[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
THE PRESIDENT'S FISCAL YEAR 2014 BUDGET
PROPOSAL WITH U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
SECRETARY KATHLEEN SEBELIUS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
APRIL 12, 2013
__________
Serial No. 113-FC05
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
DAVE CAMP, Michigan, Chairman
SAM JOHNSON, Texas SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin JIM MCDERMOTT, Washington
DEVIN NUNES, California JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois MIKE THOMPSON, California
JIM GERLACH, Pennsylvania JOHN B. LARSON, Connecticut
TOM PRICE, Georgia EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida RON KIND, Wisconsin
ADRIAN SMITH, Nebraska BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota DANNY DAVIS, Illinois
KENNY MARCHANT, Texas LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio
Jennifer M. Safavian, Staff Director and General Counsel
Janice Mays, Minority Chief Counsel
C O N T E N T S
__________
Page
Advisory of April 12, 2013 announcing the hearing................ 2
WITNESS
The Honorable Kathleen Sebelius, Secretary, U.S. Department of
Health and Human Services, Washington, DC...................... 8
THE PRESIDENT'S FISCAL YEAR 2014 BUDGET
PROPOSAL WITH U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
SECRETARY KATHLEEN SEBELIUS
----------
FRIDAY, APRIL 12, 2013
U.S. House of Representatives,
Committee on Ways and Means,
Washington, DC.
The Committee met, pursuant to call, at 9:05 a.m., in Room
1100, Longworth House Office Building, Hon. Dave Camp [Chairman
of the Committee] presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Friday, April 5, 2013
No. FC-05
Chairman Camp Announces Hearing on the
President's Fiscal Year 2014 Budget Proposal with
U.S. Department of Health and Human Services
Secretary Kathleen Sebelius
House Ways and Means Committee Chairman Dave Camp (R-MI) today
announced that the Committee on Ways and Means will hold a hearing on
President Obama's budget proposals for the Department of Health and
Human Services for fiscal year 2014. The hearing will take place on
Friday, April 12, 2013, in 1100 Longworth House Office Building,
beginning at 9:00 a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from the invited witness only. The
sole witness will be the Honorable Kathleen Sebelius, Secretary, U.S.
Department of Health and Human Services. However, any individual or
organization not scheduled for an oral appearance may submit a written
statement for consideration by the Committee and for inclusion in the
printed record of the hearing.
BACKGROUND:
On April 10, 2013, President Obama is expected to submit his fiscal
year 2014 budget proposal to Congress. The President's proposed budget
will contain his tax, spending, and policy proposals for the coming
fiscal year, including his proposed budget for the Department of Health
and Human Services and the programs it operates and oversees. Many of
the Department's programs such as Medicare, efforts to assist those who
lack health insurance, and Temporary Assistance for Needy Families are
within the Committee's jurisdiction.
In announcing this hearing, Chairman Camp said, ``I am encouraged
that the President has signaled that he intends to include reforms to
Medicare in this budget. We look forward to this discussion, but our
time is short and we must act soon to protect seniors and ensure the
Medicare program remains solvent for future generations. We also will
examine HHS' efforts to implement the Democrats' healthcare law, which
threatens to increase healthcare costs for American families, and puts
jobs and job creation further at risk, and jeopardizes the health care
that many already have and like. The deadline to implement this law is
just around the corner, and the American public needs much more
information from this Administration about how it is preparing for this
unwieldy new entitlement. Members also look forward to reviewing the
Administration's proposals affecting human services programs, including
whether the Administration will continue its unlawful and unprecedented
pursuit to waive the work requirements that have helped welfare
recipients replace welfare checks with paychecks.''
FOCUS OF THE HEARING:
U.S. Department of Health and Human Services Secretary Sebelius
will discuss the details of the President's HHS FY14 budget proposals
that are within the Committee's jurisdiction.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit
for the hearing record must follow the appropriate link on the hearing
page of the Committee website and complete the informational forms.
From the Committee homepage, http://waysandmeans.house.gov, select
``Hearings.'' Select the hearing for which you would like to submit,
and click on the link entitled, ``Click here to provide a submission
for the record.'' Once you have followed the online instructions,
submit all requested information. ATTACH your submission as a Word
document, in compliance with the formatting requirements listed below,
by the close of business on Friday, April 26, 2013. Finally, please
note that due to the change in House mail policy, the U.S. Capitol
Police will refuse sealed-package deliveries to all House Office
Buildings. For questions, or if you encounter technical problems,
please call (202) 225-1721 or (202) 225-3625.
FORMATTING REQUIREMENTS:
The Committee relies on electronic submissions for printing the
official hearing record. As always, submissions will be included in the
record according to the discretion of the Committee. The Committee will
not alter the content of your submission, but we reserve the right to
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1. All submissions and supplementary materials must be provided in
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attachments. Witnesses and submitters are advised that the Committee
relies on electronic submissions for printing the official hearing
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2. Copies of whole documents submitted as exhibit material will not
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The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four
business days notice is requested). Questions with regard to special
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Note: All Committee advisories and news releases are available on
the World Wide Web at http://www.waysandmeans.house.gov/.
-------
Chairman CAMP. The Committee on Ways and Means will now
come to order.
Madam Secretary, thank you for appearing before us today.
The Ranking Member and I have agreed this morning to allow the
Chair and Ranking Member of the Health Subcommittee to give the
opening statement this morning, and after that, we will begin
with questions where we left off yesterday. We had the
Secretary of the Treasury here yesterday. We were not able to
get through the entire panel.
So I will now recognize Health Subcommittee Chairman Brady
for his opening statement.
Mr. BRADY. Thank you, Mr. Chairman.
Secretary Sebelius, thanks for joining us today to discuss
the President's 2014 budget. One of the top priorities for this
Committee is to act now to save Medicare so that every
generation of seniors can count on it. So I welcome the
inclusion of some conceptual reforms to Medicare, including
recognizing the urgent need for a permanent solution to pay
local doctors fairly so they can continue to treat our seniors
and improvements to the current Medicare structure to modernize
cost sharing.
However the President's budget falls far short of what is
needed to save Medicare. Its trustees tell us this important
program is going broke sooner rather than later. The White
House and Congress need to act together now, this year, to save
Medicare for the long term. And I challenge you and the
President to save Medicare for its own sake, not conditioned
upon wringing tax increases from hardworking Americans that
have nothing to do with Medicare.
This Committee will act. At the direction of Chairman Camp,
we have convened a series of hearings beginning next week to
examine bipartisan solutions to save Medicare, some supported
by the President. And I invite you to join this Committee in
working toward long overdue actions to protect, improve and
strengthen Medicare.
Both Republicans and Democrats can agree that Americans
need the right kind of healthcare reform, reform that lowers
costs, improves health and protects the vulnerable. But many
Americans are concerned the Affordable Care Act may not be able
to deliver. They have real concerns about how the law will
affect their personal health care, that the President's law
will cause healthcare costs to go up while the quality of care
goes down.
This White House repeatedly promised it would lower costs
by thousands of dollars for individuals and families and that
Americans would not lose the health insurance they have and
like.
Yet, you recently admitted that the mandates in the new law
will make healthcare premiums more expensive. And this week you
warned that almost 25 million Americans will lose the insurance
they get at work. Clearly, the President's new law is not
helping families or local businesses, and this budget does
nothing to offer them relief.
To add insult to injury, as our economy continues to
struggle and millions of Americans have given up looking for
work, the healthcare law is resulting in fewer jobs and frozen
wages. It is forcing local businesses to replace full-time jobs
with part-time jobs. In one survey from the U.S. Chamber of
Commerce, over 70 percent of small businesses said the
President's healthcare law prevents them from hiring new
workers. Another study found it would put over 3 million jobs
at risk in the franchise industry alone. And as one small
businessman in Virginia stated, I am convinced the primary
reason we are not seeing a robust economic recovery is the
uncertainty and costs associated with this healthcare law.
In a wood pallet plant that I toured in Conroe, Texas, the
company owner told me the extra healthcare costs from the
President's new law is equal to opening two new plants and
adding 100 new workers.
Our local businesses and their workers are worried. They
are asking, why are my healthcare premiums going up? Why am I
losing the health insurance I have and like? And why does
Washington keep heaping on new red tape that keeps me from
growing my business?
These are serious questions I hope you can answer today,
Madam Secretary.
On top of the $2 billion already spent to set up
bureaucracy for this new law, the President's budget seeks $1.5
billion more including adding 1,000 new IRS employees to ensure
Americans comply with the new taxes and mandates.
But what we really need are 1,000 more doctors and nurses,
not more IRS agents.
Finally, will the White House be able to deliver on October
1st? Three full years after the law was passed, this
Administration seems in disarray as it rushes to set up the
healthcare exchanges by that date. With just 6 months to go, no
one has any idea how many and which Americans will be forced
into the exchanges, how they will operate, what the health
insurance plans will look like, or if Americans' private
information will be protected.
Patients, local businesses and those expected to deliver
health care are extremely concerned. Many Americans believe
that, so far, this has been nothing short of an absolute
nightmare.
Madam Secretary, we are looking to you for honest and
specific answers, as we know you will give us. Our families and
small businesses deserve to know.
[The submission of the Honorable Kevin Brady follows:]
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Chairman CAMP. At this point, we are going to recognize the
Health Subcommittee Ranking Member McDermott to deliver his
opening statement.
Mr. MCDERMOTT. Thank you, Mr. Chairman.
Welcome, Madam Secretary. I have enjoyed working with you
during the President's first term and am very pleased that you
decided to stay. Others have left, and I am sure that there are
things that might be attractive in leaving, but your
willingness to stay and serve the people should be recognized
because this is a very daunting task that you face.
Implementing the Affordable Care Act on top of managing
Medicare and Medicaid will not be easy. Enrolling millions of
people by the end of the year is a Herculean task, which is why
the leadership and continuity you provide is so critical. Your
experience, both as a health insurance commissioner and a
Governor, you know what it is like on the other end, so it is
going to be very important to have you at the top talking about
what happens.
The President's budget really is an effort, in my view, to
reinvigorate a search for common ground and the common good.
Unlike our colleagues on the other side, the President has been
clear about his willingness to tackle the tough issues.
Unfortunately, it doesn't mean much when the House Republican
leadership refuses to engage in meaningful conversation about
shared sacrifice or deficit reduction.
We just heard that we are 3 years into this. Well, what
they did for the last 3 years was they would not negotiate, and
in fact, Republicans have been as unrelenting in their zeal to
get rid of the ACA, even though it is the first serious and
successful attempt ever in this country to curb healthcare
costs. It is projected to reduce the deficit, even with its
benefits, by more than $1 trillion over the next two decades.
Despite 33 House votes for repeal, the Supreme Court ruling and
the Presidential election results, their efforts to destroy the
law continue.
We know they won't get rid of it, and they know they won't
get rid of it. John Boehner even said the other day that it is
the law of the land. And they also know that there is more than
one way to skin a cat. Republicans know the best way to secure
a government that won't tax or regulate them is to create a
government that can't do anything. Starve the programs, and the
people won't fight for them. Cripple the government, and no one
will understand what they need.
The sequester cut 8 percent of the program management
budget for CMS, a direct hit to ACA's implementation efforts.
It was obvious they did it. Their budget raises costs for
current senior citizens by repealing Medicare improvements and
ends Medicare as we know it for people nearing eligibility by
turning it into a voucher program.
Ironically, the CBO says the Republican Medicare voucher
proposals would lead to higher national healthcare spending. We
have dealt with access with the ACA. We now have to deal with
costs. That is what is the implementation that we are going to
be into presently.
Their policy is not a clever one. It doesn't lead to better
care. It isn't either ethically or fiscally responsible. In
contrast, our Medicare reforms in the ACA were based on
reality, not rhetoric. Through our efforts Medicare's per
person growth rates are historically low and projected to
remain so for the foreseeable future. Solvency was
significantly extended. New payment and delivery system reforms
will create a program that favors value over volume and helps
drive the right cost, the right care to the right patient at
the right time.
It hasn't been easy, but that is why I'm glad you are still
here. No one is better suited to do the job. You understand the
importance and the complication of State partnerships, and you
are asking for what you need, $1.5 billion to get the uninsured
Americans health care, to establish sustainable spending and
tackle the number one cause of personal bankruptcy, that is a
bargain at $1.5 billion.
HHS staff are to be commended, especially those at CMS,
because they have worked tirelessly to improve changes that
overhauled nearly every Medicare payment system. They are
creating a whole new infrastructure on the promises of ACA, and
they have done it on a shoestring. We know you don't have the
resources you need and the job has been made infinitely hard by
false and misleading attacks by opponents.
Now, enough is enough. It is time for my Republican
colleagues to work with us and the Administration to ensure
effective implementation of what the American people are
demanding, a simpler, more fair healthcare system that is
established by the Affordable Care Act.
They had 4 years of advertising against it, and they
reelected the President overwhelmingly because he put it in
place.
I hope today's conversation is a productive start toward
that eventuality, and I look forward to hearing the
discussions.
Chairman CAMP. Thank you and welcome to the Ways and Means
Committee.
And we have your written testimony. You are now recognized
for 5 minutes.
STATEMENT OF THE HONORABLE KATHLEEN SEBELIUS, SECRETARY, U.S.
DEPARTMENT OF HEALTH AND HUMAN SERVICES, WASHINGTON, DC
Secretary SEBELIUS. Well, thank you, Chairman Camp and
Ranking Member Levin, Subcommittee Chairs.
And thank you, Ways and Means Committee, for the
opportunity to discuss the President's 2014 budget for the
Department of Health and Human Services.
I think this budget directly supports the overall goals of
the President by strengthening our economy and promoting middle
class job growth. It ensures that the American people will con-
tinue to benefit from the Affordable Care Act, and it provides
much-needed support for mental health services and takes steps
to address the tragedy of gun violence.
We are proposing to strengthen education for our children
during their critical early years to ensure they can succeed in
a 21st century economy. The budget secures America's place as
the world leader in health innovation so that it remains a
magnet for jobs of the future and helps to reduce the deficit
in a balanced, sustainable way.
I look forward, Mr. Chairman, to answering your questions
about the budget, but first, I want to just share a few of the
highlights.
The Affordable Care Act is already benefiting millions of
Americans, and our budget makes sure that we will continue to
implement the law. By supporting the creation of new health
insurance marketplaces, the budget will ensure that starting
next January, Americans in every State will be able to get
quality health insurance that fits their budget.
Our budget also addresses another issue that has been on
all of our minds recently, mental health services and the
ongoing epidemic of gun violence. Now we know that a vast
majority of Americans who struggle with mental illness are not
violent. But recent tragedies have reminded us all of the
staggering toll that untreated mental illness can take on our
society, and that is why we are proposing a major new
investment to help ensure that students and young adults get
the treatment they need, including training 5,000 additional
mental health professionals to join our behavioral health
workforce.
Our budget also supports the President's call to provide
every child in America with access to high quality early
learning services. It proposes additional investments in new
early Head Start child care partnerships, and it provides
additional support to raise the quality of child care programs
and promote evidence-based home visiting for new parents.
Together, these investments will create long-lasting, positive
outcomes for families and provide a huge return on investment.
As we prepare the next generation of Americans to succeed
in the 21st century economy, our budget also makes sure that
America remains a world leader in health innovation. The
significant new investments this budget contains for NIH
reflect our commitment to furthering the biomedical research
that will help create good new jobs and advance the cause of
cures in medical science.
The new investments in health IT will allow us to continue
to support the development and use of compatible electronic
health records systems that have huge potential for improving
care coordination and public health.
Even as our budget invests for the future, it also helps
reduce the long-term deficit by making sure that programs like
Medicare are put on stable fiscal trajectory.
Medicare spending for beneficiary grew at an historically
low rate of .4 percent in 2012, four-tenths of 1 percent in
2012, thanks in part to the successful implementation of the
Affordable Care Act's $800 billion in saving provisions that
strengthen the Medicare program.
The President's 2014 budget achieves even more savings. For
example, the budget allows low-income Medicare beneficiaries to
get their prescription drugs at the lower Medicaid rates,
resulting in savings of more than $120 billion over the next 10
years, without sacrificing their drug benefits.
In total, the budget would build on the Affordable Care
Act's cost-containment measures, generating an additional $371
billion in Medicare savings over the next decade, reducing the
deficit and putting Medicare on sounder financial footing.
Our budget also reflects our commitment to aggressively
reducing waste and fraud in all our programs. We are proposing
an increase in mandatory funding for our healthcare fraud and
abuse control program, an initiative that last year alone saved
taxpayers nearly $8 for every dollar that was spent. And we are
investing in additional efforts to reduce improper Medicare,
Medicaid and CHIP payments and to strengthen our Office of
Inspector General.
What all of this adds up to is a budget that will equip HHS
to support the Administration's North Star of a thriving middle
class. It will promote job growth and keep our economy strong
in the years to come while also helping to bring down the long-
term deficit.
And I know many of you have questions, and I am happy to
take those now. Thank you, Mr. Chairman.
[The prepared statement of Secretary Sebelius follows:]
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--------
Chairman CAMP. Well thank you, very much, Madam Secretary.
Mr. Marchant is recognized for 5 minutes.
Mr. MARCHANT. Thank you, Mr. Chairman.
Welcome, Madam Secretary.
I am concerned about the impact the President's healthcare
law will have on the small businesses in my district. HHS
recently announced the delay of the choice option for small
businesses in the 33 Federal exchanges. The Small Business
Majority, a group that has been a witness before this
Committee, called your decision a major letdown for small
businessowners and their employees. Operational challenges have
been cited as the reason for delaying the choice option.
Can you please detail exactly what these operational
challenges were and the specific problem that ultimately led
you to delay the program?
Secretary SEBELIUS. Yes, Congressman, I would be glad to
answer that. The SHOP Exchange will be up and running in every
State in the country in 2014. The SHOP is the small business
market exchange. In it, small businessowners who now pay about
20 percent more than their large competitors for insurance,
will finally have competitive choices, transparency and an
ability to leverage the kind of buying power that the large
competitors have.
The SHOP Exchange, as written, had two components. One was
a choice for businessowners, and that will be up and running,
and the second was an opportunity to offer those businessowners
then to give their employees a variety of choices of plans. A
lot of feedback, from both insurance companies and from some
business groups, indicated that that would be a very hard
second tier to get set up year one. So what we have determined
to do is, in at least the Federal exchange--and the State-based
exchanges can have the full program up and running because they
are just doing one State--in the Federal exchange, every small
businessowner will have a choice of plans, will have
competition and will be automatically in a larger pool with
rates that the small, the Congressional Budget Office has
estimated will be significantly lower than what they are able
to pay right now.
What will happen year two, Congressman, is those employers
then, if they choose, can give employees the wide choice of
plans with an aggregated premium. That is the only portion that
is being delayed.
Mr. MARCHANT. But what specifically led to the decision to
delay that program?
Secretary SEBELIUS. It really was feedback mostly from
insurance companies and others that, operationally, to try to
get the aggregated premiums, all the choice plans available up
and running year one was probably going to lead to some major
glitches, and we really took that advice seriously. So all
businessowners will have an opportunity to have competition and
a choice of plans in the small market and then again, in year
2, offer from then on the opportunity for their employees to
choose among a variety of plans.
Mr. MARCHANT. Due to the delay, do you believe that some
small businesses may choose to completely drop their health
coverage for employees and opt to pay the fine instead of
provide coverage?
Secretary SEBELIUS. I do not, sir, because what we know is
that the employer will have a choice. The employer will have a
competitive market for the first time ever. That will be up and
running in every State in the country.
What the law then says is that the employer, if he or she
chooses, could offer employees a choice of every plan in the
market. That is the phase that will not be in place, at least
in the Federal market, until year 2. So employer choice will
still be there. The smallest employers will qualify for an up
to 50 percent tax break to offer their employees coverage
through the SHOP. They will have negotiated rates. They will
have transparency, and they will have competition and be part
of a larger pool that right now they don't have.
Mr. MARCHANT. Do you anticipate making the same decision to
delay the implementation of the exchanges in the entire
Affordable Care Act?
Secretary SEBELIUS. No, sir. We will be up and running in
every State in the country October 1st for open enrollment and
January 1st, 2014, for the plans to begin.
Mr. MARCHANT. As a followup question, has HHS made any
preparation for how to meet the added cost for providing care
for the potential 10 million or 12 million people that might
gain permanent resident status under any kind of an immigration
bill?
Secretary SEBELIUS. Sir, we don't do anything about what
the Congress may or may not do in the future, no sir.
Mr. MARCHANT. So there has been no preparation made
whatsoever for that large group of people?
Secretary SEBELIUS. We are working with the law as it is
right now and, believe me, have our hands full to try to make
sure that the law of the land is carried out.
Chairman CAMP. Thank you. Time has expired.
Mr. Thompson is recognized.
Mr. THOMPSON. Thank you, Mr. Chairman.
Madam Secretary, thank you very much for being here.
I want to second my colleague Mr. McDermott's comments on
how pleased we are that you are where you are and that you are
staying. It has been a pleasure to work with you through the
rollout of this measure, and you and your team have been
fantastic, and it is going to require that you continue that as
we do the, as you do the rest of the implementation.
It is disheartening to me that so many people are working
so hard to discredit the Affordable Care Act rather than to
make sure that it works and that our constituents and the
American people have access to quality affordable health care,
and that is another reason why your work is so important, to
make sure that we get over what I am sure will be a bump in the
road when we look back on this.
Thank you also for your provisions regarding mental health.
As someone who has been working on gun violence issues during
this Congress, the mental health issue is clearly an important
one, and I am glad that you brought it up because it is not
enough just to say mental health is the problem, and use that
as the beard to ignore the bigger inclusive problem; not only
is it part of the issue but it is part of the issue that we
have to deal with, and funding for that is certainly part of
it.
On a specific issue in the healthcare reform measure, and
you mentioned it in your opening statement, and that is the
audits to deal with the fraud and the abuse, the RACs, I
believe they are called, where you are working with the
hospitals to figure this out.
Can you talk a little bit about that or maybe better, I
will leave it up to you to either talk about it now or get back
to me on it. But I know I am hearing from a lot of hospitals,
especially the small ones, where they are having some trouble
going through all of the procedures associated with the RACs.
I recognize that we are saving Medicare money doing it, and
I recognize that we have to do it. I would just like to know
how it is being done and specifically the provisions on the
education and training portion.
Secretary SEBELIUS. Well, Congressman, I think there are
two facets of the fraud initiative. One is improper payments.
And as you know, many improper payments are not fraud; they are
mistakes, and they are clerical errors and they are miscoding,
misbilling. So we are ramping up fairly dramatically the
technical assistance support effort to work in advance with
providers to try to make sure that, at the outset, the bills
are submitted correctly, that we pay the proper amounts
correctly, that we don't spend a lot of time going back and not
only dinging hospitals or providers but having to try to
recollect that money.
The effort that I was commenting on that is really saving
about 8 cents on the dollar--I mean $8 on the dollar--is the
new effort that the President has directed both the Attorney
General and I to partner in and has resulted in an amazing
collaboration with U.S. attorneys on the ground with State
attorneys general, with the so-called HEAT task force,
including our Office of Inspector General and members of the
Justice Department and really ramping up the prosecution of
individuals who are bent on stealing healthcare dollars from
consumers.
So we have had an unprecedented number of not only takedown
operations, sting operations, but returns to the Federal
Treasury in both Medicare trust fund payments and Medicaid
payments to the States that is really resulting in making sure
that people understand that this is a bad way to steal money
from the government. It is a bad way to steal medical services.
So we are hoping that the mandatory request for new
resources would be granted. It is one of the single best
investments with an eight to one return, and we have now 3
years of a very impressive track record to share, but we would
really like to ramp those efforts up.
Mr. THOMPSON. Thank you. And can you get back to me on the
education and training piece of the RAC portion?
Secretary SEBELIUS. I would be glad to, sure.
Chairman CAMP. Thank you.
Mrs. Black is recognized.
Mrs. BLACK. Thank you, Mr. Chairman.
And Madam Secretary, I want to go to the issue of the
navigator program. You recently released preliminary rules for
the navigator program that is enacted in the healthcare law,
and the rule that was released last week reported that you
expect to pay these navigators up to $48 an hour.
While HHS has not released the estimates on the total
number of workers that would be hired in this program, it has
been reported that California is requesting 21,000 of these
navigators, and it would cost taxpayers about $1.5 billion in
California alone.
Have any other States released estimates on how many
workers that they need to support the navigator program in
their State?
Secretary SEBELIUS. Well, Congresswoman, there are two
issues. The funding proposal that was released by our
department is aimed at the States where we, the HHS, will be
operating a Federal marketplace. That is not California, which
is going to have a State-based market. And California resources
will pay for the California navigator program.
This is really an effort to make sure that the 41 million
eligible uninsured Americans, some of whom have never had
health coverage before, are aware of the law, aware of how to
sign up for the law and have some assistance and help along the
way to understand the benefits and make some good choices for
themselves and their families. We do not have a salary scale
set in the funding proposal. We are trying to make some
estimates of a range of scale that was recommended to us by
community groups on the ground and others, but that is not an
hourly rate that is set in the funding proposal.
Mrs. BLACK. So you don't have an hourly rate at this point
in time.
Secretary SEBELIUS. We do not.
Mrs. BLACK. The $48 that was reported was inaccurate?
Secretary SEBELIUS. We tried to estimate an amount based on
what we found community workers and community groups charging
on the ground. But we will be looking at competitive funding
proposals, and the payment to these navigators has nowhere
nearly been established.
Mrs. BLACK. Let me make sure I hear what you are saying. So
in those States that have chosen to do their own exchanges,
they will be paying for their own navigators.
Secretary SEBELIUS. That is right.
Mrs. BLACK. But for those that you go in, that you are
going to run as a Federal program, you are going to pay for
those navigators in those States. Is that correct?
Secretary SEBELIUS. Yes, ma'am.
Mrs. BLACK. So if the State has chosen to do it, they are
not going to get the assistance. They are not going to get
grants. They are not going to get any money to help them with
their navigators, but those run by the Federal Government will
be paid?
Secretary SEBELIUS. The States that have chosen to run
their State-based exchanges have planning dollars available to
them and operational dollars for year 1 until they are able to
be fully up and running, where the fees for the insurance
companies operating in their exchanges will take over the
operational costs. So they have planning dollars available
within the Affordable Care Act. This grant announcement is for
the States that have--where we will be operating a Federal
marketplace.
Mrs. BLACK. So it is a very complex application. From what
I understand, it is about 15 pages long, run by three different
agencies. Is there a way to take some of the complexity out of
the application?
Secretary SEBELIUS. We are talking about the navigator
application.
Mrs. BLACK. No, the application for someone to apply for
the program itself, to get into the exchanges.
Secretary SEBELIUS. To get health insurance.
Mrs. BLACK. That is right.
Secretary SEBELIUS. First of all, we are working hard to I
think make the application as user friendly as possible.
And just to give a little perspective, because I have seen
some reports about how daunting this will be, we looked around
the country, and the average health insurance application, if
you would go get a paper file from California or Nevada or
Georgia, is in the 20-page range. A life insurance application
is about 23 pages long right now in the market. We are trying
to actually make this a much more user-friendly proposal. What
we know is this will depend on how complicated the families
situation is, if someone is single and looking for insurance
and has a relatively simple tax situation, we think it could
take 15 minutes online to go ahead and apply. If it is a
complicated family situation with more information needed, it
could take longer and require more information.
There is a tension, Congresswoman, between making sure we
verify correctly the income levels and what is actually
eligible if a person is eligible for----
Mrs. BLACK. I am looking to reclaim my time because I see
my red light. Madam Secretary, what I would like to also know
that I am not going to have time to ask but if you could send
it to my office in writing, I want to know what the
qualifications--educational qualifications--will be for these
navigators. I also want to know why the brokers that are
already educated in insurance are not going to be eligible to
be a navigator. So if you could just respond back to my office
for that I would appreciate it.
Secretary SEBELIUS. I would be happy to.
Chairman CAMP. Thank you.
Mr. Blumenauer is recognized for 5 minutes.
Mr. BLUMENAUER. Thank you, Mr. Chairman.
Thank you, Madam Secretary. Welcome to Congress.
Sometimes it must seem a little surreal for you because you
hear tales of woe and doom and gloom and all the problems of
the healthcare system, all of which were very much in evidence
for 10 years before we passed the Affordable Care Act. And you
have made clear in your many presentations about the changes
that are already underway. The reforms are making a difference.
Costs are going down. It is not easy, and it has been made
harder because this Congress chose, instead of working with you
to accelerate reform, chose to tilt at windmills attempting to
repeal it and cutting away at the resources you need to do a
difficult job well. I find no small amount of irony that a
Congress that could not summon the courage to close military
bases instituted an independent commission to help them, now
there are howls of outrage that there may be an independent
commission if Congress doesn't do its job dealing with
healthcare reform costs in the future.
But, I have two questions that I would offer up for you.
One deals with the notion of where we are in terms of actual
healthcare savings. It has been documented by independent
sources that healthcare reform will produce approximately $1
trillion worth of net budget savings over the next 20 years.
There is work underway, and I, again, deeply appreciate the
flexibility and partnership of the department working with my
State in Oregon, accelerating those reforms, and if
successful--and it is tough--but it looks like there is an
opportunity--if it would produce savings, if they were taken on
a national level, that would achieve over $1 trillion in 10
years.
And my first question would be that you might comment on
some of the reform opportunities that you see in Oregon and
elsewhere.
My second question, and I don't think there will be time to
get into it in the 5 minutes I have, and I would welcome a
written response, deals with some of the areas that don't have
to be partisan that we could move on quickly to accelerate
reforms.
I have suggested to my colleagues on the Health
Subcommittee that we could take, for example, a piece of
legislation I am honored to cosponsor with my friend Mr.
Gerlach that would have a secure ID for Medicare recipients
that might cut down on fraud and mistakes. I have bipartisan
legislation that deals with end-of-life care. Ninety percent of
the American public actually support having some assistance
helping them navigate those difficult challenges.
We have bipartisan legislation with Dr. Roe, with Mr. Hanna
and Dr. McDermott, that would give what 90 percent of the
people want. It is supported by the Hospital Association and
insurance companies. Ellen Goodman's Conversation Project will
be coming to Washington, D.C., next year. I would like to know
in writing if we can work with you and your department to try
to make some progress helping Americans be able to deal with
the challenges they face at the end of life and making sure
they know their choices and that whatever those choices are
they will be respected.
I would appreciate that in writing but maybe you can talk
about healthcare reform in the remaining time.
Secretary SEBELIUS. Well, thank you, Congressman. I think
that while there is a lot of attention and focus on what is
happening in the insurance market which will affect, I would
say, a relatively limited number of Americans, what is going on
in the delivery system that the authors of the Affordable Care
Act and those who supported the Affordable Care Act wrote into
the bill is, to me, the most exciting and has the biggest
potential for long-term gain. And it really deals with delivery
system reforms that affect everyone, whether or not they have
coverage now, whether or not they will be in the new market,
whether or not they will have new choices for insurance.
Oregon is one of the country's leaders, no question about
it. But we are also seeing a number of other States. We are
working closely with Arkansas, with Massachusetts, with others,
who are really trying to do a couple of fairly straightforward
things--better patient care, better protocol when a patient
hits the healthcare system, better public health, so looking at
prevention programs that actually lower costs, and care
improvements that improve the deficit and lower costs.
And what we are seeing is some pretty dramatic improvements
already.
And there is real hope that those kinds of system changes
could produce not only long-term financial benefits but long-
term health benefits. America still spends almost twice as much
as any developed country in the world on health care per
capita, almost twice as much. We have more people uninsured
than any developed country in the world without health
benefits, and we live sicker and die younger than most of our
competitors. So that is not a great formula for a global
competition.
Chairman CAMP. Okay, thank you. Time has expired.
Mr. Young is recognized for 5 minutes.
Mr. YOUNG. Madam Secretary, thanks so much for being here
today and thank you for your service.
Today, you have assured this Committee that the exchanges
will be up and running pursuant to the Affordable Care Act on
time and functional October 1st of this year. It is encouraging
to hear because it is, in fact, the law. I do know there is a
lot of anxiety. I visit with my constituents and other
stakeholders about this matter.
There is also some anxiety with the release of this budget,
certainly anxiety that I harbor, about the cost of these
exchanges and said implementation.
The President's budget has HHS spending $1.5 billion on
exchange grants in 2013. That is an increase of over $300
million compared to last year's estimates for fiscal year 2013
spending, despite the fact that most States have chosen not to
create their own exchanges.
The budget also anticipates an additional $2.1 billion in
spending on exchange grants in fiscal year 2014.
Now, through the original law, Congress appropriated $1
billion for implementation, but you, Madam Secretary, were also
given unlimited authority to fund State exchange grants through
2015.
Now, press reports say there is about $235 million left in
the law's original implementation fund. Can you confirm that
number or tell us how much the department has spent on the
exchanges so far and from what other funding sources these
expenses are being funded?
Secretary SEBELIUS. Well, sir, I think that if I heard
correctly, there were a lot of numbers in your question, you
have conveyed a fairly accurate picture. When this bill was
passed in 2010, the Congressional Budget Office estimate was a
$10 billion administrative cost to full implementation of the
law. And you are correct, in the law itself, there was $1
billion appropriated, one-tenth of what the nonpartisan CBO
recommended be the cost.
I think we have done an extraordinary job, frankly, here in
2013, allocating and using judiciously the $1 billion that we
had. We do have about 230 million of those dollars left. We
will use those and some additional resources in 2013, and we
have asked for an additional $1.5 billion in 2014, and that is
really to get the IT hub, the call center, the IT up and
running and----
Mr. YOUNG. I am aware of the significant logistical and
information technology challenges of this. Some would say that
the design of the project may have been too ambitious. But,
nonetheless, certainly sensitive to that and all the good
people who are working on such implementation----
Secretary SEBELIUS. I think the good news is we are well
under what the budget estimates were.
Mr. YOUNG. But $1 billion was originally what was
authorized in the original law----
Secretary SEBELIUS. That is correct.
Mr. YOUNG. That Congress provided. That is what it was said
was required by this body when it passed the Affordable Care
Act. But we have a doubling of the projection for setting up
the exchanges by Congress, and this is with less than half--I
want to emphasize--with less than half the States
participating.
And so I guess, you know, I have a concern that if more
States did participate, that would cause the cost to explode
even further. Is that your estimation?
Secretary SEBELIUS. No, sir. And in fact, I think that
characterization is a little bit misleading. We have right now
31 States and the District of Columbia running all or part of
the up and coming marketplaces. So two-thirds of the States are
actually engaged. Some of them are not running the entire
program; they are running the plan management part or consumer
outreach or both, or they are running the entire thing.
In the remaining States, we will be setting up the entire
exchange as a start, but we are actually in conversations with
lots of States, who said we would really, once this gets up and
running, we see ourselves taking it over.
Mr. YOUNG. Thank you. Finally, if you don't receive the
additional funding requested, is this going to preclude the
ability to launch the exchanges on time? And if not, what is
your contingency plan? Presumably there is one.
Secretary SEBELIUS. Well, we are confident that we will
launch the exchanges. We will be open for open enrollment
October 1st. The hub is basically built and paid for, and we
will be using the remaining resources that we have. We are
using every opportunity we have to look at my transfer
authority within HHS and the dollars that we have. But you are
absolutely right. We have a law that is the law of the land.
The Supreme Court has confirmed its constitutionality, there
are millions of Americans looking forward to the benefits, and
we have requested additional resources to make sure that we can
reach out to folks who need it.
Chairman CAMP. Thanks so much. Time has expired.
Mr. Kind is recognized for 5 minutes.
Mr. KIND. Thank you, Mr. Chairman.
Madam Secretary, thank you so much. And we do appreciate
your service. And I think outside of the President and perhaps
Speaker Boehner, you have had the toughest job in Washington in
the last 4 years, and it may be a little tougher when we go
into crucial phases of implementing the Affordable Care Act.
But just today, I think it is a little bit refreshing that we
have some colleagues on the other side that are concerned about
HHS moving too slowly in the implementation of the Affordable
Care Act.
And I share Mr. Marchant's concern about the delay in the
SHOP Act, in particular the impact on the small businessowner
and the small group market.
But I want to ask you a question in regards to the
sustainability and the cost containment that we are already
starting to see with these reforms being implemented, because I
think it is a great story that really hasn't been told. And the
law is starting to slow down the growth of healthcare costs.
For instance, U.S. healthcare spending grew at 3.9 percent the
last 3 years; it is the lowest growth rate in over 50 years.
Medicare per beneficiary spending rose by just, as you pointed
out in your testimony, 4 percent in 2012. Medicaid beneficiary
spending actually dropped by 1.9 percent in 2012. And one of
the great untold stories that just happened a little over a
month ago is CBO's recalculation in the 10-year cost figures on
both Medicare and Medicaid. And CBO determined that both
Medicare and Medicaid will now spend $700 billion less over
this next 10-year period than previously estimated. Medicare
will save $382 billion reduction in spending, roughly 3.5
percent; Medicaid $239 billion reduction.
And the question will be whether this is sustainable.
But there are also more instances of cost containment and
cost recapture that you and your department have already gone
after, nearly $15 billion in fraudulent Medicare payments are
being recaptured now because of the beefed up authority and
enforcement we gave you under the Affordable Care Act. Hospital
readmissions are down 75,000, and the hospital-based infection
rate is the fourth largest hospital expense, so we are starting
to move the dial in that area. The law has already led to
nearly $2.1 billion in savings for American consumers due to
medical loss ratio being overcharged, and those rebates are
going out right now.
The healthcare law also provides $250 million in health
insurance rate review grants to States that are using that as
oversight and review of premium increases which is having a
real impact, and the growth of private plan premiums has also
slowed. Again, it hasn't been a story told that much.
Annual premiums for employer-sponsored family health
coverage is down by 4 percent in 2012. It is the lowest rate
except for one of the last 13 years. And so this is some real
progress when it comes to cost containment, especially in these
budget deliberations, where healthcare spending is the largest
and fastest growing area of spending we have in the Federal
budget. And we are seeing some real progress right now. But we
also have 250 new Affordable Care Act organizations with a new
model of delivery system and then payment reform, so it is
quality, not quantity, based payments anymore. And I also find
it striking that the President's budget before us today
actually finds more savings in Medicare over the next 10 years
than the Republican budget does. And that is because we
understand that it is important we move forward on reform. We
don't have the luxury of waiting 10 years before we start
reforming the entire healthcare system. We have to be doing
that now, and it has to be a comprehensive holistic approach.
But this is a tremendous success, at least initially in the
first 3 years of the passage of the Affordable Care Act, and I
am wondering in your opinion with CBO's recalculation of cost
reductions, is this sustainable with structural reforms that
are happening? Or is it a remnant of the great recession that
we are coming out of? What are you seeing and what is your
opinion?
Secretary SEBELIUS. Well, I think that you have enumerated
what is a snapshot of what is going on. In spite of some
reports to the contrary, there is a very, very positive story
to tell on cost reductions, cost improvement, on care
improvement, and that is with additional benefits for Medicare
beneficiaries, with additional people insured, with additional
coverage in the marketplace, so that is not sacrificing the
beneficiaries to get those costs savings as some would do in
plans, but it is really enhancing the benefits that people are
receiving.
I think we have a great opportunity with the kind of
delivery system reforms, again, that you, Mr. Kind, and
colleagues made sure were part of the Affordable Care Act from
the outset, driving toward a value-based payment system,
looking at strategies to make sure that medical protocol was
appropriate and paying for that, reducing the kinds of costs
that come with avoidable hospital readmissions that are built
into the system, and, frankly, having insurance coverage under
a vast majority of uninsured Americans will be another huge
step forward, getting to care treatments at a much less
expensive point in time, making sure that people don't continue
to access emergency room care at a more expensive, least
effective point in time, and really working on prevention
efforts around obesity and smoking, which are beginning to
show, again, positive signs.
This has enormous opportunity and I think enormous
potential to make sure these costs containment strategies
continue into the future and that health improves for Americans
at the same time.
Chairman CAMP. Thank you.
Mr. Kelly is recognized.
Mr. KELLY. Thank you, Mr. Chairman.
And thank you, Madam Secretary, for being here. It is good
to see. One of the questions I have back home, there is a
company called HealthSouth that does inpatient care. Now, when
it comes to market basket cuts for inpatient at the
rehabilitation facilities, now, is there any policy behind
this, or is this just a cut? Is that the market basket, is that
something, a term that you are familiar with?
Secretary SEBELIUS. Yes.
Mr. KELLY. I wasn't saying it to be funny. That wasn't a
gotcha. There is just so much here that we assume everybody
knows. But for people to build their economic model based on
future payments or repayments, it makes it very difficult for
people like HealthSouth then to develop any type of business
performance. So what was the policy that drove that?
Secretary SEBELIUS. Congressman, I think there is an
enormous amount of analysis of the health system that goes on
with every market update and every market basket proposal, and
it really looks at cost outliers. It looks at how the services
are used, where we are seeing I would say aggressive upcoding
in some instances to try to recover where there are regions of
the country that have tremendous differences without care
variations, so I would say there is an ongoing, enormous
analysis. Jon Blum, who is sitting behind me, is the deputy in
charge of Medicare Services. And, as you know, with each market
basket update, there is also a public display and a lot of
feedback, because we are always trying to balance effective
cost strategies with beneficiary needs.
Mr. KELLY. I think that one of the things that all of us
are looking at is the Patient Protection and Affordable Care
Act. The intentions were great. The reality of it is really
staggering, and it is the uncertainty of it. It is the unknown
part of it because the budget keeps changing and the costs keep
changing. And as wonderful as the product was supposed to be at
the end, it is almost like if you don't know where you are
going, any road will get you there. And so we find we really
attack providers.
Now, when I am back home and I am talking to people that
have independent hospitals, like HealthSouth, what they are
doing, when we continue to say, well, the problem is that the
providers are making too much money, we are going to have to
find a way to dial that back. They are making too much money.
So I have to tell you, from being in the private sector my
whole life, I have never been in a situation where you just
don't know what it is going to cost you going into the future.
And one of the things that the Patient Protection and
Affordable Care Act has done--I don't think this was
intentional--it has driven a wedge between employers and the
employees, between the owners of the business and their
associates. It is forcing people who have had longtime
relationships, they have been to baptisms and Bar Mitzvahs and
First Communions and weddings and funerals, and it is
portraying the owner of the business as someone who doesn't
want to do something for his associates. And a lot of my
friends, Bill Paterson back in Erie, for example, he has a lot
of employees. Do you know what he has to do now to meet this?
He has to make them part-time employees.
Now, I used to look at a work week; I thought 40 hours was
a work week. No, no, no, it is 30 hours. Then it may get down
to 10 or 15, whatever we need to make the numbers work. This is
what bothers me, and this is what really scares the living
daylights out of small business people because they don't know
where they are going. And it is apparent to them that the
government also doesn't know where they are going. And the
costs keep escalating and escalating and escalating, other than
in Washington, D.C., where all you have to do is pick somebody
up by the heels and shake the money out of their pockets. For
people that actually have to go to work every day with a plan
to be profitable, and cost is a huge factor in it because it
drives either the end price of the service or the product, gosh
we have done these people a tremendous disservice. It has been
a disservice all across the board.
We are destroying the most important relationship that we
have. It is a trust factor between those that own the
businesses and run the businesses and those that work there.
And when you destroy that, when you get into the really tough
times, when you really get into the hard pulls and you have to
rely on each other to get through it, you had better believe
that we are on the same side.
And I have to tell you, I understand the budget. I am
looking at the budget, and all I know is, yeah, we need more
money to do it, and yeah, we are going to take care of more
people.
The reality of it is, ma'am, how many pages of regulations
do we have now?
Secretary SEBELIUS. I can't tell you.
Mr. KELLY. My understanding is it is in excess of 14,000
pages. The bill was 2,700 pages, and it is still being written
today. So if I were to ask Ms. Sebelius where do you think this
ends? When does this merry-go-round stop? When do we finally
know what the costs of this are going to be? Not all these
wonderful things of what could happen in the future, but in the
reality of today for people who have to make a payroll, for
people who have to keep their associates intact--they trained
them, they have educated them, they have provided tools and
stuff for them--and now we are forcing them to separate that
relationship they had and making them adversaries. They are
against each other. And that is what I don't like about this.
The idea, great, great, affordable, accessible care for
everybody. The reality of it is, it is not affordable, and it
is never going to be affordable.
Chairman CAMP. The time has expired.
Mr. Pascrell is recognized.
Mr. PASCRELL. Madam Secretary, thank you for being here
again today. Many times you have been here before.
I had a question on the President's BRAIN initiative.
Secretary SEBELIUS. I am sorry, I am having trouble
hearing.
Mr. PASCRELL. I am sorry. I had a question on the
President's BRAIN initiative, one of the investments that I
think is particularly worthwhile. As the cochair of the
Traumatic Brain Injury Task Force, I am well aware of the
advances we have made in research on the brain in recent years.
It is pretty fantastic. Some good came out of the two wars when
we facilitated this effort, when we accelerated the effort and
got the DOD to understand what their responsibilities were. It
took us a long time doing it, but in a bipartisan way we
accomplished that.
Now, according to the Centers for Disease Control and
Prevention, each year an estimated 1.7 million people sustain a
traumatic brain injury in our country. Unfortunately, TBI is a
contributing factor to a third of all injury-related deaths in
the United States, 30.5 percent to be exact. Beyond these
numbers, TBI has become the signature wound of both Iraq and
Afghanistan. Twenty percent of the soldiers deployed are
estimated to have experienced some form of brain injury.
So it is clear brain injuries can impact anyone at any
time. It has really flowed over into the research and
development into sports in our own country, male, female, all
kinds of sports, and we have seen in our lifetime in the last 5
years the NFL finally owned up, and they are doing a great job
in trying to reverse what has become a horrific situation among
their own players.
This $100 million commitment is not just coming from your
department, but can you speak to the goals of the BRAIN
initiative for all of us?
Secretary SEBELIUS. Well, Congressman, I think it is one of
the exciting next horizons. Dr. Francis Collins, who runs the
National Institutes of Health, sees this as the project that
has a lot of parallels to the genome mapping project. We need
to map the brain, because whether it is looking at Alzheimer's
disease or the kinds of brain injuries that you have identified
that wounded warriors are suffering, or concussions that affect
our kids, we don't know enough about what is happening to
people and how to deal with it, how to prevent slowdown, or how
to rehabilitate some of these injuries and traumas.
So there is a public-private partnership initiative
announced, which will include private foundations that are
already working in the brain space; the Department of Defense,
who has a great deal of interest in this topic as you correctly
outlined; the National Institutes of Health, where a number of
the institutes are already doing critical research, but could
accelerate that further, and really in a shared collaboration
do the kind of multiyear brain mapping, accelerated cure
strategy that has been successful in a number of other areas.
Mr. PASCRELL. I have seen the help now as compared to the
help 5 or 6 years ago with our servicemembers, and it was a
catastrophe in the beginning. Soldiers are now being saved,
which obviously was not happening 5 or 6 years ago. And this is
a tremendous effort, with many departments that are involved.
How do you think servicemembers are going to be helped
potentially, in your mind?
Secretary SEBELIUS. I have had the opportunity in the not-
too-distant past to visit the amazing research facility at
Walter Reed, which is looking at a lot of these cutting-edge
strategies in terms of rehabilitating the wounded warriors, and
I think the research going on there, again trying to identify
what exactly happens when somebody--when an IED blows up, and
what posttraumatic stress syndrome actually is causing to
happen in the brain and how that can be dealt with in the
future, that has a clear impact on hundreds of thousands of
soldiers who are returning and trying to resume a normal life.
So the faster we can accelerate this, the more we know.
We know how to treat their limb injuries. We know what
happens if they have to be stitched up. We don't know nearly
enough about what has happened to their brain and nerve system,
and I think the faster we can get to this research, the more
help we can give.
Mr. PASCRELL. Thank you, Madam Secretary.
Thank you, Mr. Chairman.
Chairman CAMP. Thank you.
Mr. Griffin is recognized.
Mr. GRIFFIN. Thank you, Mr. Chairman.
Thank you, Madam Secretary, for being here. I appreciate
your service. I appreciate you answering our questions today.
I believe in healthcare reform, and I believe we need
healthcare reform, and what I am particularly concerned about
is reform of Medicare that my mother relies on and Medicaid,
which is not in this Committee's jurisdiction. But I am
concerned about long-term permanent reforms, not tweaking at
the edges. I believe that we need to strengthen these reforms
so they will be there for my generation. I know they will be
there for my mother, but I am worried about my generation and
the next generation.
And I am particularly concerned about what we call in
Washington mandatory spending, squeezing out a lot of the
investments that we need to be making in breast cancer
research, in NIH research, Alzheimer's, MS. A lot of people may
not realize that a lot of that is from the discretionary side,
and the longer we leave the mandatory side without reform, the
more pressure it puts on those critical investments.
So that brings me to--you mentioned Arkansas. And I know
there is a big debate going on with Arkansas, and you have been
working with Governor Beebe down there on Medicaid expansion or
some alternative to that. My view is we ought to have
permanent, lasting reforms all over the country. I like what
was approved for Rhode Island in early 2009.
But I want to ask a few questions specifically about what
is going on in Arkansas. I have some of the correspondence with
Governor Beebe. Have you met with--I know you met with Governor
Beebe. Have you met with any of the legislators in the House or
Senate from Arkansas?
Secretary SEBELIUS. I have not, sir.
Mr. GRIFFIN. Would you like to meet with any of them? Would
you be willing to meet with any of them?
Secretary SEBELIUS. Sir, we really--the way the Medicaid
program runs, we negotiate with the State.
Mr. GRIFFIN. Okay. Have you seen the bill that is----
Secretary SEBELIUS. No, sir.
Mr. GRIFFIN [continuing]. That is floating around? Okay.
So if this bill--and the vote is coming up soon, it passed
the Senate, it is going to come up in the House soon, at least
the appropriations for it. The bill itself I think passed
yesterday. If this passes, have you decided whether to approve
it, or are you waiting----
Secretary SEBELIUS. No, sir.
Mr. GRIFFIN. Okay. So it is not approved.
Secretary SEBELIUS. Well, again, I am a former legislator,
a former Governor. As you well know, anticipating what any
legislative body may do before they do it is probably not a
very beneficial expenditure of time.
Mr. GRIFFIN. I am familiar with that.
So your staff hasn't seen--I mean, the bill has been
published.
Secretary SEBELIUS. I assume my staff is in close touch
with the Arkansas staff, but, again, we have not looked at
the--when the bill passes, we will be happy to take a look at
it.
Mr. GRIFFIN. Got you.
I am very concerned about how we pay for the estimated $630
billion that it will cost for Medicaid expansion. I believe we
need to take care of our most vulnerable, but I am afraid that
we are setting up expectations and making promises that we are
not going to be able to keep. So I would just continue to
advocate--I will continue to advocate for long-term, lasting,
permanent reform of Medicaid, and I believe you would find a
lot of people on this side of the aisle who are willing to work
with you in fashioning reforms that will make our Medicaid
program stronger. The same with Medicare. Extend the life of it
and raise the quality of care for people.
I thank you for being here today.
Chairman CAMP. Thank you very much.
Mr. Davis is recognized.
Mr. DAVIS. Thank you very much, Mr. Chairman.
Madam Secretary, let me thank you for appearing. But more
than that, let me thank you and your staff for the way in which
you have handled one of our most precious commodities, and that
is health care for the people of these United States. I think
that you have done and continue to do an outstanding job.
I was pleased to note as you explained the options that
exist for small businesses, that this is something that people
have been trying to deal with for many, many years without
coming up with anything that was going to be beneficial or
helpful. I was also pleased to note that the exchanges across
the board seemed to be on target; that is, they are moving
right along, notwithstanding all of the criticism, all of the
efforts that there have been to discredit that approach and to
discredit them.
Two questions that come to mind. I am pleased to note that
health education, health awareness, health promotion, the
utilization of individuals to interact with the general public,
providing them with information, early screening and detection,
I think all of these things generate cost savings that are
sometimes almost immeasurable.
Let me just ask you, how has the prevention, early
detection, screening, these aspects of the plan been working,
and how are people making use of them?
Secretary SEBELIUS. Well, Congressman, one of the, I think,
very important features in the Affordable Care Act is a
direction to shift from acute care to preventive care, and that
is contained in all aspects of the bill. So insurance policies
in the private market now have reduced the financial barrier
for people to access preventive care. No copays, no coinsurance
for mammograms and colon cancer screenings and vaccinations for
kids, things that we know will keep people healthy in the long
term or identify a problem early enough that it can be
lifesaving.
Medicare benefits now have more robust preventative care
strategies, including a yearly wellness checkup and a plan to
sit down with a healthcare provider and make a strategy for the
future, something that we know is benefiting the 54 million
seniors who participate in the Medicare program.
But there are also now community strategies under way and
efforts to really, through our community health centers,
through community health workers, try to prevent hospital
admissions by delivering care strategies at an earlier point,
getting school-based health clinics into underserved areas so
that children and their families have access to care providers.
So I think all those strategies are really aimed at
reducing the health burden that people feel, and that is not
just for those individuals. They are more productive workers if
they can go to work every day. They are more productive parents
if they don't suffer from an illness. They live longer lives.
They are more productive in their communities. So this has an
economic benefit. Beyond just the individual family and the
individual patient, it has an economic benefit for communities
and for our country.
Mr. DAVIS. Let me ask you how have young people, young
adults, been making use of the provision that they could stay
on their parents' insurance policies until age 26?
Secretary SEBELIUS. Well, we have about--at last count I
think there were about 7 million young adults who are now
enrolled in their parents' plan, and over 3 million of those
young adults had no insurance at all before this provision came
about, so that young adults in America were the second largest
category of uninsured Americans. And for a number of them, that
may have been risky strategy, but it was okay. For others who
were identified with a serious illness or who were in an
accident or had a health situation, they are facing a lifetime
of bankruptcy. They may bankrupt their families at the same
time. So this provision that allowed across the country young
Americans to enroll in their parents' plan has been enormously
successful.
Mr. DAVIS. Thank you very much. I yield back.
Chairman CAMP. Thank you very much.
Mr. Renacci is recognized.
Mr. RENACCI. Thank you, Mr. Chairman, and thank you, Madam
Secretary, for being here. Thank you for your service.
One of my colleagues was talking about small businesses. Of
course, I was a small businessowner for almost three decades
before coming here just 2 years ago, and I know that the
biggest problem with jobs and job creators are certainty and
predictability, and I know this healthcare rollout is causing a
lot of uncertainty and unpredictability. But even in the
business world when you have that, sometimes you have to
redirect, you have to change, you have to make certain
decisions.
I want to read to you an email that I received, and it is
from a worker in my district. He writes that upon returning to
work, he was told that his hours were going to be reduced from
a full-time 40-plus-hour-a-week job to 30 or less, which for
him would result in approximately a 25 percent decrease in
income.
The employer mandate penalty raises significantly the cost
of employing full-time workers, especially low-skilled workers,
because the penalty is a higher proportion of their
compensation than for the higher-skilled worker. Would you at
least acknowledge that the employer mandate will hurt low-
income workers the most, and what is the Administration's plan
to address the law's disproportionate impact on that vulnerable
group?
Secretary SEBELIUS. Well, I would say, Congressman, first
of all, what we know about the market that falls under the
employer responsibility plan is about 94 percent of
businessowners who employ 50 full-time workers or more
currently offer health insurance; 94 percent. If you get over
200 people, it is about 98 percent currently offer health
insurance.
What we also know is that they pay significantly more for
that policy that they are offering their workers than their
large competitors do, because they don't have any market
leverage. They can't negotiate with the hospital, they can't
negotiate with the drug company to say, we will send you 1,000
workers, and you discount our hospital bills.
So what we are looking at is capturing markets that already
exist, but actually giving for the first time people some
choices that they don't have. They will have competitive plans,
transparent plans. They will know what is happening going in.
Their workers will not be penalized for a preexisting health
condition, which is a huge issue for a small employer, and they
will be able to move forward.
The employer mandate only falls on employers who have 50 or
more full-time workers, and, as I say, right now 94 percent of
them are in the market, but they are a market that isn't very
cost-effective for them.
Mr. RENACCI. But you have heard that most companies are
looking to keep their employment less than 50 employees.
Secretary SEBELIUS. Actually, I have not heard that. I have
heard a variety of strategies and some speculation about what
may or may not happen. What we know happened in the one State
where this was fully implemented with an employer
responsibility provision was Massachusetts, and in
Massachusetts, while the predictions were that businessowners
would drop coverage, that people would get out of the market,
just the opposite happened. In fact, they have more small
businessowners in the market today than they did when the law
was first passed. They didn't cut hours, they didn't shift
rates, they didn't drop employment.
What I also know, Congressman, from talking to
businessowners across the country, is they lose good employees
every day to large competitors based on the benefits they can
or cannot offer; that this is a huge challenge for small
businessowners because they can't provide the coverage. For the
first time we will have virtual pools larger than they have,
negotiated powers, transparency, and we think those market
strategies will be enormously beneficial.
Mr. RENACCI. Well, I hope you are right. I mean, again, as
a small businessowner and somebody who still has a lot of small
business friends, you touched on costs, and it is kind of
interesting, because when I talk to my small businessowners
back in my district, they are talking about premiums up 52
percent, premiums up 35 percent.
There is a lot of studies out there. An Oliver Wyman study
says that many under the age of 50 will see rates increase
significantly. The Aetna CEO has warned premiums would double
in some marketplaces, and that goes on and on. The President's
healthcare plan at one point in time was a promise of a $2,500
reduction in family premiums. Will that ever occur? Do you see
the President's promise of a $2,500 premium reduction for all
American families occurring?
Secretary SEBELIUS. Well, again, I don't think that was the
President's promise. It was what the Congressional Budget
Office estimated, that people would see a cost decrease as we
moved into a fully insured marketplace. And I think,
Congressman, what we know is that the CBO, you know, is a
nonpartisan objective body. They are looking at strategies in
the markets.
What you are referring to in terms of current rate
increases, first of all, is not impacted by the full
implementation of the Affordable Care Act because it is not in
place yet; and, second, is really a situation where there are
costs going up and down. But what we know is that they are
rising at a much slower rate right now than they did 3 years
ago before this law was passed.
We have insurance departments, many for the first time,
with aggressive rate-review strategies in place, where they are
actually looking at the rates, they are rejecting double-digit
increases. And we have the so-called 80-20 rule, which has
never been in place before for insurance companies, where they
actually have to spend 80 cents of every dollar on health
benefits, not CEO salaries, not marketing plans, but health
benefits, and the companies that didn't meet that threshold
returned about $2 billion last year to customers. People all
over this country got checks back from their insurance
companies.
So there are some market strategies in place that are cost-
effective.
Mr. RENACCI. I think I am out of time. I yield back.
Chairman CAMP. Your time has expired.
Ms. Sanchez is recognized.
Ms. SANCHEZ. Thank you, Mr. Chairman and Madam Secretary.
Thank you so much for taking the time to appear before the
Committee today to discuss the Administration's fiscal year
2014 budget.
Budgets, simply put, are just a reflection of our
priorities, and our priorities should be very clear: protecting
our seniors in their golden years, giving our children quality
education so they can achieve their dreams, and properly
funding health care to keep our families in good health. And I
was pleased to see that the President's budget does address
many of those shared priorities.
In particular, I was happy to see that the President's
budget adds $1.5 billion in new funding to implement the
federally facilitated and State partnership exchanges that will
help provide healthcare insurance for over 25 million people;
that the President's budget invests $1.4 billion in new Early
Head Start Childcare Partnerships. That is an issue that is
incredibly important for southern California; that it increases
funding for the Food and Drug Administration by $280 million to
improve food and drug import safety; that it continues to
invest in the National Institutes of Health; and that it
increases funding for vital Title X family-planning programs by
$30 million over last year's request.
All of those, I think, are important priorities that every
American family can benefit from. And as a working mom, I have
a particular soft spot in my heart that the President's budget
would improve both the availability and the quality of child
care. I hear far too often from parents that the lack of
affordable and quality child care is a significant barrier for
them to work.
But what I want to really focus in on is something that has
been touched on by my colleague, Mr. Kind, and others in
passing, and that is the savings that the Affordable Care Act
produces, because something that I find somewhat paradoxical,
if you will, is that the Republican budget that we saw included
all of the ACA's Medicare savings and taxes in that budget. So
on the one hand I hear from my Republican colleagues, they
claim that the ACA destroyed Medicare and levied a heavy tax
burden across health care, but on the other hand they passed a
Republican budget that retained the ACA's savings.
So, Madam Secretary, I would be interested in hearing about
some of the savings that the ACA has produced and your comments
on the paradox that on the one hand folks seem intent on
repealing ACA, but on the other hand they want to retain the
savings from ACA.
Secretary SEBELIUS. Well, I think the President believes
very strongly, as we do in the Department of Health and Human
Services, that keeping our commitment to the seniors of this
country that was made in 1965 when my father officed in this
building, and sat on the Energy and Commerce Committee, and
helped to write the Medicare law, and just turned 92, and he is
pretty happy that he did----
Ms. SANCHEZ. I am sure you are, too.
Secretary SEBELIUS. I am. We are very concerned that, on
one hand, Medicare beneficiaries continue to receive that
commitment and that promise, and that we find strategies that
continue to look at deficit reduction and long-term growth in
the plan. And I think that is what is captured in the
President's budget. It was part of the Affordable Care Act,
$800 billion worth of savings, and we are very much on track to
fully implement that with additional benefits.
People said, you can't do it, you know, it can't be done,
you can't deliver good care and cut costs. Well, I think we are
on our way, and we are in year 3 of doing exactly that. We see
that same strategy into the future where you can actually
figure out care strategies that work to benefit a growing
number of seniors. We have 11,000 people a day turning 65 in
this country, each and every day, so we have the largest number
of Medicare beneficiaries ever involved in the program. And yet
we are on an historic low in spending, 0.4 percent in 2012.
Never seen before. And as Congressman Kind said, the CBO has
reconfigured their projections into the future years.
So I think the President's budget captures the notion that
there are very effective strategies that deliver appropriate
care, make sure that we take seniors' needs into account, and
we continue to update quality programs, and at the same time
constrain the costs into the future.
Chairman CAMP. All right, thank you.
Mr. Ryan is recognized.
Mr. RYAN. Thank you.
I guess I should pick up where Mrs. Sanchez left off. The
difference in our budget approaches were we make sure that all
the Medicare money stays in Medicare. The chief actuary of CMS
was here just a year ago saying you can't spend the same dollar
twice. You can't, on the one hand, count savings from Medicare
to pay for ObamaCare and count it as savings to Medicare. He
even went so far as to put an appendix in the report to that
effect.
The other point is in our budget we put a reserve fund,
which is a budgetary mechanism to address any inadequacies in
the provider community that may arise if the case occurs where
we feel like providers are restricting access to beneficiaries
because of these cuts.
So that is just to answer the difference with the paradox,
so-called.
I have three questions. You just released your budget this
week, Madam. It's good to see you, by the way, Madam Secretary.
First on the means testing, for Part B and D, you have in your
S-9 tables, a $50 billion savings associated with that. Before,
we have had mutually agreed-on policies which got us $30
billion in savings. Where is the delta? Where do you make up
the difference, the $20 billion?
Secretary SEBELIUS. The difference, Congressman Ryan, is
that there is a new formula. Rather than having, I think, what
was in the past four different categories, it is now nine. The
lower limit----
Mr. RYAN. Is the top still 80, or does it go up to 90?
Secretary SEBELIUS. The top is 96--196.
Mr. RYAN. No, no, no. The percentage that the beneficiary
pays of----
Secretary SEBELIUS. Yes, it is still 90 percent. But there
are more categories.
Mr. RYAN. More categories. Is it still kicking in at
$80,000 for an individual and $160,000 for----
Secretary SEBELIUS. I mean, I would love to get that to you
in writing just so I make sure I don't----
Mr. RYAN. I certainly want to know.
Secretary SEBELIUS. There are more categories, and there is
a slightly different starting point and a different ending
point.
Mr. RYAN. Okay. A different starting point on income or
different starting point on threshold, on percentage of the
premiums that the person bears themselves?
Secretary SEBELIUS. The percentage of the premiums that the
person bears themselves is the same.
Mr. RYAN. Okay. All right. So $20 billion is a pretty big
difference when you are looking at a $30 billion score.
Secretary SEBELIUS. And I would be happy to get you all the
details.
Mr. RYAN. Okay. So your Medicare Advantage demonstration
program, which I think scored at $8.5 billion, where you are
offsetting 71 percent of the hit to the ACA in 2012, then it
goes to 32 in 2016, if I recall. I don't see that here in the
budget. Did you not put that in your budget? That is a pretty
substantial change in mandatory spending, especially for a
demonstration program. Is that not in your budget?
Secretary SEBELIUS. It is in the baseline, Congressman. It
is still going on. And I think the very good news is we are
seeing beneficiaries choose higher-quality programs, and we are
still very much on track to actually pay Medicare Advantage
plans at the same rate that fee-for-service plans will be paid
on even a faster pace, including the quality demonstration
plan. So it is all working very well.
Mr. RYAN. You are sticking with the formula of phasing it
out in 2014?
Secretary SEBELIUS. Yes.
Mr. RYAN. Okay. IPAB. I am trying to watch time here. I am
not going to ask you to pore through your budget here, but in
the past you have not had attributed any savings to IPAB in
your budget before because your threshold of growth rate, GDP
plus 0.5, was above what you estimate cost growth to be. But
now you have savings starting in 2021, 2022, 2023 so that IPAB
is actually starting to score positive savings.
How do I interpret that? Does that mean that you believe
excess cost growth at the end of the budget window is starting
to perforate the GDP 0.5, or are there new proposals associated
with IPAB that accrue those savings?
Secretary SEBELIUS. Congressman, there aren't new proposals
that accrue those savings, except for the fact that this budget
does capture what the President's belief is, which is different
than the Affordable Care Act, which is that IPAB should kick in
at GDP plus 0.5 rather than GDP plus 1.
Mr. RYAN. But that was in your budget last year as well.
Secretary SEBELIUS. I understand. This is really based on
just the actuary's estimate of what will happen in outlying
years and right now as they look at the snapshot into the
future. As you just heard, the CBO estimates have revised the
long-term strategy. I think it can be revised again if we stay
on a sustained cost reduction. But that is just a reflection of
when they feel that the trigger point might meet with the 0.5.
Mr. RYAN. So that answers that question. So the actuary is
now saying the IPAB mandate, keep spending within GDP 0.5,
which last year's budget didn't happen in the first 10 years
because Medicare spending was below that, now they are saying
it is being triggered so it is going to occur in 2021? If you
can just answer briefly.
Secretary SEBELIUS. Can I get back to you on that? My
understanding is----
Mr. RYAN. It has huge budget effects in the outyears.
Secretary SEBELIUS. I thought the yield projection was
actually in 2019 that IPAB would trigger, and it has now been
moved to 2021. That is what I need to check. That was certainly
my understanding.
Chairman CAMP. Thank you.
Ms. Schwartz is recognized.
Ms. SCHWARTZ. Thank you, and I am pleased to have you with
us, and I appreciate some of the good information that has been
discussed this morning, particularly in relationship to the
incredible progress that you have made in the last 3 years in
implementing the Affordable Care Act, and in containing the
rate of growth and costs in both the private sector and in the
public sector and between Medicare and Medicaid. So some really
important work is going on in this country, and I think we have
moved that dial forward, and you have and the Administration
has, in really quite extraordinary ways. So it bodes well for
the future as we stay on this course.
There are a lot of challenges that you face, and I know in
States like mine where there are real issues where the Federal
Government is going to have to step in, you are going to have
to step in, to assure that Pennsylvanians benefit from the
increased opportunity to buy insurance, and I hope we can
continue to build on some of the really important work we are
doing in some ways on healthcare delivery system reform.
So I wanted to ask you specifically about an issue I have
been pushing on pretty actively, you won't be surprised that I
would raise this issue, but it is one that actually has some
bipartisan support, as you know, which is the repeal of the
sustainable growth rate, finally making a decision
legislatively, I know you need us to do that, which is to
recognize that we are not going to implement the sustainable
growth rate. We should not. We are not going to cut physician
reimbursement in this country by 10 or 20 or 30 percent, which
is all a possibility, and the budget that the President has
proposed actually says that, that we are going to repeal SGR
and that we are going to replace it.
And you added, which is very important to me, it is not
just about saying this failed--I wasn't here when it happened,
but this failed--and we are going to recognize that, but it
really is about moving forward in a way that does sort of
universalize what you have been talking about some this
morning, which is that we should be paying our healthcare
providers differently. That would make sure that all providers
in this--under Medicare meet quality standards that are
accountable for that, that are transparent, that we help them
do that. We are doing that, but we improve the health status of
our seniors in particular.
We think this will have a role for younger people as well,
but that we actually pay them in a way that encourages that,
encourages them to coordinate care, and to meet these quality
standards, and contain the rate of growth in costs.
I have written legislation to do that. There has been a lot
of interest on the part of the Health Subcommittee here on Ways
and Means to pass legislation that would give you the tools to
do that, that would build on these models so that they wouldn't
be just interesting demonstration projects that are making a
very big difference or in States where they are really doing
important work on this or doing that, but are actually changing
the way we reimburse physicians in this country.
And I appreciate the language that you have put in, and
what I would ask you to do is just to speak to how you think we
get there. I know it requires us to take action. And I asked
the Chairman, and I know that Mr. Brady has been very helpful
on this, but to really see if we can't get that done this year,
rather than just yet again saying we are not going to implement
the SGR, but we are going to keep that uncertainty for
physicians and health providers in this country.
My concern, of course, is that if we do that, we hold them
back from really embracing some of these new, different ways of
delivering health care in the way they want to, hope to, and
that it actually meets the needs of our seniors in this
country.
So do you want to help us on that and help us figure out--
your leadership on this could be very important in moving us in
this direction.
Secretary SEBELIUS. Well, Congresswoman, I know you have
had a great deal of interest in this for a long time, and I
appreciate your leadership in this area. I think the President
shares the concerns that, first of all, the lingering
uncertainty of the SGR cliff really is probably the single
biggest issue threatening the care of our seniors. There is way
too much time and energy that, frankly, doctors spend every
year coming to Capitol Hill trying to get a fix that then takes
them down the road for the next 10 or 11 months, and then they
start all over again. So having a long-term strategy we are
eager to work on.
What we have proposed as part of this budget is--and our
baseline assumes that the SGR is fixed, but what we would like
to propose is a couple of years of sort of status quo, if you
will, which has been done by Congress a year at a time, and
then working carefully with this Committee and others who have
a great deal of interest in this, and certainly the provider
community, on formulating a value-based payment system that
would be our future look at how we pay Medicare providers, very
much recognizing that payments should be tied to outcomes, it
should be tied to care delivery, it should be tied to protocol.
I think there are ways to do that. We are beginning to see
accountable care organizations and medical home models and a
variety of strategies.
And the other thing that is going to be in place, which is
a key part of this, is the broad implementation of electronic
health records, which for the first time will actually capture
and measure what is actually happening in the marketplace.
So we would love to work with you.
Ms. SCHWARTZ. This is really very bipartisan. It is a
chance for us to get that done. Thank you very much.
Chairman CAMP. It is. We have released a memorandum and
outline and phase 1 and phase 2 with our friends on the Energy
and Commerce Committee as well, and we are working in a
bipartisan way as well in both Committees on this issue.
Dr. Price is recognized.
Mr. PRICE. Thank you, Mr. Chairman, and welcome, Madam
Secretary.
We are talking about the budget here. Your comments in
opening remarks talked about this budget strengthening the
economy, providing middle-class job growth and a ``thriving
middle class.'' And I just thought I would share with you a
couple of examples from the real world.
A car dealer in my town has 168 employees. Because of the
ACA, 166 of those employees will be moved from full time to
part time, 28 hours a week. A fellow that visited my office
this week here in Washington has a number of Burger King
outlets and has over 900 employees, moving all but five of them
to part time because of the ACA.
Madam Secretary, that is not going to lead to a thriving
middle class. That is not going to lead to job creation. This
bill is harmful to the economy, harmful to job creation. And as
a physician, you and I have had conversations, I believe it is
fundamentally harmful to the quality of care and access to care
that is provided by the docs out there who are trying just as
hard as they can to take care of their patients.
To that point this budget has $374 billion in new
reductions in Medicare spending, $307 billion of that $374
billion is out of the provider hide, out of the doctor payment.
That is not a positive move. The guys and the gals my age out
there practicing medicine are looking for the exit door. What
is their strategy to be able to survive in spite of the law
being put in place?
The HER is a classic example. You have rural docs, single-
practice physicians out there in rural communities, small
communities, trying to care for their patients, and this
imposition by the Federal Government makes it such that they
are going to have to close their doors because they can't put
in place the requirements for the HER. There is a piece of
legislation that Ms. Black has authored that would solve that.
I would urge you to take a peek at that.
I want to ask a couple very specific questions. The first
is on the in-office ancillary exception and closing that in-
office ancillary exception. As you know, oftentimes services
provided in a physician's office are more efficient, more cost-
effective, have higher quality of care than in any other
setting, and yet this budget closes the in-office ancillary
exception for things like radiation services and physical
therapy and the like, something that MedPAC themselves said
ought to be equalized in terms of payment so that you don't
incentivize treatment at one venue or another over the
objection of the patient or the physician.
Is there any rationale to why the in-office ancillary
exception is being closed? Maybe you can get back to me on
that.
Secretary SEBELIUS. I just wanted to verify, Doctor, what I
thought was the case, and what we are looking at is the
utilization factor, that often on the same day we are seeing an
increased billing. But I would like to get back to you in
writing with some of the rationale behind what you have just
identified.
Mr. PRICE. That would be great.
The same-day treatment, same-day utilization of services is
oftentimes the most convenient for patients.
Secretary SEBELIUS. That is true.
Mr. PRICE. It may not be for government, but for patients.
Secretary SEBELIUS. We are not trying to diminish the
number of in-day; we are just trying to diminish the number of
billings that occur when a patient is actually accessing a
physician.
Mr. PRICE. Heaven forbid that the patient should be cared
for in the physician's office, I understand that.
Let me move, please, to Medicare Part B drugs, cancer care.
The quality of care for cancer patients in this country is
being harmed because of a decrease in access to care because of
a decrease in payment for cancer drugs in the office setting.
Your budget proposes a further cut in cancer drugs through
Medicare Part B drug services. Is there any rationale for that?
Secretary SEBELIUS. Actually, I think, Congressman, what
you are referring to is what happened with the sequester cuts.
Mr. PRICE. The cuts in sequester were ASP plus 4.3 percent.
The cuts in your budget are ASP plus 3 percent, a lower amount.
Secretary SEBELIUS. But, actually, the cuts that are
proposed in the budget that we have put forward would not
interfere with the administrative service of the cancer drugs.
Those are held harmless. We are taking an additional cut from
actually the drugs themselves. What we learned during the drug
shortage is that it is not the pricing of the Medicare drug
that has impacted a drug shortage at all.
What happened in the sequester with that blunt cut of 2
percent across the board is the entire cut actually came out of
the physician's side of that puzzle, and it did not affect the
cost of the drug, it affected the administration of the drug,
and that is why some of the cancer centers told us they were
choosing not to admit Medicare patients any longer.
Mr. PRICE. Correct. And that has increased in this budget.
Mr. Chairman, thank you.
Chairman CAMP. Thank you.
Mr. Reed is recognized.
Mr. REED. Thank you, Mr. Chairman.
Thank you, Madam Secretary, for being here today.
Madam Secretary, I would like to take some of my time to
focus on a very important issue to me, and that is the solvency
of Medicare itself, and in particular Part A, the Part A trust
fund.
You are a public trustee, obviously, for Medicare, and the
report in 2012 indicates that Part A will be bankrupt in 2024.
Do you agree with that report, and is that still when the trust
fund will go underwater?
Secretary SEBELIUS. Well, I think with this budget we have
added 4 or 5 years again to the life of the trust fund. As you
know, the ACA added 8 years to the life of the trust fund, so
repealing the ACA would actually accelerate that timetable
significantly.
Mr. REED. So the best that you did with this budget, under
your opinion, is that you moved it 5 years. So that essentially
means everybody who is----
Secretary SEBELIUS. Four years, I am sorry.
Mr. REED. Four years. Okay.
So that means everybody who is 51 years of age today and
younger are being promised by the President's budget and your
office that Medicare Part A will be bankrupt; is that correct?
Secretary SEBELIUS. Well, sir, as you know, first of all,
it isn't bankrupt, it is that it would bring in less than is
anticipated going out, and I think we have two opportunities--
--
Mr. REED. No, no, no, no, no. No, I don't think that is----
Secretary SEBELIUS. It isn't entirely out of money.
Mr. REED. I believe it is 25 percent short in what they are
going to be reimbursing the providers----
Secretary SEBELIUS. As I say, it brings in less than it
would spend.
Mr. REED. So just so we are using the same term, what term
would you describe that as?
Secretary SEBELIUS. Well, bankrupt to me means that it is
out of money. I just want to make that clear, that there is
money in the trust fund.
Mr. REED. But what term would you use to describe that,
because I have had this issue with people on the other side of
the aisle, and they say ``bankrupt'' is not the right term. How
would you as an official represent that status? Insolvent?
Underwater? Underfunded?
Secretary SEBELIUS. Well, it is underfunded, I would say,
based on current expectations of what will happen with cost
strategies. And I think we have great opportunities between now
and then to change those projections dramatically.
Mr. REED. Between now and then. But, as of today, the best
we can do is say to people who are 50 years and younger----
Secretary SEBELIUS. As I say, the vote taken by the
majority of this Committee would move that insolvency date much
closer to where we are right now. It would actually accelerate
the date, because 8 years of the trust fund were added with the
passage of the Affordable Care Act. We would add another four.
And we would love to continue to work on strategies with this
Committee, keeping Medicare benefits in place and making sure
that we can accommodate them into the future.
Mr. REED. So then the plan I am hearing from the
Administration is that we are going to take each year small
steps to just push the number out 1 or 2 years and not fix the
problem in perpetuity.
See, I am interested in fixing the problem in perpetuity. I
want Medicare to be solvent. I don't want people that are 50, I
don't want people to look at that 2024 date that was in your
2012 report and say, I am 54, and all you are telling me is
that it is going to be bankrupt? I will use the term
``bankrupt.'' ``Underfunded'' is the term you use.
I think that is a real problem. I think that is a real
problem to send to American seniors and people who are getting
to the point of retiring, and I want to find out what the plan
is, and all I am hearing is we are going to take it year by
year, and we will move that number 1, 2, 3, 4 years. What is
the long-term plan you are advocating?
Secretary SEBELIUS. Sir, we would love to work with
Congress on a long-term plan with the contingency that the
long-term plan is not to destroy Medicare as we know it. And
that is what has been put on the table, that in the future
seniors would not count on a guaranteed set of benefits. What
they would have is a voucher. They would negotiate for their
care----
Mr. REED. I am familiar with----
Secretary SEBELIUS. Everyone projects that Medicare
beneficiaries would pay huge amounts.
Mr. REED. I appreciate that, and I am familiar with how you
characterized and classified the House Republican budget and
the proposals on that. But the bottom line is that the system
is going bankrupt. It is going to be underfunded. We need to
solve it. And all I am hearing from you today is the
Administration say, we can't change the program. Medicare as we
know it cannot be changed.
Secretary SEBELIUS. Actually, sir, in the last 4 years----
Mr. REED. The question I have for you, Madam Secretary, and
I don't mean to get into this give-and-take here, the question
I have is do you think we can balance or make Medicare solvent
in perpetuity by leaving the system in the exact same way that
it is today?
Secretary SEBELIUS. I don't think the President or our
Administration supports leaving the system exactly as it is,
and I would suggest in the last 4 years, sir, that with the
legislation passed, and with the budget that is before you,
more significant changes are being put forward than have been
put forward in decades. We would love to continue to work on
how to preserve Medicare well into the future, keeping the
promises that we made in 1965.
Mr. REED. Thank you.
Chairman CAMP. The time has expired. Now we will go back to
the beginning. I just want to know for the record that our
budget does have a guaranteed benefit in it.
Madam Secretary, last week Wall Street Journal columnist
Peggy Noonan dedicated her column to the wisdom of Lee Kuan
Yew, who is the visionary leader who really created modern
Singapore, and in describing his book on insights on China and
the United States, in her words, Mr. Yew is bullish on
America's immediate prospects, but concerned about the long-
term future. She noted that he is greatly concerned about our
prevailing culture. And to quote him, ``a major problem is the
day-to-day images of violence we expose people to through
television.''
Madam Secretary, I have worked on mental health issues, and
I am curious as to what your thoughts are as to the linkage
between violence in our culture on TV, in movies and video
games and mental health for kids and young adults, particularly
troubled young adults, and are you concerned about the
pervasive violence in our culture and entertainment industry?
Secretary SEBELIUS. Well, Mr. Chairman, I am concerned
certainly about the pervasive culture of violence throughout
media, in the entertainment industry, in movies, on TV, and in
video games, but also on our street corners, the number of
children who live in extraordinary violence day in and day out.
They don't have to turn on the TV; they have to walk outside.
So I think we have a culture of violence in this country
that is alarming. It clearly has a different impact on
different people. But there is no question that I think it does
have at a minimum a desensitization for a lot of developing
minds about what the impact of violence is, and certainly for
someone who is disturbed may have even a more frightening
impact.
Chairman CAMP. Does it concern you, then, that the Federal
Government provides subsidies to some of these industries,
often through the Tax Code, and should the Federal Government
be in the business of subsidizing something such as this that
may contribute to the breakdown of mental health in this
country, or contribute to this culture that people find outside
as you will and the desensitization that occurs on the street
as well as in the minds of those who are troubled?
Secretary SEBELIUS. Again, I think, Mr. Chairman, that is
an appropriate conversation for those of you who are looking at
the Tax Code to have. I do feel that there are lots of
influences throughout our culture that impact folks, and what
the appropriate balance is between industries that we want to
encourage and censorship and what they do I think is always
open for debate.
But I do share your concern that there is a pervasive
culture of violence both throughout the media and the
entertainment industry, but also I think America is a violent
country, and that is acted out in neighborhoods and on street
corners on a regular basis. And that has an impact on our
health, on our mental health, on our communities, on our kids.
Chairman CAMP. All right, thank you.
Mr. Levin is recognized.
Mr. LEVIN. Mr. Chairman, in a way I am glad you kind of
shifted the discussion from Mr. Reed's approach to the issue of
violence, because I share your concern on that, and I am
hopeful that the Senate will act on gun violence in the next
weeks and bring it up to the House, and we can look at the Tax
Code, too.
Mr. Reed is still here, and I just want to say something if
I might, because I think we have a friendship. Look, healthcare
reform isn't going to be repealed. I think everybody should
accept that as a given. And for those who wanted it repealed, I
think the case has become more difficult because of the
diminution in healthcare cost increases. They have been going
down now for 3 years, Madam Secretary?
Secretary SEBELIUS. Yes, sir.
Mr. LEVIN. And there is some evidence that in part it is
because of healthcare reform.
Mr. REED. Will the gentleman yield?
Mr. LEVIN. Let me just finish.
Also, there have been some clear benefits, and you
mentioned, Madam Secretary, some of them, the millions of
younger people now insured as an example, the millions of
seniors who now are paying less for prescription medicines.
So I think with that situation, it is hard for those who
opposed healthcare reform to be sure what to do. And I just
urge that there be resistance to overstating, to doom and
gloom, and I think often to kind of scaring people. That is why
I think the Secretary resisted your characterization of
Medicare going bankrupt.
On this Committee we have faced underfunding of Medicare
many, many times. You were in control for a number of years,
and there wasn't this perpetual long-term resolution of the
problem. But, again, many times we faced underfunding, and
sometimes as a result we have reduced provider reimbursement.
What healthcare reform really does in good measure is to
begin the path of changing from fee-for-service to a very
different reimbursement system. And while there is some
agreement across party lines on this, in terms of scare
tactics, sometimes they have described IPAB as a death panel
when it is really not that at all.
So let me just quickly ask the Secretary--and then, if
there is time, I would be glad to yield--I think another kind
of doom-and-gloom approach of those who never wanted the
healthcare reform, it is not going to be repealed, is to talk
about premium increases. So just address quickly, if you would,
your feeling about what is going on.
Secretary SEBELIUS. Well, Congressman, the insurance plans
are in the process of beginning to submit preliminary estimates
on rates in the new marketplaces. Those will be negotiated by
either the State-based markets or the Federal market, and by
later this summer we will have a clearer picture.
Again, what we know from the Congressional Budget Office is
that the estimate is that rates will be significantly more
competitive than people find them right now. There will be an
elimination of a lot of the overhead administrative costs.
There will be competition as a market strategy, and I have seen
this as an insurance commissioner. It does work, that when
plans have to compete side by side and it is very transparent,
that in and of itself drives prices down.
So we are anticipating having people, if you compare
policies to policies, what they have now and what they are
going to have, a very beneficial set of rates and benefits that
people will have an opportunity to choose from, some of them
for the first time ever in their lives because they have been
locked out of or priced out of the market.
Mr. BRADY [Presiding]. Well, thank you, ma'am. I appreciate
that. All time has expired.
I appreciate Mr. Reed's concern about the need to save
Medicare. The clock is ticking. We need to act now, Republicans
and Democrats. I don't see that as frightening; I see that as a
genuine concern for a program that is in very severe financial
straits. To try to bury our heads in the sand is really the
wrong thing to do for our seniors.
I think the only scare we heard was the witness' claim that
Republicans want to end Medicare as we know it. Didn't that win
the national award for the political untruth of the year just 2
years ago? Maybe we would be better off if we actually came to
the table together to figure out how we are going to save
Medicare rather than throwing out what everyone knows has been
discredited.
To that point, I would be cautious about claiming that the
slower growth in healthcare costs come from ObamaCare.
Independent experts don't say that is the case. In fact, many
of them believe that is because this is the worst economic
recovery in 70 years. Twenty million people can't find a full-
time job. Millions more have just given up looking for work. It
is Jimmy Carter days for them.
Mr. BRADY. And since the bottom of the recession, you are
more likely to be forced to go to food stamps to feed your kids
than actually find a new job. And so it is clear that if you
can't find full-time work and you can't feed your kids, my
guess is you are not going to the doctor. That is what is more
likely slowing the growth in health care.
So I would be cautious at a time when the stimulus claims
were exaggerated and the sequester claims were exaggerated. I
think on health care, let's stick to the truth.
On this point, Mr. Chairman, I believe you were recognizing
me, I apologize while you stepped away, online this is the
marketplace timeline for the exchanges, and that is for the
public, as well as lawmakers, to track how the exchanges are on
track. But as I look at it, what I see is deadline after
deadline missed. It is as if the agency is in disarray trying
to meet the October 1st deadline.
The final market rules and regulations were missed, the
payment notice rule was missed, the business rules for
information technology, that is 2 months delayed. You recently
announced the delay in the choice option for small businesses.
You have also delayed the basic healthcare plan for year 5 of
it.
And so, these delays are having real impact, real people
are concerned about these delays, and the failure by the agency
to meet these deadlines raises real concerns.
So my question is, do you have a Plan B? Do you have a
contingency if the exchanges are not ready, up and running,
with a fully informed public, by October 1st?
Secretary SEBELIUS. As I answered before, Congressman, we
will be open for open enrollment October 1st of 2013, and we
will be enrolling Americans across the country January 1, 2014.
Mr. BRADY. So, at this point, you have had no discussions
within the agency on contingency plans?
Secretary SEBELIUS. Well, we have lots of contingency
plans.
Mr. BRADY. For not meeting the October 1st deadline----
Secretary SEBELIUS. No, we are determined and on track to
meet the October 1st deadline.
Mr. BRADY. So you can assure this Committee there will be
no further deadlines missed, no further delays in the
implementation of the exchanges?
Secretary SEBELIUS. We are on track to meet the October 1st
deadline.
Mr. BRADY. The question, again, because I think we are all
concerned, Republicans or Democrats, you can assure us there
will be no further delays----
Secretary SEBELIUS. Congressman, I can only tell you what I
am telling you. We are on track to meet October 1st. I can't
tell you what exactly will happen at every step along the way,
but I can tell you that that is the determination, we are on
track to meet it. We test it.
Mr. BRADY. Well, you are not on track to meet it. That was
the question.
Secretary SEBELIUS. Pardon me?
Mr. BRADY. You are not on track to meet it. You have missed
deadline after deadline----
Secretary SEBELIUS. We are on track to meet the October 1st
deadline, yes we are.
Mr. BRADY. So there will be no further--again, I am just
trying to get to the bottom line. There will be no further
deadlines missed? There will be no further delays?
Secretary SEBELIUS.
Again, I don't know quite what that means.
Mr. BRADY. Well----
Secretary SEBELIUS. Will a rule and regulation be a week
later than what it might say on the paper? It could. We will be
open for business October 1st.
Mr. BRADY. So no delays. That is great news. No further
deadlines missed. That is great news. We are still waiting, the
small businesses, for information on the business information
notices that are 2 months late. Is that being delayed again
this week? Next week? So are we seeing another ongoing delay
there?
Secretary SEBELIUS. I think, sir, that is not ours. It is
the Labor Department's notice, but my understanding is it is
imminent. That is not an HHS rule that is coming out.
Mr. BRADY. Thank you very much, Madam Secretary.
Mr. Rangel is recognized.
Mr. RANGEL. Thank you. Thank you so much. And, again, thank
you for your service.
I am concerned about the American people that are now
doubtful as to whether or not they would have health insurance
and also the fact that I don't know whether history will record
such political opposition to any President with a national
plan. All of my political life, I had hoped and dreamed that we
would have universal coverage. And now we have it. And for some
reason, it has become a political issue. Forty attempts or 39
attempts have been made by the Republican Party just to repeal
it--not to substitute it, not to improve it--but to repeal it.
And, of course, they substitute that with just confusion that
it is not going to work, it is going to fail, as though there
were only Democrats or potential Democrats that were going to
be the beneficiary of the program.
So we have to find some way to bring truth to the American
people, no matter what their political persuasion is, and I
hope that you can do this by telling me exactly how many
Americans would be affected, since we are going to assume that
we have already--the President has won. The Supreme Court has
sustained this, and the first question is, is ObamaCare here to
stay, politically speaking, is there anything that you can
think of, besides withdrawing the President, having to recall
with the President or another case in the Supreme Court,
ObamaCare is here to stay?
Secretary SEBELIUS. Yes, sir.
Mr. RANGEL. So you would suggest that the best we can do if
we don't like it is to improve it, to deliver it, instead of
just opposing your efforts?
My question is how many Americans are going to be affected
anyway? Those that have insurance are not going to be impacted,
right?
Secretary SEBELIUS. Well, I would say, sir, in terms of a
new marketplace----
Mr. RANGEL. Yes.
Secretary SEBELIUS. A fairly small number of Americans will
be impacted, about 41 million eligible folks who don't have
insurance at all, and another 14 or 15 who are in the small
market, individual market.
Mr. RANGEL. Do you know the political persuasion of these
41 million people who have no insurance at all?
Secretary SEBELIUS. Do I know the political persuasion, no.
Mr. RANGEL. Are they Democratic people here that we want to
hurt, or Republican people, or are they just Americans?
Secretary SEBELIUS. They are Americans.
Mr. RANGEL. Right. What could the Congress do to make
certain that we provide, to help you to provide universal
coverage at the least cost and the best quality? What would you
expect this branch of government to do to help the executive
branch to do this for all Americans?
Secretary SEBELIUS. Well, I certainly think that a huge
step forward was the passage of a comprehensive health reform
bill, which has been proposed by Republican and Democratic
Presidents for over 70 years. So we finally have a framework to
work on.
You asked earlier, sir, though, how many people are
impacted. And what I gave you is an answer for the marketplace,
the new insurance fees. I think every American will be impacted
and benefited by the delivery system changes, with better care,
better population health, more effective ways to deliver care
in the future, payment for value instead of volume, and making
sure that we no longer continue to be the Nation who spends the
most with mediocre health results, and that is where we are
right now. And we are on track to look at some care strategies,
thanks to elements of the Affordable Care Act, thanks to the
innovation center, thanks to what is going on, that could
really change that profile and make us much more competitive in
a global society.
Mr. RANGEL. Since you have been unable to tell us whether
you can give assurances that these programs are going to be
open on time, is it safe to say that your assurances that we
are on track would be dependent upon some cooperation from the
Congress? Or is it possible that we could legislate something
to actually avoid you following the guidelines that you have
been planning?
Secretary SEBELIUS. Well, again, sir, I don't know how much
more specific I can be, but I think we are definitely on track
to implement the law as it is anticipated and have open
enrollment start in every State in the country on October 1st
and have people enrolled.
Mr. RANGEL. And it is essential that you are going to have
a positive support from the United States Congress to do this?
Secretary SEBELIUS. It would be helpful.
Chairman CAMP. Thank you.
Mr. Tiberi for the final question of the morning.
Mr. TIBERI. Madam Secretary, welcome. It is great to have a
buckeye here with two Michiganders, the Chairman and the
Ranking Member, just to even it out a little bit.
I would like to send you an article from the Columbus
Dispatch, a paper you are familiar with, from either last week
or the week before, to Mr. Renacci's point of a small
businessowner who has less than 50 employees that was planning
to grow his business beyond 50 employees and publicly said in
the article that he is not doing that because of the Affordable
Care Act.
It is a problem that I have heard about from a lot of small
employers within central Ohio. But this one happened to be
willing to say it to a reporter and explained why.
I think that it would just be helpful for you to have that.
I am not being--I am not trying to be political about this.
But Mr. Rangel, Mr. Chairman, just asked about the
political persuasion of people without insurance today. I was
on this Committee when we passed this bill, Mr. Chairman, and I
like you a lot. But there is a lot of concern from everyday
people out in my district at least regarding the implementation
of this bill. And the President over and over said, if you like
what you have, you can keep it.
Let me tell you, Madam Secretary, a story from my district
from a company that I met with a couple of weeks ago, a self-
insured employer. And the executive team, including the HR
person, had been looking at this and trying to implement this
law with their employees. They provide health insurance to
their full-time employees. They have a great plan. Their
employees love their plan. Their employees think they are going
to be able to keep their plan. Through their ability to look at
this implementation, they have found out that their plan, with
no added benefits, will increase by 10 percent at least. The
$63 fee that they are going to be paying alone will cost over
$1 million with absolutely no--no--change in their policy
because they already participate in what is called the, just so
I am clear on this, the plan that covers people with
preexisting conditions and they already take care of their
employees through the early retiree subsidy program--they don't
get a penny from that.
So they are trying to, Mr. Chairman, figure out what to do
next. What is clear is they are going to have to increase costs
if they keep what they have to those employees. Those employees
don't know that yet. With no--and I am not trying to be
difficult here. I am just trying to explain the concern that
Members on our side of the aisle have.
I am not going to defend the old system, but they are super
concerned about the new system because what may happen, Madam
Secretary, and, again, I am not trying to be difficult, is that
they may choose to put all their employees into the exchange.
So their employees may not be able to keep what they like,
which was a promise of this Committee when the majority was in
the minority's hands. And their employees don't even know that
yet. And the satisfaction surveys that they have received from
their employees from the plan they have are overwhelmingly
good, and this is a company that has prided itself on
healthcare coverage, dealing with obesity, dealing with cancer,
dealing with preexisting conditions. And the choices, in all
honesty, from nonpolitical HR people there, I could see it in
their eyes how troubled they were with where they were going to
have to go, and they asked me, is there any sort of opportunity
to change this for folks like us? And I said I don't think so.
You might want to contact Sherrod Brown. He might have some
better luck doing it.
In all honesty, again, I am not trying to be political,
because I think, ultimately, Madam Secretary, and I don't revel
in this because these are my constituents and they are
Democrats and Republicans and Independents and not political,
their health care is going to change, according to their
experts, for the worse. So I just like to think that maybe,
that you, and I know your history and I know you care about
this, that maybe you and your team can be more engaged with
some of these employers who are very, very nervous about the
future of a benefit that they have provided, and they are not
the ones that we were trying to get at in terms of access to
health care, if that makes any sense.
Secretary SEBELIUS. It does. And trust me, we are trying to
be very engaged. I meet with employers in various parts of the
country on a very regular basis as I travel around. I think
that as we move into full implementation, I am hopeful that
some of the projected fears will be relaxed a bit and that
people will have, it is very difficult until then. The case you
are talking about, Congressman, is a self-insured plan, so they
are looking at some certainty in terms of what fees there may
be in the market versus the penalty that they would pay if
their employees then are tax eligible, and they can do some
calculations.
I am hoping in the long run that employers who have been in
this market voluntarily because they find that a benefit to
their employees will indeed move forward with that benefit.
That is what we continue to hear from folks, and that for
people who were locked out of the market because they did not
have any affordable options, they didn't have any market
leverage, they didn't have an ability to provide those
benefits, will finally have some choices based on private plans
in their State who have to compete for the first time with a
new set of rules.
But I will continue to do the outreach, and we would love
to have a chance to talk to some of these folks about what
exactly they are looking at.
Chairman CAMP. Thank you very much.
That concludes today's hearing. I want to thank you,
Secretary Sebelius, for your time this morning and your
testimony.
And with that, this hearing is adjourned.
[Whereupon, at 11:17 a.m., the Committee was adjourned.]
[all]