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FEDERAL IMPLEMENTATION OF OBAMACARE: 

CONCERNS OF STATE GOVERNMENTS 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON ECONOMIC GROWTH, 

JOB CREATION AND REGULATORY AFFAIRS 

AND THE

SUBCOMMITTEE ON ENERGY POLICY, 

HEALTH CARE AND ENTITLEMENTS 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 18, 2013 

Serial No. 113–63 

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

( 

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

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

MARK POCAN, Wisconsin 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

STEPHEN CASTOR, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON ECONOMIC GROWTH, JOB CREATION AND REGULATORY AFFAIRS

JIM JORDAN, Ohio, Chairman 

JOHN J. DUNCAN Jr., Tennessee 

PATRICK T. MCHENRY, North Carolina 

PAUL GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

DOC HASTINGS, Washington 

CYNTHIA LUMMIS, Wyoming 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY BENTIVOLIO, Michigan 

RON DESANTIS Florida 

MATTHEW A. CARTWRIGHT, Pennsylvania, 

Ranking Minority Member 

TAMMY DUCKWORTH, Illinois 

GERALD E. CONNOLLY, Virginia 

MARK POCAN, Wisconsin 

DANNY K. DAVIS, Illinois 

STEVEN A. HORSFORD, Nevada 

(III) 

SUBCOMMITTEE ON ENERGY POLICY, HEALTH CARE AND ENTITLEMENTS

JAMES LANKFORD, Oklahoma, Chairman 

PATRICK T. MCHENRY, North Carolina 

PAUL GOSAR, Arizona 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

JACKIE SPEIER, California, Ranking 

Minority Member 

ELEANOR HOLMES NORTON, District of 

Columbia 

JIM COOPER, Tennessee 

MATTHEW CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

DANNY K. DAVIS, Illinois 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

(V) 

C O N T E N T S 

Page 

Hearing held on September 18, 2013 ..................................................................... 1 

WITNESSES 

The Hon. Jeff Colyer, M.D., Lieutenant Governor, State of Kansas 

Oral Statement ................................................................................................. 14 

Written Statement ............................................................................................ 16 

The Hon. C. Bradley Hutto, State Senator, State of South Carolina 

Oral Statement ................................................................................................. 20 

The Hon. Alan Wilson, Attorney General, State of South Carolina 

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

Written Statement ............................................................................................ 24 

The Hon. Katrina R. Jackson, State Representative, State of Louisiana 

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

Ms. Kathy Kliebert, Secretary, Department of Health and Hospitals, State 

of Louisiana 

Oral Statement ................................................................................................. 28 

Written Statement ............................................................................................ 31 

The Hon. Eleanor Sobel, State Senator, State of Florida 

Oral Statement ................................................................................................. 38 

The Hon. Matthew Hudson, State Representative, State of Florida 

Oral Statement ................................................................................................. 39 

Written Statement ............................................................................................ 42 

APPENDIX 

The Hon. James Lankford, a Member of Congress from the State of Oklahoma, Opening Statement ................................................................................... 82 

The Hon. Jim Jordan, a Member of Congress from the State of Ohio, Opening 

Statement ............................................................................................................. 85 

Testimony of Stacie Ritter ...................................................................................... 88 

Testimony of Aqualyn Laury .................................................................................. 90 

Process for Training Authentication, Registration, and Certification for Inperson Assistance ................................................................................................. 91 

Preliminary Findings of Affordable Care Act Navigators Investigation from 

Committee on Energy and Commerce Democratic Staff. .................................. 93 

A Letter to the Hon. Kathleen Sebelius from the State of West Virginia 

Office of the Attorney General ............................................................................ 99 

Preliminary Staff Report, Committee on Oversight and Government Reform, 

‘‘Risks of Fraud and Misinformation with ObamaCare Outreach Campaign.’’ ................................................................................................................... 107

The Hon. Gerald E. Connolly a Member of Congress from the State of Virginia, Opening Statement .................................................................................... 137 

The Hon. Michelle Lujan Grisham a Member of Congress from the State 

of New Mexico, Opening Statement ................................................................... 139 

(1) 

FEDERAL IMPLEMENTATION OF OBAMACARE: 

CONCERNS OF STATE GOVERNMENTS 

Wednesday, September 18, 2013 

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON ECONOMIC GROWTH, JOB CREATION & 

REGULATORY AFFAIRS, JOINT WITH THE SUBCOMMITTEE

ON ENERGY POLICY, HEALTH CARE AND ENTITLEMENTS

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The subcommittees met, pursuant to call, at 10:07 a.m., in Room 

2154, Rayburn House Office Building, Hon. James Lankford [chairman of the Subcommittee on Energy Policy, Health Care and Entitlements] presiding. 

Present from Subcommittee on Economic Growth, Job Creation & 

Regulatory Affairs: Representatives Jordan, Duncan, McHenry, 

Lummis, Bentivolio, Issa, Cartwright, Duckworth, Connolly, Pocan, 

Kelly, Horsford, and Cummings. 

Present from Subcommittee on Energy Policy, Health Care and 

Entitlements: Representatives Lankford, McHenry, Jordan, 

Woodall, Massie, Issa, Speier, Cartwright, Duckworth, Cardenas, 

Horsford, Lujan Grisham, and Cummings. 

Staff Present: Ali Ahmad, Majority Communications Advisor; 

Brian Blase, Majority Senior Professional Staff Member; Molly 

Boyl, Majority Senior Counsel and Parliamentarian; Lawrence J. 

Brady, Majority Staff Director; Daniel Bucheli, Majority Assistant 

Clerk; Caitlin Carroll, Majority Deputy Press Secretary; John 

Cuaderes, Majority Deputy Staff Director; Adam P. Fromm, Majority Director of Member Services and Committee Operations; Linda 

Good, Majority Chief Clerk; Meinan Goto, Majority Professional 

Staff Member; Frederick Hill, Majority Director of Communications 

and Senior Policy Advisor; Christopher Hixon, Majority Deputy 

Chief Counsel, Oversight; Michael R. Kiko, Majority Staff Assistant; Mark D. Marin, Majority Director of Oversight; Laura L. 

Rush, Majority Deputy Chief Clerk; Scott Schmidt, Majority Deputy Director of Digital Strategy; Sarah Vance, Majority Assistant 

Clerk; Rebecca Watkins, Majority Deputy Director of Communications; Jaron Bourke, Minority Director of Administration; Yvette 

Cravens, Minority Counsel; Jennifer Hoffman, Minority Press Communications Director; Adam Koshkin, Minority Research Assistant; 

Elisa LaNier, Minority Director of Operations; Una Lee, Minority 

Counsel; Dave Rapallo, Minority Staff Director; and Daniel Roberts, Minority Staff Assistant/Legislative Correspondent. 

Mr. LANKFORD. The committee will come to order. 

2 

I want to begin this hearing by stating the Oversight Committee 

mission statement: We exist to secure two fundamental principles: 

first, Americans have the right to know that the money that Washington takes from them is well spent; second, Americans deserve 

an efficient, effective Government that works for them. Our duty 

on the Oversight and Government Reform Committee is to protect 

these rights. 

Our solemn responsibility is to hold Government accountable to 

taxpayers, because taxpayers have the right to know what they get 

from their Government. We will work tirelessly in partnership with 

citizen watchdogs to deliver the facts to the American people and 

bring genuine reform to the Federal bureaucracy. This is the mission of the Oversight and Government Reform Committee. 

In the past month I have personally spoken with a dad who told 

me that his high graduate son was having difficulty finding a job 

that will hire him for more than 29 hours; spoken with a mom that 

brought me her late 20-something son’s insurance paperwork which 

notified him that his health premiums will increase from just over 

$200 a month to just over $800 a month starting in January; I 

talked to a family struggling with their family business because 

they cannot afford the mandates, but they also cannot afford to sell 

the business they worked so hard to build. High-risk pools that hit 

their max in March of this year, prevent anyone else from entering 

high-risk pools. 

No one disputes that there were concerns with the U.S. health 

care system that predate Obamacare. Chief among those concerns 

was the rising cost of health care that was crowding out other 

items in family budgets and contributing to massive Federal budget deficits. 

Obamacare was designed to fix three problems: reduce the cost 

of medicine, provide universal coverage for every American, and increase the quality of health care in America. Americans were told 

over and over again that if they liked their doctor and their insurance, they could keep them. After decades of work, union members 

are furious at the changes of health benefits and the traditional 40- 

hour work week. 

While the law passed by Congress three years ago, implementation of the law has been mired in one problem after another and, 

according to a report by the Congressional Research Service, the 

Administration has missed approximately half of Obamacare’s required deadlines. A recent GAO report on State progress with exchanges found that compressed time frames and a lack of clear 

Federal requirements related to the Federal data service’s hub has 

a major IT challenge to opening the exchanges for enrollment October the 1st of this year. 

Two months ago the Administration delayed Obamacare’s employer mandate and several reporting requirements. Although I believe the employer mandate is bad policy, the effect of this unilateral delay by the Administration will be that the exchanges will 

have more difficulties verifying whether individuals have an offer 

of coverage at work, thus exposing taxpayers to the risk of significant spending on subsidies for those not qualified to receive them 

and, for those individuals that have received them, a tax burden 

at the end of the year that will be quite a surprise to them. 

3 

Moreover, the Administration only delayed the employer mandate. Individual citizens are still liable for the penalties; just businesses are no longer liable. 

State leaders from across the Country have complained that the 

Administration has not adequately responded to their questions 

and concerns. Since many States have part-time legislatures that 

are only in session during the spring, HHS’s failure to issue timely 

guidance harms States’ abilities to implement the law and better 

protect its citizens from its harmful aspects. 

Today we are pleased to hear the testimony from multiple State 

officials involved in much of the day-to-day work in preparing their 

respective States for the start of Obamacare. We have with us 

today multiple different witnesses. I will allow Ms. Speier to introduce some of those, but the Lieutenant Governor of Kansas, Jeff 

Colyer, who is also a physician; Florida State Representative Matthew Hudson; Secretary of the Department of Health and Hospitals 

from the State of Louisiana, Kathy Kliebert; and Attorney General 

for the State of South Carolina, Alan Wilson. 

Yesterday the Democrats on this committee threatened not to 

participate in the hearing unless we invited eight Democrat-selected witnesses. Since normally the minority party only selects one 

witness, and even the majority party only had four witnesses for 

this hearing, it seemed like a fairly audacious request. But we 

didn’t want members of this committee, that is formed to do oversight work, to walk out and fail to hear the serious struggles that 

States are experiencing as a result of Obamacare and the Administration’s implementation of Obamacare, so we made the unprecedented accommodation to let them invite the same number of witnesses as the Majority. Members shouldn’t walk away from States 

struggling to implement Obamacare. We should listen to their concerns and we should find solutions. 

One area that will be explored today is the Administration’s Navigator and Assistor Programs. One of the witnesses here today, Attorney General Wilson, from South Carolina, along with 12 other 

attorneys general, sent a letter to Secretary Sebelius on August the 

14th asking questions about the Navigator Outreach Program. As 

is the pattern of late, the Administration has not yet responded. In 

fact, I spoke yesterday with health care leaders in my own State, 

and they informed me that they cannot get answers from HHS. 

The navigators they speak to my in State still have no idea what 

is happening, and we are only days away from October the 1st, 

that launch date. 

Fortunately, the committee has conducted oversight of the Navigator and Assistor Program. I would like to introduce into the 

record a preliminary staff report on our findings relating to the 

Navigator and Assistor Programs. These findings were largely 

based on transcribed interviews with top HHS officials and internal 

HHS documents produced to the committee. The report shows that 

the Navigator and Assistor Programs are rife with mismanagement 

and they are still struggling to be able to put things together even 

at this point, and it has the real possibility that a large number 

of Americans will fall victim to fraud and identity theft. 

Top HHS officials admitted that the Administration failed to conduct any analysis about whether or not it should require all indiVerDate Aug 31 2005 10:57 Nov 26, 2013 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\85359.TXT APRIL
4 

viduals hired by Navigator and Assistor organizations to pass a 

background check or be fingerprinted, or have the same basic requirements that census workers have. 

The Administration decided to leave the responsibility for authenticating navigators and assistors to the organizations receiving 

the grants to implement the programs. As a result, the Federal 

Government will not be able to provide consumers with a list of individuals officially certified as navigators and assistors. HHS officials deemed several marketing activities inappropriate, such as 

door-to-door solicitation and direct phone calls, but have not taken 

steps to ban them. HHS allows Navigator and Assistor organizations to pay their employees based on the number of individuals 

they enroll, which creates an incentive for those employees to provide biased or incomplete information about Obamacare to maximize employment. 

We have multiple issues here. Every program in the Federal 

Government needs oversight. That should also apply to the newest 

programs in Government, like Obamacare. While billions are spent, 

it is reasonable to ask if it is going well and accomplishing what 

it was designed to do. 

I now recognize the distinguished ranking member, the 

gentlelady from California, Ms. Speier, for her opening statement. 

Ms. SPEIER. Mr. Chairman, thank you for the opportunity to 

comment on this hearing. Let me be frank. This is not a hearing; 

this is theater. I wish it was just a little bit more entertaining. 

This is a bad script with a bad ending because some of my colleagues on the other side didn’t like the way the presidential election turned out, didn’t like the Supreme Court, including Chief Justice Roberts, finding law to be constitutional, and are simply desperate to rewrite the play. 

It is time to take the makeup and the costumes off and get real. 

The Affordable Care Act is the law of the land, and there will be 

no rewrites, no matter how much you would like to rewrite the 

ending. 

I am sickened by the efforts of some to sabotage this law at every 

turn. In some States the elected officials aren’t even subtle about 

it. They don’t even try to mask their blatantly political shenanigans under the guise of public interest. 

Take the duly elected insurance commissioner of Georgia, who 

was caught on tape bragging to an audience of Republican campaign contributors and activists. Let’s play the video. 

[Video played.] 

Ms. SPEIER. He said he was doing everything in his power to be 

an obstructionist. He pointed to the example of the Georgia Republican Legislature, which invented a new requirement that 

Obamacare navigators be licensed. His insurance department 

would just make up a test requiring navigators to pass the insurance agent’s test just to obstruct them from conducting outreach to 

uninsured people. 

The only justification for this new requirement is that it helps 

obstruct implementation of Obamacare. 

Unfortunately, he is not alone. The only witnesses the Majority 

chose to invite are, like the Georgia commissioner, doing everything 

in their power to be obstructionist. 

5 

Florida State Representative Matt Hudson, we thank you for 

being here, is no particular expert on State concerns about the 

ACA implementation. Mr. Hudson is himself busy creating concerns and barriers to implementation. Recently he introduced a bill 

suggested in the State legislator’s guide to repealing Obamacare. 

The poster is behind me, which was published by the American 

Legislative Exchange Council, ALEC, a Koch brothers-funded entity. 

Not every Republican tolerates the obstructionist tactics. In Kansas, the elected insurance commissioner, Sandy Praeger, has struggled to implement the Affordable Care Act, even as Governor 

Brownback sued to challenge the constitutionality of the Affordable 

Care Act, returned a $32 million federal grant to help the State set 

up health insurance exchanges, and has called the Affordable Care 

Act an abomination. 

Senators McCain and Coburn have both criticized their Republican colleagues for working to bring on a Federal Government 

shutdown just to stop the funding for ACA implementation. Senator Coburn called it ‘‘dishonest.’’ 

Sadly, this is a concerted campaign to deny people affordable 

health care being conducted by certain Republican elected officials, 

but it is being orchestrated by entities like ALEC and financed by 

billionaires like the Koch brothers. 

I strongly believe in the importance of congressional oversight; it 

is our job to make sure that the laws of this land, laws passed by 

Congress, are carried out effectively and efficiently. But this committee is not engaging in oversight; it is not interested in getting 

to the facts and seeing the law properly implemented; or in identifying improvements or technical fixes. This committee has, instead, 

chosen to undermine the law and encourage the vowed obstructionists who are throwing hurdles in its way at every step of the process. 

Mr. Chairman, this effort has become a theater of the absurd. 

While I appreciate that you have now accepted some of our witnesses to try and convince the audience that there is some semblance of balance to your script, your play will not make it to opening night and will be relegated to the dustbin of theatrical failures 

once the real show begins to run. I sincerely hope that this is the 

beginning of the end of the charade to undermine a law that has 

been found to be constitutional. And I would like to remind my colleagues that we are sworn to uphold the law and the Constitution, 

and that is a duty I take seriously. It is time we actually do our 

jobs. 

I want to welcome Louisiana State Representative Katrina Jackson, Senator Brad Hutto of South Carolina, and Senator Eleanor 

Sobel of Florida. Thank you for joining us today and coming here 

on your own dime. 

Mr. LANKFORD. With that, I would like to recognize the chairman 

on the Subcommittee on Economic Growth, Mr. Jordan, for his 

opening statement. 

Mr. JORDAN. Thank you, Mr. Chairman. Thank you for putting 

this important hearing together where we can hear from folks on 

the front line. 

6 

Let me just say, in response to the last statement, everyone in 

the Country knows this law is not ready. Yesterday, Warren 

Buffett said scrap the bill. Last week the AFL–CIO voted and said 

fix it or repeal it. Max Baucus, not Republican James Lankford, not 

Republican Jim Jordan, Max Baucus said it is a train wreck. Howard Dean said it is going to lead to rationing of care. Not exactly 

Republicans there. 

James Hoffa said it is going to hurt working Americans, going to 

fundamentally change the 40-hour work week, which it will, and it 

is already doing that. 

Even the President knows this bill needs delayed. That is why 

he delayed it for big business. We just want to say delay it for the 

rest of America. 

I mean, it is unbelievable. It was unpopular when not one single 

Republican voted for it and Democrats passed the bill; it was unpopular then. It is even more unpopular now. This argument is unbelievable. 

I don’t know that the Democrats have introduced a bill to fund 

the Government. There have been bills introduced by Republicans 

to fund the Government and delay Obamacare, which is exactly 

what the American people want. And we are going to hear from 

people on the front line today who know how hard it is to try to 

implement this legislation. 

In Ohio, think about this. Last week, headline in an Ohio paper, 

in Ohio, seventh largest State, 11 million people. Not one single 

navigator, not one, has been trained and licensed as our law requires by the Ohio Department of Insurance. Not one. And we are 

13 days away from the exchange starting. Not one. Seventh largest 

State; 11 million people. You think this thing is going to work well? 

You don’t think this thing needs delayed? This is unbelievable. Of 

course it needs delayed, and the American people understand that, 

and they are just asking their representatives, Republican and 

Democrats, to recognize that fundamental fact. And this hearing is 

about highlighting that fundamental fact. 

I didn’t read my statement; I just reacted to what we heard before. But this is as clear as it gets. In my time in public life, I have 

never seen something this obvious, make this much common sense, 

and have that much opposition to doing it. Unbelievable. 

Mr. Chairman, I yield back. 

Mr. LANKFORD. Recognize the ranking member of the Subcommittee on Economic Growth, Mr. Cartwright, for his opening 

statement. 

Mr. CARTWRIGHT. Thank you, Chairman Jordan and Lankford for 

calling this hearing. 

All across this Country some State legislators and other elected 

officials are obstructing the Affordable Care Act law, the law of the 

land, and undermining enrollment in health exchanges. Just this 

week Florida Governor Rick Scott issued a directive banning Navigator grantees from operating on the grounds of county health departments. This is particularly obstructive because county health 

departments are precisely where Floridians with questions about 

the health care exchanges might turn. 

Florida Governor Scott also stripped Florida’s insurance commissioner of its ability to review insurance rates and protect conVerDate Aug 31 2005 10:57 Nov 26, 2013 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\85359.TXT APRIL
7 

sumers from unfair or excessive premium hikes. The ‘‘rate review’’ 

provisions of the Affordable Care Act require insurance companies 

to justify any proposed health insurance premium increase of 10 

percent or more. Last year, this provision alone saved 6.8 million 

consumers an estimated $1.2 billion in health insurance premiums. 

This is working. 

In fact, every witness invited by the Majority here today represents a State government that is openly obstructing implementation of our Affordable Care Act. These witnesses do not have concerns about implementation, they are creating concerns and barriers to implementation, and they are proud of it. One witness, 

State Attorney General Alan Wilson, works under South Carolina 

Governor Nikki Haley, who said, ‘‘When it came to Obamacare, we 

didn’t just say no, we said never. We are not expanding Medicaid 

just because President Obama thinks we should, and we are going 

to keep on fighting until we get people like Senator Tim Scott and 

everybody else in Congress to de-fund Obamacare.’’ 

Another witness, Secretary of the Department of Health and 

Hospitals, Kathy Kliebert, works under Louisiana Governor Bobby 

Jindal, who said, ‘‘We don’t think it makes any sense to implement 

Obamacare in Louisiana. We are going to do what we can to fight.’’ 

Our constituents deserve better than this. One such constituent 

is right here with us today, Stacy Ritter, a resident of Pennsylvania, my home State. Stacy, if you are here, would you stand up? 

There she is. Welcome, Stacy. She came here on her own dime, she 

is here on her own expense, and she is here to tell you, either on 

or off the record, her compelling story, but I will tell you what it 

is right here. It is in her written statement. Unfortunately, the Majority has not allowed Stacy Ritter here to present her statement, 

but I am going to read an excerpt. 

Mr. ISSA. Would the gentleman yield? I suspect I am the Majority. We have an unprecedented number of witnesses here from the 

Minority; three, when the tradition is one, and they were selected 

by the Minority, not by the Majority. So there are four witnesses 

that we selected. The ranking member sent me a letter yesterday 

asking for an additional eight, but in order to get them all on one 

panel, we have the largest panel we ever have, and all three of 

these witnesses were selected by the Minority. So I hope the gentleman was mistaken in that portion of the statement. 

Mr. CARTWRIGHT. Reclaiming my time. 

Here is what Stacy had to say: ‘‘Thanks to the ACA, the girls’’— 

she is talking about her two daughters. She has two daughters 

with a rare blood disorder known as myelodysplastic syndrome. 

What she said was, ‘‘Thanks to the ACA, the girls can no longer 

be discriminated against if I were to lose or change jobs. Thanks 

to the ACA, we no longer worry about reaching lifetime caps on 

coverage. Thanks to the ACA, my girls can remain on my insurance 

until they are 26 years old, giving them time to finish college and 

find a job. 

There are millions of Americans like Stacy Ritter who have needed the Affordable Care Act for a very long time. 

Mr. Chairman, I am going to ask permission to insert Stacy Ritter’s entire statement into the record. 

Mr. LANKFORD. Without objection. 

8 

Mr. CARTWRIGHT. Now, in fact, in 2007, nearly 10 percent of 

Pennsylvanians reported they were unable to see a doctor when 

necessary due to the cost. Between 2003 and 2009, families in 

Pennsylvania saw their health insurance premiums increase by 45 

percent, to an average annual cost of $13,229. Single policyholders 

experienced a 38 percent increase over the same period. Of those 

who do have health insurance, 53 percent are covered through 

their employment. Public programs such as Medicaid and Medicare 

insure 31 percent of Pennsylvania’s population, and 5 percent of 

residents purchase individual private policies. This leaves nearly 

1.4 million, 11 percent of the State’s population uninsured for 

health care. 

Pennsylvania’s children are uninsured at a rate of 8 percent. 

This is a figure that doubles to 16 percent for children living in 

households with incomes less than 139 percent of the Federal poverty level. Non-elderly adults, those younger than 65, that live in 

these lower income homes, are uninsured at a rate of 32 percent. 

A quarter of Pennsylvania’s non-elderly Hispanic population lacks 

health insurance, non-elderly Blacks are uninsured at a rate of 17 

percent and 11 percent of the non-elderly white population is uninsured. 

Over the next six months, as the health exchanges stand up, 

Pennsylvanians like Stacy Ritter will finally be able to get the help 

they need for themselves and their families. 

Our job is to conduct oversight, and not cheer while State officials impede the implementation of enacted Federal law. 

I yield back. 

Mr. LANKFORD. I recognize the chairman of the full Committee, 

Chairman Issa, for his statement. 

Mr. ISSA. Thank you, Mr. Chairman. I want to thank both our 

chairman and ranking members for holding this important hearing. 

As I said earlier, we have a very large panel and I look forward 

to getting to that panel. 

There is an old expression here in Washington: When asked 

about a tough situation, people will often say, well, some of my 

friends are for it and some of my friends are against it, and I want 

to be with my friends. 

Now, I have never said let’s de-fund and eliminate all of 

Obamacare without viable replacements for many of the things 

that the Affordable Health Care Act chose to do. Along with every 

Republican in Congress at the time, I voted against the Affordable 

Care Act because I felt there were many things in there that were 

overreaching and that were very lopsided. But let’s understand 

that I think every member on the dais and every member testifying 

today would say there were problems in health care before President Obama came into office. 

The Affordable Care Act attempted to say it was going to tackle 

many of those problems, and some of them we agree on: people 

with preexisting conditions finding themselves unable to leave a 

job; the unemployed college graduate or, for that matter, the returning veteran not eligible for retirement, but finding himself unemployed and out of the military, trying to figure out where he or 

she is going to go to get health care. 

9 

There are many, many groups that were falling through the safety net of predictable access to health care. We need to deal with 

that. Very clearly, America’s problem is not that we don’t have 

some of the best health care, it is that we have the most expensive 

health care. One of my concerns is that the Affordable Care Act 

does little to make it affordable except through subsidy. Attacking 

the real causes of our health care costing more than any other first 

world nation is something that we must work on. 

Ms. Speier, who was very new when the Affordable Care Act was 

passed, said something today that I am taking some exception to, 

not on a personal basis, because I don’t think she meant it, but she 

said that this law is the way it is and nothing is going to be 

changed. Well, bad law happens. The Affordable Care Act, for example, mandates that every member of Ms. Speier’s staff and every 

staff member of everyone on this dais is to be thrown off of the 

Federal workforce’s health care system, put into an exchange, and 

not reimbursed. In other words, the Affordable Health Care Act cut 

by $5,000 to $10,000 the benefit for people making as little as 

$25,000 or $30,000 a year, as staffers here on the Hill. 

Now, I am sure Ms. Speier, if asked, would have said, well, I am 

not voting for that. But she did vote for it. It needs to be fixed. We 

cannot have the men and women who would like to serve members 

of Congress find themselves working for a deadbeat employer. That 

is real; it is in the Act. It was in the Act from the Senate, so maybe 

we in the House can say we have to fix it. But it is there. 

Now, in the Act is an implementation that has a lot of bureaucracy, including State exchanges. The anticipation was that all 

States would quickly come together and want to have State exchanges and want to have the subsidies that came with it. What 

I believe we have seen is a legitimate disagreement between States 

who do not want to have a limited subsidy that would probably be 

phased down or out and leave them holding the bag with all the 

regulations that come with a Federal program. 

More importantly, this committee has held a series of hearings, 

and I thank both chairmen, on the implementation problems, databases, privacy and so on. These are not intended to kill an existing 

law; they are intended to make it clear that if it is to go into effect, 

it should go into effect at a time that it can be effective. Nothing 

will kill Obamacare faster than in fact a series of horrific mistakes, 

losses of private or sensitive information or denial of care, or, in 

fact, huge cost overruns. 

So I, for one, am not one of those people who said I am going 

to kill Obamacare; I am going to, in a Machiavellian way, attempt 

to delay or deny. But as chairman of this committee, with my subcommittee chairmen, we have seen serious problems our witnesses 

will talk about. Hopefully, by putting all seven on this panel, we 

give an opportunity for people who have concerns about the implementation of the Affordable Care Act and those who believe that 

we are ready to go live in a matter of days to have an appropriate 

debate. 

I am pleased and I thank the ranking member, when he made 

his selection, to choose people from responsible positions where 

they are looking at the Act, and not the benefits of the Act, but the 

10 

actual Act, and whether implementation will be done properly and 

on time. 

I share with the chairman’s opening statement that, in fact, if 

the President wants to delay one part of a mandate, Congress has 

to ask are we ready to go live. 

Lastly, I think for all of us on the dais, we understand that some 

parts of the Affordable Care Act are already law, they are already 

implemented. It is a question of implementing these large, expensive programs with, for example, a database that has today not 

been tested, but in a matter of days is supposed to go live with all 

of your personal information transferred from the IRS and your 

health care information added to it on a daily basis. That is something we should be concerned with. 

So I join with the ranking member in welcoming this large panel 

of distinguished individuals who do not agree on everything, but 

hopefully they will be my friends and agree that we have to get it 

right. And if that means, Ms. Speier, changing some parts of the 

law, so be it. Let’s work together on making this an Affordable 

Care Act in every way we can while we debate whether or not we 

can afford some aspects of it. 

Chairman, thank you for the indulgence. I yield back. 

Mr. Lankford. Recognize the ranking member from the full Committee, Mr. Cummings, for his opening statement. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. I was very 

heartened by the words of the chairman of the committee and I 

want to thank all of you for bringing us together today. 

I want to remind all of us of something that we may have forgotten. This is the law. Hello, this is the law. It has been passed. 

Chief Judge Roberts of the Supreme Court said it was constitutional. It is the law. And every two years every member of this 

committee, we put our hands up and we say that we are going to 

uphold the law. That is where we start. 

So I am so appreciative of what the chairman just said, but the 

41 times that we have voted on this, it was not to replace it. No. 

It was to kill it. Period. To kill it. Forty-one times. 

So I want to thank you, Mr. Chairman, for accepting the witnesses we requested. I want to thank the chairman of the committee. I thank you. They are elected officials from South Carolina, 

Florida, and Louisiana. After serving as speaker pro tem of the 

Maryland House, I want to thank all of you, and I appreciate your 

service. 

Unlike the witnesses invited by the Majority, these officials have 

tried to implement the Affordable Care Act even in the face of obstruction coming directly from their own governors. Trying to implement the law. Unfortunately, there is a systematic effort by 

some Republican officials to obstruct implementation of the Affordable Care Act. These officials have openly, it is not a secret, come 

on now, pledged to fight implementation, harass entities attempting to conduct public education and outreach, and adopted legislative and regulatory maneuvers to sabotage the Affordable Care Act. 

That is a fact. 

Last week, Chairman Upton sent letters to 51 State Navigator 

organizations demanding that these community organizations turn 

over huge amounts of documentation to the Committee on Energy 

11 

and Commerce. As Norm Ornstein said, ‘‘This is intimidation and 

another effort to sabotage.’’ Not replacing anything. Not improving 

anything. Trying to kill it. 

Some Republican State officials have taken a page from the same 

playbook. West Virginia’s Attorney General Pat Morrisey recently 

sent letters to Navigator grantees in his State demanding answers 

to dozens of questions. One recipient, West Virginia Parent Training and Information, subsequently returned $365,000 in grant 

money that it had applied for and won. Other States are acting the 

same way. 

The problem is that there are tens of millions of people who desperately need the Affordable Care Act to succeed, including in 

these very States. And as our witnesses testify, I want you to tell 

us what happens to them. What happens to the people in your 

States who are sick and cannot get care? And they need members 

of Congress to do our job and help it succeed through responsible 

oversight. 

If I may, I would like to introduce Ms. Aqualine Laury. Ms. 

Laury, would you stand up? A resident of Virginia and the victim 

of a stroke she suffered in college, as well as a series of other serious health problems, Ms. Laury is here today on her own dime. 

Like millions of other Americans, she cares what insurance companies call a preexisting condition. And when the chairman talked 

about the good parts of law, one of the things that we have to keep 

in mind is that you have to have the whole law to make it work. 

Mr. JORDAN. Would the gentleman yield? 

Mr. CUMMINGS. No, I want to finish my statement. I want to talk 

about this lady who traveled here, who has been ill. Ms. Laury 

traveled here today to present her story to Congress. 

This is her story: ‘‘In 2005, I decided to leave my job and a large 

employer to pursue my dream of owning my own business. However, later that year I needed emergency gallbladder surgery and 

suffered complications. At that point, my insurer rescinded my coverage and left me with $50,000 in medical bills during my first 

year in business. If the Affordable Care Act had been in place then, 

it would have been against the law for my insurer to drop me from 

coverage. I am looking forward to opening the health insurance 

marketplace in Virginia this October and the availability of the 

new health insurance premium tax credit that could potentially 

make my health insurance even more affordable. I am also very appreciative that I no longer have to worry ever again about being 

denied coverage due to my preexisting conditions, being charged exorbitant premiums that I can’t afford, or having my coverage 

dropped if I need another hospital visit.’’ 

Ms. Laury, I want to thank you for coming. By telling us the 

story of your life, it is personal business, you speak for millions of 

Americans, millions. 

And I ask that Ms. Laury’s complete statement be entered in the 

record, Mr. Chairman. 

Mr. LANKFORD. Without objection. 

Mr. CUMMINGS. Thank you. 

Mr. CUMMINGS. As I conclude, the truth is that nobody really believes today’s hearing was intended to help make the Affordable 

Care Act work better. 

12 

Now, I must say that I believe the chairman meant what he said. 

But not everybody is where the chairman is. That is why we have 

had 41 votes to kill it. Republicans have taken more than 40 votes 

on the House floor to appeal Obamacare and replace it with absolutely nothing. 

Everyone knows what this hearing is really about: trying to end 

Obamacare. This week House Republicans are threatening to shut 

down, shut down the entire Government unless the Affordable Act 

is completely de-funded. Republicans want to eliminate health coverage for tens of millions of Americans, return the keys to the insurance companies, and go back to the days of discrimination 

against people like Ms. Laury with preexisting conditions. 

Ladies and gentlemen, I have said it before and I will say it 

again, we can do better. And the chairman is right, there are 

things that we can do to improve this. And this may be hard, but 

this is America. We do hard things all the time. We can do this because people’s lives are dependent upon it. 

With that, I yield back. 

Mr. JORDAN. Mr. Chairman? 

Mr. LANKFORD. Yes, sir. 

Mr. JORDAN. Mr. Chairman, I just point out the gentleman 

talked about the law, implementing the whole law. Was the President upholding and implementing the whole law when he gave a 

delay to big business? Great speech. Give it to the President of the 

United States. He is the one who said big business gets a delay, 

but the rest of America doesn’t. 

Mr. CUMMINGS. Come on, now. 

Mr. JORDAN. Well, that is the truth. 

Mr. CUMMINGS. Mr. Chairman? 

Mr. LANKFORD. Yes, sir. 

Mr. CUMMINGS. He knows what the President was trying to do, 

was to try to—— 

Mr. JORDAN. The gentleman—— 

Mr. CUMMINGS. Are you going to let me answer the question? 

Mr. JORDAN. You got seven minutes. I just took—— 

Mr. CUMMINGS. Why did you ask me a question? 

Mr. LANKFORD. It is all right. Go ahead and answer the question, 

sir. 

Mr. CUMMINGS. Yes. Again, this is hard and business said that 

they could not get certain things accomplished. The President gave 

them that leeway. A lot of the problem that we have in the law is 

because of things that happened when we were trying to pass it 

and trying to compromise here, compromise there. But, again, the 

chairman of the committee is right. You are right. There are things 

that could be better. But that does not mean we scrap it and throw 

it out, because people will die. They will literally die, and you know 

it. 

Mr. JORDAN. The gentleman was making the fundamental point. 

He specifically said, and we can read it back, he specifically said 

the whole law. And I just want to know if it is the whole law, it 

should be the whole law, and we shouldn’t give some special dispensation to big business, which the President did without even 

have Congress vote on it. 

Mr. ISSA. Mr. Chairman? 

13 

Mr. LANKFORD. Sir. 

Mr. ISSA. I take no special privilege, but as a member of the committee I know that we have witnesses who can deal with some of 

the challenges that everyone is concerned about, the individual 

mandate, the corporate mandate, the timeliness of it and so on. So 

I hope we can get to it. 

I join with the ranking member in one sense: this is an important hearing. We will disagree on the purpose of it, perhaps, but 

I think that as we hear from our witnesses, both sets of witnesses, 

I think the witnesses will speak for the real intent of the hearing, 

and I look forward to getting to it and then a lively debate afterwards. 

Mr. LANKFORD. We will have plenty of opportunity for that in the 

conversation as we try to determine how is the implementation 

going and what are the real effects on the ground. 

With that, members will have seven days to submit opening 

statements for the record. 

We will now recognize our first and only panel today. 

The Honorable Jeff Colyer is the Lieutenant Governor of Kansas 

and also a physician. 

Ms. SPEIER. Mr. Chairman, I have an inquiry. 

Mr. LANKFORD. You have an inquiry? 

Ms. SPEIER. Mr. Chairman, we normally swear in all of the witnesses. Are we not going to do that today? 

Mr. LANKFORD. We are. We going to introduce all of them and 

then swear in. 

Ms. SPEIER. Thank you. 

Mr. LANKFORD. We can’t have a good hearing without a good 

swearing in the middle of it as well. 

[Laughter.] 

Mr. LANKFORD. The Honorable Brad Hutto is a State senator 

from the State of South Carolina. The Honorable Alan Wilson is 

the Attorney General for the State of South Carolina. The Honorable Katrina Jackson is a State Representative for the State of 

Louisiana; Kathy Kliebert is the Secretary of the Department of 

Health and Hospitals for the State of Louisiana; the Honorable Eleanor Sobel is the State Senator for the State of Florida; and the 

Honorable Matthew Hudson is a State Representative for the State 

of Florida. 

Pursuant to committee rules, all witnesses will be sworn in before they testify, and by Ms. Speier’s demand as well. Just kidding. 

But we do ask you to rise, raise your right hand. 

Do you solemnly swear or affirm the testimony you are about to 

give will be the truth, the whole truth, and nothing but the truth, 

so help you, God? 

[Witnesses respond in the affirmative.] 

Mr. LANKFORD. You may be seated. 

Let the record reflect all the witnesses have answered in the affirmative. Thank you for that. 

In order to allow time for discussion, and we will have some good 

discussion with this, please limit your testimony to five minutes. 

You have a clock that is right in front of you that will start as soon 

as you begin. Please note, as well, we need you to be able to push 

your button to make your microphone live. When that is lit up and 

14 

it says talk, you are live on your microphone, and we will need you 

to get as close as we can to make sure that we can hear every syllable that you say from there. 

With that, I would like to recognize our first person, Lieutenant 

Governor. Be honored to be able to receive your testimony. 

WITNESS STATEMENTS 

STATEMENT OF THE HONORABLE JEFF COLYER, M.D. 

Dr. COLYER. Thank you, Mr. Chairman and ranking members. 

My name is Jeff Colyer. I am honored to be the lieutenant governor 

of Kansas. I am also a practicing physician who, every day, this 

past week, for example, has operated on people without insurance, 

and we take care of them every day. So this is something that is 

very personal to me. 

Like most States, Kansas is facing problems with the Affordable 

Care Act. It is a drag on Kansas businesses. A July 2013 Gallup 

poll suggested that small business owners revealed that 41 percent 

of business owners said that they were going to hold off on plans 

to hire new employees because of the Affordable Care Act. And in 

Kansas that trend is no different. Wherever I go, the biggest concern I hear is the uncertainty about what the ACA is going to do 

to small businesses. 

In a new development, since my testimony was written last 

week, it affects businesses such as mine. I am a sole practitioner. 

Just yesterday we had to sign a contract for $3400 to rewrite all 

of our compliance manuals to fit in with the ACA. All it does is continues the same HIPAA requirements that we had before, but we 

just have to have a new form of documentation of that. It is something that doesn’t change what we do, but it certainly costs us from 

new equipment, new jobs, and from taking care of our patients. So 

I think you are going to see this everywhere in a lot of different 

places. 

Another Kansan, named Mike Bergmeier, of Shield Agricultural 

Equipment in Hutchison, Kansas, said that he can’t grow his company beyond the 44, 45 full-time employees because he needs to 

avoid the mandates that require companies with more than 50 employees to meet the ACA’s requirements. Mr. Bergmeier’s situation 

is not unique. 

The Affordable Care Act is a drag on the economy like ice is on 

the wing of an airplane, preventing it from taking off. This is damaging to everyone, especially the middle class. 

Now, there is some other issues on operability. One place is 

where the States and Federal Government interact to determine 

eligibility for Medicaid and for the individuals on the exchange. 

Our State is significantly advanced in doing that and we have a 

very good, very strong working relationship with CMS, and a very 

positive one. Now, as recently as September 6th I said in my testimony, but we have now heard on September 13th, there are a 

number of additional technical updates that keep disrupting the 

time completion for this. In fact, it appears that there is going to 

be an additional update coming up even before the October 1st 

deadline. So that is going to make it very difficult for every State 

to do that. We are doing our best that there is. 

15 

But then there is also this contradiction that is set up in determining eligibility. For Medicaid, Kansas and every other State they 

have to look at a person’s real income and, if they don’t verify that, 

we would lose Federal funding for our Medicaid program. It is very 

hard for the taxpayers to have confidence in a system where, on 

the exchanges, we have an honor system in the first year to verify 

income. So it is really a strong dichotomy that I think undermines 

a lot of confidence in the system. 

Another issue that we have is dealing with the education and 

outreach by the Federal Government. Just recently is when the 

Navigator programs received their contracts. As yet, they are supposed to be set up in order to know how the system runs, and we 

just learned who are those navigators going to be just a few weeks 

ago, and yet the system is still not able to go live today so that 

they can even practice and be fully formed in that. Kansas has not 

passed a number of laws about the skill sets of the navigators or 

anything partly because we didn’t have all of the regulations that 

had come down. 

There is also an issue of rates. It is going to be very expensive 

for us. One of the things that is there is in the State of Kansas, 

our exchange is only going to have two insurers on the entire exchange. Two insurers. That is not more competition, that is less 

competition. In fact, in Kansas you have more choices in Medicaid 

than you do in the Federal exchange in the State of Kansas. So we 

have looked at a number of the price issues and things like that, 

and it is going to be a challenge for people. 

Finally, as a physician, I see this every day. I visit with my colleagues; we work together. We serve the uninsured. We have done 

that before. I have been doing it for 20 years; we will continue to 

do it in the future. This is not going to solve those issues. This is 

not going to make health care more affordable. In fact, it sets up 

new bureaucracies like the $3400 that I have to spend just now. 

It doesn’t make health care necessarily better. 

We can do a much better, and it is best left to the States. Thank 

you. 

[Prepared statement of Dr. Colyer follows:] 

16 


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Capitol BI./llding 

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Lieutenant Governor 

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Sam Um\\"llbad .. , Go"ernor 

TESTIMONY BEFORE THE JOINT SUBCOMMITTEE ON ECONOMIC GROWTH. JOB 

CREATION AND REGULATORY AFFAIRS. 

AND ENERGY POLICY. HEALTH CARE AND ENTITLEMENTS 

September 18, 2013 

Jeffrey Colyer. MD. 

Lieutenant Governor. Kansas 

Good morning. Chairman Jordan. Chairman Lankford and members orthe Subcommittees on 

Economic Growth and Health Care, 

Thank you for holding this hearing on the concerns of state governments related to the federal 

implementation of the Affordable Care Act My name is Dr. Jeff Colyer. I am a practicing 

physician. and I am honored to serve as the Lieutenant Governor of the state of Kansas. 

There are several issues that affect states with the implementation of the Affordable Care Act in 

the short and long runs. Theoretically these issues should be less complex in Kansas than other· 

states because Kansans have chosen not to expand Medicaid nor implement a state based 

exchange. Nevertheless the issues are profound and detrimental to OUf citizens. 
17 


Insert offset folio 2 here 85359.002

UNCERTAINTY DRAGGING DOWN BUSINESS 

Although we are told the entire law must be fully implemented to achieve its goals, the federal 

government is having significant problems and is delaying or modifying programs. This month, 

the Congressional Research Service reported that President Obama has already signed 14 laws 

that amend, cancel or otherwise change parts orhis health care law, and most significantly, just 

this year his administration has taken five independent steps to delay significant provisions of tile 

ACA on its own. I With a law of this size and scope, these haphazard changes are having a 

devastating effect on the confidence of citizens and businesses in our great state of Kansas, and 

across the country. And they obviously change the basis of the program. 

Uncertainty caused by the Affordable Care Act is a drag on Kansas businesses. A 2012 Mercer 

study indicates more than sixty percent of small business owners expect ACA to raise their 

business's health care costs.2 Similar research by the Gallup Organization echoes these 

findings. These higher health insurance costs are creating incentives for businesses to cut back 

and produce services and products with fewer workers. The July 2013 Gallup poll of smalJbusiness owners further reveals that forty-eight percent of business owners believe the 

Affordable Care Act will be bad for their business, while forty-one percent indicated that they 

have held off on plans to hire new employees.3 

In Kansas, this trend is no different. Wherever I go, the biggest concern I hear is the uncertainty 

about what the law is going to do to small business. A Kansan named Mike Bergmeier recently 

testified to Congress about the challenges that all federal regulations have on his business. Mr. 

Bergmeier, President of Shield Agricultural Equipment in Hutchison, Kansas told the House 

Small Business Committee he will not grow his company beyond the 44 full time employees and 

4-15 part time people he currently employs so as to avoid the mandates that apply to companies 

with 50 or more employees. Mr. Bergmeier's situation is not unique. 

The inability of the Administration to project clearly and articulately how the law will affect 

small businesses is resulting in economic stagnation. Businesses are scm'ed to invest in jobs, 

they're scared to invest in expansion, and they're scared to invest in Kansas' future. This is 

damaging to everyone. but felt most directly by the middle class. 

The effect of the Affordable Care Act on the economy is like ice on the wing of an airplane 

preventing it from taking off. As stories like those told by Shield Agricultural Equipment play 

out thousands oftimes across the country, it is easy to understand why our economy refuses to 

I CRS memorandum to the Honorable Tom Coburn. September 5,2013. 

'Scott Shane, "Obamacare already shrinking small.businessjob gro\\1h" Entrepreneur. September 12.2013. 

J Dennis Jacobs, "HalfofU.S. small businesses think health law bad for them" Gallup:Economy, May 10.20\3. 
18 


Insert offset folio 3 here 85359.003

take off as it should. 

INOPERABLE TIMELINE 

One place where states and the federal government interact is in detennining eligibility for 

Medicaid and the individuals on the exchange. In practical terms, this means that the state 

eligibility data platfonn must be interoperable with the federal eligibility system. This program 

has been a challenge to implement under the unreasonable timelines demanded by the law. 

While our state is significantly advanced in the process and has had a positive working 

relationship with the Centers for Medicare and Medicaid Services, we continue to face 

challenges. As recently as September 6, Kansas learned of technical updates that disrupted some 

of the critical preparation we had previously completed. As a result, countless resources and 

energy continue to be dedicated to evaluating the ever-changing landscape of ACA 

implementation. We must continually consider whether or not our timelines will match those of 

the federal government. 

Even if the deadlines are met there is a significant contradiction in detennining eligibility. For 

Medicaid, states must verify incomes or face loss of federal funds. On the other hand income 

eligibility tor subsidies on the federal exchange apparently does not need to be verified with the 

same rigor. It is hard for the taxpayers to have confidence in a system where exchanges use an 

"honor system" to verify income for federally run programs while the states - appropriatelyuse much more stringent verification for Medicaid. 

The lack of education and outreach by the federal government is disappointing. As a Federally 

Facilitated Marketplace, there is ambiguity 011 the state side because of the late date the federal 

government awarded navigator grants. This delay is forcing the navigators in Kansas to rapidly 

get up to speed, while the system they will be working with is not yet fully formed. 

The delays prevented many states from enacting appropriate privacy laws and have to deal with 

issues relating to insurance brokers, navigators. and an apparently a new category of assistors. 

GOVERNMENT ENFORCED RATES 

Unlike the president and his team have promoted, Kansans will undoubtedly see rate hike and 

limited competition on the exchange. While most details of the exchange have not been released 

by the federal government, what we do know about rates is startling. A website recently 

launched by the Kansas Insurance Department, insureks.org, allows Kansans to estimate their 

premiums under the new marketplace. The website projects a typical 25 year old uninsured male 

Kansan in Douglas County with an income of$30,000 will have a premium of$163 per 

month. Further, this individual will only be able to choose between two companies. A similar 
19 


Insert offset folio 4 here 85359.004

search on ehealthinsurance.com indicates this same young man could obtain insurance for $43 

per month today with the option of choosing a higher cost plan should he want. But unlike 

today, the Kansan in this example will be required by their government to purchase the far more 

expensive product he may not want or need on January 1. 

Lastly, as a physician, I speak with my colleagues in the medical community every day. To a 

person all have expressed concern that the law will significantly limit their capacity to practice 

best care. They don't understand how health outcomes can be improved by a law that drives 

healthcare decisions to be made from Washington rather than the cherished relationship between 

the doctor and patient. 

Kansans and I believe most Americans know the best decisions are made closest to the people. 

Ifwe repeal the ACA, we can make a health care system that provides better results, provides 

coverage for the vulnerable, and is affordable. 

Mr. Chairman Lankford, Mr. Chairman Jordan, thank you both very much for the opportunity to 

visit with you today. 
20 

Mr. LANKFORD. Senator Hutto. 

STATEMENT OF THE HONORABLE C. BRADLEY HUTTO 

Mr. HUTTO. Thank you, Mr. Chairman. I thank the distinguished 

members for allowing me the opportunity to address the issue of 

the Affordable Care Act and how it will affect my rural South Carolina district. 

The Affordable Care Act would allow 350,000 to 400,000 South 

Carolinians to obtain health coverage. With Medicaid expansion, an 

additional 200,000 South Carolina adults could be covered. It is appalling that some South Carolina officials continue to pursue efforts to block our citizens from receiving health care coverage. 

I am pleased to be seated by our fine, hardworking attorney general from South Carolina, a friend of mine. Like me, he is privileged to be an elected official. But from his privileged place as an 

elected official and the child of an elected official, General Alan 

Wilson has enjoyed taxpayer subsidized health care for most of his 

life. He has never had to worry about having a doctor to see when 

he gets sick. 

Yet, when it comes to allowing hundreds of thousands of South 

Carolinians to obtain much-needed health coverage, he willingly 

leads the opposition, without offering any constructive alternatives 

to their plight. 

When I go back to the State Senate in January, I am going to 

be facing the first bill up, which is a Republican filed bill that will 

nullify Obamacare. In a chamber which is presided over by the portrait of John C. Calhoun, we are going to debate nullification in the 

South Carolina Senate. 

We tried that in the middle 1800s. It didn’t work out too well for 

us then, and it is not going to work out too well this time. What 

we are looking for is solutions, not roadblocks. 

Without the expanded health care coverage from the Affordable 

Care Act, uninsured South Carolinians will continue to be relegated to emergency rooms across the State or to simply suffer in 

pain without basic care. Treatment in an emergency room for nonemergent conditions is the most inefficient and most expensive 

form of care. Expanded coverage can allow the newly insured to 

find a medical home where they can be diagnosed and treated for 

basic human health needs that do not require the attention of an 

emergency room. Medical homes will allow patient-focused preventative care such as coaching and counseling on nutrition, diet, and 

physical activity, a holistic approach which will lead to cost-effective health care. 

It is shameful for us to live in the greatest Country in the world 

and yet have our citizens face the threat of bankruptcy merely because they got sick or injured. Economic ruin should not be the 

price of having a sick child. By having more of our citizens covered 

with comprehensive insurance, premiums should be lower. We look 

forward to a time when all of our citizens can enjoy the coverage 

that is enjoyed by General Wilson and myself. Some could be covered by expanding Medicaid, others by purchasing affordable coverage through the exchanges, and yet others through their employment. It is this inclusive approach that will allow all South Carolinians to be covered. 

21 

Full implementation of the Affordable Care Act will benefit taxpayers. Without expanded coverage, the cost of paying for treatment of the uninsured falls now on taxpayers and employers. South 

Carolinians have paid Federal taxes that can come home to South 

Carolina once the expansion is implemented. Once every one is covered, medical costs can be more easily controlled and premium 

rates should fall. 

As more people have health care coverage, more providers are 

going to be needed. The expansion will result in an economic boost 

to South Carolina. The training of new providers will allow our 

technical colleges and our universities to grow. We have had a university-based research study done in our State that says that we 

can expect 44,000 new jobs from the full implementation of the 

ACA. The salaries from these employees and the expanded services 

will generate millions in annual earnings and ultimately new revenue for the State. This is in addition to the billions of dollars that 

will flow back to the State from the Federal Government over the 

next six years. 

Health care in South Carolina is 20 percent of our economy. With 

over 1100 different occupations, health care sectors in our State 

employ 250 South Carolinians. These are good paying jobs, jobs 

built on caring for our neighbors. It is a vital part of our economic 

sector and these are jobs that cannot be outsourced 

The Affordable Care Act is a huge net benefit not just to those 

with preexisting conditions, but to our taxpayers, our hospitals, our 

doctors, those who will be newly employed, and citizens who will 

see their premiums reduced. Quite simply, South Carolina needs to 

accept the benefits being extended to our citizens if for no other 

reason than it is the right thing to do. Thank you. 

Mr. LANKFORD. Attorney General Wilson. 

STATEMENT OF THE HONORABLE ALAN WILSON 

Mr. WILSON. Thank you for this opportunity to address the committee. I want to deviate from my introduction briefly to say that 

several remarks were made that aren’t accurate. Earlier, Representative Cartwright mentioned that I was under the governor, 

under Governor Haley. That is not accurate. I am an independently-elected official in South Carolina. 

To my recollection, those comments or that quote that was attributed to me was not made by me. My opposition was presented in 

our briefs before the United States Supreme Court. As attorney 

general, I am not in the implementation process; I am here as an 

advocate for the consumers of South Carolina. Also, I am on government health care, as my good friend, Senator Hutto, said, but 

after 17 and a half years and a combat tour in Iraq, I believe I am 

entitled to be on TRICARE. 

My testimony today has nothing to do with the merits of the Affordable Care Act; it has everything to do with the first obligation 

of government: the security and safety of the citizens, as well as 

sharing with Congress the need to indefinitely suspend implementation of the Affordable Care Act until security risks are mitigated, 

privacy protections are provided, and legally mandated deadlines 

are properly met. 

22 

Despite the President saying, last month, we are all on our way 

to fully implementing the Affordable Care Act, important deadlines 

are being routinely missed and, more importantly, security concerns are being dismissed. An unpublished Congressional Research 

Service meme cited by Forbes last month noted that the Administration has missed more than half the legally imposed implementation guidelines. 

In order for the ACA to adequately determine eligibility of consumers for exchange subsidies, it must create a data hub that creates databases from seven different agencies. 

Last week, Centers for Medicare and Medicaid Services confirmed the ACA’s data hub complies with Federal Standards. However, the hub has not been beta-tested, independently verified, or 

properly audited by the inspector general. More troubling is the 

fact that senior HHS technology officials lowered previous standards earlier this year by saying let’s just make sure it is not a 

third-world experience. 

When it goes live on October 1, it may not be a third-world experience, but it will be a con man’s all-you-can-eat buffet, overflowing 

with a gold mine of sensitive information from the agency databases that fall under the hub. 

This information in the hub should be guarded as if it were gold 

in Fort Knox, not haphazardly. The hub should be at least required 

to exceed minimally adequate protocols which have allowed the 

records of more than 20 million veterans to be compromised during 

at least eight hacks of the VA’s unencrypted computer system between 2010 and 2013. 

States are also victims of similar attacks. Exactly one year ago, 

more than 3.6 million South Carolinians were put at risk when 

hackers obtained our social security numbers and personal information during a major security breach at the South Carolina Department of Revenue. 

Such attacks make the hub’s insufficient security testing that 

much more troubling. However, that is not our primary immediate 

concern. Last month’s letter that was sent by the AGs and myself 

in 12 other States was prompted by the fact that HHS is not requiring groups receiving roughly $67 million in Navigator grants to 

properly screen, train, or conduct background checks on individuals 

who will be entering sensitive information into the Federal data 

hub. 

The vice president of a Navigator group which received $1.2 million in grants for South Carolina said last week in The State paper, 

it is like Girl Scouts selling cookies, you go to the shopping centers 

and set up tables to capture people as they come and go. 

The fact is it is more difficult to help Girl Scouts sell boxes of 

cookies than it is to become a health care Navigator. While groups 

like the Girl Scouts require employees to complete background 

checks, there are no such requirements for Navigators. This is despite the fact that HHS exchange regulations require Navigators to 

safeguard consumers’ sensitive personal information, including, but 

not limited to, health, income, employment, tax, and social security 

information. The only requirement for Navigators is that they complete 20 hours of online training, less than most States require for 

a driver’s license. 

23 

This weekend, newspapers across the Country ran headlines 

such as Rollout of Obamacare spawns slew of scams: Con artists 

are busy dialing seniors and other consumers as they try to cash 

in on the confusion around the Affordable Care Act. Last week, the 

Department of Insurance in our State issued a consumer alert due 

to the proliferation of online, in person, and telephone scams. 

The first obligation of government is maintaining the safety and 

security of its citizens. Ironically, the implementation of a Federal 

program designed to provide health care to all Americans puts us 

all at severe risk because it is riddled with scams and security 

breaches. Americans should not have to barter their privacy and financial security for health insurance. 

Thus far, the Administration’s implementation of the Affordable 

Care Act undermines a fundamental responsibility of the Federal 

Government, the security of its citizens. Until HHS answers our 

questions and rectifies this matter by properly safeguarding American’s personal information, Congress must suspend implementation 

of the ACA. Thank you. 

[Prepared statement of Mr. Wilson follows:] 

24 


Insert offset folio 5 here 85359.005

Prepared Remarks 

South Carolina Attorney General Alan Wilson 

House Oversight and Government Reform Committee 

September 18, 2013 

Thank you for the opportunity to share the concerns of Attorneys General from across the 

country. Last month, thirteen state Attorneys General, led by West Virginia's Patrick Morrissey, 

wrote Health and Human Services Secretary Kathleen Sebelius. Our letter outlined twenty-one 

simple, time-sensitive questions related to consumer protection and fraud prevention concerns 

associated with HHS Navigators and the implementation of the Affordable Care Act.; 

My testimony today has nothing to do with the merits of the Affordable Care Act. It has 

everything to do with the first obligation of government, the security and safety of its citizens, 

and sharing with Congress the need to indefinitely suspend implementation of the Affordable 

Care Act until security risks are mitigated; privacy protections are provided; and legally 

mandated deadlines are properly met. 

Despite the President saying last month "we're well on our way to fully implementing the 

Affordable Care Act," important deadlines are being routinely missed, and more importantly, 

security concerns are being dismissed. An unpublished Congressional Research Service memo 

cited by Forbes last month noted the Administration has missed more than half of the legally 

imposed implementation deadlines (41 of73)." 

In order for the ACA to adequately determine the eligibility of consumers for exchange subsidies 

it must create a data hub that connects data bases from seven different agencies which include 

Medicare, Medicaid, the IRS, Homeland Security, HHS, VA and the Social Security 

Administration. 

Last week, the Centers for Medicare and Medicaid Services confirmed the ACA's data "hub" 

complies with federal standards. iii However, the hub has not been beta-tested, independently 

verified or properly audited by the Inspector General. More troubling is the fact senior HHS 

technology officials lowered previous standards earlier this year by saying, "Let's just make sure 

it's not a third-world experience."iv 

When it goes live on October 1, it may not be a third world experience, but it will be a con-man's 

all-you-can-eat buffet overflowing with a gold mine of sensitive information from 

Medicare/Medicaid, Social Security, IRS, Homeland Security, HHS, VA, and other government 

databases. 

This information in the Hub should be guarded as if it were the gold in Fort Knox, not 

haphazardly. The Hub should be required to exceed minimally adequate protocols which have 

allowed the records of more than 20 million veterans to be compromised during at least eight 

hacks of the VA's unencrypted computer system between 2010 and 2013." 

1 
25 


Insert offset folio 6 here 85359.006

States are also victim of similar attacks. Exactly one year ago, more than 3.6 million South 

Carolinians were put at risk when hackers obtained our social security numbers and personal 

information during a major security breach at the South Carolina Department of Revenue. v; 

Such attacks make the Hub's insufficient security testing that much more troubling. However, 

that is not our primary immediate concel11. Last month's letter was prompted by the fact that 

HHS is not requiring groups receiving roughly $67 million in Navigator grants to properly 

screen, train, or conduct background checks on individuals who will be entering sensitive 

information into the federal data hub. 

The Vice President for a group which received a $1.2 million grant to "conduct target marketing 

campaigns and public education events" throughout South Carolinav

;; said last week (in The 

State), "It's like the Girl Scouts (selling cookies), you go to shopping centers and set up tables to 

capture people as they come and go."v;;; 

The fact is - it is more difficult to help Girl Scouts sell boxes of cookies than it is to become a 

Healthcare Navigator.ix While groups like the Girl Scouts require employees to complete 

background checks, there are no such requirements for Navigators. This is despite the fact that 

HHS Exchange Regulations require Navigators to "safeguard consumers' sensitive personal 

information" including but not limited to health, income, employment, and tax, and social 

security information: The only requirement for Navigators is that they complete 20 hours of 

online training, less than most states require for a driver's license. 

This weekend, newspapers across the country ran headlines such as, "Rollout of Obamacare 

spawns slew of scams: Con artists are busy dialing seniors and other consumers as they try to 

cash in on the confusion around the Affordable Care Act."x; Last week, the South Carolina 

Department of Insurance issued a consumer alert due to the proliferation of online, in person, and 

telephone scams. x;; 

The fIrst obligation of government is maintaining the safety and security of its citizens. 

Ironically, the implementation of a federal program, designed to provide health care to all 

Americans, puts us all at severe risk because it is riddled with scams and security breaches. 

Americans should not have to barter their privacy and fmancial security for health insurance. 

Thus far, the Administration's implementation of the Affordable Care Act only does violence to 

the fundamental responsibility of the federal government, the security of its citizens. HHS must 

answer our questions and rectifY this matter. If Americans' personal information cannot be 

safeguarded, the Administration must be held accountable. 

### 

2 
26 


Insert offset folio 7 here 85359.007

'Office of the West Virginia Attorney General. (2013, August 14), W,Va" 12 Other States Voice Concerns About 

Consumer Privacy Under Health Care Exchanges [Press Release). Retrieved from 

http://wVl\'1,'.wvago.e:ovipress.cfm?ID=717&fx=more 

"Roy, Avik. (2013, August 18). Unpublished CRS Memo: Obama Administration Has Missed Half ofObamacare's 

Legally Imposed Deadlines. Forbes. Retrieved from 

http://www.forbes.comisitesitheapothecarv/20 13/08118iu npublished-crs-memo-obama-admi nistration-hasmissed-half-of-obamacares-Iegally-imposed-implementation-deadlines/printl 

;;; Sternstein, Aliya. (20l3, September 12). Obamacare Data Hub Security Review Blasted. NextGov. Retrieved from 

http://\vww.nextgov.com/cvbersecurityf20 13/09/ obamacare~data~hub~securitv-reviewblastedI70220/?oreFng-skvbox 

" Roy, Avik. (2013, August 7). HHS Inspector General: Obamacare Privacy Protections Way Behind Schedule; 

Rampant Violations of Law Possible. Forbes. Retrieved from 

http://wv{w.forbes.com/sites/theapothecary/2013IOS/07lhhs-inspector-general-obamacare-privacyprotections-way-behind-schedule-rampant-violations-of-law-possiblelprintl 

,. Freking, Kevin. (2013, June 3). Official describes rampant computer hacking at VA. Associated PresslYahoo. 

Retrieved from http://news. vahoo.comlofficial-describes-rampant -computer-hacking-va-185613959 .html 

,; South Carolina Department of Revenue. (2012, September 21). SC Department of Revenue Responds to Cyber 

Attack, Will Provide Credit Monitoring and Identity Theft Protection to Taxpayers [Press Release). 

Retrieved from http://www.sctax.orgiNews+Releases/201210091026NR.htm 

di Centers for Medicare and Medicaid Services. (2013, August 13). Navigator Grant Recipients. Retrieved from 

http://www.cms.gov/CCIIOiPrograms-and-InitiativeslHealth-InsuranceMarketplacesIDownloads/navigator -list-8-15-2013 .pdf 

,iii Holleman, Joey. (2013, Septrnener 4). Health insurance navigators hustle to hire, train workers in SC by Oct. I. 

The State, Retrieved from http://www.thestate.comJ2013109/04/2960095Ihealth-insurance-navigatorshustle.html 

i, Girl Scouts of South Carolina. (2013) Background Check FAQs. Retrieved from: http://www.gsscmm.orglvolunteerslhackgroundcheckinfo.aspx 

'Centers for Medicare & Medicaid Services. (2013, August), Health Insurance Marketplace Navigator Standard 

Operating Procedures Manual. 45 CFR 155.260 (a) and (b) (DHHS Publication Version 1.0). Washington, 

DC: U.S. Government Printing Office. 

xi Matos, Alejandra. (2013, September 15). Rollout ofObamacare spawns slew of scams. Star Tribune. Retrieved 

from http://www.startribune.comllocaI/223776421.html 

xii South Carolina Department ofInsurance. (20]3, September 12). Scammers Take Advantage of Health Reform 

Confusion [Press Release). Retrieved from http://www.postandcourier.comiassets/pdf/CP9535912.pdf 

3 
27 

Mr. LANKFORD. Representative Jackson. 

STATEMENT OF THE HONORABLE KATRINA R. JACKSON 

Ms. JACKSON. Members of this committee, I serve in Louisiana 

as a State legislator as a member of the House Health and Welfare 

Committee, Joint Committee on Budget, and the Committee on Appropriations. 

The United States Supreme Court has emphatically stated what 

the law is relative to health care in the United States of America. 

In upholding the Patient Protection and Affordable Care Act. However, we sit here today continuously debating this law, instead of 

working together to ensure that this implementation is beneficial 

to all States and all citizens of the United States. 

In a State where almost 900,000, some 20 percent of Louisiana’s 

population, is uninsured and the health care budget has been cut 

by 10 percent each year for five consecutive years, we cannot afford 

to decline any portion of the Affordable Health Care Act. Our governor advocated for us cutting one of the most vital health care 

services offered to any State’s constituency, our hospice care, to 

take care of the problem, he said. 

As a State representative who represents Louisiana citizens who 

have entrusted us with the duty to ensure that we do all we can 

to represent them, I cannot, in good conscience, in good moral conscience, advocate for the repeal or de-funding of the Affordable 

Health Care Act, for in doing so I would fail an overwhelming number of the constituency in my State. 

The secretary of the Louisiana Department of Health and Hospitals, who sits next to me today, will neglect to mention that she, 

herself, and her Department published a report that reflects up to 

a $367.5 million savings while offering health care to over 400,000 

of our uninsured citizens, almost half of those on the uninsured 

roll. Our independent, nonpartisan legislative fiscal office arrived 

at an even higher number in savings to Louisiana and its citizens, 

almost $550 million. 

DHSH will stand before you today on behalf of Louisiana complaining about the difficulty in implementing this Act. However, 

they have wasted countless time supporting measures such as one 

that we voted down last session, in this current year, which would 

have required us to take a vote of referendum of our people by twothirds vote in order to enact any portion of the Affordable Health 

Care Act. 

Louisiana spends over $600 million in uncompensated care yearly, mainly through DISH dollars that we continuously request from 

the Federal Government. We are one of the top five States who receive and expend these dollars. Independent reports reflect that the 

Affordable Health Care Act will save the Federal Government approximately 50 percent of all DISH dollars spent around this Nation. That is the long-term savings. The immediate savings in 2014 

show approximately $500 million in savings to this Federal Government. 

Louisiana’s economy, just like many other States, has suffered 

during these tough economic times. The full implementation of the 

Affordable Health Care Act offers an injection of $26.8 billion in 

our State’s economy and will create over 47,000 jobs in the State 

28 

of Louisiana. It will further aid businesses by contributing greatly 

to a healthier, more productive workforce. The Federal insurance 

exchange is beneficial to those currently paying insurance premiums by creating a more competitive market and driving down 

the costs of insurance premiums for everyone. 

Somewhere in Louisiana, and all across this Nation, there are 

younger versions of you and myself who aspire to matriculate in institutions of higher learning without having to worry about whether they will have insurance or not. The Affordable Health Care Act 

offers them access to the American dream, something that most of 

us have already been through. By allowing them to remain covered 

under their parents’ premiums, their parents, who are mostly middle-to upper-class citizens, have paid for those premiums. 

In each of our great States, just like Ms. Ritter, who sits here 

today, there are families with children or sick parents who have 

been diagnosed with life-threatening conditions and have been told 

that they have reached their mandatory maximum of benefits. I 

say to you today our good conscience tells us that we must respond 

to their needs, and the Affordable Health Care Act has done so. 

But if you don’t believe me, a great writer once penned our great 

lord and savior Jesus Christ when he told us that what we do to 

the least of these we also do to him. It is time to do what is right. 

Mr. LANKFORD. Secretary Kliebert. 

STATEMENT OF KATHY KLIEBERT 

Ms. KLIEBERT. Good morning. Thank you for the invitation to 

highlight how the implementation of the Patient Protection and Affordable Care Act has presented major problems for Louisiana. My 

name is Kathy Kliebert. I am the Secretary of the Department of 

Health and Hospitals in Louisiana. I have served the Department 

for over 25 years, primarily working with individuals who have behavioral health challenges and those individuals with developmental disabilities. 

Since the Affordable Care Act was signed into law, we have repeatedly shared our concerns with the law itself and with its implementation. Over the past few years we have seen our fears become 

reality, and our decision to not establish a State-based exchange in 

Louisiana validated. As a complex project with often delayed and 

frequently changing guidance, it is not surprising that many 

States, and even the Federal Government, are narrowing the scope 

of their day one exchange capabilities as we near the mandated 

launch. 

Though this law was passed over three years ago, much of the 

critical guidance and regulations have only been issued in this past 

year, and they continue to change. For example, CMS released in 

June what they claimed to be the final version of guidance that will 

govern interactions between the exchange and State Medicaid programs. However, we have since learned that new changes are 

forthcoming, which will likely require significant reprogramming 

efforts for our Medicaid eligibility system. 

Critical questions often take three to four months for a response, 

wasting precious time and resources that easily could have been 

avoided and cannot be afforded as we near federally mandated 

deadlines. 

29 

We have also faced conflicting messages and confusing misinformation. In just one example, we recently experienced confusion 

about whether pregnancy was considered a qualifying life event for 

women to enroll in the exchanges outside of the designated open 

enrollment period. The Federal Government’s own website recently 

changed the definition of a qualifying life event, removing the 

event of becoming pregnant and now stating that it is the birth of 

the baby that qualifies the woman for coverage. 

After seeking clarification, we have received multiple and conflicting answers from HHS officials. The screen shots included in 

my written testimony, taken just a few weeks apart, illustrate this 

frustrating inconsistency. 

We are also troubled with how HHS is conducting education and 

outreach in States with a Federal exchange, where they have assigned much of the responsibility to federally-funded Navigators. 

Named only weeks ago, these groups have had barely a month and 

a half to prepare. There is almost no oversight or standards for 

how they will work, and their training requirements have actually 

been scanned down by HHS. 

We also have serious concerns about the call centers that will 

provide much of the direct consumer assistance. We learned from 

a press release that a call center will be operated in the small town 

of Bogalusa, Louisiana, but its operations are only starting this 

month, meaning their employees will have less than a month of 

training before launch. 

Just last week we were alarmed to hear that a constitute who 

called the exchange hotline was told that many States are expanding their Medicaid eligibility. He was told to first call the State to 

see if he may now qualify for Medicaid, even though Louisiana has 

very publicly stated that it will not expand Medicaid eligibility. If 

the Federal call center employees are not equipped with such basic 

information, how are they expected to help individuals navigate 

this enormously complex program? 

We have also been frustrated by numerous technical issues that 

have resulted in duplicate efforts for States, particularly as it relates to the single streamline application for both Medicaid and the 

exchange and the new Federal data services hub. For example, we 

asked CMS for the ability to link directly to the single streamline 

application being built at the Federal level, rather than duplicate 

those efforts at the State level. We were told that each State was 

responsible for building its own application based on the Federal 

version, which was not made available until April of this year. We 

then made multiple requests to CMS this summer for its online application source code in order for our contractor to verify Louisiana’s version. It was never provided to us. 

In March, Federal officials promised to provide States with a nocost solution to meet the newly mandated, Modified Adjustor Gross 

Income standard for Medicaid eligibility. However, we learned in a 

June conference call that we had the responsibility. We anticipate 

that it will take our contractor more than 5,000 hours of work to 

meet all the related mandates, for a total cost of $750,000. To frustrate matters further, we learned last week the Federal solution 

was finally ready, far too late to be useful. 

30 

While I have only highlighted our major concerns, we expect 

more problems to arise, as October is just two weeks away. While 

these facts raise serious questions about whether implementation 

of the exchanges should be delayed, we continue to believe the best 

solution for our Nation and our State is that the entire law be repealed and replaced with a more affordable and market-driven solution that gives States the flexibility to design programs that best 

meet the needs of their individual populations. Thank you. 

[Prepared statement of Ms. Kliebert follows:] 

31 


Insert offset folio 8 here 85359.008

Bobby Jindal (;(1\'CR:--"()R 

~tatt of 'lout~tana 

Department of Health and Hospitals 

Office of the Secretary 

TESTIMONY 

Hearing on 

"Federal Implementation of Obamacare: 

Concerns of State Governments" 

September 18, 2013 

Statement of 

Kathy H. Kliebert 

Secretary 

Louisiana Department of Health and Hospitals 

Before the 

Subcommittee on Energy Policy, Health Care & Entitlements 

Committee on Oversight & Government Reform 

U.S. House of Representatives 

Bienville Building· 628 N. 4th Street- P.o. Box 629· Baton Rouge, Louisiana 70821·0629 

Phone #: 225/342-9509. Fax #: 225/342-5568. WWW":VHH.IA.COV 

"An Equal Opportunity Employer" 

Kathv H. Kliebert ;';"ECRFT \R\ 
32 


Insert offset folio 9 here 85359.009

Introduction 

Good morning, Chairman Lankford, Ranking Member Speier, Chairman Jordan, Raking Member 

Cartwright, and distinguished members of the subcommittees. Thank you for the im-itation to testify 

on the obstacles we are facing at the state le,-el as the Patient Protection and "\ffordable Care Act 

(PPAC\) is implemented, particularly as it relates to the Federally-Facilitated Health Insurance 

Exchange in Louisiana. 

~1y name is Kathy Kliebert, and I am the Secretary of the Louisiana Department of Health and 

Hospitals (LDHH) and senior health policy adds or to Gm-ernor Bobby Jindal. Prior to my 

appointment as secretary, I served as the Department's deputy secretary, where I prm-ided 

leadersbip to the agency's program offices, including the Offices for Citizens with De,-elopmental 

Disabilities, Behavioral Health, Public Health, and Aging and Adult Services. Prior to my 

appointment as Deputy Secretary, I led the Office of Behavioral Health, where I managed the 

merger of the Department's mental health and addictive disorders offices to better serve 

Louisianians in need. I also spearheaded the development and implementation of Louisiana's new 

approach to both delivering and financing behavioral health services for approximately one million 

Louisiana children and adults through a fully integrated, single-point-of-entry system. 

I have dedicated the bulk of my career to serving individuals with developmental disabilities through 

the Department's Office for Citizens with Developmental Disabilities (OCDD), which I also led as 

Assistant Secretary for six years. During my tenure with OCDD, we successfully completed a multiyear transition to move individuals out of institutions and into community-based scn-ices, reducing 

the number of individuals living in institutions by more than 26 percent. Prior to leading OCDD, I 

served as diversification director of the Metropolitan/Peltier-Lawless Development Centers in New 

Orleans and Tbibodaux, where I led the expansion of community-based options for people with 

developmental disabilities. I have more than 20 years of experience as a licensed clinical social 

worker and have a master's degree in social work. I also currently serve as Secretary of the Louisiana 

Educational Television Board and as a member of the Louisiana Children's Cabinet. 

Introduction 

Since PPACA was signed into law, we have repeatedly shared our concerns regarding its policy 

implications, lack of sufficient guidance and unreasonable timelines for implementation. Over the 

past few years we have seen our warnings become reality. Today, I would like to address some of 

those continuing concerns. 

On March 23, 2011, the State of Louisiana announced that it would not assume the risk of building 

a state-based health insurance Exchange as outlined by the PPACA. Over time, tbis has proven to 

be a sound decision for our state and for the 33 others who joined us. Just last week, a senior official 

from one of the leading consulting groups assisting states with Exchange development, Leavitt 

Group, told your colleagues on the Health Subcommittee of House Energy and Commerce that not 

a single state-operated Exchange appeared to be completely ready to launch on October 1, 2013. As 

was noted in his testimony, these Exchanges remain an enonnously complex IT project with 

frequently changing and delayed guidance. It is not surprising that many states are narrowing the 

scope of their day-one Exchange capabilities as we near their mandated launch. 

Page 2 of7 
33 


Insert offset folio 10 here 85359.010

:Meanwhile, contractors building the federal Exchange that will sen-e 3~ states hal-e, under the close 

watch of the C.S. Department of Health and Human Sen-ices (HHS), unsurprisinglv offered their 

assurances that the federal Exchange will launch on October 1. Despite these reassurances, I am 

frustrated by what appears to be, based on our own front-line experience, a lack of forthrightness 

from federal officials and contractors about the status of critical components. \'\'ith less than two 

weeks until the doors open for indiyiduals to enroll, many questions remain about whether the 

systems are ready. 

There is a common misconception that states that haye opted not to expand their Medicaid 

programs or build their own Exchange are free of the onerous mandates ofPPACA. To the 

contrary, we are faced with numerous new requirements, which I w1ll highlight. Through my 

testimony I ,,~ll describe the major hurdles Louisiana has faced, touching on the three main areas of 

concern, which are (1) guidance from CMS, (2) conflicting messages and misinformation, and (3) 

technical issues and delays. 

Exchange Implementation Issues 

Although PPACA was signed into law in 2010, it was not until this past year that federal officials 

began to release the bulk of the guidance related to critical components of this law. \117hile we have 

elected not to expand Medicaid or establish our own Exchange, our staff, particularly our Medicaid 

eligibility and information technology teams, has been working non-stop to meet the complex new 

mandates set by the law. Although our concerns are many, the main issues we have experienced thus 

far with the rushed implementation of this law are descrihed as follows. 

Guidance 

Much of the guidance and regulations have been issued in rapid succession over the past 

year. This condensed timeline has provided states with far too titde time to carefully read 

and thoroughly understand them, much less provide meaningful questions and comments. 

Even more concerning is that the rules keep changing. For example, CMS released in June 

2013 what it claimed to be the final version of guidance that w1ll govern how interactions 

between the Exchange and state Medicaid programs w1ll work, but we have since learned 

from CMS officials that they are making tweaks to this without a firm delivery date. While 

we are unsure what these changes w1ll include, we know they ,,~ likely require 

reprogramming efforts for states. 

In addition to the issues we face because of late guidance releases, we've struggled to get 

timely answers to pertinent questions from federal officials. For example, on April 1, 2013, 

CMS agreed to provide details on how data transfers would be structured in response to 

requests made by Louisiana Medicaid staff on multiple occasions. This information was 

never received and our contractor was forced to comply by other means, wasting precious 

time and resources, which could easily have been avoided with proper guidance. It would 

often take CMS three or four months to respond to other critical questions about eligibility 

operations. We cannot afford to wait months for these answers as we prepare for the fast 

approaching, federally-mandated readiness deadlines. 

Conflicting Messages and Misinformation 

While there are clearly many dedicated career officials at the federal level working on 

PPACA, they've been tasked with the job of implementing an unworkable law within an 

Page 3 of7 
34 


Insert offset folio 11 here 85359.011

not rhat .stilte:: 

contlicting Jnd 

jU:,t 

dc:,ignatcd open enrnlhnt-'t'lt 

! Tcahhcarc.goy, had included of 

YOU "bcCOtDC UO\\'C\Tf the inforn1atlon 

to state that the birth baby that qualities the \\"on1;1n 

for clarification, we'vc rcceiycd n1ulriple and conflicting 

officials. The below scrcenshots, token only a it,\\, "pan, 

Heal/hcari', GOI' GloJJa/y 

_\dditionally, we continue to be concerned \v~tb how HHS is conducting education and 

ontreach in states, HHS set aside hillion for the implementation of PPACA, the 

has made requests for billions more, inclnding solicitations to 

1 Though is the main \\:'ebsite for consumer 

access point for the federal it was only redesigned and focnsed for consnmer 

access at the end Jnne 2013, on the same its call center launched soft 

1 Budget request denied, SebeHus turns to health executives to finance Obamacare, Washington Post, 

http://www.washingtonpost.com/blogs/wonkblog!wp!2013/0S!10Ibudget-reauest-denied-sebelius-turns-tohealth-executives-to-finance-obamacareL May 10, 2013, 

Page 4 of7 
35 


Insert offset folio 12 here 85359.012

open.' ;\lost concerning is the fact that federal oftlcials haye assigned much of their 

responsibility for education and outreach in Louisiana to federally-funded "Na,"igators," 

which were onll' announced on ,\ugust 15,2013. \'i'ith almost no Q\-ersight, these groups 

ha"e essentially a month in a half to train their staff on the complex workings of this new 

federal program and to begin educating the public about how to appropriately access the 

Exchange and make an informed decision. 

Furthermore, we have serious concerns ,,,ith how effective the Exchange call center will be 

in answering consumer questions. Similar to the Nadgators, thc call centers that were 

contracted to answer consumer questions and enroll indiyiduals are on a rapid timeline for 

hiring and training. In July 2013, it was announced that a 600-person call center senmg 

seyen states with a federal Exchange was being opened in the small town of Bogalusa, 

Louisiana with an anticipated start to operations expected in September 2013. 3 That means 

the employees in the call center answering consumer questions ",-:ill have less than a month 

of training. '\1i7 e were alarmed this past week upon receh"ing word from a constituent in 

Louisiana who had called the Exchange hotline to fInd out about how he could enroll in a 

health plan on October 1, only to be directed to first contact his state's Medicaid oftlce. He 

was told that many states are expanding their Medicaid eligibility and he may now qualify for 

the Medicaid program in Louisiana. This left the individual in a frustrating cycle as our staff 

had to answer basic questions about the Exchange and direct him back to the appropriate 

channels. If the federal call center employees do not even know basic information like which 

states are expanding Medicaid and which are not, how are they to be expected to help 

individuals navigate the complex process of qualifying for an advanced premium tax credit 

and selecting from potentially hundreds of health plan coverage options? 

Technical Issues and Delays 

We've already seen delays of critical pieces of the law, including the mandate that larger 

employers offer health coverage to their workers and the requirement for state-based 

Exchanges to verify applicant income. Other delays have forced compromises in readiness. I 

previously mentioned how the organizations tasked with helping people enroll are only now 

starting to be trained. Some of those training requirements, such as those for the navigators, 

now have been scaled back from a requirement of 30 hours of training to only 20.4 

We're additionally concerned about the lack of interoperability between systems and a 

duplication of efforts. PP ACA was touted as a means to sync state and federal operations, 

notably through efforts such as the single streamlined application and the federal data 

services hub. Both efforts haye proven to be problematic. 

2 HHS launches Health Insurance Exchange educational tools, 

http://www.hhs.gov(news(press(2013pres(06120130624a.html. June 24, 2013. 

3 General DynamiCS brings 600 new jobs to Bogalusa, http://www.fox8Iive.com(storv/22970885/general-dynamicsbrings-600-new-jobs-to-bogalusa, August 6. 

4 Preparations for Health Exchanges on Tight Schedule, 

http://online.wsj.com/articie/SB10001424127887324170004578638100820728288.html, August 7,2013. 

Page 5 of7 
36 


Insert offset folio 13 here 85359.013

For example, Louisiana requested an ability to link to the single streamlined application 

being built on the fedcrallcwl as replicating those efforts at the state le,"el would be a costly 

duplication. It was then our understanding that each state was responsible for building its 

own single, streamlined application, based on the federal wrsion (which was not completed 

until c\pril 2013). Essentially, each state \vould be duplicating efforts already made by the 

federal government. Multiple requests were made to eMS in July of this year for its online 

application source code, in order for our contractor to check the coding being used for 

Louisiana's ,-ersion. That source code was never provided to us. 

One of the criticisms most frequently cited recently has been the delay in and lack of security 

and functionality testing for components of the Exchange. As you are surely aware, the 

Goyernment Accountability Office (GAO) warned in June 2013 of a likely delay in its 

launch, and just last month the HHS Office of the Inspector General pointed out that 

testing of the new "data services hub" that will support the Exchange was more than a 

month behind schedule. The final deadline for certifying the security of the system was 

pushed back to Sept. 30 - one day before the Exchanges are set to go live. Given the highly 

sensitive nature of the information that "till be transmitted through this process, this is most 

concerning. 

The problems are not just isolated to the inner workings, but could have a real impact on 

consumers. It was revealed on a recent conference call between federal contractors and 

insurance industry representatives that there were significant issues with how information 

about health plan cost information was being displayed on the new Exchange website'. One 

Florida insurer noted that their information made it appear that there was no charge at all for 

some medical services, when in fact that was only the case after a deductible had been met. 

This led to federal officials delaying their timeframe for signing final agreements with 

companies issuing health plans on the federal Exchange while these issues were worked out. 

New federal requirements have also placed a significant burden on states. For example, 

states are required to convert their Medicaid eligibility standards to the new Ml\GI 

(Modified Adjusted Gross Income) standard. This requires extensive modifications to states' 

Eligibility systems and external interfaces. In a March 2013 eMS presentation, Federal 

officials promised to provide states with a no-cost solution called "MAGI-in-a-box." State 

integration and testing for this solution was initially scheduled for the end of May 2013. 

However, Louisiana Medicaid stafElearned on June 13,2013, during one of our regularly 

scheduled calls with eMS, that the service would not be available after all. We were told that 

we should now consider other alternatives. This left the state with the responsibility of 

executing contracts and conducting systems modifications to meet the October 1,2013 

deadline. We anticipate it will take our contractor 5,437 hours of work at $138.86 per hour to 

meet all of the M,.A..GI-related mandates, for a total cost of roughly $750,000. To frustrate 

matters further, we finally learned last week that the federal solution was ready - far too late 

to be useful as we've already had to complete the work in order to meet eMS deadlines. 

While states are faced with onerous and often unalterable federal deadlines, we've learned 

that HHS officials often apply a different standard to themselves. Just this last week, 

5 Technical snafus confuse charges for Obamacare plans, http://www.reuters.com/article/2013/09/0S/us-usahealthcare-technology-idUSBRE9840SE2013090S, Sep. 5, 2013 

Page 60£1 
37 


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Louisiana Medicaid staff attended the MESC Conference in Charleston and learned from a 

Deputy Director for the Centers for Medicaid and CHIP that the federal goyernment would 

not be ready to make account transfers on October 1, 2013, as it was supposed to do. The 

federal Exchange is intended to haye the capability of making ~Iedicaid eligibility 

determinations using our eligibility guidelines and transferring the applicant's file to the state 

to acti,'ate cm'erage. \\'ith that capability now delayed, we asked what CMS's contingency 

plan was, and the official stated the Exchange was going to hold the application and tell the 

indiyidual that if they needed immediate coyerage they should contact the state directly, 

which essentially requires indiyiduals to apply t'IN~ce. The CMS official could not provide a 

time frame for how long it would take the agency to ha,'e the system ready to make transfers. 

It is extremely frustrating that states are often told that our compliance by hard deadlines is 

expected while federal officials delay their own capabilities and requirements repeatedly. 

Conclusion 

1'd like to reiterate that although Louisiana is not operating our own Exchange or expanding our 

Medicaid program, we are not free of the impact of this law, nor are our residents. In my testimony I 

described some of the major hurdles Louisiana has faced as federal officials force a rushed 

implementation of this law, though I did not touch on every issue that we have faced. Certainly, we 

expect more problems to arise as October 1,2013 approaches. Without timely, clear guidance from 

CMS, and facing an abundance of conflicting messages, misinformation, and munerous technical 

issues and delays, Lonisiana continues to have serious concerns about the implementation of the 

Affordable Care Act. While these facts raise serious questions about whether implementation of the 

Exchanges should be delayed, we continue to believe that the best solution for our nation and state 

is that the law be repealed and replaced with a more affordable and market-driven solution that gives 

states the flexibility to design programs that best meet the needs of their individual populations. 

Page 7 of7 
38 

Mr. LANKFORD. Senator Sobel. 

STATEMENT OF THE HONORABLE ELEANOR SOBEL 

Ms. SOBEL. Good morning, Chairman Lankford, Chairman Jordan, Ranking Member Speier, Ranking Member Cartwright, and 

members of the committee. Thank you for extending me an invitation to testify today on the Federal Implementation of Obamacare. 

Concerns of State Governments. I am excited and eager to elucidate the problems we have encountered and address opposition to 

the implementation of the Affordable Care Act in Florida. 

My name is Eleanor Sobel, and I represent the 33rd District in 

the Florida Senate. I was first elected to the Florida Senate in 2008 

and I serve as chairwoman of the Florida Senate Children, Families, and Elder Affairs Committee. I also serve as vice chair of the 

Florida Senate Ethics and Elections Committee, as well as vice 

chair of the Florida Senate Health Policy Committee, vice chair on 

the Senate Select Committee for Affordable Health Care, as well as 

a delegate to the National Conference of State Legislators in an 

overwhelmingly predominant Republican Senate. 

I wish I could be here with better news, telling you that the 

State legislature managed to put partisan politics aside and expand 

coverage to millions of uninsured individuals. Unfortunately, as 

you may know, this is not the case. Regular session, our spring session, concluded with the legislature being unable to pass on a bill 

to expand coverage. 

I am here to also tell you that the State of Florida is actually 

punishing its people by putting up roadblocks and barricades to obtaining quality, affordable, accessible health care. The message 

some of Florida’s Republican leaders are sending, would you believe, sound something like this: Health care is a privilege, not a 

right, and don’t expect help from the government. Another message 

that is going forth was: We are here to put up barricades and obstacles, and to create public chaos and misinformation all in the 

name of political warfare. 

The Florida House, Senate, governor, and cabinet are divided, 

split. The Senate wishes to move forward with Obamacare. We 

came up with a bipartisan bill in the Florida Senate that was a 

public-private partnership that actually would cover 1.5 million 

people in Florida, as well as use the $52 billion of the money from 

the Federal Government to help implement the program. Our Senate President Gates has also made overtures to work with Secretary Kathleen Sebelius. However, the House, governor, and cabinet are irrationally and ideologically preventing the execution and 

implementation of a policy that the citizens of Florida so desperately require. 

Florida has the second highest percentage of uninsured residents 

in the Nation, at 25.3 percent. Florida has rejected again the $5.2 

billion over a 10-year period of Federal Medicaid money, which 

would have served 1.5 million Floridians. The Florida House will 

not go along with the Senate’s public-private expansion plans, and 

Governor Rick Scott often contradicts himself, saying he support 

Medicaid expansion and then does an about-face by trying to defeat 

implementation of Obamacare. 

39 

I want to focus on the two most important Florida sandbag 

issues that I have encountered in the implementation of affordable 

health care in Florida. 

Sandbag number one: What is the best way to defeat a program? 

Answer: Make sure no one knows about it or understands how it 

affects the well-being of its citizens. 

Just recently, Governor Scott has implemented a policy that 

would prevent the 60 Departments of Health from carrying out 

much needed education to the uninsured, claiming that health care 

education, known as Navigators, will be allegedly violating HIPAA 

laws. This is a desperate attempt to prevent access to those who 

need health insurance the most. 

Sandbag number two: Last session, the Florida legislature 

passed a bill that handcuffed the insurance commissioner to use 

his State authority to negotiate lower rates of premiums for two 

years. Affordable insurance is a key part of Obamacare. Although 

Florida has agreed to a federally-run marketplace, the Federal 

Government can only rule if rates are reasonable or unreasonable, 

but cannot negotiate lower rates. We needed the insurance commission to provide the lowest rates possible so people would sign up. 

Hopefully, tax credits will reduce costs and make insurance affordable. 

We must find a way to put aside Florida’s differences and move 

forward with the Affordable Care Act. We must move forward with 

this very, very important Act and rectify Florida’s political stalemate. Thank you very much for your consideration. 

Mr. LANKFORD. Representative Hudson. 

STATEMENT OF THE HONORABLE MATTHEW HUDSON 

Mr. HUDSON. Good morning, Chairman Lankford, Chairman Jordan, and members of the committee. Thank you for inviting me to 

speak with you today. My name is Matt Hudson, and I am honored 

to represent District 80 in the Florida House of Representatives. I 

also chair the Florida House Health Appropriations Subcommittee, 

serve as vice chair of the Florida House Select Committee on 

PPACA, and cochair of the National Conference of State Legislatures Health Committee. I am also a Florida realtor. 

Remember when you bought your first home? You saved money, 

found a home you liked. And then what if your realtor had handed 

you a contract and you had to review it and three of the pages were 

blank, and then when you questioned it they said trust me? I am 

positive none of you would have invested your money that way. I 

am positive that the citizens of Florida expect their government to 

make well-informed decisions, not based on Federal promises like 

trust me. But that is exactly what the ACA has forced us to do. 

What we do know doesn’t look very good. The ACA will make our 

health workforce shortage even worse and has led to skyrocketing 

premiums. It has kept States uninformed and puts consumers’ privacy at risk through the insurance exchanges. And its Medicaid expansions threaten patients’ health and taxpayers’ bottom line. 

The ACA will make our health workforce shortage even worse. 

By 2020, we will have a national shortage of more than 90,000 physicians and 1.2 million nurses. In Florida, about 13 percent of our 

physician workforce is retiring in the next five years, and we are 

40 

currently already short 753 doctors in our 248 primary care crisis 

areas. A massive influx of Government-subsidized health care recipients, because of the ACA’s insurance exchanges and Medicaid 

expansions will make things much worse. Because of the ACA, patients will face even longer wait times and worse access to specialty 

care. Costs will obviously spike as the demand for limited health 

care services will dramatically increase. 

The ACA will drive patients’ premiums higher. We were promised the ACA would let us keep the plan we like and the doctors 

we trust, but the premium increases resulting from the web of new 

regulations and mandates make that an empty promise for millions 

of Floridians. The Florida Office of Insurance Regulation projects 

that our small group and individual market premiums will rise an 

average of between 5 and 40 percent. Will these folks have to 

choose between prohibitively high premiums and fear of Government-run health care or no coverage at all? Where is the promise 

in that? 

Washington isn’t providing answers about insurance exchanges 

or protecting citizens’ privacy. As Florida weighed whether the 

State or the Federal Government would build a State-based exchange, we had questions that needed answering. These questions 

were included in a three-page November 2012 letter from our 

House speaker and our Senator president to HHS. They did not respond until January, after our exchange decision deadline. And the 

response was just three brief paragraphs that did not answer any 

of our questions. 

Based on the final HHS rules for federally-facilitated exchanges, 

Florida made the right decision in rejecting a State-based exchange. Still, the time line and HHS’s non-cooperation made an informed decision process impossible. 

What we did know is that the exchange applicants will have to 

hand over social security numbers, birth dates, employment information, tax returns, and much more, all the information needed for 

identity theft, and we took action. Florida passed a law that required the registration of exchange Navigators, which included 

background screenings, disqualifications for certain crimes, and 

penalties for improper actions. 

Medicaid expansion is wrong for patients and taxpayers. Medicaid is already a problem across the Nation; access is limited and 

outcomes are poor. The only randomized control trial of Medicaid 

ever conducted found no improvements in health when compared 

to the uninsured. Still, the Federal Government continues to push 

Medicaid expansion in Florida. 

We rejected a Medicaid expansion to add another million people 

to the Medicaid rolls because we knew access problems would get 

much worse. And it has been difficult to estimate true costs of expansion. In Florida, official cost estimates for Medicaid expansion 

range from less than $30 billion over a 10-year period to nearly $55 

billion. 

And then as we learn more about expansion, cost estimates for 

Florida portion went from $1.4 billion to $3.5 billion. And even 

these estimates assume that the Federal Government will be able 

to keep its funding promises, despite carrying $17 trillion in debt. 

41 

States deserve answers to these questions. Washington is notorious for passing laws and leaving States to figure out how to make 

them work. In the case of ACA, we deserve to have our concerns 

heard. 

Thank you, members of the committee, for giving me the opportunity to talk to you today, and I look forward to your questions. 

[Prepared statement of Mr. Hudson follows:] 

42 


Insert offset folio 15 here 85359.015

Subcommittee 01'1 

Statement of 

Matt Hudson 

District 80 

Florida House of ""'<'I",r&><::"''''''':UII 

before the 

Health Care and Entitlements and the 

Job Affairs 

Committee on and Government Reform 

U.S. House of H:<'I'nr~·<:"'n,.:n·I\/P"" 

2013 

Statement of Florida Representative Matt Hudson: Page 1 
43 


Insert offset folio 16 here 85359.016

Introduction 

Chairman Lankford, Chairman Jordan, Ranking Member Speier, Ranking Member Cartwright, 

and members of the Committee, thank you for the invitation to testify on "Federal 

Implementation of Obamacare: Concerns of State Governments." I welcome this opportunity to 

share with you the challenges Florida has experienced in dealing with the Patient Protection 

and Affordable Care Act (PPACA). 

My name is Matt Hudson and I represent the 80th District in the Florida House of 

Representatives. I was elected to office in 2007 and I serve as chairman of the Florida House 

Health Appropriations Subcommittee and vice-chairman of the Florida House Select Committee 

on PPACA. I also serve as co-chairman of the National Conference of State Legislatures (NCSLj 

Health Committee and as a member of the NCSL Health Reform Task Force. 

State officials across the country have a vested interest in ensuring access to quality, affordable, 

private health insurance coverage for their citizens. My colleagues in the state of Florida are no 

different. Currently, 19 percent of Florida's population is uninsured.! Between 2008 and 2012, 

average private-sector employer-based premiums rose by 22 percent, or a compounded 

average increase of 5.1 percent per year.2 We have 3.3 million Floridians in our Medicaid 

program, yet 41 percent of Florida's doctors won't accept new Medicaid patients.3

-

4 

These problems existed before PPACA, and we look forward to working with our federal 

partners to make health coverage more affordable and accessible to all Floridians. 

Unfortunately, PPACA only makes these problems worse. Today, I'd like to discuss four areas of 

concern: one, Florida's health workforce shortages; two, the excessive premium increases on 

Florida's families; three, the haphazard implementation and privacy concerns surrounding 

health insurance exchanges; and four, PPACA's Medicaid expansion. 

PPACA Makes Florida's Health Workforce Shortages Worse 

The growth and aging of the U.S. population has increased demand for healthcare services.s 

The implementation of PPACA will substantially add to the demand for healthcare services, 

1 U.S. Census Bureau, Current Population Survey, U.S. Census Bureau, http:Uwww.census.gov!cps/. 

2 Based on 2008 Medical Expenditure Panel Survey·lnsurance Component: Table x'D, U.S. Department of Health 

and Human Services 

(2009), http:Umeps.ahrq.gov/mepsweb/data stats/summ tables/insrlstate/series 10/2008/txd.pdf and Agency 

for Healthcare Research and Quality, 2012 Medical Expenditure Panel Survey-Insurance Component: Table X.D, 

u.s. Department of Health and Human Services 

(20B), http:Umeps.ahrq.govLmepswebLdata statsLsumm tablesLinsrLstate/series 1O/2012Ltxd.pdf. 

3 Florida Agency for Health Care Administration, Florida Medicaid Managed Care [191S(bll and Medicaid Pilot" 

11115) Enrollment Reports As of September 1st. 2013, Florida Agency for Health Care Administration 

(2013), http://www.fdhcstate.fI.us/MCHQ/Managed Health CareLMHMaLdocs/MC ENRalL!RF NR SMMC/ENR 

Sep2013.xls. 

, Sandra L Decker, In 2011 Nearlv ane-Third af Physicians Said They Would Not Accept New Medicaid Patients, 

But Rising Fees May Help, Health Affairs (2012), http:({content.heafthaffairs.org{content/3118/1673. 

s Maria Schiff, The Role of Nurse Practitioners in Meeting Increasing Demand for Primary Care, National Governors 

Association (2012), http://www.nga.org/filesLliveLsites/NGAlfiles/PdfLl212NursePractitionersPaper.pdf and A. N. 

Statement of Florida Representative Matt Hudson: Page 2 
44 


Insert offset folio 17 here 85359.017

especially primary care services.s Currently there is an inadequate supply of heelthcare 

practitioners in the U.S. to meet chis growing need for healthcare services. 

According to the Association of American Medical Colleges, the U.S. faces a shortage of more 

than 90,000 physicians by 2020 and the shortage will grow to more than 130,000 physicians by 

2025. 7 According to the U.s. Bureau of Labor Statistics, the registered nurse workforce is the 

top occupation in terms of job growth through 2020. The number of employed nurses is 

expected to grow from approximately 2.74 million in 2010 to 3.45 million in 2020-an increase 

of 712,000, or 26 percent. Additionally there is a projected need for 495,500 replacements in 

the nursing workforce, bringing the total number of nursing job openings due to growth and 

replacements to 1.2 million by 2020.8 

Florida's demographics, particularly its disproportionately large elder population, mean Florida 

will experience a greater healthcare workforce shortage than many other states. Florida's aging 

population currently includes many practicing physicians. Within the next five years, 5,810 

(12.97 percent) of Florida's 44,804 active physicians plan to retire, adding to the workforce 

shortage dilemma.9 Florida currently has a shortage of primary care physicians and would need 

753 doctors just to eliminate the state's 248 primary care crisis areas.lO The implementation of 

subsidized health insurance through the exchange, plus a PPACA Medicaid expansion, would 

generate the need for an additional 50,300 registered nurses to meet the demand for 

healthcare services in Florida.ll 

These shortages will affect access to health care negatively, both with regard to patient 

caseloads and price. Practitioners will have larger caseloads. Patients will have to wait longer 

for care and may have difficulty accessing the care they need. Increased demand for fewer 

resources leads to higher costs. 

States can address healthcare workforce shortages by increasing the matriculation of 

practitioners in the state, competing for existing workforce resources by encouraging and 

Hofer, 1. M. Abraham, and I. Moscovice, Expansion of Coverage Under the Patient Protection and Affordable Care 

Act and Primary Care Utilization, The Milbank Quarterly (2011), http://www.ncbi.nlm.nih.gov/pubmedf21418313. 

'Id. 

l Association of American Medical Colleges, Fixing the Doctor Shortage, Association of American Medical Cofleges 

(2013), https:ljwww.aamc.org!advocacy!campaigns and coalitions/fixdocshortage/. 

• U.S. Department of labor, Bureau of labor Statistics, Employment Projections - 2010-20, U.s. Department of 

Labor, Bureau of labor Statistics (2012), http://www.bls.gov!news.release/pdf/ecopro.pdf.See also: Robert J. 

Rossiter, Nursing Shortage Fact Sheet, American Association of Colleges of Nursing (20l2), 

http://www.aacn.nche.edu/media-relations/NrsgShortageFS.pdf. 

9 Florida Department of Health, PhYsician Workforce Annual Report 2012, Florida Department of Health (2012), 

http://www.doh.state.fl.us!WorkforcelWorkforce!Annual Reports!PhysicianWorkforceAnnuaIReport2012.pdf. 

10 Florida Department of Health, Presentation by State Surgeon General & Secretary of Health john H. Armstrong, 

M.D., before the House Select Committee on Patient Protection and Affordable Care Act, February 18, 2013, on file 

with Florida House Select Committee on PPACA staff. 

11 Florida Center for Nursing, RN and LPN Supply and Demand Forecasts. 2010-2025: Florida's Projected Nursing 

Shortage in View of the Recession and Healthcare Reform. Florida Center for Nursing (2010), 

http://www.doh.state.fl.us/Workforce/Workfon::e/Annual Reports/PhysicianWorkforceAnnuaIReport2012.pdf. 

Statement of Florida Representative Matt Hudson: Page 3 
45 


Insert offset folio 18 here 85359.018

removing barriers to migration from other states, and using existing in-state resources as 

efficiently as possible, Some of the methods to accomplish these goals include dedicating more 

funds to practitioner education programs, removing regulatory barriers to licensure, creating or 

expanding licensure reciprocity between states, and expanding scope of practice to ensure all 

practitioners practice to the greatest extent of their education, training, and experience. 

Healthcare workforce regulation is traditionally the purview of state governments, not the 

federal government. The federal government's attempts to both increase access to care and 

reduce costs through PPACA will be thwarted by the failure to address workforce problems. 

In Florida, the political and policy dialogue surrounding PPACA led us to consider significant 

changes to the way we produce and utilize health care practitioners as a way to mitigate the 

existing and looming health care workforce shortages. To that end, the Speaker of the House of 

Representatives, Will Weatherford, has convened a Select Committee to explore these issues 

and identify short-term and long-term solutions. We hope to improve Florida's regulatory 

position compared to other states, invest more wisely in education, and make it easier for 

health plans and health provider organizations to build networks and recruit practitioners. We 

want to make sure that Florida is in the best possible position to ensure our citizens have access 

to the best possible health care workforce. 

PPACA Levies Excessive Premium Increases on Florida's Families 

PPACA inflicts problems on both the supply and the demand side of health care. We must have 

a robust and innovative healthcare workforce to meet the health needs of all Floridians. But we 

also need to make health insurance more affordable so that Floridians can access that care. 

Contrary to its name, PPACA fails to make health care more affordable and will price increasing 

numbers of Floridians out ofthe healthcare marketplace. 

Under the new federal health law, individuals are seeing their premiums skyrocket in Florida. 

There are a number of reasons for this. The law's guaranteed issue requirements, community 

rating provisions, minimum mandated benefits, age rating restrictions, actuarial value 

requirements, and new taxes and fees will all drive up the cost of health insurance.12 

These provisions require insurance companies to accept all applicants, even if they wait until 

they get sick before applying for coverage, and the insurance companies are now prohibited 

from charging premiums based upon likely costs. So many individuals in the market today are 

seeing their premiums go up in order to subsidize others. These provisions also make 

individuals buy more robust coverage than they currently have, want, or even need. And the 

new taxes and fees on private insurance are simply being passed along to consumers. 

12 House of Representatives Select Committee on PPACA, Committee Meeting Notice' January 25, Florida House of 

Representatives (2013), 

http://www.myfloridahouse.gov/Sections!Documents/loaddoc.aspx?PublicationType=Committees&Committeeld= 

2738&Session-2013&DocumentType=Meeting%20Packets&FileName-PPACA%201-25-13%200NlINE.pdf. 

Statement of Florida Representative Matt Hudson: Page 4 
46 


Insert offset folio 19 here 85359.019

The Florida Office of Insurance Regulation (OIR) reports that premiums in our small-group 

market will rise by an average of 5 to 20 percent. 13 In our individual market, the results are 

even worse. According to aiR, premiums in our individual market are expected to increase by 

an average of 30 to 40 percent. l' 

Of course, insurance regulation has historically been a state power. As vice-chairman of the 

Florida House Select Committee on PPACA, I learned that PPACA had taken much of this state 

role and given it to the federal government without creating the regulatory structure to 

administer it. We learned that the U.S. Department of Health and Human Services (HHS) 

planned to leverage state infrastructure and resources to implement the PPACA insurance 

provisions-particularly state insurance regulatory departments.1S 

When we started the Select Committee meetings in January of 2013, the rules on insurance 

rating were not finalized. The insurance industry was facing a deadline of May 1,2013 to 

submit products to HHS for approval to be sold on the exchange.16 The rating rules did become 

final on February 27,2013. 17 We knew that because of the lateness of the rule we would not 

know the full impact of PPACA on rates until after the legislative session ended. 

Florida has a long history of transparency including extensive public records and open meetings 

laws-and the Select Committee realized that insurance rates were changing as a result of the 

actions of the federal government. We wanted Floridians to know and understand the effects 

of PPACA on their insurance rates. Since the federal government had superseded the role of the 

state in setting policy affecting insurance rates, we wanted to make sure the public understood 

that state could do nothing to affect rates. 

As a result, the legislature passed Senate Bill 1842, which in part requires insurance companies 

to provide a one-time notice to policyholders that describes or illustrates the estimated impact 

of PPACA on monthly premiums.18 The notice must also be submitted to OIR, which will post a 

summary of the notices on its website. 19 

13 Wences Troncoso, Patient Protection & Affordable Care Act (PPACA) Overview: Post-legislative Session Update. 

Florida Office of Insurance Regulation (2013), http:Uwww.floir.com/sitedocuments/PPACAUpdate07302013.pdf. 

1

4 1d. 

15 Florida House of Representatives, Select Committee on PPACA, Overview of the Patient Protection and 

Affordable Care Act. January 14,2013, on file with Florida House Select Committee on PPACA staff. 

16 Wences Trocoso, Patient Protection & Affordable Care Act (PPACA) Overview. Florida Office of Insurance 

Regulation (2013), 

http://myfloridahouse.gov!Sections!Documents/loaddoc.aspx?PublicationType=Committees&Committeeld=2738 

&Session=2013&DocumentType=Meeting Packets&FileName=PPACAl-2S-13 ONLlNE.pdf. 

11 U.s. Department of Health and Human Services, Patient Protection and Affordable Care Act; Health Insurance 

Market Rules; Rate Review. Federal Register 78 FR 13405 (2013), 

https:/lwww.federalregister.gov/ articies/2013/02/2 7!2013-0433S!patient -protection-and·affordable-care-acthealth-insurance-market-rules-rate-review. 

19 Senate Appropriations Committee and Senate Banking and Insurance Committee, CS/SB 1842. Florida Senate 

12013), http://www.flsenate.gov!Session!Bill/2013/18421BiHText{er!PDF. 

19 ld. 

Statement of Florida Representative Matt Hudson: Page 5 
47 


Insert offset folio 20 here 85359.020

The information in the notice must be based on the statewide average premium for the bronze, 

silver, gold, or platinum level plan, whichever is applicable to the policy, and provide an 

estimate of specified effects of the following PPACA requirements)O 

• The dollar amount of the premium attributable to the impact of guaranteed issuance of 

coverage; 

• The dollar amount of the premium attributable to fees, taxes, and assessments; 

• For individual policies, the dollar amount of the premium increase or decrease 

attributable to the combined impact of the age and gender rating requirements of 

PPACA, shown for specified age brackets for males and females; and 

• The dollar amount attributable to the requirement to cover essential health benefits 

and to meet a required actuarial value, as compared to the statewide average premium 

for the policy that has the highest enrollment in the individual or small group market, 

whichever is applicable. 

OIR developed the form this summer with input from industry and advocacy groups. In Florida, 

our citizens will know the true costs of PPACA and will be able to judge for themselves if the 

costs are worth the value they receive from their new insurance policies. 

Haphazard Implementation of PPACA Exchanges Threatens Both Policymaking and Privacy 

The Florida Select Committees on PPACA spent a great deal of time learning about our policy 

options under PPACA, including our choices for the structure and operation of Florida's health 

insurance exchange. In several areas of PPACA, the federal government made assumptions 

about the degree of state Willingness to participate in implementation. For the members of 

Florida's Legislature, the decision concerning what kind of exchange would operate in Florida 

turned on whether there were any meaningful policy choices we could make in a state-based 

exchange or partnership to tailor the exchange to meet Floridians' unique needs. 

We needed information on how the federal government would run the federally-facilitated 

exchanges (FFEs) in order to evaluate and decide whether Florida would benefit from taking on 

this role of building and operating an exchange. What policy choices would HHS make? For 

example: 

• Would the FFE be an active purchaser, or an open market? 

• Would Florida be one statewide rating area, or divided into many rating areas? If the 

latter, how many areas and what would they look like? 

20 Florida Office of Insurance Regulation, Notice of Premium Impact Template. Florida Office of Insurance 

Regulation (2013), http://www.floir.com/siteDocuments/NoticeofPremiumlmpactsTemplate.xlsx. 

Statement of Florida Representative Matt Hudson: Page 6 
48 


Insert offset folio 21 here 85359.021

• Will the FFE have an outreach program, and what will it look like? 

What is the process for transitioning from a FFE to a state-based exchange? 

• What are the procedural and technical requirements for connecting to the federal data 

hub? 

However, federal timelines and a lack of information made the legislative process difficult. The 

federal deadline for a state to notify HHS that it planned to have a state-based exchange was 

originally November 16, 2012, and was extended to December 14, 2012.21 The notice deadline 

for a partnership exchange election was February 15, 2013.22 

We were being forced to make this important decision before the federal government had 

addressed these and many other questions in either rules or guidance. Prior to the deadlines 

for declaring which exchange model Florida would pursue, the Speaker of the House of 

Representatives and the Senate President submitted a joint letter to HHS detailing a list of 

questions they believed needed to be answered in order for the Florida Legislature to make an 

informed decision.23 They received a response in January-after the notice deadline for a statebased exchange-which contained no answers to any of the questions.24 

In an attempt to get answers to some of our questions, the legislature invited Center for 

Consumer Information and Insurance Oversight (CClIO) staff to attend a committee meeting 

and discuss exchanges with the members of the Select Committees.2s Over a period of weeks of 

communication, Select Committee staff first was advised that CCiIO does not have a travel 

budget 50 no one from CCiIO could attend in person.26 Later they were told CCIIO officials are 

not allowed to meet officially with state legislatures; rather, they are permitted only talk 

informally and not in public. 27 This created understandable problems given our open 

21 Kathleen Sebeliu5, Letter to The Honorable Bob McDonnell and The Honorable Bobby Jindal, U.S. Department of 

Health and Human Services (2012), accessed at http://healthreformgpsdev.forumone.com!resources!sebeliusgrant-rga-request-for-more-time-to-decide-on-a-state-run.exchange!. 

" Id. 

23 Don Gaetz and Will Weatheriord, Letter to The Honorable Kathleen Sebelius, Florida Legislature, November 15, 

2012, on file with Florida House Select Committee on PPACA staff. 

,. Gary Cohen, Letter to The Honorable Don Gaetz and The Honorable Will Weatheriord, U.S. Department of 

Health and Human Services, January 14, 2.013, on file with Florida House Select Committee on PPACA staff. 

lS E-mail from staff of the U.S. Department of Health and Human Services to staff of the Florida House of 

Representatives Select Committee on PPACA, December 17, 2012, on file with Florida House Select Committee on 

PPACA staff . 

.. E-mail from staff of the U.S. Department of Health and Human Services to staff of the Florida House of 

Representatives Select Committee on PPACA, January 2,2013, on file with Florida House Select Committee on 

PPACA staff. 

"E-mails from staff of the u.s. Department of Health and Human Services to staff of the Florida House of 

Representatives Select Committee on PPACA, January 28, 2013, January 29, 2013, and January 30, 2013, on file 

with Florida House Select Committee on PPACA staff. 

Statement of Florida Representative Matt Hudson: Page 7 
49 


Insert offset folio 22 here 85359.022

government laws, so we were not able to schedule the meeting. The February partnership 

deadline passed without any answers. 

The final rule for the FFEs came out in late March of this year, in the middle of Florida's 

legislative session and long after the deadlines for deciding on FFE alternatives. While the 

substance of the rules happened to affirm Florida's policy decision to have a federallyfacilitated exchange, the federal timeline made a more thoughtful, informed decision process 

impossible, further damaging a federal-state relationship already stressed by PPACA's 

assumptions about states' willingness to participate. 

The federal government's haphazard implementation of exchanges affected Florida's ability to 

craft sound public policy. And now our most vulnerable Floridians will be impacted, thanks to 

the exchange navigator program that lacks meaningful privacy protections. 

These exchanges-and the people helping run the exchanges-will be handling all kinds of 

personal information of consumers. Consumers will be handing over Social Security numbers, 

dates of birth, addresses, employment information, tax return information, and much more, 

not just for the applicants themselves, but for their entire families.2s This is more than enough 

personal information for consumers to have their identities stolen. 

We wanted to know who would be handling this information. Would the people handling this 

information receive background checks? If not, how can we be sure the people collecting this 

information haven't committed identity theft in the past? Would the data be secure once 

collected? Would the federal government be able to protect this personal information against 

security breaches that we see time and again? 

Florida takes the safety of its citizens' private information very seriously. I want to thank 

Florida's Attorney General, Pam Bondi, for joining with 12 other attorneys general in a letter to 

HHS Secretary Kathleen Sebelius expressing concern about the failure to adequately protect the 

privacy of citizens seeking to enroll in the new exchanges. 29 

During the legislative session, we wanted to protect the private information of Floridians. We 

didn't want to pass overly burdensome or duplicate regulation on the navigators. Additionally, 

PPACA placed constraints on a state's ability to regulate naVigators by requiring that state 

28 Health Insurance Marketplace, Application for Health Coverage & Help Paying Costs. U.S. Department of Health 

and Human Services (2013), http://cdn.insuranceexchangehg.com/wp-content/uploads/2013!05!ObamaCareApplication-Form-Family-AttachmentC 042913.pdf. 

,. Patrick Morrisey et aI., A Communication from the States of West Virginia. Alabama. Florida. Georgia. Kansas, 

lOUisiana, Michigan. Montana, Nebraska, North Dakota. Oklahoma, South Carolina. and Texas Regarding Data 

Privacy Risks Posed by Programs Assisting Consumers with Enrollment in Health Insurance Through the New 

Exchanges, State of West Virginia. Office of the Attorney General (2013), accessed at 

http://myfloridalegal.com!webfiles.nsf/WF/JMEE·9AKRP2/Sfile/HHSletter.pdf. 

Statement of Florida Representative Matt Hudson: Page 8 
50 


Insert offset folio 23 here 85359.023

regulation may not "prevent the application of a provision of PPACA." 30 It is unclear and 

uncertain what requirements a state can place on navigators. 

We passed a law in Florida that required the registration of navigators which included 

background screenings, disqualifications for certain crimes, and penalties for improper 

actions31 

During session, the navigator grants had not been awarded, the navigator rules had not been 

finalized, and the navigator training had not been announced. We didn't know, and frankly 

didn't expect, how little training and oversight the navigators received-or we would have 

passed an even more rigorous law in Florida. 

PPACA itself only refers to "navigators." And Florida passed registration requirements for 

navigators. Now we find out that HHS has also created certified application assisters, certified 

application organizations, and Champions for Coverage-all of which appear to be expected to 

perform the same activates as navigators but with even less oversight. 

PPACA's Medicaid Expansion Will lead to Poor Care and Cost Overruns 

The federal government has exerted great pressure on our state to expand Medicaid eligibility. 

Despite the fact that our Medicaid reform pilot had been widely hailed as a decided success, 

our request to implement those reforms statewide sat on the desk at the Centers for Medicare 

& Medicaid Services (CMS) for nearly two years. We submitted our request to implement those 

reforms statewide in August 2011, but didn't gain final approval until June 2013. 3

2-33 

Were our reforms held hostage to pressure us into expanding Medicaid? After all, HHS is 

continuing to push Medicaid expansion in our state.34 Fundamentally, I believe the Medicaid 

expansion is a flawed approach to reduce the number of uninsured residents in Florida. 

Rather than temporary assistance targeted to our most vulnerable residents, the optional 

Medicaid expansion would have created a new entitlement for able-bodied, working age adults 

without children.35 This group has never been considered categorically needy and doesn't 

3lJ Senate Banking and Insurance Committee, Bill Summary for CSfSB 1842, Florida Senate (2013), 

http://www.flsenate.gov/PublishedContent/Session/2013!BiIISummary/Banking B!1842bi 1842.pdf. 

31 Supra Note 18. 

" Florida Agency for Health Care Administration, Statewide Managed Medical Assistance Program 

1115 Research and Demonstration Waiver. Florida Agency for Health Care Administration 

(2011), http://www,ldhc.state.ft"us!Medicaid!statewide mc/pdf/mmafAmendment 1 1115 Medicaid Reform 

Waiver 08012011.pdf. 

33 Centers for Medicare and Medicaid Services, Managed Medical Assistance Program Approval Letter, U.S. 

Department of Health and Human Services 

(2013), http://www.fdhc.state.fl.us/Medicaid/statewide mc/pdf/mma!06-14-2013 Appproval Letter.pdf" 

'" Daniel Chang and Kathleen McGrory, Feds to Florida: Not Too Late for Medicaid Expansion, Miami Herald (2013), 

http://www.miamiherald.com!2013/07!24!3519595/feds-to-florida-not-too-late-for.html. 

" According to the Urban Institute, nearly 83 percent of the uninsured individuals made eligible by the expansion 

are working-age adults with no disabilities and no dependent children. The remaining 17 percent are working-age 

Statement of Florida Representative Matt Hudson: Page 9 
51 


Insert offset folio 24 here 85359.024

qualify for other types of welfare, including the Temporary Assistance for Needy Families 

program's cash assistance.'5 

Across the nation, Medicaid programs already face major problems. Access to care is limited 

and outcomes are poor.i7-

3S The only randomized, controlled trial of Medicaid ever conducted 

found no improvements in health when compared to the uninsured3s 

We're already facing a provider shortage, both inside and outside of the Medicaid program. 

There is nothing in PPACA to significantly and permanently increase the number of providers. 

Expanding Medicaid to more than a million new individuals would undoubtedly make access 

problems worse. And those who would suffer most would be our most vulnerable residents, 

including our elderly population and those with disabilities. They would be forced to compete 

with able-bodied adults for a limited number of appointments. 

But even if Medicaid were an efficient program, state lawmakers face another huge problemwe have no idea how much it would really cost. In Florida, we heard testimony on what 

happened in other states that had already expanded Medicaid to this group of people:0-41 

We learned that in Arizona, enrollment was nearly three times what was expected and that 

costs were four times what was expected.42 We learned within two years of Maine expanding 

Medicaid, nearly twice as many people signed up as the state thought were even eligible and 

uninsured.43 We learned that in state after state that expanded, this new eligibility category 

cost far more than policymakers expected.44 

We received plenty of cost estimates. But they were ali highly sensitive to a number of 

assumptions-illustrating the general lack of experience and multitude of unknowns inherent in 

parents with no disabilities. See, for example, Genevieve M. Kenney, Opting In to the Medicaid Expansion Under 

the ACA: Who Are the Uninsured Adults Who Could Gain Health Insurance Coverage? Urban Institute (20l2), 

http://www,urban.org/UploadedPDF!412630-opting-in-medicaid.pdf. 

"Gene Falk, The Temporary Assistance for Needy Families fTANFl Block Grant: A Primer on TANF Financing and 

Federal Requirements. Congressional Research Service (2013), http:f{www.fas.org/sgp/crs!misc/Rl32748.pdf. 

37 Supra note 4. 

"Kevin D. Dayaratna, Studies Show: Medicaid Patients Have Worse Access and Outcomes than Privately Insured. 

The Heritage Foundation (20U). http://thfmedia.s3.amazonaws.com/2012/pdf!bg2740.pdf. 

'" Katherine Bakker et aI., The Oregon Experiment-Effects of Medicaid on Clinical Outcomes. New England 

Journal of Medicine (2013), http://www.nejm.orgfdoi/full/lO.l056/NEJMsa1212321. 

40 Senate Select Committee on PPACA, Committee Meeting Expanded Agenda: February 11. Florida Senate (2013), 

http://www.flsenate.gov!PublishedContent/Committees!Z012-

2014!SPPNMeetingRecords!MeetingPacket 2026.pdf. 

41 House of Representatives Select Committee on PPACA, Committee Meeting Notice: February 18. Florida House 

(2013), 

http://www.myfloridahouse.gov!Sections!Documents/loaddoc.aspx?PublicationType=Committees&Committeeld= 

2738&Session-2013&DocumentType=Meeting%20Packets&FileName=PPACA%20Z-18-13-0NUNE.pdf. 

"ld . 

• , Supra note 41. 

44 Supra note 42. 

Statement of Florida Representative Matt Hudson: Page 10 
52 


Insert offset folio 25 here 85359.025

expanding Medicaid to such a large and unfamiliar population." As we got more information 

over time, the projected costs of Florida's Medicaid expansion skyrocketed. Our official 

estimates on the total ten-year cost of expanding Medicaid went from less than $30 billion, as 

reported to us at a February 2013 committee hearing, to nearly $55 billion less than one month 

later-based on more realistic figures pulled from reports from CMS, Mathematica, and other 

states' Medicaid programs.46-

L7 Florida's share of these costs more than doubled to $3.5 billion, 

up from the earlier $1.4 billion estimate48 

Even without expansion, Medicaid spending is crowding out funding for state priorities like 

education. More than 30 percent of our state budget goes to Medicaid.4s A little over a decade 

ago, it was half that.so Expanding Medicaid would crowd-out even more of our resources. And 

even worse, it would prioritize our Medicaid resources on able-bodied, working-age adults, 

rather than on the most vulnerable. 

All this assumes, of course, that the federal government is going to keep its funding promises. 

The federal government is already nearly $17 trillion in debt.s1 That's expected to grow to more 

than $26 trillion during the next decade.52 Can the federal government afford to keep this 

promise? It couldn't afford to keep its promises to states on special education funding. 53 Or on 

the funding promised to states when we borrowed with Build America Bonds.s4 How many 

broken promises do we need to be on the losing end of before we recognize that grand 

promises such as this one are inherently suspect? 

Florida decided not opt-in to the Affordable Care Act's voluntary expansion of Medicaid. That 

doesn't mean we won't be affected by the law. The law is still expected to add more than $82 

billion in costs to our Medicaid system during the next decade.55 

A5 Jonathan Ingram, The Uncertainty of Medicaid Expansion, Foundation for Government Accountability (2013), 

http://www.floridafga.org!wp-content/uploads!lFINAL-The-Uncertainty-of-Medicaid-Expansion.pdf. 

'6 Supra note 42. 

47 Senate Select Committee on PPACA, Committee Meeting Expanded Agenda: March 11, Florida Senate (20B), 

http://www.flsenate.gov/PublishedContent/Committees!l012· 

2014/SPPA/MeetingRecords/MeetingPacket 2102.pdf. 

"'Id. 

49 Brian Sigritl, State Expenditure Report: 2011, National Association of State Budget Officers (2012), 

http://www.nasbo.org{sites/default!files!State%20Expenditure%20Report l.pdf. 

so Nick Samuels et aI., State Expenditure Report: 2000, National Association of State Budget Officers (2001), 

http://www.nasbo.org!sites!default/files/ER 2000.pdf. 

51 Bureau of the Public Debt, The Debt to the Penny and Who Holds It. U.S. Department of the Treasury (2013), 

http://www.treasurvdirect.gov/NP(debt!curren!. 

52 Douglas W. Elmendorf, The Budget and Economic Outlook: Fiscal Years 2013 to 2023, Congressional Budget 

Office (2013), http://www.cbo.gov/sites/default!files!cbofiles/attachments/43907-SudgetOutlook.pdf. 

53 Jonathan Ingram, Medicaid in Ohio: The Choice is Clear, Foundation for Government Accountability (2013), 

http://www.medicaldclJre.org/wp·content/uploadsI2013!06!Medicaid-in-Ohio-The-Cholce-is-Oear.pdf. 

"Id. 

55 John Holahan, The Cost and Coverage Implications of the ACA Medicaid Expansion: 

Statement of Florida Representative Matt Hudson: Page 11 
53 


Insert offset folio 26 here 85359.026

CONCLUSION 

Thank you, Chairman Lankford and Chairman Jordan, for giving me the opportunity to share 

Florida's challenges with PPACA implementation. I share your goal of making quality, 

affordable, private health coverage accessible for all Americans-and I look forward to working 

with you to accomplish that goal outside of the constraints of the federal health law. 

National and State-by-State Analysis, Kaiser Commission on Medicaid and the Uninsured (2012), 

http://www.urban.org(UploadedPDFf4127D7-The-Cost-and-Coverage-Implications-of-the-ACA-MedicaidExpansion.pdf. 

statement of Florida Representative Matt Hudson; Page 12 
54 

Mr. LANKFORD. Thank you. 

Thank you to all of you for your testimony, both your written testimony and your oral testimony as well. We appreciate your participation in this. 

I seem to get a feeling we have two different views today. The 

difficulty is one group is talking about the dream of what these 

benefits might someday do and what they might actually occur one 

day if everything works, and another group that is dealing with the 

reality on the ground of implementation and is not the dream of 

what might one day become, but what is currently right now and 

the problems we face. 

We have a challenge dealing with this law, to say the least, but 

implementation is very often the State and the employer and the 

individual challenge, as every individual has to figure out some 

way to determine whether their employer has provided them qualified health care and determine what does that mean, or whether 

they qualify for a subsidy; and if they get that guessed wrong, they 

will be penalized on their income tax later for getting that guess 

wrong; or if their dad works somewhere and they take out insurance and get the subsidy, if they will be penalized because they 

took the subsidy that because their dad’s employer should have 

covered them and all of that convoluted mess that has become this. 

We cannot ignore employers like IBM. Walgreen’s today, on the 

front cover of the newspaper, has shifted their insurance. Did not 

shift their insurance because they thought it was the right time, 

they shifted their insurance because they were dealing with the 

ACA. Unions continue to step up and say there are major problems 

and issues, we wish these would be addressed. 

There is the dream of what we hope it will be and the reality of 

what is on the ground. We have the responsibility to deal with the 

reality on the ground, and to get questions and to be able to work 

through what is the solution at this point. 

Attorney General Wilson, you wrote a letter August the 14th, 

with other attorneys general, and asked some very specific questions to HHS. Do you recall some of those questions and issues that 

you asked in August? 

Mr. WILSON. Yes, I do. In fact, I have the letter here with me. 

I believe it was provided to the members of the committee, but we 

can provide that. 

Mr. LANKFORD. We can have that in the record. 

Mr. WILSON. Our concerns, and, again, I am not here today as 

an implementer, because that is not my role as attorney general. 

I am here as an attorney for the State, the citizens of South Carolina, and as a consumer advocate. And the questions we outlined 

in the letter dealt with screening of personnel, guidance to program 

personnel of the Navigator, so to speak, the monitoring of personnel. 

Other areas of concern were who bears the liability; is it the exchange, is it the individual navigator, is it the sponsoring group 

that receives the grant funds? What notice to consumers are they 

going to get? Fraud prevention and remedies was another area that 

we asked questions under. We had questions about penalties, as 

well as supplemental State regulations; what can the States do, 

55 

without running afoul of preemption issues, in protecting our citizens. 

So our questions, we sent this letter to HHS. We are still waiting 

on an answer. 

Mr. LANKFORD. So no response at this point. 

Mr. WILSON. No response at this point that I am aware of. 

Mr. LANKFORD. Okay. 

Lieutenant Governor, you seem to a person that is trying to obstruct something that is going to help people and take care of people. Yet you speak of taking care of people for free and caring for 

the folks. You also speak of $3400 just last week, an additional 

compliance cost in your office, and I can’t imagine what that is 

multiplied around the Country of millions of dollars of additional 

compliance costs that has been added to it. My question for you is 

what could the State of Kansas do to take care of their people, or 

have they already done something to be able to take care of their 

people that need health care? 

Dr. COLYER. This is not a simple answer. There is not just one 

single answer, but let me give you a couple of examples. The States 

of Kansas, unlike almost every other State, we have overhauled our 

entire Medicaid system. We did not throw anybody off our system; 

we did not cut rates. But we are able to save $1 billion. And by 

competing it out, we actually are giving everybody now three 

choices, where they didn’t have choices before. And in that bidding 

process we actually got additional services for people and are starting to look at long-term health care outcomes. 

In the State legislature we passed a bill that got rid of mandates 

so that people could have a choice on a more affordable insurance 

option now in the State of Kansas. We have worked on this in a 

whole variety of areas, medical homes, our indigent clinics, and 

working on this in a very comprehensive way. 

Mr. LANKFORD. So there are State solutions that you are proposing on this. 

Dr. COLYER. Absolutely. 

Mr. LANKFORD. I am going to be real close on time, just to let 

everyone know, the five minute time. Because of the number and 

we have two different subcommittees together, I am going to try to 

stick right on the five minute time for questioning on that. 

So, with that, let me recognize Ms. Speier. 

Ms. SPEIER. Mr. Chairman, thank you, and I will abide by your 

time frame as well. 

Let me just say I was very impressed to hear that the chairman 

of the full committee now is of the opinion that we should be fixing 

the Affordable Care Act, not repealing it. Unfortunately, I regret 

that he is not here right now because last year he was a cosponsor 

of H.R. 2, which was in fact a bill to repeal the Affordable Care 

Act. So he has had a change of heart, it appears, based on his comments today, and I am pleased to hear that. 

Let me start by asking each of you do you receive health insurance as government employees through your States? Just raise 

your hand if you do. 

So everyone except for the attorney general. You receive yours 

through TRICARE, is that correct? 

Mr. WILSON. That is correct. 

56 

Ms. SPEIER. All right. I know why you receive it through 

TRICARE, because with TRICARE, which is what my brother has, 

you pay $500 a year for health care. It is pretty remarkable that 

that insurance is available. 

Mr. JORDAN. Would the gentlelady yield for a second? 

Ms. SPEIER. No, I am not going to yield. I have very few seconds 

in my opportunity, so I think we are all just going to be able to 

ask our questions. 

So let me ask you all this. The presentations that you have provided today, particularly the Republican representatives, were pretty remarkable in that they were elaborate, they were footnoted. 

And I am curious when were you asked by the committee to participate in this hearing. 

Dr. COLYER. About Wednesday or Thursday of last week. I think 

Thursday. 

Ms. SPEIER. Okay. Attorney General? 

Mr. WILSON. A week or two ago. 

Ms. SPEIER. A week or two ago. All right. 

And Secretary Kliebert? Thursday? 

Ms. KLIEBERT. Thursday. 

Ms. SPEIER. And Representative Hudson? 

Mr. HUDSON. Mid last week, Wednesday or Thursday. 

Ms. SPEIER. Mid last week. 

So pretty impressive that you have been able to put together 

those kinds of statements with footnotes. I mean, that is something 

I did when I was in college, and I didn’t do it very well. I guess 

my question to you is did any of you have any assistance; anyone 

help you develop your statements? 

Dr. COLYER. Sure. Actually, Ren, my staffer, and our staff, we 

were literally working at this footnoting this at 1 a.m. on Monday 

morning. 

Ms. SPEIER. All right. Thank you. 

Attorney General Wilson? 

Mr. WILSON. Yes, my staff and I prepared the remarks. 

Ms. SPEIER. All right. 

Secretary Kliebert? 

Ms. KLIEBERT. Yes, certainly. My staff that is involved in the implementation and involved in our Medicaid program helped, as 

well. 

Ms. SPEIER. Representative Hudson? 

Mr. HUDSON. Yes, Florida House Health Policy staff. 

Ms. SPEIER. All right. To your knowledge, did any of them do this 

in conjunction with ALEC, the American Legislative Exchange 

Council? They are very similar, many of them drafted in a way 

that would suggest that there was collaboration. 

Dr. COLYER. No. 

Ms. SPEIER. No? 

Mr. WILSON. Not to my knowledge, no. 

Ms. KLIEBERT. No. 

Mr. HUDSON. No. 

Ms. SPEIER. All right. Thank you. 

Let me then move forward with the one minute and 33 seconds 

that I have left and ask a couple of questions. Bobby Jindal, who 

is the governor of Louisiana, recently said, ‘‘We don’t think it 

57 

makes any sense to implement Obamacare in Louisiana. We are 

going to do what we can to fight it.’’ 

Ms. Jackson, in your opinion, is it a significant challenge to the 

ACA implementation when the chief executive of a State is so 

strong-willed in their commitment and interest in not implementing the law of the land? 

Ms. JACKSON. It has been one of the most difficult challenges. 

Passed himself as an elected official, basically attempting to prohibit the implementation. Every letter sent to the Department of 

Health and Hospitals from any Health and Welfare Committee 

member or any legislature has been met with delay, and sometimes 

we have been told that it was not part of the public records request. 

It is also difficult, if I can, when you have a secretary of Department of Health and Hospitals, with all due respect, who has only 

been there six months and trying to implement a major privatizing 

of our Medicaid-Medicare program as we speak, along with attempting to obstruct this implementation. 

Ms. SPEIER. I thank you, and my time has expired. 

Mr. LANKFORD. Thank you. 

Chairman Jordan. 

Mr. JORDAN. I thank the chairman. 

Let me just start first with the reason I asked if the gentlelady 

would yield is my guess is, and the attorney general can speak for 

himself, but my guess is the reason he has TRICARE is because 

he wore the uniform of our Country and served our Nation. I believe even served in combat, is that correct, attorney general? 

Mr. WILSON. Yes, correct. 

Mr. JORDAN. Well, we appreciate your service, and you are simply getting what you are entitled to. 

Lieutenant Governor, let me start with you. You are a physician 

and elected State-wide. Do you think it makes sense to delay the 

Affordable Care Act? 

Dr. COLYER. Yes, it does. 

Mr. JORDAN. Okay. 

Attorney General Wilson, you represent an entire State as well. 

Your job is to look out for consumers. You have asked questions of 

HHS and CMS; they have yet to answer your questions. Do you 

think it makes sense to delay the Affordable Care Act? 

Mr. WILSON. From a security and privacy interest standpoint, I 

do. One other comment, I would like to know what plan under 

TRICARE allows me to pay $500 a year, because I pay nearly $200 

every month. 

Mr. JORDAN. Your wife would probably like to know that too. 

Mr. WILSON. My wife wants to know where we get that plan. 

Mr. JORDAN. Let me go to you, then, Senator Hutto. So based on 

what you said in your testimony, you probably disagree with the 

guys on either side of you. You think that the Affordable Care Act 

should move forward and the law should go ahead and be fully implemented, is that correct? 

Mr. HUTTO. That is correct. I won’t tell you that it will be seamless. 

Mr. JORDAN. Let me ask you a couple questions. Let me ask you 

a couple questions. Was Howard Dean wrong when he said the 

58 

Independent Payment Advisory Board is essentially a health care 

rationing body? Was he right or wrong when he said that about the 

Affordable Care Act? 

Mr. HUTTO. I don’t think it is going to be a rationing body, no. 

Mr. JORDAN. Was head of the Teamsters, James Hoffa, wrong 

when he said that this law is going to hurt working Americans and 

fundamentally change the 40-hour work week? Was he wrong? 

Mr. HUTTO. I think he was. 

Mr. JORDAN. He didn’t know what he was talking about? 

Mr. HUTTO. We are going to have to work through this. 

Mr. JORDAN. Was AFL–CIO wrong last week, at their convention 

in Los Angeles, where they said fix the bill or repeal the whole 

darn thing? Were they wrong? 

Mr. HUTTO. Yes. 

Mr. JORDAN. They are wrong too. Okay. Was Senator Baucus, a 

guy who helped write the bill, head of the Senate Finance Committee, pretty accomplished public servant, was he wrong when he 

referenced that this bill was a train wreck? 

Mr. HUTTO. That was taken out of context, but yes. 

Mr. JORDAN. He was wrong too. Okay. And Warren Buffett yesterday, probably most people would said a fairly sharp individual, 

made a few dollars in his life, was he wrong yesterday when he 

said we should scrap the entire bill? 

Mr. HUTTO. We have to fix the bill. 

Mr. JORDAN. Was he right or wrong? So far everyone has been 

wrong and you are the only one who has been right. 

Mr. HUTTO. That is not what I am saying. What I am saying is 

that we need to work together. 

Mr. JORDAN. The President’s hometown newspaper, three weeks 

ago, lead editorial, final paragraph of the editorial said, delay the 

entire law. Chicago Tribune endorsed the President both times he 

ran for the President. Were they wrong when they said delay the 

entire bill? 

Mr. HUTTO. That is their opinion. 

Mr. JORDAN. Their opinion. But I am asking you were they right 

or wrong. 

Mr. HUTTO. I think they were wrong. 

Mr. JORDAN. This is amazing. We need to have you up here more 

often, because you are right and everyone else is wrong. Let me ask 

you this. Do you still say this bill should be implemented when 

Kroger, a major employer in our State, announced last week that 

11,000 employees and their spouses would no longer be covered by 

their insurance? Is that a good thing? Is that a good result for the 

Affordable Care Act? 

Mr. HUTTO. That is not a good thing, but I am sure there are 

alternatives. 

Mr. JORDAN. United Parcel Service announced recently that 

15,000 workers and their spouses and families would no longer be 

covered. Is that a good thing? 

Mr. HUTTO. It is going to be a good thing when hundreds of thousands of new people are covered. 

Mr. JORDAN. Let me just turn to the attorney general. You deal 

with protecting consumers in your State, so when a company offers 

a product and they have a guarantee, and someone purchases that 

59 

product and the guarantee is not met, the consumer gets a chance 

to take the product back and get something new or get their money 

back. 

But what we have here is we have the guarantee that if you 

liked your insurance, you would be able to keep it. And we just 

know Kroger, UPS, University of Virginia, Trader Joe’s, and I could 

name a whole bunch of other companies, are now telling people because of the Affordable Care Act you will no longer be able to keep 

the product you thought you were going to be able to keep. That, 

to me, if for no other reason, that is why we should delay it, because the guarantee that the President said and everyone who supported this bill said was going to be in place is no longer in place. 

Would you agree? 

Mr. WILSON. Yes. 

Mr. JORDAN. All right. 

Mr. Chairman, I yield back. 

Mr. LANKFORD. Mr. Cartwright. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

And thank you to all the witnesses who came here today to share 

your expertise and your insights on the implementation of the Affordable Care Act. An exciting time in America. October 1st is time 

to start getting signed up for the health care law. To make sure 

we get the word out, it is Healthcare.gov. Get right on there, enter 

your information. It is going to be easy and it is going to be interesting, and it is a new dawn in American health care. 

I want to start with you, Attorney General Wilson, and I want 

to thank you for correcting my misstatement. You work with Governor Nikki Haley, not under her, and I appreciate that. In fact, 

I also want to thank you for your military service. I don’t care if 

you are Democrat, Republican, pro-ACA, anti-ACA. If you deliver 

military service like what you did, you deserve the thanks of all of 

us. 

And I want to expand on our discussion of Governor Nikki Haley. 

Were you attempting to distance yourself from her remark about 

the importance of de-funding Obamacare in Congress? Were you 

trying to get away from that remark? 

Mr. WILSON. No, representative. What I am trying to do is I am 

trying to appear today here, I am an elected official, but I am trying to wear the State’s lawyer hat. I fought Obamacare in the court 

all the way to the U.S. Supreme Court. In fact, the Supreme Court 

agreed with the States and NFID on every issue we presented except for the fact whether the mandate was a tax or penalty. But 

we lost the fight, so now, if it is the law of the land, my job is now, 

as the lawyer for the citizens of South Carolina and as a consumer 

advocate, to ensure that their information is protected. 

Mr. CARTWRIGHT. Well, general, you are a prosecutor. You know 

what a yes or no question is. Yes or no, do you agree with Governor 

Haley when she says everybody else in Congress needs to de-fund 

Obamacare? 

Mr. WILSON. I believe it is good policy, yes. 

Mr. CARTWRIGHT. You agree with that. And is that why, when 

you were engaged in the fight in the Supreme Court, arguing that 

the ACA is unconstitutional, is that why you made the public comVerDate Aug 31 2005 10:57 Nov 26, 2013 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 C:\DOCS\85359.TXT APRIL
60 

ment publicly comparing the ACA to committing robbery? Is that 

why you did that? 

Mr. WILSON. I don’t recall that comment. I don’t dispute that I 

made it, but I don’t recall it. 

Mr. CARTWRIGHT. All right, I want to switch over to you, Senator 

Hutto. You made the comment that my brother, Congressman Jordan’s quote of Senator Baucus was taken out of context. Congressman Jordan has not been bashful about doing that, talking about 

the train wreck. The full context was that Senator Baucus said, 

and meant, that if the ACA is not implemented properly, the way 

it is meant to be done, it could turn into a train wreck. Is that your 

recollection? 

Mr. HUTTO. Absolutely. And I think what he is saying is we need 

to work together to make sure it is fully implemented correctly. 

Mr. CARTWRIGHT. Thank you, sir. 

I want to jump over to you, Senator Sobel. It is a pleasure to 

have you here, Senator. All the things that you have done to help 

seniors and health care in Florida. I want to remind everybody that 

Senator Sobel has been talked about by the South Florida Sun Sentinel as ‘‘a strong voice in Tallahassee for education, health care 

issues, and senior citizens services.’’ So welcome. Nice to have you 

here, Senator. 

You have heard about what we have been talking about here. 

This hearing is about challenges facing ACA implementation. This 

week it was reported that, in Florida, Governor Scott issued a directive banning Navigators from operating on the grounds of county health departments in Florida. Senator Sobel, in your opinion, 

was this move intended to obstruct implementation of the Affordable Care Act? 

Ms. SOBEL. Yes, I believe so. These health departments have the 

kinds of people that actually need health care; they go to these 

health departments because they don’t have a private physician, 

they don’t have health insurance. And by not allowing them on the 

property, and some of these properties are owned by counties, by 

the way. Broward County owns its own properties, so they worked 

out a compromise that they could work outside and sign people up. 

But that is not good enough because you cannot get to people who 

don’t show up on that day, but showed up in the past. And this is 

a tremendous group of people who desperately need health care, 

and Governor Rick Scott is denying them that access and information. 

Mr. CARTWRIGHT. Thank you for that. 

I yield my time. 

Mr. LANKFORD. Thank you. 

Chairman Issa. 

Mr. ISSA. Thank you, chairman. 

General Wilson, I heard your testimony. I apologize, we have a 

classified briefing going next door on another program of interest, 

but you said something a moment ago: this is the law of the land, 

right? But you have an opinion that there are some aspects of this 

law that were defective in how they did things, and let me just run 

you through one of them. 

Under the Act, currently, my State, Ms. Speier’s State, Medicaid, 

the poorest of Medicaid recipients, it is a 50/50 deal; the Federal 

61 

Government throws in 50 percent on Medicaid, the State pays 50 

percent. Under the Affordable Care Act, for the first three years it 

is 100 percent paid for by the Federal taxpayer; afterwards, it is 

supposed to go to 90 percent. 

Now, isn’t it a legitimate concern of States that a promise to pay 

more for less poor people, less needy people at 90 percent, where 

the more needy people are being reimbursed at 50 percent, and 100 

percent for the first three years, is inherently likely unsustainable; 

that in fact the bargain in the Act that we had to pass before we 

could read it created a situation in which some of these things are 

simply not believable? Is that correct in your assumption? 

Mr. WILSON. That is correct. 

Mr. ISSA. And in your State of South Carolina wasn’t that one 

of the reasons that the governor had concerns, is that it is all going 

to be sugar from the Federal Government for the first three years, 

and then after that it is at the whim of Congress that is borrowing 

a trillion dollars a year, right? 

Mr. WILSON. That is correct. 

Mr. ISSA. Now, in the case of the recent release of 2400 personal 

social security numbers, even before the Act was implemented, isn’t 

that one of your concerns, that this highly personal information, 

the question of what your social security number is, but the question of whether or not you are being treated for venereal disease 

or you have a persistent illness of some sort or whether you are 

a diabetic, all of that is exactly the kind of information that you 

are charged to make sure does not become public, since that is historically private information. 

Mr. WILSON. Yes, that is correct. 

Mr. ISSA. Now, the conversation about people coming into county 

health centers and so on, isn’t compliance with HIPAA, making 

sure that only doctors and cleared medical professionals have access to this kind of information, as to what you or I or anyone else 

is receiving by way of medical concern, isn’t that a legitimate concern of letting basically a salesman into a hospital or clinic facility? 

Mr. WILSON. That is correct, and that is a concern I had about 

HIPAA not applying to potential navigators that are helping people 

enroll in the exchange. 

Mr. ISSA. But these navigators will in fact be gathering exactly 

the information that HIPAA is supposed to prevent from going into 

people not very specifically cleared, true? 

Mr. WILSON. It is very potential, yes. 

Mr. ISSA. Well, Ms. Speier perhaps paraphrased what I said, and 

I want to make sure we get it correct here. I think that the Affordable Care Act currently will be a train wreck. It doesn’t answer serious questions about cost and privacy. Now, I was saying, and, Ms. 

Speier, I want to make sure I am clear, there were problems when 

President Obama came in that had not been addressed; rising cost 

of health care, an interesting cliff that causes people to choose to 

not earn more than a certain amount, because if you earn less than 

a certain amount in America you have $20,000 or $30,000, maybe 

$40,000 worth of benefits that come to you. When you earn a little 

more, you lose those benefits. The Affordable Care Act, in my opinion, even exacerbates that more because of the nature of the means 

testing and so on. 

62 

So do I want to address the issues of cost of health care, access 

of health care? Absolutely. And I would make it clear, and any 

member on the dais can get more information from our staff, we 

have been working on a change to FEHBP to make it compliant 

with the exchange systems, if you will, that are envisioned in the 

Affordable Care Act. We are responding to, at least as to the 2.4 

million Federal workers and the 8 million covered individuals, the 

reality of a law. 

But don’t confuse my votes repeatedly to repeal as either only 

wanting to repeal or somehow not being against the Affordable 

Care Act. I believe that a bill that was 100 percent partisan, voted 

on without a single Republican vote or any real input, that we had 

to pass it before we could read it, and that has material flaws 

which are numerous in fact is a bill that should be started over 

again. 

Having said that, I appreciate our panel and I am going to continue to hear what you have to say. I would note, because the ranking member is not here, that I want to thank all the witnesses. I 

have checked, and all of you came here without the Federal Government paying you a dime to come here. So since you all came on 

your own dime, I would like to add to the list the thank you. 

With that, Mr. Chairman, I yield back. 

Mr. LANKFORD. Mr. Cardenas. 

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

My first question is to Mr. Hudson. In your submitted testimony 

you stated, ‘‘These provisions require insurance companies to accept all applicants, even if they wait until they get sick before applying for coverage, and the insurance companies are now prohibited from charging premiums based upon likely costs.’’ Is that accurate? 

Mr. HUDSON. Thank you. Yes. 

Mr. CARDENAS. Okay. Are you referring to the guaranteed issue 

and community rating provisions of the Affordable Care Act? 

Mr. HUDSON. Yes. 

Mr. CARDENAS. Okay. Thank you for clarifying that. Personally, 

I can’t understand why you would oppose these important consumer protections in the Affordable Care Act. A recent analysis by 

the Department of Health and Human Services estimates that between 50 million and 129 million non-elderly Americans have some 

kind of preexisting condition. Without the guaranteed issue and 

community ratings protections in the Affordable Care Act, these 

preexisting conditions would put them at risk of not being able to 

obtain health insurance if they are self-employed or experience 

some other change in life circumstances. 

I think, for example, we heard the story of Aqualine Laury, she 

was here earlier, which Ranking Member Cummings described in 

his opening statement, as illustrative of the importance of these 

consumer protections in the Affordable Care Act. Due to a preexisting condition, a heart condition that she had suffered from 

since 1990, Ms. Laury has been unable to obtain consistent health 

care coverage since 2005. 

In 2005, when her insurer rescinded her coverage and left her 

with a $50,000 medical bill. Thankfully, she was able to obtain insurance through a high-risk pool established by the Affordable 

63 

Care Act and was covered when she had a heart attack this past 

May. I am grateful for that. She is able to be here with us today. 

Another question, Mr. Hudson, in the State of Florida, if somebody suffers a heart attack and they do not have insurance, what 

is the likely scenario from that moment forward? I would assume 

that if somebody has a heart attack and somebody witnesses it, 

let’s just say an ambulance shows up, what is the likely scenario 

after that, when the ambulance shows up and tries to attend to 

somebody without insurance who just had a heart attack? 

Mr. HUDSON. Thank you for the question. I would assume it 

would be the same in your great State of New Mexico. 

Mr. CARDENAS. No, I am from California. Continue. 

Mr. HUDSON. California. Excuse me. Where, frankly, EMS would 

try and revive that person to the best of their skills and ability, 

and they would transport that person to a hospital. In my State, 

that is prohibitively challenging, as I have eight counties without 

hospitals. 

Mr. CARDENAS. Okay. Now say that person was fortunate to arrive at a hospital and then their condition was in fact adhered to, 

say they revived that person, say that person had some kind of surgery or what have you, then there comes a big list of expenses. 

What would happen to that list of expenses when that person without insurance ended up showing up at the hospital due to a heart 

attack, then what would happen with the bottom dollar, the bottom 

line of that expense? What would likely occur with that expense, 

would the State eventually end up picking up some of that cost, 

perhaps the hospital would absorb a portion or all of that cost? 

What is the likely scenario? 

What committee are you chairman of in the State Senate in Florida? 

Mr. HUDSON. It is the State House, and it is Health Appropriations. 

Mr. CARDENAS. Okay. So what would likely happen to that dollar amount, whether it is $40,000, $80,000, $120,000, whatever? 

Mr. HUDSON. Likely what would happen is that patient would be 

treated, would be stabilized under your Act of EMTALA, and then 

sent home after they had been stabilized. The cost of the care could 

be incorporated under charity care through that particular hospital, it could be facilitated by DISH funds or low income pool 

funds. 

Mr. CARDENAS. Okay. So to my point, ladies and gentlemen, the 

Affordable Care Act is trying to find a solution to all of those situations in the great State of Florida and the great State of California, 

and every State in the Nation, what the Affordable Care Act is trying to address, and that is the overall cost and who will bear that 

cost at the end of the day, and trying to provide a system that actually is better than the system that we have today, because I know 

exactly what happens when that occurs; the person who actually 

had the heart attack does not bear the burden of that and the insurance companies in the State of Florida or California do not inherently bear that burden, it will eventually be a taxpayer system 

that will bear that burden and/or a private or public hospital that 

actually adhered to that patient who suffered a heart attack and 

got administered some health care. 

64 

So what we need to understand, ladies and gentlemen, and I will 

end quickly, Mr. Chairman, thank you so much, is that the Affordable Care Act is trying to transition into a system that is more appropriate for this great Country to address the ills, the health care 

ills of all Americans, and the current system leaves 50 to 129 million out because they have preexisting conditions, and those people 

with preexisting conditions who don’t have health care will end up 

in the system and costing American taxpayers even more. 

Thank you very much, Mr. Chairman. 

Mr. ISSA. Would the gentleman yield? Would the gentleman 

yield? 

Mr. CARDENAS. My time has expired. 

Mr. LANKFORD. His time has expired, but I will extend 30 seconds to you. 

Mr. ISSA. Just quickly for a question. So if I understand correctly, the Affordable Care Act, which costs hundreds of billions 

dollars of taxpayers’ money replaces the idea that taxpayers pay 

money. Didn’t you make essentially the point that the taxpayer is 

going to pay it under the Affordable Care Act involuntarily and the 

taxpayer is already paying it? People are not failing to get care, 

under the Affordable Care Act you simply have taxpayers paying 

for the insurance in addition to paying for somebody if they go to 

the hospital. 

Mr. CARDENAS. That is an interesting interpretation. That is not 

what I said. At the end of the day, under a new system, if we implement the Affordable Care Act properly, what we are going to 

have is more Americans with health care coverage and true access 

to health care, unlike what we have today. Thank you. 

Mr. LANKFORD. The challenge is even CBO has said at the end 

of it, full implementation, we will still have about 31 million Americans still not covered. 

Mr. CARDENAS. With an M, not a B, right? Thirty-one million 

Americans? 

Mr. LANKFORD. Thirty-one million, yes. 

Mr. Woodall. 

Mr. WOODALL. Thank you, Mr. Chairman, and thank you all for 

coming. 

I am from the great State of Georgia. This is my insurance commissioner that you see up there on the wall. And candidly, Mr. 

Chairman, I couldn’t tell if that was you or the ranking member 

who put that up there, because what I am going to tell you will 

not surprise you at all. Ralph Hudgens, our insurance commissioner, love Georgians. He loves people and he cares about people, 

which is why he got involved in public service and ran to be our 

insurance commissioner. It is a constitutional office in our State, 

insurance commissioner, and what he said there is we talk about 

how to get coverage for Georgians, how to get affordable care for 

Georgians, and he said Obamacare is actually the problem and I 

am going to do everything I can to obstruct it from creating those 

problems. 

I have a high deductible medical savings account. My policy was 

outlawed by the President’s health care bill. Now, I can afford to 

buy a more expensive policy, but a lot of folks in Georgia who relied on those high deductible policies can’t afford to buy something. 

65 

What I wanted to ask you all, representing different States and 

different opinions, what is it in the President’s health care bill that 

you like, that is going to be valuable for your constituents back 

home, that you and your State, with your governor, with your legislature, with your insurance commissioner, that you all couldn’t 

have done on your own if you thought it was the best plan for your 

State? What is it that you needed the benevolence of the Federal 

Government for? What permission did you need from Washington 

to implement some of these things that are really going to pay off 

for your constituents back home? 

If I could start with you, governor. 

Dr. COLYER. Nothing. I mean, solutions are best where it is local, 

and all of our States have different problems and different solutions. We have a number of solutions that we could do here in the 

State. It is all of these regulations that are there. Sure, we would 

like to have the money in the State so that we could implement 

some things there, but there are so many strings attached that it 

really gets in the way of a lot of things that prevent us from getting better outcomes. 

Mr. WOODALL. Senator, let me ask you. I actually went to school 

in South Carolina. My understanding is the very modest health 

care plan that I had in college is now outlawed as well, so students 

will no longer be able to have that. But what is it that South Carolina is going to benefit that you all couldn’t have done in the senate 

with your governor and your insurance commissioner? 

Mr. HUTTO. What we are looking forward to is not using the 

emergency room as the medical home for so many people, and the 

money that we are going to get from the Federal tax dollars that 

our citizens pay coming back to us is going to help us implement 

that. 

Mr. WOODALL. I talk about that regularly. I don’t have any dollars to spend except the dollars your constituents send to me and 

that I turn around and give back. I am pretty sure we take a cut 

off the top, but I am glad that folks see that as a glass that is half 

full, that some of those dollars will come back. 

Mr. Attorney General, is there anything that is going on in South 

Carolina that you needed the Fed’s permission in order to implement? 

Mr. WILSON. I am a strong federalist. I believe that the problems 

can best be solved by the States, with a few exceptions. But I have 

looked at the numbers. It has been a year, but it would have been 

cheaper for the Federal Government just to cut a check to every 

American who didn’t have health insurance, as opposed to basically 

create this huge goliath of a bill. It would have been cheaper just 

to write a check and give it to people without insurance than do 

this. 

Mr. WOODALL. That is the way my math looked, too, Attorney 

General. Though, in fairness, President Clinton and Newt Gingrich, Republicans and Democrats, came together in 1996 with 

HIPAA to solve all of these preexisting problems for federally regulated plans. We just said at that time States are pretty smart folks, 

they have smart people running those programs, so we won’t get 

into their business. 

66 

I would ask you, Ms. Jackson, in 1996 we said let’s leave it to 

the States, the States will love their constituents more than we do. 

Is there something that you were unable to do to serve your constituents that you needed our permission from Washington to get 

done? 

Ms. JACKSON. Of course, if you had heard any of my testimony 

today, I talked specifically about our State governor and the Department of Health and Hospitals advocating for cutting hospice 

care for those uninsured patients. We couldn’t even provide hospice 

care. And to the extent that we were trying to regulate interstate 

commerce, then, of course, you know the States are limited on their 

regulation of interstate commerce, which are most insurance companies; and that argument has been made at the Supreme Court. 

Mr. WOODALL. So when you are thinking about what you can and 

can’t do in Louisiana, you are saying you all don’t have enough 

money to get these things; you are counting on us taxing other 

Americans and you will be getting more than your fair share? 

Ms. JACKSON. Oh, not at all, sir. What we count on is that the 

money we send to the Federal Government that our taxpayers in 

Louisiana pay would be distributed in a manner that we can take 

care of all citizens in our State, just like other States count on that 

as well. But we do pay Federal taxes, and to that extent we are 

afforded, or should be afforded, our rightful share of those Federal 

taxes, and that is the problem. 

Mr. WOODALL. There is no question about that, and I suspect 

that is something you will find good bipartisan support on. 

Madam Secretary, is there something that Louisiana really needed the Fed’s permission to get done? 

Ms. KLIEBERT. I don’t think anybody could be more passionate 

than myself about providing uninsured care for our citizens. However, I believe several things: one, we have done a very good job 

providing uninsured care. We have had a State charity system. We 

have recently changed that to a public-private partnership, which 

has eliminated a two-tiered system for the uninsured. We don’t use 

the emergency rooms as our medical homes; we have opportunities 

for people to receive outpatient care, as well as follow-up care after 

they have received inpatient care, if needed, for every uninsured 

person in our State. 

I actually believe that implementation of the Affordable Care Act 

will be detrimental to those that we are trying to help in the longrun. 

Mr. WOODALL. That is what we believe in Georgia, as well, but 

I look forward to sharing our ideas with you all and you all sharing 

your ideas with us. I am convinced if we have 50 different projects 

going on here, we are going to find at least one that successfully 

serves America, and we can implement it. 

Ms. KLIEBERT. We definitely would love to have flexible and outcome-driven health care, and we believe that we can do that within 

the system that we have without having the complications of the 

implementation of that. 

Mr. WOODALL. Thank you, Madam Secretary. 

Thank you, Mr. Chairman. 

Mr. LANKFORD. Thank you. 

Representative Duckworth. 

67 

Ms. DUCKWORTH. Thank you, Mr. Chairman. I would like to yield 

my time to the gentleman from Pennsylvania, the ranking member 

of the Subcommittee on Economic Growth, Job Creation and Regulatory Affairs, Mr. Cartwright. 

Mr. CARTWRIGHT. Thank you, Congresswoman Duckworth. 

Senator Sobel, I want to return to you. You are from Florida and 

I am from Pennsylvania. In my home commonwealth we have a figure of uninsured citizens of almost 12 percent. That pales in comparison to the 25.3 percent uninsured in your State, so obviously, 

in your position, with your set of values, this is something that you 

have been worrying about, something you have been working on for 

many years, am I correct in that? 

Ms. SOBEL. Yes, sir. 

Mr. CARTWRIGHT. So I want to follow up. Senator Sobel, do you 

believe that your Governor Scott is investing the resources necessary to ensure that Florida residents have the information they 

need to enroll in affordable quality health care in the Affordable 

Care Act exchanges? 

Ms. SOBEL. Thank you very much for that very good question. I 

don’t believe that there has been anything budgeted or used by the 

governor to inform people about the Affordable Care Act. 

Mr. CARTWRIGHT. So we all know that getting on Healthcare.gov 

is easy enough for young people, but you have some folks in Florida 

that may not be as facile with computers. They are the people that 

need us to go the extra mile to make sure they understand how to 

sign up. Is the Florida administration doing everything it needs to 

be doing to help those people? 

Ms. SOBEL. The Florida administration is not, to my knowledge, 

doing much or anything to educate the people about this program, 

and I believe the best way to kill a program, destroy a program is 

not to get the information out to the people who actually need that 

information. So it has become a formidable task to make this program a success and to have the people get the health care that they 

need in a way that they understand it. 

Mr. CARTWRIGHT. So let’s you and I give Governor Scott some 

help, shall we? Tell us, what should Governor Scott be doing to ensure that implementation of ACA, the law, goes smoothly? 

Ms. SOBEL. Well, first of all, I think that he should allow the 

health departments to allow the navigators on the premises and to 

work with the people in the health department. I also think that 

he should be establishing a website probably in the State, which 

we might have one, but nobody knows about it, telling people about 

the Affordable Care Act. I believe that he should be speaking about 

it in his conferences, press conferences, as well as sending out information that is now available. None of that is happening. 

Mr. CARTWRIGHT. Now, switching gears for the moment, the rate 

review provisions in the ACA require insurance companies to justify any proposed rate hike of 10 percent or more. Last year, this 

provision saved 6.8 million consumers in this Country an estimated 

$1.2 billion in health insurance premiums. Unfortunately, in Florida, the legislature recently passed, and Governor Scott signed, legislation stripping Florida’s insurance commissioner of the authority 

to review health insurance rate hikes. 

68 

Congressman Joe Garcia, my colleague, has called this move ‘‘a 

cynical attempt to undermine protections for Florida’s consumers in 

order to sabotage the implementation of the Affordable Care Act.’’ 

Senator Sobel, do you agree? 

Ms. SOBEL. Yes, I do agree with the handcuffing of our insurance 

commissioner. At this particular time, he can only, well, first of all, 

previously, he could have negotiated the rates. Right now he can’t 

say anything or do anything for the next two years. 

Mr. CARTWRIGHT. So what is the point of just doing this giveaway to health insurance companies? 

Ms. SOBEL. Well, I think the underlying premise here is that the 

rates will be so high people will not sign up, and you lose the affordable in the Affordable Care Act, and that is wrong. But the insurance commissioner has indicated, and rightfully so, that there 

are tax credits to be had, so the 30 to 40 percent rates that he is 

talking about, of an increase, will be mitigated with the tax credits 

people will get for signing up, but the headlines are 30 to 40 percent. 

Mr. CARTWRIGHT. And it is misleading. Well, thank you very 

much, senator. 

Mr. LANKFORD. Thank you. 

Mr. Bentivolio. 

Mr. BENTIVOLIO. Thank you, Mr. Chairman. Mr. Chairman, the 

committee has obtained an internal memorandum from May 28, 

2013, detailing serious concerns about the ability to certify and register Navigators and Assisters in the Obamacare Consumer Outreach Program. The memo reads: We are becoming increasingly 

concerned about the ability of CMS staff to authenticate, register, 

and certify everyone who will be involved in the consumer assistance process. 

I would like to enter this memo in the record. 

Mr. LANKFORD. Without objection. 

Mr. BENTIVOLIO. Later, though, another top official testified that 

HHS decided to leave the responsibility of certifying and registering to each Navigator organization. HHS rejected the option of 

creating a list of all certified Navigators and Assisters. The lack of 

a list exposes consumers to significant risk, since consumers that 

call the HHS hotline will be unable to verify if a person offering 

to provide them information about Obamacare is working for a legitimate organization. 

Were you aware that there is no way for citizens in your State 

to contact HHS to verify if a person offering information about 

Obamacare is working for a legitimate organization, Lieutenant 

Governor? 

Dr. COLYER. That is a very troubling aspect because there is 

going to be a lot of confusion overall, and we need good information, and you need time to get good information there and you need 

to be able to verify that. 

Mr. BENTIVOLIO. Attorney General Wilson? 

Mr. WILSON. Yes. 

Mr. BENTIVOLIO. Secretary of Health Kliebert? 

Ms. KLIEBERT. Yes. 

Mr. BENTIVOLIO. Mr. Hudson, are you aware of a poll that was 

released last week, 68 percent of Americans believe Obamacare will 

69 

harm their health care, 56 percent of Democrats believe Obamacare 

will harm their health care? Are you familiar with that poll? 

Mr. HUDSON. Yes, sir, I have seen the headlines on that. 

Mr. BENTIVOLIO. Okay. I have another question. I am just going 

to twist things around a little bit. You said you were a realtor, correct? 

Mr. HUDSON. Yes. 

Mr. BENTIVOLIO. Okay. Now, if I understand a realtor’s job, you 

bring a customer in, they are thinking of buying a home, you talk 

to them, find out what kind of home they want, you look at the listings, you show them the listings, maybe a photograph, correct? You 

ever sold a home to somebody? 

Mr. HUDSON. Yes, sir, I have sold many homes to first-time home 

buyers. 

Mr. BENTIVOLIO. How about somebody that never walked into 

the home you sold them? Did they get to look at all the rooms? Did 

they get to go in the basement, if you have basements? In Florida, 

I don’t know, I think they are on slabs, a lot of them, right? 

Mr. HUDSON. Basements are a challenge for us. 

Mr. BENTIVOLIO. Basements are a challenge. Yes, I understand. 

Okay, well, in Michigan we have basements. So before a person 

buys, they get to walk in and go into each room, maybe test the 

appliances, correct? 

Mr. HUDSON. Yes, sir. 

Mr. BENTIVOLIO. Okay. 

Mr. HUDSON. In fact, if I can add, I would never sell a home to 

someone that didn’t know what they were actually bargaining for, 

because, frankly, that is one of the single largest investments in 

their life, their personhood, their entire family, and doing so is 

reckless and inappropriate. 

Mr. BENTIVOLIO. And before they buy that home you give them 

the documents, you go over the purchase agreement with them, you 

tell them what they are getting, right, and what they are not getting, correct? 

Mr. HUDSON. That is absolutely correct, as well as a number of 

other disclosures that will help them fully understand their purchase so that they are well informed and knowledgeable. The days 

of caveat emptor are gone, and should be under the Affordable 

Care Act as well. 

Mr. BENTIVOLIO. So you would let your customers read the contract before they signed it, correct, or at least have their attorney 

or a representative read the contract, correct? 

Mr. HUDSON. You are absolutely correct, sir. 

Mr. BENTIVOLIO. But, senator, you disagree with that. You think 

we should, as legislators, vote for something that we didn’t have 

the opportunity to read before we voted for it. 

Mr. HUTTO. No, but there has been plenty of time now. It is a 

complex law and it is going to be tough. We need to roll up our 

sleeves and implement it. 

Mr. BENTIVOLIO. So I have a bill on th floor right now, or not on 

the floor, but in the hopper, that basically is called Read the Bill’s 

Act. You wouldn’t be a cosponsor, but I suspect you would be, correct? 

Mr. HUDSON. Absolutely, sir. 

70 

Mr. BENTIVOLIO. Thank you very much. 

I yield back my time, Mr. Chairman. 

Mr. LANKFORD. Would the gentleman yield to me? I think we had 

20 seconds or so. Would the gentleman yield? 

Mr. BENTIVOLIO. I yield. 

Mr. LANKFORD. Just for Ms. Kliebert, you had mentioned before, 

as well, about conflicting messages on pregnancy as a life event. 

Has that been resolved yet, or are you still waiting for details on 

that? 

Ms. KLIEBERT. We are still waiting for details. And it really affects us because our policy decisions in terms of how we will treat 

that population, it affects how we will move forward on that policy. 

But we have not heard back. 

Ms. SPEIER. Would the gentleman yield? 

Mr. LANKFORD. It is actually the gentleman’s time. Mr. 

Bentivolio? Would the gentleman yield to the gentlelady? 

Mr. BENTIVOLIO. Yes. 

Ms. SPEIER. To the secretary, isn’t the reason why there is not 

a willingness to allow someone to acquire insurance once they 

know they are pregnant because we don’t want people to game the 

system and not access the insurance when the insurance is available to them, and they choose, instead, to just pay the tax? 

Ms. KLIEBERT. I am not sure in terms of the rationale. All we 

want is an answer as to whether or not that is or is not a qualifying condition so we can make our policy decision on that. 

Ms. SPEIER. But since there is an individual mandate of everyone 

actually takes up the insurance, then there wouldn’t be an issue 

about a life-changing event because, in fact, you would already 

have insurance. The only time it would play a role would be if in 

fact you chose not to take insurance and, instead, pay the $300 fee, 

correct? 

Ms. KLIEBERT. Correct. 

Mr. LANKFORD. So it is not the gentlelady’s position that we 

wouldn’t give some kind of prenatal care at that point because 

someone didn’t pay the penalty. 

Ms. KLIEBERT. Correct. 

Ms. SPEIER. No. I think, though, the point is that an individual 

mandate is trying to make sure that we all take personal responsibility. That is one of the precepts of the Republican party, personal 

responsibility. We are going to provide a health care opportunity 

for every American to access health care, and we are going to keep 

the cost down, but if you choose not to, and this is a free Country, 

if you choose not to, then you can pay a fee, which would mean 

that you are not going to access that health care. But that is a 

choice. 

So if in fact you do become pregnant, then you are going to be 

paying out of pocket. We, of course, want you to have prenatal care. 

If you are indigent you will get prenatal care. But if you are making $75,000, $100,000 a year and you choose not to have health insurance and you get pregnant, well, you had an offer to have 

health insurance and you chose not to access it. I think that is why 

you are getting some question as to whether or not it is a lifechanging event. 

71 

Ms. KLIEBERT. Again, we just want a definite answer so that we 

can move forward on any policy decisions we need to make as a 

State. 

Mr. LANKFORD. And just for quick clarification, they don’t pay a 

fee, they pay a tax. 

Ms. SPEIER. Yes. 

Mr. LANKFORD. Mr. Connolly. 

Mr. CONNOLLY. I thank the chairman. Before my time starts 

counting, I would ask unanimous consent that the extra one 

minute and ten seconds provided my good friend and colleague 

from Georgia be extended to me. 

Mr. LANKFORD. No, that was in a response. If you ask a question 

at the last second, I am going to allow that person to be able to 

respond. 

Mr. CONNOLLY. I thank the chair. 

By the way, my friend from Georgia mentioned Newt Gingrich. 

Senator Hutto, do you happen to recall the reason then Speaker of 

the House Newt Gingrich opposed the Clinton health care initiative? The single most important reason he objected to the 1993 initiative, do you recall? 

Mr. HUTTO. I don’t. 

Mr. CONNOLLY. It was that it lacked a universal mandate, an individual mandate. Senator Hutto, intellectually, was that a liberal 

think tank that came up with the idea of an individual mandate? 

Mr. HUTTO. It was not, but things have been turned on their 

head. 

Mr. CONNOLLY. It was actually a conservative think tank idea. 

Mr. HUTTO. Yes. 

Mr. CONNOLLY. Now it is socialism. 

Mr. Hudson, you introduced some legislation, H.B. 1193, in 2011, 

to prohibit a person from being compelled to purchase health insurance, objecting to the individual mandate, is that correct? 

Mr. HUDSON. That is correct. 

Mr. CONNOLLY. And you just testified to Mr. Bentivolio that, as 

a realtor, you really believe in disclosure, full disclosure so that a 

consumer is fully aware of the strengths and pitfalls of a potential 

purchase. 

Mr. HUDSON. That is correct. 

Mr. CONNOLLY. When you introduced your bill, did you happen 

to mention that it was modeled almost identically on something 

provided by ALEC? Page 12 of that booklet pretty much mirrors 

your legislation. Were you aware of that? 

Mr. HUDSON. If you are referring to something called the Health 

Care Freedom Act, that was actually sponsored by Representative 

Plakon. I was a cosponsor. 

Mr. CONNOLLY. No, sir. I am referring to a model bill on page 

12 of that brochure provided to a conference I think you attended. 

Did you not attend an ALEC conference where this was discussed? 

Mr. HUDSON. I don’t have that book in front of me. 

Mr. CONNOLLY. So you were not aware of the fact that your legislation happens almost identically to mimic a model bill that ALEC 

was encouraging State legislators such as yourself to introduce into 

their respective legislatures? Is that your testimony under oath? 

72 

Mr. HUDSON. There are a number of pieces of legislation that are 

supported by a wide variety of—— 

Mr. CONNOLLY. Not my question. Were you or were you not using 

or aware of the ALEC model on page 12, I have it here, that almost 

identically mirrors the legislation you introduced? 

Mr. HUDSON. Yes, sir, that is correct, I was aware of it. 

Mr. CONNOLLY. So did you review—— 

Mr. HUDSON. I would like to finish my question. I was not not 

civil to you. 

Mr. CONNOLLY. This is my time, Mr. Hudson, and I am asking 

you a question about whether you were aware or not. Your answer, 

I believe, for the record is you were. 

Mr. HUDSON. It is absolutely true. 

Mr. CONNOLLY. Did you reveal that to your colleagues? Because 

you have just said how committed you are as a realtor to full disclosure. Was there full disclosure, when you introduced that bill, 

that you were modeling it on a national conservative movement 

funded by the Koch brothers and that this came from their legislative initiative? 

Mr. HUDSON. Yes. When we had discussions on this, the term of 

ALEC did come up. 

Mr. CONNOLLY. Thank you. 

Mr. Attorney General, you talked about your view about States’ 

rights. South Carolina has a long tradition about that issue. I am 

just interested in your philosophy of the law. When you lose in a 

legislative battle and something becomes law, even then you voted 

against it, and then you lose through the legal system up to the 

Supreme Court, and the Supreme Court upholds the constitutionality of that law, do you think, as attorney general, it is still 

okay to try to obstruct its implementation because you just don’t 

agree with it? Is that your legal philosophy? 

Mr. WILSON. No, that is not my legal philosophy. 

Mr. CONNOLLY. Thank you. So would you take issue with this 

gentleman, whoever he is, that maybe that is really not a very good 

legal strategy? 

Mr. WILSON. You use obstruct very broadly. My concern is that 

a law can be constitutional and still be bad policy. 

Mr. CONNOLLY. Sure. 

Mr. WILSON. And the debate should continue. Now, I believe 

Obamacare was unconstitutional. The Supreme Court disagreed 

with me and I have to live with that decision. But that doesn’t negate the fact that Obamacare, in my opinion, is still bad policy, and 

we have a duty as elected representatives to continue to try to improve it as long as it is going to be the law of the land, and that 

is what we are here to do today. 

Mr. CONNOLLY. I couldn’t agree with you more if that is what 

you mean. But obstruction, that word, his, not mine, is a different 

matter. 

Mr. Chairman, I think I have a little extra time, and I yield the 

balance of it to—— 

Mr. LANKFORD. Actually, you have none. I was just saying that 

Mr. Woodall’s response was—the witness was responding to his 

question at the end, and that is the reason it went long. But I have 

73 

been very careful on time and have been very fair with everyone 

on that. 

With that, I recognize Mrs. Lummis. 

Mrs. LUMMIS. Thank you, Mr. Chairman. 

Question for Lieutenant Governor Colyer, Secretary Kliebert, and 

Representative Hudson: Does Obamacare raise premiums in your 

State? Does Obamacare raise insurance premiums in your State? 

Do you know? 

Dr. COLYER. We have not had the full release of what it does to 

premiums across the board for that, and the Federal Government 

has not released that information for us. 

Mrs. LUMMIS. Okay, thank you. 

Dr. COLYER. However, we have an example. When we have gone 

to the website, all of the examples it shows a dramatic increase in 

cost. 

Mrs. LUMMIS. Madam Secretary? 

Ms. KLIEBERT. For some groups up to 200 percent. Again, we 

don’t have all the details in terms of what it is going to mean for 

every different type of population, but we do have data that indicates for some groups it will go up to a 200 percent increase. 

Mrs. LUMMIS. Representative? 

Mr. HUDSON. Like my colleagues before me, we lack a tremendous amount of actuarial value to be able to make good discerning 

judgments regarding that, and as the rules have continued to 

change. We can project, and the projections are not good, they will 

go up. 

Mrs. LUMMIS. Lieutenant Governor, does Obamacare reduce 

choices in your State? 

Dr. COLYER. Absolutely it reduces choices, in the scope of plans 

that people can choose and also in the number of insurers that are 

in the exchange. 

Mrs. LUMMIS. Madam Secretary, same question. 

Ms. KLIEBERT. We currently believe there will be four exchanges. 

In our Medicaid plans we now have five choices for individuals who 

have Medicaid recipients. So in those instances, if you compare the 

two, it will reduce some level of choice. 

Mrs. LUMMIS. Representative Hudson, do have an answer to 

that? Same question. 

Mr. HUDSON. Yes, it will definitely reduce choice. 

Mrs. LUMMIS. What is the overall view of the citizens of your 

State with regard to Obamacare? Again, Lieutenant Governor? 

Dr. COLYER. Kansans are overwhelmingly against it. They see 

the economic impact and how it affects their health care. 

Mrs. LUMMIS. Madam Secretary? 

Ms. KLIEBERT. We have had several polls, as well as debates 

within the legislature that indicate that overwhelmingly there is 

not a will to move with expansion or towards some of the implementation of the Affordable Care Act. 

Mrs. LUMMIS. Representative Hudson? 

Mr. HUDSON. Floridians are absolutely opposed to it, and they 

recognize in our State, like many States, that the rural areas are 

going to be disproportionately affected. Lack of choice, lack of access, and tremendous challenges with workforce, which makes 

74 

things almost impossible to implement. A one-size-fits-all doesn’t 

work well in clothing; it doesn’t work well in this either. 

Mrs. LUMMIS. Thank you. 

Attorney General Wilson, question for you. Obamacare’s implementation has problems: delays and will lead to greater State 

spending, higher insurance premiums, and greater burdens on 

business. Can you tell us how the law is impacting the citizens of 

your State? How are the delays impacting the State’s ability to 

comply with the new Federal requirements as well? So the question 

is two-fold, the State’s ability to comply; individual’s impacts. 

Mr. WILSON. Well, let me qualify by saying that, independently, 

that is not something I am qualified to comment on. It is my opinion, my personal opinion that it will adversely affect our citizens 

and our State. My one thought, Representative, is that I am begging Congress. If they want to criticize the criticizers of 

Obamacare, if they want to criticize me and other folks who share 

my view, I welcome that, that is part of our American process. 

But look at the questions we are asking as consumer advocates 

and look at that independent of Obamacare. We have a duty as 

elected officials to protect the citizens, and I think right now we 

are getting into a debate on the merits of something that has been 

decided, instead of how to make it better going forward, and I am 

begging Congress to look at the questions the AGs have asked. 

Thank you. 

Mrs. LUMMIS. Lieutenant Governor, could you describe the regulation process and how it is impacting Kansans as citizens and the 

Kansas government as well? 

Dr. COLYER. There are some issues of transparency. Here it is 

two weeks before, we don’t know what all of the rates are. We are 

getting new software updates. We have a new software update 

coming sometime before October 1st, so even if the Navigators can’t 

be trained, up to date on that. We are having to work overtime to 

try to comply. 

Mrs. LUMMIS. Considering that the President of the United 

States, after whom the bill is named, is the person who has done 

the most to delay implementation of Obamacare, do you think it is 

appropriate to say that the obstruction is coming from outside the 

White House? 

Dr. COLYER. No. I wish they could block a number of other areas 

as well. 

Mrs. LUMMIS. Thank you, Mr. Chairman. I yield back. 

Mr. LANKFORD. Thank you. 

I recognize the ranking member, Mr. Cummings. 

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

Ms. Sobel, I would like to ask you about the important role that 

Navigators will play in helping the uninsured sign up for benefits 

under the Affordable Care Act. By the way, in my district, I just 

had 400 people Saturday morning to come out, trying to find out 

more about this. The attorney general, I talked about making government work, they came out because they wanted to take advantage of the law. As a lawyer, I am trained to look at the law, and, 

as a legislator, to uphold the law. 

Ms. Sobel, according to a memorandum released this morning by 

the Minority staff of Energy and Commerce, Navigator grant recipiVerDate Aug 31 2005 10:57 Nov 26, 2013 Jkt 000000 PO 00000 Frm 00080 Fmt 6633 Sfmt 6633 C:\DOCS\85359.TXT APRIL
75 

ents will directly enroll nearly 1.1 million uninsured people in the 

exchanges and in Medicaid. They also expect to inform an additional 7.3 million people through public education efforts about the 

benefits of the Affordable Care Act. 

Moreover, according to the memorandum, many of these organizations are experienced in precisely the type of outreach necessary 

to get people enrolled in the exchanges. They have linked families 

in need with public and private benefits for which they are eligible, 

such as food stamps, Medicaid, disaster assistance, S–Chip, the 

Medicare Part D benefit, by the way, which a number of people on 

this side of the aisle were against, but yet and still, when it became 

the law, we did everything in our power to make sure our constituents were informed of it, and the low income subsidy for Part D 

benefit. 

Finally, according to the memorandum, there is strong and effective privacy protections in place in the Navigator Program. All 

grant recipients must abide by laws that prohibit the use or disclosure of personally identifiable information or face stiff criminal and 

civil penalties. Many of the grantees have adopted additional privacy practices for their staff above and beyond those required by 

the Federal regulation and have a proven track record of responsibly handling sensitive personal financial and health data in the 

course of their work. 

Ms. Sobel, I think we can agree that implementing the Affordable Care Act is a heavy lift. I am not saying that there aren’t any 

legitimate privacy concerns or that we shouldn’t examine the issues 

of data security and Navigator training. But do you think that Governor Scott’s decision to ban Navigators from operating on the 

grounds of county health departments was a necessary or even a 

remotely proportionate response? 

Ms. SOBEL. Thank you for that very good question. I basically 

think it is a roadblock; it is a sandbag. He overreacted. There are 

standards in place from the Affordable Care Act about Navigators, 

as well as Florida having in place criminal background checks and 

other standards that the State put forward. I think that this is an 

effort to stop people from enrolling, and it is just unfair, not right, 

and it hurts a lot of people who need the information. 

Mr. CUMMINGS. I told my constituents on Saturday, I said it is 

one thing to have opportunity; it is another thing to know about 

it and then to be able to take advantage of it. Do you believe that 

this and many of the other onerous regulations that Republican 

State officials and legislatures across the Country have imposed on 

Navigators are motivated by desire to delay, hinder, and obstruct 

enrollment in the exchanges? 

Ms. Jackson, could you answer that? Did you hear my question? 

I said do you believe that this and many of the other onerous regulations by Republican State officials and legislatures across the 

Country have imposed on Navigators are motivated by desire to 

delay, hinder, and obstruct enrollment in the exchanges? 

By the way, I might add that it just came over the wire that the 

Republican conference, Speaker Boehner said this morning, talking 

to the Republicans in Congress, every member in this room is for 

de-funding Obamacare, while letting the rest of the Government 

continue to operate. 

76 

Ms. JACKSON. I totally agree with what you are saying. As a 

practicing attorney and a legislator in the State of Louisiana, I 

have seen so much obstruction of this law. It somewhat reminds 

me of what I learned in my history lessons about the civil rights 

structures and the right to vote that was given to minorities. 

States began to obstruct those, and in Louisiana we have seen just 

that example with the Federal Affordable Health Care Act, that 

there has been a major obstruction. 

Mr. CUMMINGS. Mr. Chairman, I would just like to enter into the 

record the staff report from the Commerce Committee. 

Mr. LANKFORD. Absolutely. Without objection. 

Mr. CUMMINGS. Thank you very much. 

Mr. LANKFORD. Mr. Horsford. 

Mr. HORSFORD. Thank you, Mr. Chairman. I am going to be 

quick because I have a number of points. 

First, Mr. Attorney General, just so that you know, on Wednesday, September 11th, 2013, the House Committee on Homeland Security Subcommittee on Cybersecurity, Infrastructure, Protection 

and Security Technologies had a hearing on this very subject 

around the data hubs, where we are with the implementation. In 

your testimony you talked about deadlines not being met. Those 

were on-the-record responses that were provided by the auditor, 

the OIG who oversees this, and the result was the deadline was 

met. So while we want to have talking points that say something 

else, the reality is different. 

Mr. Chairman, I attended a brain health trust in my district this 

last Saturday and one thing that was made clear to me is there is 

more work to be done on the implementation of the Affordable Care 

Act; the outreach that is necessary, the education that is necessary, 

the fact that people need to understand that this is in large part 

about expanding care under Medicaid and expending benefits 

under Medicare, and adopting a new marketplace under the exchange. 

I want to say our governor, who happens to be a Republican, who 

was part of the lawsuit with other States that challenged the constitutionality of the Affordable Health Care Act at the time I 

served in the State legislature, allowed his director of Health and 

Human Services to continue to work on the implementation of the 

bill until the outcome of the Supreme Court’s determination. And 

because he made that decision, Nevada is ahead of the mark on the 

implementation of our marketplace exchanges. They have agreed to 

expand Medicaid. Our Navigators have been recruited and trained, 

and are ready to do their job. And this from a Republican governor 

who did not agree with the law. But he understood his job was to 

implement the law as it was adopted by Congress and upheld by 

the Supreme Court. 

So in my State I have far too many constituents who will benefit 

under the Affordable Care Act to not see it implemented. Is it perfect? No. Does this Congress need to do its job to make the necessary adjustments? Yes. And I am glad to hear that Mr. Jordan 

shares my concern and those concerns of Labor, particularly the 

AFL–CIO, on a provision of the bill that does need a congressional 

fix; and I would ask him, even though he is not here, if he will join 

77 

me in bringing forward legislation so that we can fix that and other 

provisions. 

Let me ask my couple of questions. 

Senator Hutto, what happens to the millions of Americans who 

now have health coverage if the opponents of the ACA are successful? 

Mr. HUTTO. Well, we hope that they are not going to be successful. If they are successful, people could lose coverage that they have 

now. We hope that won’t happen. 

Mr. HORSFORD. Representative Jackson, how would it affect your 

constituents if suddenly they had to worry about insurance companies rescinding their insurance because of preexisting conditions? 

Ms. JACKSON. I think we will be in the same boat that we were 

in a year ago when the governor of our great State asked us to 

defund hospice care. We would begin to look for solutions that really weren’t solutions and our constituency would not be offered any 

health care at all; and, if offered health care, very minimal, and 

forced to go into emergency rooms when there are dire need situations in health care. 

Mr. HORSFORD. And Senator Sobel, more than 32.5 million seniors have already received one or more free preventative services 

because of the Affordable Care Act. Can you express to the subcommittees the importance of these services to your constituents? 

Ms. SOBEL. Absolutely. And if the bill is repealed, I believe that 

there would be greater hardships for our seniors. It would be sinful 

and shameful to repeal any part of the benefits that have already 

passed. 

Mr. HORSFORD. So, Mr. Chairman, you know, I know that there 

are those on the other side who have differing opinions about 

where we are with the Affordable Care Act, but after hearing from 

my constituents, small business owners, those in health care in my 

State, I believe that it is time for us to stop having these continual 

efforts to defund the Affordable Care Act and it is time for us as 

Congress to do our jobs in implementing it and moving forward, 

and I would use my home State of Nevada as an example of how 

Republicans and Democrats, the governor, the legislature, and 

members here in Congress, are working to do our job and not obstructing the Affordable Care Act. 

Thank you, Mr. Chairman. 

Mr. LANKFORD. Thank you. 

I recognize, for just some closing comments, Ranking Member 

Ms. Speier. 

Ms. SPEIER. Mr. Chairman, thank you. 

First of all, let me say to Attorney General Wilson I too am very 

grateful for your service to this Country. I was trying to make the 

point that all of us here have the great luxury of having a Government-sponsored health insurance plan to benefit from. And the 

hope is that for the 45 million Americans who have no insurance 

whatsoever, that the Affordable Care Act will place them on equal 

status with all of us. 

Let me also point out there is a script that is being used that 

isn’t accurate, and when people talk about the Affordable Care Act 

as costing us so much money, that couldn’t be further from the 

truth. In fact, the very nonpartisan Congressional Budget Office 

78 

has said that we will save $1.3 trillion over the next two decades 

with the implementation of the Affordable Care Act. Now, as a 

Country, we spent 18 percent of our gross domestic product on 

health care, 18 percent, more than the next 10 biggest spenders in 

the world, including Japan, Germany, France, China, the U.K., 

Italy, Canada, Brazil, Spain, Australia combined. And you might 

think, well, we get better health care, but the fact of the matter 

is we do not. In fact, we rank 38th in the World Health Organization’s ranking of countries in terms of the quality of their health 

care. We rank number one in spending and 38th in overall health 

care. 

Now, the reference made by my good friend, Mr. Jordan, and by 

others on the other side of the aisle about the comment made by 

Max Baucus has been taken out of context and, Senator Hutto, you 

made reference to it. And I would like to just point out what was 

really being said by Senator Baucus. There was $554 million requested by the President in his budget for promotion and advertising and education on behalf of the Affordable Care Act. 

Our good friends on the other side of the aisle chose to strike 

that funding completely, and it was with that backdrop that Senator Baucus said that without promotion, without education that 

there is going to be a train wreck relative to the implementation 

because people aren’t going to know about it. So when we use the 

term train wreck, let’s use it accurately as it reflects Senator Baucus’ comment. 

With that, I would like to point out, finally, that the hand-wringing that is going on here is all well and good, but the truth of the 

matter is that starting October 1st there will be six months in 

which people will have the opportunity to enroll. They will have 

the opportunity to enroll until March. Lots of these kinks will be 

worked out during that period of time, and I think that it would 

be better for all of us to not be the obstructionists that some have 

suggested. 

And I would like to end by quoting Governor Snyder from Michigan, a Republican, who said, and said it very well, it is the law of 

the land upheld by the U.S. Supreme Court, and it is being implemented. Some believe that fighting it is good politics. I believe that 

finding a way to make it work for our State is good government. 

I yield back. 

Mr. CUMMINGS. Would the gentlelady yield for that one minute? 

Ms. SPEIER. I certainly will. 

Mr. CUMMINGS. Thank you very much. 

I just want to thank all of our witnesses for being here today. 

We may disagree, but the real deal is we are talking about our fellow Americans. We are talking about our brothers, our sisters, our 

neighbors, and there are people who, and I was just, like I said, 

in my district this weekend talking to some of my constituents, and 

there are people who really need this. 

I tell the story about when we voted for the Affordable Care Act 

I got to the Floor of the House four hours early. I sat on the front 

row and I had only one prayer. I said, God, don’t let me die before 

I vote for it. And the reason why I said that is because I knew it 

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79 

born. I knew that it would allow some mother to be able to save 

her child. I knew it would have a tremendous effect. 

We have to make it work. I am tired of people saying it is hard, 

this is hard. Well, a lot of things are hard. We are America. We 

are better than that. So I am looking forward to all of you all working with us not about de-funding, not about destroying, but trying 

to make it better. 

With that, I yield back, and thank you, Mr. Chairman. 

Mr. LANKFORD. I would thank the witnesses for coming and 

being a part of this dialogue. This is in your lap in a lot of ways, 

as far as implementation; you are the one on the phone trying to 

get answers, writing letters trying to get answers, dealing with the 

implementation on the ground, and many of you will be on the first 

line of that phone call, trying to be able to get things resolved. 

In my State, they gathered all the State leaders together last 

week from all the different agencies that have any connection and 

they had a long list of all the unanswered questions, and they 

wanted to get everyone together so they could pool it and find out 

what everyone knew and get all those answers so everyone could 

share it. What they did instead is they got all the State leaders together, listed the questions, and none of them had the answers. All 

of them assumed someone else knew this and they just weren’t 

sharing it. None of them knew what is going on. 

So, again, the focus of, gosh, this is going to be great is very different when you have to implement and when it is coming at you, 

and the questions come to you. I would commend to anyone’s reading, on this committee and outside this committee, the Navigator 

report that was done by this committee dealing with the issues of 

fraud, dealing with the exposure areas that we have that are a real 

risk to consumers. 

We have had a hearing on the data hub to ask some of the questions that should be asked about security because a lot of Americans’ information is about to be exposed. But with the Navigators 

and all that is happening in the days ahead, and as we have seen 

the reduction of time that is now required in their training and 

what is there, there are serious issues. 

I know the ranking member has mentioned we are 38th in the 

world in health care. I would say in my district, in Central Oklahoma, we have more advanced cancer care in Oklahoma City than 

in all of the U.K. We had a hospital open in Oklahoma City that 

is a straight fee-based hospital, and they were surprised to see that 

the first thing that happened was the Canadians started coming for 

health care. Twenty-five percent of their business are people from 

outside the Country that come to that hospital from all over the 

world. 

And when people are sick and they need advanced care, they are 

coming here to get that. The term medical tourism didn’t exist 

years ago, but now many of our communities see it as some of the 

finest hospitals in the world are located right here; and the challenge is do we put that medical advancement at risk by limiting 

reimbursements, limiting access to that, controlling how it is done 

in the days ahead so that the medical innovation that is currently 

occurring slows down and that we suddenly become equal with the 

rest of the world, rather than leading the rest of the world in medVerDate Aug 31 2005 10:57 Nov 26, 2013 Jkt 000000 PO 00000 Frm 00085 Fmt 6633 Sfmt 6633 C:\DOCS\85359.TXT APRIL
80 

ical innovation and device manufacturers and drug developments 

and such. We have to continue to press on to that. 

This is a bill where there are major problems. I have heard over 

and over again it is the law of the land, we should just leave it. 

We are not doing that with No Child Left Behind. We see that 

there are major issues on implementing that law, and we have now 

reached a time where almost every State is under a waiver. No one 

here is saying we need to implement all of No Child Left Behind, 

it is the law of the land, we need to demand every part of that is 

implemented. Why? Because there are major problems with the 

law. And we can see it based on how it is implemented, so waivers 

have gone everywhere to try to free everyone up from what is happening on No Child Left Behind. 

We are seeing the same thing occur with the Affordable Care 

Act; waivers for employers, waiver for certain people, waiver for 

certain group, because the problems continue to double up on this. 

Right now the House and the Senate are dealing with what do we 

do to replace No Child Left Behind because it has become such a 

problem, and in the days ahead we will finally come to a point of 

saying there are so many issues and so many problems with the 

implementation, we have to look again at what do we do to replace 

this. 

I look forward to the day when States are allowed to experiment, 

as my State now has to come begging to the Federal Government 

to do things to take care of the needy in my State. There is a program called Insure Oklahoma, which has been a fantastic program 

to be able to serve people in my State of great need, which we continue to expand. Now we have to beg to allow that program to continue to go forward. 

When health care is controlled from Washington, D.C., it is about 

numbers. When it is controlled in State and local areas, and counties and districts with great need, and I have many rural districts 

in my State, it is about neighbors and it is about families and real 

lives. So at the end of this day hopefully we have brought some 

questions to the table that we can get resolution on and hopefully 

we can continue to focus on families and lives. 

Thank you again for being here and for being a part of this conversation. With this, we are adjourned. 

[Whereupon, at 12:48 p.m., the subcommittee was adjourned.] 

(81) 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

82 


Insert offset folio 85 here 85359.085

Statement of Chairman James Lankford 

Subcommittee on Energy Policy, Health Care and Entitlements 

Committee on Oversight and Government Reform 

Federal Implementation ofObamaCare: Concerns of State Governments 

September 18, 2013 

In the past month, I have personally spoken with a Dad who told me his high school graduate son 

cannot find a job that will hire him for more than 29 hours a week. 

I spoke with a Mom who brought me her late-20-something son's insurance paperwork, which 

notified him that his health premiums will increase from just over $200 a month to over $800 a 

month in January. 

I talked to a family struggling with their family business because they cannot afford the 

mandates, but they also cannot sell the business they worked so hard to build. 

The high-risk pools hit their max in March of this year, preventing anyone else from entering the 

high-risk pool. 

No one disputes that there were concerns with the U.S. healthcare system that predate 

Obamacare Chief among those concerns is that the rising cost of health care was crowding out 

other items in family budgets and contributing to massive federal budget deficits. 

Obamacare was designed to fix three problems by reducing the cost of medicine, providing 

universal coverage for every American and increasing the quality of health care in America. 

Americans were told over and over that if they liked their doctor or their insurance, they could 

keep them. 

After decades of work, union members are furious at the changes to health benefits and the 

traditional 40-hour work week. 

While Congress passed the law three years ago, implementation of the law has been mired with 

one problem after another. According to a report by the Congressional Research Service, the 

Administration has missed approximately half ofObamacare's required deadlines. A recent 

GAO report on state progress with exchanges found that "compressed timeframes" and "a lack of 

clear federal requirements related to the federal data services hub" presented major IT challenges 

to opening their exchanges for enrollment on October 1,2013. 

Two months ago the Administration delayed Obamacare's employer mandate and several 

reporting requirements. Although I believe the employer mandate is bad policy, the effect ofthis 

unilateral delay by the Administration will be that exchanges will have greater difficulty 

verifying whether individuals have an offer of coverage at work, thus exposing taxpayer to the 

risk of significant spending on subsidies for those not qualified to receive them. Moreover, the 
83 


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Administration only delayed the employer mandate. Individual citizens are still liable for the 

penalties, but businesses are not liable. 

State leaders from across the country have complained that the Administration has not 

adequately responded to their questions and concerns. Since many states have part-time 

legislatures that are only in session during the spring, HHS's failure to issue timely guidance 

harms state ability to implement the law and better protect its citizens from its harmful aspects. 

Today, we are pleased to hear the testimony of state officials involved in much of the day-to-day 

work in preparing their respective states for the start of Obamacare. We have with us today 

Lieutenant Governor of Kansas Jeff Colyer, M.D., Florida State Representative Matthew 

Hudson, Secretary of the Department of Health and Hospitals from the State of Louisiana Kathy 

Kliebert, and Attorney General for the State of South Carolina Alan Wilson. 

Yesterday, the Democrats on the Committee threatened not to participate in the hearing unless 

we invited eight of their selected witnesses. Since normally the Minority only selects one 

witness and even the Majority only had four witnesses, it seemed like a fairly audacious request. 

But, we did not want members of a committee tasked with oversight to walk out and fail to hear 

the serious struggles states are experiencing as a result of the Administration's implementation of 

ObamaCare, so we made the unprecedented accommodation to let them invite the same number 

of witnesses as the Majority. Members should not walk away from states struggling to 

implement Obamacare. We should listen to their concerns and try to find solutions. 

One area that will be explored today is the Administration's Navigator and Assister programs. 

One of the witnesses here today, Attorney General Wilson from South Carolina, along with 12 

other Attorneys General, sent a letter to Secretary Sebelius on August 14th asking questions about 

the Navigator outreach program. As is the pattern, the Administration has not yet responded. In 

fact, I spoke yesterday with healthcare leaders in my own state, and they informed me that they 

cannot get answers from HHS. The Navigators they speak to have no idea what is happening, 

and we are only days away from the October 1 launch date. 

Fortunately, the Committee has conducted oversight of the Navigator and Assister program. I 

would like to introduce into the record a preliminary staff report on our findings related to the 

Navigator and Assister programs. These findings were largely based on transcribed interviews 

with top HHS officials and internal HHS documents produced to the Committee. 

This report shows that the Navigator and Assister programs are rife with mismanagement and 

carry the risk that a large number of Americans could fall victim to fraud and identity theft: 

• Top HHS officials admitted that the Administration failed to conduct any analysis about 

whether or not it should require all individuals hired by Navigator and Assister 

organizations to pass a background check and be fingerprinted. 

• The Administration decided to leave the responsibility for authenticating Navigators and 

Assisters to the organizations receiving the grants to implement the programs. As a 

2 
84 


Insert offset folio 28 here 85359.028

result, the federal government will not be able to provide consumers with a list of 

individuals officially certified as Navigators and Assisters. 

• HHS officials deemed several marketing activities inappropriate, including door-to-door 

solicitation and direct phone calls but have not taken steps to ban them. 

• HHS allows Navigator and Assister organizations to pay their employees based on the 

number of individuals they enroll, which creates an incentive for those employees to 

provide biased or incomplete information about ObamaCare to maximize enrollment. 

• Individuals employed by Navigator and Assister organizations do not have to disclose 

that they are paid per enrollee to individuals with whom they interact. 

Every program in the federal government needs oversight. That should also apply to the newest 

program in government, Obamacare. While our nation spends billions, it is reasonable to ask if 

it is going well and accomplishing what it was designed to do. 

### 
85 


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Statement of Chairman Jim Jordan 

Subcommittee on Economic Growth, Job Creation and Regulatory Affairs 

Committee on Oversight and Government Reform 

Federal Implementation of ObamaCare: Concerns of State Governments 

September 18, 2013 

Three-and-a-half years ago, a Democratic Congress jammed ObarnaCare through the Congress 

without a single Republican vote. 

ObamaCare has only grown increasingly unpopular as Americans have learned more about it. In 

fact, in a new poll, over half of Democrats believe that ObamaCare is going to harm their health 

care. 

I believe ObarnaCare should be repealed because it is bad law and bad policy. Here is what we 

know so far about ObamaCare that has led me to this conclusion. 

First, ObamaCare significantly increases the size and power of the Federal Government. 

• ObamaCare tasks the IRS with implementing and enforcing at least 47 new provisions, 

including 18 new taxes. These taxes are expected to raise $1 trillion dollars over the next 

decade. Just this year, the IRS has requested nearly $500 million to enforce ObamaCare, 

including 2,000 new full-time employees. 

• The Administration's implementation ofObamaCare has already added over 10,000 

pages of regulations to the Federal Register. 

Second, ObamaCare has harmed the economy and job growth by leading employers to drop 

coverage and cut the hours of their workers. 

• The Cleveland Plain Dealer reported that many colleges, universities, and town 

governments are limiting the hours of part-time workers to under 30 hours to stay under 

the employer mandate threshold. 

• Regal Cinemas, one of the largest movie theatre chains is reducing many workers to less 

than 30 hours per week because of ObamaCare. 

• This Committee has heard testimony from numerous owners over the past two years 

about how they will be forced to lay off workers because ofObarnaCare. 

• Leaders of three major unions wrote the President last week demanding significant 

changes to ObamaCare. They wrote that the Administration's implementation of 

ObamaCare will "destroy the foundation of the 40-hour work week that is the backbone 

of the American middle class." 
86 


Insert offset folio 30 here 85359.030

Third, ObamaCare has disrupted Americans' health insurance coverage and reduced choices. 

• Kroger, a major supermarket chain, recently announced that it would no longer provide 

health coverage to spouses of 11,000 employees working in Indiana. 

• UPS is dropping coverage for the spouses of 15,000 workers, citing increased costs from 

ObamaCare. 

• The University of Virginia told employees that they would stop offering spousal coverage 

because ofObamacare. 

• Trader Joe's told their part-time employees that they would no longer offer health 

benefits for part -time workers. 

• Howard Dean, writing in the Wall Street Journal, criticized ObamaCare's Independent 

Payment Advisory Board writing: "The IPAB is essentially a health-care rationing body." 

Moreover Dean argues that" ... these kinds of schemes do not control costs. The medical 

system simply becomes more bureaucratic." 

Fourth, ObamaCare's centralized data collection apparatus and poorly planned and managed 

outreach campaign exposes Americans to significant risks of identity theft and fraud. 

• Although open enrollment is two weeks away, the Ohio department of insurance has yet 

to receive any navigator applications or certify any individuals for this formal outreach 

effort. This raises concerns that many Navigators will not be adequately trained to 

conduct outreach. 

• Last week, the Minnesota health insurance exchange admitted'lhat an employee 

mistakenly released confidential information on 2,400 brokers, including Social Security 

numbers and addresses. 

As the Administration has learned, implementing a deeply unpopular law is very difficult. 

The witnesses here today are working hard to understand the law and minimize the law's damage 

on their populations. These witnesses are from the two-thirds of states that opted not to create a 

health insurance exchange, largely because of inflexible rules and objections to the law's 

complicated and expensive mandate, regulation, tax, and subsidy scheme. 

This work is difficult because of the failure of the Administration to promptly respond to state 

concerns and questions as well as significant delays in regulation and guidance. I am deeply 

grateful that they have come to share their stories about their concerns with the Administration's 

implementation of ObamaCare. 

Finally, in an editorial last month, the Chicago Tribune, a paper that endorsed President Obama 

twice, called to "delay and rewrite this ill-conceived law. Congress need not start from scratch. 

Lawmakers can build on what all of us have learned from three years of painful trial and error. 

2 
87 


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Three years of attempting, but failing, to make this clumsy monstrosity work for the American 

people." 

I look forward to hearing the witnesses' perspective on this debate and am grateful that my 

Democratic colleagues choose not to boycott the hearing. It is important for the Democrats in 

the Congress to hear about the very real concerns and challenges that states are confronting in 

implementing this law and not to pretend that they don't exist. Today's hearing is also a 

reminder that a one-size fits all federal solution to most problems is far less effective than statebased approaches. 

### 

3 
88 


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Testimony Stacie Ritter 

Why the ACA is important to me 

Good morning, Thank you for inviting me here today to share with you why the ACA is 

so important to me and my family. 

My Ilame is Stacie Ritter, I'm a mother of four amazing kids. My oldest are twin girls, 

diagnosed with myelodyspJastic syndrome when they were only four years old. Both girls had 

stem cel! transplants at the Children's Hospital of Philadelphia 10 years ago. At that time, we hit 

the lifetime cap on insurance, and filed for bankruptcy. We've bounced back from that, but 

through no fault oftheil' own, my girls will have pre-existing medical conditions for the rest of 

their lives. 

• Thanks to the ACA, they can no longer be discriminated against if I were to lose 01' 

change jobs. 

e Thanks to the ACA, we no longer worry about reaching lifetime caps on coverage. 

• Thanks to the ACA, the girls can remain on my insurance until they are 26 years old, 

giving them time to finish college and find a job. 

Health insurance isn't simple - especially for people who have never had it before, as 

well as the 129 million Americans who, like my daughters, have pre-existing conditions. That's 

why the law established "insurance navigators" to help them. It's important that the navigators 

be allowed to do their jobs so people can get the medical insurance that they have been waiting 

for! 

I live in the 16th congressional district of Pennsylvania represented by Joe Pitts. I'd like 

him to stop his attacks on the ACA. It is the law, Representative Pitts -- accept it, help implement 

it, help to improve it. Like many Americans, I'm tired of all the games! We didn't vote for 
89 


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nonsense I Health care is personal, not political. It's a basic human right. It's time for everyone to 

work together so every American can get the health care they deserve! 
90 


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Testimony of Aqualyn Laury 

Before the House Committee on Oversight and Govemment Reform Subcommittees on 

Economic Growth, Job Creation and Regulatory Affairs and Energy Policy, Health Care and 

Entitlements 

Wednesday, September 18, 2013 

Good morning, Chairman Issa, Ranking Member Cummings, and other distinguished Members 

of the Committee. My name is Aqualyn Laury, and I live in Alexandria, VA. I appreciate the 

opportunity to be here to share my story. I'm proud to be here today, as a small business owner, 

a survivor, and an American Heart Association volunteer advocate. 

My story begins back on September 28, J 990 during my 4th week as a freshman at Spelman 

College in Atlanta. I was walking across campus to my morning class when I experienced a 

sudden moment of confusion and vision irregularity. When I got to class, I tried to ask some 

classmate..~ a question and finally realized they couldn't understand me because my speech was 

coming out garbled. Despite this evidence that something was very wrong, I kept going about my 

business the rest of the day and even took a philosophy exam. When I finally went to the hospital 

and saw a neurologist, I learned that I had had a stroke that was caused by a tumor in my heart. I 

ended up having open-heart surgery to remove the tumor, and to replace the heart valve that the 

tumor destroyed. 

During this ordeal my Mom's health insurance covered me. However, since that September day 

more than 20 years ago, I have been one of the 122 million Americans who has been labeled as 

having a pre-existing medical condition. I graduated with a Bachelor of Science in Mathematics 

from Spelman College and later, an M.B.A. from Duke University. Subsequent to both 

graduations, I joined great companies with equally great insurance plans like a good "preexisting" should. 

In 200S, I decided to leave my job at a large employer to pursue my dream of owning my own 

business. I knew it would be difficult to find affordable coverage due to my pre-existing 

condition, but I couldn't help but to seek greater purpose for my life. Fortunately, or at least so I 

thought at the time, I was able to secure a health plan through my graduate school's alumni 

program after COBRA ended. However, later that year, I needed emergency gall bladder surgery 

and suffered complications because of the same genetic blood disorder that caused the tumors 

previously. At that point, my insurer rescinded my coverage and left me with $50,000 in medical 

bills during my first year in business. Do you know how hard it is for a sick person to fight this? 

But I did and I was both thankful yet disheartened that the non-profit hospital that cared for me 

wrote off substantial portions of the bill that should have been covered by the insurer. If the 

Affordable Care Act had been in place back then, it would have been against the law for my 

insurer to drop me from coverage. I'm grateful that I and other Americans no longer have to 

worry about losing our coverage when we get sick, even though we've been faithfully paying our 

insurance premhuns. 
91 


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To: Gary Cohen, Director, CClIOi James Kerr, Acting Deputy Director, CClllOi Chiquita 

Brooks-LaSure, Deputy Director, CCiIO 

From: Vicki Gottlich, Director, Consumer Support Group 

RE: Process for Training, Authentication, RegIstration and Certification for In-person 

Assistance 

Date: May 28, 2013 

Without appropriate IT solutions In place, CMS staff will be required to utilize a manual process 

to match the results from EIDM (for authentication) and from Medicare Learning Network 

(MLN) (for trainIng) to ensure that each Individual assister (whether NaVigator, In-person 

assistance personnel, or Certified Application Counselors) has completed both elements ofthe 

registration/certification process. In developing responses to the questions posed by Aryana 

Khalld, we have become Increasingly concerned about the ability of CMS staff to authenticate, 

register, and certify everyone who will be Involved In the consumer assistance process. 

Registration and certification of Individuals: 

The MLN business owners have Indicated that they will be able to provide us with a list of users 

that have self·selected as a specific type of asslster. Optimally this not will include both the 

users' names as well as their e-mail addresses. 

Our SOPs will encourage assisters to use the same e-maIl address to go through both the MLN 

training and EIDM authentication. We are confident that we can also obtain a list of EIDM· 

authenticated users, although - as currently built -there Is no way to distinguish a potential 

asslster that has gone through EIDM from anybody else (Issuer staff, eMS staff] etc.) that has 

gone through EIDM. 

With these two sets of data - EIDM-authentlcated Individuals and MLN-trained assisters - eMS 

staff would have to manually match asslsters (all 3 types) from one data set to the other. Onlv 

after a match has been made would CMS be able to fully register/certify an Individual. 

Given the scope of the different programs - particularly the CAC program - it Is possible that 

this would entail eMS staff attempting to manually match approximately 20,000 Individuals 

overthe course ofthe year. 

Designation of CAC organizations: 

An organization that wants to serve as Exchange-designated CAC organizations downloads the 

application posted on the appropriate website (CeliO or healthcare.gov), completes the 

application and submits the application to CCIIO. 
92 


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CliO manually reviews and processes the application (probably using an excel spreadsheet). 

This will require that CCiIO maintaIn and track Information for each organization, including a 

continually updated list of staff and volunteers, and the name(s) and contact information for 

any points of contact and approving officials for the organization. This will also require that 

CCIIO maintain and track the applications received, and the proceSSing and outcome of 

designation applications. 

CCCIiO informs organization of Its designation organization (via email) and records this 

on its tracking spreadsheet. 

We anticipate thousands of organizations will seek designation. 

Help Desk Issues: 

Organizations that want to serve as CACs will have questions about the deSignation process. 

Individuals who seel( registration and certification will also have questions. If we utilize a 

manual process, CSG staff will also have to provide the Help Desk function to respond to all of 

the questions from potential users. 

Potential IT solution: 

We propose leveraging the existing HIOS contract to perform some of these functions. An 

outline of how the process would work, Including potential questions, Is attached. We are 

seeking front office approval before InItIatIng additional work. We have reached out to 80S to 

determine whether funding would be available for this work. 
93 


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\\',\SHI'-:GTO'-:. DC 205! 5-6115 

MEMORAl'iDUM 

September 18, 2013 

To: Committee on Energy and Commerce Democratic Members and Staff 

Fr: Committee on Energy and Commerce Democratic Staff 

Re: Preliminary Findings of Affordable Care Act Navigators Investigation 

On August 29,2013, Chairman Upton and 14 Republican members of the House 

Committee on Energy and Commerce sent a detailed request for documents and briefings to 51 

groups that received grants to serve as Navigators to help the uninsured sign up for benefits 

under the Affordable Care Act. 

The following day, Ranking Member Hellry A Waxman wrote: "there is no legitimate 

predicate for these letters and no evidence of any malfeasance from any of the organizations. It 

is an abuse of your oversight authority to launch groundless investigations into civic 

organizations that are trying to make health refonn a success." 

The Committee has received grant applications and other infomlatiol1 from 42 of the 51 

organizations. A review of these applications reveals that there is no basis for the Republican 

concerns about the Navigator program. It finds that: 

• Navigators will help millions obtain health insurance coverage. The recipients of the 

Navigator grant aim to directly enroll over one million uninsured people in the Health 

Insurance Marketplaces and Medicaid and will reach an additional 7.3 million people 

through public education efforts, 

• Navigators have extensive experience assisting individuals with federal and state 

benefit programs. The role of educating and enrolling individuals for benefits is not a 

new role for these organizations; most have vast experience helping individuals in 

targeted commlmities with Medicaid or other health insurance coverage, food security 

programs, legal services, and other counseling or assistance programs. 
94 


Insert offset folio 38 here 85359.038

'\lost i'ayjgators are nonprofit, community sen-ice providers, and all i'avigators 

are nonpartisan organizations. 

• l'avigator grant recipients have effective privacy protections in place. All the grant 

recipients must abide by statutory provisions providing for the privacy and secmity of 

personally identifiable info[111ation under the Affordable Care Act. and many are taking 

additional steps to protect individuals' privacy or already have extensive experience 

handling highly sensitive personal financial and health data information 

1. BACKGROL"~D 

On August 29, 2013, Chairman Upton and 14 Republican members of the House 

Committee on Energy and Commerce sent request letters to 51 groups that received grants to 

serve as Navigators to help the wlinsmed sign up for benefits under the Affordable Care Act. 

The letter demanded that the groups provide "all docwnents and communications related to your 

Navigator grant," and asked that they provide briefings and answer many questions on 

organization budgets and employee training, education, monitoring, review, and superv'ision,l 

The follow'ing day, Ranking Member Henry A. Waxman wrote: "there is no legitimate 

predicate for these letters and no evidence of any malfeasance from any of the organizations. It 

is an abuse of your oversight authority to laWlch groundless investigations into civic 

organizations that are trying to make health refOlID a success.,,2 He concluded that the impact of 

the Republican investigations "is not to enlighten the Committee, but to intimidate and divert 

resources from the effort to implement the law."> 

Recent comments by Republican Committee member Rep. Renee Ellmers, who signed 

the Committee's original letter, appear to confirm Ranking Member Waxman's concern. The 

Charlotte News and Obsef'l!er reported that "she said she would be pleased if the congressional 

navigator inquiry stymies the nonprofits planning navigator work. 'If this ended up resulting in a 

delay, I wouldn't be unhappy about it,' El!mers said. ,.4 

One organization that received the letter from the Committee has withdrawn from the 

program and returned the funding, telling the Committee that it is returning the grant because 

"emerging State and Federal regulatory scnttiny surrounding the Navigator program requires us 

to allocate resources which we cannot spare and will distract us from fulfilling our obligations to 

[See, e.g., Letter from Chairman Fred Upton et a1. to Arizona Association of Community 

Health Centers (Aug. 29, 2013). 

2 Letter from Ranking Member Henry A. Waxman to Chairman Fred Upton (Aug. 30, 

2013). 

3 Id. 

4 NC Groups Working to Implemellt Health Care Law Targeted by GOP Data Request, 

Charlotte News and Observer (Sept. 7, 2013) (online at 

www.newsobserver.coml20 13/09/07/316689S/nc-groups-,\vorking-toimplement.html#storylinlc=cpy). 

2 
95 


Insert offset folio 39 here 85359.039

on;- clients_--; The grant to this organization. Cardon Outreach. was to fund outreach activities in 

Pennsyh ania. Ohit;' Florida. and Utah. (, . 

On September 9. 2013. the Department of Health and Human Services (HHS) responded 

to the Committee"s request. 111 an enol1 to "enable the l\a\'igators to tocus on training stalTto 

begin 10 assist uninsured Americans:'lhe Department answered the Committee's questions and 

provided copies of the l\avigator grant applications. The Department produced 42 grant 

applications from the 5] organizations originally requested by the majority. At the request of 

Ranking Members Waxman and DeGette. Democratic staff reviewed the l\avigator grant 

applications produced by the Department. This memo provides a summary oflhe preliminary 

findings of this review. 

II. FIl'iDIl'iGS 

A, l'iavigators Will Help Millions of Americans Obtain Health Care Coverage 

According to their application materials. the recipients of the 42l\avigator grants 

reviewed by the Committee will directly enroll nearly 1.1 million uninsured people in the 

Health Insurance Marketplaces and Medicaid. They also expect to assist an additional 7.3 

million people through public education efforts such as marketing campaigns, community 

enrollment and education events, and extensive information, outreach, and referral servicesabout the benefits of the Affordable Care Act. 

In Texas, Navigators will help over 450,000 people sign up for health insurance coverage 

and will educate over 1.2 million; in Florida, Navigators will help over 330,000 people sign up 

for health insurance coverage and will educate more than 830,000. 

Many of these groups will focus on ensuring that minorities, low-income individuals, 

individuals with mental illnesses or substance abuse problems, and other vulnerable populations 

have access to health care coverage under the law. One organization explains that its "primary 

target clientele are Hispanic field workers and their families." 7 Their programs "reach a variety 

of ethnicities and communities, but most clients have limited education., many limited English 

language skills, and are culturally Hispanic."s Another organization will target specialized 

navigation services to "people in recovery from mental illness andlor substance abuse, 

individuals in active addiction, or those who are seeking behavioral health treatment services.'·9 

5 Letter from Charles W. Kable, Cardon Outreach, to Members of the Committee on 

Energy and Commerce (Sept, 13,2013). 

6 Citing scrutiny,jirm won't aid Pa. on ACA, Associated Press (Sept. 17,2013). 

7 [Redacted], Cooperative Agreement to Support Navigators ill Federal~v-facilitated and 

State Partnership Exchallges, at 33 (June 6, 2013). 

RId. 

9 [Redacted], [Redacted} has been developed [to} provide specialized navigatiol1 services 

to people ill recovelyji-om mental illlless alldlor substance abuse, il1dividuals il1 active additioll, 

or seeking treatment, at 26 (June 7, 2013). 

3 
96 


Insert offset folio 40 here 85359.040

lie third organization explains that it traditionally "serves persons who are considered poor or 

working poor and who are in need of insurance. Some of these populations are single mothers 

with children. indi"iduals \\ho are ,"ictims of crime and domestic yjolence and urban 

populatiol1s:,lO 

B. :\'ayigators Haye Extensive Experience Assisting Indiyiduals with Federal 

and State Benefits 

Outreach to these vulnerable communities is not a new role for these organizations. One 

Navigator grant recipient explains its extensive experience, writing, h[s]ince 200X, our Benefits 

Access Program has linked families in need with public and private benefits for which they are 

eligible, especially food stamps, free tax preparation, utilities assistance programs, Medicaid, ... 

and most recently, disaster assistance in the aftermath of Super storm Sandy."jj 

Another group states that over the last 12 years, it "has helped more than 80,000 

individuals and families enroll in and retain public health insurance including Medicaid, Child 

Health Plus, and Family Health Plus." 12 Another recipient highlights the work of just one of its 

nonprofit consortium members, explaining that it has "extensive prior experience assisting lowincome indh·jduals with public health insurance, such as Medicaid and CHIP, including applying 

the regulations to an individual's situation, administrative and judicial appeals, and navigating 

the bureaucratic process inherent in the administration of public benefit programs."I) 

At least one organization plans to complete the same education and outreach activities for 

the Affordable Care Act that is undertook during the rollout oflhe Medicare Part D program. 

The organization explained in its Navigator grant application that in the past, it served as the lead 

"in an effort to enroll eligible, low-income populations in the Low Income Subsidy (LIS) and the 

Medicare Part D benefit." 14 The organization explained: 

Beginning in 2004, this effort encompassed education and outreach efforts for initial 

efforts into these brand-new federal programs. [The organization] mobilized its network 

to hold regional enrollment events, conducted telethons, provided mobile enrollment 

services, fielded telephone inquiries through its hotline, performed eligibility screening, 

and completed hundreds of applications for the LIS and during open enrollment periods 

10 [Redacted], Cooperative Agreement fo Support Navigators ill Federally-facilitated alld 

State Partnership Exchanges, at 12 (June 5, 2013). 

II [Redacted], Cooperative Agreement to Slpport Navigators ill Federally-facilitated and 

State P0I1nership Exchanges, at 12 (June 6, 2013). 

12 [Redacted], Cooperative Agreement to Support Navigators ill Federatly-facilitated and 

State P0I1nership Exchanges, at 43 (June 6, 2013) 

13 [Redacted]. Statewide consortium of navigators to enroll the uninsured into the 

federal(vfacilitated marketplace, at 23 (June 6, 2013). 

14 [Redacted], Cooperative Agreement to Support Nal'igators in Federally-facilitated and 

State PartllershipExchanges, at 34 (June 5, 2013). 

4 
97 


Insert offset folio 41 here 85359.041

tor Jvledicare Part D. This experience demonstrates a long-standing commitment to 

expanding access to health coverage through public education and ontreach. I5 

C. Most :'\avigators Are :'\onprofit Community Service Providers 

The grant applications rc\"iewed by the COlllmittee statI're\'eal that the vast majority of 

Navigators are nonprofit community service providers, Illuny of whom have extensive 

experience in assisting low-income people with complex public benefit programs. Forty of the 

42 organizations for which the Committee has applications are not-for-profit entities. ThiI1y-five 

are nonprofits or nonprofit-led conSOI1ia, two are state universities, two are private entities or 

private entity-led consoI1ia, one is a county government and one is a municipal corporation. 

Republican leaders have raised concerns that the l\avigators would use information 

provided from individuals they help sign up for coverage for "fundraising, voter registration 

efforts, [or) campaign activities.,,16 But all 42 of the organizations whose applications were 

reviewed by the Committee staff were nonpaI1isan and nonpolitical inl1ature. 

D. Navigators Have Effective Privacy Protections in Place 

Republican attomeys general have written that "we are concemed that [HHS] has failed 

to adequately protect the privacy of those who will use the assistance programs connected with 

the new health insurance exchanges.,,11 But the Democratic staff review of Navigator grant 

applications indicates that the recipients have effective privacy protections in place. 

All the grant recipients must abide by 45 C.F.R. § 155.260, the statutory provisions 

providing for the privacy and security of personally identifiable information under the 

Affordable Care Act. These regulations dictate the manner in which grant recipients can collect, 

use, and access personally identifiable information. Among other requirements, the law provides 

that "[p ]ersonally identifiable information should be protected with reasonable operational, 

administrative, technical, and physical safeguards to ensure its confidentiality, integrity, and 

availability and to prevent unauthorized or inappropriate access, use, or disclosure." 18 Any 

organization or individual that knowingly or willfully uses or discloses infomlation in violation 

of these regulations is subject to a civil penalty of $25,000 per individual, per disclosure. 19 

I5 fd. 

16 See, e.g., Letter from Chairman Fred Upton et a1. to Arizona Association of Community 

Health Centers (Aug. 29, 2013). 

17 Letter from State Attorneys General to the Honorable Kathleen Sebelius (Aug. 14, 

2013). 

11145 C.F,R. § 155.260(a)(3)(vii) 

19 Exchange Establishment Standards And Other Related Standards Under The 

Affordable Care Act, 45 C.F.R. § 155.260. 

5 
98 


Insert offset folio 42 here 85359.042

In addition to these privacy safeguards, many organizations that received navigator grants 

are taking additional steps to protect individuals' privacy, At least 15 ortlle organizations have 

additional privacy practices for their Navigator staft: including background checks. training: in 

Health Insurance Portability and Accountability Act (HfPAA) pri\'acy requirements. and 

computer security policies. 

Moreover. many oflhe organizations already have extensive experience handling highly 

sensitive personal financial and health data infon11ation in the course of their work to assist 

indi\'iduals in need of state or federal assistance program, Grant applications reveal that at lenst 

270fthe 42 organizations hare extensive past experience in handling such information, One 

organization explained: 

As a HUD-approved housing counseling agency, [the organization] already has extensive 

data privacy and security standards and protocols in place as a result of our contracts to 

provide foreclosure prevention counseling. During the mortgage modification 

application process, clients are required to gather and bring in a variety of official 

documents that include private andlor confidential information; applications are 

submitted online. but the paper copies must be kept on file at our location. Application 

data is submitted online, protocols regarding the use of computers and laptops or tablets 

are already in accordance with 45 CF.R, § 155.260. In addition to online data privacy 

and security policies, we have protocols in place that physically separate client data files 

in a secured room away from other program areas and offices, We have written 

procedures for accessing filed client data for appointment and returning it to the client 

file, (including signature logs identifying the staff who access mes) and policies 

governing the data destruction once the mandatory storage timefrarne has expired. 

Finally, aU staff and contractors are required to sign confidentiality agreements covering 

client infonnation as a condition of employment. These policies and protocols will be 

used for the Navigator program as well.20 

20 [Redacted], Cooperative Agreemellt to Support Navigators in Federally-facilitated and 

State Partl1ership Exchanges, at 37 {June 7, 2013). 

6 
99 


Insert offset folio 43 here 85359.043

Patrick Morrisey 

Attorney General 

Via Certified Mail & Email 

The Honorable Kathleen Sebelius 

State 01'\\'e51 Virginia 

OffIce of the Attorney Gener",j 

August 14,2013 

U.S. Department of Health and Human Services 

200 Independence Avenue, S.W. 

Washington, D.C. 20201 

Kathleen.SebeIius@hhs.gov 

(3(4) 558-2021 

Fax (304) 558-0140 

Re: A communication from the States of West Virgiuia, Alabama, Florida, 

Georgia, Kansas, Louisiana, Michigan, Montana, Nebraska, North Dakota, 

Oklahoma, South Carolina, and Texas regarding data privacy risks posed by 

programs assisting consumers with enrollment in health insurance through 

the new exchanges 

Dear Secretary Sebelius: 

As the chief legal officers of our states, we are concerned that the U.S. Department of 

Health and Human Services ("HHS") has falled to adequately protect the privacy of those who 

will use the assistance programs connected with the new health insurance exchanges. The 

Patient Protection and Affordable Care Act provides funding for groups to assist consumers in 

understanding their health insurance options on the new exchanges. When the exchanges begin 

enrollment, various "navigator," assister, application counselor, and other consumer outreach 

programs will begin inputting consumers' private data into insurance applications to help 

consumers enroll in health insurance plans. We take very seriously the privacy of our states' 

consumers and believe that your agency's current guidance regarding these groups suffers 

numerous deficiencies. 

State Capitol Building 1. Room E-26. 1900 Kanawha Boulevard East, Charleston, WV 25305 
100 


Insert offset folio 44 here 85359.044

Honorable Kathleen Sebelius 

August 14,2013 

Page 2 

A Risk oflnadequate Training 

Personnel in many of the new programs will have significant access to consumers 

personal infonnation, yet HHS's relevant guidance lacks clarity regarding privacy protection. In 

the July 17, 2013 Final Rule relating to the Standards for Navigators and Non-Navigator 

Assistance Personnel, HHS stated that personnel will "receive training on the privacy and 

security standards applicable" to their work. It promises that the training will be "extensive." 

But the Rule did not set forth any of the applicable standards beyond citing 45 C.F.R. § 155.260, 

which merely sets forth broad principles for data protection: "individual access," "correction," 

"openness and transparency," "individual choice," "collection use and disclosure limitations," 

"data quality and integrity," "safeguards," and "accountability." As to what these principles 

mean in practice. the Rule provides platitudes with little concrete guidance, requiring: 

"reasonable operational, administrative, technical, and physical safeguards to ensure [data) 

confidentiality, integrity, and availability and to prevent unauthorized or inappropriate access, 

use, or disclosure"; protections "against any reasonably anticipated threats or hazards to the 

confidentiality, integrity, and availability of such information"; and "openness and transparency 

about policies, procedures, and technologies that directly affect individuals andlor their 

personally identifiable information." The Rule does not even require unifonn criminal 

background or fingerprint checks before hiring personnel; indeed, it does not state that any prior 

criminal acts are per se disqualifying. 

Likewise, in the related June 19, 2013 Proposed Rule on Program Integrity, HHS 

proposed monitoring grantees for adherence to applicable privacy and security requirements, but 

did not articulate what those requirements would be. For example, while HHS proposed 

adopting abstract regulations forbidding unauthorized security "breaches" and "incidents," the 

proposed regulations did not identify what exactly would constitute such events. Moreover, 

although HHS proposed requiring grantees and exchanges to have accountability standards and 

procedures in the event of a breach of private information, the agency suggested nothing specific 

beyond a requirement that HHS be notified of such breaches. 

The short time remaining before exchange emollment begins will only exacerbate these 

unclear standards. Emollment is currently set to begin October 1, 2013, and yet many programs 

have not received their grants and thus have not started preparations. HHS is scheduled to finish 

awarding grants to applicants no later than August 15, which will leave participating programs 

only thirty-two business days to screen, hire, and train thousands of new personnel natiom'l'ide. 

In that window, inexperienced new grantees will have to read these "principles" and guess what 

they should do, and HHS will not have sufficient time to consult with or audit each program 

prior to emollment. Consumer privacy will be catch-as-catch-can in each program. As it now 

stands, it is inevitable that HHS's vague "standards" ",~11 result in improperly screened or 
101 


Insert offset folio 45 here 85359.045

Honorable Kathleen Sebelius 

August 14, ~013 

Page 3 

inadequately trained personnel. These individuals will be more prone to misappropriateaccidentally or intentionally-the private data of consumers. 

To make matters worse, HHS recently announced that it may cut back 011 its previously 

announced and already scant training requirements due to time constraints. As reported in the 

Wall Street Journal on August 5, 2013: "With time running short before enrollment kicks off 

Oct. 1, the Obama Administration last week cut back on training requirements for these 

'navigators.' Officials were concerned there might not be enough time to do more-extensive 

training before the health-insurance exchanges open." Previously, the Rule stated that navigators 

would need up to 30 hours of online training before they start, but, as reported in the same 

article, HHS has since said in an interview with an official spokesperson that an initial "20 hours 

would be sufficient." Setting aside the absurdity of simply changing the rules to paper over the 

Administration's abject failure at implementing the statute, reduced training requirements are 

only going to lead to more problems. 

This is exactly the \';'rong response. HHS must take action to ensure that thorough and 

specific safeguards are put in place to protect the confidentiality of consumers' data before 

enrollment begins. Rigorous programmatic safeguards are needed to prevent security breaches 

by new personnel, as well as to ensure clear lines of accountability for any harm caused by 

confidentiality breaches. As of right now, your agency has no realistic plan to prevent identity 

theft or to provide recourse to consumers when it inevitably occurs. 

Less Consumer Protection Than In Other Contexts 

The risk of inadequate training is only one problem. The proposed consumer safeguards 

are also woefully substandard. When compared to other privacy protections at the state and 

federal levels, the vague requirements in your agency's guidance come up well short. 

For example, the guidelines appear to provide significantly less protection to consumers 

with respect to navigators than the states have provided with respect to insurance agents and 

brokers. For decades, health insurance agents and brokers have been subject to strict state-level 

exam-based licensing laws and annual continuing education requirements, as well as significant 

federal and state privacy, security, and market conduct requirements. Furthermore, licensed 

agents and brokers are personally liable if they fail to comply with these laws and requirements, 

and are obligated to maintain professional liability insurance to protect consumers. Your 

guidance does not include comparably rigorous training or educational requirements for 

navigators. Nor does your guidance impose specific liability for disclosing the many forms of 

private information that will be given to counselors. Existing laws criminally prohibit sharing 

certain forms of consumer iuformation, such as tax returns, but those laws do not cover all the 

information consumers will provide to these HHS-sponsored programs. 
102 


Insert offset folio 46 here 85359.046

Honorable Kathleen Sebelius 

August 14,2013 

Page 4 

What is more. your agency's guidance could be construed to limit state efforts to impose 

such licensing requirements on the numerous non-profit groups expected to do most of the work 

of assisting consumers. The Rule provides that state licensure or certification rules must not 

prevent the application of ACA navigator requirements, and the regulations require at least one 

navigator entity not to be a licensed agent or broker. 45 C.F.R. § 155.210(c)(l); id. 

§ 155.210(c)(2) (directing the Exchange to select at least two different types of entities as 

navigators, one of which must be a commtmity and consumer-focused non-profit group). In 

practice, non-profit groups are anticipated to take a much greater role, and may be the main 

source for enrollment assistance. Yet your agency's requirements might bar states from 

imposing any comparable certification and licensing requirements, such as surety bonds and acts 

and omissions insurance, on non-proiit navigator groups who are not licensed agents or brokers. 

78 Fed. Reg. 42831 (stating that the "requirement by a state or an Exchange that Navigators be 

agents and brokers or obtain errors and omissions coverage would prevent the application of the 

requirement at § 155.210(c)(2) that at least two types of entities must serve as Navigators, 

because it would mean that only agents or brokers could be Navigators"). 

Your guidelines are also less demanding than many federal privacy requirements, such as 

those applicable to federal census workers and those that the Department of Treasury would like 

to apply to professional tax preparers. Census Bureau employees take an oath for life to protect 

identifiable information and information about businesses gathered by the agency. By law, the 

Census Bureau cannot share respondents' answers with the IRS, FBI, CIA, or any other 

government agency. The penalty for unla>lowl disclosure is a fine of up to $250,000 or 

imprisorunent of up to 5 years, or both. Separately, since 2009, the Department of Treasury has 

aggressively pursued reforms to ensure comprehensive oversight of tax professionals including 

registration of individual preparers, background checks, certification, competency examinations, 

and continuing education requirements. Your agency's guidance regarding navigators and other 

assisters is not remotely comparable. 

Finally, the lack of standardized background checks in the Rule pales in comparison to 

what is usually required for employees in programs receiving federal healthcare funds, 

particularly with respect to high-risk employees with direct access to consumers. For example, 

the Centers for Medicare & Medicaid Services has worked with twenty-four states to design 

comprehensive national background check programs for employees in long-term care facilities 

with direct patient access. Likewise, in other rules promulgated by your agency, heightened 

screening, fingerprinting, and backgrotmd check requirements apply to high-risk providers 

seeking to participate in Medicare, Medicaid, and the Children's Health Insurance Program. See 

76 Fed. Reg. 5862. 
103 


Insert offset folio 47 here 85359.047

Honorable Kathleen Sebelius 

August 14,2013 

Page 5 

Further WOI'k Is Required 

It is not enough simply to adopt vague policies against fraud. HHS will be giving its 

stamp of approval to every counselor who interacts with a consumer. This position of trust will 

allow counselors to gain access to a wide variety of personal infomlation from unsuspecting 

consumers. Unscrupulous counselors, who are not properly screened out or supervised, will 

have easy means to commit identity theft on consumers seeking enrollment assistance. 

According to the Bureau of Jnstice Statistics, more than five percent of adults already fall victim 

to identity theft each year, and that is before they hand over all their individual data to a 

minimally screened and virtually unaccountable "counselor." HHS needs on-the-ground plans to 

secure conSUlller infoffilation, to follow up on complaints, and to work with law enforcement 

officials to prosecute bad counselors. Without more protections, this is a privacy disaster waiting 

to happen. 

In the questions below, we have identified a number of areas that we believe are critical 

to ensuring effective safeguards for the protection of consUlllers' private data through the 

navigator, assister, application counselor, Of other consumer outreach programs. We ask that 

you please provide answers to the following questions in writing. OUf hope is to work with you 

to better assess the state of health insurance consumers' data protection and to evaluate the role, 

if any, for state regulatory action. 

1. Screening Personnel. Beyond the general grant screening process, does the process for 

hiring personnel include any screening for staff that may pose risks to conSUlller data 

privacy? For example: 

a. Will HHS or others require that all navigators or similar personnel have an 

educational degree or have any past experience or expertise in the health 

insurance field or data privacy? 

b. Will HHS or others require uniform criminal background checks or credit reports? 

c. Will certain individuals, such as those who have committed identity theft, be 

prohibited from becoming a navigator or other program personnel? 

2. Guidance to Program Personnel. What forms of guidance will HHS provide to 

program personnel about COTISUlller data privacy protections? 

a. For example, will navigators that receive taxpayer return information be advised 

of their potential criminal liability, under section 7213(a) of the Internal Revenue 

Code, for unauthorized disclosure of such information? 

b. Please identify the specific existing laws and standards that HHS believes govern 

the use of consunlers' information and which HHS will expect navigator, assister, 

application counselor, or other consumer outreach programs to follow. 
104 


Insert offset folio 48 here 85359.048

Honorable Kathleen Sebelius 

August 14,2013 

Page 6 

3. '!\ionitoring Program Personnel. How will HHS or others oversee the activities of 

navigators and non-navigator assistance persoID1e1 and ensure that employees do not 

retain personal information? 

4. ~otice to Consumers. Will consumer outreach programs inform consumers of their data 

privacy rights and the programs' liability before they decide to receive assistance? 

5. Liability. Where does liability rest when a consumer outreach program causes harm to a 

consumer, either purposefully or unintentionally, through the misuse of personal 

information? 

a. Specifically, does liability rest with the individual who had direct consumer 

contact, the entity that received funds for consumer outreach, or the exchanges? 

b. Does HHS plan to require that entities that receive federal or exchange-generated 

funds for consumer outreach activities carry any sort of professional liability 

insurance? 

6. Fraud Prevention and Remedies. Does HHS have any plans to provide assistance and 

relief to defrauded consumers? 

a. Will programs be required to aid consumers who believe information provided to 

a program has been misused? 

b. How does HHS plan to prevent potential fraud by entities and individuals that 

may disingenuously represent themselves as navigators or other assisters to 

unsuspecting consumers? 

7. Penalties. HHS has promised to take "appropriate action if complaints of fraud and 

abuse arise." 

a. Beyond civil monetary penalties, what other "appropriate action" will your 

agency take? 

b. Beyond the False Claims Act, what other existing statutes providing for penalties 

will apply? 

8. Supplemental State RegUlation. How do you view the role of states with regard to 

supplementing federal data privacy requirements in all three types of exchanges? Many 

states have enacted or are considering legislation that further regulates navigators. 

a. Has HHS informed any state that a proposed or adopted state requirement is 

inconsistent with federal rules? If yes, please provide an exhaustive list of such 

requirements. 

b. To what extent will states be able to impose additional certification requirements 

and safeguards relating to a program's data privacy operations, at levels 

comparable to the licensing of agents and brokers, without being in conflict with 

the Act? 

c. What is your understanding of the minimum insurance and bonding requirements 

that states could impose on non-profit programs? 
105 


Insert offset folio 49 here 85359.049

Honorable Kathleen Sebelius 

August 14,2013 

Page 7 

d. How does HHS plan to inform state regulators about which entltles and 

individuals may be performing federally-funded, out-of-state consumer outreach 

activities in their states, so that they "ill be aware of who may be interacting with 

their constituents and may enforce state-based consumer protection requirements? 

We appreciate your prompt attention to these critical questions and request a response by 

August 28, 2013. 

Sincerely, 

Patrick Morrisey 

West Virginia Attorney General 

Luther Strange 

Alabama Attorney General 

Pamela Jo Bondi 

Florida Attorney General 

Samuel S. Olens 

Georgia Attorney General 

Derek Schmidt 

Kansas Attorney General 

James D. "Buddy" Caldwell 

Louisiana Attorney General 

Bill Schuette 

Michigan Attorney General 

Tim Fox 

Montana Attorney General 

1",C(j~ 

Jon Bruning 

Nebraska Attorney General 

North Dakota Attorney General 
106 


Insert offset folio 50 here 85359.050

Honorable Kathleen Sebelius 

August 14,2013 

Page 8 

E. Scott Pruitt 

Oklahoma Attorney General 

Alan Wilson 

South Carolina Attorney General 

Greg 

~~ Abbott 

Texas Attorney General 
107 


Insert offset folio 51 here 85359.051

Risks of Fraud and Misinformation with ObamaCare Outreach LlImjlai:gn: 

How ,,,,;i ... ,,,t,, ... and Assister P"'~'H"' ... n Mjlsmlanag~ement l';ndanglers Cousumers 

STAHREPORT 

U.S. HOUSE REPRESENTATIVES 

SEPTEMBER 18, 2013 
108 


Insert offset folio 52 here 85359.052

Table of Contents 

Table of Contents ................................................................................................................ i 

Executive Summary ............................................................................................................ 1 

Findings .............................................................................................................................. .3 

I. Introduction ............................................................................................................. 5 

II. HHS's Extralegal Expansion of Navigator Program ............................................... 6 

III. Insufficient HHS-Imposed Navigator and Assister Requirements .......................... 9 

IV. Fraud and Abuse Risks of Navigator and Assister Program ................................. 14 

V. High Risk that Navigators and Assisters Will Not Be Fair and Impartial ............. 21 

Problematic Pay-Per-Enrollee Payment Structure ............................................... 21 

Insufficient Navigator Training Standards ............................................................ 23 

VI. Time-Crunched States Unable to Take Actions to Regulate Navigators 

and Assisters ......................................................................................................... .25 

HHS-Approved Actions States Can Take to Minimize the Risk of Fraud 

and Misinformation ................................................................................................ 27 

VII. Conclusion ............................................................................................................. 27 
109 


Insert offset folio 53 here 85359.053

Executive Summary 

The Patient Protection and Affordable Care Act, also known as ObamaCare, requires 

states to establish "Navigators" to conduct outreach about the law, provide fair and impartial 

information to consumers, and facilitate enrollment in new health insurance exchanges and state 

Medicaid programs. However, ObamaCare explicitly prohibited states from using federal 

exchange establishment grants to fund Navigator organizations; instead ObamaCare required that 

Navigators receive funding from a state exchange's operational funds. When several states 

objected to financing Navigators with state revenue, the Administration created a twin program 

called In-Person Assisters (Assisters) in states with state-based exchanges, effectively 

circumventing the statutory restriction on using federal exchange establishment grants to fund 

the Navigator program. This year alone, the Administration will provide several hundred million 

dollars of unauthorized taxpayer funds to Assister organizations. 

The Administration's improper creation and funding of the Assisters program as a "de 

facto" Navigator program is just one of many concerns regarding Navigators and Assisters. 

First, the Administration has failed to create adequate training standards for Navigators and 

Assisters, even though the Administration assumes most Navigators will lack prior knowledge of 

ObamaCare or health insurance markets. The training program for Navigators and Assisters 

states that it will only provide "approximately five to 20 hours of training," down considerably 

from HHS's previous estimate that it would take 20 to 30 hours to complete the online training. 

Although individuals employed by Navigator or Assister organizations must pass exams, the 

exams are conducted online and individuals may attempt the exams an unlimited number of 

times. 

Second, allowing organizations that receive Navigator and Assister funding to pay their 

employees based on the number of individuals they enroll creates an incentive for those 

employees to provide biased or incomplete information about ObamaCare to maximize 

enrollment. Third, despite the statutory requirement that Navigators and Assisters be free of 

conflicts of interest, the Administration has decided that individuals employed by Navigator and 

Assister organizations will not have to disclose that they are paid per enrollee to individuals with 

whom they interact. Fourth, neither Congress nor an independent entity reviewed the training 

materials for Navigators and Assisters, despite the statutory requirement that Navigators provide 

"fair and impartial information." Moreover, the incentives that encourage Navigators and 

Assisters to maximize enrollment raise the risk of massive fraudulent spending on Medicaid and 

exchange subsidies for individuals who do not meet eligibility requirements. 

Although the structure of the Navigator and Assister programs could potentially lead to 

consumers receiving incomplete and inaccurate information about the law, the main concern for 

consumers is the heightened risk of identity theft and financial loss from a poorly managed 

outreach campaign. Navigators and Assisters will come into contact with a plethora of 

personally identifiable information (PH), including an applicant's Social Security number, date 

of birth and income, as well as the PH of everyone in an applicant's household. Some of the 

training received by Navigators and Assisters will be related to consumer protection and privacy 

standards, but substantial risks remain. In part, substantial risks remain because the 

Administration decided not to require background checks and fingerprinting of individuals hired 
110 


Insert offset folio 54 here 85359.054

by Navigator and Assister organizations. Under the Administration's plan, unless states have 

already taken actions to protect their citizens, Navigators and Assisters are not prohibited from 

hiring convicted felons, including individuals convicted of identity theft or fraud. State efforts to 

protect citizens from the fraud and identity theft risks posed by Navigators and Assisters have 

largely been stymied by the Health and Human Service Department's (HHS) delay in releasing 

regulations and guidance about the Administration's planned outreach campaign for 

ObamaCare. 

In addition to the risks associated with an insufficient training program and the lack of 

background checks, there are already numerous reports of scam artists posing as Navigators and 

Assisters to take advantage of people's confusion about ObamaCare. According to recent news 

reports, scam artists are calling individuals and asking for information to sign them up for their 

"ObamaCare card," are asking seniors for their personal information to verify their Medicare and 

Social Security status and are going door-to-door threatening people with prison time if they do 

not sign up on the spot. The Administration is keenly aware of these reports and concerns, but 

has thus far failed to take appropriate measures. For example, both Gary Cohen, the Director for 

the Center for Consumer Information and Insurance Oversight at HHS, and Vicki Gottlich, the 

HHS official in charge of the day-to-day development of the Navigator and Assister programs 

until June 2013, testified that direct solicitation was inappropriate, yet the Administration has not 

clarified which Navigator and Assister marketing practices are allowed and which are prohibited. 

The Committee has also learned that senior HHS officials raised concerns about the 

govemment's inability to authenticate individuals operating as Navigators and Assisters in May 

2013. In response to this concern, HHS considered creating a list of certified Navigators and 

Assisters for consumers to use as a resource. However, HHS decided against the creation of 

such a list, and Ms. Gottlich testified that consumers will have no reliable way to learn the 

identity and association of individuals offering to assist them with enrolling in ObamaCare. The 

failure of the Administration to provide clarity about prohibited marketing and solicitation 

techniques and to provide consumers with a list of authenticated Navigators and Assisters 

substantially increases the number of Americans likely to fail prey to fraud and identity theft. 

2 
111 


Insert offset folio 55 here 85359.055

Findings 

The Committee's findings are the result of six months of oversight related to the Administration's 

Navigator and Assister programs, Most of the findings resultedfi'om transcribed interviews with Vicki 

Gottlich, who oversaw the Navigator and Assister programs for the federal gOl'el71ment until June 2013, 

and GG/y Cohen, the director of CCIIO since August 2012, as well as documents obtained by the 

Committee, 

According to testimony by top Health and Human Services (HHS) Department officials, 

several states told the Administration that they were unwilling to spend their own 

resources on the Navigator program established by the federal health law. In response, the 

Administration created a twin program, called the In-Person Assistance Program 

(Assisters), which will operate with federal funding in states with state-based exchanges. 

Top HHS officials acknowledged that Navigators and Assisters will perform essentially the 

same roles, will undergo the same training, and will be subject to the same federal 

requirements. 

• Internal documents reveal that staff within HHS worried that Assisters would be viewed 

as "de-facto" Navigators and that there would be much greater spending on the federallyfunded Assisters than the state-funded Navigators. For example, the District of 

Columbia's Exchange will spend $35 million on Assisters, but only $100,000 on 

Navigators. 

The Administration failed to conduct any analysis about whether it should require 

individuals hired by Navigator and Assister organizations to pass a background check and 

be fmgerprinted. 

• During the rulemaking process, top HHS officials expressed concern that the federal 

government lacked the authority to require that government grantees conduct background 

checks of prospective employees. However, HHS never conducted analysis about this 

concern; had they done so, they would have learned that HHS has ample legal authority 

to put these safeguards in place. 

• In a transcribed interview, Gary Cohen, the Director of the Center for Consumer 

Information and Insurance Oversight within HHS, testified "that requiring background 

checks and fingerprinting could inhibit the availability of Navigators to provide consumer 

assistance and to do outreach for the marketplaces" and that there ''will be Navigators to 

serve certain communities which may be unwilling to do that if they had to go through a 

background check and fingerprinting.,,1 

1 Transcribed Interview of Gary Cohen, U.S. Dep't of Health & Human Serv., in Wash., D.C. (Aug. 7, 2013) 

[hereinafter COHEN INTERVIEW]. 

3 
112 


Insert offset folio 56 here 85359.056

During transcribed interviews, both Mr. Cohen and Vicki Gottlich, the top HHS official 

engaged in the day-to-day development of the Navigator and Assister programs until June 

2013, acknowledged the concern that con artists and identity thieves will pose as 

Navigators. Ms. Gottlich testified that this problem will only increase as ObamaCare is 

fully implemented. They also admitted that HHS has not yet provided consumers with a 

reliable way to verify the identity or authenticity of certified Navigators or Assisters. 

• In May 2013, top HHS officials, including Aryana Khalid, Chief of Staff at the Centers 

for Medicare and Medicaid Services (CMS), expressed concern about the "ability of 

CMS staff to authenticate, register, and certify everyone who will be involved in the 

consumer assistance process.,,2 The Administration decided to leave the responsibility 

for authenticating Navigators and Assisters to the organizations receiving grants to 

implement the programs. As a result, the federal govermnent will not be able to provide 

consumers with a list of individuals officially certified as Navigators and Assisters. 

• Top HHS officials testified that Navigators and Assisters will be allowed to type 

personally identifiable information into the online application system on behalf of 

enrollees. One CMS whistleblower warned that because it may not be possible to track 

every computer and hard drive used by Navigators to gather applicants' personally 

identifiable information (PH), the sensitive information is vulnerable. The CMS 

whistleblower also warned that the devices used to scan supporting documents may store 

and save the images containing sensitive PlI. 

HHS officials also deemed several marketing activities inappropriate, such as door-to-door 

solicitation, but have not taken steps to ban them. 

• Mr. Cohen and Ms. Gottlich both testified that it would be inappropriate for Navigators 

and Assisters to engage in activities such as door-to-door solicitation or direct phone 

cal1s, or giving gifts of more than nominal value to entice enrollment. However, the 

Administration has not yet informed the Cormnittee or the American people about any 

measures it has taken to prevent inappropriate marketing practices. 

Ms. Gottlich testified that there is a potential conIDct of interest for Navigators and 

Assisters who are paid based on the number of persons they enroll for coverage through 

ObamaCare, a payment structure that several states allow. 

• Mr. Cohen testified that he believed HHS prevented Navigators in federal exchanges 

from paying their employees based on enrollment numbers, but that this same 

requirement was not placed on Assisters in state-based exchanges. 

The Administration expects that individuals applying to be Navigators and Assisters will 

lack any experience related to health insurance and ObamaCare. Despite this expected 

lack of experience, Mr. Cohen testified that it would be "logical" for Navigators and 

Assisters to conduct outreach activities prior to completing the training. 

2 Memo from Vicki Gottlich to Gary Cohen, May 28, 2013 (on file with Committee). 

4 
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Insert offset folio 57 here 85359.057

I. Introduction 

The Patient Protection and Affordable Care Act (PP ACA), the legislation commonly 

known as ObamaCare, directed states to establish health insurance exchanges,3 government-run 

entities that facilitate the buying and selling of health insurance. ObamaCare authorized the 

Secretary of the Department of Health and Human Services (HHS) to set up exchanges in states 

that declined to establish their own exchange.4 ObamaCare also requires that newly established 

health insurance exchanges establish a "Navigator" program to provide unbiased infonnation 

about ObamaCare, conduct outreach about ObamaCare, and facilitate enrollment in the new 

exchanges. The law requires that states fund Navigator grants from the states' exchange 

operational funds and not with direct federal funds. 

The Administration was confronted with several unforeseen problems related to its 

outreach campaign. Most states refused to create exchanges and those that did create exchanges 

refused to spend state funds on ObamaCare outreach and education. Responding to several 

states' decisions not to fund their Navigator programs from state revenue, HHS created the InPerson Assistance (Assisters) program, a twin program to the Navigators. HHS then funded 

Assisters with federal funds. As a result, states that set up their own exchanges will have both a 

very limited Navigator program (funded from state operational exchange budgets) and an 

Assister program (funded with federal grants). States that did not set up their own exchange but 

instead have a federal exchange will likely have only Navigators (funded by HHS through the 

law's Prevention and Public Health Fund).5 In addition to using Navigators and Assisters to 

provide infonnation about ObamaCare and to facilitate enrollment, the Administration is also 

using Certified Application Counselors, who will largely work out of hospitals or cornmunity 

health clinics, to increase enrollment in ObamaCare. 

HHS officials testified that most individuals hired by Navigator and Assister 

organizations will have no health care or insurance experience. Despite this lack of knowledge, 

the required training, which includes education about ObamaCare, health insurance, and privacy 

protection, will only take five to 20 hours to complete and will give trainees the ability to take 

the online exams as many times as necessary to pass. 

Individual Navigators and Assisters will have access to many applicants' personally 

identifiable infonnation (PH), including Social Security numbers, dates of birth, home addresses, 

email addresses, and in many cases the PH for other members of the applicant's household. Such 

information may also be stored on computers and scanners owned by Navigator and Assister 

organizations. Furthennore, unlike agents and brokers, Navigators and Assisters bear no 

personal liability if they give taxpayers misinfonnation that damages their financial interests. 

Finally, there are already reports from across the country that scam artists are attempting to 

impersonate Navigators and Assisters to steal credit card infonnation and PI! in order to take 

advantage of massive confusion about ObamaCare. 

3 Pub. L. No. 111-148, Sec. l311. 

4 fd., Sec. 1321. Exchanges established by the Secretary of Health and Human Services are referred to as federallyfacilitated exchanges. 

5 Abby Goodnough, $67 Million Awarded to Groups Helping With Health Law, N.Y. TIMES (Aug. 15, 2013), 

http://www.nytimes.coml20 I 3/081 I 6/us/politics/67 -million-awarded-to-groups-helping-with-health-Iaw.hlml. 

5 
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Insert offset folio 58 here 85359.058

The potential for the accidental release of thousands or hundreds of thousands ofPU is 

staggering. For example, on September 13, 2013, the Associated Press reported that a 

confidential list, containing names, addresses, Social Security numbers, and other PH of roughly 

2,400 brokers, was accidentally released by an employee at MNsure, the Minnesota exchange. 6 

In addition to worries about identity theft and fraud, if Navigators and Assisters give 

inappropriate advice or forms are filled out incorrectly, applicants may receive subsidies for 

health insurance or Medicaid coverage for which they are not eligible. This will either result in 

individuals having to pay back those subsidies years later or the federal government spending 

billions of tax dollars which it cannot recover. 

II. BBS's Extralegal Expansion of Navigator Program 

To assist states in building health insurance exchanges, ObamaCare gave authority to the 

Secretary ofHHS to make grants to states that created their own exchan1e.7 To date, HHS has 

provided states with over $3.8 billion in exchange establishment grants. The exchange 

establishment grants can be used for states to develop any of the exchange functions with one 

important exception: they cannot be used to fund Navigator organizations. According to 

PPACA: 

Grants under this subsection [that establishes the Navigator program 1 shaH be 

made from the operational funds of the Exchange and not Federal funds received 

by the state to establish the Exchange.9 

When drafting ObamaCare, Democratic leaders in both the House and Senate were 

conscious about keeping the Congressional Budget Office's estimate of the cost of the legislation 

as low as possible.!O This was likely why Congress prohibited Navigator organizations from 

receiving federal establishment funds. l

! 

6 Worker for Minnesota ObamaCare 'exchange' releases private info in security breach, TIm ASSOCIATED PRESS 

(Sept. 13, 2013), available at http://www.foxnews.comlpolitics/20 13/09113/worker-for-minnesota-ObamaCareexchange-releases-private-info-in-security/. 

7 The Secretary detennines the amount of grants available to states for exchanges. See Pub. L. No. 111-148, Sec. 

1311 (a)(2) ("[flor each fiscal year, the Secretary shall detennine the total amount that the Secretary will make 

available to each State for grants under this subsection."). 

8 Kaiser Family Foundation, Total Health Insurance Exchange Grants, STATE HEALTH FACTS (July 10, 2013), 

http://kff.orglhealth-reformlstate-indicator/total-exchange-grants/. 

9 Pub. L. No. 111-148, Sec. 1311 (i)(6). 

10 President Obama, in a speech to Congress, set a goal for the health care bill to cost $900 billion dollars over ten 

years. See Remarks by the President to a Joint Session of Congress on Health Care (Sept. 9, 2009), 

http://www.whitehouse.gov/theyress _ officelRemarks-by-the-President-to-a-Joint-Session-of-Congress-on-HealthCare ("Now, add it all up, and the plan I'm proposing will cost around $900 billion over 10 years .... The plan will not 

add to our deficit. The middle class will realize greater security, not higher taxes."). Liberal columnist Ezra Klein 

criticized Congress's use of this $900 billion dollar figure as a cap arguing that it makes tradeoffs necessary for the 

bill to stay under the cap. See Ezra Klein, The $900 billion mistake, WASHINGTON POST (Nov. 11,2009), 

http://voices.washingtonpost.comlezra-k1einl200911I1the_900_billion_mistake.html(''there'slittle budgetary 

flexibility even if you could find the revenue, because each dollar is in a zero-sum competition with each other dollar 

so the entire plan comes in under the Iimit."). 

II The Cougressional Budget Office originally estimated exchange start-up costs to cost $2 billion between 2010-

2019. To date, HHS has spent $3.8 billion creating exchanges, nearly double the original amount, with only 16 

6 
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Insert offset folio 59 here 85359.059

At a briefing with Committee staff on April 18,2013, Vicki Gottlich, Director ofthe 

Consumer Support Group at the Center for Consumer Information and Insurance Oversight 

(CClIO) and then-head Administrator for the Navigator and Assister programs, continued that 

Navigators and Assisters will perform the same duties, with the only difference being their 

funding sources. I2 At the time, Ms. Gottlich admitted to Committee staff that ObamaCare did 

not authorize the Assisters program and that it was a creation of the rule-making process. 13 

Therefore, while Navigators are statutorily required in both federal and state exchanges, the 

Assister program is a creation ofHHS that has no statutory backing. 14 

In their transcribed interviews, both Mr. Cohen and Ms. Gottlich admitted that 

Navigators and Assisters will perform essentially the same role. IS Because Assisters are funded 

with federal establishment grants, they replace Navigators in state exchanges and are an endaround of the statutory requirement that Navigators receive funding through an exchange'S 

operational funds and not from federal funds. Emails obtained by the Committee show concern 

within CClIO that Assisters would be viewed as "de-facto Navigators.,,16 Brian Schwartz, a 

CClIO employee, wrote to Ms. Gottlich on December 14, 2012: 

We are wondering to what financial ratio we should [be] holding SBEs 

[state-based exchanges], so that the IP A [in-person assistance] program is 

not seen as de-facto Navigator. A few states are requesting a good deal of 

money for their IP As, but planning to fund Navigators at a much lower 

amount. 17 

At a hearing before the Committee on May 21,2013, Gary Cohen, Director ofCClIO, 

testified that the Assister program was created because states had expressed concerns about 

being able to establish Navigator programs without federal funds. 18 During his transcribed 

states and the District of Columbia creating exchanges. One of the contributing factors for the greater spending is 

likely be the inclusion of funds for assisters. See Letter from Douglas W. Ehuendorf, Director, Congressional 

Budget Office, to Nancy Pelosi, on the direct spending and revenue effects of an amendment in the nature of a 

substitute to H.R. 4872, the Reconciliation Act of201O, Table 2 (Mar. 20, 2010); Kaiser Family Foundation, Total 

Health Insurance Exchange Grants, STATE HEALTH FACTS (July 10, 2013), bttp://kff.orgihealth-refonnlstateindicator/total-exchange-grants/. 

12 Oversight & Government Reform Briefing by HHS Officials on Navigators and Assisters Programs (Apr. 18, 

2013) [hereinafter BRIEFING]. 

13 Id. 

14 Pub. L. No. 111-148. Sec. 1311. 

IS Examining The Concerns About the ObamaCare Outreach Campaign, Hearing Before the H. Comm. on 

Oversight and Government Reform, Subcomm. on Energy Policy, Health Care, and Entitlements, and Subcomm. on 

Economic Growth, Job Creation and Regulatory Affairs, 1 13th Congo 20-21 (2013) (Statement of Gary Cohen, 

Director, Center for Consumer Information and Insurance Oversight) ("Mr. Lankford: .... 'What is the difference 

between a navigator and an assister?' Mr. Cohen.: 'The functions are essentially the same."'); Transcribed 

Interview of Vicki Gottlich, U.s. Dept. of Health & Human Serv., at 68 (July 25, 2013) ("Staff: 'Can you describe 

for us what some of those differences are?' Gottlich: 'They're pretty much the same. "') 

16 Email fromBrianSchwartz.toVickiGottlicb.Director.ConsumerSupportGroup.CCIIO. IP A vs. Navigator 

funding in an SBE (Dec. 14, 2012). 

17 Id. 

18 Examining the Concerns About the ObamaCare Outreach Campaign, Hearing Before the H. Comm. on Oversight 

and Government Reform, Subcomm. on Energy Policy, Health Care, and Entitlements, and Subcomm. on Economic 

7 
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Insert offset folio 60 here 85359.060

interview, Mr. Cohen testified that he was aware of the concern that the Assister program would 

be seen as a de facto Navigator. 19 According to Mr. Cohen, "We understood that the use of 1311 

[the section ofPPACA that authorizes and funds state exchanges] grant money for In-Person 

Assisters in state-based marketplaces could not replace the Navigator program. They still had to 

have a Navigator Program, and they had to be distinct.,,2o Mr. Cohen further explained that 

many states informed HHS that they did not have state funds to spend on their Navigator 

programs,21 an indication that states did not value the role of Navigators or Assisters as long as 

state general revenue was needed for the funding. Since HHS was offering to use federal funds, 

however, states did not have to devote resources to the outreach effort. 

California and New York plan to spend $58 million and $27 million of federal funds on 

their exchange outreach programs, respectively. 22 Vermont, a much smaller state, plans to spend 

roughly $2 million.23 Top officials from the DC Exchange have outlined plans to spend $35 

million on Assisters, but only $100,000 on Navigators.24 While it is difficult to determine the 

actual breakdown in spending across state Navigator and Assister programs, states with statebased exchanges are not going to spend significant state funds on Navigators when they have 

access to a huge amount of federal funding for Assisters, who will perform an identical function. 

Neither Mr. Cohen nor Ms. Gottlich had any idea how much would be spent on Navigators and 

Assisters in states with state-based exchanges or how states would ensure that Navigators and 

Assisters are distinct. 25 

Despite a clear prohibition on using federal exchange establishment grants for the nearly 

identical Navigator program, Mr. Cohen stated that "[t]he statutory authority [for using exchange 

establishment grants to fund Assisters] is the requirement in the Affordable Care Act that statebased exchanges and all exchanges provide outreach and education and enrollment assistance to 

people.',26 Mr. Cohen's answer was inconsistent with the information provided by Ms. Gottlich 

at an April 2013 briefing when she told Committee staff that the authority for Assisters came 

entirely through the rulemaking process?7 Furthermore, Mr. Cohen's response was not accurate. 

Section 1311 ofPPACA lists several requirements for exchanges, including maintaining a 

website, a call center, and utilizing a single-streamlined application.28 Outside the requirements 

placed on Navigators, there is no broad requirement in the statute to provide outreach and 

Growth. Job Creation and Regulatory Affairs, 1 13th Congo 20-21 (2013) (Statement of Gary Cohen, Director, 

Center far Consumer Information and Insurance Oversight). 

19 See COHEN INTERVIEW, supra note 1. 

20 !d. at 104. 

21 ld. at 105. 

22 Tricia Brooks, Assister Types Abound: But Will Navigators and Assisters Be Plentiful Enough? GEORGETOWN 

UNIVERSITY HEALTH POLICY INSTITUTE BWG (May 17, 2013), http://ccf.georgetown.eduJalllassister-lypes-abaundbut-will-navigators-and-assisters-be-plentiful-enoughl. 

23 !d. 

24 Oversight & Govt. Reform Briefing by DC Exchange Officials (Aug. 26, 2013). 

25 See COHEN INTERVIEW, supra note I; Transcribed Interview of Vicki Gottlich, U.S. Dep't of Health & Human 

Serv., in Wash., D.C. (July 25,2013). 

26 See COHEN INTERVIEW, supra note 1. 

27 See BRIEFING, supra 12. 

28 Pub. L. No 111-148, Sec. 1311(d). 

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Insert offset folio 61 here 85359.061

education.29 At a transcribed interview with Committee staff, Mr. Cohen backed off from the 

answer he provided at the hearing, stating that his answer "was not as precise as it might have 

been.,,3o According to Mr. Cohen: 

I think the statutory authority comes from, as I said, from 1321 (a), which 

gives the Secretary broad discretion to issue regulations and standards for 

implementation of the law and, in particular, establishment of exchanges. 

You know, pursuant to that authority, we have required exchanges to do 

consumer assistance and to provide outreach. 3 1 

Despite Cohen's explanation, Section 131 1 (i)(6) ofPPACA clearly prohibits the use of 

federal exchange establishment grants to fund a state's Navigator program. When Congress 

inserts specific words into a statute's text, those words are there for a reason. In this case, 

Congress explicitly stated that federal establishment funds shall not be used to fund Navigators. 

Section 1321 (a) of PP ACA gives the Secretary authority to issue regulations in order to 

implement exchanges; however, it does not give the Secretary authority to ignore the statute's 

plain text.32 When HHS decided to provide Navigator funds in state exchanges by creating a 

new program identical to the Navigator program in everything but name, HHS deprived the 

funding restriction found in Section 1311 (i) of its plain meaning and circumvented the law. 

HHS's policy permitting states to then fund these de-facto Navigators from federal 

establishment grants rather than the exchange'S operational funds is not supported by the statute 

and thus spends substantial sums of unauthorized money on ObamaCare outreach. Because 

exchange establishment grants are essentially unlimited. HHS' s decision to provide 

establishment grants to fund Assisters will result in unauthorized federal spending of hundreds of 

millions of dollars this year alone.33 

III. Insufficient HHS-Imposed Navigator and Assister Requirements 

One of the Committee's primary concerns with the Administration's proposed rule for the 

Navigator and Assister program was the lack of standards for the individuals chosen to serve as 

Navigators and Assisters, including the Administration's decision not to require background 

checks for individuals applying to be Navigators and Assisters! During the April 18,2013, 

briefing, Committee staff asked Ms. Gottlieh whether convicted felons, including individuals 

convicted of identity theft, or someone without a high school degree could become Navigators 

and Assisters. 34 Ms. Gottlieh replied that the proposed rule would perniit all of these individuals 

to work as Navigators and Assisters, but Gottlich as well as several other CCIIO employees in 

29 !d., Sec. 131 I (d)(4)(K). This provision requires exchanges to "establish the Navigator program described in [Sec. 

1311J subsection (i)." 

30 See COHEN INTERVIEW, supra note I. 

31 [d. at 104. 

32 Pub. L. No 111-148, Sec. 1321(a). 

33 Pub. L. No 111-148, Sec. 1311Sec. 131 (a). 

34 See BRIEFING, supra 12. 

9 
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Insert offset folio 62 here 85359.062

attendance encouraged the Committee to submit comments so problems with the proposed rule 

could be remedied.35 

On May 6,2013, Chairman Darrell Issa, Energy Policy, Health Care, and Entitlements 

Subcommittee Chairman James Lankford, and Economic Growth, Job Creation, and Regulatory 

Affairs Subcommittee Chairman Jim Jordan wrote to Secretary Sebelius with a number of 

detailed recommendations to improve the proposed rule,36 including the recommendation that 

Navigators and Assisters "be held to the same hiring standard as U.S. Census and IRS 

employees, who are subjected to FBI background checks during the application process and 

fingerprinting once hired.,,37 The Committee also submitted this letter to HHS during the formal 

notice and comment period for the rule. On July 17,2013, the Administration released its final 

rule on Navigators and Assisters, without adoptin~ any of the common sense recommendations 

made by these senior members of the Committee. 8 For example, the Administration's final rule 

does not prohibit Navigators and Assister organizations from hiring individuals convicted of a 

felony, including those convicted of identity theft, from engaging in consumer outreach activities 

and potentially accessing hundreds, if not thousands, of individuals' sensitive information.39 

Moreover, the final rule does not require that Navigators and Assisters have graduated from high 

school or earned an equivalent degree.4o 

During her transcribed interview, Ms. Gottlich testified that "there's nothing that 

prohibited HHS from [requiring individuals to have gone through a background check]," but 

HHS "determined that it would be up to the individual grantee to comply with state requirements 

for background checks and investigations of their employees.,,41 According to Ms. Gottlich, "in 

many states, there would be sufficient checks," "the cost [of background checks] might be 

prohibitive for some entities," and entities in rural areas might have difficulty with background 

checks and fingerprinting.42 Although unsure of the cost of a background check, Ms. Gottlich 

stated that she "saw one estimate [from the budget of a Navigator applicant] of about a hundred 

dollars per person.',43 Ms. Gottlich also testified that HHS did not discuss requiring background 

checks prior to the proposed rule and the issue being raised by Committee staff in April 2013 and 

that HHS never considered banning convicted felons or individuals convicted of identity theft 

from being Navigators or Assisters.44 According to Ms. Gottlich, all hiring decisions are "going 

to be up to each individual [Navigator award] grantee,,,45 and, if the state law allows, Navigator 

and Assister organizations can hire convicted felons including those individuals convicted of 

identity theft.46 

35 [d. 

36 Letter from Hon. Darrell Issa, Chainnan, Committee on Oversight & Govt. Refonn to Kathleen Sebelius, 

Secretary, Dept. of Health & Human Servo (May 6, 2013). 

37 Id. 

38 78 Fed. Reg. 42823 (July 17, 2013), available at http://www.gpo.gov/fdsys/pkg/FR-2013-07-17/pdf/2013-

17125.pdf. 

39 !d. 

40 !d. 

41 See GOTTLICH INTERVIEW, supra note 25. 

42Id. 

43Id. 

44Id. 

45 Id. 

46 Id. 

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Insert offset folio 63 here 85359.063

During his transcribed interview, Mr. Cohen confirmed Gottlich's admission that CMS 

failed to conduct any real analysis about whether to require that all individuals hired by 

Navigators and Assisters pass a background check and be fingerprinted. 47 Mr. Cohen described 

one informal meeting with other HHS officials48 regarding whether to require background checks 

for Navigators and Assisters.49 Mr. Cohen recalled three reasons why the Administration 

decided against requiring background checks: 

One was cost. One was it wasn't clear to us that [CMS] had the authority or would 

even be allowed, or able, I should say, is a better word for it, to access the 

criminal justice databases that would be necessary to perform background checks 

ifwhat you were looking for was a criminal history. 

We had a conversation, and it was expressed in the meeting from [Leon 

Rodriquez, head of the Office of Civil Rights within HHS], who purported to 

have some knowledge of this type of issue, that it wasn't clear that we would be 

able to get access to the criminal history databases that would be needed for the 

purposes of this type of program. That's what was expressed. I can't tell you 

whether they're right or not; I'm just telling you what was talked about. 50 

No one bothered to look into whether Leon Rodriquez was right, and no one at CMS apparently 

considered that CMS could have required Navigator and Assister entities to conduct background 

checks before hiring, as a condition of receiving the grant. 51 Mr. Cohen also stated that Mr. 

Rodriquez raised the issue of cost, but he could not recall any specific cost amount.52 Finally, 

Mr. Cohen discussed one additional reason that the group considered: 

Q: Were there any separate meetings dealing with the other concerns raised in the 

Chairman's letter? 

A: Not that I recaIl specifically, no. And I should just say, we were going through 

the reasons why -- the downsides, if you wiIl, to requiring background checks and 

fingerprints. There was a third one that I didn't quite get to, which is that, at 

various times when, you know -- and I think in this meeting, but certainly it has 

been discussed in meetings that I have been in -- that requiring background 

checks and fingerprinting could inhibit the availability of Navigators to provide 

consumer assistance and to do outreach for the marketplaces. 

47 See COHEN INTERVIEW, supra note I. 

48 According to Cohen, the meeting was between himself, Mike Hash, Director, Office of Health Reform at HHS, 

Chiquita Brooks-LaSure, Deputy Center and Policy Director at CCIIO, Ken Choe, Deputy General Counsel, Office 

of General Counsel at HHS, and Leon Rodriquez, Director, Office for Civil Rights at HHS, Cohen also mentioned 

that Christian Young, who works for Mr. Hash, might also have been in the meeting. 

49 See COHEN INTERVIEW, supra I. 

50 Id. 

51 Section 74.4 Deviations available at http://www.hhs.gov/opalgrants-and-funding/grant-forms-and-references/45-

cfr-74.html#74.11. 

52 See COHEN INTERVIEW, supra 1. 

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Insert offset folio 64 here 85359.064

Q: How so? 

A: What has been expressed is that we are hoping that there will be Navigators to 

serve certain communities which may be unwilling to do that if they had to go 

through a background check and fingerprinting. That was the concern that was 

expressed. 53 

While Mr. Cohen could not specifically recall who initiated the discussion that 

individuals who HHS was hoping would serve as Navigators might be unwilling to submit to 

background checks, this point has also been raised by Carla Saporta, health policy director at a 

nonprofit group in California. According to Ms. Saporta, "[b Jackground checks would create 

barriers for a lot of conununities of color and disproportionately exclude African American and 

Latino men from participating.,,54 Mr. Cohen told Committee staff that the Administration never 

considered whether to prohibit convicted felons or individuals convicted of identity theft from 

becoming Navigators and Assisters because doing so was "tie[ dJ to the background check and 

the fingerprint.,,55 

Both Ms. Gottlich and Mr. Cohen testified that during the rulemaking process they 

discussed that HHS might not have the authority to require Navigator and Assister organizations 

to conduct background checks of individuals applying to work as Navigators and Assisters.56 

However, had they looked into whether HHS had this authority, they would have found that they 

did. 57 Moreover, on July 4, 2013, the New York Times reported that Serco, a United Kingdombased government contractor, obtained a contract with the federal government to process 

ObamaCare's paper applications for individuals in states with federal exchanges. 58 The contract 

required that all Serco employees processing paper applications be fingerprinted and receive a 

background check.59 Apparently, in this case, HHS's concerns about protecting sensitive 

consumer information outweighed concerns about the cost of the background checks. In totality, 

the information gathered by the Committee shows that the Administration never seriously 

considered requiring background checks for Navigators and Assisters or prohibiting individuals 

with serious criminal backgrounds from obtaining access to sensitive consumer information. 

The Committee has obtained an internal memorandum from May 28, 2013, detailing 

serious concerns of the Centers for Medicare and Medicaid Services (CMS) about the 

ObamaCare consumer outreach program. The memo, written by Ms. Gottlich to Mr. Cohen, 

states: 

53 Id. 

54 Chad Terhune, Callfor screening of health care enrollers meets resistance, (March 15,2013), available at 

http://articles.latimes.coml20 13!mar!15!businesslla-fi-insure-criminal-checks-20 130315. 

55 See COHEN INTERVIEW, supra 1. 

56 See COHEN INTERVIEW, supra 1; See GOTTLICH INTERVIEW, supra 25. 

51 Section 74.4 Deviations at http://www.hhs.gov/opa/grants-and-funding/grant-forms-and-references/45-cfr74.html#74.11. 

58 Robert Pear, British Company Is Awarded Contract to Administer Health Rollout, N.Y. TIMES (July 4, 2013), 

http://www.nytimes.coml20 13!07 !05!bealthlbritish-company-is-awarded-contract-to-administer-health-rollout.html; 

Sarah Kliff, Meet Serco, the private firm getting $1.2 billion to process your ObamaCare application, WASHINGTON 

POST, July 16, 2013, available at http://www.washingtonpost.comiblogsiwonkbloglwp/2013/07116/meet-serco-thep,rivate-finn-getting-I-2-billion-to-process-your-ObamaCare-application!. 

9 Oversight & Government Refonu Staff Meeting with Serco Officials regarding HHS Contract (Aug. 14,2013). 

12 
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Insert offset folio 65 here 85359.065

Without appropriate IT solutions in place, CMS staff will be required to utilize a 

manual process to match the results ... for authentication and ... for training ... to 

ensure that each individual assister (whether Navigator, in-person assistance 

personnel, or Certified Application Counselors) has completed both elements of 

the registration/certification process .... [W]e are becoming increasingly 

concerned about the ability of CMS staff to authenticate, register, and certify 

everyone who will be involved in the consumer-assistance process.60 

The memorandum was written, in part, because of concerns raised by Aryana Khalid, CMS 

Administrator Marilyn Tavenner's Chief of Staff, about the outreach programs. Mr. Cohen was 

able to provide some background information on the memorandum, testifying: 

I was involved in a number of conversations with different people on a general 

topic of whether we at CMS were going to be able to capture, store, and possibly 

provide to people the identifying information of each individual person [providing 

outreach and consumer assistance 1 ... [sol we could provide that information if 

requested .... So those are the concerns. The concerns were can we keep track of 

who all these people are, and can we provide that information if we are asked for 

it.6! 

Mr. Cohen concluded that "ultimately, we decided to put that responsibility on the 

organization,,62 and that an individual seeking to find whether someone is an authenticated 

Navigator or Assister should "go to the organization, rather than to US.,,63 

Leaving the Navigator and Assister entities to authenticate, register, and certify the 

individuals they hire does not resolve the concerns raised by Ms. Khalid as discussed in the 

memorandum above.64 In fact, CMS's refusal to coordinate the registration of Navigator and 

Assister personnel or maintain a list of the names of certified Navigators and Assisters exposes 

consumers to significant risks, particularly given the widespread reports of scam artists and 

fraudsters who plan to take advantage of Americans' confusion about ObamaCare. As will be 

discussed in the next section, consumers will be unable to verify if a person offering to provide 

them information about ObamaCare is working for a legitimate organization. Without a way to 

verify that a Navigator's affiliation is legitimate, scam artists can easily prey upon unsuspecting 

enrollees by impersonating a Navigator or Assister. 

HHS's decision to outsource the authentication, registration, and certification to the 

Navigator and Assister organization is also problematic due to the Department's weak oversight 

plan for the outreach campaign. HHS plans to oversee Navigators the same way that other grants 

are handled, with quarterly reports from grant organizations overviewed by one program 

manager responsible for multiple grant awards.65 HHS' s role in overseeing Assister 

60 Memo from Vicki Gottlich to Gary Cohen, May 28,2013 (on file with Committee). 

61 See COHEN INTERVIEW, supra note I. 

62 ld. 

63 !d. 

64 See COHEN INTERVIEW, supra note I. 

65 See BRIEFING, supra 12. 

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Insert offset folio 66 here 85359.066

organizations is unclear given that the states operating state-based exchanges will be selecting 

the organization to receive funding. It is unclear how individuals employed by Navigators and 

Assisters will be held accountable for mistakes or misinformation.66 

IV. Fraud and Abuse Risks of Navigator and Assister Program 

Although open enrollment doesn't start until October 1, 2013, many news outlets have 

already reported about scam artist attempts to exploit the mass confusion related to ObamaCare. 

For example, individuals claiming to be associated with the federal government have stolen 

credit card information and Social Security numbers, and have tricked people into paying for an 

"ObamaCare card".67 A Washington Post article from September 10, 2013, titled "Using 

ObamaCare as bait, scam artists target consumers and business owners" describes scam artists 

targeting consumers through email, phone calls, door-to-door canvassing and fraudulent 

websites.68 According to the Washington Post: 

In Maryland, scam artists have started calling residents claiming they need to 

verifY Medicare ID and Social Security numbers for purposes associated with the 

health law ... In New York and Florida, meanwhile, scammers have been 

traveling door-to-door, asking whether individuals currently have health 

insurance. If not, some individuals have reportedly been threatened with prison 

time if they do not sign up for coverage on the spot. .. 69 

With an influx of Navigators, Assisters, and individuals employed by non-governmental 

organizations like Enroll America engaging in ObamaCare outreach, it will be very difficult for 

consumers to differentiate between a scam artist and a legitimate source of information. In a 

July 2013 news article entitled Feds: Beware o!'ObamaCare' scams asfraudsters prey on 

confusion, Lois Greisman, associate director for the Federal Trade Commission's division of 

marketing practices, stated that "[ObamaCare] is the huge, new government program. There's 

no doubt in my mind that the fraudsters view it as an opportunity to rip people off.,,70 When 

questioned about the article during her transcribed interview, Ms. Gottlich shared the concern 

that fraudsters will pose as Navigators or Assisters and try to steal consumer information: 

Q: Have you heard about some of the scams mentioned in the [July 2013] article? 

A: Yes. 

66 [d. 

67 Lindsay Wise, Feds: Beware of 'ObamaCare' Scams as Fraudsters Prey on C01ifUsion, NewsObserver.com (July 

12,2013), available at http://www.newsobserver.coml2013/07/12/3026645/feds-beware-of-ObamaCare-scams.htm!. 

68 J.D. Harrison, Using ObamaCare as bait, scam artists target consumers and business owners, THE WASHINGTON 

POST (Sept. 10,2013) available at http://www.washingtonpost.comlbusinession-small-business/using-ObamaCareas-bait-scam-artists-target-consumers-and-business-owners/20 13/09/1 0/27a4ca36-1 alb-II e3-82efa05ge54c49dO _ story.htm!. 

69 [d. 

70 Lindsay Wise, Feds: Beware of 'ObamaCare' Scams as Fraudsters Prey on Corifusion, NewsObserver.com (July 

12,2013), available at http://www.newsobserver.coml2013/07/12/3026645/feds-beware-of-ObamaCare-scams.htm!. 

14 
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Insert offset folio 67 here 85359.067

Q: Okay. And does this cause concern for your Department? 

A: Yes. 

Q: Okay. And another line ... reads, "The FTC received more than 1,100 

complaints about similar scams in May alone." And it seems to suggest that the 

scams will only continue or increase as we approach October 1 51 implementation. 

Is that something that you're concerned about? 

A: Yes. 

Q: Okay. And are you concerned that people will pose as Navigators and try to 

take consumer information? 

A: Yes. 71 

Despite her concerns, Ms. Gottlieh was unable to articulate how HHS's protocols would 

protect consumers against unscrupulous Navigators and Assisters or fraudsters posing as 

Navigators or Assisters. To date, HHS has not taken necessary actions to protect citizens from 

scam artists trying to take advantage of confusion about ObamaCare. HHS issued only a single 

page of guidance for consumers, and this guidance failed to address multiple scenarios where 

scammers could impersonate Navigators and steal information.72 Moreover, most Americans 

will not know where to access a relevant fact sheet even if the fact sheet contained useful 

information. Furthermore, HHS has not instituted protocols to better protect consumers from 

identity theft through the misuse of information on paper applications or information stored on 

hard drives of Navigator computers. 

During Ms. Gottlich's testimony, she stated that Navigator and Assister organizations 

will be listed on the HHS website so that consumers can cross check the Navigator organization 

with the website.73 However, because HHS will not maintain a list of names of certified 

Navigator and Assister personnel, she admitted that there is no way for consumers to verify 

whether a person is affiliated with a legitimate organization.74 In fact, HHS will be unable to 

confirm if the individual contacting the consumer is a legitimate Navigator or Assister for 

consumers who call the HHS hotline recommended on the HHS Consumer Information Sheet. 

As discussed earlier, CMS contemplated creating a list of all individuals certified and 

authenticated as Navigators and Assisters but ultimately decided not to create such a list. 75 

Moreover, Ms. Gottlich added that Navigators and Assisters will not be given official 

badges or other forms of identification or documents because scam artists could recreate official 

looking documents to fool consumers anyway: 

7I See GoITLICH INTERVIEW, supra note 25. 

72 Protect Yourself/rom Fraud in the Health Insurance Marketplace, CMS Product No. 11693, Dept. of Health & 

Human Serv., Aug. 2013, available at https:llwww.healthcare.gov/how-can-i-protect-myself-from-fraud-in-thehealth-insurance-marketplace/. 

73 !d. 

74 See COHEN INTERVIEW, supra note 1; See GOITLICH INTERVIEW, supra note 25. 

75 Memo from Vicki Gottlieh to Gary Cohen. May 28, 2013 (on file with Committee). 

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Insert offset folio 68 here 85359.068

Q: So will the Navigators and Assisters be required to carry their certificate with 

them or have a badge of some sort? 

A: There won't be a badge. And we're actually discussing now how are you going 

to show [that] I'm a bona fide navigator. And if you think about it, and you think 

about the scams and you think about the scams that have occurred in the past with 

Medicare, there were a lot of very official looking documents that went out that 

weren't necessarily Federal Government documents. So we're trying to work that 

OUt.76 

Contrary to Ms. Gottlich's testimony, the HHS Consumer Information Sheet advises 

consumers to look for "official government seals, logos or web addresses" to help determine if 

the information presented by a Navigator or Assister is legitimate.77 It is troubling that HHS 

would provide this information to consumers a month after Ms. Gottlich, the senior CCHO 

official in charge of the Navigator and Assister program until June 20l3, testified that scam 

artists can easily reproduce official looking documents and seals. Moreover, the fact sheets 

being developed by HHS are an inadequate solution to a serious problem since the vast majority 

of Americans will not know where and how to locate this information. 

During her transcribed interview, Ms. Gottlich also testified that Navigators and Assisters 

would not be permitted to use personal laptops to sign people uf for ObamaCare, but would 

rather use laptops purchased by Navigator or Assister entities.7 However, a whistleblower 

inside CMS has warned that computers provided by Navigator entities pose problems as well 

because it may not be possible to track each computer and hard drive containing the personally 

identifiable information of applicants. The CMS whistleblower has also warned that Navigators 

and Assisters will sometimes scan supporting documentation for eligibility determinations, with 

scanners storing images containing PH. 

Adding to the problems with the ObamaCare outreach campaign is the Administration's 

lack of clarity about acceptable and unacceptable Navigator marketing practices. A 2009 

Government Accountability Office (GAO) report found that inappropriate marketing techniques 

were used to encourage people to sign up for Medicare Advantage, including door-to-door 

solicitation and giving gifts of more than nominal value.79 When asked about these two 

practices, Ms. Gottlich assured Cornmittee staff that neither type of activity would be performed 

by Navigators or Assisters: 

Q: So door-to-door marketing without an appointment was considered an 

inappropriate practice by GAO? 

76 See GoTTLICH INTERVIEW, supra note 25. 

77 Protect Yourself from Fraud in the Health Insurance Marketplace, CMS Product No. 11693, Dept. of Health & 

Human Serv., Aug. 2013, available at https:ffwww.healthcare.govlhow-can-i-protect-myself-from-fraud-in-thehealth-insurance-marketplace/. 

78 See GOTTLICH INTERVIEW, supra note 25. 

79 Medicare Advantage: CMS Assists Beneficiaries Affected by Inappropriate Marketing but Has Limited Data on 

Scope ofIssue, Govermnent Accountability Office, December 2009, available at 

http://www.gao.gov/assetsl300/299560.pdf. 

16 
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Insert offset folio 69 here 85359.069

A: Yes, same thing for Navigators and Assisters. 

Q: So if somebody comes to your door without an appointment, that is, that's a 

fraud. 

A: Yes, that's correct. 

Q: One other thing they [GAO] mentioned was that providing potential enrollees 

with meals or gifts of more than nominal value to induce enrollment was 

considered inappropriate. 

A: Yes. Same thing for Navigators. 

Q: Okay. So if they have, you know, a table at a fair, and they're, like, you know, 

if you come and make an appointment with us, we'll give you a coupon to 

whatever, that's not going to be allowed. 

A: I believe that's correct. 80 

Despite Ms. Gottlich's repeated insistence that Navigators and Assisters would not be allowed to 

canvass door-to-door, make unsolicited phone calls, or send unsolicited emails, HHS's 

Consumer Information Sheet failed to include this information.81 Mr. Cohen had the following 

exchange with Committee staff regarding solicitation for ObamaCare: 

Q: Would it be inappropriate for Navigators and Assisters to go door to door to 

find potential applicants? 

A: So we have had discussion about door to door and about concerns about 

problems that can arise from people going door to door and in particular actually 

the biggest concern that has been expressed to me has been that we should just tell 

people -- well, that people who could not really be Navigators but say they were 

Navigators could be going door to door, and one way to prevent that is just to say, 

we don't go door to door, and then you don't have that problem. 

I think that conversation is still happening, but it is certainly an issue that we are 

conscious of and are thinking about, whether we would give it direction. 

Q: So 2 weeks ago, Vicki [Gottlich] told us that Navigators and Assisters would 

not be doing door to door, but you are saying that [discussion] is still ongoing? 

80 See GOTILICH INTERVIEW, supra note 25. 

81 Protect Yourself from Fraud in the Health Insurance Marketplace, eMS Product No. 11693, Dept. of Health & 

Human Serv., Aug. 2013, available at https:llwww.healthcare.govlhow-can-i-protect-myself-from-fraud-in-thehealth-insurance-marketplace/. 

17 
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Insert offset folio 70 here 85359.070

A: She may be ahead of me on the policy, honestly. 

Q: Is that something you could follow up with us on? 

A: Yes. Fair question. 

Q: Same question about going door to door, except for calling individuals [with] 

unsolicited phone calls. So do you think [making unsolicited phone calls] would 

be inappropriate for Navigators and Assisters? 

A: I don't have an answer for you on that, but the same, I will go back and talk to 

our folks and see if anyone can answer. It is a fair question. 

Q: For the nonnal person, how are they going to be able to identify legitimate 

individuals giving them infonnation about the Affordable Care Act from 

individuals who are not? 

A: So I think that, I think that Navigator grantees, the organizations, and Assister 

entities ... have some ability to detennine ... what sort of identifying --

identifications they are going to provide to the people who are doing the work. 

I think that, as we have talked about, assuming that and I think a fair assumption 

that Vicki [Gottlich] is right and ultimately we are going to be saying no one is 

going to be going door to door, then that makes it a little easier, right, because it is 

not like someone is coming up to your door saying, I'm a Navigator. You are 

seeing them in a location that it is either at a meeting or they have got a kiosk in 

the mall or that kind of thing. I think that we are going to encourage people in the 

first instance to contact the organization that the person is saying that they are 

affiliated with if they want confinnation that this person actually is representing 

that organization and is authorized to do the work rather than contact us. 

Q: There might be a problem with someone not providing the legitimate 

organization that they are representing? 

A: That is true, and that infonnation will be available online and through the call 

center as to what the organizations are. 

Q: So this fact sheet is going to come out, and it will clarifY what arc appropriate 

marketing practices for Navigators and Assisters and what is inappropriate? 

A: I think that is right. That is the draft I have seen addresses those issues. 

Q: So we are likely to be able to tell Americans, if there are news stories of 

someone coming to their door or calling them on the phone, then they should not 

deal with that individual? 

18 
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Insert offset folio 71 here 85359.071

A: I believe that is right. 82 

Despite both Ms. Gottlich's and Mr. Cohen's statements about direct solicitation and gifts 

of nominal value, as of August 29, 2013, HHS has not yet fonnulated official guidance on 

either.s3 No one within the Administration has yet provided the clarity of Michael Flagg, 

Director of Communications for the District of Columbia's Department of Insurance, Securities 

and Banking, who was quoted by the Washington Post as saying "If somebody calls and offers to 

sign you up [for ObamaCare) for $500, whether. you're a business owner or individual consumer, 

you just have to hang up.,,84 It is now seven weeks after.Mr. Cohen's transcribed interview, and 

HHS has still not provided definitive answers to the Committee's questions about direct 

solicitation and gifts of nominal value despite Mr. Cohen's agreement to do so during his August 

7,2013, interview. In response to the Committee's latest request for documents, HHS staff 

emailed Committee staff on August 29, 2013: 

CMS is currently working on a document addressing door to door marketing. It is 

a follow up to the program integrity final rule that was released yesterday and 

covers issues having to do with providing personalized assistance. It should be 

out soon. We're still looking into the issue of nominal giftS.85 

It is troubling that HHS is fonnulating guidelines for basic Navigator and Assister marketing 

practices only a month before open enrollment, and weeks after Navigator and Assister grants 

have been awarded and training materials have been finalized. 

The Administration's confusion about the basic tenets of the outreach program extends 

not only to marketing techniques but also to methods of enrollment, such as the use of paper 

applications for ObamaCare. Ms. Gottlich stated in her transcribed interview that Navigators 

will generally not be giving out paper applications and that over 99 percent of applications will 

be online: 

Q: So navigators carmot leave someone with their infonnation on a paper 

application. 

A: That's going to be our standard -- you know, there -- it's hard to say, yes and 

no. I mean, 99.99 percent of the time there's going to be no paper applications. 

You know. Navigators are not going to be completing paper applications. 

Navigators are going to be doing all the applications online.86 

82 See COHEN INTERVIEW, supra note 1. 

83 Email from Centers for Medicare and Medicaid Services, Dept. of Health & Human Servo and Committee staff 

(August 29, 2013) (on file with Committee); The Committee requested documents related to Navigator and Assister 

marketing practices from HHS in its original May 6th document request, and this request was reiterated to HHS 

officials multiple times. 84 Id. 

85 Email from Centers for Medicare and Medicaid Services, Dept. of Health & Human Servo and Committee staff 

(August 29, 2013) (on file with Committee). 

86 See GorrLICH INTERVIEW, supra 25. 

19 
128 


Insert offset folio 72 here 85359.072

However, weeks later, Mr. Cohen stated the opposite in his interview with Committee staff: 

Q: Are Navigators and Assisters going to be providing, or are they allowed to 

provide, applicants with paper applications? 

A: Yes.87 

However, Mr. Cohen and Ms. Gottlich agreed that Navigators and Assisters will be 

allowed to type an applicant's information into the online applications system.88 Committee staff 

asked Mr. Cohen about the distinction between typing in applicant information and actually 

enrolling someone, which Navigators and Assisters are not permitted to do. Mr. Cohen 

responded that "enrolling encompasses the decision, the choice to become enrolled in a health 

plan. I don't think the physical activity of inputting the information on a form or online is 

enrollment.,,89 

As it turns out, and as confirmed by the contractor Serco,90 the expectation is that 

millions of paper applications will need to be processed in the next few months.91 Navigators 

and Assisters' roles in assisting with paper applications creates increased data security risks 

because consumers might trust persons posing as Navigators and Assisters to mail an application 

on their behalf, or make copies of the application, which contain a plethora of PlI. It is alarming 

that at the time of her testimony and at the time when HHS was considering policies governing 

Navigator and Assister activities, Ms. Gottlich, the federal official in charge of the Navigator and 

Assister program until June 2013, was unaware of the expectation that Navigators and Assisters 

will handle an enormous number of paper applications. 

V. High Risk that Navigators and Assisters Will Not Be Fair and Impartial 

Section 1311 ofPPACA requires that Navigators "distribute fair and impartial 

information.,,92 However, HHS has failed to define what "fair and impartial information" means 

in the context of consumer outreach for ObarnaCare. According to testimony from Ms. Gottlich 

and Mr. Cohen, no independent entity determined what information Navigators and Assisters 

must provide to consumers or how that information would be represented.93 Ms. Gottlich stated 

that she believed "impartial and fair means explaining the full range of [consumer] options," and 

87 See COHEN INTERVIEW, supra 1. 

88 Jd.; See GOTTLICH INTERVIEW, supra note 25. 

89 See COHEN INTERVIEW, supra I 

9iJ Sarah Kliff, Meet Serco, the private firm getting $1.2 billion to process your ObamaCare application, 

WASHINGTON POST, July 16,2013, available at 

http://www.washingtonpost.comlblogslwonkblog/wpI20 13107116Imeet-serco-the-private-finn-getting-I-2-billion-toprocess-your-ObamaCare-applicationi. 

91 Senior employees of Serco, a contractor awarded a contract to process ObamaCare applications, told the 

Committee that paper applications in federal exchanges are expected to comprise as much as one-third of the total 

volume of applications. Oversight & Govermnent Refonn Staff Meeting with Serco Officials regarding HHS 

Contract (Aug. 14,2013). 

92 Pub. L. No. 111-148, Sec. 1311. 

93 See GOTTLICH INTERVIEW, supra 25. 

20 
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Insert offset folio 73 here 85359.073

that full range of options would be included in the Navigator training.94 As a result, those 

crafting the Navigator training - HHS officials, particularly those within HHS's Office of 

Communications, and government contractors at Booz Allen Hamilton had sole discretion over 

how to portray ObamaCare to millions of Americans. In addition to concerns that the 

Administration will determine what constitutes "fair and impartial" ObamaCare information, 

Navigators and Assisters are likely to promulgate misinformation due to inadequate training and 

the incentives in place to maximize enrollment. 

Problematic Pay-Per-Ellrollee Payment Structure 

Navigators and Assisters in some states will be paid depending on how many persons 

they enroll in ObamaCare.95 With this kind of pay structure, Navigators and Assisters have a 

financial incentive to persuade people to enroll. Ms. Gottlich admitted that paying Navigators 

for each person they enroll could lead Navigators and Assisters to cross the line from simply 

"facilitating" enrollment, to persuading persons to enroll and/or actually enrolling them.9 When 

asked about this pay structure in her transcribed interview, Ms. Gottlich stated that she 

recognized an inherent conflict of interest in her personal capacity: 

Q: So you personally recognize the conflict of interest between providing fair and 

impartial information and also paying Navigators based on how many people are 

enrolled? 

A: Well, you know, they can still provide fair and impartial information. 

Q: I agree. But there's a conflict of interest. 

A: There could be.97 

Mr. Cohen also admitted Navigators have an incentive to enroll more individuals when they are 

paid per enrollee.98 When asked if that payment structure incentivized Navigators to enroll 

people, Mr. Cohen responded in the affirmative and suggested that despite the law's prohibition 

on Navigators and Assisters enrolling individuals in ObamaCare, they will be incentivized to do 

exactly that. 

94 !d. 

Q: So do you recognize that paying an individual based on whether they enroll 

someone provides an incentive for them to try to enroll that person? 

A: Yes, but that is an incentive I think they have. That is the nature of the Job, you 

know. That is what Navigators are supposed to be doing, helping people.9 

95 ASSISTERS PROGRAM: IN-PERSON ASSISTANCE AND NAVIGATOR STAKEHOLDER WEBINAR, California 

Health Benefit Exchange, March 14, 2013, available at 

http://www.hea1thexchange.ca.gov/StakeHolders!Documents/ Assisters2ndW ebinar''1020MarchI4-20 13 ]INAL. pdf. 

% See GOITLICH INTERVIEW, supra 25. 97 Id. 

98 See COHEN INTERVIEW, supra note 1. 

99 Id. 

21 
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Mr. Cohen's response presupposes that everyone targeted by a Navigator or Assister will be 

helped by signing up for ObamaCare, which is certainly not true given how much ObamaCare 

increases premiums for relatively young and healthy individuals and reduces choices in many 

state insurance markets. IOO When Navigators or Assisters are incentivized to increase 

enrollment, they will be less concerned with providing fair and impartial information and more 

concerned with persuading individuals to enroll. 

Mr. Cohen testified that he believed, but was not certain, that HHS had prohibited 

Navigator ori{anizations in federal exchanges, from paying their employees based on 

enrollment. 10 Although Assisters in state-based exchanges are being financed with federal tax 

dollars, HHS has refused to prohibit Assister organizations from paying their employees based 

on enrollment. Mr. Cohen did not explain why HHS would eliminate this conflict of interest for 

Navigators in federal exchanges while allowing the conflict of interest to remain for Navigators 

and Assisters in state-based exchanges. 

Q: Are you concerned that paying Navigators and Assisters based on how many 

people they enroll will lead some Navigators and Assisters to pressure individuals 

to enroll? 

A: I think all I can say is that if I am correct, we made a determination for the 

Federally Facilitated Marketplace that we would not permit that, but we have 

given states flexibility to do it differently, and I respect their decision to do it 

differently if that is what they think is the best thing for their particular 

situation. 102 

Compounding the problem of the payment structure is that the Administration is not 

requiring that Navigators and Assisters who are paid per enrollee disclose that fact to individuals 

with whom they interact. Ms. Gottlich testified that Navigators and Assisters are required to 

disclose conflicts of interest to applicants, such as a relationship the Navigator or Assister has 

with a health insurer, but that there will not be a standard disclosure and "the individual grant 

entity [will) determine how that information should be disclosed."J03 Ms. Gottlich testified that 

Navigators and Assisters will not be required to disclose to individuals if they are paid based on 

how many people they enroll. J04 Mr. Cohen was unsure whether there was a standard disclosure 

requirement for Navigators and Assisters: 

I don't believe, in the Federal facilitated marketplace, we are going to be 

compensating based on the number of people enrolled. I have heard that 

there are states, state-based marketplaces that are doing that, and I would 

100 Chris Conover, Young People Under ObamaCare: Cash Cow For Older Workers, FORBES (Nov. 27, 2013), 

http://www.forbes.com/sitesichrisconover/2012/11/27/young-people-nnder-ObamaCare-cash-cow-for-olderworkers/. 

101 

102 See COHEN INTERVIEW, supra note 1. 

103 See GOTILICH INTERVIEW, supra 25. 104 ld. 

22 
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Insert offset folio 75 here 85359.075

think it would be up to them to determine whether that disclosure would 

be required. IDS 

In a list of clarifYing questions following Mr. Cohen's interview, the Committee asked 

HHS to explain whether Navigators in federal exchanges could be compensated based on how 

many people they enroll. Five weeks later, HHS has yet to provide a response. 106 

Insufficient Navigator Training Standards 

HHS is ultimately responsible for developing and operating the training program which 

will prepare both Navigators and Assisters to provide information to consumers about 

ObamaCare and factors related to health insurance. 107 The online training for Navigators and 

Assisters consists of multiple informational modules with each module followed by an openbook exam module. Individuals can complete the training using personal computers. Prior to 

the training being released, HHS estimated that it would take between 20 and 30 hours to 

complete the online training. IDS However, the actual training program states that it will only 

"provide approximately 5-20 hours oftraining.,,109 

The online training materials were released publicly on August 29, 2013, allowing 

Navigators and Assisters just over a month to register and complete the training before the 

exchanges open on October 1, 2013, and leaving little time for any substantive or technical 

glitches to be corrected. As of July 27,2013, and August 7, 2013, the dates of their respective 

interviews, neither Ms. Gottlich nor Mr. Cohen, the head of the HHS department overseeing the 

Navigator and Assister programs, had even seen a draft version of the Navigator training and 

both did not know when the training would be completed. 1 10 Moreover, according to Mr. Cohen, 

no one in the legislative branch was allowed to review the training prior to its public release, nor 

were any independent parties allowed to review the training for fairness and impartiality. 1 

II 

While each Navigator and Assister must create an online account with a login and 

password to access the training modules, it will be easy for a person other than the one who 

created the account to take the training. In fact, anyone could complete the exams once the 

person has logged into the training. It would also be possible for individuals to collaborate on 

exam questions. Moreover, while a Navigator must score above 80 percent on each exam to pass 

a particular module, there is no limit to how many times a Navigator may take each exam. 

During their transcribed interviews, both Mr. Cohen and Ms. Gottlich expressed 

uncertainty around the development and oversight of the training. For example, Mr. Cohen 

testified that Ms. Gottlich "is the person within CClIO who has the greatest responsibility with 

105 See COHEN INTERVIEW, supra 1. 

106 Email from Committee staff to Centers for Medicare and Medicaid Services, Dept. of Health & Human Servo 

staff (August 22,2013) (on file with Committee). 

107 See BRlEFlNG, supra 12. 

108 Id. 

109 Navigator Training Overview, Navigator Online Training, available at 

https:/lmarketplace.medicarelearningnetworklms.comlDefault.aspx (last visited Sept. 10,2013). 

IlO See GOTTLlCH INTERVIEW, supra note 25; see COHEN INTERVIEW, supra note 1. 

III See GoTILlCH INTERVIEW, supra note 25. 

23 
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Insert offset folio 76 here 85359.076

respect to developing the training,,,ll1 yet Ms. Gottlich told Committee staff on July 25,2013, 

that she stopped overseeing preparation of the training in June of2013. 

Q: Are you responsible for the training? 

A: I am not responsible for training now. The Office of Communications is now 

in charge of all the training .... 

Q: The training for what? 

A: For everybody. For navigators, non-navigator assistance personnel, call center. 

That change happened in June after we spoke in April. 

Q: After June. So they're responsible for the modules? 

A: They're responsible for the modules, yes. l13 

Surprisingly, Mr. Cohen stated that it would be "logical" for Navigators and Assisters to 

conduct outreach activities prior to completing the trainingll4 even though HHS is operating 

under the assumption that most individuals hired as Navigators and Assisters will lack 

experience with health insurance markets and ObamaCare.1l5 As a result of their lack of 

knowledge and their inexperience, Navigators and Assisters will face a significant learning curve 

in order to provide accurate and unbiased information about an extremely complicated matter to 

consumers within a few weeks of being hired. Without adequate training, it is likely that many 

Navigators and Assisters will confuse and mislead consumers regardless of how Navigators and 

Assisters are paid. Furthermore, unlike agents and brokers, Navigators and Assisters bear no 

personal liability if they give taxpayers misinformation that damages their financial interests. 

Despite Mr. Cohen's claim that he thinks "there will be information that will be required 

to be provided" by Navigators and Assisters, HHS has not been able to provide the Committee 

with a list of all the information that Navigators and Assisters will be required to tell potential 

applicants. According to Mr. Cohen, Navigators and Assisters will primarily be answering 

questions from individuals: 

[T]here will also be information that is going to depend on what the person asks. 

And if the person doesn't ask about it, then the Navigator or Assister most likely 

wouldn't provide that information because it wouldn't be relevant to that 

person. 11 I> 

112 See COHEN INTERVIEW, supra note 1. 

113 See GOTILICH INTERVIEW, supra note 25. 

114 See COHEN INTERVIEW, supra note 1. 

115 See BRIEFING, supra note 12. 

116 See COHEN INTERVIEW, supra note 1. 

24 
133 


Insert offset folio 77 here 85359.077

Mr. Cohen testified that Navigators will likely not provide information on the 

requirement to purchase insurance, the relatively small individual mandate penalty, or the 

exceptions to the individual mandate penalties unless prompted by the consumer. I 17 Failure to 

explicitly provide information related to the individual mandate indicates that Navigators and 

Assisters will not provide fair and impartial information since it is important for individuals to 

receive information related to the individual mandate to determine how to best satisfY their legal 

obligation to obtain coverage, given their own specific circumstances. I IS Without a clear 

requirement to provide information about the size of the mandate penalty and the numerous 

exemptions to the mandate, Navigators and Assisters may decide to withhold this information 

from individuals in order to encourage emollment. This could result in consumers making 

suboptimal decisions, such as purchasing coverage that they cannot afford, or paying a penalty 

when exemptions might be available. 

VI. Time-Crunched States Unable to Take Actions to Regulate Navigators and Assisters 

Several states have expressed concerns to Secretary Sebelius and HHS about the 

inadequacy of federal guidelines and requirements for Navigators and Assisters. In a detailed 

letter dated August 14,2013, thirteen state Attorneys General (AGs) wrote Secretary Sebelius 

with their concerns over insufficient training standards, consumer protections, and fraud 

prevention mechanisms related to the ObamaCare outreach campaign.119 HHS has yet to provide 

any response to their concerns or questions, and the lack of response from HHS exacerbates the 

Committee's ongoing concerns about the Administration's implementation ofObamaCare. 

The AGs' letter echoed many of the same concerns raised by many on the Committee, 

including the failure ofHHS to require uniform criminal background checks or fingerprint 

requirements for those hired to perform ObamaCare outreach and the Administration's decision 

to significantly reduce training requirements for Navigators and Assisters. 120 The AGs' letter 

also refers to HHS's proposed consumer safeguards for Navigators and Assisters as "woefully 

substandard," particularly when compared to the licensure and liability requirements of health 

insurance agents and brokers, and to the required background checks of census workers, and 

federal workers who conduct similar outreach activities. 121 The AGs write that these consumer 

outreach initiatives are "a privacy disaster waiting to happen" because lax screening and 

supervision means that individuals "will have easy means to commit identifY theft on consumers 

seeking emollment assistance.,,122 

117Id. 

118 Pub. L. No. 111-148, Sec. 1501. 

119 See letter from Patrick Morrisey, West Virginia AG, James D. "Buddy" Caldwell, Louisiana AG, Luther Strange, 

Alabama AG, Bill Schuette, Michigan AG, Pamela Jo Bondi, Florida AG, Tim Fox, Montana AG, Samuel S. Olens, 

Georgia AG, Jon Bruning, Nebraska AG, Derek Schmidt, Kansas AG, Wayne Stenebjem, North Dakota AG, E. 

Scott Pruitt, Oklahoma AG, Greg Abbott, Texas AG and Alan Wilson, South Carolina AG, to the Honorable 

Kathleen Sebelius, Secretary, Dep't of Health and Human Services, (Aug. 14,2013). 120Id. 

121Id. 

1221d. 

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More than a dozen states have imposed or are considering legislation to protect their 

citizens from the risks posed by unscrupulous or poorly trained Navigators and Assisters or 

individuals posing as Navigators and Assisters. 12 For instance, Florida passed a law earlier this 

year that requires Navigators to be fingerprinted and have background checks conducted by the 

Florida Department of Law Enforcement. 124 Despite initial resistance, California decided to 

require background checks and fingerprinting for its Assisters as welL 125 Navigators in Montana 

are also required to be fingerprinted, pass a background check, and receive special training on 

Montana privacy laws in order to gain certification.126 

Many states are concerned about HHS's failure to provide specific guidance about 

whether these steps preempt federal law. Mr. Cohen and Ms. Gottlich were both unable to 

provide specific answers when asked whether HHS had clearly defined what legislative 

requirements states are allowed to impose to minimize the risk of fraud and misinformation. Ms. 

Gottlich said that HHS has not "nullified anything that a State has done,,127 so far; however, Mr. 

Cohen said that HHS is actively following "the activity in State legislatures to see what they 

were doing .... ,,128 In his transcribed interview, Mr. Cohen testified: 

So I think that, you know, the states have flexibility to impose additional 

requirements on Navigators when they are the granting agency. And the general 

preemption provision in the Affordable Care Act, which says that states can -- you 

know, that State laws are not preempted unless they prevent the implementation 

of the Affordable Care Act, would apply to those types of provisions. And it 

would really be a legal, you know, determination, not mine, whether any 

particular State requirement. .. 129 

Recalling a conversation he had with the Iowa State Insurance Commissioner, Mr. Cohen 

testified "[ w ]e've regulated, we've said that states may not require Navigators to be licensed as 

insurance agents or brokers .... ,,130 However, when asked about licensure of Navigators more 

generally, Ms. Gottlich responded "[l]icensing and certification wouldn't be a problem. But on 

the issue would come what's the cost of the licensing and certification .... ,,131 Ohio,132 

123 Katie Keith and Kevin Lucia, the Commonwealth Fund, Will New Laws in States with Federally Run Health 

Insurance Marketplaces Hinder Outreach? (July 1,2013), available at 

http://www.commonwealthfund.orglBlog/20 13fJullWill-State-Laws-Hinder-F ederal-Marketplaces-Outreach.aspx. 

124 Zachary Fagenson & Bill Cotterell, Florida Voices Privacy concerns over ObamaCare 'Navigators,' REUTERS, 

Aug. 20, 2013, available at http://www.reuters.comfarticle/2013f08/20/us-usa-florida-healthcareidUSBRE97J0XK20 130820. 

125 Covered California Certified Enrollment Counselors, available at http://www.cahba.comlcoveredcalifornialassisters.htm. 

126 Dan Boyce, Insurance Commissioner seeks to dismiss fears of privacy infringement from ObamaCare, Montana 

Public Radio, Aug. 27, 2013, available at http://mtpr.orglpostlinsurance-commissioner-seeks-dismiss-fears-privacyinfiingement-ObamaCare. 

127 See GOTfLlCH INTERVIEW, supra note 25. 

12, See COHEN INTERVIEW, supra note I. 

129 Id. at 34. 

130 Id. 

I3l See GOTfLICH INTERVIEW, supra note 25. 

m Sandhya Somashekhar, States Fine New Ways to Resist Health Law, WASHINGTON POST, Aug. 28, 2013, 

available at http://www.washingtonpost.comfnational!health-science/states-find-new-ways-to-resist-healthlaw/20 13f08f28/c63f8498-0a93-11 e3-8974-197 ab3b3c677 _ story.htm!. 

26 
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Missouri,133 Iowa, 134 Montana,135 and perhaps other states have already acted to require some 

type of certification for Navigators. 

HHS-Approved Actions States Can Take to Minimize the Risk of Fraud and Misinformation 

Although HHS has refused to directly provide states with information about the types of 

actions they can take to minimize the risk of fraud and misinformation from poorly trained 

Navigators and Assisters and scam artists, the Committee has learned that there are two specific 

actions that are allowed. First, the Committee has learned that states can require Navigators and 

Assisters to pass a background check and be fingerprinted. 136 Second, given the lax education 

and training standards, many states are understandably concerned that Navigators and Assisters 

will not adequately understand either ObamaCare, health insurance or the necessary protections 

for sensitive consumer information. The Committee has leamed that states can design their own 

additional tests and require that Navigators and Assisters pass these tests as a condition of 

employment. 137 These tests would overcome the problem of Navigators completing the training 

and becoming certified without adequately learning the information necessary to inform 

consumers about the benefits and costs of signing up for coverage through ObamaCare. Finally, 

given the poor design ofthe Navigator and Assister programs, states should consider alerting 

their populations to the risk posed by individuals directly soliciting them about ObamaCare. 

VII. Conclusion 

When ObamaCare was being debated by Congress, then-Speaker Nancy Pelosi famously 

stated that "We need to pass the bill so you can find out what's in it.,,138 Three-and-a-halfyears 

later and after Americans have learned more about the law, ObamaCare remains deeply 

unpopular. ObamaCare's individual mandate, employer mandate and new taxes will result in 

dramatically higher premiums for young Americans. The law also offers unsustainable and 

expensive subsidies to individuals to disguise the visible component ofObamaCare's rising 

premiums and pass an increasing burden to taxpayers. Navigator and Assister programs are 

aiming to sign up enough young and healthy people so that the law's Rube Goldberg structure 

does not collapse. 

133 Virginia Young, New Missouri Law Imposes Hurdle for Insurance Exchange, St. Louis Post, July 17, 2013, 

available at http://www.stltoday.cominewsllocallgovt-and-politicslpolitical-fixlnew-ntissouri-Iaw-imposes-hurdlefor-insurance-exchangelarticie _ dccc78fll-6171-5350-a84a-2a263a5flldb 7 .html. 

134 Iowa passes insurance navigator legislation, June 4, 2012, available at 

http://www.oulinenavigator.org/newsllowa-passes-insurance-navigator-Iegislation.htm!. 

135 Dan Boyce, Insurance Commissioner seeks to dismiss fears of privacy infringement from ObamaCare, Montana 

Public Radio, Aug. 27, 2013, available at http://mtpr.org/postlinsurance-commissioner-seeks-dismiss-fears-privacyinfringement-ObamaCare. 

136 See COHEN INTERVIEW, supra note 1. 

m See GOTILICH INTERVIEW, supra note 25. 

138 Peter Roff, Pelosi: Pass Health Reform So You Can Find Out What's In It, U.S. NEWS (Mar. 9, 2010), 

http://www.usnews.comiopinionlblogs/peter-roffl2010/03/09/pelosi-pass-health-reform-so-you-can-fmd-out-whatsin-it. 

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In order to increase enrollment, the Administration has decided to spend hundreds of 

millions of dollars in an extralegal attempt to increase enrollment through the Navigator and 

Assister programs. The Committee has previously raised concerns with the outreach campaign. 

Despite several Committee members' common sense recommendations, the training to be 

Navigators and Assisters will last only five to 20 hours and there is no requirement for a 

background check of Navigators and Assisters who will have access to highly sensitive personal 

information, such as Social Security numbers, dates of birth, and income for everyone in an 

applicant's household. Given the stories about how scammers are gearing up to take advantage 

of the tremendous confusion caused by ObamaCare, Americans are at an increased risk of being 

the victim of fraud and identify theft because of the Administration's poor development of its 

outreach programs. Moreover, allowing Navigators and Assisters to be paid on a per enrollee 

basis, without even requiring that the Navigator or Assister disclose his or her financial interest 

in increasing enrollment, means Navigators and Assisters will have the incentive to provide false 

or misleading information to maximize enrollment. The Committee's preliminary findings 

indicate that Americans should approach the information provided by Navigator or Assisters 

with caution, at least until the Administration reforms the outreach program and addresses the 

many limitations discussed in this report. 

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Statement of Congressman Gerald E. Connolly (VA-Il) 

Committee on Oversight and Government Reform 

Subcommittee on Economic Growth, Job Creation, and Regulatory Affairs & 

Subcommittee on Energy Policy, Health Care, and Entitlements 

Federal Implementation ojObamaCal'e: Concerns ojState Governments 

September 18, 2013 

Today's joint hearing exemplifies the majority's troubling and routine abuse of this Committee's 

oversight authority to conduct tired political theater that attacks the Patient Protection and Affordable 

Care Act to advance partisan aims yet doing nothing to strengthen public policy, or provide affordable, 

quality health care coverage to millions of uninsured Americans. 

Ensuring our Nation develops an effective and efficient healthcare system may be the most important 

and enduring challenge we face today. This critical issue begs to be addressed in a serious, substantive, 

and bipartisan manner. Yet time and time again, the Republican majority's blind hatred of the Obama 

Administration's efforts insure all Americans has led them to waste taxpayer dollars in holding partisan 

show hearings designed to score political points while pursuing the astonishing goal of preventing 

American families from obtaining affordable healthcare. 

Even with something as simple as loday's hearing title, the majority cannot resist imposing a false 

narrative as if it were fact. Exhibit A. is today's very fair and balanced title that simply asserts the 

existence of conveniently unidentified and vague" ... Concerns of State Governments" with 

implementation of the Affordable Care Act, as if the partisan accusations of a few Republican 

malcontents constitutes evidence of real national implementation problems. 

I hope the press will note that the Republican majority failed to invite a single representative of a nearby 

neighbor, the State of Maryland - which won an "Early Innovator" grant in recognition of its impressive 

progress implementing an effective and innovative insurance exchange supported by insurance carriers, 

hospitals, providers, brokers, advocates, and consumers. Could it be that the majority wants to hide real 

world examples of effective Affordable Care Act implementation by a popular Democratic governor? 

Would it have been that difficult to convene a serious hearing that oversees the implementation of the 

Affordable Care Act by focusing on challenges and successes that provide insights into how we can 

enhance intergovernmental coordination and collaboration, not simply repeal healthcare reform? 

Perhaps our press tables would be sparser, yet I would respectfully suggest to my Republican colleagues 

that this is a slight price to pay in order to achieve intellectual honesty. 

As a public servant who spent the majority of my time serving in local government, I am inclined to be 

sympathetic to concerns of State and local governments with unreasonable Federal mandates. However, 

I have little patience for those who would use these concerns as a false pretense to launch unfounded and 

unsubstantiated partisan attacks to foil the Administration's efforts to provide all Americans with quality 

health insurance. 

(OVER) 
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The utterly hollow nature of Republican ··concerns" over Affordable Care Act implementation are laid 

bare by the stark discrepancy between the spurious allegations and complaints of Republican elected 

officials who just happen to be outright opposed to the Affordable Care Act, and the positive 

implementation experience of States such as Mim1esota, Oregon, and California. California's experience 

implementing the Affordable Care Act is particularly worth focusing on, since it is our Nation's largest 

State, contains 7.1 million uninsured residents, and boasts one of the most robust implementation efforts. 

I recognize that facts have proven to be oflittle interest to my Republican colleagnes. Nevertheless, I 

would point out that in 2009, the Congressional Budget Office projected that a medium-level "silver" 

plan would cost $5,200 annually on the California exchange, while the actuarial firm Milliman predicted 

that the average silver plan in California would carry a $450 monthly premium. I am confident that my 

colleagues in the majority are familiar with these figures, since I recall not too long ago they were 

waiving them about while peddling Republican talking points that featured dire predictions about 

"ObamaCare" and the coming "rate shock." 

Fortunately, today we no longer need to rely on projections, we can instead check reality .. 

Lo and behold, the actual average premium for the "silver plan" on California's Affordable Care Act 

exchange will be $276. Further, for the 2.6 million Californians eligible for Federal subsidies, the 

premiums will be drastically lower, ranging from an average of$235 for individuals at 150 percent of 

the Federal Poverty Level (FPL) to $17 for individuals at 300 percent of the FPL. Reality has 

definitively demonstrated that when a State employs strong insurance regulation, promotes healthy 

competition, and conducts vigorous outreach, the Affordable Care Act works. 

Meanwhile, States such as Louisiana, Kansas, and South Carolina - which are the antithesis of 

California with respect to preventing Medicaid expansion to cover their lowest-income residents, 

refusing to establish exchanges, and failing to conduct outreach - have provided their residents with less 

competition, less choices, and consequently higher premiums relative to proactive States. Perhaps the 

focus of this hearing should be shifted to overseeing derelict States who are actually harming the welfare 

of their own residents by maliciously and irresponsibly refusing to implement the law of the land. 

One might express shock at such injurious defiance by Republican-governed States, were it not for the 

relentless efforts of House Republicans to deprive Americans of affordable health insurance coverage by 

any means necessary, be it outright repeal or backdoor budget cuts. Unfortunately today's joint hearing 

is neither shocking nor surprising, it merely represents the cynical approach to healthcare policy 

employed by Republicans that has contributed to Americans losing faith in Congress as an institution. 

-END-
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Opening Statement 

Rep. Michelle Lujan Grisham 

Committee on Oversight and Government Reform Subcommittee on 

Economic Growth, Job Creation and Regulatory Affairs and the 

Subcommittee on Energy Policy, Health Care and Entitlements joint 

hearing entitled "Federal Implementation of ObamaCare: Concerns of 

State Governments" 

September 18, 2013 

Dr. Colyer, you state in your written testimony that "Uncertainty ... is a drag on Kansas 

businesses... Businesses are scared to invest in jobs, they're scared to invest in 

expansion ... " 

I couldn't agree with you more. The Republican'S effort to delay, defund, and repeal 

the Affordable Care Act 41 times without bringing forward any credible alternative for 

providing health care to our nation's most vulnerable citizens-has created uncertainty 

for America's businesses. 

The Obama Administration, many state governments, businesses, insurers, and the 

medical community are working toward implementation of the Affordable Care Act. In 

comparison, House Republicans are currently threatening to shut down the 

government and let our nation default on its debt unless the ACA is repealed. This 

uncertainty prevents new hiring and decreases investment and economic growth. The 

U.S. Chamber of Commerce has stated that, 

"It is not in the best interest of the U.S. business community or the American 

people to risk even a brief government shutdown that might trigger disruptive 

consequences or raise new policy uncertainties washing over the U.S. 

economy ... Likewise, the U.S. Chamber respectfully urges the House of 

Representatives to raise the debt ceiling in a timely manner and thus eliminate 

any question of threat to the full faith and credit of the United States 

government .. . " 

The Republicans' effort to repeal the Affordable Care Act using artifiCially-created 

government funding and debt crises undermines U.S. national interests and 

jeopardizes the very businesses and jobs that they claim to protect. 
140 

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But in addition to. Republican-sponsored paralysis in Washington, misinformation and 

misrepresentation regarding the Affordable Care Act are also causing confusion and 

uncertainty among our nation's citizens. Dr. Colyer, you also state in your testimony 

that, 

" ... 1 speak with my colleagues in the medical community every day. To a 

person all have expressed concern that the law will significantly limit their 

capacity to practice best care. They don't understand how health outcomes can 

be improved by a law that drives healthcare decisions to be made from 

Washington rather than the cherished relationship between the doctor and 

patient." 

I talk to doctors too, and the idea that the law "drives healthcare decisions to be made 

from Washington" could not be further from the truth. Doctors want their patients to 

have access to affordable, quality care and the law actually preserves and expands 

the private market. In fact, the law's provisions ensure that insurance companies do 

not jeopardize that sacred relationship by banning insurance companies from placing 

caps on coverage and turning customers down based on preexisting conditions. That 

is why many groups that represent physicians, including the American Medical 

Association, have expressed their support for the law. They don't buy the Republican 

talking point about bureaucrats coming between doctors and patients, because they 

know better. 

I recently held two town halls about the Affordable Care Act in my district, where I 

answered questions from my constituents, listened to their concerns, and tried to help 

them navigate the benefits of the law. I did that because it's my job. As public 

servants, we should be working to ensure that the ACA is implemented effectively and 

efficiently, not spreading more uncertainty and misinformation. 

Thank you.