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82–187 2013

THE CENTER FOR CONSUMER INFORMATION AND 

INSURANCE OVERSIGHT AND THE IMPLEMENTATION OF THE PATIENT PROTECTION AND 

AFFORDABLE CARE ACT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 24, 2013 

Serial No. 113–34 

( 

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 

EDWARD J. MARKEY, Massachusetts 

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 

(III) 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

TIM MURPHY, Pennsylvania 

Chairman 

MICHAEL C. BURGESS, Texas 

Vice Chairman 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

GREGG HARPER, Mississippi 

PETE OLSON, Texas 

CORY GARDNER, Colorado 

H. MORGAN GRIFFITH, Virginia 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

DIANA DEGETTE, Colorado 

Ranking Member 

BRUCE L. BRALEY, Iowa 

BEN RAY LUJAN, New Mexico 

EDWARD J. MARKEY, Massachusetts 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

KATHY CASTOR, Florida 

PETER WELCH, Vermont 

PAUL TONKO, New York 

GENE GREEN, Texas 

JOHN D. DINGELL, Michigan 

HENRY A. WAXMAN, California (ex officio) 

(V) 

C O N T E N T S 

Page 

Hon. Tim Murphy, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 1 

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

Hon. Diana DeGette, a Representative in Congress from the state of Colorado, 

opening statement ................................................................................................ 4 

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

prepared statement .............................................................................................. 6 

Prepared statement .......................................................................................... 7 

Hon. Henry A. Waxman, a Representative in Congress from the state of 

California, opening statement ............................................................................. 8 

WITNESSES

Gary Cohen, Director, Center for Consumer Information and Insurance Oversight ....................................................................................................................... 10

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

Answers to submitted questions ...................................................................... 61 

(1) 

THE CENTER FOR CONSUMER INFORMATION 

AND INSURANCE OVERSIGHT AND THE 

IMPLEMENTATION OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT 

WEDNESDAY, APRIL 24, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Tim Murphy 

(chairman of the subcommittee) presiding. 

Members present: Representatives Murphy, Burgess, Blackburn, 

Scalise, Harper, Olson, Gardner, Griffith, Johnson, Long, Ellmers, 

Upton (ex officio), DeGette, Braley, Lujan, Schakowsky, Butterfield, 

Castor, Tonko, Green, and Waxman (ex officio). 

Staff present: Mike Bloomquist, General Counsel; Sean Bonyun, 

Communications Director; Matt Bravo, Professional Staff Member; 

Karen Christian, Chief Counsel, Oversight; Andy Duberstein, Deputy Press Secretary; Brad Grantz, Policy Coordinator, O&I; Sydne 

Harwick, Legislative Clerk; Brittany Havens, Legislative Clerk; 

Sean Hayes, Counsel, O&I; Robert Horne, Professional Staff Member, Health; Alexa Marrero, Deputy Staff Director; Andrew 

Powaleny, Deputy Press Secretary; Brian Cohen, Democratic Staff 

Director, Oversight & Investigations, and Senior Policy Advisor; 

Karen Nelson, Democratic Deputy Committee Staff Director for 

Health; Stephen Salsbury, Democratic Special Assistant; and Matt 

Siegler, Democratic Counsel. 

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA 

Mr. MURPHY. Good morning. I convene this hearing of the Subcommittee on Oversight and Investigations to examine the Department of Health and Human Services’ management of the Affordable Care Act as we approach the January 1, 2014, deadline for full 

implementation. 

Mr. Gary Cohen, Deputy Administrator and Director of the Center for Consumer Information and Insurance Oversight, or CCIIO— 

by the way, it is known as CCIIO—is here to testify on behalf of 

HHS. Good morning. 

CCIIO was responsible for implementing the Patient Protection 

and Affordable Care Act’s many changes to the private health inVerDate Nov 24 2008 15:05 Sep 27, 2013 Jkt 037690 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-34 CHRIS
2 

surance market. Mr. Cohen and those at CCIIO certainly have 

their work cut out for them. At the beginning of the next year, full 

implementation of the PPACA will finally take place. And on that 

day, Americans have been promised the ability to purchase health 

insurance plans through new exchanges. The American people have 

been promised good coverage that is also affordable. 

We all remember the many promises that were made in the rush 

to pass the bill by any means necessary, that if you liked your coverage, you could keep it. Yet, we see many stories about impending 

doctor shortages and companies faced with tough decisions on 

whether to continue providing coverage. The decision of whether to 

provide that coverage is related to another promise that will surely 

be broken—that the law will lower costs. One large health insurance company’s CEO has already noted that Americans should get 

ready for premium rate shock. A school district in my district has 

said that they are going to see their premiums go up by something 

like $1 million in cost. 

Yet, there is yet another promise that we are hearing more recently from the law’s defenders: that the health insurance exchange 

will be ready for enrollment on October 1 and full implementation 

on January 1. Since only 18 States elected to establish their own 

exchanges, CCIIO is currently preparing the federally facilitated 

exchanges that will cover 26 additional States, along with the partnership exchanges CCIIO will operate with 7 other States. I hope 

we will be able to hear today about the progress being made in 

building those exchanges. 

Recent news reports have indicated—and even President 

Obama’s budget has confirmed—that the Administration is seeking 

additional funding to operate the exchanges. This is troubling considering that a substantial amount of funding has already been expended building those exchanges and they have yet to even begin. 

Today, I expect the witnesses to provide a full accounting of 

where CCIIO stands with regard to building the federally operated 

exchanges and those that will be run in partnership with States, 

including where CCIIO is obtaining funding for these programs 

and will they ask for more. 

Since passage of PPACA this committee has had many questions 

about the funding being used to implement the law. Most recently, 

we have heard many stories about the healthcare law’s Prevention 

and Public Health Fund. Most notably, that money from this fund 

is being utilized to hire thousands of healthcare navigators who 

will assist the public in signing up for Obamacare. 

Considering that we have also heard that funding from the Prevention Fund is being used on many different projects, we are concerned that it is being rated as an ever-ready piggy bank, or slush 

fund, to throw money at and hide the many problems inherent with 

implementing Obamacare. I hope that Mr. Cohen will be able to 

address the potential overutilization that has become so common 

that the Washington Post has dubbed it ‘‘the incredible shrinking 

Prevention Fund.’’ 

We have many concerns about those navigators, including how 

they will be trained and supervised. CCIIO is actively soliciting 

navigators from the community and consumer groups, yet those 

that receive any compensation from insurance companies are proVerDate Nov 24 2008 15:05 Sep 27, 2013 Jkt 037690 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-34 CHRIS
3 

hibited from becoming navigators. We recognize the need to have 

impartial navigators, but the realities of the insurance market also 

indicate that those who have been selling insurance for many years 

may have some expertise of value. 

Furthermore, we have questions about what standards will be 

put into place to ensure that we are not simply paying groups chosen to be navigators to pad their membership rolls or funding 

drives. In other words, someone with experience and training is not 

qualified and is excluded, whereas someone without any experience 

stands in front of the line for hiring. 

But this only scratches the surface of many activities and responsibilities of CCIIO. Today, I hope we will also be able to discuss 

CCIIO’s ability to determine whether health insurance premiums’ 

increases are legitimate. As I mentioned before, one large health 

insurance company has already warned of rate shock, and this is 

an obvious concern for many Americans. 

Obamacare has consistently promised lower costs and now we all 

hear from supporters of the law that there are tax credits and subsidies available, but a recent study showed that only 8 percent of 

the public will qualify for those subsidies. I hope we can hear from 

the witnesses today what the other 92 percent of us can expect. 

Thank you again, Mr. Cohen, for joining us today. And now I 

would like to recognize the ranking member, Ms. DeGette, for an 

opening statement. 

[The prepared statement of Mr. Murphy follows:] 

PREPARED STATEMENT OF HON. TIM MURPHY

I convene this hearing of the Subcommittee on Oversight and Investigations to examine the Department of Health and Human Services’ management of the Affordable Care Act as we approach the January 1, 2014, deadline for full implementation. 

Mr. Gary Cohen, Deputy Administrator and Director of the Center for Consumer Information and Insurance Oversight, or CCIIO, is here to testify on behalf of HHS. 

CCIIO is responsible for implementing the Patient Protection and Affordable Care 

Act’s many changes to the private health insurance market. 

Mr. Cohen and those at CCIIO certainly have their work cut out for them: At the 

beginning of next year full implementation of the PPACA will finally take place. On 

that day Americans have been promised the ability to purchase health insurance 

plans through new exchanges. The American people have been promised good coverage that is also affordable. 

We all remember the many promises that were made in the rush to pass the 

PPACA by any means necessary. That if you liked your coverage you could keep it. 

Yet, we see many stories about impending doctor shortages, and companies faced 

with the tough decision of whether to continue providing coverage. The decision on 

whether to provide that coverage is related to another promise that will surely be 

broken: that the law will lower costs. One large health insurance company’s CEO 

has already noted that Americans should get ready for premium ‘‘rate shock.’’ 

There is yet another promise that we are hearing more recently from the law’s 

defenders: that the health insurance exchanges will be ready for enrollment on October 1 and full implementation on January 1. Since only 18 states elected to establish their own exchanges, CCIIO is currently preparing the federally facilitated exchanges that will cover the other 26 states, along with the partnership exchanges 

CCIIO will operate with seven other states. I hope we will be able to hear today 

about the progress being made in building those exchanges. 

Recently news reports have indicated-and even President Obama’s budget has 

confirmed-that the administration is seeking additional funding to operate the exchanges. This is troubling considering that a substantial amount of funding has already been expended building those exchanges and they have yet to even to begin. 

Today I expect the witness to provide a full accounting of where CCIIO stands with 

regards to building the federally operated exchanges and those that will be run in 

4 

partnership with states, including where CCIIO is obtaining funding for these programs. 

Since passage of the PPACA this committee has had many questions about the 

funding being used to implement the law. Most recently we have heard many stories 

about the health care law’s Prevention and Public Health Fund—most notably that 

money from this fund is being utilized to hire thousands of health care ‘‘navigators’’ 

who will assist the public in signing up for Obamacare. Considering that we have 

also heard that funding from the Prevention fund is being used on many different 

projects, we are concerned that it is being raided as an ever-ready piggy bank to 

throw money at and hide the many problems inherent with implementing 

Obamacare. I hope that Mr. Cohen will be able to address the potential overutilization that has become so common the Washington Post has dubbed it ‘‘The incredible 

shrinking prevention fund.’’ 

We have many concerns about those Navigators, including how they will be 

trained and supervised. CCIIO is actively soliciting Navigators from community and 

consumer groups, yet those that receive any compensation from insurance companies are prohibited from becoming Navigators. We recognize the need to have impartial Navigators, but the realities of the insurance market also indicate that those 

who have been selling insurance for years may have some expertise. Furthermore, 

we have questions about what standards will be put in place to ensure that we are 

not simply paying groups chosen to be Navigators to pad their membership roles 

or funding drives. 

Yet, this only scratches the surface of the many activities and responsibilities of 

CCIIO. Today I hope we will also be able to discuss CCIIO’s ability to determine 

whether health insurance premium increases are legitimate. As I mentioned before, 

one large health insurer has already warned of ‘‘rate shock’’, and this is obviously 

a concern considering how supporters of Obamacare have consistently promised 

lower costs. Now, we all hear from supporters of the law that there are tax credits 

and subsidies available, but a recent study showed that only eight percent of the 

public will qualify for those subsidies. I hope we can hear from the witness today 

what the other 92 percent of us can expect. 

# # # 

OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO 

Ms. DEGETTE. Thank you very much, Mr. Chairman, and welcome to you, Mr. Cohen. 

Thanks to the Affordable Care Act, tens of millions of Americans 

who would otherwise be uninsured will receive health insurance for 

the first time. Americans will enjoy protections from the worst 

abuses of the insurance industry: rescissions, coverage denials, and 

annual and lifetime limits that cruelly cut off coverage for folks 

when it is needed most. These are all big changes and the time to 

implement them is coming up very, very fast. 

In just over 5 months, citizens will be able to sign up for health 

insurance through the federal or state marketplaces. Now, while 

signing up for coverage should be easy come October, implementation is going to be a complicated process over these next few 

months, not because of any flaws in the law, but because this is 

a new approach to providing coverage nationwide, and these things 

are always difficult to implement. 

And by the way, this CBO has predicted that overall consumer 

costs will go down once these marketplaces are implemented. There 

is no reason to think it won’t work. It worked great in Massachusetts under Mitt Romney. But we have to educate millions of people about the marketplaces in advance. CCIIO and the States have 

set up complex data systems to manage the process. 

5 

So, Mr. Chairman, I am super glad that you are doing this oversight, and I think we need to hear from Mr. Cohen, probably not 

just today, but as we go through the summer, about how CCIIO 

was doing, where there are challenges, and how the agency expects 

to address those challenges. I do think, though, that we should conduct this oversight with an appropriate perspective. 

I wish, for example, that when the naysayers raise the specter 

of a potential increase in premiums for some young healthy people, 

particularly young men, that they can also put this into perspective 

by understanding that the tax credits and caps on out-of-pocket 

costs will sharply lower overall costs for these individuals and millions of other Americans. 

And I wish that folks raising the specter of high premiums for 

young men in particular could add to that perspective the millions 

of women of all ages who will pay lower premiums and who won’t 

be discriminated against by insurers simply because they are female or the millions of Americans who will receive dramatically 

better and more dependable insurance coverage. 

When people complain about the fact that the Obama Administration is, heaven forbid, spending money to make sure that citizens understand the new law, I wish they would take the perspective to remember that the Bush Administration did the same thing, 

even hiring blimps to spread the word about Medicare and spending $300 million on a public relations campaign for Medicare Part 

D. 

And Mr. Chairman, I will say, I voted against the Medicare Part 

D Bill because it didn’t allow negotiation by the Secretary of HHS 

to lower prescription drug costs. But even though I voted against 

it, I had town hall meetings all throughout my district and I had 

internet training to help my constituents figure out how to sign up 

for it. And I think we need to have that kind of bipartisan cooperation as we implement these exchanges at the national and state 

level. And so I hope that we take that appropriate perspective and 

I hope that we can develop that perspective as the Affordable Care 

Act is implemented over the coming months. 

In January 2006, when we implemented the Medicare Part D 

program, Time magazine described a ‘‘initial nightmares of implementation,’’ noting snafus that have resulted in many low-income 

seniors being turned away by the compounding new prescription 

drug program. In Vermont, the implementation of the law was described as a ‘‘public health emergency.’’ Now, those problems are almost forgotten until today. Ultimately, the Part D program got off 

the ground and even those who initially voted against the bill, like 

me, took a stake in it and worked to fix the problems. The biggest 

problem, the donut hole, was eliminated by the Affordable Care 

Act. 

So I think, Mr. Chairman, as usual, there is a lesson to be 

learned in this history. I hope that the implementation of the Affordable Care Act goes smoothly. I certainly hope it goes more 

smoothly than the implementation of the Medicare Part D. But I 

am not naı ̈ve enough, and no one should be, to think it will be completely wrinkle-free. What I do hope is, as problems arise, we can 

work together to identify and fix them instead of using them to 

simply score political points, because we all have a stake in proVerDate Nov 24 2008 15:05 Sep 27, 2013 Jkt 037690 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-34 CHRIS
6 

viding quality, affordable health insurance coverage for all Americans. 

I hope this hearing and our future work on this subject represents an effort by everybody to truly work together to implement 

this law. I thank you for having the hearing and I yield back. 

Mr. MURPHY. The gentlelady yields back. I now recognize the 

chairman of the full committee for 5 minutes, Mr. Upton of Michigan. 

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

Mr. UPTON. Thank you, Mr. Chairman. 

Today’s hearing continues this committee’s rigorous oversight of 

the Obama Administration’s implementation of the healthcare law. 

Since the law’s passage, we have had CCIIO before this subcommittee three times, and during previous hearings, we uncovered that the promises made about the Affordable Care Act didn’t 

quite match up with reality. 

In 2011, we learned that CCIIO was granting waivers from the 

law to individuals and companies that would face large premium 

increases or the loss of coverage because of Obamacare. We also 

found that, through its implementation of the Early Retiree Reinsurance Plan, CCIIO had handed out millions of dollars to certain 

corporations, unions, and state governments. Even more troubling 

was the fact that the Early Retiree Plan burned through the $5 billion allocated to it so quickly that it actually stopped accepting applications in May of 2011, more than 2 years before the program 

was supposed to and. Yet, this is the same amount of money that 

was given to the Preexisting Condition Insurance Plan. 

This bill has been the law of the land now for over some 3 years 

and we are just 8 months away from the full implementation, and 

by all accounts, the Administration still doesn’t have its act together. It doesn’t bode well when just last week a top supporter of 

the President and leading Senate architect of the law publicly 

warned the HHS Secretary that he sees a train wreck coming. Will 

the exchanges be ready? How will families be able to prepare for 

it? Will they be able to rely on the promises that if you like your 

coverage you can keep it? Will young adults be able to afford higher costs? 

The alarm bells over how Obamacare will unfold are getting 

louder by the day. Costs are going up, insurers are warning about 

premium increases, and small businesses are indeed struggling 

with the choices about whether they can provide employees with 

coverage. Patients need certainty. Employers need certainty. And I 

hope that HHS and CCIIO will always show us what they are 

doing to implement the law by the deadline. 

Finally, last week, this committee marked up a bill that targets 

the Prevention and Public Health Fund to give that money to those 

who need it most: Americans with preexisting conditions who were 

promised coverage by supporters of Obamacare, only to find that 

the program was closed to new applicants a few weeks ago. The 

Preexisting Condition Insurance Plan has been an unfortunate example of the problems of Obamacare. The promises don’t match reality, and I think that it is unacceptable that this is going to hapVerDate Nov 24 2008 15:05 Sep 27, 2013 Jkt 037690 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-34 CHRIS
7 

pen, and I look forward to the vote this afternoon to fix it. And I 

yield the balance of my time to Dr. Burgess. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Today’s hearing continues this committee’s rigorous oversight of the Obama administration’s implementation of the health care law. 

Since the law’s passage, we have had CCIIO this subcommittee three times. During previous hearings, we uncovered that the promises made about the Affordable 

Care Act didn’t match up with reality. 

In 2011, we learned that CCIIO was granting waivers from the law to individuals 

and companies that would face large premium increases, or the loss of coverage, because of Obamacare. 

We also found that, through its implementation of the Early Retiree Reinsurance 

Plan, CCIIO had handed out millions of dollars to certain corporations, unions, and 

state governments. Even more troubling was the fact that the Early Retiree plan 

burned through the $5 billion allocated to it so quickly that it stopped accepting applications in May 2011-more than 2 years before the program was supposed to end. 

Yet, this is the same amount of money that was given to the Pre-Existing Condition 

Insurance Plan. 

This bill has been the law of the land for over three years. We are just eight 

months from the full implementation and by all accounts the Obama administration 

does not have its act together. It does not bode well when, just last week, a top supporter of the president and leading Senate architect of the law publicly warned the 

HHS Secretary that he sees a ‘‘train wreck’’ coming. Will the exchanges be ready? 

How will families be able to prepare for this? Will they be able to rely on the promise that if you like your coverage you can keep it? Will young adults be able to afford higher costs? The alarm bells over how Obamacare will unfold are getting louder by the day: costs are going up, insurers are warning about premium increases, 

and small businesses are struggling with the choice about whether they can provide 

employees with coverage. 

Patients need certainty. Employers need certainty. And I hope HHS and CCIIO 

will always show us what they are doing to implement the law by the deadline. 

Finally, last week this committee marked up a bill that targets the Prevention 

and Public Health Fund to give that money to those who need it most: Americans 

with pre-existing conditions who were promised coverage by supporters of 

Obamacare, only to find that the program was closed to new applicants a few weeks 

ago. The Pre-Existing Condition Insurance Plan has been an unfortunate example 

of the problems of Obamacare: the promises don’t match reality. I think it’s unacceptable that this is going to happen, and I look forward to voting to fix it today. 

# # # 

Mr. BURGESS. I thank the gentleman for yielding. 

Mr. Cohen, thank you for coming back to our humble little subcommittee. 

Of course, my interest in CCIIO actually predated CCIIO when 

you were OCIIO, right after the Affordable Care Act passed and 

Mr. Angoff was good enough—I didn’t get a hearing on that. We 

were in the minority but Mr. Angoff was good enough to come to 

my office and talk to me at least. Mr. Larson has been in a couple 

of times, and you have been in before us at least one time before. 

But I have got to tell you, it has been very, very difficult to get information out of the Center for Consumer Information and Insurance Oversight, the basic budgetary information. 

Now, the ranking member says that we all ought to be in a posture of working together. It is difficult to do that when the most 

basic questions remain unanswered. So we got October 1, it is coming fast, 5 months away, and it seems like there are more and 

more questions about the readiness of your office, and indeed, the 

8 

Administration to get the answers that people want. I mean, you 

yourself went to AHIP, the American Health Insurance Plans conference this month and, ‘‘it is only prudent to not assume everything is going to work perfectly on day one.’’ I agree with that, but 

I think we at this committee need to hear from you, where are the 

concerns? Where do you see the lights blinking on the dashboard? 

What are you doing to prepare yourself and your agency and your 

center for that day in October that dawns and everyone goes online 

on the federal hub that may or may not exist to be able to sign up 

for these programs? Senator Rockefeller actually said it pretty well 

the other day. People are going to get a bad impression and it is 

going to stay with them. 

I think the references to Part D are reasonable to make. But remember, that they happened after 2 years of preparation. You have 

had 3 years of preparation. The 6 weeks of turmoil with Part D 

could likely turn into many more weeks and/or months, or even 

years of turmoil when this program is unfolded next year. 

So the application process is lengthy and complex. People are 

asked to estimate whether or not they think their employer will 

provide insurance next year, what their earnings are going to be 

next year. I mean, these are tough questions that need answers 

and we hope we get some today, and certainly, we will be adding 

additional questions in writing in the period that they are allowed. 

So I thank you for being here today and look forward to your answering questions. 

Mr. MURPHY. The gentleman’s time has expired. I now recognize 

the ranking member of the full committee, Mr. Waxman, for 5 minutes. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

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

The Republicans on this committee and our Health Subcommittee have held 5 hearings since December on the Affordable 

Care Act, and each of these 5 hearings repeats the themes that 

they expressed when they opposed the bill. And they certainly 

never expected this to become law. Republican members can’t accept the health reform is working and it is now the law of the land. 

They opposed it from the beginning, and until the day the President signed the bill into law, they insisted it had no chance of passing. Until the Supreme Court ruled it constitutional, the Republican said, oh, it is not constitutional. Until the day President 

Obama was reelected, they insisted the American people would 

vote him out of office so they could overturn this law. None of that 

happened. 

And now, they call this an oversight hearing because they predict 

all these terrible things to happen. They are not predicting; they 

are wishing bad things to happen. This is not a hearing to be constructive; it is a hearing to attack the law and hope that it doesn’t 

work. Well, the Affordable Care Act will go fully into effect and 

Americans will never again have to worry about their ability to get 

affordable, high-quality health insurance. So the Republicans are 

9 

saying, well, the implementation is not going to go smoothly. Well, 

implementation of any new big program has its kinks. 

But the Affordable Care Act is proceeding on schedule and it has 

done a remarkable amount of good for people. Over 3 million young 

adults now have health insurance. Over 100 million Americans 

have received free preventive health benefits. More than 6 million 

seniors have saved $6.1 billion in the Medicare Part D drug program. And beginning next year, tens of millions of Americans, who 

would otherwise be without health coverage, will have dependable, 

quality health insurance. 

My Republican colleagues said people want certainty. Well, the 

certainty they would have if there was no Affordable Care Act is 

that millions of people would be discriminated against because they 

had preexisting health conditions, because they offer a risk to the 

insurance companies. They have to pay more money for their care. 

They would have the certainty of knowing that insurance companies would do everything they could to keep them from getting coverage if it is going to cost the insurance companies money. And 

that is what we wanted to change. 

Republicans still oppose the Affordable Care Act. They are not 

taking a constructive approach. They are not saying, what can we 

do to make this law and its implementation work more smoothly? 

They are saying, what can we blame people who supported this law 

about the problems that may come up? 

While I am pleased that we have at this hearing today again 

Gary Cohen, who was here in December answering many of the 

same questions I am sure he will be addressed today. The Center 

for Consumer Information and Insurance Oversight has made huge 

progress in implementing the Affordable Care Act. Success doesn’t 

change the opinions of my colleagues on the Republican side of the 

aisle. It makes them even more determined to look for something 

they can criticize. And today on the House Floor, we are going to 

vote on a bill that they produced, because under the Affordable 

Care Act, we had a high-risk pool for people with preexisting conditions who are waiting until January to be able to buy health insurance without being discriminated against, without being charged 

more money because of those preexisting conditions. 

We have spent $5 billion on a program to precede that to help 

people with preexisting conditions to be in a high-risk pool and we 

ran out of money. Republicans don’t mind that we run out of 

money for everything that the government does because they supported the idea of sequestration happening. And we are running 

out of money in all sorts of places where the government has an 

obligation. But we have run out of money for that preexisting medical problems pool until the last few months of this year. 

So the Republicans are suddenly concerned about people with 

preexisting conditions decided to make sure that fund has enough 

money to go on for the rest of this year. But they funded by taking 

away the Public Health Prevention Funds until 2016. It makes no 

sense whatsoever. We are happy to support the continuation of that 

preexisting pool to the end of this year, but certainly, we could 

have found a better funding source and the Republicans have denied the opportunity for any other source to be offered on the 

House Floor today. 

10 

You have to question how sincere they are about wanting to help 

people with preexisting conditions, how sincere they are for wanting to see a smooth implementation of the bill now that it is law. 

They want this bill to fail. They want to go back to the time when 

millions of people had no chance for insurance. That is the certainty they want to offer and it is a certainty that led us to have 

the Affordable Care Act passed into law. 

I congratulate Mr. Cohen and his agency for doing all that they 

are doing. It is an important service to make sure the law succeeds. 

And that is what we should all want to see happen now that it is 

the law and they lost the last election and their last chance to repeal it. 

Mr. MURPHY. The gentleman yields back. All right. 

For our witness, Mr. Cohen, you are aware that this committee 

is holding an investigative hearing, and when doing so, has the 

practice of taking testimony under oath. Do you have any objections to testifying under oath? 

Mr. COHEN. No, sir. 

Mr. MURPHY. The chair then advises you that under the rules of 

the House and the rules of the committee you are entitled to be advised by counsel. Do you desired to be advised by counsel during 

your testimony today? 

Mr. COHEN. No, sir. 

Mr. MURPHY. In that case, if you would please rise and raise 

your right hand; I will swear you in. 

[Witness sworn.] 

Mr. MURPHY. Thank you. You are now under oath and subject to 

the penalties set forth in Title XVIII, Section 1001, of the United 

States Code. You may now give a 5-minute summary of your written statement, Mr. Cohen. 

TESTIMONY OF GARY COHEN, DIRECTOR, CENTER FOR 

CONSUMER INFORMATION AND INSURANCE OVERSIGHT 

Mr. COHEN. Thank you and good morning, Chairman Murphy, 

Ranking Member DeGette, and members of the committee. I appreciate the opportunity to tell you about CCIIO’s accomplishments 

over the past year. A lot has happened since your last hearing on 

implementation of the Affordable Care Act, and I would like to describe to you some of the progress we have made and explain how 

I know that we are on track for open enrollment this October. 

We achieved a major milestone earlier this month when we 

opened the window for issuers to begin submitting plans to be sold 

through the federally facilitated marketplace. We said that would 

happen on April 1 and it did, right on schedule. We have had a 

very encouraging response and we expect to see robust competition 

for the business of millions of Americans who will be shopping for 

health insurance in this new marketplace. States that are operating their own marketplaces had begun accepting submissions 

from issuers as well. 

It is also important to understand the ways in which we have 

continued to improve our process since the window opened on April 

1. We have gotten feedback from States and issuers as they have 

accessed the system, and we have addressed whatever issues have 

come up. We have a helpdesk that responds by email to anyone 

11 

with questions about how to submit information to us. We hold regular phone calls and we regularly publish answers to frequently 

asked questions. At last count, there were over 200 answers to frequently asked questions in connection with this process that have 

been provided to issuers and States. I am extremely proud of the 

work that the team is doing to make sure that we will have products on the shelves by October 1. 

Another key element of this process is the federal data hub. As 

you know, consumers will be providing certain information in order 

to determine whether they are eligible for tax credits to help pay 

their premiums for the commercial health insurance that will be offered in the marketplaces. This data will be transmitted to the data 

hub in real time to be checked against information that is available 

regarding income, citizenship, incarceration, and so forth. The hub 

will not store any individual’s data. It is a conduit from the agencies where this data is kept such as the IRS, Social Security, and 

Department of Homeland Security. This will enable real-time electronic verification of information needed to determine eligibility 

and will reduce, to the greatest extent possible, the need for people 

to submit paper documentation. 

States that are operating their own marketplaces will also have 

access to the data hub. We have recently begun testing the connection between state systems and the hub and have succeeded in 

transferring data back and forth. This is another major milestone 

that has been achieved on schedule. Testing will continue and the 

hub will be fully operational in time for open enrollment this fall. 

Another key element is the single streamlined application the 

consumers will use in order to find out whether they are eligible 

for Medicaid or CHIP on the one hand or tax credits to purchase 

commercial insurance plans through the marketplace on the other. 

We have gone through an extensive consumer testing process since 

the draft of the application was published and we have continued 

to work to make it as simple as possible. The results have been encouraging. Highlighted messaging will help answer questions, alleviate concerns, and direct consumers to where they can get additional help. We found that most applicants will need to complete 

less than 1⁄3 of the total number of items included in the entire 

physical form. 

Now, no matter how simple and straightforward we are able to 

make the application process, we know that buying health insurance is not like buying a book on Amazon or shoes from Zappos. 

Many of the people coming to the marketplace will never have had 

commercial health insurance before and will need help in choosing 

the plan that is right for them and their family. 

During the past year, we have been putting in place a variety of 

ways for people to get that help. On healthcare.gov, people can 

learn about the Affordable Care Act, review health insurance basics 

in order to understand what their coverage costs, and interact with 

a checklist on how to prepare for shopping for coverage in the new 

marketplace. There are several short videos explaining how shopping for Qualified Health Plans in the federally facilitated marketplace will work. 

In addition, healthcare.gov will have a chat capability so that 

people can get their questions answered quickly as they use the 

12 

site. The call center will begin operating in June, and during open 

enrollment, it will be answering questions 24 hours a day, 7 days 

a week. 

On April 9, we announced a funding opportunity for recipients to 

operate as navigators for the federally facilitated and partnership 

marketplaces. Navigators will provide fair, accurate, and impartial 

information to help consumers use the marketplace and select a 

Qualified Health Plan. Meanwhile, licensed agents and brokers, 

compensated by the issuer and regulated under state law, may enroll consumers in coverage through the marketplace in every State. 

As you can see, CMS has been hard at work over the past year 

improving the health insurance market for all Americans. This 

work and these achievements make me confident and excited for 

the future health insurance market. Soon, consumers will have better access to health coverage that best fits their needs. 

So I thank you for holding this hearing and I would be happy to 

answer your questions. 

[The prepared statement of Mr. Cohen follows:] 

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Mr. MURPHY. I thank you very much, Mr. Cohen. Let me recognize myself for 5 minutes here. 

Regarding the navigators, I believe the law says that if they have 

received compensation from an insurance company, they are not eligible to be employed as a navigator. Is that correct? 

Mr. COHEN. That is what we have said in our regulations. If they 

have received compensation from an insurance company in connection with enrolling people in health coverage, they are not eligible 

to be navigators. 

Mr. MURPHY. So let’s say Mary Smith is an insurance agent in 

Pennsylvania, 20 years in the field. Now, she has received a license 

to sell insurance in the State of Pennsylvania. In order to do that, 

she had to have 24 credit hours of training. Then, she takes a test. 

She passed the test, must continue to take 24 credit hours of training every 2 years to maintain her license. Let’s say she has sold 

a wide range of insurance for multiple companies for profit and 

nonprofits to perhaps thousands of individuals. She would like to 

apply for a job as a navigator. There is also John Doe who is applying for a job as a navigator with a high school degree and zero experience selling insurance. Who is eligible to be hired? 

Mr. COHEN. So I think it is important to understand that there 

really is a difference between what a navigator does and what an 

insurance agent does. 

Mr. MURPHY. I understand. 

Mr. COHEN. Mary Smith—— 

Mr. MURPHY. But I just want—— 

Mr. COHEN. Mary Smith—— 

Mr. MURPHY [continuing]. To make sure I understand. Mary 

Smith is not qualified? Or she is—— 

Mr. COHEN. Mary Smith is qualified to offer insurance in the 

marketplace as—— 

Mr. MURPHY. But not as a navigator. She is prohibited—— 

Mr. COHEN. She is not eligible for a navigator—— 

Mr. MURPHY. But she is discriminated from being a navigator because she has experience in the field that is paid. Am I correct? 

Mr. COHEN. But she is welcome to help clients obtain coverage 

in the marketplace as an agent. 

Mr. MURPHY. I understand. But someone who has actually done 

this for a living is prohibited from being hired to advise people to 

buy insurance under the exchanges or to be advised on how to buy 

insurance in the States. Am I correct? 

Mr. COHEN. Well, she could choose no longer to be selling insurance—— 

Mr. MURPHY. But if—— 

Mr. COHEN [continuing]. Like half of issuers, and be a navigator. 

That is her choice. 

Mr. MURPHY. So as long as she is no longer taking any money 

from insurance companies—— 

Mr. COHEN. She is eligible. Correct. 

Mr. MURPHY. Now, let me ask you this because some of this still 

I am still puzzled about. In terms of the time frame here—because 

a lot of employers are saying to me I have got to make decisions 

now. They are not going to start budgeting, or having budget decisions on December 31st but want to make decisions now. How soon 

25 

will the information be available to them in terms of what is going 

to be in these exchanges? Do you have some date of that? 

Mr. COHEN. Yes. The plans are being submitted now. They will 

be reviewed both by us and by the state insurance regulators that 

have to approve the plans. And then issuers will have an opportunity to make any changes—— 

Mr. MURPHY. Just give a date in terms of when those will be 

available. 

Mr. COHEN. September. 

Mr. MURPHY. In September. Now, the navigators are going to 

have complete final training in August, so that seems a bit odd according to your calendar. They can’t really get final training before 

they see the exchanges, so I hope you would adjust that date. 

Mr. COHEN. Well, the primary function of the navigators in the 

early period will be outreach and enrollment. And then once open 

enrollment starts in October, then that is when they will be helping people—— 

Mr. MURPHY. So these things will be available to look at in September, but then sales of these plans will start in October, a month 

later? 

Mr. COHEN. Correct, for coverage in January. 

Mr. MURPHY. And you feel you will be ready with everybody fully 

trained and people fully informed of what is available in that 

month? 

Mr. COHEN. Yes. 

Mr. MURPHY. All right. Now, I want to ask you also another 

thing with regard to navigators because there are some concerns I 

have heard that people who—are people who are involved in some 

community groups or political groups, they can apply for jobs as 

navigators? 

Mr. COHEN. So the requirements for applying for a grant are set 

forth in the funding opportunity, not to mention—— 

Mr. MURPHY. But I am just wondering if there are prohibitions 

in terms of involvement in other activities that they would not 

be—— 

Mr. COHEN. We are hoping that groups that have a demonstrated 

history of serving their community and serving the people in their 

community that we are trying to reach will apply for navigator 

grants. 

Mr. MURPHY. So ACORN members could? 

Mr. COHEN. I can’t speak to any particular group—— 

Mr. MURPHY. Well, but they wouldn’t prohibit them, right? 

Mr. COHEN. They can apply—— 

Mr. MURPHY. OK. 

Mr. COHEN [continuing]. And their application will be reviewed 

and we will be making decisions—— 

Mr. MURPHY. Well, given that they are community groups, I am 

concerned about data confidentiality and HIPAA laws, et cetera, 

certainly, if they are discussing their own health with navigators. 

What assurance do you have in place and what penalties will there 

be to make sure they do not keep that data, it is only, for example, 

on government computer systems, they cannot use it for any other 

purpose? Could you address that issue? 

26 

Mr. COHEN. Certainly, thank you. So navigators will be trained 

on the importance of privacy and security and will be subject to all 

of the laws and regulations that protect people—— 

Mr. MURPHY. Are there other specific criminal penalties if they 

use this data for their own purpose? 

Mr. COHEN. There are. 

Mr. MURPHY. And are they allowed, as community groups, to accept donations from insurance companies and other private groups? 

Mr. COHEN. The prohibition is against receiving compensation for 

enrolling people in coverage. 

Mr. MURPHY. I understand. But if they get donations in a general sense, are they permitted to do that? 

Mr. COHEN. I think—— 

Mr. MURPHY. You are not sure? 

Mr. COHEN [continuing]. I would need to understand better what 

the—what type of donation and what the purpose of it would 

be—— 

Mr. MURPHY. Could you look into that, please, and get back to 

us? 

Mr. COHEN. I would be happy to. 

Mr. MURPHY. I understand your concern. That is an important 

concern for all of us on those things, too. 

I also have a final question with regard to do you think you have 

enough funding at this point, not future budgetary things, to take 

care of your enrollment of people in these exchanges? 

Mr. COHEN. For fiscal year 2013 we have enough funding and we 

have—the President’s budget requests additional funding for fiscal 

year 2014. 

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

I will now recognize Ms. DeGette for 5 minutes. 

Ms. DEGETTE. Thank you very much, Mr. Chairman. 

Mr. Cohen, the chairman talked to you about this hypothetical 

person, Mary Smith, who is a registered insurance broker or something. And she can’t be a navigator while she is selling insurance. 

That is because it would be a conflict of interest, correct? 

Mr. COHEN. That is right. 

Ms. DEGETTE. But if she, with all her qualifications, decided not 

to represent any insurance companies and not to do that, she could 

become a navigator, correct? 

Mr. COHEN. She could. 

Mr. DEGETTE. Because then she wouldn’t have a conflict of interest, right? 

Mr. COHEN. That is right. 

Ms. DEGETTE. Now, what about these community groups? On the 

community groups, as I recall when we did the Medicare Part D 

prescription drug benefit, we also had a number of community 

groups helping sign seniors up for that. Is that right? 

Mr. COHEN. Correct. 

Ms. DEGETTE. And that was kind of a similar situation because 

it involved asking citizens—in this case, senior citizens—to sort out 

a number of plans and then apply online, right? 

Mr. COHEN. That is true. 

27 

Ms. DEGETTE. And so really you did have to have trained individuals, whether from community groups or other places, helping 

folks do this, right? 

Mr. COHEN. You did. 

Ms. DEGETTE. OK. Now, I am glad that you have a lot of confidence that on October 1, 2013, consumers are going to be able to 

sign up for these exchanges. I want to ask you about the States, 

including my State of Colorado, which are going to either run their 

own marketplaces or their marketplace in partnership with the 

Federal Government. There are 24 of them. What is your view 

about the state marketplaces, how are they coming along? 

Mr. COHEN. So I am very encouraged by the progress the States 

have been making. We work with them on literally, you know, a 

daily and weekly basis. We are in close contact with the people at 

the exchanges and also at the state Medicaid agencies because that 

is a very important part of this as well. I think it is fair to say that 

there are some States that started earlier in the process and some 

States that started a little bit later. So we are looking very carefully at the progress that each of the States are making and our 

commitment is that there will be a functioning marketplace in 

every State on October 1. So we have been working with the States 

to make sure that we provide the support that is needed to make 

that happen. 

Ms. DEGETTE. And what about the States that got a late start? 

Are you giving them extra effort to help them get their exchanges 

up and going? 

Mr. COHEN. That is correct. 

Ms. DEGETTE. OK. Now, can you give us a sense—the Chairman 

and I have talked a lot about the importance of doing this oversight—what are the milestones and benchmarks we should be looking at to measure CCIIO’s progress over the next few months? 

Mr. COHEN. So I think—and we provided you, I think, with a 

timeline for what is supposed to be happening and what will be 

happening over the next several months. I think the keys are that 

we are on schedule and on track with the IT build that were doing, 

which is clearly an important part of this. And as I mentioned, we 

have achieved a big milestone earlier this month with the QHP 

Submission process. The federal data hub is going to be moving— 

is in testing now but will be continuing testing through the summer. And so I think it is just important to take a look at each of 

the steps along the path and make sure that we are on track. But 

I am very optimistic and confident of where we are at this point. 

Ms. DEGETTE. Now, Mr. Cohen, a couple of months ago at a conference you said, ‘‘it is only prudent to not assume everything is 

going to work perfectly on day one and to make sure that we have 

got plans in place to address things that may happen.’’ You also 

said that as we get closer to October 1, ‘‘we will be in a position 

to better know which contingency plans we actually have to implement.’’ That seems a little in contrast to what you are saying this 

morning. Can you explain what that comment meant and if that 

means that HHS is not going to be ready to implement the law? 

Mr. COHEN. I would be happy to, and I think, you know, sometimes when things get reported, the context gets a little lost. 

So—— 

28 

Ms. DEGETTE. I have never noticed that before. 

Mr. COHEN. I was speaking specifically not about whether we 

would be ready and in operation October 1; I was speaking really, 

Congresswoman, to some of the comments that you made in your 

opening statement, that we know that when big programs begin, 

sometimes things aren’t perfect on day one and you have to make 

improvements. And it is only prudent to be prepared for the things 

that might happen that you could do better. And we are, like all 

federal agencies, subject to guidelines that are published by the 

National Institute of Standards and Technology for when you do an 

IT project. And so you have to be prepared with mitigation strategies in case something doesn’t work exactly the way you expected. 

But we will be up and operational October 1. I don’t have any question about that. 

Ms. DEGETTE. Could you tell us about how you are developing 

those mitigation strategies and are those coming along? 

Mr. COHEN. Yes. So it is really a constant process of you—as you 

do the build—and I am not the expert on IT—but as you do the 

build, you do testing, you see how things are going, you come up 

with strategies for how you are going to deal with—for example, 

suppose we get a lot more applications that come in on day one 

than we planned for. So you have to have redundancy; you have 

to be prepared for that eventuality. 

Ms. DEGETTE. Right. 

Mr. COHEN. So those are the types of things that we are doing. 

Ms. DEGETTE. Thank you. 

Mr. MURPHY. OK. The gentlelady’s time has expired. 

I now recognize the gentleman from Texas for 5 minutes, Dr. 

Burgess. 

Mr. BURGESS. Thank you, Mr. Chairman. 

So Mr. Cohen, let’s go back to AHIP quote about which contingency plans you actually have to implement now. 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. 

Mr. BURGESS. Well, the Committee would benefit, actually, from 

seeing some of those contingencies. Let me just ask you this: would 

it be fair to say that closing the enrollment on the Pre-Existing 

Condition Insurance Plan, was that a contingency? 

Mr. COHEN. Closing enrollment on the Pre-Existing Condition 

Plan was something that we did because it was the prudent thing 

to do in light of the fact that we had a certain amount of money, 

$5 billion, to spend on that program—— 

Mr. BURGESS. So that was a contingency plan to close enrollment 

in PCIP that this committee was unaware of last year? 

Mr. COHEN. I think we were looking very carefully at the expenditures of the program and we were committed as careful stewards 

29 

of the money that had been appropriated us to do whatever was 

needed to live within the money—— 

Mr. BURGESS. Yes, but here is the point: I mean the Secretary 

comes in and says there are no contingency plans; you are telling 

me that a year ago there was a contingency plan to deal with the 

Pre-Existing Conditions program. We need to know. 

Mr. COHEN. Well, I didn’t say that. I didn’t say that. I said—— 

Mr. BURGESS. Well, it sounded like you said that. And if we take 

a context, which we will, that is how it will be reported by your 

friends in the press over here. 

Look, we have got to level with each other. I mean people are 

going to be counting on you to do your job on January 1. And you 

have raised questions; your main health IT guy at the same AHIP 

conference where you spoke, he raised questions about whether 

that federal hub will be ready. And then you look at what happened in the Pre-Existing Condition Plan, there is a word that goes 

around. I learn new words in this town all the time. Some of them 

I can say here in committee; some of them I can’t. But the word 

that keeps coming up is de-scoping. So are you actively discussing 

de-scoping, reducing the scope of the Affordable Care Act when the 

rollout occurs? 

Mr. COHEN. No. 

Mr. BURGESS. I mean I am reminding you, you are under oath 

so—— 

Mr. COHEN. Yes. 

Mr. BURGESS [continuing]. When we call you back in here next 

year to talk about this, there is no plan to narrow the scope of the 

Affordable Care Act? 

Mr. COHEN. We intend to implement fully the Affordable Care 

Act. We have announced already some portions that will be put off 

to 2015. But at this point, I don’t anticipate any de-scoping of the 

Affordable Care Act now. 

Mr. BURGESS. And yet, you look at the people who wanted to sign 

up for the preexisting program and in their parlance they have 

been de-scoped out the availability of that program, have they not? 

Mr. COHEN. Well, the Preexisting Condition program was always 

meant to be temporary. And the circumstances of those people really point to exactly why we needed the Affordable Care Act—— 

Mr. BURGESS. Yes, but you know what—— 

Mr. COHEN [continuing]. Because those people were not able to 

get health insurance coverage at all—— 

Mr. BURGESS. Building a bridge doesn’t do you any good if it 

doesn’t get to the other side, and these people now fall into this 8- 

month chasm and that is a problem. 

Now, the SHOP exchanges that were much extolled as a virtue 

of the Affordable Care Act and now those are going to be delayed— 

well, not really delayed but you will only have one choice because 

the competition that was advertised amongst these plans. 

Mr. COHEN. Well—— 

Mr. BURGESS. And I think that is what Senator Rockefeller was 

talking about. Wait a minute. This was a serious missed-at fire. 

Mr. COHEN. Let’s be clear. Employers will have a choice. They 

can choose among the plans that are available in the SHOP. And 

we believe that employers will have more choice under the AffordVerDate Nov 24 2008 15:05 Sep 27, 2013 Jkt 037690 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-34 CHRIS
30 

able Care Act than they did before. The 1-year transition to—affects only employees’ choice and whether employers can offer more 

than one plan to their employees in the federally facilitated marketplace. 

Mr. BURGESS. Again, I would just offer the observation that 

sounds like a narrowing in scope to at least to me. Maybe it doesn’t 

to other people, but it does to me. 

So let me ask you a question about taking the money from the 

Prevention Fund. Did someone in your department make the decision to take the money from the Prevention Fund to fund these 

navigators? 

Mr. COHEN. Within CCIIO, no. 

Mr. BURGESS. So who made the decision? 

Mr. COHEN. The Secretary. 

Mr. BURGESS. So can you perhaps talk a little bit about how your 

department has been using the money that the Secretary moved 

from the Prevention Fund? 

Mr. COHEN. The portion of the Prevention Fund money that 

CCIIO is using goes to the $54 million funding opportunity announcement for navigator grants. 

Mr. BURGESS. So are you going to take other money from the 

Prevention Fund? 

Mr. COHEN. I am not aware of that at this point, no. 

Mr. BURGESS. But it is the Secretary who has the transfer authority under the law, so unless she were to level with us—and I 

promise you, she didn’t last week—unless she were to level with us 

about what the future plans are, you would have no way of knowing; we would have no way of knowing. That secret is locked up 

with the Secretary. 

Thank you, Mr. Chairman. I will yield back. 

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

I will now recognize Mr. Waxman for 5 minutes. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

It is so amazing to me that the Republicans are complaining that 

money was taken from the prevention program to help pay for the 

implementation of the Affordable Care Act after the Republicans 

denied the Administration funds to implement the Affordable Care 

Act. It is like the kid who killed his mother and father and then 

said you have to care for me because I am an orphan. They are the 

ones who are impeding this legislation from being implemented 

and forcing the Administration to make these kinds of choices. But 

they are now making a conscious choice to take the Prevention 

Public Health Fund to pay for a short period of time for this Preexisting Condition Insurance Program that is supposed to go out of 

existence at the end of this year. 

This Preexisting Condition Insurance Program, or PCIP, was 

part of the Affordable Care Act. It isn’t something the Republicans 

authored into law; it was part of the Affordable Care Act that they 

voted against. And in February of this year, CCIIO, your agency, 

announced that enrollment would be suspended to ensure that the 

program’s funds, which were capped, would be able to pay the 

claims of existing enrollees. This is what happens when you cap a 

program. They want to cap Medicare; they want to cap Medicaid. 

31 

That means if you run out of money, you run of services. Well, why 

was this decision made? 

Mr. COHEN. Well, you stated it, Congressman. When we had a 

certain amount of money that was authorized for the program, our 

number one priority, obviously, was to make sure that those people 

who were already enrolled in the program got continuity of care 

until the end of the year. 

Mr. WAXMAN. So we are talking about 107,000 enrollees. Isn’t 

that correct? 

Mr. COHEN. It is at least that many, yes. 

Mr. WAXMAN. OK. These individuals will be able to receive their 

benefits until the end of this year. Is that correct? 

Mr. COHEN. Correct. 

Mr. WAXMAN. OK. And am I correct that the PCIP program was 

always meant to be a temporary bridge to full ACA implementation 

in 2014 when insurers would be barred from discriminating against 

people with preexisting conditions? 

Mr. COHEN. That is right. 

Mr. WAXMAN. OK. And will those uninsured individuals who cannot get access to the PCIP program now be able to get access to 

affordable quality healthcare coverage when the ACA goes fully 

into effect in January? 

Mr. COHEN. That is right. Insurers won’t be able to turn them 

away and they won’t be able to charge them more just because they 

are sick. 

Mr. WAXMAN. It is to be quite amazing that the Republican suddenly want to champion a program for a few months which is a 

bridge until people get to what is a much more sane way to handle 

the matter. People in this preexisting program until the end of the 

year, we don’t pay all their expenses, do we? They have to buy 

their insurance? 

Mr. COHEN. That is right. 

Mr. WAXMAN. And is that going to be the same price as other 

people’s insurance, or that—— 

Mr. COHEN. Under the PCIP program, it is about the price of 

other people’s insurance today, unlike state high-risk pools where 

the cost to enrollees is typically much higher. 

Mr. WAXMAN. We talked about the Affordable Care Act being 

fully implemented in 2014, but many key benefits and protections 

from the law are already in place. And I want to ask you how 

Americans are already benefiting from the law. The ACA prohibits 

insurers from denying coverage for children with preexisting conditions right now, isn’t that correct? 

Mr. COHEN. That is right. 

Mr. WAXMAN. And how many children are there with preexisting 

health conditions? 

Mr. COHEN. As many as 17 million. 

Mr. WAXMAN. Seventeen million people. We didn’t have to create 

a fund for them; we just said they have to be covered right now; 

the others will be covered in January. 

Mr. COHEN. That is right. 

Mr. WAXMAN. Covered without being discriminated against. The 

law also bans annual lifetime coverage limits, isn’t that correct? 

Mr. COHEN. It did. 

32 

Mr. WAXMAN. And when did this ban going to affect? 

Mr. COHEN. In September of 2010. 

Mr. WAXMAN. And how many Americans are benefiting from this 

provision of the Affordable Care Act? 

Mr. COHEN. Approximately 105 million. 

Mr. WAXMAN. The ACL also ends some of the insurance industry’s most harmful abuses, including policy rescissions. Mr. Cohen, 

for folks who aren’t experts in the insurance industry, tell us: what 

are these rescissions? 

Mr. COHEN. So insurance—before the Affordable Care Act, insurers often had a policy of what is called post-claim underwriting. So 

they would wait to see if someone got sick and started having a lot 

of health claims, and then they would go back to look at their application and see if they could find something in the application 

that maybe was mistakenly entered that was incorrect. And then 

they would say we are going to take way your policy retroactively 

so that we don’t have to pay for any of those claims. 

Mr. WAXMAN. So when Republicans voted against the Affordable 

Care Act, they were voting to let the insurance companies do this 

rescission, which is taking away your insurance coverage when you 

needed even though you paid for it. 

Mr. COHEN. That is correct. 

Mr. WAXMAN. Thank you. 

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

I now recognize Mr. Scalise for 5 minutes. 

Mr. SCALISE. Thank you, Mr. Chairman. I appreciate you having 

in this hearing. 

Thank you, Mr. Cohen, for coming. Yesterday, I was in my district before I flew back here to D.C. and there was a panel on the 

healthcare law that was held at a local hospital in my district. And, 

you know, I was one of the people that was speaking on that panel. 

And there were a number of people in the healthcare industry, people that have insurance. And it just seemed to be an underlying 

theme that continued to go through that room that nobody is ready 

for this law. Nobody knows how it is going to work for them, and 

most people are really concerned that the good healthcare they 

have they are in jeopardy of losing. And again, this is something 

I hear all the time when I am back in my district talking to small 

businesses, talking to families who have healthcare that they are 

now having real concerns about whether or not they are going to 

be able keep that. I mean are you out of touch with this or do you 

hear these real concerns? And I talked to my colleagues from other 

States and they are hearing the same things. I mean are you hearing these things? 

Mr. COHEN. I mean I think it is important to keep in mind that 

for the many millions of Americans who have healthcare through 

their employer who—that employs more than 50 people, they are 

largely unaffected by the Affordable Care Act. 

Mr. SCALISE. Well, I will give you an example. I met recently 

with the owner of Whole Foods. They have something like 30,000 

employees. This is a very large company, a very well-respected 

company nationally. They have healthcare that their employees 

really like. Their employees actually get to vote on the benefits. It 

is a very highly successful plan. They have managed to control 

33 

costs, they beat the industry average, and yet they still provide a 

plan that their employees like. And under the current law, from 

what they see, their plan is not even eligible. Their 30,000 plus employees that have good healthcare they like our right now at risk 

of losing that coverage. You know the old promise if you like what 

you have, you can keep it? It was broken to those 30,000. That was 

one example. I mean, are you even aware of that? 

Mr. COHEN. Well, I can’t speak to—specifically to—— 

Mr. SCALISE. You ought to find out about it. 

Mr. COHEN [continuing]. That example. What I can—— 

Mr. SCALISE. A real-life example of a real company that is a wellrespected company that has good healthcare their employees really 

like and they are right now at risk of losing it because of this law. 

Mr. COHEN. But I can’t—— 

Mr. SCALISE. Well, I want to walk you through some specific 

things that we have been seeing, you know, and start with the PreExisting Condition Insurance program. You all did actually stop 

taking new enrollees in that program, right, because it ran out of 

money? 

Mr. COHEN. We stopped taking new enrollees to make sure we 

wouldn’t run out of money. 

Mr. SCALISE. All right. So the Early Retiree Reinsurance Program, that was supposed to last until 2014. I think it was discontinued in 2011, is that right? 

Mr. COHEN. Well, I think the success of that program showed the 

great need for it and—— 

Mr. SCALISE. So enrollments closed on it? It was so successful 

that somebody can’t get in it right now? 

Mr. COHEN. We are paying out claims now only based on money 

that is coming back to us. 

Mr. SCALISE. So can someone enroll in it today? 

Mr. COHEN. Enroll in it today, no. 

Mr. SCALISE. No. So they can’t enroll in it. Some requirements 

for Small Business Health Options Program were delayed, is that 

correct? 

Mr. COHEN. The SHOP will be operating in October. The one provision that is put off—— 

Mr. SCALISE. But did you delay some of those provisions? 

Mr. COHEN. One aspect of the SHOP, which is the employee 

choice we had—— 

Mr. SCALISE. That has been delayed. The CLASS program—that 

was supposed to be Obamacare’s long-term care program—that was 

actually repealed by Congress, wasn’t it? 

Mr. COHEN. That is not one of mine so—— 

Mr. SCALISE. No, it is not one of anybody’s anymore because it 

got repealed by Congress it was so bad. And hopefully, none of this 

is yours anymore because we could repeal the whole thing. 

But I want to hit one more of them. The 1099 requirement that 

we were hearing horror stories about that was getting ready take 

effect, again, part of Obamacare. The horror stories were so bad 

that Congress, Republican and Democrat alike, agreed to repeal 

that, too, right? 

Mr. COHEN. That is my understanding. Well, again that is 

the—— 

34 

Mr. SCALISE. But it is not your problem anymore either because 

we repealed that. So there are five examples right there, five examples, some fairly small components, but then you are here telling 

us that probably the largest component that you are going to have 

to deal with, and that is these exchanges, they are going to be 

ready. You think they are going to be fine in a couple of months 

when it is time for them to come online, yet I just gave you five 

examples of programs that were either delayed, closed enrollment 

because they weren’t ready for primetime, or just outright repealed 

because they were so bad. But then you are going to tell us that 

the biggest part is going to be oK? 

Mr. COHEN. We are on track and I can just point to the successes 

that we have had so far in developing systems—— 

Mr. SCALISE. I just highlighted five examples of failures. In fact, 

I don’t know if you know this, one of the lead architects of 

Obamacare, Senator Baucus just last week said, ‘‘I just see a huge 

train wreck coming down,’’ and he is not even running for reelection. But, I mean, he just said that last week. I mean, do you dispute what he said last week about the healthcare law being a huge 

train wreck coming down? 

Mr. COHEN. We are on track and on schedule—— 

Mr. SCALISE. On track. The problem is there is a train coming 

at you on that track—— 

Mr. COHEN. We—— 

Mr. SCALISE. According to one of the architects—that is what I 

mean. I voted against it. Somebody that actually was helping push 

this thing through said it is about to be huge train wreck—— 

Mr. COHEN. We will be ready to help millions of Americans enroll 

in quality affordable health—— 

Mr. SCALISE. I hope you are ready to help the millions of Americans that are about to be dealing with this train wreck that is coming because again, when you talk to real people out there in the 

real world—big and small—they don’t know how they are going to 

be able to keep the healthcare they like for their employees. And 

that is a big concern of mine. 

I yield back. 

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

I now recognize Mr. Tonko for 5 minutes. 

Mr. TONKO. Thank you, Mr. Chair. Mr. Cohen, thank you for appearing before the subcommittee today. And the Affordable Care 

Act’s Prevention and Public Health Fund have been subject to ongoing attacks since their inception under the Affordable Care Act. 

The Republicans have repeatedly sought to repeal or drain those 

funds. They argue that it is a slush fund and that the resources 

are being used inappropriately to pay for public health lobbying efforts. 

Let’s take the opportunity to set the record straight on exactly 

how the Prevention Fund is or isn’t being used. I know the Prevention Fund isn’t under your supervision but can you give us a general overview of the HHS agencies and public health programs and 

activities that have been and will be supported through the fund? 

Mr. COHEN. So I would be happy to try, Congressman. That is 

not directly my area and I would be happy to get back to you with 

information on that. But I do know that the Prevention Fund has 

35 

been used extensively in tobacco cessation and wellness programs 

and in other programs designed to get preventive care to people. 

And with respect to the work that we are doing, we know that 

when people have health insurance, they get preventive care and 

they get care for the illnesses that they do have earlier and they 

get better treatment and it is more cost-effective. 

So I think that the use of the Prevention and Public Health Fund 

to help stand up these exchanges and make sure that people know 

about them and take advantage of the benefits they have to offer 

is really, you know, right within the scope of what the fund is intended to do. 

Mr. TONKO. Thank you. And do state and local governments receive any of the dollars? 

Mr. COHEN. I don’t know the answer to that. I am sorry. 

Mr. TONKO. Is there a way you can check and get back to us, 

please? 

Mr. COHEN. Absolutely. Be happy to, yes. 

Mr. TONKO. And is any of the Prevention Fund being used by its 

grantees to support local lobbying efforts? 

Mr. COHEN. No, not that I am aware of. But again, I can check 

into that and get back to you. 

Mr. TONKO. And what is the Department’s policy on the use of 

federal grant dollars for lobbying activities? 

Mr. COHEN. It is not permitted. 

Mr. TONKO. OK. With respect to using this fund to help implement the Affordable Care Act and implement the health insurance 

marketplaces, I understand that you and the rest of the Administration are in a very difficult position. Because Republicans in Congress have refused to provide any funding to support this critical 

program and help the implementation work smoothly, HHS was 

forced to leverage and reallocate existing resources to provide 

short-term and immediate funding. So my question is, can you 

please explain to us how the Secretary has used her transfer authority to help implement the Affordable Care Act? 

Mr. COHEN. The Secretary has used the statutory authority that 

she has to transfer funds within HHS. She has used some funding 

from the Prevention Fund, as you mentioned, and she has used 

some funding from a nonrecurring expense fund particularly for IT 

projects. And those are the sources that she has used in addition 

to the implementation fund that was contained in the Affordable 

Care Act. 

Mr. TONKO. And the IT projects that you are talking about 

would—— 

Mr. COHEN. That is the work that we are doing to get the marketplaces ready for October. 

Mr. TONKO. For October 1. And how will HHS ensure that programs supported by the Prevention Fund won’t be negatively impacted due to the reallocation, if you will, of the funds? 

Mr. COHEN. Well, I mean, obviously the President’s budget for 

2014 requests additional funding for the work that we are doing. 

So the hope is that going forward we will get that funding and will 

be able to rely on that rather than having to use any funding under 

the Prevention Fund. 

36 

Mr. TONKO. I thank you for your response. The Prevention Fund 

is a significant, smart, and worthwhile investment obviously in improving health situations for customers and reducing costs. It is 

unfortunate that you had to reallocate some of these funds to pay 

for implementation. I think is unfortunate that my Republican colleagues have been so unwilling to provide the basic funding requested by the Administration to implement the healthcare laws. 

So, you know, I appreciate the insight that you have provided 

today. If you can get back to us with some of those other concerns, 

that would be appreciated. But, you know, this down payment is 

the effort to provide for a better outcome and to achieve the ultimate goals of the Affordable Care Act. 

So with all of that, I thank you—— 

Mr. COHEN. Thank you. 

Mr. TONKO [continuing]. For your response here. 

And with that, Mr. Chair, I will yield back. 

Mr. MURPHY. Thank you. The gentleman yields back. 

I now recognize Mr. Harper for 5 minutes. 

Mr. HARPER. Thank you, Mr. Chairman. 

Mr. Cohen, thank you for allowing us this opportunity on very 

important issues that we need to discuss. 

And I want to follow up a little bit on what the gentleman from 

Louisiana just asked you about the Pre-Existing Condition Insurance program, the fund, where you had to stop enrollment. I was 

under the impression that it was stopped because the money was 

exhausted, but you said that you stopped so you wouldn’t run out 

of money. Would you explain that in a little more detail? 

Mr. COHEN. Sure. As with any program like this, claims come in 

and have to get paid out over a period of time, so we have to 

project forward for the people that we have enrolled in the program 

now. We need to make sure that we can cover their costs. 

Mr. HARPER. Your anticipated or projected or expected costs—— 

Mr. COHEN. For the rest of the year. So we look at how much 

we are spending and how much we have, and obviously, we know 

that we can’t go beyond what has been appropriated. So that was 

the basis for the decision. 

Mr. HARPER. Right. How much money was left when it was 

closed when enrollment was stopped? 

Mr. COHEN. I would have to go back and get you those precise 

numbers. I don’t—— 

Mr. HARPER. Can you provide that information to us? 

Mr. COHEN. Yes, I would be happy to. I don’t want to misstate 

it so I would like—I would prefer to go back and get you that information. 

Mr. HARPER. Preexisting, I think everybody here is always concerned about preexisting. But even before the implementation of 

this, the largest insurer in my home State already provided preexisting coverage for dependent children up to age 25, not quite 26, 

but 25. 

Mr. COHEN. Yes. 

Mr. HARPER. And those things were there and available. But 

what I want to know is you said there was not enough money left 

so you had to stop, but isn’t this money that we are talking about 

today that Ms. Sebelius has available to her under the Preventive 

37 

Care, could not some of that have been—instead of used for navigators or something else? Didn’t she have the authority to transfer 

some of that money that was available to her, the billions of dollars 

available to her to help prop this program up for preexisting? 

Mr. COHEN. That is not something that we have looked at, Congressman, but I am sure we can—— 

Mr. HARPER. Well, I don’t know that I need you to provide an answer. We know that is the truth. She has the ability; that money 

is available. I mean the money is almost like a slush fund for her 

to use. And so we are going to do what should have been done, 

which is to take this money that is there available to use to help 

these people that are sick and to help those with preexisting. I 

mean some of this money has been used for a pet neutering project. 

And some others we used for lobbying efforts regarding soda taxes. 

I mean that is unconscionable that we would use money for something like that but yet deny care to those that are in most need. 

So I would encourage you to, even now, as this is going on, there 

are funds available within the program that could be shifted over 

to preexisting but we are going to take care of it with legislation 

today. It is interesting that even though some on the other side 

have been very critical, there are many health advocacy groups, patient advocacy groups that support this bill that is going to come 

up for a vote later today. 

Now, I would like to talk now for a minute about the sequester 

impact if we could. We have had this Administration cancel White 

House tours but yet have concerts that cost over $400,000 of taxpayer money. We have had an Easter egg roll. We are going to 

have, I guess, another congressional White House Christmas Ball. 

All these things are done. TSA talking about long waits at the airport even though they ordered $50 million worth of new uniforms 

before the sequester kicked in. 

So I think the public realizes the political gamesmanship that is 

taking place in this. So I want to know what you have done, as far 

as the sequester, how that has impacted you and if there is anything there that we should expect as far as furloughs or impact on 

patient care? 

Mr. COHEN. Within CMS, we have been working very hard to 

avoid the necessity for furloughs. We are under a hiring freeze so 

I can’t hire. I can’t replace people who leave, which is a serious 

issue for me in terms of trying to run a program. If people move 

on to other jobs, I can’t hire to replace them. And there have 

been—we have applied the sequester according to the advice that 

we have been given across the board, as we are required to do. 

Mr. HARPER. OK. I am almost out of time. But are you telling 

me, then, that this Administration is furloughing air-traffic controllers vital to public safety in this country but yet you are not furloughing anybody in your agency? 

Mr. COHEN. Well, in effect we are because we can’t replace people who leave. So we are—— 

Mr. HARPER. But that is not the same. I mean we are talking 

about at least a 15 percent furlough of current air-traffic controllers resulting in delays and perhaps safety concerns, but yet this 

has been a selective political item by the Administration. 

I yield back. 

38 

Mr. MURPHY. The gentleman yields back. I now recognize the 

gentleman from Texas, Mr. Green, for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. 

And I share my colleagues’ concern, but when that sequester was 

passed, it was passed by a huge bipartisan vote. And, you can’t 

vote for something and the say, oh, I wish it weren’t happening because it is happening whether it be at CMS or TSA or anywhere 

else. 

But let me get to the health exchanges. I have a question related 

to exchanges’ important goal and I think we both share in sharing 

that part of the successful implementation of the Affordable Care 

Act, people have access to the care they need. Your agency has released a series of letters to issues relating to Qualified Health 

Plans, QHPs and the insurance exchanges and the essential community partners. In your letter, you state CMS urges issuers to 

offer provider networks with robust ECP participation. Do you 

agree that is important that ECPs such as community health centers be considered as an integral part of the Qualified Health Plans 

networks? 

Mr. COHEN. Yes. Yes. 

Mr. GREEN. And is CMS encouraging that? 

Mr. COHEN. We are. 

Mr. GREEN. I have another related question but I will submit 

that for the record. 

And on the topic of premiums we heard repeatedly last month 

concerns about the potential rate increases under the Affordable 

Care Act, the concern that there will be some people, mainly 

healthier young men, who will pay higher premiums under the Affordable Care Act than they pay in an individual market. I would 

like to understand more detail. First, can you tell us a bit about 

how rates are structured for different groups in the individual market now based on factors such as age, sex, and health status? 

Mr. COHEN. Yes. So in the market today, issuers are allowed to 

vary rates depending on the health status of a person, whether 

they are sick and they were expected to have higher costs. They are 

allowed to charge women more than men and treat being a woman 

as a preexisting condition. 

Mr. GREEN. OK. So older and sicker people pay more and women 

pay more for healthcare right now? 

Mr. COHEN. That is right. 

Mr. GREEN. How would the rates be structured under the Affordable Care Act go into effect? 

Mr. COHEN. Health status won’t be able to be used as a factor. 

Gender won’t be able to be used as a factor. Age still can be used 

as a factor but the impact is limited compared to what it is today. 

And where you live is—can be used as a factor. 

Mr. GREEN. So under the Affordable Care Act, the risk will be 

pooled insurance cannot charge more for women and those with underlying health conditions. They are limited on how they can 

charge older people more than younger people, is that correct? 

Mr. COHEN. That is correct. 

Mr. GREEN. And I know there are groups like young healthy 

males that look like they might pay higher premiums. My understanding is a number of factors that mitigate these premium inVerDate Nov 24 2008 15:05 Sep 27, 2013 Jkt 037690 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-34 CHRIS
39 

creases. First, many of these individuals may qualify for Medicaid, 

so they will be able to receive coverage without paying premium, 

is that correct? 

Mr. COHEN. Yes. 

Mr. GREEN. In addition, the Affordable Care Act now allows 

young adults to remain on their parents’ healthcare until 26? 

Mr. COHEN. Correct. 

Mr. GREEN. And that was part of the Affordable Care Act? 

Mr. COHEN. It was. 

Mr. GREEN. And as I recall, being here in 2009, there was not 

a Republican vote for moving that to 26 years old. But anyway, let 

me go on. 

What about those who are not on Medicaid or their parents’ 

health plan? Am I correct that they qualify for tax credits or premium assistance that will reduce their insurance costs? 

Mr. COHEN. Correct, up to 400 percent of the federal poverty 

level. 

Mr. GREEN. OK. And to what extent will this mitigate the impact 

of premium increases? 

Mr. COHEN. It will be significant. 

Mr. GREEN. OK. Finally, individuals under the age of 30 may 

purchase so-called young and invincible plans on health insurance 

and exchanges. I know I used to think that way when I was in my 

20s but since I joined Medicare last year, I know I am not. Can 

you tell me how these plans will work and how they will reduce 

cost? 

Mr. COHEN. Absolutely. So that is a high-deductible plan which 

means that for your typical doctor’s visit, it won’t cover it, but if 

something serious were to happen to you—you become ill or in an 

accident—it will cover you. And those plans, we expect, will be very 

affordable for younger people. 

Mr. GREEN. OK. The Affordable Care Act contains a lot of new 

tools like rate review and the medical loss ratios. I come from the 

State of Texas and we typically don’t regulate anything in health 

insurance except policies, and to be one of the best reforms in the 

Affordable Care Act was the 80 percent loss ratio. Because as an 

employer of small business years ago, I was not sure that the premiums we were paying were coming back into medical benefits. 

But we only had 13 employees and we didn’t have a choice. But 

now, that small employer will know that 80 percent of their premiums will come back into medical benefits. 

Mr. COHEN. That is exactly right. And insurers have to pay back 

over $1 billion in rebates to consumers and businesses in 2012 because of that program. 

Mr. GREEN. Well, and again, like I said, that seemed like one of 

the best reforms, although there a lot of things in there. And again, 

you don’t need to say this but I also know that we tried to work 

on that bill in our committee and we did have a markup. And 

again, I didn’t expect many Republicans to vote for it and none of 

them did. But there were a lot of good things in the Affordable 

Care Act that people have talked about on a bipartisan basis for 

decades. 

And I realize I am out of time. Mr. Chairman, thank you. 

40 

Mr. MURPHY. The gentleman’s time has expired. I will now go to 

the gentleman from Texas, Mr. Olson, for 5 minutes. 

Mr. OLSON. I thank the chair. 

And good morning, Mr. Cohen. 

Mr. COHEN. Good morning. 

Mr. OLSON. And I know I don’t have to say this but I am going 

to say it anyway. I have been elected three times by the people of 

southeast Texas, my home—Texas 22—to be the Member here in 

Congress, their Representative. And quite frankly, they are frightened, and I don’t use that word lightly. But they are frightened 

about Obamacare and what it is going to do to their healthcare. 

Will it become more expensive? Will they have access? Will they 

keep it? Many promises have been made and many have already 

been broken. They want and deserve answers to my questions. So 

I ask you to respect them and directly answer the questions I ask. 

In a prior life, I spent 9 years as a staffer in the United States 

Senate. I know what a filibuster looks like. And I haven’t seen one 

today, so thank you for that. But if I smell a filibuster I will 

abruptly interrupt and ask the questions. So thank you for that. 

But I am confused. I mean last week right here in this room the 

Secretary said that there are no contingency plans for the statebased exchanges changes. And yet, Mr. Cohen, you today are saying there are some plans. So are there plans, contingency plans, or 

aren’t there plans? Yes or no. 

Mr. COHEN. We will be ready to operate October 1 of 2013. We 

are preparing for the eventuality that different parts of the system 

that we are building may not work perfectly and may need to be 

improved, and those are the kinds of plans that we are working on. 

We are doing testing and we are doing everything that we can to 

make sure that everything works as well as possible. But we know 

that in any large project—— 

Mr. OLSON. OK. That is great, sir. It sounds like you are preparing for the worst and planning for the best—hoping for the best. 

Is that correct, yes or no? 

Mr. COHEN. We are—— 

Mr. OLSON. Preparing for the worst but hoping for the best. 

Mr. COHEN [continuing]. We are realistic in our planning and we 

will be ready. 

Mr. OLSON. OK. One further question, sir. I have talked to many 

family businesses back home about Obamacare and its impact on 

their businesses. These guys provide health insurance to their employees, and every single one of them that I have talked to, every 

single one has told me, Congressman, I provide healthcare for my 

employees because it is good for my business, it is a recruiting tool, 

retention tool, but I have to compete in the market. If this thing 

goes down, it will cost me anywhere between, I have heard, $5,000 

to $9,000 per employee per year. If the healthcare bill comes to 

pass and the exchanges don’t work out, I will dump my people in 

the exchanges, because I will pay a $2,000 or $3,000 fine that is 

more beneficial for business. They are not going to be the first one 

to pull the trigger. They are waiting because they want to do it for 

their employees. But they will have to because the market will demand them to. Are you prepared? Have you gotten out in American 

heard this complaint or concern from small businesses? 

41 

Mr. COHEN. Yes, I have spoken to small business owners and 

representatives of small business associations. I think it is important to keep in mind that the offer rate for small businesses of 

health insurance has been declining dramatically over the past decade and more because it is not affordable. And that was before 

there ever was an Affordable Care Act. I think there are a number 

of very important provisions in the law that will make coverage 

more affordable for small businesses, one of which certainly is the 

tax credit that is for eligible employers that can pay up to 50 percent of the cost of providing healthcare to their employees. 

Mr. OLSON. Again, sir, every business I have talked to in this situation has said they are planning to drop their healthcare insurance. that is in stark contrast to what you are saying here. I know 

what you are saying, but again, the bottom line on Americans’ 

minds is there are going to be changes. People will lose their 

healthcare because of Obamacare. 

And one final question. My State of Texas is going to go on the 

federal exchange, and so obviously enrollment on October 1, full on 

go on January 1. One of the problems with D.C. is our eagerness 

is to impose a one-size-fits-all solution to all of our problems. It 

won’t work, the state exchanges. My parents live in Vermont; they 

retired up there. And I can assure you that Vermont’s challenges 

are much different than Texas’ challenges. Heck, Texas has a onesize-fits-all problem within the State. 

I mean, the Rio Grande Valley there has a high epidemic of diabetes. West Texas has a high epidemic of skin cancer compared to 

the rest of the State. Urban environments have more asthma, more 

issues in that area. So how do you address these differences? Will 

the federal exchanges address the differences between States? 

Mr. COHEN. Congressman, I think you know that Texas has one 

of the highest uninsured rates in the entire country. And the Affordable Care Act and Medicaid expansion and the exchanges offers 

an opportunity to Texas to get a lot of those people enrolled in coverage. And we welcome Texas’ involvement with us and a partnership with us as many, many, many states have to develop a marketplace that is best suited to the needs of the people in Texas. 

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

Mr. OLSON. And I yield back. Thank you, sir. 

Mr. MURPHY. Thank you. 

I now turn to the gentlelady from Florida, Ms. Castor, for 5 minutes. 

Ms. CASTOR. Well, thank you, Chairman Murphy and Ranking 

Member DeGette, for calling this hearing because I think it is very 

important that we have substantial oversight of the implementation of the Affordable Care Act. The good news is that, so far, families across America have seen vast improvements already even before the marketplaces are set up and people are enrolling in health 

insurance. You know, some of the ones that are popular in my community, young people aged 26 now can stay on their parents’ insurance. That has meant a meaningful change to over 3 million young 

people across America. 

Medicare has gotten better; it has gotten stronger. Whether it is 

your prescription drugs that are more affordable or those new preVerDate Nov 24 2008 15:05 Sep 27, 2013 Jkt 037690 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-34 CHRIS
42 

ventive services when you go in for checkups, that is a very meaningful change for our parents and grandparents. 

And then the one that doesn’t get as much attention but should 

are the rebates that have come back from insurance companies. In 

the State of Florida alone, 1.2 million Florida families have gotten 

an insurance rebate because of the terms of the Affordable Care 

Act that say, you know, when you pay your premiums and your 

copay, that money should go to actual healthcare and health insurance rather than profits and marketing and CEO salaries. That 

has brought back to the State of Florida $123 million right back 

into the pockets of Florida families at a time when they could really use those extra couple hundred dollars. So thank you for that. 

And now we are on the cusp of such a positive change for families across America, so many that have not had access to those important doctor visits or being able to call the nurse and get the 

checkups that they need or, with a chronic condition, get the significant health services that they need. 

So, Mr. Cohen, I want to ask you about the outreach efforts, especially the navigators. We have talked little bit about that already 

today. This is going to be a very substantial effort as HHS begins 

the outreach rollout, how you inform families about signing up, 

how you educate families and small businesses about their insurance options. I know that some are concerned that some of the Affordable Care Act dollars are going to fund these outreach efforts, 

but how else are we going to educate everyone? I think it is all 

hands on deck. We need the insurance companies here. We need 

community groups, community health centers, doctors, nurses, and 

what I hear at home is everyone is ready to join in this effort. 

But could you talk about—kind of set the stage for this? We have 

50 million uninsured in this country. People are hungry for information, wouldn’t you agree? Could you talk about, right here at the 

outset, what you are going to be doing in the coming months? 

Mr. COHEN. Thank you. I would be happy to. First of all, as you mentioned, the $54 million for grants to community organizations 

and church groups and Indian tribes and other groups to serve as 

navigators, we are allocating that money based on the number of 

uninsured in each State. So we are going to try to put that money 

where we need it the most. 

In addition to that, there is going to be sort of a media campaign, 

just sort of to get people to understand more about the law and the 

benefits that it can bring to them. And we will be directing people 

to go online to healthcare.gov where, beginning in June, the call 

center will be up and healthcare.gov will have changed its focus to 

really be a consumer site that will be there to provide information 

to consumers and help them get ready for the steps that they will 

need to take beginning in October for enrollment. 

And as you mentioned, I am hearing a tremendous amount of excitement out there in the community from foundations, from the insurance companies that, obviously, have a real incentive to get people to come buy their products. So I think there is going to be a— 

really a multifaceted effort to make sure that people know what is 

in store for them. 

Ms. CASTOR. And looking at the States that have such high numbers of uninsured—California, Texas, New Mexico, Florida—in 

43 

Florida we have between 20 and 25 percent are uninsured, do not 

have health insurance. So these are going to be critical areas. In 

many of those areas, English is not the first language. Could you 

talk about American citizens that don’t—your outreach in bilingual 

and diverse communities? 

And then, I do think it is important to have insurance agents 

and brokers involved. If I have a large outreach event with the 

community health centers, doctors, nurses, and I have the brokers 

there, they are not a navigator—— 

Mr. COHEN. Right. 

Ms. CASTOR [continuing]. But can they participate in those kinds 

of outreach efforts? 

Mr. COHEN. So thank you. So on the language side, one of the 

qualifications for being a navigator is that you be able to serve people, you know, in cultural and appropriate ways. And we definitely 

are expecting to get applications from groups that are specifically 

going to target specific groups that are not English-language proficient. 

We are working very closely with the agent broker community. 

I have had a number of meetings with their trade associations and 

with the agents and brokers directly, and we have come up with 

a way for agents and brokers to easily be able to enroll people 

through the marketplaces, and we are definitely expecting that 

they will play a very significant role, particularly with regard to 

small business where—as they do today. 

Ms. CASTOR. Thank you very much. 

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

I am curious, are you asking for perhaps a written statement on 

that? Because I think the chair would like to know that as well to 

help our people who may be in other groups. 

Ms. CASTOR. Yes, Mr. Chairman. I think it is very important. All 

hands on deck here for enrollment. 

Mr. MURPHY. So you will get back a written response to the committee on that? 

Mr. COHEN. Sure. 

Mr. MURPHY. Brief one? Thank you very much. 

I now recognize the gentleman from Virginia, Mr. Griffith, for 5 

minutes. 

Mr. GRIFFITH. Thank you, Mr. Chairman. I was a little bit surprised that you said people that you talked to, there is excitement 

out there. The excitement that I am finding in my district is kind 

of like the excitement that Mr. Olson found in his district in Texas, 

is that people are scared and they are concerned. And I have got 

businessmen who come to me and say I don’t know what I am 

going to do. Do I lay off some of my employees in order to get down 

under 50? What do I do? 

Of course, the Commonwealth of Virginia, which I represent, has 

indicated that they are going to have all of their part-time employees go under 29 hours so that they won’t have to cover them on 

insurance. And it is becoming kind of interesting to see because 

you have people who were promised if you like your insurance, you 

can keep it. But just recently, I think within the last 48 hours, a 

proposal passed in the State of Washington out of the Senate—it 

is probably not going to pass the House—but it passed out of the 

44 

State of Washington where they currently cover employees down to 

20 hours, but they are going to take their state employees and 

move them into the exchanges is the proposal. Under the plan, 

they would give them $2 per hour bonus and pay that would help 

defray the premium cost but they won’t be able to keep the insurance they had. And I wonder what your thoughts are on that, that 

folks are being forced out of the plans they like because the 

States—and look, let’s face it. If the States can’t afford it, a lot of 

businesses can afford either. The States are doing things that are 

pushing people away from either the number of hours they work 

or the insurance that they like and that they had. 

Mr. COHEN. Well, first of all, the law does provide that grandfathered plans are not subject to most of the provisions of the Affordable Care Act. So it is possible for employers to keep the plan 

that they like. If they had a plan in place before and it is not 

changed significantly, they can keep the insurance that they have. 

Mr. GRIFFITH. Well, the employer can keep it, but in this case, 

they are looking at moving the employees off of that plan and into 

the exchanges because it will save the State of Washington $120 

million. 

Mr. COHEN. Well, obviously I don’t know specifically what is happening in Washington. I think there are a great number of factors 

that go into employers’ decisions about how many hours their employees work and how many employees they employ. Healthcare is 

certainly one of those. But we know that under the existing system, 

which has been broken, employers have found it difficult or impossible to get affordable coverage, particularly with a small employer. 

Just one employee who has a serious illness can drive the cost for 

that employer to the point where the employer can no longer afford 

to provide that coverage. That can no longer happen under the Affordable Care Act. 

Mr. GRIFFITH. Well, let me tell you what is going on. I will tell 

you the excitement that you reference is excitement of the negative, 

not excitement of the positive. And I am going to quote now from 

the Olympian—their .com or their online publication—because they 

go on to cite ‘‘worker-friendly lawmakers’’—and talk about that 

same bill, but this person was opposed to that bill—‘‘worker-friendly lawmakers such as Democratic Senator Karen Fraser of Thurston County called the bill ‘‘premature.’’ Why you ask? Again 

quoting Senator Fraser, ‘‘because the precise benefits available 

under the exchanges are still unknown.’’ She said there is a chance 

that some workers could not afford coverage and plunge their families into poverty. 

Now, that is a Democratic State Senator in the State of Washington who fears putting state workers into the exchanges because 

they won’t be able to afford the coverage. How can you tell the 

American people and how can you tell Senator Fraser that she is 

wrong and that she has no reason to be fearing. Is that the kind 

of excitement that your hearing? Because that is the kind of excitement I am hearing in my district, and, obviously, Senator Karen 

Fraser of the State of Washington, a member of the Democratic 

Party, has that same fear coming to her from her constituents. 

How do you respond to that, sir? 

45 

Mr. COHEN. Well, I don’t know about her particular concerns, but 

what I do know is that under the Affordable Care Act, tax credits 

will be available to people that will make insurance coverage more 

affordable beginning in 2014 than it is today. 

Mr. GRIFFITH. And that argument was made on the floor in the 

State of Washington and Ms. Fraser wasn’t convinced. 

Thank you, sir. I yield back my time. 

Mr. MURPHY. The gentleman yields back. I now recognize the 

gentleman from North Carolina, Mr. Butterfield, for 5 minutes. 

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

Thank you, Mr. Cohen, for coming to be with us today. Hopefully, 

you have brought with you some very important information that 

we can all benefit from. 

As you may know, I represent a very low-income district in 

North Carolina. In my whole State we have about 1 1⁄2 million people who are uninsured. About 1⁄3 of those, 500,000 of those, are 

poor people. And about 10 percent of those live in my congressional 

district. And so I have listened to the questions and answers here 

today and I can tell you that in my district—I can’t speak for other 

districts—but in my district there is a lot of excitement about the 

Affordable Care Act. The people that I represent are looking forward to it, including businesspeople. Those who are rational, those 

have taken the time out to study the benefits of the Affordable 

Care Act for their business, once they understand it, most if not all 

of them are ready to embrace it. 

But I want to just take a few minutes to drill down on the navigator program, because you know and I know that that is so critically important. I see the navigator program as community-based 

individuals who will go out into the community and go to 

untraditional places: barbershops, and beauty salons, and even 

knock on doors to find people who would qualify for the exchange. 

Is that correct? 

Mr. COHEN. That is exactly right. 

Mr. BUTTERFIELD. These are not elitist, these are not people who 

will sit behind a desk and push some buttons. These are people 

who will actually beat the pavement and go out and find people, 

first of all, to inform them about the benefits of the program. 

Mr. COHEN. That is right. And ideally, people who already have 

a track record and a history of helping people in those communities. 

Mr. BUTTERFIELD. Will this include knocking on doors, canvassing neighborhoods? 

Mr. COHEN. Absolutely. 

Mr. BUTTERFIELD. All right. And when a door is knocked on and 

an individual is found who would potentially qualify for the program, what happens next? I guess there is an informational session 

with the individual. But once the navigator determines that this individual qualifies for assistance for the tax credits, what happens 

next? Do you take them by the hand and take them to some central 

location and process a claim? 

Mr. COHEN. I mean, ideally, the easiest way to get people signed 

up is online. So ideally, navigators would help folks who may not 

have access to a computer at home, you know, go to the community 

46 

organizations location and help them through an online process 

which could be done—— 

Mr. BUTTERFIELD. Well, let’s divide into two pieces. Let’s say the 

citizen has a computer in their home. Will the navigator actually 

stay in the home, assist the individual with the application online? 

Mr. COHEN. They can help them walk through the application, 

exactly. 

Mr. BUTTERFIELD. At the request of the individual? 

Mr. COHEN. Of the person, of course. 

Mr. BUTTERFIELD. Yes. And if the citizen does not have access to 

a computer, then the navigator will enable the individual to go to 

an office? 

Mr. COHEN. Ideally, or people can apply—there is a paper application and people can apply with a paper application. So a navigator could sit down with someone across the kitchen table and go 

through the application and do it that way as well. 

Mr. BUTTERFIELD. Then will the navigators see it through to 

completion? Is there a procedure for making sure that the individual follows through? 

Mr. COHEN. There can be a procedure for the navigator finding 

out whether—what the result of it has been. 

Mr. BUTTERFIELD. All right. Now, from what I can gather, if an 

individual—let’s say a single, healthy, childless adult who makes 

$20,000 a year—and that individual would qualify for tax credits 

through the exchange. But an individual who makes $10,000 year 

who is single and childless and healthy would qualify for Medicaid. 

But if a State has declined the expansion of Medicaid, the 10,000 

individual will have no access to insurance. Is that correct? 

Mr. COHEN. They can still go into the exchange. 

Mr. BUTTERFIELD. Even if they are under 100 percent of the federal poverty line? 

Mr. COHEN. They could then—those people won’t be getting a tax 

credit. You are correct. 

Mr. BUTTERFIELD. But can anyone under 100 percent of poverty 

go into exchange? 

Mr. COHEN. Yes. 

Mr. BUTTERFIELD. So if makes $50 a year in income, if they have 

the capacity to pay for the exchange, they can go into it? 

Mr. COHEN. Correct. 

Mr. BUTTERFIELD. So if a family member wanted to assist that 

low-income individual, they could do that? 

Mr. COHEN. They could do that. 

Mr. BUTTERFIELD. All right. All right. Thank you very much. I 

yield back. 

Mr. MURPHY. The gentleman yields back. 

I will now go to the gentleman from Ohio, Mr. Johnson, for 5 

minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman. Mr. Cohen, has your 

office done any analysis of the healthcare law, Obamacare’s impact 

on premiums? 

Mr. COHEN. No. 

Mr. JOHNSON. You haven’t? 

Mr. COHEN. No analysis in the sense that—— 

47 

Mr. JOHNSON. That is great. We are going to have a fun session 

here then. So are premiums going up or down for the average consumer? You testified earlier that millions of Americans that don’t 

currently have insurance are going to have insurance in October 

under the law. 

Mr. COHEN. Right. 

Mr. JOHNSON. For the average consumer that has healthcare 

today, are their premiums going up or down? 

Mr. COHEN. I think we have to wait and see when the plans submit their rates—— 

Mr. JOHNSON. But that is not what the President promised. The 

President promised that supporters would see lower costs. So are 

people going to see increases or decreases in their premiums? 

Mr. COHEN. I think at this point we have to wait and see what— 

how the rates come in for 2014. Over time, people absolutely will 

see lower costs. As we see more competition in the system, a broader risk pool, and if you look at the overall healthcare costs that 

people have to absorb, giving tax credits, lower cost-sharing, they 

will see lower costs. 

Mr. JOHNSON. Well, who is going to see lower cost? What demographics are going to see lower costs? Is it going to be the young? 

Is it going to men? Is it going to be women? Is it going to be seniors? Who is going to see lower costs? 

Mr. COHEN. Well, we know that women today can be charged up 

to 50 percent more than men just because they are women. So yes, 

women will see lower costs. And we know that older people can be 

charged often 5 or 6 times as much because of their age, and that 

is going to be limited. So they will see lower costs. 

Mr. JOHNSON. Are anybody’s premiums going up? 

Mr. COHEN. I think we have to wait and see what the rates look 

like when they come in. 

Mr. JOHNSON. That is a theme that has persisted in this law. 

Wait and see. Pass it, and then let’s see what happens down the 

road. Well, I tell you what, that is a dangerous way to navigate a 

ship like America’s economy. 

You know, you also write that these programs will keep premiums in the individual and small group markets reasonably 

priced. What is a reasonable price? Surely, you have got some idea 

what a reasonable price is? 

Mr. COHEN. You know, sitting here today, I don’t have an answer 

to the question. We can certainly come back. I think what I can say 

is that we know that over the last couple of years, health insurance 

premiums have been going up at a lower rate than they have been 

for decades before. I mean, health insurance premiums are going 

up by double digits year after year after year. And that hasn’t been 

the case—— 

Mr. JOHNSON. But the American people were promised two 

things. 

Mr. COHEN [continuing]. Over the past couple of years. 

Mr. JOHNSON. They were promised that if they like their current 

coverage, they could keep it, and that cost would be lowered. You 

have just confirmed to me that you don’t know that to be true anymore. You don’t know. You are having to wait and see. 

Mr. COHEN. For 2014. Over time, you know—— 

48 

Mr. JOHNSON. Well, I just asked you that. Were premiums going 

up or down and you said you don’t know. 

Mr. COHEN. For 2014 we have to wait and see—— 

Mr. JOHNSON. OK. Let’s look out longer than that. Are premiums 

going up or down? 

Mr. COHEN. I expect that premiums will go down relative to what 

they would have been—— 

Mr. JOHNSON. For who? 

Mr. COHEN [continuing]. Without the Affordable Care Act. 

Mr. JOHNSON. For who? 

Mr. COHEN. For everyone. 

Mr. JOHNSON. For everyone? 

Mr. COHEN. If not for the Affordable Care Act, they will be going 

up higher. 

Mr. JOHNSON. OK. So then you must know then what defines 

some reasonable cost. If you know they are going down or you 

think they are going down, you have got some idea of what that 

range is. What is reasonable? 

Mr. COHEN. The primary factor that goes into what a healthcare 

premium is is the cost of medical care, and we all know that. That 

is the primary driver of healthcare costs. So in order to have premiums go—truly go down, we need to address the cost of medical 

care. And the Affordable Care Act and the Administration have a 

number of different ways of—— 

Mr. JOHNSON. Well, we have a very different—— 

Mr. COHEN [continuing]. Doing that. As far as my program is 

concerned—— 

Mr. JOHNSON. We have a very different understanding of what 

is driving the cost of healthcare, because in my opinion, what is 

driving that cost of healthcare up is the bureaucracy that has now 

set itself up in Washington to oversee 1⁄6 of our economy. I have 

only got a little bit of time left. 

On the application, one of the questions that the applicants are 

asked is, do you think the employer’s coverage is affordable? Do 

you think the employer’s coverage is affordable? Why do you ask 

this? 

Mr. COHEN. It is—— 

Mr. JOHNSON. What is affordable healthcare in your opinion? 

Mr. COHEN. It is defined in the statute. The question is asked because it is one of the eligibility requirements and it is defined in 

the statute as up to—depending on what your income level is, up 

to 9.5 percent of your income. 

Mr. JOHNSON. So affordable in your opinion is 9.5, which is almost 10 percent of a person’s income for healthcare. 

Mr. COHEN. It is not my opinion. It is what is in the law. 

Mr. JOHNSON. But what is your opinion of what is affordable? 

Mr. COHEN. I don’t have an opinion. 

Mr. JOHNSON. Well, that is good. Got you. I yield back. 

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

I now go to the gentlelady from Illinois, Ms. Schakowsky, who is 

recognized for 5 minutes. 

Ms. SCHAKOWSKY. Well, Mr. Cohen, it is not surprising that from 

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49 

tion to the Affordable Care Act, or Obamacare as I proudly say, 

goes on after 33 efforts to repeal the entire bill. 

But I would challenge my colleagues on the other side to go out 

and explain to at least some of their constituents—for example, the 

parents of children with preexisting conditions—that they want to 

take away insurance to them, that annual and lifetime coverage 

limits should be reinstated, that the rescissions of policies should, 

once again, go into place, that all the preventive health services 

without cost-sharing ought to go back into effect, that the young 

people that are on their parents’ policies, forget it, they are off. You 

explain that to them, that the medical loss ratio requiring insurance companies to actually pay for health coverage should be 

changed, and tell women that we think you should be discriminated against. That is a good idea, that about, I don’t know how 

many billions of dollars we collectively pay more in health insurance. 

And so, you can list 5 problems with the program and we can list 

many, many more good things. And we would like to work with 

each other to try and correct them rather than just complain. No, 

the program is not perfect. 

I wanted to ask you. We are just months away now from full implementation of Obamacare’s coverage, and the Administration has 

requested additional resources to implement the law and those requests have been ignored. And it seems to me the refusal of my Republican colleagues to appropriate HHS adequate resources to help 

implement the law is limiting our efforts to inform Americans 

about Obamacare’s exciting new coverage options. 

And let me just say that when the Part D was put into effect, $600,000 was spent by the Bush Administration for blimps to talk 

about—just for blimps alone. So could you explain how CCIIO 

would use additional resources that the Administration has requested to implement the law, and how might the refusal to appropriate adequate resources hinder the ability of consumers to know 

about October 1? 

Mr. COHEN. Thank you, Congresswoman. We certainly would 

welcome the ability to provide more grants to navigators out there 

in the community. We welcome the ability to do more outreach ourselves to—as you know, there has been a lot of misinformation 

about this law. People, you know, really do need to understand the 

benefits of it and what it can do for them. And so with the President’s budget request, we certainly could use that money to do 

more outreach into the community and make sure that people understand what the law is and how it can benefit them. 

Ms. SCHAKOWSKY. You know, and I would just like to say to my 

colleagues, you talk about the fear in the districts. And to the extent that there are some problems with the bill, if we could sit 

down and work together and figure out how to make it better, but 

a lot of that fear is the misinformation that has been quite deliberately sent out. You watch Fox; it is hard not to be scared about 

Obamacare and what it might do to you. So I would suggest that 

the fear-mongering that is going on about this law, which has now 

been upheld by the United States Constitution that will bring up 

to 30 million people of the United States of America to be able to 

have healthcare, that will help us join the community of nations in 

50 

the world that declare that healthcare is a right of the citizens of 

their countries. You know, we could use the help. All of us could 

use the help. All Americans could use the help to perfect this legislation. 

And I yield back. 

Mr. MURPHY. Thank you. The gentlelady yields back the balance 

of her time. 

I now recognize the gentleman from Colorado, Mr. Gardner, for 

5 minutes. 

Mr. GARDNER. Thank you, Mr. Chairman. 

Thank you, Mr. Cohen, for your time with us this morning. And 

my colleagues said that there is fear-mongering on this bill but I 

would just like to point out that I read an article the other day that 

the roofers union backtracks on Obamacare and wants repeal or reform of the bill. So I don’t think this is right wing fear-mongering. 

I think when you have a union that is very concerned about 

Obamacare and wants its repeal or reform, I think that is where 

we have significant concerns that must be addressed. 

Mr. Cohen, are you familiar with Richard Foster, the actuary of 

Medicare? 

Mr. COHEN. I know who Richard Foster is, sure. 

Mr. GARDNER. Are you familiar with testimony that he gave before the House of Representatives Budget Committee a year ago or 

so? 

Mr. COHEN. Generally, but not specifically, no. 

Mr. GARDNER. In that testimony he talked about the two central 

promises of the healthcare law that were unlikely to be fulfilled: 

one, that the bill will not hold costs down; and two, that it won’t 

let everybody keep the current insurance if they like it. Would you 

agree with that assessment? 

Mr. COHEN. Well, I think, as I said, I do believe that costs will 

be down relative to where they would have been without the Affordable Care Act—— 

Mr. GARDNER. So that is an increase then. 

Mr. COHEN. Well, if medical costs increase, then the cost of insurance is going to increase. But at least—— 

Mr. GARDNER. So that the promise—— 

Mr. COHEN [continuing]. People will have—— 

Mr. GARDNER [continuing]. Was made that it would keep costs 

down. 

Mr. COHEN. Well, it will keep costs down relative to what they 

would have been without the law and at least people will have the 

security—— 

Mr. GARDNER. So what you are saying is that we will expect, 

then, costs to increase? 

Mr. COHEN. At least people will have the security of knowing 

that if they have a serious illness, their care will be paid for, which 

they don’t have today. 

Mr. GARDNER. We are talking about cost increases. 

Mr. COHEN. Well, for someone who has never been able to have 

health insurance before, to talk about an increase—— 

Mr. GARDNER. What about the person who has health insurance. 

Are they going to experience cost increases? 

51 

Mr. COHEN. I think it is going to depend on the individual situation. There are factors that will cause costs to go down; there are 

tax credits that are available. 

Mr. GARDNER. Are you insured through the federal system or do 

you have outside insurance? 

Mr. COHEN. I am insured through the federal system. 

Mr. GARDNER. Has your insurance gone down or gone up? 

Mr. COHEN. You know, I don’t even remember what happened. 

I think we had a small increase this year. 

Mr. GARDNER. So—— 

Mr. COHEN. But we have had lower increases in the last 2 years 

than we have had for a long time before that. 

Mr. GARDNER. So what kind of—— 

Mr. COHEN. The fact that health insurance goes up is not new. 

I mean, that is—health insurance has been—— 

Mr. GARDNER. But I think the promise that was—— 

Mr. COHEN [continuing]. Going up year after year after year after 

year. 

Mr. GARDNER [continuing]. Made in the healthcare bill, if I am 

not mistaken, the promise was made that this would lower the cost 

of healthcare. 

Mr. COHEN. Well, I think it will relative to where it would have 

been without the law. 

Mr. GARDNER. So this is kind of like the Washington two-step 

when we say we are cutting budgets but you are actually decreasing the rate of an increase. Is that what you are saying Obamacare 

has done? 

Mr. COHEN. I am saying that I believe that healthcare insurance—and if you look at the total out-of-pocket costs that people 

have to absorb—will be lower than it would have been without the 

law, yes. 

Mr. GARDNER. So that is an increase in costs because if it is 

going to be—— 

Mr. COHEN. It may or it may not be, depending on—— 

Mr. GARDNER. What is an acceptable increase? I mean—— 

Mr. COHEN. I mean for—— 

Mr. GARDNER [continuing]. What are you anticipating under this 

healthcare bill? 

Mr. COHEN. For women who have had to pay 50 percent more 

than men, you know, the effect will be to reduce their costs. For 

people who have had to pay out-of-pocket for all that medical 

care—— 

Mr. GARDNER. But reduce their cost, even though their costs increase from year to year? It is just what you are saying is that, oh, 

it might not increase as much. 

Mr. COHEN. I think it is going to depend on a number of factors, 

including the underlying costs of medical care. 

Mr. GARDNER. Well, let me ask you this then: will Obamacare reduce the cost of healthcare? 

Mr. COHEN. It will relative to what it would have been without 

the law, yes. 

Mr. GARDNER. But you are saying then that healthcare will increase? 

52 

Mr. COHEN. That will depend on factors that are external to the 

Affordable Care Act. It will depend on—— 

Mr. GARDNER. Well, maybe—— 

Mr. COHEN [continuing]. The costs of healthcare. 

Mr. GARDNER [continuing]. I am not asking my question very 

clear. 

Mr. COHEN. Yes. 

Mr. GARDNER. Will healthcare costs be less next year after the 

implementation of this bill? 

Mr. COHEN. I think that will depend on—— 

Mr. GARDNER. Yes or no. 

Mr. COHEN. I can’t answer the question. I don’t know what is 

going to happen next year. 

Mr. GARDNER. So we don’t know whether or not the—— 

Mr. COHEN. I don’t know what is going to happen to the underlying cost of medical care. 

Mr. GARDNER. Well, what about insurance—— 

Mr. COHEN. What doctors charge—— 

Mr. GARDNER [continuing]. That people—— 

Mr. COHEN [continuing]. What hospitals charge, what—— 

Mr. GARDNER. Well, what about insurance that people like? If 

they have their insurance and they want to keep it, are they going 

to be able to? 

Mr. COHEN. They can if they are in a grandfathered plan and the 

plan doesn’t change significantly, they can keep that coverage and 

it is not affected by the Affordable Care Act. 

Mr. GARDNER. So you are saying that, right now, people across 

this country who have been told they are not going to be able to 

keep their insurance, they are being misinformed? 

Mr. COHEN. They are misinformed if they don’t understand that 

if they are in a plan that was grandfathered, as many people are, 

that they could keep that coverage, then yes, they are misinformed. 

Mr. GARDNER. So if the employer switches the plan because of 

this healthcare bill, then they get to keep their old healthcare? 

Mr. COHEN. Employers can keep their employees in a grandfathered plan and not be affected by the provisions of the Affordable Care Act, yes. 

Mr. GARDNER. Do you know which plans were grandfathered? 

And if the healthcare bill requires them to change the plans, 

though, doesn’t that mean that they are going to lose the 

healthcare? 

Mr. COHEN. No, no, no, the healthcare law doesn’t require them 

to change the plans. That is the whole point of being grandfathered. You don’t have to change it if you are in a grandfathered 

plan. 

Mr. GARDNER. So these employers will never have to change 

their healthcare plan that they are offering? 

Mr. COHEN. As long as the plan does not change significantly in 

terms of the benefits that they offer. If they keep the benefits the 

same—— 

Mr. GARDNER. Or what is required by the healthcare bill. 

Mr. MURPHY. Time is expired. 

53 

Mr. COHEN. Then, they can keep a grandfathered plan and they 

don’t have to comply with the provisions of the Affordable Care Act. 

That is what grandfathering means. 

Mr. MURPHY. Thank you. The gentleman’s time is expired. 

Now, I will recognize the gentleman from Missouri, Mr. Long, for 

5 minutes. 

Mr. LONG. Thank you, Mr. Chairman. 

And Mr. Cohen, thank you for being here today. But I have got 

to say that if Rod Serling walked through that door right there, I 

wouldn’t be surprised because he could walk in here and say you 

have now entered the Twilight Zone. There cannot be so much difference in interpretation, I don’t think, other than it is inexplicable. 

It is Twilight Zonish if that is a word. We have friends of mine on 

the other side of the aisle, a good friend that just spoke a minute 

ago, Ms. Schakowsky. She, to paraphrase her, said on the Republican side of the aisle, there is relentless drumbeat of opposition to 

the President’s healthcare plan. And my other very good friend 

over there, Gene Green, said something to the effect of people 

across America have seen vast improvements in their healthcare. 

And I think from the questions you have seen today, that is not 

what some of us are hearing. 

So I want to start with a couple of yes-or-no answers if I may 

on some things some Democrats have said, see if you agree with 

them. Democratic Senator Max Baucus said, ‘‘I just see a huge 

train wreck coming down because of bumbling implementation.’’ 

Yes or no, do you agree with that? 

Mr. COHEN. I do not agree with that. 

Mr. LONG. Let’s move to another Democrat Senator. Let’s move 

to Tom Harkin. Senator Tom Harkin—and Mr. Cohen, yes or no— 

do you agree with Senator Harkin that this Administration should 

not be raiding the Prevention Fund for funding exchange expenditures? 

Mr. COHEN. Congressman, I really am not going to express a 

view on that. That is not a decision I made. It is not—— 

Mr. LONG. You can’t answer a yes-or-no question—— 

Mr. COHEN. I can’t answer—— 

Mr. LONG [continuing]. Whether you agree with a statement—— 

Mr. COHEN. I can’t answer that—— 

Mr. LONG [continuing]. That a Democrat Senator made? 

Mr. COHEN. I can’t. 

Mr. LONG. You can’t—— 

Mr. COHEN. I don’t have—— 

Mr. LONG [continuing]. Or you don’t want to—— 

Mr. COHEN. I—— 

Mr. LONG [continuing]. Or you don’t know if you agree—— 

Mr. COHEN. I don’t have a view. 

Mr. LONG. You don’t have a view whether you agree with a statement that a Senator made? 

Mr. COHEN. I don’t. 

Mr. LONG. I really don’t know what to say. I guess I will wait 

for Rod Serling to come through the door. 

Mr. COHEN. That would be the second coming of Rod Serling I 

think. I think he passed away—— 

54 

Mr. LONG. The way things have been going here, I wouldn’t 

doubt it. I mean I could see it happening. 

This morning, according to POLITICO Pro’s whiteboard, Senator 

Tom Harkin blasted HHS Secretary Kathleen Sebelius at a hearing 

this morning. It was after we had started this hearing—blasted 

Sebelius for using Prevention Fund money to pay for insurance 

navigators saying the Obama Administration is treating preventive 

care as an afterthought. To quote the Senator, ‘‘I am sorry to say 

this Administration just doesn’t get it.’’ And this is a Democrat. 

This is not the Republican’s drumbeat. First of all, it was a $5 billion raid last year on Prevention Funds, Harkin said, referring to 

the payroll tax extension Barack Obama signed into law last year 

that cut $5 billion from the Prevention Fund. This year, it is another $332 million raid. It is sort of like the Prevention Fund is 

sort of an afterthought. 

I am going to ask you one more time. Do you agree with Senator 

Harkin that this Administration should not be raiding the Prevention Fund for funding exchange expenditures, yes or no? 

Mr. COHEN. You know, I would have been happy if Congress had 

appropriated funding for us to do the work that we need to do and, 

you know, that didn’t happen. And so the Secretary made decisions 

under her authority. And I don’t have an opinion one way or the 

other as to those decisions, no. 

Mr. LONG. Who would you direct me to? Let’s say for a minute 

that I have staff that come to me and say we are a little confused. 

What is our healthcare going to cost starting 2014? What government agency would you direct me to to get their questions answered, what they are going to be paying for their healthcare next 

year, my staff? 

Mr. COHEN. Well, if your staff is covered by the federal program, 

then I think the information that they would want to get would be 

from the program that administers their healthcare. 

Mr. LONG. What government agency? 

Mr. COHEN. FEHB or whoever—whatever coverage they have. 

Mr. LONG. OPM maybe? 

Mr. COHEN. Could be. 

Mr. LONG. Well, we have tried relentlessly because I have—well, 

you laugh at it but—— 

Mr. COHEN. No, no—— 

Mr. LONG [continuing]. My staff is not laughing and it is a very 

serious concern for me. When you have staffers on this Hill that 

have got college educations, some of them have law degrees, and 

they are living two and three people to an apartment because the 

cost of living up here to get by, and they come to me with a legitimate question on what they are going to be paying next year. They 

are thinking about leaving government service. They are thinking 

about taking jobs other places. It is a very serious thing so we have 

tried and tried and tried to get the answer on what they are going 

to be paying. OPM cannot tell us. 

Mr. COHEN. No, and I don’t mean to minimize that, Congressman. I was only smiling because I can’t help with OPM obviously. 

I wish I could but I can’t. 

Mr. LONG. I gave Rod Serling 5 minutes and he didn’t make it, 

so I yield back. 

55 

Mr. MURPHY. The gentleman’s time is expired. 

And I recognize the gentlewoman from North Carolina, Mrs. 

Ellmers, for 5 minutes. 

Mrs. ELLMERS. Thank you, Mr. Chairman. 

And thank you, Mr. Cohen, for being with us today. I do have 

to go back and just reiterate some of the points that have already 

been made and get some clarification from you. Going back to the 

closing of the Pre-Existing Insurance program. When was that 

closed? 

Mr. COHEN. It was closed for the federal program in February 

and for the state programs in March. 

Mrs. ELLMERS. OK. And so those individuals who would be utilizing those dollars for their preexisting condition coverage will not 

be able to do so until January 1? 

Mr. COHEN. The existing enrollees are unaffected but new people 

who would be coming into the program will not be able to come 

into the federal—into the PCIP program unless we are able to— 

yes, until January. 

Mrs. ELLMERS. After January—— 

Mr. COHEN. January they can—— 

Mrs. ELLMERS [continuing]. As it is right now. 

Mr. COHEN. As it is right now, correct. 

Mrs. ELLMERS. OK. You know, this is the confusing part about 

it because especially my colleagues across the aisle continuously try 

to paint us—us meaning Republicans here on the other side—as 

the ones who are interfering with anyone getting preexisting coverage and looking at it from an unsympathetic standpoint. However, this program has been cut off and they support that, and here 

we are attempting to pass legislation to actually help those individuals. I am just—— 

Ms. SCHAKOWSKY. So are we. Will the gentlewoman yield? 

Mrs. ELLMERS. This is my time. You had your time. 

You know, I am perplexed by that and you clarified that for me. 

I just want to make sure that we have clarified that we are talking 

about months of time that individuals will go without that care. 

Also, for clarification purposes, in the discussion that you were 

having with Mr. Johnson and then also with Mr. Gardner, you 

stated that as of January 1, 2014, that healthcare premiums will 

go down. Is that correct? 

Mr. COHEN. No, what I think I said—what I believe is that, first 

of all, we don’t know yet what premiums are going to be for coverage in January of ’14 because plans are just now submitting 

those rates to their state insurance departments for approval to the 

exchanges of—with respect to—— 

Mrs. ELLMERS. OK. But, sir, that was not the promise. The promise that was made continuously when this was being implemented, 

that healthcare premium costs would go down. And so I am asking 

you under oath today, as you see it—you are no longer standing behind that statement? You are now saying that we do not know and 

probably more than likely we wil see healthcare insurance premiums going up. Is that correct? 

Mr. COHEN. No, that is not correct. What I think I said was that 

for 2014 we need to wait to see how the rates come in, and over 

56 

time, I believe that the Affordable Care Act will result in lower 

overall cost of—— 

Mrs. ELLMERS. And what—— 

Mr. COHEN [continuing]. Healthcare for people—— 

Mrs. ELLMERS. OK. Sir, what do you base that on? Because CBO 

has done a culmination of studies, which showed—and I will just 

cite North Carolina—that North Carolina healthcare premium 

rates will go up by 61 percent. So what are you basing your data 

on? And if you do have studies that show this, I would like for you 

to submit them to the Subcommittee. 

Mr. COHEN. I am basing it on the increased competition that will 

exist in the new marketplace compared to what we have today 

where, in many States—— 

Mrs. ELLMERS. But that could exist—— 

Mr. COHEN [continuing]. There—— 

Mrs. ELLMERS [continuing]. With or without the Affordable Care 

Act going into effect. You know, we in Congress could enact many 

pieces of legislation and are working on just that, to help increase 

competition—— 

Mr. COHEN. Well—— 

Mrs. ELLMERS [continuing]. Among the healthcare providers. 

Mr. COHEN. Well, it could, Congresswoman, but in most States 

today—in many States today, the individual and small group markets are dominated by one carrier that has 60, 70, 80, even 90 percent of the market. That is the reality today. 

Mrs. ELLMERS. And that could be—— 

Mr. COHEN. And that is what we are—— 

Mrs. ELLMERS [continuing]. Easily remedied. 

Mr. COHEN [continuing]. Going to change. 

Mrs. ELLMERS. That could be easily remedied with legislation. 

We don’t need this massive takeover of healthcare, increasing rates 

by 61 percent for those who I represent in North Carolina. There 

again, I would really hope that you would be able to gather some 

data, because again under oath you are saying, ‘I am incredibly unclear as to what will happen with healthcare rates as of 2014.’ 

Mr. COHEN. For most Americans, the millions of Americans who 

are covered by insurance through their employer that is in a large 

group, they are not going to see an effect from the Affordable Care 

Act one way or another—— 

Mrs. ELLMERS. OK. Well, my time is up—— 

Mr. COHEN [continuing]. So that their—— 

Mrs. ELLMERS [continuing]. And I don’t understand even what 

you base that on. 

Mr. MURPHY. If I could ask the gentleman, you asked a question 

about while he was under oath about prices going up or not going 

up and you didn’t get a chance to answer that question, so I am 

going to give you a moment to answer that question with regard 

to you previously stated about prices not going up, you said you 

couldn’t guarantee that and you were going to elaborate on that 

statement. 

Mr. COHEN. I think—— 

Mr. MURPHY. Do you recall? 

Mr. COHEN [continuing]. We have lost the thread. 

Mr. MURPHY. All right. 

57 

Ms. DEGETTE. Mr. Chairman, let me ask. 

Mr. Cohen, did you ever say that—— 

Mrs. BLACKBURN. Mr. Chairman, I think I am next in the 

queue—— 

Mr. MURPHY. It is. 

Mrs. BLACKBURN [continuing]. If you don’t mind before you go to 

a second round. 

Ms. DEGETTE. I would ask unanimous consent to—listen, the 

previous questioner advised the witness he was under oath and 

then asked him a question and refused to let him finish answering 

that question, and I think that is inappropriate for this hearing. 

Mr. MURPHY. No, I just asked if he would like—— 

Ms. DEGETTE. And so, Mr. Chairman, I think that the witness 

should be allowed to complete his answer. 

Mr. MURPHY. I just did that and—— 

Mr. COHEN. Well, I am not sure what the question was—— 

Ms. DEGETTE. Right. 

Mr. COHEN [continuing]. That is my problem. 

Mrs. ELLMERS. I will be more than happy to restate my question 

if that will help. 

Mr. MURPHY. Can I ask if you could submit that question—— 

Ms. DEGETTE. I think it is—— 

Mr. MURPHY [continuing]. For the record and—— 

Ms. DEGETTE [continuing]. Wrong for members of this committee 

to try to put the witnesses in a perjury trap—— 

Mr. MURPHY. That is why I am—— 

Ms. DEGETTE [continuing]. When they come in here—— 

Mrs. ELLMERS. No, ma’am. 

Ms. DEGETTE [continuing]. And they are trying to help this committee—— 

Mrs. ELLMERS. No, ma’am. 

Ms. DEGETTE [continuing]. Understand. 

Mrs. ELLMERS. I am clearly restating that the gentleman is 

under oath and that he was not answering the question was—— 

Ms. DEGETTE. Well, get him—— 

Mr. MURPHY. Order here. What I would like to ask is if the 

gentlelady would submit that question and we will ask Mr. 

Cohen—— 

Mr. COHEN. I would be happy—— 

Mr. MURPHY [continuing]. To submit it for the record. 

Mr. COHEN [continuing]. To answer for the record. Thank you. 

Mr. MURPHY. That way we will be sure what exactly what you 

were asking, Ms. Ellmers, and sure of your answer. 

Mr. COHEN. Thank you. 

Mr. MURPHY. Thank you so much. 

Recognize the gentlelady from Tennessee for 5 minutes. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

And sir, you have been patient with us and we do appreciate it. 

I want to go to your statement you made I think in response to 

Mr. Harper’s question about over time you thought the insurance 

cost would come down. And this is something that I always watch 

very closely because I am out of Tennessee, and you are probably 

familiar with the program TennCare, and I know I have worn out 

all of my committee members here talking about TennCare and 

58 

asked Secretary Sebelius about it repeatedly. And I just want to let 

you know that it seems from what we have found, what I have 

found in my research—and I have been working on this since we 

got TennCare—as a test case for Hillarycare in 1995. And bear in 

mind, it quadrupled in cost over a 5-year period of time. 

But sir, what we found is there is no example where these nearterm expenses are going to yield a long-term savings in healthcare. 

And if you do have those examples, I would love to see them because through all of this debate of Obamacare, nobody has been 

able to show one, not with public option care, not with guaranteed 

issue, not with community rating, not with any of this in New Jersey or Tennessee or Hawaii or anywhere else, not with any of these 

CMS waiver programs. There is no example where you decrease 

cost, you increase access, and you get better outcomes. So if you 

can prove us wrong on that, then, you know, feel free to bring forward an example. Do you have an example? 

Mr. COHEN. Congresswoman, I think for the person today who 

doesn’t have health insurance coverage and doesn’t know how they 

are going to pay their medical bills and worries about going into 

bankruptcy because their child is sick, I think for that person, a 

lot of this discussion is really irrelevant. And we—and that is what 

we are going to change. 

Mrs. BLACKBURN. OK. Let me ask you this. I want to ask you 

a question about the navigators. Is it true that the navigators cannot have healthcare or health insurance experience? 

Mr. COHEN. No. 

Mrs. BLACKBURN. That is not true? 

Mr. COHEN. That is not true. 

Mrs. BLACKBURN. OK. Because that has been part of the understanding that is out there. 

Also, on your increased competition theory, I have got to tell you, 

what we have seen in Tennessee when you have government control, when it is government control, that is what runs people out 

of the marketplace. 

Mr. COHEN. Well, this isn’t government control. This is a commercial marketplace with—— 

Mrs. BLACKBURN. I beg to differ—— 

Mr. COHEN [continuing]. Private insurance carriers—— 

Mrs. BLACKBURN [continuing]. With you. Let me—— 

Mr. COHEN [continuing]. Providing coverage to people. 

Mrs. BLACKBURN [continuing]. Give you a few examples of what 

is happening in Tennessee. Yesterday, of course, the rate filings in 

Maryland shows that small group coverage increases are going to 

go up 145 percent. And we have got examples in Tennessee that 

we have been polling our companies for this year and next year. 

This year, they are going up anywhere from 26 percent to 132 percent. We are seeing 40 and 50 percent increases expected for next 

year. In the young adult population, the survey we have here at 

Energy and Commerce Committee is looking at 145 to 185 percent. 

Families have already seen their insurance go up $3,000 per family 

since this law was passed. So what do I tell people that are coming 

to my town halls and saying but the President promised my premium was going to go down $2,500 a year. What do we tell these 

people? 

59 

Mr. COHEN. I think you tell them that they should shop on the 

marketplace to find the plan that is best for their family and is the 

most affordable for them. And that is what we expect to be able 

to provide for people. 

Mrs. BLACKBURN. But it is going to cost them more. 

Mr. COHEN. I think healthcare costs have been going up year 

after year after year long before we ever had Obamacare, so it has 

nothing to do with—the fact that the costs go up—— 

Mrs. BLACKBURN. The percentage is—— 

Mr. COHEN [continuing]. Isn’t—— 

Mrs. BLACKBURN [continuing]. Greater, and I think that you 

probably are aware of that. Do you believe that the increases are 

tied to the taxes and the mandates in Obamacare? Do you believe 

that that is any of the driver? 

Mr. COHEN. The impact of the taxes on healthcare premiums is 

very small by all accounts. 

Mrs. BLACKBURN. $165 billion is small? 

Mr. COHEN. The impact on premiums of the taxes is very small. 

Mrs. BLACKBURN. You think that $165 billion of new taxes has 

a small impact on premiums. What do you call—— 

Mr. COHEN. And—— 

Mrs. BLACKBURN [continuing]. Large? 

Mr. COHEN. And we are going to have—— 

Mrs. BLACKBURN. How would you classify small and large? 

Mr. COHEN. We have a reinsurance program that is going into 

effect that is estimated to reduce premiums from what they otherwise would have been by 10 or 15 percent. 

Mrs. BLACKBURN. Let me ask you a little bit about that. I would 

like to know if you find it odd or ironic that we are now subsidizing 

insurance purchase while at the same time we are making insurance more expensive by the mandates and taxes that are being 

piled on this? Thus, we have got increasing subsidies and we are 

putting taxpayers on the hook for even higher federal spending. Do 

you find that odd or ironic? 

Mr. COHEN. I think that Americans are paying for the cost of uncompensated care today. When people show up at the emergency 

room and they don’t have coverage and they get treatment, those 

costs have to be passed on to all—— 

Mrs. BLACKBURN. So you are comfortable—— 

Mr. COHEN [continuing]. Businesses—— 

Mrs. BLACKBURN [continuing]. With the costs going up? 

Mr. COHEN [continuing]. So we are going to—— 

Mrs. BLACKBURN. I yield back. 

Mr. COHEN. We are going to move to a system where we have 

much more insurance coverage. We are going to spread the cost 

over more people, and that will be to the benefit of all Americans. 

Mr. MURPHY. I thank the gentlelady from Tennessee. I might 

also add on that issue of uncompensated care, I hope that is an 

area you will submit more questions for the record so we will have 

those. 

I ask unanimous consent that the written opening statements of 

members be introduced into the record of those who wish that. And 

without objection, the documents will be entered in the record. 

60 

And in conclusion, I would like to thank all the witnesses and 

members that participated in today’s hearing, which would be you, 

Mr. Cohen. I remind members they have 10 business days to submit those other questions for the record, and I ask that Mr. Cohen 

will respond promptly to our questions. 

I appreciate you being here today. I am sure we will be seeing 

you again soon. Thank you very much. 

Mr. COHEN. Thank you. 

Mr. MURPHY. The committee is adjourned. 

[Whereupon, at 12:05 p.m., the subcommittee was adjourned.] 

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