a number 

of features. And clearly they can see the products. Note, there is 

no requirement to buy anything. 

Mr. SCALISE. Look, I spent over 2 hours trying to get into the 

system. I never once got to a point where I could see a price. I did 

get kicked out many times and got some of those blanks screens 

other people got. 

I do want to share some stories with you from some of my constituents, because we started a page on our Facebook and on Twitter. We are collecting what’s called Share with Scalise. People are 

sending us stories. And we’re getting lots of stories from my constituents. I want to read you a few of them. 

Randall from Mandeville said, ‘‘My healthcare premium went up 

30 percent. That’s over $350 a month increase.’’ 

We had Michelle from Slidell: ‘‘Our insurance premiums are 

going up $400 a month, and our deductible has increased.’’ 

And then you’ve for the Sean from Covington, who said, ‘‘My current plan through United Healthcare is no longer being offered in 

2014 due to Obamacare. In fact, I received a letter stating that the 

new healthcare law was indeed the reason for the removal of my 

current healthcare plan.’’ 

Madam Secretary, what would you tell Sean, who liked his plan 

and now has lost it? And he was promised by you and the President he’d be able to keep that plan. What would you tell Sean now 

that he’s lost his plan? 

Secretary SEBELIUS. I would tell Sean to shop in the marketplace 

and out of the marketplace, and he will find—— 

Mr. SCALISE. Do you really think that’s an acceptable answer—— 

Secretary SEBELIUS [continuing]. And he will find competitive 

prices. 

Mr. SCALISE [continuing]. To Sean? 

Secretary SEBELIUS. Again, if United chose not to keep Sean’s 

plan in effect for Sean—— 

Mr. SCALISE. Because of the law. 

Secretary SEBELIUS. Sir, the law said if you keep Sean’s plan in 

place, if he liked his plan, if you only—— 

Mr. SCALISE. Sean likes his plan—— 

Secretary SEBELIUS [continuing]. Applied trendlines to Sean, 

then the plan is still there. 

Mr. SCALISE. You and I may disagree over who you work for. I 

work for Sean. You work for Sean, Madam Secretary. Sean lost his 

plan that he liked. And there are thousands and millions of Seans 

58 

throughout this country that lost the plan they like because some 

bureaucrat in Washington said, we think your plan’s not good 

enough; even though you like it, even though you were promised 

you could keep it, you’re now not able to keep that plan. I think 

you deserve to give Sean a better answer than you just have to go 

shop for something else even though you lost your plan. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. SCALISE. I yield back the balance of my time. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. McNerney. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

Thank you, Madam Secretary, for coming today. 

I’m going to follow up on Mr. Doyle’s line of questioning. One 

concern I have with the fallout from the Web site is that many 

users who tried to sign up and were discouraged because of the 

problems will now be too discouraged to come back once the site 

is fixed. So what do you plan to do to get those folks to come back? 

Secretary SEBELIUS. Well, sir, we intend to invite them back formally, by email, by message, but we don’t want to do that until 

we’re confident that they will have a different experience. So fixing 

the site is step one, and then inviting people back to the site to 

make it clear that when our timetable is fulfilled, they have 4 

months to shop for affordable health coverage on a fully functioning 

site. 

We know we’re going to have to spend special time and attention 

on young and healthy Americans, who don’t start out thinking they 

need health insurance, aren’t aware of the law, certainly don’t 

want to use a failed or flawed site. So we’re going to have to spend 

some particular attention on them. 

Mr. MCNERNEY. Thank you. 

Have the software specifications for the Web site and its related 

software elements, including the test specifications—has that 

changed since the initial rollout? 

Secretary SEBELIUS. I know that there certainly are some 

changes, because—since October 1st? I’m sorry. 

Mr. MCNERNEY. Yes. Since the rollout, the specifications. 

Secretary SEBELIUS. The specifications haven’t changed. We are 

certainly fixing—as I say, speed and reliance is one of the issues 

we’re taking a look at. That’s the performance side. But there also 

are some functionality sides that things do not work as they can, 

including the enrollment passed on to insurers. So we are fixing 

functionality. And I don’t think that’s a change in the specs; I think 

it is actually making the system work the way it should. 

Mr. MCNERNEY. Well, are you—or is the Department doing 

prioritization on the problems? 

Secretary SEBELIUS. Yes. 

Mr. MCNERNEY. Could you describe that a little bit? 

Secretary SEBELIUS. Yes. As of last week, when Jeff Zients joined 

us for the short-term project, we asked him to lead a sort of management team. We have pulled in all of our contractors as well as 

additional talent that they may have available. We have talked to 

tech folks in and out of the private sector and insurance, some of 

their tech experts, to get all eyes and ears; made a full assessment; 

developed a plan for fixes along the way; have a punch list for 

59 

going after those fixes; and we are doing a daily tech briefing and 

blog to tell people what we have found, what we have fixed, what 

is coming next, what the functionality is. And we intend to do that 

until it’s fully functional. 

Mr. MCNERNEY. Thank you, Madam Secretary. 

Looking past the initial problems with the ACA rollout, do you 

think that the Affordable Care Act will be successful in bending the 

healthcare cost curve and reducing the fraction of our national 

economy that goes for health care? 

Secretary SEBELIUS. Well, I think that we have already had some 

success. I think the goal is to continue to achieve that. A fully insured population arguably with preventive care, with an opportunity to see a primary care doctor and not go through the emergency room will in and of itself reduce costs. Having people identified earlier who may have serious problems in managing those 

problems will reduce health costs. But I think the delivery system 

also needs some considerable help in paying for not number of procedures, number of tests, number of prescriptions, but paying for 

health outcomes. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

Mr. UPTON. Mr. Latta. 

Mr. LATTA. Well, thank you very much, Mr. Chairman. 

And, Madam Secretary, thank you so much for being with us 

today. Appreciate your testimony so far today. 

What I’d like to do is I’ll get these to you because there’s so many 

we’ve received. These are questions that we’ve received from our 

constituents back home specifically about what’s going on with the 

Web site and for them. And so what I’ll do, I’d like to get those to 

you. But there’s a lot of questions here, and a lot of thought’s gone 

into a lot of these questions. 

But if I could start with last week’s testimony when four of the 

contractors were here. And in one of the questions that I had posed 

to Ms. Campbell from CGI, in her testimony she had stated that 

they delivered the Medicare.gov and also the FederalReporting.gov. 

And I had asked at that time were those sites more or less complicated than the site we’re talking about here today. And she said, 

of course, the site today was more complicated. And in the questioning and from her testimony—and we’ve been hearing about this 

end-to-end testing that wasn’t happening, that we had individuals 

out there saying that about 2 weeks had been done. But I’d asked 

her about was there a sufficient enough time when they did Medicare.gov. And the response that she gave me back was on Medicare.gov, which was a less complicated site, and she stated that 

‘‘we had sufficient time to test the system before it went live.’’ And 

I asked her in a follow-up then, ‘‘What was that sufficient time?’’ 

And she said, ‘‘We had a number of months before the system went 

live at that time.’’ 

And I just want to make sure, because, again, sometimes things 

don’t get reported accurately, but—in the U.S. News there was a 

report on October the 18th of this year, and there’s some questions 

going back and forth. I just want to make sure that you were 

quoted properly. Said, ‘‘’After 2 weeks of review,’ the HHS Secretary concluded, ’we didn’t have enough testing specifically for 

high volumes for a very complicated project. The online insurance 

60 

marketplace needed 5 years of construction a year of testing,’ she 

said. ’We had 2 years and almost no testing.’’’ Is that correct? 

Secretary SEBELIUS. I don’t know the quote. I never suggested 

that we needed 5 years. 

Mr. LATTA. OK. That’s just—— 

Secretary SEBELIUS. I don’t know what that’s from or what 

that—— 

Mr. LATTA. That’s one of the things we’re going to check. 

Secretary SEBELIUS. We clearly did not ever have 5 years. The 

law was signed in March of 2010. 

Mr. LATTA. OK. And then last week when you were down in 

Texas, you were being asked by a reporter about the system and 

the launch. And one of the parts of the question was that at what 

point did you realize the system wasn’t going to be working the 

way that you envisioned before the launch, and why didn’t we stop 

it before the launch? And, again, this is what was reported: ‘‘We 

knew that if we had another 6 months, we’d probably test further, 

but I don’t think anyone fully realized both the volume caused such 

problems, but volume’s also exposed some of the problems we had.’’ 

Now, going back, though, to Ms. Campbell’s statement that they 

tested more extensively on a system that was not as complicated, 

but HHS, CMS decided to go forward with only a very short period 

of testing. Do you think that was acceptable? 

Secretary SEBELIUS. Well, clearly, looking back, it would have 

been ideal to do it differently. We had a product that, frankly, people have been waiting decades to have access to affordable health 

care. Medicare existed well before the Web site. Medicare is a program that started 50 years ago. The Web site was an additional 

feature for consumer ease and comfort. And so they were not 

launching Medicare, they were not delivering health benefits to 

seniors, they were putting together an additional way to enroll in 

Medicare. 

I would suggest, sir, that we had deadlines in the law, that people had benefits starting January 1st. We wanted an extensive 

open enrollment period so that a lot of people who were not familiar with insurance, didn’t know how to choose a doctor or choose 

a plan, had never been in this marketplace, or people who needed 

to understand fully what the law offered had ample time to do 

that. 

So the date that I was, again, required to select for open enrollment, that’s, again, part of the statute, how long would open enrollment be. We picked that date. All the contractors that began early 

in this process in the fall of 2010, when we issued—I’m sorry, 2011, 

when we issued the initial contracts to CGI and QSSI, knew the 

October 1st date. That was not changed. It wasn’t added to. 

As we got closer to the system, one of the reasons, again, that 

we pared down what needed to launch on October 1st was an attempt to minimize the risks to the system to get people to their 

ability to see clearly what they were entitled to, what the plans 

were, and, if they chose to, to enroll. Clearly the testing should 

have been longer, should have been more sufficient. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. Braley. 

Mr. BRALEY. Thank you, Mr. Chairman. 

61 

Madam Secretary, people who are watching this hearing might 

be under the assumption that there’s some kind of political debate 

going on over the Affordable Care Act. I think people in Iowa don’t 

care anything about who’s winning the political debate. They want 

these problems fixed, and they want them fixed now. And I think 

that’s the responsibility of everyone in this room to make sure that 

that happens. 

I tried to go into the marketplace on October 7, and I encountered problems immediately dealing with the security code questions which required you to select dates. One of them was type a 

significant date in your life. Today is my birthday, so I put that in. 

I tried three different ways of entering that data and got a message 

each time: ‘‘Important, this is not a valid answer.’’ Same thing for 

the third date entry. And a lot of times when you’re registering online for anything, and you have to put a date in, there will be a 

little prompt there that tells you what the format is you’re required 

to enter. 

Do you know, have we solved this problem in the security code 

area? 

Secretary SEBELIUS. Yes, sir. One of the initial issues was just 

getting people into the site. And the ID proofing, which is a twostep process, one is that you give some preliminary information 

and you set up a password, but the second, to ensure that your personal data can’t be hacked, can’t be interfered with, is the second 

step where some personalized questions, which only can be verified 

by you, are indeed part of that. 

Again, that was an initial hold-up in the system. We focused a 

lot of attention on that in the first several days. It was fixed, only 

to then discover that there were system problems throughout the 

application. And that piece has been fixed, but I would suggest it 

also was a function of trying to make sure we had the highest security standards, that we were not cavalier about someone’s personal 

information being able to be addressed and attached. And it was 

a functionality that didn’t perform properly, but does now. 

Mr. BRALEY. One of the things that keeps coming up in this 

hearing, because you are from Kansas, is references to The Wizard 

of Oz. And people went to see the wizard because of the wonderful 

things that he did. And the Affordable Care Act is doing a lot of 

great things in Iowa. The Des Moines Register wrote that ‘‘Iowans 

buying health insurance on the government’s new online marketplace will face some of the lowest premiums in the country. It’s increasing competition in our State. Iowa consumers are able to 

choose from 40 health plans in the marketplace.’’ 

You’ve mentioned the growth of healthcare spending is at the 

slowest rate in 50 years. Fifty thousand Iowa seniors have received 

prescription drug rebates. Bans on preexisting conditions are allowing people to get coverage and switch carriers. And now insurance 

premium increases are subject to review and can be rejected by the 

people reviewing those plans. 

But all of these good things don’t mean anything unless we solve 

these problems. And what I need to know is how confident are you 

that the problems will be fixed by December 1st? 

Secretary SEBELIUS. Well, again, Congressman, I have committed 

to that date because that is the assessment of both inside and outVerDate Nov 24 2008 13:09 Aug 15, 2014 Jkt 037690 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-90 CHRIS
62 

side experts have analyzed, and I think they kicked all the tires 

and looked at all the system. I know that there’s no confidence in 

that date until we deliver on the date. I am well aware of that, and 

that’s on me. 

Mr. BRALEY. Since Americans were supposed to have 6 months 

to sign up, would you support ensuring they still have 6 months 

by extending the open enrollment period for 2 more months? 

Secretary SEBELIUS. At this point, Congressman, they will have 

a—fully 4 months of fully functional all ways to sign up. And 

again, there are alternate ways and the Web site right now that 

people are getting through. 

The open enrollment period is extraordinarily long. It’s about six 

times as long as a typical generous open enrollment period. And it’s 

important for the insurance partners to know who is in their pool 

so, again, they can stay in the market next year and know who 

they are insuring. So we think that the timetable will allow people 

4 months’ time to fully use the Web site. They can use it right now, 

they can use the call center, they can go to navigators, they can 

enroll. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. Harper. 

Mr. HARPER. Thank you, Mr. Chairman. 

Thank you, Madam Secretary, for being here today. I’m sure 

there are other things you’d rather be doing, but we welcome the 

opportunity to have this conversation. 

I’m going to ask the clerk to bring you a document for you to look 

at so I can ask you a couple of questions. 

If you can go to page 8 on that, I have highlighted an item there. 

But this is a copy of a CGI slideshow from October 11 discussing 

technical issues that must be addressed within the Web site. And 

on page 8 of what I’ve handed you, CGI recommended that CGI 

and CMS have a review board to agree on which issues can technically be solved and which should politically be solved. Was such 

a review board convened? 

Secretary SEBELIUS. Sir, I cannot tell you. I’ve never seen this 

document, and I’m not aware of this recommendation. 

Mr. HARPER. But CGI is responsible for the Web site, correct? Or 

for the operation? 

Secretary SEBELIUS. CGI is responsible for the application. 

Mr. HARPER. For the application of this. 

Secretary SEBELIUS. Yes. 

Mr. HARPER. Does it surprise you that in a slideshow that they 

gave in October 11th, they acknowledge political reasons for—— 

Secretary SEBELIUS. Sir, again, I’ve never seen this document. I 

have no idea what that means. Did you ask CGI when they came 

last week? 

Mr. HARPER. Can you find out for us if such a review board was 

done and if any decisions were made on political reasons or any 

other reasons and find that out for us? 

Secretary SEBELIUS. Sir, I—that question needs to go to CGI, but 

I can ask them to report to you. 

Mr. HARPER. If you will do that. 

Secretary SEBELIUS. This is their document, if I understand. This 

is not our document. 

63 

Mr. HARPER. Would you turn to page 9 of that document, please? 

And it states ‘‘Challenges’’ on page 9 in this presentation by CGI. 

And it says, under ‘‘Challenges,’’ ‘‘Unable to determine at this time 

whether low enrollment counts are attributable to system issues or 

due to users choosing not to select or enroll in a plan.’’ 

So those are two completely different issues, obviously. If it is a 

system issue, that’s something you have confidence at some point 

will be resolved, correct? 

Secretary SEBELIUS. Yes, sir. 

Mr. HARPER. And if it’s a user selection issue, that’s an entirely 

different story; is it not? 

Secretary SEBELIUS. Yes, sir. 

Mr. HARPER. OK. Now, when you used the phrase earlier about 

a punch list, that’s like having somebody move into a house. Someone’s buying a new house, and they go through, and they’ve been 

told this house is going to be ready for you to move in on October 

1st. They load up the van, they come in. And they get in, and it’s 

not finished. Part of the plumbing’s not right, the wiring’s wrong, 

and they go in. 

This creates the situation where, health care shouldn’t be a zerosum game. I mean, we want to be fair to everyone. We want to help 

people who are vulnerable, but at the same time we shouldn’t have 

to hurt folks. We’ve got people in my district, in my State, who are 

getting notices of cancellation. They are being told of higher premiums that they’re having. And these are great concerns that we 

have. And how do we work through that? 

And I want to say I appreciate you accepting responsibility for 

these initial rollout failures that we’ve had, but who is ultimately 

responsible? It is the President, correct? 

Secretary SEBELIUS. For the Web site? I would say that we are. 

Mr. HARPER. I would say that the President is ultimately responsible for the rollout, ultimately. 

Secretary SEBELIUS. No, sir. No, sir. We are responsible for the 

rollout. 

Mr. HARPER. But who do you answer to? 

Secretary SEBELIUS. I answer to the President. 

Mr. HARPER. So is the President not ultimately responsible, like 

a company CEO would be? 

Secretary SEBELIUS. Sir, he’s the President of the United States. 

I have given him regular reports. And I am responsible for the implementation of the Affordable Care Act. That’s what he asked me 

to do, and that’s what I’ll continue to do. 

Mr. HARPER. So you’re saying that the President is not responsible for HHS? 

Secretary SEBELIUS. Sir, I didn’t say that. 

Mr. HARPER. OK. So the President ultimately is responsible. 

While I think it’s great you’re a team player and you’re taking responsibility, it is the President’s ultimate responsibility, correct? 

Secretary SEBELIUS. You clearly—whatever. Yes. He is the President. He is responsible for government programs. 

Mr. HARPER. My time is expired. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. Lujan. 

64 

Mr. LUJAN. Mr. Chairman, thank you very much. Before I begin, 

I’d like to ask unanimous consent to submit into the record some 

articles from New Mexico publications, the Albuquerque Journal, 

and Albuquerque Business Journal, the first entitled ‘‘Small Business Owner: Health Exchange Will Save Me $1,000 a Month.’’ 

Mr. UPTON. Without objection. 

[The information appears at the conclusion of the hearing.] 

Mr. LUJAN. Thank you, Mr. Speaker. And I see my time did 

begin there, so I’ll try to get through this, Mr. Chairman. 

Madam Secretary, I was intrigued by a line of questioning by 

Congressman Green, asking questions about the individual marketplace. How volatile was the individual marketplace before the Affordable Care Act became law? 

Secretary SEBELIUS. I would say it wasn’t a marketplace at all. 

It was unprotected, unregulated, and people were really on their 

own. 

Mr. LUJAN. Madam Secretary, the Kaiser Family Foundation reports that over 50 percent of individuals that have coverage in the 

individual market churn out of coverage every year. They either 

lose coverage, they are priced out or drop it. Is that consistent with 

what you’re aware of? 

Secretary SEBELIUS. That’s an accurate snapshot. About a third 

of the people are in for about 6 months, and over half are in for 

a year or less. 

Mr. LUJAN. So individuals that were in the individual marketplace before the passage of the Affordable Care Act did not have 

the same protections as those that were in group coverage. 

Secretary SEBELIUS. That’s true. 

Mr. LUJAN. And would those individuals in the individual marketplace sometimes have higher copays? 

Secretary SEBELIUS. Higher copays, unlimited out-of-pocket costs 

for often coverage that was medically underwritten or excluded 

whatever medical condition they had in the first place. 

Mr. LUJAN. So these were typically 1-year contracts. If they use 

the plan because they got sick or in a car accident or a victim of 

domestic violence, sometimes they’d be thrown off their plans, or 

their rates would go up. 

Secretary SEBELIUS. Yes. 

Mr. LUJAN. I think that’s important to note, Madam Secretary. 

And I’m intrigued as well that my understanding is last month 

HHS conducted an analysis that found that nearly 6 out of 10 uninsured Americans getting coverage through the marketplace will 

pay less than $100 per month; is that correct? 

Secretary SEBELIUS. They will have a plan available for less than 

$100 if that’s their choice, yes. 

Mr. LUJAN. And that number would be even higher, would be 

better, if more States chose the option of using Federal funds to expand Medicaid to cover their low-income population? 

Secretary SEBELIUS. Oh, very definitely. That’s just a marketplace snapshot. Those are people who will be in the marketplace. 

Mr. LUJAN. Madam Secretary, I don’t think that I’ve heard anyone from the other side of the aisle today, my Republican colleagues, ask you how can Congress work with you and support you 

in fixing this Web site and fixing this problem. I hope that we all 

65 

agree we want this Web site fixed. I would yield to anyone that 

would disagree. 

Seeing no one accepting that, I’m glad to hear that we agree with 

this. 

Now, Madam Secretary, what can Congress do to work with you 

to fix this Web site? 

Secretary SEBELIUS. Well, I’m not sure that there is hands-on 

work that you can do, maybe we have some technical expertise, but 

I would say getting accurate information to constituents is helpful; 

letting people know that they can check out the facts and the law; 

that they may be entitled to some financial support; that cancellation of policies means that the policy that they had may not exist, 

but they have a lot of choices of new policies and a law that now 

says they must be insured in a new policy, that they don’t have to 

be insured by their company at a higher price. 

Mr. LUJAN. I appreciate that, Madam Secretary. 

Going back to the individual marketplace, Madam Secretary, did 

this Congress in previous years before the Affordable Care Act 

make it illegal for health insurance companies to raise rates on 

someone after they submitted a claim for going to the hospital or 

becoming sick or getting rid of preexisting conditions? 

Secretary SEBELIUS. No, sir. 

Mr. LUJAN. Madam Secretary, one last note here. It seems that 

we’ve received some horrible news here that there are bad actors 

already taking place of fraudulent Web sites that imitate the 

healthcare exchange or misleading seniors into disclosing their personal information. I’ve signed onto a letter to you led by my colleague, Representative Raul Ruiz out of California, to request that 

you prioritize fraud-prevention efforts. What’s the administration 

done to prevent these fraudulent acts and protect personal information? 

Secretary SEBELIUS. I can tell you, Congressman, that the President felt very strongly that that needed to be part of our outreach 

effort, which is why the Attorney General and I convened representatives of State attorneys general, insurance commissioners, 

the U.S. attorneys, and the Justice Department and the Federal 

Trade Commission, which has jurisdiction, to make sure that we 

first got out ahead of some of this developing consumer outreach. 

No one should ever give personal health information, because 

personal health information is not needed for these policies any 

longer. That’s a red flag. We want to make sure that people turn 

over potential fraudulent acts. We have put training in place for 

navigators. We have our law enforcement doing—— 

Mr. UPTON. Gentleman’s time has expired. 

I would just note that, with the indulgence of the Secretary, 

we’re hoping that we can have all Members ask some questions, 

but we also know that with 4 minutes, we’re going to have a little 

trouble. So I’m going to ask unanimous consent that we try limit 

our questions and answers to no more than 2 minutes. And I’ve 

talked to Mr. Waxman. Is that OK? Because otherwise there will 

be a lot of folks who will not be able to ask a question at all. 

Secretary SEBELIUS. Mr. Chairman, I would commit to if the 

questions get submitted, we would be happy to provide timely answers also to make sure—— 

66 

Mr. UPTON. Can I do that? So with that, we’ll try 2 minutes. 

Mr. Lance. 

Mr. LANCE. I guess I won the lottery on the 2 minutes. Madam 

Secretary. 

Mr. UPTON. Time has expired. 

Mr. LANCE. Twenty seconds, Mr. Chairman. 

On the Web site, Madam Secretary, the contractors testified last 

week that they needed more than 2 weeks for end-to-end testing. 

Why, in your opinion, was there not more than 2 weeks? 

Secretary SEBELIUS. Again, we had products—the insurance policies themselves by companies were loaded into the system. So 

wecould test up until then, but it wasn’t until September, mid-September, that that was done. And, again, the contractors said, we 

would have loved more testing time, but we think we’re ready to 

go ahead. 

Mr. LANCE. I believe that will ultimately be a dispute between 

CMS and HHS and the contractors. And if there’s anything we can 

do regarding that, because obviously that didn’t work. And I had 

thought, given this signature issue with the President, that the 

Web site would be ready. 

Number two, in my judgment, the President’s statements were 

overstatements. The four Pinocchios is an indication of that. 

There’s a report in the New Jersey newspapers this morning that 

800,000 people in New Jersey who purchased their policies in individual or small-employer markets will be affected by this. 

Mr. Walden in a previous question mentioned the fact that in an 

individual market you would be able to keep your policy grandfathered. Yet regulations issued by HHS say that grandfathered 

status would not be continued for so much as a $5 change in a 

copay. Is that accurate, and do you believe that that is a significant 

change? 

Secretary SEBELIUS. Sir, we gave, I think, in the grandfather regulations a guide for how pricing could change, medical inflation, 

and I think it was in most cases a plus 15 percent. There were 

some individual consumer outfacing issues that were more rigid 

than that. But I would say that in terms of having companies being 

able to collect a profit margin, that was certainly built into the 

grandfather status. 

Mr. LANCE. I think that’s too little a change, respectfully. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. Tonko. 

Mr. TONKO. Thank you, Mr. Chair. 

And welcome, Honorable Secretary. Thank you for fielding our 

questions and for responding when you were extended the courtesy 

to offer a response. 

As a strong supporter of the Affordable Care Act, I’m frustrated, 

and I think it’s fair to say that the American people are frustrated 

as well. And I heard you here many times this morning say you’re 

frustrated. 

I think by and large people want this law to work. When I talk 

to folks back home in the capital region of New York that I represent, even people who opposed the law initially aren’t rooting for 

the failure of the Affordable Care Act. Instead, they want Congress 

to come together to fix these problems so that we can move on to 

67 

real issues that matter, like creating jobs and growing the economy. 

My home State of New York, which also experienced Web site 

problems at the outset, has now completed enrollment determinations on over 150,000 New Yorkers, with more than 31,000 having 

already signed up for quality, low-cost health insurance. Given that 

many States have had success in overcoming these initial Web site 

issues, has HHS looked at what these State Web sites are doing 

as it searches for solutions to the fix HealthCare.gov? 

Secretary SEBELIUS. Absolutely. And we shared a lot of the information going in. I think that the hub feature that we have in our 

Web site that all States are using, including the State of New York, 

is fully functional, and that’s good news for New York and California and others who are running their own State Web sites. But 

we are learning from them, we’ve shared information with them, 

and we are eager for all the help and assistance moving forward. 

Mr. TONKO. Thank you. 

Similarly, many States made the illogical choice of rejecting Medicaid expansion contained in the ACA that would help some of their 

poorest citizens get access to the healthcare situation. This is despite the fact that Medicaid expansion is almost entirely financed 

by Federal dollars. 

Can you comment broadly on HHS’ plan in the future to encourage more States to run their own marketplaces and expand Medicaid so that the law can function as designed? 

Secretary SEBELIUS. Well, absolutely. Most recently, last week, 

the State of Ohio did move into the Medicaid market. And we now 

have 30 Governors. I think 27 States have fully completed the process. Another three are in the process, Republicans and Democrats, 

some of whom sued us about the constitutionality of the act, who 

are now deciding that for the citizens of their State, they want to 

be part of the expanded Medicaid. And we will continue to have 

those conversations. It’s not just about the marketplace, it’s also 

about Medicaid. 

Mr. TONKO. Thank you very much. 

Mr. UPTON. Gentleman’s time has expired. 

Dr. Cassidy. 

Mr. CASSIDY. You said that an individual policy is only cancelled 

if it changes significantly. But, to be clear, after May 2010, if coinsurance went up by any amount, even by a dollar, according to 

your regulations, that would not qualify as a grandfathered clause. 

Just to have that out there for the record. I gather even by a dollar. 

That said, I get a letter from someone in my district, Adrian. She 

says that, oh, she lost her coverage. She lost her coverage because 

spousal coverage is gone. She’s gone on the exchange, she doesn’t 

qualify for a subsidy, but that her premium and out-of-pocket costs, 

under any plan, is $10,000 a year. She feels—she writes this—she 

feels betrayed by her government. Now, she has to sit there asking 

herself, is this fair? If you were she, do you think that this would 

be fair? 

Secretary SEBELIUS. Dr. Cassidy, I want to start by the amount that you gave is not accurate. I was told it’s $5, not a dollar. 

Mr. CASSIDY. That’s for the copay, not for the coinsurance. For 

the coinsurance, it’s any amount. But I have limited time. 

68 

Do you think that if you were she, if you were Adrian, do you 

think this is fair? Loses her spousal coverage, now it’s 10K, no subsidies? 

Secretary SEBELIUS. Sir, I don’t have any idea what she’s looking 

at. I can tell you that, again, based on what we’ve seen in the market, what we’ve seen in the plans, people will be getting full insurance for the first time at competitive prices. 

Mr. CASSIDY. Well, again, this is what she reports. Do you think 

it’s fair—if what she reports is true, do you think it’s fair? 

Secretary SEBELIUS. I can’t answer fair or not fair. I don’t know 

what she was paying or what she was paying before—— 

Mr. CASSIDY. That’s OK. Let’s move on. 

Secretary SEBELIUS. Did she have full insurance? 

Mr. CASSIDY. Richard writes that his daughter received a note 

that his premium’s going up because she’s being lumped with older, 

costlier patients. Now, it’s possible that the only people that sign 

up will be those who are more costly. Does HHS have plans on 

what to do if only those who are more costly sign up and premiums 

rise for everybody? 

Secretary SEBELIUS. I think, sir, that’s what we’re trying to do 

to make sure that—— 

Mr. CASSIDY. But if only the costly—— 

Secretary SEBELIUS [continuing]. With the individual mandate—— 

Mr. CASSIDY [continuing]. Sign up, do you have plans? 

Secretary SEBELIUS. That’s the importance of the individual mandate that you’ve just outlined. Getting rid of preexisting conditions, 

making sure that people who come in—— 

Mr. CASSIDY. But if only the most costly sign up, do you have 

backup plans? 

Secretary SEBELIUS. We will encourage others to sign up. It’s 

why there’s a penalty in place and why—— 

Mr. CASSIDY. Is this to assume that there are no backup plans? 

I don’t mean to be rude, but—— 

Mr. UPTON. Gentleman’s time has expired. 

Mr. Yarmuth. 

Mr. YARMUTH. Thank you, Mr. Chairman. 

Madam Secretary, nice to see you. 

I come to this hearing with a little bit different perspective. Kentucky is doing a great job with our exchange. As of this morning, 

we have 350,000 people that have explored the Web site, 59,000 

started applications, 31,000 are now fully enrolled in new coverage, 

and 5,000 just in the last week. And I think, very importantly, 

more than 400 businesses have begun applying for their employees 

as well. So the idea that somehow this is going to be bad for businesses is not borne out in Kentucky. 

Would it be safe to say that if 36 States had done what Kentucky 

and New York and California have done instead of 14, that the 

rollout would have been much smoother, and the Web site would 

have been much easier to construct? 

Secretary SEBELIUS. I don’t think there’s any question that the— 

you know, in January of 2013, we knew how many States were not 

running their own Web site. In, I think, mid-February we learned 

69 

about partnerships. So it was not until that point that we learned 

that 36 States would actually be coming through the Web site. 

Having said that, we should have anticipated, we should have 

planned better, we should have tested better. I don’t think that’s 

any excuse. But we clearly are a running very different vehicle for 

enrollment than we thought we were going to run in March of 

2010. 

Mr. YARMUTH. On the subject of cancellation of policies, isn’t it 

true that, first of all, the Federal Government can’t require insurance companies to sell insurance? 

Secretary SEBELIUS. That they can’t? 

Mr. YARMUTH. Federal Government can’t require insurance companies to sell insurance? 

Secretary SEBELIUS. Yes, that’s true. Yes, sir. 

Mr. YARMUTH. And, in fact, insurance companies all over the 

country are making very difficult decisions now about where they 

want to participate and where they don’t. And in some markets 

they are actually trying to get out of the market, canceling people, 

because they want to play in other markets and so forth. They are 

all making those decisions now. 

Secretary SEBELIUS. Well, and we know we have more insurers, 

25 percent more insurers, in the individual market than we did 

prior to the law being passed. 

Mr. YARMUTH. So there are a lot of dynamics going on here that 

are not necessarily an indication that the President misled anybody. There are business decisions being made all over now. 

Secretary SEBELIUS. Well, in cancellation of policies, again, the 

1-year contract notice is a routine in the individual market. It has 

been in place for years. And for a lot of people, they are policies 

now; they are being canceled because they are being notified you 

can no longer being medically underwritten. We can’t charge you 

more because you’re a woman. We won’t ever have the kind of limitation on what your policy can pay out or charge you exorbitant 

out-of-pocket rates. Those policies will cease to be offered in the 

marketplace. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. Guthrie. 

Mr. GUTHRIE. Thank you, Madam Secretary, for being here. And 

last week Mr. Lau from Serco was here. I know the President’s 

talked about the alternatives to the Web site is phone calling or 

using paper, paper application. And what he said, and I think 

you’ve said it with the phone, they take the paper applications, but 

they enter them into the same Web portal. So I know you get 

around the issue of getting on and getting logged off, but also—but 

there are still issues with data within the Web portal. As you said, 

you can’t even get reliable data who’s even signed up. 

So he also said because of the surge in paper applications, it’s, 

like, 6 to 8 weeks to process. So if November 30th is when this will 

be ready that they can use—and even if you do it now, 8 weeks, 

you’re getting close to January 1st—if somebody does lose their insurance, so they’re signing up for this, and they get to January 1st, 

even though you have a March 31st open enrollment, what happens to these? Is there a contingency plan for these people to continue their insurance? 

70 

Secretary SEBELIUS. Sir, I think that we have improvements 

every day on the speed of the site. Serco was giving you early snapshots of difficulty of accessing the site. I think that’s greatly improved—— 

Mr. GUTHRIE. Well, they said just processing the paper, actually. 

OK. 

Secretary SEBELIUS. I understand. But it is the site for—they put 

the application into the site and get a determination. That’s part 

of what the process is. 

So the site is part of the portal all the way through. This is an 

integrated insurance vehicle, and so that will improve. And we— 

again, with 4 months of continuous service, which is far longer 

than most people had, some of these cancellation numbers—Mr. 

Geraghty again pointed this out from Florida Blue Cross, but it’s 

true of everyone else—these are not January 1st numbers, they are 

year-long numbers. So over the course of 2014, when an individual’s policy is due to expire, that individual—— 

Mr. GUTHRIE. But somebody’s could expire January 1st and not 

be able to get coverage if the Web site—and the vendors said they 

needed months to test, they would have liked to have months and 

months to test. That’s what they said. So if we are going to get November—even if it works November 30th—— 

Secretary SEBELIUS. I would say we’re testing as we go. This is 

beta testing going out right now. That’s why we’re fixing and how 

we can identify things. People are getting through every day. And 

we now know a lot more—— 

Mr. GUTHRIE. I know I’m out of—but the paper process, if it does 

take even 4 weeks, and it’s November 30th, and people’s cancel on 

January 1st, you—there needs to be a contingency for that person. 

Secretary SEBELIUS. Well, again, typical insurance is 2 to 4 

weeks of sign-up. They will have 2 full months of sign-up. 

Mr. UPTON. Gentleman’s time has expired. 

Ms. Schakowsky. 

Ms. SCHAKOWSKY. Thank you, Madam Secretary, for bringing to 

millions of Americans access to affordable, comprehensive 

healthcare coverage that’s going to be there when they need it. 

I want to thank you especially as a woman. Women can no 

longer—being a woman can no longer considered being a preexisting condition. Women can no longer be charged more than a 

man for the same coverage. Women have access to comprehensive 

benefits like prescription drugs, and free preventive screenings, 

and free contraceptive coverage, and maternity care, which is often 

left out of coverage. And the days of complicated pregnancy, or diabetes, or domestic violence being a preexisting condition, those days 

are over. 

You know, I want to say to my colleagues, after a 3–1/2-year 

campaign to repeal, to discredit, to even shut down the government 

over Obamacare, I want to say, get over it. We all agree that there 

are problems, but these are problems that I see being fixed. 

And so I want to ask one—oh, and I want to say that what we 

did under Medicare Part D can be an example of how we can work 

together. And, in fact, Chairman Upton and I both sent a letter 

asking for more money for community-based groups to help implement the program and make it work. We can work together. 

71 

So if you could just briefly say how are the navigators; how important are they in making this system work for the American people? 

Secretary SEBELIUS. Well, what we know, Congresswoman, is 

that a lot of people are not Web savvy and are not frustrated by 

the Web site, because they don’t have a computer, they don’t want 

to use a computer, they don’t trust a computer. They need a live 

human being to ask questions, get questions answered, talk about 

the plan, talk about insurance. So the navigators play a hugely important role. 

We have about 2,500 trained navigators on the ground right now. 

We have thousands more community assisters who are trained and 

ready to go. About 45,000 agents and brokers have gone through 

specific Affordable Care Act training. But those individuals working with their clients, customers, and, in the case of navigators and 

community assisters, just the public at large, they are not paid by 

a company, they are not collecting a fee, they just want to help people get coverage, they are hugely important. 

Ms. SCHAKOWSKY. Thank you. 

Mr. UPTON. Gentlelady’s time has expired. 

Mr. Olson. 

Mr. OLSON. I thank the chair. 

And welcome, Madam Secretary. 

Secretary SEBELIUS. Thank you. 

Mr. OLSON. I’d like to open with a quote from an American icon. 

I’ll hold up a poster. It says, ‘‘If a user is having a problem, it’s our 

problem.’’ I’m glad to hear that you embrace this philosophy during 

your testimony, ma’am. 

Obamacare was signed into law 1,256 days ago, and since then 

there’s been user problem after user problem after user problem. 

Regarding HealthCare.gov, your Deputy Administrator for Consumer Information, Gary Cohen, testified 1 month ago, right where 

you’re sitting, that—and this is a quote—‘‘CMS has worked hard to 

test the infrastructure that will allow Americans to enroll in coverage confidently, simply, and securely,’’ end quote. Yet according 

to Forbes and the Wall Street Journal, you told them that you 

needed 5 years of construction and 1 year of testing. The program 

has crashed and burned at least three times, and the user is still 

having problems. It’s been down the whole time you’ve been testifying. The system is down at this moment. 

My question, ma’am, is very simple: When did you know these 

changes were going down? A month? A day? A quarter? And did 

you tell the President what you knew? 

Secretary SEBELIUS. Sir, I was informed that we were ready to 

launch on October 1st. The contractors who we had as our private 

partners told us and told this committee that they had never suggested a delay, and that is accurate. Our CMS team felt we were 

ready to go. 

I told the President that we were ready to go. Clearly I was 

wrong. We were wrong. I—we knew that in any big, new, complicated system, there would be problems. No one ever imagined 

the volume of issues and problems that we’ve had, and we must fix 

it. 

Mr. OLSON. Yes, ma’am. 

72 

Credible journalists said you know you needed 6 years to get the 

program up and running. 

Secretary SEBELIUS. Sir, that quote has been repeated. I can 

guarantee you I would have never stated that, because the law was 

passed in March of 2010. I chose the open enrollment date. I don’t 

know where that quote comes from, but that is not from me. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. Barrow. 

Mr. BARROW. Thank you, Mr. Chairman. 

And thanks for attending today, Madam Secretary. I suspect that 

deep down most people on this committee support the concept of 

reforming insurance markets so that more people have access to 

better insurance coverage. We have disagreements about the 

means used to get at those ends, which is ultimately why I voted 

against the Affordable Care Act. 

But it seems that every day we’re hearing of something new 

going wrong. I’m concerned that these short-term enrollment problems could become long-term insurance market problems. My constituents are already losing confidence in the Federal Government’s 

ability to pull this thing off, and I think the only way to begin to 

restore their trust is to delay the individual mandate penalties 

until we’re sure this system is going to work. It’s not fair to penalize consumers when their noncompliance is not their fault. 

We also need to take the time make sure additional fits and 

starts won’t cause larger problems. Right now I’m less concerned 

about who’s to blame, more concerned about what went wrong and 

how to fix it and how we’re going to ensure it doesn’t happen again. 

Nearly all of our constituents want and need health insurance. 

It would be a huge mistake if we were so blinded by our love or 

our hatred for Obamacare that we miss opportunities to address its 

flaws. 

Now to the subject of technical problems becoming market problems. Can problems of folks getting into the system snowball into 

risk pool problems where those who choose not to enroll can actually affect the cost of those who do choose to enroll? 

Secretary SEBELIUS. Certainly. A risk pool needs a balanced market, so you need people who are older and sicker to be balanced 

with people who are younger and healthier. That’s how a pool 

works. 

Mr. BARROW. At what point are we going to see a problem having 

the risk pool if the tech problems cause—affecting the folks who 

are entering? What are we going to look for? What are we going 

to use to decide something needs to be done? 

Secretary SEBELIUS. Well, again, sir, we will be monitoring during the 6 months of open enrollment, as will our insurance partners, who is coming into the pool. That’s why we want to give this 

committee and others reliable, informed data about not only who 

it is, but what the demographics are and where they live. That’s 

part of our target. 

Mr. BARROW. If things aren’t better by the end of this next 

month, at what point are we going to start thinking about further 

delays and imposing penalties? 

Secretary SEBELIUS. Well, again, I think that having a defined 

open enrollment period is one of the ways that you then make an 

73 

assessment if you have a pool that works or not. You cannot have 

an unlimited open enrollment period with any insurance company, 

because that really doesn’t work. 

Mr. BARROW. Thank you. 

Mr. UPTON. Mr. McKinley. 

Mr. MCKINLEY. Thank you, Mr. Chairman. 

Last week the CGI representative Campbell said she had met 

her contract obligations and met the specifications. And she said 

the only problem she had was with pace, but the pace wasn’t part 

of the specification. We asked her what you would—you would testify to. Did—she said you would testify that she did complete her 

contract in accordance with the specifications. Would you? 

Secretary SEBELIUS. Sir, I don’t think until the product is working the way it’s designed to work that anybody has finished their 

job. And that’s really my interest. 

Mr. MCKINLEY. Thank you. I’m sorry, with time, they’ve shortened our time. 

So if she hasn’t met their specifications, but yet we’re still using 

her, so is the American taxpayer still paying the money to fix the 

problems that her company didn’t do in the first place? 

Secretary SEBELIUS. None of our contractors have been paid the 

amount of their—— 

Mr. MCKINLEY. Will she be paid for this work into the future as 

we go to correct this problem? 

Secretary SEBELIUS. We will make that determination as the 

work goes forward. I would tell you, sir, that as we learn what 

needs to be fixed, how long it takes, we’ll know more about whether 

they delivered. 

Mr. MCKINLEY. I’m very sorry, but the time frame has been cut 

down. 

Who owns the software now? Now that this has been developed 

with taxpayer money to develop the software to do this—— 

Secretary SEBELIUS. It is owned by the Centers for Medicaid & 

Medicare Services. 

Mr. MCKINLEY. So it’s all owned by us. OK. 

Will they be able to use it by a license for other clients? 

Secretary SEBELIUS. Not to my knowledge. I think it is specifically designed for the marketplace with these products in mind. 

Mr. MCKINLEY. Thank you. 

Then last question to trying to work—— 

Secretary SEBELIUS. And the clients are the American public. 

Mr. MCKINLEY [continuing]. Under IV&V, and she testified that 

she thought that was something we should have done. Under HHS, 

you recommend or the HHS recommends that for software development, that they should have an independent verification and validation program, but it wasn’t used in this case. Can you share with 

us in the—the time that’s gone why we didn’t use IV&V on something that’s—— 

Secretary SEBELIUS. Again, I don’t think that’s accurate, sir. At 

every point along the way, there is independent testing. There 

is—— 

Mr. MCKINLEY. Independent. 

Secretary SEBELIUS. Yes. 

Mr. MCKINLEY. You recommend independent—— 

74 

Secretary SEBELIUS. An outside—— 

Mr. MCKINLEY [continuing]. Verification and validation. Not 

someone within your staff. 

Secretary SEBELIUS. Pardon me? There is a level of company selfattested testing, there is a level of CMS testing and then there is 

an independent test on each piece of the contracting; an independent, not CMS. 

Mr. MCKINLEY. You’ve acknowledged it wasn’t done independently, and that’s the—— 

Mr. UPTON. The gentlemen’s time—— 

Mr. MCKINLEY. It needs to be done independently. People that 

do not have a—— 

Mr. UPTON [continuing]. Has expired. 

Secretary SEBELIUS. No. 

Mr. MCKINLEY [continuing]. A dog in the fight. 

Secretary SEBELIUS. It isn’t CMS. I will get you the information. 

There are three levels of testing. One of them is independent for 

every piece of this contracting, yes. 

Mr. UPTON. Mrs. Castor. 

Ms. CASTOR. Good morning. When open enrollment began a few 

weeks ago, the people back home in Florida who are helping their 

neighbors sort through the new options for coverage, the navigators, were taken aback by how grateful people are to have a new 

pathway to the doctor’s office and the care they need, affordable options. They’re no longer being discriminated against because they 

had cancer and diabetes or asthma, and they are very grateful. 

They said to me directly it’s like they found water in the desert. 

Right now they are—surprisingly, they said it’s taking time, because people want to sort through all of these options before they 

finally sign up at the end of the 26-week enrollment period. 

So we must fix the marketplace, we must, to meet their expectations. And we have very high expectations for you and for the administration. 

But I think it’s important to point out the Affordable Care Act 

is more than just a Web site. Despite all the obstruction by Republicans in my home State of Florida, nationally, even going so far 

as to shut down the government, millions of Americans are already 

benefiting, and they are benefits that are not tied to 

HealthCare.gov. 

So, Madam Secretary, let’s clarify what’s working, despite 

HealthCare.gov. Is it correct to say that many of the improvements 

that the ACA makes to employer coverage and to Medicare, where 

the vast majority of Americans who receive their coverage, are not 

dependent on HealthCare.gov? 

Secretary SEBELIUS. That’s correct. 

Ms. CASTOR. And so the delays and problems with 

HealthCare.gov do not affect the millions of individuals, thanks to 

the ACA, who no longer have to worry about lifetime monetary 

caps on their coverage that previously sent them to bankruptcy? 

Secretary SEBELIUS. That’s absolutely true. And I think the 

quote that the President was quoted recently saying if you have 

health care, you can—you don’t have to sign up for the new marketplace was referring to that large portion, the 95 percent of inVerDate Nov 24 2008 13:09 Aug 15, 2014 Jkt 037690 PO 00000 Frm 00078 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-90 CHRIS
75 

sured Americans whose plans are solid, stay in place and move forward. 

Ms. CASTOR. And I understand the frustration with the Web site. 

What I don’t understand is why people are not similarly outraged 

by the lack of Medicaid coverage in many of our States. Do you find 

that hypocritical? 

Secretary SEBELIUS. Well, I think it’s very troubling that millions 

of low-income working Americans will still have no affordable option if States don’t take advantage of the expansion program, leaving States bearing the cost of uncompensated care, families bearing 

the costs of parents who can’t take care of their kids, workers not 

able to go to work, and people still accessing care through emergency room doors, the most expensive, least effective kind of care 

they could get. 

Mr. UPTON. The gentlelady’s time has expired. Mr. Gardner. 

Mr. GARDNER. Thank you, Mr. Chairman. And thank you, Secretary Sebelius, for being here. 

Here’s my letter. This is the letter that my family got canceling 

our insurance. We chose to have our own private policy back in 

Colorado so we could be in the same boat as every one of my constituents, and yet my insurance policy has been canceled. The 

White House Web site says, if you like your health plan you have, 

you can keep it. Did I hear it wrong? 

Secretary SEBELIUS. Again, sir, I don’t know how long you’ve had 

your policy or what policy—— 

Mr. GARDNER. Why aren’t you losing your insurance? 

Secretary SEBELIUS. Pardon me? 

Mr. GARDNER. Why aren’t you losing your health insurance? 

Secretary SEBELIUS. Because I’m part of the Federal Employee 

Health Benefits plan. 

Mr. GARDNER. Where aren’t you in the exchange? You’re in 

charge of this law, correct? Why aren’t you in the exchange? 

Secretary SEBELIUS. Because I’m part of the Federal Employee 

Health Benefits plan. 

Mr. GARDNER. Why aren’t you in the exchange? Why won’t you 

go into the exchange? You’re a part of this law. You’re literally in 

charge of this law. Should you be any different than all of the other 

Americans out there who are losing their health insurance today? 

Secretary SEBELIUS. I’m part of the 95 percent with affordable 

available health coverage, as are—— 

Mr. GARDNER. You’re part of a plan that—— 

Secretary SEBELIUS [continuing]. Most of your colleagues in this 

room. 

Mr. GARDNER [continuing]. Most Americans don’t have available 

to them. Why will you not agree to go into the exchange? 

Secretary SEBELIUS. I am not eligible for the exchange. 

Mr. GARDNER. I went into the exchange. 

Secretary SEBELIUS. Because I have coverage in—— 

Mr. GARDNER. You can decide—— 

Secretary SEBELIUS [continuing]. The employee side. 

Mr. GARDNER [continuing]. To drop the coverage of your employer. You have the choice to decide not to choose—— 

Secretary SEBELIUS. Well, I—that is not true, sir. 

Mr. GARDNER. I chose not to go into the congressional—— 

76 

Secretary SEBELIUS. Members of Congress are now part of the 

exchange thanks to an amendment—— 

Mr. GARDNER. Before—— 

Secretary SEBELIUS [continuing]. That was added by Congress, 

but I am not eligible—— 

Mr. GARDNER. Madam Secretary, with all due respect—— 

Secretary SEBELIUS. If I have affordable coverage in my workplace, I am not eligible to go into the marketplace. 

Mr. GARDNER. With all due respect, Madam, I would—— 

Secretary SEBELIUS. That’s part of the law. 

Mr. GARDNER [continuing]. Madam Secretary, I would encourage 

you to be just like the American people and enter the exchange—— 

Secretary SEBELIUS. I—— 

Mr. GARDNER [continuing]. And agree to find a way to do that, 

Madam Chair. 

Secretary SEBELIUS. It’s illegal. 

Mr. GARDNER. Madam Secretary. And I would like to show you 

an advertisement that’s going on in Colorado right now. This is an 

advertisement that a board member of the Colorado exchange has 

put forward. Do you agree with this kind of advertising for—— 

Secretary SEBELIUS. I—— 

Mr. GARDNER [continuing]. Obamacare? 

Secretary SEBELIUS. I can’t see it. And, again, it’s—— 

Mr. GARDNER. It’s a college student doing a keg stand. 

Secretary SEBELIUS. If the Colorado exchange did that, they 

are—— 

Mr. GARDNER. Do you approve of this kind of advertising? 

Secretary SEBELIUS [continuing]. A State-based marketplace. 

Mr. GARDNER. Do you approve of this kind of advertising? 

Secretary SEBELIUS. I don’t see it. I don’t know what it is, and 

I did not approve it. This is a State-based marketplace. 

Mr. GARDNER. That’s a pretty big font, that’s a pretty big picture 

of a keg—— 

Secretary SEBELIUS. I—— 

Mr. GARDNER [continuing]. And you can’t see it? 

Secretary SEBELIUS. Sir, do I approve of it. 

Mr. GARDNER. You—— 

Secretary SEBELIUS. I’ve never seen it. 

Mr. GARDNER. You have the ability to opt out, by the way, as a 

Federal employee. You could take the insurance. So I just—— 

Secretary SEBELIUS. If I have—— 

Mr. GARDNER. I would encourage you to make that decision. 

Secretary SEBELIUS [continuing]. Available employer-based coverage, I am—— 

Mr. GARDNER. I would also like to submit a—— 

Secretary SEBELIUS [continuing]. Ineligible for—— 

Mr. GARDNER [continuing]. Waiver from my district from 

Obamacare, and hope that you will consider waiving Obamacare 

for the Fourth Congressional District. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. WAXMAN. Does your policy cover—never mind. 

Mr. UPTON. Mr. Matheson. 

Mr. MATHESON. Well, thank you, Mr. Chairman. And, Madam 

Secretary, thanks for your time. I just want to ask, on the issue 

77 

of the fixes to HealthCare.gov, we’ve had a lot of conversation 

about that today, and we’ve talked about confidence levels for being 

ready by a certain time, but I think one question that a lot of us 

have is can you define what the magnitude of the problem is? Is 

there a scale or a metric by which we can understand how bad this 

is today and how we’re going to get to where we go to have it fixed? 

Secretary SEBELIUS. Well, again, sir, I’ve been informed that the 

problems are in—and the reports I’ve seen are really in two areas. 

They are in the performance area, which is speed and reliability. 

It’s too slow, it doesn’t have reliable transfers. And in functionality. 

There are parts of the system that just don’t make accurate transfers. So we have done an extensive assessment. They are 

prioritized, as I indicated earlier. One of the priorities is the enrollment features which pass individual information to the companies 

where they want to enroll. That is not reliable at this point. The 

companies are not getting accurate data. So it’s an example of the 

kind of thing we know we need to fix. 

Mr. MATHESON. And is there a way to have you set up your 

metrics to figure out if we’re making progress in terms of if you’re 

fixing those issues with speed and performance and functionality? 

Secretary SEBELIUS. Again, with a team and Jeff Zients at the 

head of it reporting to Marilyn, there are definitely a comprehensive set of issues going forward that will be measured and accelerated. 

Mr. MATHESON. Do you have target dates along the way if you 

want to meet the November 30th time to assume it’s functional at 

what you want, do you have target or metrics along the way to 

make sure you’re on that path? 

Secretary SEBELIUS. My understanding is yes, there are sort of 

groups of targets, that fixes, as you know, can be loaded together. 

Mr. MATHESON. Right. 

Secretary SEBELIUS. It isn’t one at a time, so they don’t take 

days, but they’re trying to determine with a specific path, it’s one 

of the charges that QSSI has really looking at the umbrella of what 

needs to be fixed, prioritizing them, figuring out what destabilizes 

if something else is fixed, how they can be grouped together, and 

that report will be in later next week. 

Mr. MATHESON. OK. 

Mr. UPTON. The gentleman’s time has expired. Mr. Pompeo. 

Mr. POMPEO. Great. Thank you. Thank you for coming, Secretary 

Sebelius. It won’t surprise you that I would like to talk about Kansas a little bit today. Much like with some of my colleagues that 

made references to the ‘‘Wizard of Oz,’’ I don’t think anybody not 

from Kansas should be able to do Oz allegories, but my story, the 

way I think about it is those folks worked awful hard to go down 

that yellow brick road, and at the end of the day when they got 

there and pulled back the curtain, they found out there was nothing that they didn’t already have. And as we pull back the curtain 

on the Affordable Care Act, I think people are finding that it’s not 

exactly what they are going to have worked so hard to find their 

way to as well. 

I want to talk about two stories. There’s this commitment that 

said if you like your plan, you can keep it. I have a letter I’ll submit for the record from Mr. Brito in Kansas. You might know him. 

78 

I saw him the other night in Benton. He got the following letter 

from Blue Cross Blue Shield that says, because your current plan 

does not offer the benefits standards specified, you will be discontinued on December 31st. And it says, good news. And then there’s 

a group of folks, Pizza Hut, you know the company from Kansas, 

franchisees, founded there. 

Secretary SEBELIUS. Yes, I do. 

Mr. POMPEO. Lots of those folks have now taken employees, families who were working there, and they’ve gone from having fulltime jobs to part-time jobs, so they aren’t able to keep the health 

care plan that they had either and the one that they wanted. 

Why were the plans these folks had good enough when you were 

the insurance commissioner in Kansas and when you were Kansas’s governor, but those plans today aren’t good enough for those 

hardworking Kansas families? 

Secretary SEBELIUS. Sir, I would tell you in the roles I had the 

honor of serving of in Kansas, I worked every day to try and eliminate some of the discriminatory features of the insurance industry 

that finally, with the Affordable Care Act, are gone. My successor 

and elected insurance Republican commissioner, Sandy Praeger 

and I worked on a whole series of plans to expand coverage. So I 

did—— 

Mr. POMPEO. But—— 

Secretary SEBELIUS [continuing]. Work on these issues. We were 

not able to necessarily—— 

Mr. POMPEO. So you thought these—— 

Secretary SEBELIUS [continuing]. Get them passed. 

Mr. POMPEO. To use your words, you said these were, I think you 

said, lousy plans, and Ms. Tavenner said, not true insurance. You 

think that the plans that were offered when you were insurance 

commissioner weren’t true insurance? 

Secretary SEBELIUS. In the individual market, the insurance 

commissioner in Kansas and virtually every place in the country—— 

Mr. POMPEO. So if the—— 

Secretary SEBELIUS [continuing]. Does not have regulatory authority over the plans—— 

Mr. POMPEO. Let me ask the questions. 

Secretary SEBELIUS [continuing]. And a lot of them are not insurance. 

Mr. POMPEO. Were they true insurance plans when you were insurance commissioner? 

Secretary SEBELIUS. A lot of them were not true insurance plans, 

no. 

Mr. POMPEO. Thank you. I yield back. 

Mr. UPTON. Gentleman from Vermont, Mr. Welch. 

Mr. WELCH. Thank you. I’m going to try to just summarize correctly what I’ve been hearing. Number one, the Web site must be 

fixed, you’ve been very forthright, and you’re going to fix it. 

Number two, I’m hearing a tone change. We’ve had a real battle 

about health care. We had a battle in this Congress. It was passed. 

The President signed it. The Supreme Court affirmed it. A really 

brutal battle. There was an election where the American people affirmed it. And then the last gasp effort was the shutdown and the 

79 

threat of debt default. But what I’m hearing today is that there are 

problems and people want to fix them, because all of us represent 

people who are going to win or lose depending upon how effectively 

this is rolled out. 

Third, there’s some significant question about existing insurance 

policies, what the President said and so on, but let’s acknowledge 

something. A lot of insurance companies were ripping off innocent 

American people by promising them insurance until they got sick, 

and then it got canceled because they ‘‘had a pre-existing condition 

that wasn’t, ‘disclosed.’’’ That’s got to end. The challenge for us 

going forward is to make health care affordable. 

So, Madam Secretary, my question is, is there any indication 

that there’s been a slowing of premium increases as a result of the 

Affordable Care Act, because unless we can keep those premium increases down, they can’t rise faster than the rate of inflation, 

wages and profits, all of us are going to lose. 

Secretary SEBELIUS. Well, I would say the trends in the private 

market over the last 3 1⁄2 years are that cost increases have slowed 

down, are rising at a lower rate than the decades before. And, in 

fact, in this individual market, the old individual market, the typical increase was 16 percent year in and year out, rate increase, 

and often that came with additional medical underwriting. So it 

gives you a sense of how the costs were. 

We know that Medicare costs are down. We know that Medicaid 

costs actually had a decrease per capita last year, not an increase 

per capita, and underlying health care costs are down. 

These rates in the new marketplace, have come in about 16 percent lower on average than was projected; not by us, but by the 

Congressional Budget Office. And we know that in many of these 

markets, they’re much more competitive. I believe in market competitiveness. That actually drives down rates. The States where the 

most companies are participating have the lowest rates. And new 

companies have come in significantly below the old monopoly companies that often dominated this individual marketplace. So we’re 

on a pathway. Are we there? No. But you’re absolutely right: affordable coverage at the end of the day for everybody is the goal. 

Mr. WELCH. OK. I yield back. Thank you, Madam Secretary. 

Mr. UPTON. Madam Secretary, I’m trying to make sure that 

you’re out of here by 12:30 before we start the second round of 

questions. 

Mr. Kinzinger. 

Secretary SEBELIUS. That was a joke, right. 

Mr. MCKINLEY. I see sheer panic. 

Madam Secretary, thank you for being here. You stated earlier 

to Mr. Harper that you give the President regular updates on the 

marketplace. The President stated that he knew nothing about the 

status and functionality of the marketplace. How often and what 

were the subjects of those updates? 

Secretary SEBELIUS. Well, I think there were a series of regular 

meetings with the President, with some of our Federal partners, 

with offices of the White House, from the OMB to others on a 

monthly basis giving reports on policy and where we were going. 

None of those, I would say, involved detailed operational discusVerDate Nov 24 2008 13:09 Aug 15, 2014 Jkt 037690 PO 00000 Frm 00083 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-90 CHRIS
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sions. That wasn’t the level. It was, are we coming together? Do we 

have companies? Do we have plans? 

Mr. MCKINLEY. Sure. And I understand that. I mean, obviously 

when it comes to the President of the United States, certain level 

of details, you have to see it kind of a 10-, 20,000-foot overview, but 

in terms of the actual functionality, whether it’s the Web site or 

the marketplace, he was legitimately caught off guard on October—— 

Secretary SEBELIUS. Well, I assured him that we were ready to 

go. Everyone knew with a big plan that there were likely to be 

some problems. No one—— 

Mr. KINZINGER. OK. 

Secretary SEBELIUS [continuing]. Anticipated this level of problems. 

Mr. KINZINGER. And just a second, a quick question. Where is 

HHS getting the money to pay for these fixes? Is it coming from 

other HHS accounts? Have you used your transfer authority to 

move money from non-ACA programs to pay for the cost of implementing the President’s health care program, and if so, from which 

programs have you drawn money to help with the fix that’s not 

ACA-related? 

Secretary SEBELIUS. Well, as you know, Congressman, it’s been 

2 years since we’ve had a budget at HHS and we also have not 

had—at the President’s requested implementation budget authorized by the Congress, each of those years we have used not only 

resources internally, but I do have legal transfer authority that I’ve 

used and a non-recurring expense fund. We will get you all the details of that. 

Mr. KINZINGER. Great. Thank you. 

Secretary SEBELIUS. We’ve been reporting that to Congress regularly. 

Mr. KINZINGER. So the answer is yes, though, there is some nonACA money being transferred and used for the implementation of 

ACA? 

Secretary SEBELIUS. There is money that is specifically designed 

for either outreach and education, so the health centers have hired 

education outreach people as part of their outreach for health personnel. I would say it’s definitely a related cause to get expanded 

health care. 

Mr. KINZINGER. Thank you. Thank you, Mr. Chairman. 

Mr. UPTON. Mr. Sarbanes. 

Mr. SARBANES. Thank you, Mr. Chairman. Thank you, Madam 

Secretary, for being here. My understanding is that a lot of the 

companies, insurers that have been offering plans in the individual 

market, the ones who are sending out these notices are actually 

repositioning themselves in the health insurance exchange to offer 

alternative plans. Is that correct? 

Secretary SEBELIUS. Yes. 

Mr. SARBANES. And in addition to those insurers who’ve been in 

the individual market, you now have a lot of other companies and 

insurers providing plans in the health insurance market? 

Secretary SEBELIUS. That is true. 

Mr. SARBANES. So the way I look at this is, I went to buy Orioles 

tickets a while back when the season was still underway, and I was 

81 

standing in line and I got up to the ticket window, and they closed 

the window, but I didn’t have to go home, because they opened another window a few feet away. 

So essentially what’s happening is people are coming up on the 

renewal period, they’re getting up to the window of the individual 

market, they’re being told, well, that window’s closed, but if you go 

right down the line here, there’s another window that’s open. And, 

by the way, when you get there, you will get better coverage potentially at reduced premiums, and if you go down to window three, 

there’s some subsidies that may also be available to you. 

So this notion that people are being turned away from an affordable product that provides good, quality care is preposterous. In 

fact, they’re being steered to a place where they can get good quality coverage, in many instances much better than the coverage that 

they had before, at an affordable rate that is supported by the subsidies that can be available to many, many people. 

This is what’s so promising about the Affordable Care Act, and 

so I think it’s important for people to understand that that window 

is not being shut, they’re just being steered someplace else where 

they can get a good opportunity. 

Secretary SEBELIUS. And I think the first option for those companies is to say we’d like to keep you here and here are the plans 

we’re offering, but to be fair, customers will now have an opportunity to look across a landscape, which they couldn’t before, they 

will have entry into those other windows, which many of them 

didn’t have before with a pre-existing condition, and as you say, 

about 50 percent of this market will have financial help in purchasing health insurance, which none of them had before. 

Mr. UPTON. Gentleman’s time has expired. Mr. Griffith. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

Earlier in your testimony here today, you said a couple times the 

plans we enjoy, but then as you noticed with Mr. Gardner’s eloquent testimony, that we’re not going to be in the same plan that 

you’re in after January 1. I was one of those who thought it was 

a good idea as a part of a proposal that was floating around the 

halls here in Congress that the President and the cabinet secretaries ought to also be in the marketplace and not have a special 

Federal plan that you will have after January 1, but that we will 

not. 

The President, while that was being discussed, issued a veto 

threat. Did you discuss the veto threat with the President before 

he made it and have you discussed it with him since then? Yes or 

no on the first. 

Secretary SEBELIUS. No. 

Mr. GRIFFITH. No. And then I would have to ask you relating 

back to the contractors involved in this, CGI told us that the Spanish Web site was ready to go, that they thought everything was 

ready just as they did with the regular site, and obviously that 

didn’t prove out, but that they were told not to implement it; likewise, the shop and browse section was ready to go. Do you think 

that they were misleading this committee when they made those 

comments? 

Secretary SEBELIUS. I think what they believed is that that product, independent of the entire operational site, was ready and testVerDate Nov 24 2008 13:09 Aug 15, 2014 Jkt 037690 PO 00000 Frm 00085 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-90 CHRIS
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ed. What—a determination was made. I was involved with the 

Spanish Web site—— 

Mr. GRIFFITH. Let me—— 

Secretary SEBELIUS [continuing]. And the Medicaid transfers to 

say let’s minimize the risk for the whole site, let’s load—— 

Mr. GRIFFITH. But let—— 

Secretary SEBELIUS [continuing]. These later. 

Mr. GRIFFITH. But that raises the next question now, because 

one of the other contractors, QSSI, I believe it was, indicated to us 

that part of the problem was was that once you took away the ability to browse, everybody had to go through the business of setting 

up an account, and you stopped one of the browse—or CMS stopped 

one of the browsing options as well, and that that actually contributed to the logjam and contributed to the problems. So is he correct 

on that, that not allowing people just to look without having to sign 

up, wouldn’t that have made it easier for the American people? 

Secretary SEBELIUS. In hindsight, I think that probably would 

have been advantageous. I can tell you that the reason the decision 

was made going forward was to minimize risk. That didn’t work so 

well, but adding additional features that didn’t involve people actually wanting to get to what they would independently pay and 

what they would qualify for and what the plans were seemed to be 

things that could be added down the road. It was wrong. 

Mr. UPTON. Gentleman’s time has expired. Mr. Bilirakis. 

Mr. BILIRAKIS. Thank you Mr. Chairman. I appreciate it very 

much. Thank you, Madam Secretary, for testifying today. 

Madam Secretary, over the weekend, The New York Times wrote 

the following: ‘‘Project managers at the Department of Health and 

Human Services assured the White House that any remaining 

problems could be worked out once the Web site went live, but 

other senior department officials predicted serious trouble and advised delaying the rollout.’’ 

Can you confirm if this is true? Did any senior department officials predict serious problems, and did any senior department officials advise delaying the rollout of the exchanges or parts of the exchanges on October 1st? Can you—— 

Secretary SEBELIUS. I can tell you that no senior official reporting to me ever advised me that we should delay. You heard from 

the contractors on the 24th that none of them advised a delay. We 

have testing that did not advise a delay. So, not to my knowledge. 

Mr. BILIRAKIS. Did they indicate to you that there were serious 

problems? 

Secretary SEBELIUS. They indicated to me that we would always 

have risks, because this system is brand-new and no one has operated a system like this before to any degree. So we always knew 

that there would be the possibility that some things would go 

wrong. No one indicated that this could possibly go this wrong. 

Mr. BILIRAKIS. Can you name some of these officials that gave 

you that advice that there were serious problems? 

Secretary SEBELIUS. Again, we had a series of meetings with 

teams from CMS. I was always advised that there is always a risk 

with a new product and a new site, but never suggested that we 

delay the launch of October 1st, nor did our contracting partners 

ever suggest that to us. 

83 

Mr. BILIRAKIS. Thank you. Thank you, Madam Secretary. 

Thank you, Mr. Chairman. Appreciate it. I yield back. 

Mr. UPTON. Mr. Johnson. 

Mr. JOHNSON. Madam Secretary, thank you for being here with 

us today. CMS was the integrator of the Web site prior to and leading up to the 1 October—— 

Secretary SEBELIUS. That’s correct. 

Mr. JOHNSON [continuing]. Rollout, correct? You’ve testified that 

you’ve now hired an outside company to serve as the integrator. 

Who is that? 

Secretary SEBELIUS. One of our contractors is taking on an additional—— 

Mr. JOHNSON. Who is that? 

Secretary SEBELIUS. QSSI—— 

Mr. JOHNSON. QSSI. 

Secretary SEBELIUS [continuing]. Who built the hub. 

Mr. JOHNSON. OK. 

Secretary SEBELIUS. Yes, sir. 

Mr. JOHNSON. This is the same company that told our committee 

last week that they were not only the developer of the hub and the 

pipeline, but also an independent tester of system? 

Secretary SEBELIUS. Yes. 

Mr. JOHNSON. You’ve acknowledged in your testimony today that 

inadequate testing played a significant role in this failed launch, so 

aren’t you concerned that QSSI has lost its ability to be an objective independent arbitrator in addressing the problems that plague 

the system now, because they’re part of the tester, part of the developer, part of the problem? 

Secretary SEBELIUS. No, I haven’t lost my confidence in them. I 

think the testing that they did is validating the pieces of the equipment. What we’ve said since the launch is that we did not do adequate end-to-end testing. 

Mr. JOHNSON. OK. 

Secretary SEBELIUS. That was not the QSSI responsibility. 

Mr. JOHNSON. All right. And in this new role as integrator, are 

you going to be paying QSSI more than they were to be paid under 

their original contract? I would expect with this expanded role, 

they’re going to get paid more. Right? 

Secretary SEBELIUS. That discussion is underway in terms of 

what the role will entail, what the outlines are, yes, sir. 

Mr. JOHNSON. OK. Well, hardworking American taxpayers have 

already paid for this implementation once. Do you think it’s fair to 

ask taxpayers to pay more so that QSSI can now attempt to do 

something that Administrator Tavenner and her CMS team were 

unable to do right the first time? 

Secretary SEBELIUS. Well, sir, I think the American taxpayers expect us to get the site up and running. As I told you earlier—— 

Mr. JOHNSON. Well, I’m certain that they did. They expected it 

the first time. 

Secretary SEBELIUS. I understand. And so did I. We have not expended the funds that have been encumbered for the contracts. 

Mr. JOHNSON. You know, we—— 

Secretary SEBELIUS. We have not—— 

Mr. JOHNSON. Madam—— 

84 

Secretary SEBELIUS. And we will monitor every dime we spend 

from here on in and re-audit things that are going forward. 

Mr. JOHNSON. Well, with that, Mr. Chairman, I yield back. 

Mr. UPTON. Gentleman yields back. Mr. Long. 

Mr. LONG. Thank you, Mr. Chairman. And thank you, Secretary, 

for being here today and giving your testimony. 

Earlier today you said that, I’m responsible for the implementation of the Affordable Care Act. I’ve heard you referred to, and 

maybe yourself, as the point person for the rollout, the architect of 

implementing the Affordable Care Act. So you are kind of the 

President’s point person, are you not, for this rollout? 

Secretary SEBELIUS. Yes, sir. 

Mr. LONG. Earlier you were asked—and there’s a lot of things 

striking about the rollout of this and about the Affordable Care Act 

altogether, but the thing that’s most striking to me is that when 

we have the point person for the rollout here and you’re not going 

into the exchange—now, I’ve heard you say that—and you’ve got 

some advice from the folks behind you, but I’m asking you today, 

can you tell the American public, if your advisors behind you that 

if they happen to have given you some wrong information, if it is 

possible for you to go into the exchange like all these millions of 

Americans that are going to go into the exchanges, will you commit 

to forego your government insurance plan that you’re on now and 

join us in the pool? 

Come on in. The water’s fine. All the Congressmen, all of our 

staff have to go into the exchanges. We have to go into the D.C. 

exchanges. And I will say that I tried to get on the Web site, I was 

successful during the hearing earlier, and I got to the D.C. exchange, which is where I have to buy from. I got part way through, 

and then when it got to the point to enter my Social Security number, I could not bring myself to do that from what I’ve heard from 

people like John McAfee and folks about the security. 

Will you tell—if your advisors are wrong and it is possible for 

you, I’m not saying it is, but if it is, if it’s possible for you to forego 

your government program you have now, will you tell the American 

public that, yes, I will go into the exchanges next year like everyone else? 

Secretary SEBELIUS. Sir, the way the law is written—— 

Mr. LONG. It’s a yes or no. 

Secretary SEBELIUS. We have—— 

Mr. LONG. Let’s say that you’re wrong on that. Yes or no? If 

you’re wrong—— 

Secretary SEBELIUS. I don’t want to give—— 

Mr. LONG [continuing]. Will you, yes or no? 

Secretary SEBELIUS [continuing]. Misinformation to the American 

public—— 

Mr. LONG. You what? 

Secretary SEBELIUS [continuing]. I don’t want to give misinformation. 

Mr. LONG. I want you to go home and research it—— 

Secretary SEBELIUS. If you have affordable—— 

Mr. LONG. If—— 

Secretary SEBELIUS [continuing]. Coverage—— 

Mr. LONG. If you’re wrong—— 

85 

Secretary SEBELIUS. If you have affordable coverage—— 

Mr. LONG [continuing]. Will you go into the exchanges? 

Secretary SEBELIUS. If I’m wrong—— 

Mr. LONG. If you can, will you? That’s a yes or no. If you can, 

will you, ma’am? 

Secretary SEBELIUS. I will take a look at it. I don’t have any 

idea—— 

Mr. LONG. That’s not an answer. That’s not a yes or no. 

Mr. UPTON. Gentleman’s time has expired. 

Mr. LONG. You’re the architect of the whole program, and you 

won’t go into it with the rest of the American public. 

Secretary SEBELIUS. I did not say that, sir. I think it’s illegal for 

me to—— 

Mr. LONG. If it’s not illegal. If it’s legal, will you go in? 

Secretary SEBELIUS. If I have affordable coverage—— 

Mr. LONG. Come in. The water’s fine. 

Mr. UPTON. The gentleman’s time has expired. 

Mr. WAXMAN. I have a unanimous consent request. I’d like to— 

Madam Secretary, I’d like you to answer for the record, if you are 

able to do what the gentleman just suggested or follow the recommendation of Cory Gardner, our colleague from Colorado, and 

went in to buy an individual policy, would you be able to find one 

that would protect you from cheap shots, or do you think that it 

has to be mandated for coverage? I’ll leave the record open for your 

response. 

Mr. UPTON. We’ll wait for that response to come back. 

Secretary SEBELIUS. I’d gladly join the exchange if I didn’t have 

affordable coverage in my workplace. I would gladly join it. And the 

D.C. market is an independent State-based market, even though 

D.C. is not a State. We do not run the D.C. market in the Federal 

marketplace. 

Mr. UPTON. The gentlelady from North Carolina, Ms. Ellimers. 

Mrs. ELLMERS. Thank you, Mr. Chairman, and I have a couple 

of questions. Thank you for being with us today, Madam Secretary. 

I’d like to go to the issue that has been raised by my colleagues 

on the left here about accurate information. Number one, I’ve 

heard the issue of Medicare Part D brought up many, many times. 

Although my colleagues all voted no against it initially, now they’re 

extolling the virtues of Medicare Part D. Is Medicare Part D a 

mandate or is it voluntary? 

Secretary SEBELIUS. It is voluntary. 

Mrs. ELLMERS. It is a voluntary program. 

Secretary SEBELIUS. Yes. 

Mrs. ELLMERS. That’s the first accurate piece of accurate information I would like to get. 

You know, we’re actually forcing millions of Americans to go to 

find a health care premium in some way, whether it’s to go to the 

exchange or whether they are to be insured. Many of my constituents are reaching out to me, those with individual policies, and 

they are saying to me that my rates are going up 400 percent, my 

rates are going up 127 percent. These are my constituents. Now, 

we’re talking about open enrollment, but it’s forcing the issue, is 

it not? That if an American does not have health care coverage, 

they are essentially breaking the law. Is that not correct? 

86 

Secretary SEBELIUS. If someone can afford coverage and has that 

option and chooses not to buy coverage, they will pay a fee on 

their—— 

Mrs. ELLMERS. And that—— 

Secretary SEBELIUS [continuing]. Liability in their—— 

Mrs. ELLMERS. And it is a law, so therefore they are breaking the 

law. 

Secretary SEBELIUS [continuing]. Next year’s tax. 

Mrs. ELLMERS. OK. You also brought up the issue when you were 

in Kansas, that you fought against discriminatory issues. Now, as 

far as essential health benefits, correct me if I’m wrong, do men not 

have to buy maternity coverage? 

Secretary SEBELIUS. Policies will cover maternity coverage for 

the young and healthy. 

Mrs. ELLMERS. Including men? 

Secretary SEBELIUS. Under 30 years old will have so a choice also 

of a catastrophic plan which has no maternity coverage. 

Mrs. ELLMERS. The catastrophic, but men are required to purchase maternity. 

Secretary SEBELIUS. Well, an insurance policy has a series of 

benefits whether you use them or not, and one of the benefits will 

be—— 

Mrs. ELLMERS. And that is why—— 

Secretary SEBELIUS [continuing]. Coverage for mental health coverage—— 

Mrs. ELLMERS [continuing]. The health care premiums are increasing—— 

Secretary SEBELIUS [continuing]. Violence—— 

Mrs. ELLMERS [continuing]. As high, because we are forcing them 

to buy things that they will never need. 

Thank you, Mr. Chairman. 

Secretary SEBELIUS. The individual policies cover families. Men 

often do need maternity coverage for their spouses and for their 

families, yes. 

Mrs. ELLMERS. Single male age 32 does not need maternity coverage. To the best—— 

Secretary SEBELIUS. He may not need—— 

Mrs. ELLMERS [continuing]. Of your knowledge, has a man ever 

delivered a baby? 

Mr. UPTON. Gentlelady’s time—— 

Secretary SEBELIUS. I don’t think so. 

Mr. UPTON [continuing]. Has expired. The gentlelady, Ms. Cathy 

McMorris Rodgers. 

Mrs. MCMORRIS RODGERS. Thank you, Mr. Chairman. And 

Madam Secretary, although we were told repeatedly that if you 

liked your health insurance plan, you’d be able to keep it, we’re 

now being told by the government that they have determined many 

existing plans to be lousy, subpar. 

In reality, this law is becoming quickly less about helping Americans purchase affordable coverage and more about compelling millions of Americans into a struggling Medicaid program. In my home 

State of Washington, 90 percent of enrollees will be in Medicaid; 

16,000 of them coming into a program that they were already eligible for; Colorado, 89 percent; Kentucky, two-thirds; Maryland, 97 

87 

percent. And these are States that are already struggling with 

their budgets, wondering how they’re going to cover Medicaid, 

which is, as we all know, for the most vulnerable population. 

So isn’t it true that in States like Washington, they’re going to 

have new, unexpected costs associated with a dramatic influx into 

Medicaid? 

Secretary SEBELIUS. Well, Congresswoman, the Medicaid expansion provision of the Affordable Care Act is—— 

Mrs. MCMORRIS RODGERS. Are States going to face new costs—— 

Secretary SEBELIUS. The Federal Government pays 100 percent 

of the costs of newly insured for the first 3 years and gradually reduces—— 

Mrs. MCMORRIS RODGERS. These are existing—— 

Secretary SEBELIUS [continuing]. That cost to 90 percent. 

Mrs. MCMORRIS RODGERS. These were people that were already 

eligible. 

Secretary SEBELIUS. Well, existing people were—— 

Mrs. MCMORRIS RODGERS. And we know that two out of three 

doctors don’t accept new Medicaid patients, we know that current 

provider rates are going to drop at the end of 2014. So isn’t it true 

that existing Medicaid enrollees are going to further compete for 

scarce resources in these States? 

Secretary SEBELIUS. If the citizens of Washington who are signing up were eligible for Medicaid, they certainly will be entitled to 

enroll in Medicaid now. The newly insured will be—— 

Mrs. MCMORRIS RODGERS. I’m concerned—— 

Secretary SEBELIUS [continuing]. Fully paid for. The doctors have 

additional fees. 

Mrs. MCMORRIS RODGERS [continuing]. That the most vulnerable 

in this country are going to lack access to the care that they they’re 

going to receive. And I know time is short, Madam—— 

Secretary SEBELIUS. Well, I think that’s absolutely true. And in 

States that are choosing not to expand Medicaid, it’s particularly 

dire. 

Mrs. MCMORRIS RODGERS. It’s—— 

Secretary SEBELIUS. So I would love to work with you on 

that—— 

Mrs. MCMORRIS RODGERS. It’s existing Medicaid. 

Secretary SEBELIUS [continuing]. Expansion. 

Mrs. MCMORRIS RODGERS. And finally, I just wanted to inform 

the Secretary, you told us several hours ago when the hearing 

started that the Web site was down. If you look at the screen, several hours later, HealthCare.gov is still down. You promised this 

system would be ready on October 1st. You’re clearly wrong. 

So before I leave you today, I would just impress upon you, this 

is more than a broken Web site. This is a broken law. Millions of 

Americans are getting notices their plans are being canceled. I 

yield back my time. 

Mr. UPTON. Gentle—— 

Mr. WAXMAN. Meh, meh, meh. 

Mr. UPTON. Gentlelady’s time has expired. 

I would do a couple things here. First I’m going to ask unanimous consent that the written opening statements for any member 

on the committee be introduced into the record. And without objecVerDate Nov 24 2008 13:09 Aug 15, 2014 Jkt 037690 PO 00000 Frm 00091 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-90 CHRIS
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tion, the documents will be there. I also would ask unanimous consent to put the document binder and other documents presented to 

the Secretary during questioning into the record without objection. 

So ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. UPTON. Let me just say in conclusion, we do look forward to 

having you back in December to get an update on where we are, 

and we’ll work with your schedule to find a right time and date 

early that week. I want you to know, we’re going to want real numbers. You will have them by then, is that right, in terms of the 

signup? You’ll have them in the next couple of weeks, so—— 

Secretary SEBELIUS. That’s correct. We’ll have them by mid November. 

Mr. UPTON. We look forward to getting those done. We appreciate, we really do appreciate your time this morning to take questions. And I apologize to all the members who we had to shorten 

the time, but those things happen when we have this much interest. We look forward to continuing to get an update and look for 

your continued work. 

Mr. WAXMAN. Mr. Chairman, and—— 

Mr. UPTON. Yes. 

Mr. WAXMAN [continuing]. From our side of the aisle, we want 

to work with you. And I would hope on the other side of the aisle, 

they would take that same approach. Let’s do something constructive, not just negative attacks against a bill that I think is going 

to be a Godsend for millions of Americans. Thank you for being 

here. 

Secretary SEBELIUS. Thank you. 

Mr. UPTON. Thank you. The hearing is adjourned. 

[Whereupon, at 12:40 p.m., the committee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. MARSHA BLACKBURN

For four years, the president told Americans that if they like the health insurance 

plan they have, they can keep it. The facts today show this is not the case. Everyday, my office gets letters from constituents letting us know they have been thrown 

off their current plan. Adding insult to injury, the Web site to buy one of the presidents plans doesn’t even work. For those that are able to get through, many are 

finding their premiums going up, not down. The botched rollout of this law simply 

confirms everyone’s worst fears about government run health care. If they government can’t figure out how to run a Web site, how will they be able to figure out 

how to take care of us. Today we continue our investigation into these issues of behalf of all Americans whose lives are affected by this law. 

# # # 

PREPARED STATEMENT OF HON. GREG WALDEN

Thank you, Mr. Chairman and Ranking Member, for holding this very important 

hearing. The fact is that the rollout of healthcare.gov has been a failure at every 

turn. The federal exchange still isn’t working for millions of Americans who visit 

the Web site trying to enroll. In my home state of Oregon, our state run exchange, 

Cover Oregon, still hasn’t even gone online. A month after they were supposed to 

be up and running, they have yet to sell even one single private insurance policy 

through the exchange Web site. 

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But what’s most troubling is that Obamacare isn’t just a Web site. In fact, the 

Web site is supposed to be the easy part. And now, we’re seeing more and more 

cracks in the foundation. This administration promised, in unequivocal terms that, 

‘‘If you like your doctor, you will be able to keep your doctor, period. If you like your 

health care plan, you’ll be able to keep your health care plan, period. No one will 

take it away, no matter what.’’ 

Despite White House rhetoric, millions of Americans are receiving cancellation notices in the mail. In Oregon alone, 150,000 people are losing their insurance plans. 

Health insurance they liked and that their President promised they could keep. I’ve 

heard from dozens of people living in Oregon’s Second Congressional District who 

are now struggling to make ends meet because their premiums are doubling, their 

deductibles are going up, and they’re getting worse coverage for it. It’s just another 

broken promise from the administration. 

And the problems don’t end there. What’s next? What new hurdle is about to be 

thrown in the way of the American people? For one, the Affordable Care Act required the Centers for Medicare and Medicaid Services (CMS) to rebase home 

health payments. The stated goal was to align payment with costs. The law gave 

CMS the authority to rebase the payments by as much as 3.5 percent per year from 

2014 through 2017. Rather than implement these cuts gradually seeing the effect 

as they go—or on a year by year basis, CMS regulations recommend payments be 

rebased by the full 3.5 percent every year for all four years. Taken as a whole, these 

cuts result in a 14 percent cut to Medicare home health payments. 

These policies might seem like something done in a vacuum to bureaucrats in 

D.C. But they have significant and lasting effects for people living in the real world. 

My home District is 70,000 square miles. We stretch across a distance roughly as 

far as Cincinnati to Baltimore. We’re mountainous, we’re rural, and some counties 

are without a physician, let alone a hospital. For the Oregonians I represent, access 

to home health providers is crucial. 

My family and I have seen first-hand the powerful impact that compassionate and 

highly skilled home health nurses provide. We’ve used it with our own loved ones 

and know how meaningful it is to be able to recover at home, in familiar surroundings, with your family by your side. It would be devastating for the people in 

Oregon’s Second District—and throughout rural America if these services were no 

longer available to them. 

Unfortunately, the Affordable Care Act could limit access to home health. CMS’s 

cuts to home health would result in negative Medicare margins for home health care 

providers in nearly every single state. Oregon’s margins would fall to negative 26.5 

percent. 

I was one of 142 members of the House who sent a letter to Administrator 

Tavenner expressing our concerns about this very issue back in September. To date, 

we haven’t heard back. But this issue is not one that is going to go away. As we 

move from one crisis point with the flawed implementation of the government takeover of health care to the next, this issue will, inevitably, come to the forefront. Too 

many of our nation’s seniors and rural residents depend on the availability, reliability, and affordability of home health care services. 

Thank you again Mr. Chairman and Ranking Member. I look forward to hearing 

what the administration plans to do to protect Americans from a fatally flawed law 

that reduces access to health care, increases costs, cuts Medicare, and puts a barrier 

of government red tape between patients and their doctors. 

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