[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
RESCUING AMERICANS FROM THE
FAILED HEALTHCARE LAW AND
ADVANCING PATIENT-CENTERED SOLUTIONS
=======================================================================
6HEARING
before the
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, FEBRUARY 1, 2017
__________
Serial No. 115-1
__________
Printed for the use of the Committee on Education and the Workforce
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COMMITTEE ON EDUCATION AND THE WORKFORCE
VIRGINIA FOXX, North Carolina, Chairwoman
Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
Duncan Hunter, California Virginia
David P. Roe, Tennessee Ranking Member
Glenn ``GT'' Thompson, Pennsylvania Susan A. Davis, California
Tim Walberg, Michigan Raul M. Grijalva, Arizona
Brett Guthrie, Kentucky Joe Courtney, Connecticut
Todd Rokita, Indiana Marcia L. Fudge, Ohio
Lou Barletta, Pennsylvania Jared Polis, Colorado
Luke Messer, Indiana Gregorio Kilili Camacho Sablan,
Bradley Byrne, Alabama Northern Mariana Islands
David Brat, Virginia Frederica S. Wilson, Florida
Glenn Grothman, Wisconsin Suzanne Bonamici, Oregon
Steve Russell, Oklahoma Mark Takano, California
Elise Stefanik, New York Alma S. Adams, North Carolina
Rick W. Allen, Georgia Mark DeSaulnier, California
Jason Lewis, Minnesota Donald Norcross, New Jersey
Francis Rooney, Florida Lisa Blunt Rochester, Delaware
Paul Mitchell, Michigan Raja Krishnamoorthi, Illinois
Tom Garrett, Jr., Virginia Carol Shea-Porter, New Hampshire
Lloyd K. Smucker, Pennsylvania Adriano Espaillat, New York
A. Drew Ferguson, IV, Georgia
Brandon Renz, Staff Director
Denise Forte, Minority Staff Director
------
C O N T E N T S
----------
Page
Hearing held on February 1, 2017................................. 1
Statement of Members:
Foxx, Hon. Virginia, Chairwoman, Committee on Education and
the Workforce.............................................. 1
Prepared statement of.................................... 6
Scott, Hon. Robert C. ``Bobby'', Ranking Member, Committee on
Education and the Workforce................................ 7
Prepared statement of.................................... 14
Statement of Witnesses:
Bollenbacher, Mr. Scott, CPA, Managing Partner, Bollenbacher
and Associates, LLC, Portland, Indiana..................... 38
Prepared statement of.................................... 40
Eddy, Mr. Joe, President and Chief Executive Officer, Eagle
Manufacturing Company, Wellsburg, West Virginia............ 24
Prepared statement of.................................... 26
Schlaack, Ms. Angela, St. Joseph, Michigan................... 32
Prepared statement of.................................... 34
Troy, Mr. Tevi, PH.D., Executive Officer, American Health
Policy Institute, Washington, DC........................... 17
Prepared statement of.................................... 20
Additional Submissions:
Adams, Hon. Alma S., a Representative in Congress from the
State of North Carolina:
Letter dated January 3, 2017, from Seven Children's
Groups................................................. 130
Bonamici, Hon. Suzanne, a Representative in Congress from the
State of Oregon:
Letter December 28, 2016, from AARP...................... 71
Brat, Hon. David, a Representative in Congress from the State
of Virginia:
Chart: Hitting the Wall: When Health Care Costs are No
Longer Manageable...................................... 96
Courtney, Hon. Joe, a Representative in Congress from the
State of Connecticut:
Article: Is healthcare law really going into a death
spiral?................................................ 149
DeSaulnier, Hon. Mark, a Representative in Congress from the
State of California:
Article: One in Five 2014 Marketplace Consumers was a
Small Business Owner or Self-Employed.................. 142
Espaillat, Hon. Adriano, a Representative in Congress from
the State of New York:
Prepared statement of from Cuomo, Hon. Andrew M.,
Governor of New York................................... 85
Article: AAMC Statement on President Trump's Executive
Order on Immigration................................... 92
Chairwoman Foxx:
Republican Subcommittee Assignments...................... 3
Key Facts on Obamacare................................... 169
Breaking Down the Uninsured.............................. 172
Polis, Hon. Jared, a Representative in Congress from the
State of Colorado:
Letter dated January 4, 2017, from Hickenlooper, Hon.
John, Governor of Colorado............................. 64
Mr. Scott:
Letter dated January 30, 2017, from the U.S. Department
of Health and Human Services........................... 10
Report: Highlighting the Progress of the Affordable Care
Act.................................................... 46
Prepared statement of from Pollack, Mr. Rick, President
and CEO, American Hospital Association................. 172
Takano, Hon. Mark, a Representative in Congress from the
State of California:
Letter dated December 6, 2016, from the American Hospital
Association and Federation of American Hospitals....... 79
Thompson, Hon. Glenn ``GT'', a Representative in Congress
from the State of Pennsylvania:
Submission for the record................................ 156
Mr. Troy:
Briefing Paper: How the Implementation of the Affordable
Care Act Will Affect Doctors........................... 112
Questions submitted for the record by:
Barletta, Hon. Lou, a Representative in Congress from the
State of Pennsylvania.................................. 174
Stefanik, Hon. Elise, a Representative in Congress from
the State of New York
Responses to questions submitted for the record:
Mr. Barletta............................................. 177
Mr. Eddy................................................. 178
RESCUING AMERICANS FROM THE FAILED
HEALTHCARE LAW AND ADVANCING
PATIENT-CENTERED SOLUTIONS
----------
Wednesday, February 1, 2017
House of Representatives,
Committee on Education and the Workforce,
Washington, D.C.
----------
The committee met, pursuant to call, at 10:04 a.m., in Room
2176, Rayburn House Office Building, Hon. Virginia Foxx
[chairwoman of the committee] presiding.
Present: Representatives Foxx, Wilson of South Carolina,
Roe, Thompson, Walberg, Guthrie, Rokita, Messer, Byrne, Brat,
Bishop, Grothman, Stefanik, Allen, Lewis, Rooney, Mitchell,
Smucker, Scott, Grijalva, Courtney, Fudge, Polis, Wilson of
Florida, Bonamici, Takano, Adams, DeSaulnier, Norcross, Blunt
Rochester, Krishnamoorthi, Shea-Porter, and Espaillat.
Staff Present: Bethany Aronhalt, Press Secretary; Andrew
Banducci, Workforce Policy Counsel; Courtney Butcher, Director
of Member Services and Coalitions; Ed Gilroy, Director of
Workforce Policy; Jessica Goodman, Legislative Assistant;
Callie Harman, Legislative Assistant; Nancy Locke, Chief Clerk;
Dominique McKay, Deputy Press Secretary; James Mullen, Director
of Information Technology; Michelle Neblett, Professional Staff
Member; Krisann Pearce, General Counsel; Brandon Renz, Staff
Director; Molly McLaughlin Salmi, Deputy Director of Workforce
Policy; Alissa Strawcutter, Deputy Clerk; Olivia Voslow, Staff
Assistant; Joseph Wheeler, Professional Staff Member; Tylease
Alli, Minority Clerk/Intern andFellow Coordinator; Austin
Barbera, Minority Press Assistant; Michael DeMale, Minority
Labor Detailee; Denise Forte, Minority Staff Director;
Christine Godinez, Minority Staff Assistant; Carolyn Hughes,
Minority Senior Labor Policy Advisor; Kevin McDermott, Minority
Senior Labor Policy Advisor; Richard Miller, Minority Senior
Labor Policy Advisor; Udochi Onwubiko, Minority Labor Policy
Counsel; Veronique Pluviose, Minority Civil Rights Counsel;
Arika Trim, Minority Press Secretary; and Elizabeth Watson,
Minority Director of Labor Policy.
Chairwoman Foxx. Good morning. A quorum being present, the
Committee on Education and the Workforce will come to order.
Before we turn our attention to this morning's hearing, I'd
like to take care of an administrative matter. Today, both the
Republicans and Democrats have completed assigning members to
the subcommittees. I ask unanimous consent on behalf of myself
and Ranking Member Scott to submit those assignments for the
record.
Hearing no objection, the subcommittee assignments are
made.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairwoman Foxx. Next, I recognize myself for an opening
statement.
I want to again say good morning to my colleagues and
guests. I want to welcome our witnesses. We appreciate that you
took time out of your busy schedules to be with us today.
It is no coincidence that our first hearing is focused on
our efforts to rescue Americans from a fatally flawed
healthcare law and transition to a patient-centered system.
There's an urgent need to address the challenges facing working
families and small businesses under ObamaCare, and that's
exactly what this hearing is about.
For nearly seven years, Americans have struggled as they've
seen their healthcare costs skyrocket, their plans canceled,
and their choices and access to quality care diminished. That
is why for nearly seven years Republicans have been fighting to
provide the relief Americans desperately need.
This has never been about politics. The fight to repeal and
replace ObamaCare has always been about people.
It has been about people like Steve from my congressional
district. Steve resides in West Jefferson, and he and his wife
are paying 225-percent-higher premiums than they were four
years ago.
Scott from Hickory, North Carolina, has had his healthcare
plan canceled three times because of the law and today has
access to only one insurance provider.
Michael from Winston-Salem has an $800 monthly premium for
him and his daughter, and their deductible is over $14,000.
Terry, a 70-year-old retiree from Advance, is working part-
time just to help pay his wife's $900 monthly premium.
These stories aren't unique to North Carolina. Working
families across the country are suffering under a failed
government takeover of health care.
Remarkably, the consequences extend beyond higher insurance
costs and limited plan options to fewer jobs and suppressed
wages. In fact, a recent study by the American Action Forum
found ObamaCare has destroyed 300,000 small-business jobs and
cost small-business employees $19 billion a year in wages. An
estimated 10,000 small businesses were even forced to close
their doors because of the law's burdensome regulations.
All of these individuals, families, and small-business
owners were promised far different. They were promised lower
costs, more choices, and more competition. What they got was
the exact opposite.
The reality is the 2010 healthcare law is completely
unsustainable. It's collapsing as we speak. We cannot stand by
as the law creates even more havoc in the lives of the American
people. That's why we're on a rescue mission to deliver the
relief people need, and this committee will play an important
part in the process. We have already taken steps to repeal
ObamaCare, and the Trump administration is actively working to
stabilize health insurance markets.
Once the law is repealed, there will be a stable transition
to a patient-centered system. At least 4.7 million Americans
have already been kicked off their healthcare plans under
ObamaCare, and the last thing Republicans want is to disrupt
more people's coverage.
We're going to do this the right way. There won't be a
massive bill that no one has read and is jammed through
Congress in the dead of night. Instead, we will tackle the
challenges of our broken healthcare system through step-by-step
solutions that provide lower costs, more choices, and protect
the most vulnerable among us.
We will put patients in control of their healthcare
decisions. That means eliminating one-size-fits-all rules that
drive up costs and restrict choices. All Americans should have
the freedom to select a healthcare plan that meets their needs.
After years of costly federal mandates, we will empower
small businesses to band together and provide affordable
coverage for their employees. Additionally, we will preserve
employee wellness plans that have been under attack in recent
years by Washington bureaucrats.
Undoing the damage of ObamaCare and achieving real
healthcare reform won't happen overnight. We will continue to
hold hearings just like this one, and we will continue to
receive input from Governors, insurance commissioners, workers,
and employers across the country.
Today's discussion is an important step in this process. We
look forward to hearing from all of you on how we can provide a
better way forward on health care for the American people.
With that, I yield to Ranking Member Scott for his opening
remarks.
[The statement of Chairwoman Foxx follows:]
Prepared Statement of Hon. Virginia Foxx, Chairwoman, Committee on
Education and the Workforce
It is no coincidence that our first hearing is focused on our
efforts to rescue Americans from a fatally flawed health care law and
transition to a patient-centered system. There is an urgent need to
address the challenges facing working families and small businesses
under Obamacare, and that's exactly what this hearing is about.
For nearly seven years, Americans have struggled as they've seen
their health care costs skyrocket, their plans canceled, and their
choices and access to quality care diminished. That is why for nearly
seven years, Republicans have been fighting to provide the relief
Americans desperately need.
This has never been about politics. The fight to repeal and replace
Obamacare has always been about people. It's been about people like
Steve from my congressional district. Steve resides in West Jefferson,
and he and his wife are paying 225 percent higher premiums than they
were four years ago. Scott from Hickory, North Carolina, has had his
health care plan canceled three times because of the law, and today he
has access to only one insurance provider.
Michael from Winston-Salem has an $800 monthly premium for him and
his daughter, and their deductible is over $14,000. Terry, a 70-year
old retiree from Advance, is working part-time just to help pay his
wife's $900 monthly premium.
These stories aren't unique to North Carolina. Working families
across the country are suffering under a failed government takeover of
health care. Remarkably, the consequences extend beyond higher
insurance costs and limited plan options to fewer jobs and suppressed
wages.
In fact, a recent study by the American Action Forum found
Obamacare has destroyed 300,000 small business jobs and cost small
business employees $19 billion each year in wages. An estimated 10,000
small businesses were even forced to close their doors because of the
law's burdensome regulations.
All of these individuals, families, and small business owners were
promised far different. They were promised lower costs, more choices,
and more competition. What they got was the exact opposite.
The reality is the 2010 health care law is completely
unsustainable. It's collapsing as we speak. We cannot stand by as the
law creates even more havoc in the lives of the American people.
That's why we are on a rescue mission to deliver the relief people
need, and this committee will play an important role in the process. We
have already taken steps to repeal Obamacare, and the Trump
Administration is actively working to stabilize health insurance
markets.
Once the law is repealed, there will be a stable transition to a
patient-centered system. At least 4.7 million Americans have already
been kicked off their health care plans under Obamacare, and the last
thing Republicans want is to disrupt more people's coverage.
We're going to do this the right way. There won't be a massive bill
that no one has read and is jammed through Congress in the dead of the
night. Instead, we will tackle the challenges of our broken health care
system through step-by-step solutions that provide lower costs, more
choices, and protect the most vulnerable among us.
We will put patients in control of their health care decisions.
That means eliminating one-size-fits-all rules that drive up costs and
restrict choices. All Americans should have the freedom to select a
health care plan that meets their needs.
After years of costly federal mandates, we will empower small
businesses to band together and provide affordable coverage for their
employees. Additionally, we will preserve employee wellness plans that
have been under attack in recent years by Washington bureaucrats.
Undoing the damage of Obamacare and achieving real health care
reform won't happen overnight. We will continue to hold hearings just
like this one, and we will continue to receive input from governors,
insurance commissioners, workers, and employers across the country.
Today's discussion is an important step in this process. We look
forward to hearing from all of you on how we can provide a better way
forward on health care for the American people.
______
Mr. Scott. Thank you, Madam Chair.
And I'd like to first, before we begin, introduce one new
member who's here, Adriano Espaillat, who represent New York's
13th Congressional District. He wasn't here when we introduced
new members before. He represents the same district as the past
chair of this committee, Adam Clayton Powell. He served in the
State Senate and State Assembly in New York.
We have another member, Carol Shea-Porter, who was
appointed to the Committee. She is from New Hampshire and
previously served on this committee.
I'd like to welcome our witnesses and thank them for their
testimony. This is our first hearing of the 115th Congress.
Unfortunately, this hearing is part of a larger agenda to
repeal the Affordable Care Act root and branch, despite the
fact there's no credible plan to deal with the chaos that
repeal would create.
I'd first like to remind our Republican colleagues once
again where we were when we passed the Affordable Care Act.
Healthcare costs were skyrocketing. If you lost your job or
wanted to start a new business and had a preexisting condition,
you were out of luck. Women were paying more than men. Seniors
had no help for paying for prescription drugs when they landed
in the notorious doughnut hole. The miners suffering from lung
disease struggled to get access to health benefits because of
complicated requirements that made it almost impossible to
prove eligibility. And every year millions of people were
losing their insurance altogether.
The so-called damage caused by the Affordable Care Act
includes women no longer paying more for insurance than men.
The costs have gone up but they've gone up at one-half the rate
that they were going up before. Those with preexisting
conditions can get insurance at the standard rate. We're
closing the doughnut hole. We have helped miners get their
benefits. And instead of millions of people losing their
insurance every year, 20 million more people have insurance.
And all Americans, even if they had insurance before, are
enjoying consumer protections. Small businesses were exempt
from virtually all of the mandates in the bill.
And this progress will be reversed if the ACA is repealed.
We know, for example, that 30 million Americans would lose
coverage, with the vast majority in working families. Workers
with job-based plans could lose out on ACA's consumer
protections, such as prohibitions against annual and lifetime
limits. They could lose out on access to free preventive
services which keeps the American workforce healthier and on
the job.
These meaningful protections have improved the lives of
people around the country, protections that are being
threatened.
The collateral damage won't stop there. The individual
market could all but collapse if there's a repeal without a
credible replacement, making it likely that nobody will be able
to buy insurance at an affordable rate. Costs for uncompensated
care will skyrocket, but those costs won't disappear. When
people go to the hospital and don't pay, those costs have to be
paid by somebody. When we passed the Affordable Care Act, that
cost was about $1,000 on a family policy, covering
uncompensated care. Coal miners who now benefit from enhanced
protections and benefits provided by the ACA could lose them.
Now, another important item to both workers and employers:
employment. Repeal would devastate communities around the
country, particularly rural areas that already face employment
challenges. The American Hospital Association and the
Federation of American Hospitals sent a letter to congressional
leaders warning of massive job losses if the ACA is repealed.
The letter noted a specific threat to rural communities,
pointing out that hospitals are often the largest employers in
many communities. Estimates show that repeal would result in a
loss of 2.6 million jobs almost immediately.
Over the last seven years, we have heard a lot of
complaints about the Affordable Care Act, but we haven't seen a
plan that would actually make things better. Just last week,
our colleagues on the Budget Committee held a hearing where
healthcare experts from the Urban Institute estimated that, if
the GOP were to replace the ACA coverage expansion with tax
credits at the inadequate level pushed by the new HHS Secretary
nominee, the healthcare deductibles could skyrocket to $25,000
for individuals and $50,000 for family plans.
Today, we are likely to hear about some other plans that,
frankly, just won't work or won't do anything. And there's no
strategy or interest in protecting the millions of Americans
who now benefit from the ACA.
If a credible replacement plan were possible, we obviously
would have seen it by now. But there's no legislation pending
that has significant support, and there's no reason to believe
that a replacement plan could be produced that would actually
work.
Now, some of the initiatives already taken by this
administration have been proven to be counterproductive. For
example, the administration took action to threaten the
marketplace by pulling advertisements for coverage in the final
days of the open enrollment period. It is well-known that those
who wait till the last minute tend to be younger and healthier.
And fewer of them signing up just means higher premiums for
everybody else.
And I ask unanimous consent to insert into the record a
letter sent by three ranking members of House committees with
healthcare jurisdiction to the Department of Health and Human
Services asking for further details on the impact of this
decision.
Chairwoman Foxx. Without objection.
Mr. Scott. Thank you.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Scott. Even President Trump's recent immigration order
not only runs afoul of American values and our Constitution,
essentially creating a religious test for entry into the United
States and denying due process, but it also has an impact on
health care in the United States. The Association of American
Medical Colleges, one of the many groups to express concern
over the Executive Order, released a statement explaining that
the Executive Order could disrupt education and research and
have a damaging long-term impact on patients and health care.
So we do have a few options moving forward. We could choose
to move to a single-payer system, or we can improve upon the
ACA. Going back to the days where a preexisting condition meant
you couldn't get insurance should not be an option.
Now, since this is our first hearing in Congress, let me be
clear about our shared priorities and the vision of Democrats
on this committee. We are here to strengthen the economic
security of Americans and to protect health care in this
country. This is more that we need to do to improve access and
affordability in health care, and Democrats are willing to work
on a responsible improvement.
If the goal is to replace, then repeal, we can work
together. But you cannot count on our support if the first step
is to create total chaos by repealing without any replacement
in sight.
In fact, Democrats are skeptical that there will ever be
any replacement. We are reminded that the majority of the
Republicans in Congress did not support Medicare. We know that
over 60 votes have been taken in the House to repeal all or
parts of the Affordable Care Act without any replacement in
sight. And we have already missed the legislative deadline
under the reconciliation. The two committees were given
instructions to come up with changes in the Affordable Care
Act, and they've missed that deadline. And so we're skeptical
that there will be any replacement if there is a repeal.
So it is my hope that we can focus our efforts on the
financial security of American families by working to improve
health care instead of turning the clock backwards and ruining
health care possibly for everybody.
Thank you, Madam Chair, and I yield back.
[The statement of Mr. Scott follows:]
Prepared Statement of Hon. Robert C. ``Bobby'' Scott, Ranking Member,
Committee on Education and the Workforce
Thank you, Chairwoman Foxx. I would like to welcome and introduce
the newest Democratic members to the Committee.
Congresswoman Carol Shea-Porter represents New Hampshire's first
congressional district and is serving her fourth term in Congress, and
I am pleased to welcome her back to the Committee.
Congressman Adriano Espaillat represents New York's thirteenth
congressional district, the same district as the esteemed past-chairman
of this Committee - Adam Clayton Powell, Jr. He previously served as a
member of the New York State Senate and as a member of the New York
State Assembly.
Welcome to the both of you.
I would now like to welcome our witnesses and thank them for their
testimony. This is our first hearing in the 115th Congress and this
hearing will likely lay out our Committee's agenda for the coming weeks
and months. Unfortunately, this hearing is also part of a larger agenda
to repeal the Affordable Care Act, root and branch, despite the fact
that there is no credible plan to deal with the chaos that this repeal
will create.
I'd first like to remind my Republican colleagues once again of
where we were when we passed the ACA. Health care costs were
skyrocketing and if you lost your job, or wanted to start a new
business and you had a preexisting condition, you were out of luck.
Seniors had no help paying for prescription drugs when they landed
in the Part D ``donut hole''. Miners suffering from lung disease
struggled to get access to health benefits because of complicated
requirements that made it almost impossible to prove eligibility.
Yes, the cost of health coverage remains a challenge for both
employers and workers. But although costs in employer-provided health
coverage have gone up, they have gone up much more slowly than they
were prior to the ACA. Today, we are releasing a report that highlights
all of the ACA's benefits to the American people, particularly those
with job-based health coverage, and why repeal is so dangerous for our
country and families' health and economic security.
The ACA fixed many of these problems. Despite, Republicans' nonstop
attacks on the ACA, we have made great progress in improving the
nation's health care system. And because of those efforts, the rate of
uninsured adults and the rate of uninsured children are at an all-time
low.
If my Republican colleagues continue on the course to repeal, we
know that thirty million Americans will lose coverage, with the vast
majority of those millions in working families. Workers with job-based
plans could lose out on the ACA's consumer protections - such as
prohibitions on annual and lifetime limits. They could lose out on
access to free preventive services which keeps the American workforce
healthier and on the job. These are meaningful protections that have
improved the lives of people in this country - protections that the
Republicans are threatening to take away. And the collateral damage
won't stop there. The individual market will all but collapse, making
it likely that nobody will be able to buy insurance at an affordable
rate. Uncompensated costs will skyrocket and those costs won't
disappear - they will be absorbed by other payers. Coal miners, who now
benefit from the enhanced protections and benefits provided in the ACA,
could lose them.
Another item of importance to both workers and employers is jobs.
Repeal would devastate communities across the country, particularly
rural areas that already face employment challenges. The American
Hospital Association and the Federation of American Hospitals sent a
letter to Congressional leaders warning of ``massive job losses'' if
the ACA is repealed. The letter noted the specific threat to rural
communities, pointing out that, ``hospitals are often the largest
employer in many communities.'' Estimates show that repeal would result
in a loss of 2.6 million jobs across all states almost immediately;
while a third of those lost jobs would be in health care, the impact
would be felt across industries.
Over seven years we have heard a lot of complaints about the
Affordable Care Act, but we have not seen a plan that would make things
better. Just last week, our colleagues in the Budget Committee held a
hearing where a health care expert from the Urban Institute estimated
that if the GOP were to replace the ACA coverage expansion with tax
credits at the inadequate levels pushed by HHS Secretary nominee
Congressman Tom Price, health care deductibles could skyrocket to
$25,000 for individual and $50,000 for family plans. Today, we are
likely to hear about some of the old, discredited, and highly
inadequate ideas around health reform. But there is no strategy or
interest in protecting the millions of Americans who now benefit from
the ACA. If a credible replace were possible, we would have seen it by
now, and yet there is no legislation pending that has Republican
support and there is no reason to believe that a replacement would
actually work.
Unfortunately, the conversation around health care has now taken on
an even more troubling tone. The new Administration has taken action to
threaten the Marketplace by pulling advertisements for coverage in the
final days of the open enrollment period, making no secret about its
intention to subvert Marketplace enrollment. I ask unanimous consent to
insert into the record a letter sent by the three Ranking Members of
the House Committees with health care jurisdiction to the Department of
Health and Human Services asking for further details on the impact of
this decision.
Further, President Trump's recent immigration executive order runs
afoul of American values and our constitution by essentially creating a
religious test for entry into the United States and denying due process
to green card holders who have been unable to reenter the country. The
impact of this order is being felt by communities across the country,
and is particularly detrimental to students who wish to pursue their
education in the United States. The Association of American Medical
Colleges - one of the many groups to express concern over the executive
order - released a statement explaining that the executive order could,
``disrupt education and research and have a damaging long-term impact
on patients and health care.'' I trust that my colleagues on the other
side of the aisle are as outraged as I am at the executive order, both
because of its lack of humanity and its detrimental impact on the
health care sector in this country.
So we have a few options moving forward. We can choose to move to a
single payer system or we can improve upon the ACA. Going back to the
days where a preexisting condition meant you didn't get insurance is
not an option.
Since this is our first hearing of the Congress, let me be clear
about our shared priorities and the vision of the Democrats on this
Committee. We are here to strengthen the economic security of Americans
and to protect the health of this country. There is more that we need
to do to improve access and affordably in health coverage, but setting
the stage for a repeal vote that will take benefits away from
hardworking Americans is irresponsible and morally reprehensible.
Similarly, banning the best and brightest talent in the medical
community from studying at our universities and practicing medicine in
our hospitals is irresponsible and morally reprehensible.
It is my hope that we can refocus our efforts to the financial
security of American families, instead of turning the clock backward.
Thank you.
______
Chairwoman Foxx. Thank you, Mr. Scott.
Pursuant to committee rule 7(c), all members will be
permitted to submit written statements to be included in the
permanent hearing record. Without objection, the hearing record
will remain open for 14 days to allow such statements and other
extraneous material referenced during the hearing to be
submitted for the official hearing record.
We will now turn to introductions of our distinguished
witnesses.
Dr. Tevi Troy is the chief executive officer of the
American Health Policy Institute. Previously, Dr. Troy held
numerous positions in the Federal Government, including serving
as Deputy Secretary of Health and Human Services beginning in
2007, where he oversaw all operations, including Medicare and
Medicaid, public health, medical research, food and drug
safety, welfare, child and family services, disease prevention,
and mental health services.
Mr. Joe Eddy is president and chief executive officer of
Eagle Manufacturing Company and will testify on behalf of the
National Association of Manufacturers. In addition to his work
at Eagle Manufacturing, Mr. Eddy also serves on the Advisory
Board of the McDonough Center for Leadership in Business at
Marietta College and the Foundation Board at West Virginia
Northern Community College.
Ms. Angela Schlaack is a widow, mother of two children, and
a student at Siena Heights University pursuing a bachelor's
degree in Communications. She is an educated grief group
facilitator at Lori's Place in St. Joseph, Michigan. Lori's
Place serves children and adults who suffered a death or are
dealing with anticipatory grief. She is active also in
fundraising for the Leukemia and Lymphoma Society.
Mr. Scott Bollenbacher is the creator and managing partner
of Bollenbacher & Associates, LLC, a certified public
accounting firm serving mainly small to midsize business in
north-central Indiana and western Ohio. As a CPA, Mr.
Bollenbacher provides accounting and tax services to clients in
manufacturing, agricultural, retail, and professional services
trades, as well as not-for-profits and individuals. Mr.
Bollenbacher is testifying on behalf of the National Federation
of Independent Business.
I will now ask our witnesses to raise your right hand.
[Witnesses sworn.]
Chairwoman Foxx. Let the record reflect the witnesses
answered in the affirmative.
Before I recognize each of you to provide your testimony,
let me briefly explain our lighting system. We allow five
minutes for each witness to provide testimony. When you begin,
the light in front of you will turn green. When one minute is
left, the light will turn yellow. At the five-minute mark, the
light will turn red, and you should wrap up your testimony.
Members will each have five minutes to ask questions.
Now I recognize Dr. Troy for five minutes.
TESTIMONY OF TEVI TROY, PH.D., CHIEF EXECUTIVE OFFICER,
AMERICAN HEALTH POLICY INSTITUTE, WASHINGTON, D.C.
Mr. Troy. Chairwoman Foxx, Ranking Member Scott, and
members of the committee, thank you all for the opportunity to
testify today on the effects of the Affordable Care Act on
large employers and their employees, as well as how to advance
patient-centered solutions going forward.
My name is Dr. Tevi Troy. I am CEO of the American Health
Policy Institute, a nonprofit research organization focusing on
employer-sponsored healthcare benefits. I also served, as you
mentioned, as a senior White House aide in the George W. Bush
administration and Deputy Secretary of HHS.
While the public debate over the ACA appropriately focuses
on the 20 million Americans who are receiving coverage through
its exchanges, Medicaid expansion, and other provisions, the
ACA also significantly and in many cases unnecessarily
increased the regulatory requirements and burdens on
employment-based health care that covers more than 177 million
Americans.
Too little attention has been focused on this important
aspect of the law. In this time of transition on health care,
it is important to protect those who have gained coverage under
the ACA, but it is also a critical priority to protect those
who are covered by employers.
There is clear evidence that the ACA has both directly and
indirectly increased the cost of employer healthcare benefits.
In 2014, an American Health Policy Institute study found that
over the next decade the cost of the ACA to large employers --
10,000 or more employees -- will be about $4,800 to $5,900 per
employee over a decade.
My written testimony includes other studies showing how the
ACA has increased employer costs, and I ask that they be
submitted for the record.
Furthermore, the regulatory burden the ACA imposes on
businesses and individuals should not be underestimated. Since
the ACA was enacted, 106 regulations implementing the law have
been published. These regulations will cost the private sector
more than $51 billion and require 173 million hours of
paperwork in order to comply. These cost increases come from a
number of ACA provisions that have a direct impact on employees
and employers and on the cost of their health plans.
Going forward, I believe that we should move toward a more
patient-centered healthcare system and look to the private
sector to lead transformation efforts. In order for the private
sector to be innovative, it is imperative to protect the tax
exclusion on employer-sponsored healthcare benefits as well as
the ERISA preemption.
For more than 60 years, employer-provided health benefits
have been excluded, without limit, from income and payroll
taxes. Over time, this benefit has helped make employer-
sponsored care a basic building block of our healthcare system.
Given the role of employer-sponsored health insurance in
providing stability and coverage to so many Americans, making a
substantial change to the tax treatment of employer-provided
health care could cause a significant disruption.
We strongly support the bipartisan effort to repeal the
ACA's 40-percent Cadillac tax on employer-sponsored health
benefits and urge Congress to repeal this tax, along with other
ACA taxes and fees. We have seen how problematic the tax
approach is by its opposition from both business and labor. We
are glad that the tax has been delayed until 2020 and hope to
see it repealed soon.
Reducing or eliminating the tax exemption on employer-
sponsored health care would raise the same problems as the
Cadillac tax. It would serve as a middle-class tax hike, drive
up the health insurance costs for millions of American
employees, and eliminate the strong incentives currently in
place that constantly pressure large purchasers of health to
demand more efficient, affordable, and effective health care
from the marketplace.
Getting rid of or reducing the tax preference would also
harm efforts to maintain strong risk pools and to cover the
maximum number of people. As we have learned from experience
with the ACA, encouraging people to get coverage is a costly
and challenging endeavor, and risk pools are difficult to
maintain as well. Employers, however, are both good at getting
people covered and at maintaining manageable risk pools. Public
policy should aim to encourage these important goals. As
economist Peter Nelson has said, ``Employers do get people
covered -- they very successfully get people covered.''
A second key issue is the ERISA preemption. ERISA is the
foundation of employer-sponsored health benefits, and we
encourage you to strengthen the protections in the law.
The longstanding preemption provision is vital to multi-
state employers because it enables them to offer uniform,
nationwide healthcare benefits at the lowest possible cost to
employers no matter what state they live in. This leads to
better benefit design and reduction in administrative costs
through economies of scale, increased purchasing power, and
greater innovation. Without it, an employer doing business in
50 different States would be required to comply with 50
different State healthcare laws, something that would make
administrating a healthcare plan a complex nightmare.
In conclusion, I appreciate the opportunity to testify here
today about the importance of employer-sponsored coverage and
its importance to our system. Going forward, our policy should
not be to increase the burdens or costs on employers and the
177 million employees and dependents who get coverage through
the employer-based system but to encourage that coverage for
the benefit of our system as a whole.
Thank you for having me here today.
[The statement of Mr. Troy follows:]
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Chairwoman Foxx. Mr. Eddy.
TESTIMONY OF JOE EDDY, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
EAGLE MANUFACTURING COMPANY, WELLSBURG, WEST VIRGINIA, ON
BEHALF OF THE NATIONAL ASSOCIATION OF MANUFACTURERS
Mr. Eddy. Thank you. Good morning, Chairwoman Foxx, Ranking
Member Scott, and distinguished members of the committee. I
thank you for the opportunity to appear here today before you
and for holding this hearing.
My name is Joe Eddy, and I am president and CEO of Eagle
Manufacturing Company in Wellsburg, West Virginia. I'm
currently on the board of directors of the National Association
of Manufacturers, also known as NAM, and also serve on their
Small and Medium Manufacturers Group. The NAM is the Nation's
largest industrial trade association and a voice for more than
12 million men and women who make things here in America.
Eagle Manufacturing Company is a family-owned business
established in 1894. We employ approximately 195 employees and
are a prime manufacturer of safety cans, safety cabinets,
secondary spill containment products, poly drums, and material-
handling products. At Eagle, we design and manufacture all of
our own products. We are a respected brand name across the
world for consistent quality and value, and all of our products
are still made in the United States.
Manufacturers have a proud tradition of providing health
insurance for their employees. At Eagle, our tradition has been
to cover 100 percent of medical costs. We have done this
because it's the right thing for our employees and our
community. No government policy or mandate leads us to provide
this generous benefit. We often hear that people specifically
want to come to work at Eagle because of our reputation for
taking care of our employees. We live by our mission statement:
Protecting people, property, and the planet.
Unfortunately, the last few years under the Affordable Care
Act have made it more difficult to live up to our own
standards. Rising healthcare costs have forced us to make some
difficult choices, and the ACA has further limited our options.
In 2009, prior to the ACA, we were paying about $13,500 per
year per employee, and by 2013 those costs increased to over
$15,800 per year per employee. The additional taxes, paperwork,
fees, and mandates of the ACA cost us nearly $1,000 per year
per employee. As much as we work to keep costs down, our plan
now costs over $22,800 per year per employee.
We do not think that our benefits are excessive. They are
necessary to attract, retain, and maintain a strong, quality,
and healthy workforce. And I am not alone. Ninety-eight percent
of NAM members offer health insurance to employees, and the
cost of health care remains a top business concern for both
large and small manufacturers. These rising healthcare costs
impact all facets of any company: hiring new workers,
maintaining competitive pay rates, making capital investments,
as well as our decisions in researching and developing new
products.
Part of the challenge that the ACA ushered in was the
paradigm shift in healthcare choices available to manufacturers
and other businessowners. More specifically, the insurance that
we had for more than 10 years was no longer available. Many of
our employees had to find new doctors, and we had to learn to
manage an entirely new system. Furthermore, the new product we
purchased was more expensive, driving our healthcare costs up
that year an additional $4,000 per year per employee.
Unhappy with the outcomes of this change, we switched
carriers again to another insurer. We are hopeful that our
situation has stabilized, but businesses such as ours need
flexibility and competitive options so that we can always find
the best and most cost-effective plan for our employees.
Perhaps the most challenging part of the ACA is the effect
that it's had on our employer-employee relations. As I
mentioned earlier, Eagle has 195 employees, but it should be
noted that 150 of those are unionized through the United
Steelworkers Union. We have traditionally had a strong
relationship with the union and our employees. However, last
year, during contract negotiations, for the first time in our
history, we had to negotiate a cost-sharing arrangement with
the union. The union members now have to contribute $35 per
pay, or $910 per year, towards monthly healthcare premiums. As
you would imagine, those were not easy negotiations, tending to
break down the trust and partnership that we had established
through the many years between the company and our employees.
The years following the passage of the ACA have been
costly, disruptive, and distracting from the things that we are
really good at doing as manufacturers. Moreover, the dose of
uncertainty delivered to us over seven years ago still has not
been fully resolved.
Eagle is very proud of our 123 years in West Virginia,
manufacturing innovative, quality products for our customers.
As a leader in the Wellsburg community, we strive to provide
healthcare benefits that allow for a strong, healthy workforce,
but it is a struggle given the limits, restrictions, and
mandates of the Affordable Care Act.
I know that my struggle is not unique and that many
manufacturers across the country are facing the same
challenges. I very much look forward to working with you to
find a workable solution that will help control outrageous
costs and provide the flexibility for employers to continue to
provide the benefits their employees deserve.
Thank you for inviting me to testify before you today, and
I am happy to answer any questions. Thank you.
[The statement of Mr. Eddy follows:]
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Chairwoman Foxx. Thank you very much.
Ms. Schlaack, you are now recognized for five minutes.
TESTIMONY OF ANGELA SCHLAACK, ST. JOSEPH, MICHIGAN
Ms. Schlaack. Good morning, Chairwoman Foxx, Ranking Member
Scott, and the members of the committee. Thank you very much
for inviting me to attend the session today.
My name is Angela Schlaack, and I am originally from
central Texas but have been a longtime resident of St. Joseph,
Michigan. I'm here today to share with you a little bit about
how the Affordable Care Act has impacted my life and the lives
of my family. Never could I have imagined the life-changing
events that would bring me here today.
In November 2013, my husband, Michael Schlaack, suddenly
had three days of extreme fever, headaches, and sweating.
Michael was diagnosed with the most aggressive form of acute
myeloid leukemia, and he had mere days to live. He was 44,
exercised, did not smoke, got routine medical checkups, and had
no prior health issues.
He was admitted to the University of Chicago Medical
Center's Leukemia Intensive Care Unit that night, as our local
hospital does not have the ability to treat this type of
disease.
The University of Chicago is about 90 miles from our home,
and the distance created an additional hardship on our lives.
This diagnosis meant he was forced to take an extended leave
from work, as living with AML is a full-time job in itself. His
employer, Whirlpool Corporation, was supportive and,
thankfully, very generous in their benefits. Little did we know
at that point the cost of treating leukemia and how valuable
our health insurance would be.
The only cure as of now for AML involves chemotherapy and
donor stem cell transplant. Not only were we responsible for
Michael's medical expenses, but patients are also responsible
for those of their donor.
After six weeks of chemotherapy to keep the leukemia under
control and preparation for transplant in place, Michael was
able to return home for a few weeks before returning for
another minimum six weeks inpatient. In those weeks at home, we
still had to return to his hematology oncologist two to three
times per week. At this point, we were beginning to realize the
financial magnitude of what treatment for leukemia entails. Our
bills were exceeding a million dollars already.
Within three months of his stem cell transplant, Michael's
leukemia relapsed with a vengeance. At this point, the only
options were clinical trial therapies. We spent the next four
months in and out of the hospital in Chicago, and he needed
blood transfusions every few days. One bag of blood, which he
was receiving multiple units of per week, was over $1,500 each.
In addition to the 20 or so prescriptions he was taking, the
constant trips for doctor visits to Chicago, we still had to
maintain our household financially.
With the extreme physical, mental, and emotional stress
that came with this journey, one thing we did not have to worry
about was the fact that we knew our insurance would not cut us
off after any lifetime maximum. Hoping Michael would survive,
we knew, despite this now preexisting condition, he would stay
covered and not be discriminated for something he had no
control over.
The provisions of the Affordable Care Act kept us from
filing bankruptcy and losing what we had built up in our over
20-year marriage. The expenses incurred in a matter of 10
months were nothing any health savings account could properly
fund. We had peace of mind knowing Whirlpool's insurance would
take care of us.
In September 2014, Michael died at age 45 of AML. As I had
been a full-time caregiver to him, in addition to trying to
maintain some normalcy for our family, I was not employed. I
was a stay-at-home mom to our then-10-year-old daughter. Our
young adult son was in graduate school at the time and was
entering the Peace Corps after graduation. Whirlpool graciously
covered the three of us under their insurance for the rest of
the calendar year.
Though offered COBRA benefits beginning in 2015, the
premiums were beyond anything I could afford. I was able to
take advantage of something I never expected to need, the
healthcare marketplace.
Knowing I needed to continue to provide for myself and
daughter from here on out, I decided to go back to college to
complete my degree. Having access to the marketplace gave me
the ability to provide excellent coverage for us at an
extremely low monthly rate and not have to return to work yet
simply to have the benefit of health insurance. We were able to
keep our same doctors, and while dealing with our grief and
this new life, the ability to have full coverage, including
mental health benefits, was one less worry.
Though I am just a common person from a small town in the
Midwest, I know my experience with devastating health issues
and having my whole world turned upside down in the blink of an
eye is not uncommon, and anyone can be one illness away from
losing everything they have. Our bills were nothing a health
savings account could have remotely covered. Had Michael
survived, he would have had a major preexisting condition. And
being that AML has genetic links, our family is at risk for
facing similar situations down the road.
The Affordable Care Act has helped keep my life moving
forward. It's given me the ability to continue a healthy life
with access to routine care and without worry that one hospital
admission could cost me everything.
I implore you to please consider the benefits that the
Affordable Care Act has provided. Whether through an employer
or the marketplace, everyone deserves that peace of mind.
Thanks for your willingness to hear my voice.
[The statement of Ms. Schlaack follows:]
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Chairwoman Foxx. Thank you very much.
Mr. Bollenbacher, you're recognized for five minutes.
TESTIMONY OF SCOTT BOLLENBACHER, CPA, MANAGING PARTNER,
BOLLENBACHER & ASSOCIATES, LLC, PORTLAND, INDIANA, ON BEHALF OF
THE NATIONAL FEDERATION OF INDEPENDENT BUSINESS
Mr. Bollenbacher. Good morning, Chairwoman Foxx, Ranking
Member Scott, and members of the committee. My name is Scott
Bollenbacher, and I'm a managing partner of Bollenbacher &
Associates, a CPA firm serving individuals and small-business
clients, most of which are family-owned.
I started the business in 2004 with six employees serving
400 clients. We have grown to 11 full-time employees and six
part-time employees serving 1,600 clients. I am pleased to be
here on behalf of the NFIB to discuss how the ACA has impacted
our business and our clients at today's hearing.
As a small business, we are a close-knit family. Our
employees are much more than employees; they are our friends.
We care deeply for them. We care for their families. We want to
provide for them -- provide benefits and help in any way we
can. We know that our success as a business depends on our
team. Most of our employees have been with us for 10 or more
years.
From 2004 to 2014, our firm maintained a high-deductible
health insurance plan accompanied by a health savings account.
The firm paid the entire premiums and funded up to $3,000 per
year to the employees' HSA. This plan worked well for the
business and our employees. We saved tax-preferred funds for
predictable and unforeseen medical expenses.
In late 2014, we learned that our policy no longer
qualified under the ACA because it did not cover the essential
health benefits package, specifically pediatric dental
coverage. I requested the benefit be added but was unable to do
so, and we lost our plan.
We did not know what to do, and we had little time to
choose a new option, but we explored all the available options
with a consultant. We considered purchasing insurance through
the SHOP exchange. However, the plan would have cost over 50
percent more than our previous plan with less coverage. We
considered dropping health insurance altogether and increasing
the employees' salary to help them purchase insurance on their
own. IRS restrictions made this very difficult. We considered a
healthcare sharing ministry called Medi-Share, and we
considered self-insuring.
The only feasible option at the time was a partially self-
funded plan. I believe our firm was the smallest group they
accepted at the time. The premiums were similar to our previous
plan, but the coverage was not as good. It carried a higher
deductible and did not cover vision care. It did not cover my
family doctor.
We have maintained this coverage for two years. In the fall
of 2016, we learned that our carrier no longer wanted to offer
self-funded health plans to small businesses, so they proposed
to raise our premiums by 156 percent. We could either pay the
increase or leave. We left. Essentially, our plan was canceled
again. As with most small businesses, we must watch our
expenses. A 156-percent increase is not possible.
Once again, we worked with our benefit consultant to
explore all options. Shopping for the right plan is complicated
for us because the firm is close to the Indiana and Ohio
border. Our employees live in both states. We must find a
policy that is accepted by doctors and hospitals on both sides
of the state line.
We finally settled on another fully insured plan at a 78-
percent increase. It was our only available option. Most of our
employees liked the HSA option we maintained for 12 years, but
this plan is not HSA-eligible.
The experience has been frustrating and stressful. The
increases and cancellations are unsustainable for a small
business like ours.
Many clients experience similar disruption with premium
increases and plan cancellations:
A church could no longer provide three ministers with tax-
preferred money to purchase coverage in the individual market
due to IRS guidance. The pastors ended up purchasing coverage
on the individual exchange that was twice as expensive because
they did not qualify for a subsidy.
A cabinet manufacturer with 25 employees could no longer
contribute the entire premium to their employees after a 44-
percent increase to their 2017 plan.
A pallet manufacturer with 110 employees who could neither
afford the $500,000 insurance nor the $70,000 employer mandate
penalty was forced to terminate 80 employees and subcontract
some of the work.
A farmer couple who earns just above the subsidy had to pay
a 38-increase after their plan was canceled.
And a single, female businessowner suffered a policy
cancellation, forcing her onto the individual exchange
marketplace, where her premiums doubled without a subsidy.
I want you all to know what's going on in the real world
with average Joes and Janes. We work very hard. I brought a
picture of our team today so that you see that we're real
people. We've been hurt badly by the cost increases caused by
the ACA and request your assistance in fixing this. As you
consider repealing and replacing ACA, I encourage you to focus
on lowering the costs and increasing flexibility for small
businesses.
Thank you again for allowing me to share my story today,
and I'm happy to answer any questions.
[The statement of Mr. Bollenbacher follows:]
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Chairwoman Foxx. Thank you very much.
Thanks to all of our witnesses.
And now we'll recognize members for five minutes of
questioning, and I'll begin with Dr. Roe.
Mr. Roe. Thank you, Dr. Foxx.
And, first of all, Ms. Schlaack, I want to offer you my
condolences for your loss. Two years ago today, I was sitting
home with my wife, who was dying of cancer. So, certainly, my
sympathy goes out to you and your family, and I share your
grief.
Ms. Schlaack. Thank you.
Mr. Roe. You know, we had a promise from the
administration, when we started debating the Affordable Care
Act, to increase access and lower cost. And I think certainly
everybody agreed with that. I know on our side of the aisle I
did. And you all don't know me, but I'm a doctor that practiced
medicine for over 31 years before I ran for Congress.
And so what did we get? We got some increased access, but
at what cost? And I know at our local hospital at home, 60 to
70 percent of the uncollectible debt -- now, it's a billion-
dollar healthcare system -- are people with insurance.
And, certainly, we agreed on the preexisting conditions --
everybody on this dais agreed with that -- and lifetime limits.
I think that certainly was something that we all agreed on,
because health care is more sophisticated and costs more money
than it used to.
And we created this incredibly complex plan. And I said
this seven years ago in an article I wrote. I could have done
three-fourths of what the ACA did in two paragraphs. And I've
just heard the data that once again proved that. Mr. Scott
pointed out that 20 million people who weren't covered are.
Over half of them are Medicaid. We could have expanded Medicaid
and allowed 26-year-olds to stay on their parents' healthcare
plan. That would have covered, along with the 5 million people,
almost, who lost their insurance, including me -- I had
perfectly good healthcare insurance and lost it and had to go
on the ACA. You ended up with 80 percent. All these regulations
and things that these three witnesses have talked about could
have been avoided easily.
In my own state, almost as many people pay a penalty, a
tax, a fee, whatever Judge Roberts labeled it, as get a
subsidy. And for the people who get a subsidy, it's a good
deal. The problem with it is there are millions of other people
out there with small businesses who are being harmed by this.
I was a mayor of my local community before I got elected,
and we had to pay a $180,000 fee so that insurance companies
would stay in the market. Eighteen of the 23 co-ops, one in the
state of Tennessee, went broke to the tune of billions of
dollars of costs of -- really, no health care got provided.
Just the taxpayers were on the hook for this.
And I can tell you flatly, we went through this over 20
years ago in our state, healthcare reform. I could have written
the epitaph of what's happening. We don't do something, we
cannot not do something, because no one is going to be able to
afford health insurance coverage any longer if we don't. I
mean, Bill Gates won't be able to buy a health insurance
policy. When you're talking about $22,000, that makes you not
competitive with other people in foreign countries, and
eventually you will lose your business.
And, Mr. Bollenbacher, you mentioned one of the things you
want to do is go across the state lines. I have a city in my
district, Bristol, Tennessee/Virginia. I mean, the center
street of that, one side you're in Virginia, one side you're in
Tennessee, but you can't purchase health insurance.
Mr. Scott mentioned there are no plans. There are. I've
written one, and it has 130 cosponsors. It's been submitted,
and we'll have some version of that.
What I want to know from you all at the dais is what can we
do, what would you expect us to do. When we rewrite this
policy, what could we do to help you lower the cost and
increase access, which was the premise of the ACA to begin
with?
Anyone can take it.
Mr. Troy. I'll step in. Thank you for your statement, Mr.
Roe.
So we believe that the way to approach this is to try and
incentivize the purchase of health care by lowering costs
overall. What the ACA did, as you so cogently said, was to
increase the costs for everyone and subsidize a select few. I
think a better approach would be to try and make it cheaper
overall to reduce costs.
And there have been a number of Republican plans that have
done this: the HSAs, health savings accounts, purchase across
State lines, tort reforms, and association health plans that
would allow people to get the tax benefits not just through
their employer. And a combination of those things have been
scored by the Congressional Budget Office as having the effect
of reducing overall premiums.
Mr. Roe. And Ms. Schlaack mentioned -- I use a health
savings account and have since the day they came out. And for
most people -- for her, she's right; it would only have covered
part of the cost of that, not this astronomical cost. But for
most of the care, it would work just fine.
And the cost of the ACA -- a personal testimonial. I had
major back surgery in September of this year. I looked at all
the bills I got for the doctor, for the hospital, for the
anesthesia, the MRIs, all of that. At the cost of the ACA, they
still made money on me this year. My premiums were that
expensive. And so I can pay that, but the average person where
I live in rural Appalachia, which is what I represent, cannot.
With that, I'll yield back.
Chairwoman Foxx. Mr. Scott, you're recognized for five
minutes.
Mr. Scott. Thank you, Madam Chair.
Madam Chair, I'd like unanimous consent to enter into the
record a report prepared by the committee staff on the
Democratic side showing the benefits of the Affordable Care
Act.
Chairwoman Foxx. Without objection.
[The information follows:]
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Mr. Scott. I'd like to ask all the witnesses if any support
a total repeal of the Affordable Care Act without any credible
replacement.
Anybody?
Let the record reflect that nobody volunteered.
Does anybody propose -- we have a mandate that individuals
buy coverage. Do any of the witnesses propose to eliminate that
individual mandate?
Mr. Troy. I don't think the individual mandate is
effective, sir.
And then, also, on your previous statement, I want to make
sure that it's the -- we oppose the repeal without any
alternative, but I think there will be an alternative.
Mr. Scott. Okay. Well, if you eliminate the mandate for
individuals, could you cover those with preexisting conditions?
Mr. Troy. I think there are a number of proposals that look
at covering people with preexisting conditions, especially
those who maintain continuous coverage, and then also having
high-risk pools to address those people, if it's designed
correctly.
Mr. Scott. Has that ever worked anywhere, covering those
with preexisting conditions, without an individual mandate?
Mr. Troy. We are obviously going into new places in health
care and new directions, so I'm not aware of any --
Mr. Scott. Well, that's not a new direction because they
tried it in New York, and when the Affordable Care Act came in,
the individual prices in the individual market were cut 50
percent. The Governor of Washington State has indicated they
tried it in Washington, and they had to repeal the whole thing
because nobody could buy insurance if you didn't have the
individual mandate. So it's not real new.
Now, some of the witnesses have talked about the costs
going up since the Affordable Care Act. We didn't hear much
about the costs going up before the Affordable Care Act.
If the witnesses could present, Mr. Eddy and Mr. Troy, what
your cost increases were the 10 years before the Affordable
Care Act, I would appreciate to see that. Because all the
studies have shown that the cost increases since the Affordable
Care Act have been on average about half of what the increases
were before.
Could you provide that for us?
Mr. Troy. Yes. We actually prepared that, sir. From 1999 to
2005, employer-provided healthcare costs for family coverage
were increasing by an annual average of about 11.1 percent.
From 2006 to 2010, we saw a number of steps by employers to
reduce costs, including the implementation of CDHPs, consumer-
directed health plans, wellness programs, and other benefit
plan innovations. And, as a result, the annual increase dropped
to 4.8 percent -- still high, but much lower.
And then in the intervening period from 2010 to 2016, the
annual increase has been 4.7 percent. And this reflects the net
costs increases and decreases from the ACA and additional cost
savings innovations by employers. And we believe that without
the cost increases by the ACA that 4.7 percent figure would be
even lower.
So it is absolutely true that costs have been going up over
time, and we're looking for ways to continue to moderate those
costs through innovative programs.
Mr. Scott. Okay. Well, if you could show us that 11
percent, because that's consistent with what most increases
were before the Affordable Care Act. And the 4 percent is
consistent with what most of the -- closer to what the
increases have been since the Affordable Care Act.
So complaining about the costs going up without pointing
out that they were going up a lot faster before the Affordable
Care Act tends to be a little misleading.
Some of the plans that have been referred to point out that
you can reduce costs, but all of those plans appear to just
shift the cost to the patient by cutting benefits, that the
patient's going to be just as sick, probably going to get the
same kind of treatment, just have to pay more.
Ms. Schlaack, can you say where you would be without the
Affordable Care Act?
Ms. Schlaack. I'd probably still be paying bills from three
years ago. My daughter and I wouldn't have been able to afford
any health insurance if we wouldn't have had the marketplace to
go to. Where my COBRA payments were going to be $1,000 a month
for the two of us, with the marketplace our premiums were under
$100 a month. We had deductibles that were possibly $500 a
month the first year, and the second year they were lowered.
We very well could have been bankrupt from well over the
million dollars that my husband's medical expenses racked up
in, again, just 10 months' time.
Mr. Scott. You mentioned the lifetime cap. What did you
mean by that?
Ms. Schlaack. I know prior to the ACA, some insurance
companies, once you hit a million dollars, you could be
penalized and not be able to get insurance ever again. And had
he survived, he could've possibly not ever been able to get
coverage from anyone.
Chairwoman Foxx. The gentleman's time has expired.
Mr. Walberg, you're recognized for five minutes.
Mr. Walberg. Thank you, Madam Chairman, and I appreciate
this hearing.
Of course, what we desire is that people, in general,
across the spectrum, be covered and have better opportunities
for health care. We appreciate the fact that some have had good
results, but we want to do this for all. And so we need to take
this seriously here.
Dr. Troy, you cited several studies in your testimony
predicting that the ACA would increase the cost of offering
coverage for large employers. These studies were conducted in
2012, 2014, and even 2016. Has this prediction come to be?
Mr. Troy. Thank you for that question, sir.
So two points on that. First, number one is the study in
2012 and our study in 2014 that I mentioned that would increase
costs $4,800 to $5,900 for an employee over a 10-year period,
these were numbers that were produced by teams, benefit teams,
at large employers that were reflecting what the CEOs and CFOs
were looking at in making their determinations. So it is very
important to look at those projections in saying that these
affected how employers looked at the plans going forward.
The second thing, there has been a recent study that found
large costs associated with general ACA administrative costs,
reporting disclosure and notification costs, costs associated
with benefit plan design changes related to the ACA, costs of
adjusting benefits to keep up with the ACA affordability
requirements, and PCORI fees. So those are some of the biggest
recurring costs.
One cost that has not come to fruition at this point is the
Cadillac tax, which was delayed in a bipartisan effort, which
we applaud, and would impose extremely large costs on employers
if it were to be instituted going forward. And so we would like
to see its repeal.
Mr. Walberg. So, basically, costs did increase, as you
suggested in the studies. What were the biggest contributing
factors to those increases?
Mr. Troy. So I mentioned a number of those, so I'll be a
little more specific.
So the H26 dependent coverage, which I recognize is
popular, one company said that it could cost about $69 million
over 10 years. Another one estimated about $56 million over 10
years.
In terms of the transitional reinsurance fee, estimated
cost of $15.3 million from 2014 to 2016.
One-hundred percent coverage of prevention services and
other benefit mandates, one company said that this would cost
them about $36.5 million over 10 years.
And, again, the big five are the ACA administrative costs,
the reporting disclosure and notification costs, the costs
associated with plan design changes, the costs of adjusting
benefits, and the PCORI fee.
Mr. Walberg. Okay. These are things we need to work on.
Mr. Eddy, thank you for your testimony, and it's admirable
that your company traditionally paid 100 percent of the medical
costs for your employees. And it was your desire to continue
doing that, as a good number of businesses I've interviewed in
my district as well, who literally at times with tears in their
eyes, with their insurance agent sitting next to me, talked
about what this would mean to them, to change a process that
they felt they wanted to continue because of the family, as
they called it. It was the right thing to do.
It's understandable that it was not sustainable under ACA.
And it's no surprise that your colleagues in the manufacturing
business continue to cite the cost of health care as a top
business concern, according to the National Association of
Manufacturers.
Could you tell the committee more about the difficult
choices ACA forced you to make in breaking with the tradition
of providing this type of coverage for your employees?
Mr. Eddy. Yes, sir. Thank you, Congressman.
You know, the difficult decisions really started with the
implementation of the ACA during the tough times of a really
bad recession, and it couldn't have been a more worse time. And
the decisions that we've had to make, now we seem to focus more
on how we're going to try to manage things like hiring people
that we need and, you know, how soon people have to retire now.
Every decision that we make now revolves around the costs and
the uncertainties really afforded to us by the Affordable Care
Act.
So the tough thing we had to do -- we always like to try to
take care of our employees, and that's not only with good
salary but also good benefits. We've always had that as a
company philosophy. Asking them to participate in health care,
as you said, it has really disrupted the relationship between
management and union, management and the salary group, as well,
because they pay more than the union does for their health
coverage now. It's just a matter of trying to keep them
accountable and realize the additional burdens that we've had
to take on here.
Really, the bad part for the union and the company is I
truly believe we could have added another 20 to 25 people in
the last five to seven years if we didn't have the additional
burden of the Affordable Care Act. I'm not sure where the
increases would have taken, but we didn't see the major
increases.
Now, as an employer, we look for flexibility. That's all we
can ask you, as you're working on the ACA, to give us some more
flexibility as an employer, as well as options. And without
that, the uncertainty going forward, it really delays any
options for hiring people, developing new products. It's really
created a major burden.
Thank you for your question.
Chairwoman Foxx. Thank you.
Mr. Walberg. Thanks for your response.
And my time has expired.
Chairwoman Foxx. The gentleman's time has expired.
Mr. Polis, you're recognized for five minutes.
Mr. Polis. Thank you, Madam Chair. I thank the chairwoman
for yielding and the witnesses for coming.
We're here today to discuss the Affordable Care Act and its
repeal. This committee has held a number of hearings in this
area, in particularly to highlight the dangers of repealing the
Affordable Care Act without a replacement that improves and
builds upon it.
Of course, I would note that the title of the hearing is
somewhat deceptive. It's called ``Rescuing Americans from the
Failed Healthcare Law and Advancing Patient-Centered
Solutions.'' Obviously, we hope that we can move forward in way
to improve upon the healthcare law and leave something in its
place that's better.
It has been six years since the law passed. Before the
passage of the Affordable Care Act, about 48 million Americans
had no insurance, and now that number has fallen to 28 million.
For the first time, being a woman is no longer a preexisting
condition; a diagnosis in childhood doesn't preclude coverage
as an adult; and cancer survivors can't be sent a bill for
their radiation after hitting their coverage ceilings for the
year. As was indicated in the testimony, medical bankruptcies
can be avoided. The statistics bear that out as well.
In my home state of Colorado, I'd like to submit a letter
from our Governor Hickenlooper urging this body to protect
healthcare coverage for 600,000 Coloradans. Without objection,
Madam Chair, I'd like to add that to the record.
Chairwoman Foxx. Without objection.
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Mr. Polis. And I would also like to share a couple stories
as well.
A few weeks ago, Elizabeth Robinson, a constituent of mine,
called my office in Boulder. She works as a homeless navigator
for Boulder Municipal Court. For Elizabeth, the expansion of
Medicaid that Colorado and 31 states took advantage of has been
absolutely critical for serving the homeless population with
which she works. She urged me specifically to oppose repealing
the law because of the dramatic consequences to the most
vulnerable.
I also received an email from Dorothy, who shared her
story. She's from Louisville, Colorado, 63 years old, self-
employed, earns less than $20,000 a year. Thanks to the
subsidies on the individual marketplace, she finally has
coverage that's affordable as she waits for her Medicare
eligibility.
Elizabeth is an advocate, Dorothy is a patient, but both of
them believe strongly the Affordable Care Act is working for
them.
My first question is for Ms. Schlaack.
According to January reports from The Commonwealth Fund,
repeal would cost $54 million in gross State product and $1.8
million for Michigan alone in local and state tax revenues.
In addition to your personal responsibilities, are you also
concerned about this negative fiscal impact on your State the
repeal would produce?
Ms. Schlaack. Well, sure, Michigan being a lot of
manufacturing facilities that struggle as it has been for a
while. Also, like, the area where I live is right on Lake
Michigan, and it's a heavy tourist economy. And when people
don't have jobs, they don't have extra money to spend, and the
tourist economy is going to suffer. And the small community
where I live, a lot of it is based around tourism.
Mr. Polis. Thank you.
And, Dr. Troy, I appreciated in your written testimony
where you said it's important to protect those who've gained
coverage under the ACA. What concerns me is the CBO has made
clear that repealing the ACA would cause over 30 million
Americans to lose their insurance.
Would your organization oppose legislation that doesn't
maintain those coverage gains made by the Affordable Care Act
in some way, shape, or form?
Mr. Troy. Thank you, Congressman, for the question.
As I said earlier in my testimony, I do believe it is
important to protect the 20 million who have coverage via the
ACA. I think the CBO study suggests that just if you repeal it
and do nothing in its place, you would have a number of people
without coverage, and I think that would be a problem.
So we want to build on the existing building blocks of
American health care, the successful ones, such as employer-
sponsored care, and make sure that we can expand coverage and
maintain coverage for all.
Mr. Polis. So I think you said it would be a problem if it
didn't maintain that coverage. Is that what you said?
Mr. Troy. We absolutely would like to maintain coverage
levels, yeah.
Mr. Polis. Mr. Eddy, you mentioned some of the -- this is
on the pay-for side, the way that the Affordable Care Act was
paid for. You mentioned in particular the so-called Cadillac
tax. There's other aspects, like a tax on unearned income,
medical device tax. I'm not aware of your organization's
position on all of those, but certainly you've made it clear
you oppose the Cadillac tax.
Do you have other ideas for how to pay for an ACA
replacement? And whatever takes the place of it, have you put
other potential pay-fors on the table that are acceptable to
you?
Mr. Eddy. No, Congressman, I have not seen anything else
that's --
Mr. Polis. Does your organization propose any, or do you
simply oppose the current ones?
Mr. Eddy. There are some provisions of the ACA that --
Mr. Polis. Pay-fors, pay-fors. The ways that it's paid for.
The revenues.
Mr. Eddy. Well, I don't support the fact that it's a
mandate and has to be paid with penalties if not. And I
understand why there are the mandates and the health insurance
industry fees. The fees are really what -- the pay-fors, the
additionals --
Mr. Polis. Right.
Mr. Eddy. -- where that amount could have gone to health
coverage for our employees.
Mr. Polis. My time has expired, but, in concluding, I would
just say, you know, it's fine to oppose particular ways of
paying for it, like fees and certain taxes, but, obviously,
something has to be paid for. So maybe you can put, in the
future, some on the table -- we'll be happy to submit that to
you in writing after the hearing -- as to how you would like to
pay for the replacement for the ACA.
And I yield back the balance of my time.
Chairwoman Foxx. The gentleman's time has expired.
Mr. Rokita, you're recognized for five minutes.
Mr. Rokita. I thank the chairwoman.
I also thank the witnesses for your testimony today. I
learned a lot from each of you.
I want to start by commenting on some of the comments made
by the Ranking Member, a dear friend of mine, Mr. Scott, who
talked in his opening statement about a Budget Committee
hearing. I happen to be an officer on that committee. And I
just want to say, while I don't dispute that there was some
testimony given at that committee hearing along the lines of
what Mr. Scott was talking about, the overwhelming testimony
last week in the Budget Committee was that -- and these were
experts in the field of health care and the economy and both --
was that ObamaCare was roundly criticized, that, in fact, if it
was left to go on, it would implode, that the fact that you had
another major government control in people's lives only meant
that costs were going up and choices were going down.
So that was the takeaway from the Budget Committee
witnesses last week when we examined this. And it's not any
different than the other examinations we've had on ObamaCare
over the last several years.
Mr. Scott also talked about some misleading figures, about
the increase in costs and whether or not the increase in costs
actually went down with ObamaCare or whether, if we didn't have
ObamaCare, the costs would've continued to increase at a higher
rate.
What I find to be misleading about the 6 years or so that
we've had ObamaCare is statements like this: If you like your
doctor, you can keep your doctor. That, in fact, is wrong. If
you like your healthcare plan, you can keep your healthcare
plan. That, in fact, is wrong. There are over 1,000 counties in
the United States right now that have one choice on the
exchange for a healthcare provider. In fact, it's gotten worse.
Then the cost was told to us to not be more than $2,500 per
family or something along those lines. And, of course, we've
blown through that figure almost immediately.
So where are we today?
I'd like to recognize my fellow Hoosier, Mr. Bollenbacher.
I'm glad to see you here. I'm very familiar with your area of
the State from when I served as Indiana Secretary of State.
Can you explain a little bit about how a small accounting
firm owner from northern Indiana winds up testifying before
this committee on this issue? Did you ever think that would be
the case? And can you go into a little bit more detail?
Mr. Bollenbacher. Thank you.
In the fall of 2016, we received a renewal for our health
insurance of 156 percent, and it just blew me away. Many of my
clients -- I was expecting a 40- to 50-percent increase based
on the number my clients had been receiving. When I received
156, I just shook my head. I had no idea what we were going to
do.
My team members are my family. You know, I want to care for
them, I want to take care of them. So I wrote a letter to
President Obama just explaining to him about our 156-percent
increase. And I sent that also to the NFIB, and they contacted
me to come speak today, which I'm grateful for.
Mr. Rokita. Well, you're not alone. I mean, in Indiana
alone, 31 percent of small businesses offered coverage in 2010,
and by 2015, the most recent year that I could find data, only
23 percent of those same businesses were able to offer
coverage, a decrease of 26 percent in the number of offerings.
And your reason, just to be clear for the record, for this
reduced coverage among small-business owners?
Mr. Bollenbacher. The costs have been increasing. It's just
increasing out of control.
Mr. Rokita. When you described how your insurance was
canceled the first time, you said there were some less ideal
options. One of those was Medi-Share, I heard from your
testimony, and some other things. Could you go into a little
bit more detail there?
Mr. Bollenbacher. We looked at a number of options. Medi-
Share is called a church plan. I have a number of clients that
have gone to that. It's usually a half or a third of what even
on the exchange it would cost them. And that was one of the
options that we looked at.
Mr. Rokita. But that's not working?
Mr. Bollenbacher. For those clients that have gone to Medi-
Share, they are still on it. It is working for them.
Mr. Rokita. Okay. Thank you.
And then, Mr. Troy, I think with the 30 seconds I have
remaining, I'd just like to ask you, at the risk of this
committee losing jurisdiction over the issue, why do employers
have to be involved in the insurance market? I mean, I
understand the history and all that, but why couldn't if we
changed or modified the Tax Code could we not incentivize
individuals to enter directly into a competitive marketplace?
Why does the employer have to be involved?
Mr. Troy. I don't think the employer has to be involved per
se. I just think that is the way the system has evolved, and to
change it precipitously would be to cause large disruptions. As
we saw with the Affordable Care Act, the disruptions are often
quite problematic. Somebody mentioned the 5 million people who
lost their individual plans via the ACA.
So I think the best way to go forward is to try and avoid
disruptions and focus on what is working. And you have 177
million people getting health care through employers. If you
were to disrupt that, the government would have an even larger
hole to fill in terms of covering people.
Chairwoman Foxx. The gentleman's time has expired.
Ms. Bonamici, you're recognized.
Ms. Bonamici. Thank you, Chairwoman Foxx and Ranking Member
Scott.
And thank you so much to all of our witnesses for being
here today and testifying.
I wanted to just follow up on what Mr. Rokita said about
employer-provided health care. And also Dr. Roe mentioned, as
well, that insurance costs make us noncompetitive with other
countries. And I want to point out that that's not necessarily
a function of the Affordable Care Act.
I was born in Detroit, Michigan, many years before the
Affordable Care Act. And everyone knew in Detroit, Michigan,
that if you make something in Detroit or if you go across the
bridge and make it in Windsor, Ontario, you have very different
cost considerations, because in Windsor, Ontario, they don't
have employer-provided health care, because Canada, like
basically every other industrialized country, has universal
health coverage.
So it's not necessarily a function of the Affordable Care
Act that healthcare costs are making us unaffordable. And if we
want to have a conversation about that in another hearing, I'd
welcome that.
Madam Chairwoman, I ask unanimous consent also to insert
into the record a letter from the AARP supporting the
Affordable Care Act and expressing concerns about the effects
of repeal.
Chairwoman Foxx. Without objection.
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Ms. Bonamici. The AARP also mentioned in the letter that
Medicaid is the only safety net for millions of children with
disabilities, adults, and seniors in need of critical long-term
services and supports.
I want to point out that, in Oregon, the Kaiser Family
Foundation estimates that more than 546,000 Oregonians could
lose coverage if the ACA Medicaid expansion is repealed. Also,
in Oregon, we have been doing some great innovations with care.
We have CCOs improving care and reducing costs with patient-
centered primary care homes. It's really working well to
provide that preventive care.
And I've heard from hundreds of constituents in Oregon. In
fact, thousands showed up recently at a townhall meeting that I
did with our Senators about this issue. They're terrified about
losing their coverage.
And Debra from Rainier shared her story with me. She called
my office. She's worried that she's going to lose her care if
the ACA is repealed. She's in the final stages of pancreatic
cancer. She's not yet eligible for Medicare. She's worried that
her cancer will prevent her from obtaining coverage without the
Affordable Care Act. So she's spending her remaining time
advocating for those who have benefited from health reform and
doing what she can to prevent the repeal of this important law.
And I know her fears are shared with millions of Americans
in districts all across the country. And I hope my colleagues
will keep her, as well as you, Ms. Schlaack, in mind as we
debate this repeal.
And, Ms. Schlaack, thank you so much for being here to
share your story. I know it's not easy to come forward and talk
about something so personal.
But you mentioned that the type of leukemia your husband
was diagnosed with has genetic links so your family might be at
risk. Can you discuss how the repeal might affect your family
if individuals with preexisting conditions are no longer
protected under the ACA? And if you might mention, what would a
high-risk pool do? Do you think that's an acceptable
alternative for your family?
Ms. Schlaack. No, not -- I mean, a high-risk pool, not at
all. I mean, actually, the University of Chicago continues to
work with samples from my husband to further educate
themselves. And I've learned from my own family about some of
the genetic links.
And being that I have a young daughter who previously was
almost a preexisting condition for being a female, the thought
that 30, 40 years down the road, if she sees the same thing,
she won't possibly have the choice of buying prescriptions or
paying for groceries.
Ms. Bonamici. Thank you, and I hope we can keep your story
and others in mind.
Mr. Eddy, you stated in your testimony your business had
experienced some significant challenges as the health coverage
you offered your employees changed, but you are hopeful your
situation is stabilized. So can you talk a little bit about how
the repeal of the Affordable Care Act without a credible
alternative would affect your current situation?
There's a lot of uncertainty now. I know the President has
said there's going to be insurance for everybody. I don't know
how that plan would work. We haven't seen that yet. But how
would the uncertainty of repeal and replace, how would that
affect your business and business owners like you?
Mr. Eddy. Thank you, Congresswoman.
For the answer to that, I will reference a study that the
NAM has completed called ``Shaping Up.'' The NAM took a hard
look at the challenges as well as the opportunities for
employers concerning healthcare insurance coverage. They were
really looking at three broad themes with that: controlling
costs, such as eliminating burdensome taxes and paperwork;
expanding coverage options, such as providing flexibility for
employers to cater their health insurance options; and access
to better information in the form of improved healthcare IT and
information sharing.
I think that document would maybe tend to give some
additional, broader perspective than my own personal. I think
that I would reference that, and that would be made available
to you.
Ms. Bonamici. Thank you, Mr. Eddy.
And I see my time has expired. Thank you, Madam Chairman.
Chairwoman Foxx. Thank you. The gentlewoman's time has
expired.
Mr. Guthrie, you are recognized for five minutes.
Mr. Guthrie. Thank you, Madam Chairman, for the
recognition. Thank you all for testifying. I appreciate you all
being here.
And, Mr. Bollenbacher and Mr. Eddy, you mentioned in your
testimony about your small businesses. And I have heard from
families in my district. Right when we first got back to the
session, a lot was going on in January, and I got a call, my
office got a call from a young lady. And I called her back. I
wanted to talk to her personally. And she has a special needs
son, and she was really concerned -- and she's on the exchange
in Kentucky -- extremely concerned about the idea that she
might lose her health care as a lot of stuff has been reported.
So I wanted to assure her, we're going to have a transitional
plan and an ability for her to move forward.
But then we started talking about her plan. In Owensboro,
Kentucky, on the exchange, you have one insurance choice. She
said her husband works for a small business, less than 50
people, didn't get health care now through that business, had
to go on the exchange, only one choice. Her child has special
needs. We have great physicians in Kentucky, all over our
state, but there was a particular physician for her child's
needs in Cincinnati at the Children's Hospital and he was not
in network.
So we started walking her through, after we talked about
you're going to be able to continue your current coverage, the
things that we want to do in our replacement plan that will
have her have better coverage. One is, well, if it's a small
business, associated health plans for small business will have
better opportunities to provide health insurance, if she can
buy out-of-state plans, if she needed a doctor in Ohio, because
they had special skills for her child.
So we started walking through that, and she became more
confident as we moved forward that we can improve the situation
that she's in instead of being stuck in an exchange with one
plan.
But my question. So I've actually put the Employee
Protection Act that would allow small businesses, because what
we are going to do with small business -- because the people
who are really trapped in this are people that are single
employers, small businesses trying to buy on the individual
market or small market. And what I want in this bill, and I
want to see how this would help you, that you could actually
offer pre-ObamaCare plans, pre-ACA plans. If you could go back
and offer a plan like that to your employees, would that help
you?
I think, Mr. Bollenbacher, you're a smaller business, I
believe.
Mr. Bollenbacher. Yes, sir. It sure would. We feel like we
have no options right now. We have a cookie-cutter plan that we
have to pick, and that's it. And before the ACA, we had the
ability to pick the plan that best fit our particular needs.
Mr. Guthrie. Mr. Eddy.
Mr. Eddy. Yes, Congressman, we run into the same issues. We
are in the northern panhandle of West Virginia, so we are about
a mile from Ohio and five miles from Pennsylvania.
One of the issues as far as going backwards is the fact
that we don't have several of the carriers that used to
represent West Virginia. The ACA has weakened and some of them
have actually been taken over. So our options now are somewhat
limited to three carriers in the northern Ohio Valley. And we
would like to maybe move some of the provisions back that would
give us more options and flexibility that we talked about. So,
yes, that would be important.
Mr. Guthrie. And we think what we want to propose will give
her more options for her son, and that's what we hope to
certainly accomplish.
Mr. Bollenbacher, I think Mr. Rokita -- I was out but just
coming back -- asked you about a letter that you sent to the
President. Can you talk about the response you got on the
letter -- or from the administration? I didn't expect him to
personally respond, but from the administration what did you?
Mr. Bollenbacher. Sure. A month or so after I sent the
letter, somebody from the SHOP Marketplace called me, just to
talk about the plans that they had available on the SHOP
network, which really wasn't any benefit to us.
Mr. Guthrie. Okay. Well, thanks.
And then, Dr. Troy, in your testimony you mentioned that
innovations in large employer-sponsored healthcare benefits
helped to reduce healthcare costs for employees, retirees, and
dependents. Can you share with the committee some of the ways
employer coverage is reducing costs?
Mr. Troy. Thank you. So as I was saying earlier, that we
were seeing reductions in employer-sponsored costs in that
period, 2006 to 2010, before the ACA went into effect, and it
was a result of program design changes and plan design changes
on the part of employers, which included the implementation of
consumer-directed health plans, wellness programs, which have
been shown in many cases to reduce costs and actually improve
the health of employees, which is really what we are trying to
get at, and other significant plan innovations.
And, again, combined, these really dropped the annual
increase from 11.1 percent in the period before 2006 to from
2006 to 2010 to 4.8 percent. And we believe that additional
innovations by employers could reduce costs even further in the
years ahead. Employers are now taking this issue very
seriously.
Mr. Guthrie. Thank you.
Thank you, Madam Chair. I yield back my time.
Chairwoman Foxx. Thank you so much.
Mr. Takano, you are recognized for five minutes.
Mr. Takano. Thank you, Madam Chair.
Madam Chair, before I begin, I would like to ask unanimous
consent to insert into the record a letter from the American
Hospital Association and Federation of American Hospitals
raising grave concerns with repealing the Affordable Care Act.
Chairwoman Foxx. Without objection.
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Mr. Takano. Thank you, Madam Chair.
I'm disappointed that my colleagues are yet again seeking
to undermine a law that has helped millions of Americans get
health coverage while creating a more just and compassionate
healthcare system for hundreds of millions more through
consumer protections.
Before I get to my questions, I want to speak briefly about
the impact of the Affordable Care Act on my constituents. When
I took office in 2013, a quarter of my constituents were
uninsured. By 2015, the uninsured rate was cut in half to less
than 12 percent, and nearly 90,000 people were newly insured.
People like my constituent and childhood friend Heather
Froehly. Heather had a preexisting condition, and for years
before the ACA she was priced out of the insurance market and
denied coverage. She contacted me during the first enrollment
period in 2014 to let me know that she had successfully
purchased a plan and was thrilled to be covered for the first
time in years. The law's subsidies ensured here coverage was
not only accessible but affordable.
Soon after, Heather was diagnosed with stage two breast
cancer. In the following months she underwent treatment, and
I'm happy to report Heather is now cancer free and doing well.
Heather has told me without hesitation that the Affordable Care
Act saved her life. Had she not been able to obtain coverage,
she would not have been able to go to that appointment where
the doctors first discovered her cancer. She was fortunate to
catch the cancer before it progressed further. I don't want to
think what she would have done without the ACA.
Now, we know the costs of repealing the ACA: 30 million
people will lose their insurance, including nearly 5 million
Californians. It would cost my State nearly 150,000 jobs. But
more than that, we know that stories like Heather's or Ms.
Schlaack's can be found in every district represented here
today. Democrat and Republican districts share the same
predicament.
Cancer does not recognize red states and blue states. We
have to take off our partisan blinders and acknowledge where
the ACA has succeeded and where it must be improved. And I hope
we can agree that it would be a terrible mistake to repeal a
law that has saved so many American lives.
Now, Ms. Schlaack, first of all, I want to thank you for
your courage this morning and sharing your family story. And
I'm incredibly sorry for our loss and appreciate your
willingness to speak here today.
Now, my colleagues on the other side of the aisle seem to
be in a great rush to repeal a law that insures millions of
Americans and that they have any access at all to lifesaving
care. And it seems in their illogical haste to score political
points and make good on an ill-informed promise to repeal the
ACA that they have ignored the impact of their actions,
especially for families who are dealing with a significant
healthcare crisis.
Can you help us understand what it must be like for those
families, on top of the deep concern for their loved one's
health, to be scared about Republican attempts to dismantle a
law that is working to ensure that they maintain lifesaving
care? Can you help us understand?
Ms. Schlaack. Thank you.
Well, like I had mentioned before, I mean, when you're
going through this treatment, whether you're the patient or
caregiver or family friend, your focus is on wellness. And the
bills keep coming in regardless of what's going on, and the
fact that you don't have to worry about whether you're going to
be covered or not is one less worry.
Mr. Takano. Tell us more about the annual or lifetime caps,
the fact that there were no caps annually.
Ms. Schlaack. Right.
Mr. Takano. How would that have affected you and your
husband?
Ms. Schlaack. Well, for instance, my husband had to have --
in a 10-month period he had 12 bone marrow biopsies. Those are
four grand apiece. Blood transfusions multiple times a week. An
ambulance arrived from our house to the hospital, which
happened three times, $2,000. This is not counting the doctors,
the medical staff, the hospital admissions. Easily before he
was even halfway through his treatment would have maxed out a
lifetime million-dollar maximum like it used to be.
Mr. Takano. So this consumer protection was key. And if I
had more time, I would want to ask Mr. Eddy and Mr.
Bollenbacher whether their policies had any lifetime or annual
caps and that might have made them more affordable to them. But
I don't have the time. My time expired. So I don't want to
yield back, but my time has expired.
Chairwoman Foxx. Thank you very much.
Mr. Rooney, you are recognized for five minutes.
Mr. Rooney. Thank you, Chairwoman Foxx, and thank the
witnesses for being here today. I've got questions for Dr. Troy
and Mr. Eddy.
People throughout southwest Florida have expressed many of
the frustrations shared here today. According to Forbes
magazine, an average 64-year-old woman in Lee County, Florida,
has seen her insurance premiums and costs jump 135 percent.
Under these exchanges, due to the failure of competition, most
southwest Floridians now have one choice for their health
insurance. Many of them are on a fixed income.
So my question for Dr. Troy is, if the failed experiment of
ObamaCare continues as is, what chance do our average southwest
Floridians have to see their healthcare costs go down?
Mr. Troy. I am, too, sir, concerned about the lack of
choices on the ACA exchanges, and we are having an increasing
number of exchanges with only one option, as you were saying.
The cost trend suggests that the chance for the average
Floridian of seeing cost reductions under the ACA are very low.
Mr. Rooney. Thank you.
Mr. Eddy, thank you for being here as well. Glad to see
another businessperson here who has firsthand experience with
this disaster on our employees.
According to the American City Business Journals, Lee
County, Florida, is the third-best place for small businesses.
Employer mandates have prevented many of our small-business
owners from hiring new employees. And as I think you've
mentioned as well, many have had to reduce the hours worked to
deal with the cost increases of ObamaCare.
Can you share with us some insights on how the employer
mandates have curbed jobs and wage growth?
Mr. Eddy. Yes, Congressman. Thank you.
The obvious first one is the cost. As it restricts our
hiring capability, the costs per year, if you look at just the
costs related to the mandates and the health insurance industry
fees, those two alone really represent about three full-time
equivalent employees for us.
The restrictive parts of the ACA really, as I said earlier,
dictate a lot of different business decisions that we make,
including capital investments. Looking to the future, we have
to, any time we make a capital investment for growth, we have
to hire and plan on hiring new employees.
So this has, as I said, become one of our most critical
decisionmaking parts. And it's not just the costs and fees,
it's the future. It's the uncertainty. The Cadillac tax, for
example, is of critical concern because of our -- the curve on
the costs right now by 2018 would possibly put us into that 40
percent additional tax rate.
So it's fully encompassing, to say the least, for all of
our business decisions.
Mr. Rooney. Well, I appreciate that response. Like I say,
I'm an employer too, and I'm used to satisfying customers, as
you are. And maybe we ought to think about a system that puts
the patient first, patient-centric care, where they get to make
the choice instead of a top-down government mandate. What do
you think about that?
Mr. Eddy. I can tell you, I'm no healthcare expert, but
without change -- and I want everybody to know that we are all
compassionate to the needs of the people. That's why we employ
and try to take great care of our employees. But I'm very
concerned about the long-term sustainability of health care in
general if we don't make a major change. I'm supportive of
that, yes. Thank you.
Mr. Rooney. Thank you very much.
Again, thank you all for being here.
And I yield back.
Chairwoman Foxx. Thank you very much.
Mr. Espaillat, you're next for five minutes.
Mr. Espaillat. Thank you, Madam Chair.
Dr. Troy, I appreciate in your written testimony that you
stated, and I quote, ``It is important to protect those who
have gained coverage under the ACA.'' However, I am concerned
that about 30 million individuals are projected to lose health
insurance if the ACA is repealed. Specifically, New York State
Governor Cuomo, Andrew Cuomo, has stated that over 2.7 million
New Yorkers would lose coverage, with Republicans offering no
guarantee to protect this coverage.
I ask for unanimous consent to include Governor Cuomo's
statement announcing the impact of the ACA repeal on the
record.
Chairwoman Foxx. Without objection.
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Mr. Espaillat. Dr. Troy, I appreciate that in your written
testimony, you stated that employers, and I quote, ``however,
are both good at getting people covered and maintaining
manageable risk pools. Public policy should be aimed at
encouraging these important goals.'' You also mentioned the
risk pools are difficult to maintain. Employer risk pools for
the chronically ill is a central tenet of Speaker Ryan's ``A
Better Way'' paper.
I would like to know how you will separate the healthy from
the ill. And considering that high-risk pools are more
expensive to buy by consumers, more expensive to administer,
and generally provide less coverage, how do you propose to
implement these high-risk pools without taking a real hit on
consumers and patients across the country?
Mr. Troy. Thank you, sir, for your question. And as a
native New Yorker, I congratulate you for your joining Congress
and joining the committee.
In terms of risk, managing risk is a crucial part of how to
handle any possible healthcare plan going forward. It's a
crucial part of healthcare reform. One of the things about
employers and why I said in my testimony that they are good at
managing risk is that they have large pools of people who work
for them and therefore the risk pools generally tend to be
better. You don't have the same kind of options such as you
have in the ACA exchanges in which you have the young and
healthy people choosing not to participate. And we, too, have
evidence that the percentage of the young people in the ACA
exchanges are younger than needs to be to maintain an
acceptable risk pool. So I think --
Mr. Espaillat. Aren't they generally more expensive to buy?
Aren't they more expensive to administer and provide less
coverage?
Mr. Troy. Are you saying employer-sponsored plans? No, we
have not found that to be --
Mr. Espaillat. High-risk pool.
Mr. Troy. We have not found that to be the case.
In terms of high-risk pools, the idea is to minimize the
number of people who would be in them. And that's why employer-
sponsored health care is an important building block, as would
be, perhaps, association health plans that would allow other
people to join what are effectively risk pools by joining with
their civic organization or their union or their religious
organization and then get the tax-preferred benefit. So the
idea is to minimize the number of people in high-risk pools.
But, yes, of course, you are right that the specific high-
risk pools that these programs that would establish, the
specific high-risk pools programs would establish are more
expensive because we're dealing with a group by its nature that
is high risk. The idea is to minimize the number of people in
those pools.
Mr. Espaillat. Dr. Troy, the Trump administration's recent
immigration executive order has made it impossible for many
foreign-born physicians and students to enter the United
States. On your blog in December 2013, you discussed the
worrisome expected doctor shortages. And in 2012, while a
fellow at the Hudson Institute, you wrote a piece that
commented on the physician shortage that this country already
faces.
As a healthcare policy matter, does it make sense for the
administration to make it more difficult for the United States
to meet the health needs of our population by restricting the
number of doctors we recruit and train?
Mr. Troy. Thank you very much for that question. As a
healthcare policy nerd, I guess, as you said, who wrote this
paper four years ago, I'm flattered that people are reading the
paper, and I hope it has an important public policy impact. I
absolutely think that we do have concerns about a doctor
shortage. I've always been in favor of an immigration system
that works to bring in people who are willing to work and
willing to help improve our economy, and I worked in the Bush
administration on the immigration reform plans that would have
helped bring more doctors into the country.
Mr. Espaillat. So you support an exemption for doctors and
healthcare professionals from those countries that are
currently being hit with the ban?
Mr. Troy. I would like to see our immigration policy have
plans to allow more doctors to come into the country,
absolutely.
Mr. Espaillat. Madam Chair, the statement from the
Association of American Medical Colleges expresses deep
concerns about this new immigration policy. I ask unanimous
consent to insert this in the record.
Chairwoman Foxx. Without objection.
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Chairwoman Foxx. And the gentleman's time has expired.
Mr. Espaillat. I yield my time.
Chairwoman Foxx. Mr. Brat, you're recognized for five
minutes.
Mr. Brat. Thank you very much, Madam Chairman.
Thank you all very much for being with us today.
I'm on the Budget Committee, and so I like to kind of zoom
in on the mandatory spending problem this country faces, and a
lot of that is going to be impacted by increasing healthcare
costs over the years. And so that's where I'm headed.
And so we all appreciate the concerns shared across the
aisle on uninsured, the costs. We want to get it right. But the
amazing thing I never hear and that the media, unfortunately,
never covers is the impact on our children with the programs,
Medicare, Social Security, et cetera, going forward. So I'll
just share a few facts.
And then I don't know whether you all have this in your
planning horizon or not, because it is 10 to 20 years off. But
just the basic fact, everyone -- I taught economics for a 18
years -- everyone wants everything in the short run, right? I
mean, utility maximization, et cetera, and we're pushing stuff
off when it comes to the debt, et cetera. So in Virginia,
healthcare costs are going up by 20 percent, and that's pretty
typical. Some States, 50 or more percent increase in premiums.
So, number one, is that sustainable?
Two, Kaiser recently has come out with just the standard
premium rates, about $17,000 for a family of four in Virginia
or across the country. That's just the new family of four
premiums, $17,000. Is that sustainable?
Average family income in my counties is about $65,000 for
family. Family income 65, 17 health care. Is that sustainable?
Deductibles are over 5,000 typically now for silver, bronze
plans, right, not just high deductible. It is across the board.
Is that sustainable?
And then my commentary is what I know is not sustainable.
So currently we are 20 trillion in debt. And if you go out to
CBO, the trendline is in 10 years we're going to add another 10
trillion. Likely, we'll be at 30 trillion in debt. When does
the bond market call that in? Is that sustainable? I don't
think it is.
The flip side of that is what's driving that debt? A lot of
the pressure is coming from the mandatory spending programs.
Medicare and Social Security are both insolvent in 15 years,
roughly speaking. In 50 years, it's not clear whether our kids
will have those programs at all.
And healthcare costs are, of course, probably the main
driver of those programs, of Medicare, Social Security,
Medicaid, veterans, et cetera. And I haven't heard enough
analysis of that. This is a huge ethical issue and an ethical
tradeoff of current generations versus the next generation. So
everyone's talking about what we would all like right now, but
the facts look to me, with Medicare and Social Security
insolvent in 15 years and maybe nonexistent in 50 years when
our kids retire, is anyone taking that into account?
And so what goes with that, the main graph out at CBO also
shows in 10 years all Federal revenues will go only to
mandatory spending programs, right? So all Federal revenues
will only go to mandatory spending programs, Medicare, Social
Security, Medicaid, Bush prescription drug plan, et cetera.
Right? So that means there's no money left for the military,
education, transportation, everything we believe in across the
aisle.
And the mirror image of that same statement, that there's
no Federal revenues left, is the deficit in 10 years is
expected to be $1.2 trillion, which fully funds the
discretionary budget, right? So we will be deficit financing
the entire discretionary budget in 10 years.
So this is just CBO facts, most of it related to
mandatories. And I just want to open it up to your comments.
Why don't we just work down the -- Dr. Troy, why don't you lead
off, just on the sustainability. And, sorry, I've left you
probably with probably way too little time.
Mr. Troy. That's, fine, sir. I will be brief.
We have a chart that we've prepared. It's called ``Hitting
the Wall,'' and it talks about the period from 2025 to 2030
when we're going to have Medicaid spending hit over a trillion
dollars. All of the baby boomers will have retired. The
Medicaid trust fund, as you say, will be insolvent. And we are
very concerned about all those trends going forward.
We are also concerned about recent public policy which puts
more people onto government-sponsored healthcare programs and
fewer on private programs. So we would like to see more
reliance on this employer-sponsored care as a way to address
these issues going forward. And I would like to submit that
chart for the record.
Mr. Brat. Right. Thanks.
Chairwoman Foxx. Without objection.
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Mr. Brat. Mr. Eddy, please.
Mr. Eddy. Yes. I think I would refer back to the concern
about sustainability not only of the healthcare plan, but also
of the tax base if this continues to damage small companies. A
large part of the tax base, has to be remembered, comes from
the small businesses. As our friend Adam Smith said, there's
only three ways to create new wealth in any culture:
agriculture, manufacturing, and resource extraction. And a lot
of those companies that support those industries are small
businesses now. So without change, I really am concerned about
our sustainability even with the tax system. Thank you.
Mr. Brat. Thank you for bringing in Adam Smith.
Thank you all very much.
Chairwoman Foxx. Thank you very much.
Mr. Grijalva, you are recognized for five minutes.
Mr. Grijalva. Thank you very much, Madam Chair.
I think it's important, kind of, to remind as we deal with
ACA and have this discussion in this panel -- and thank you for
being here -- and as we stumble or edge toward TrumpCare in the
foreseeable future, it's important to remember that there were
60-plus votes for repeal in this House. And at the time it was
a messaging vote. Now reality bites, that we have issues to
deal with and how do we keep commitments that, perhaps, are
contradictory to even some of the testimony that I read from
the witnesses here today.
For example, President Trump said that he wanted health
care for everyone, he mentioned that, and that he wanted it to
be great, affordable care for everyone. The commitment not to
touch Medicare and not to touch Social Security. Congressional
leaders on the Republican side have talked about dealing with
the popular parts of ObamaCare, no prohibition of preexisting
conditions, no gender discrimination in terms of costs,
preventive mandated examinations for wellness issues, no
maximum caps, sons and daughters remain until they're 26.
And Mr. Troy, Mr. Eddy, those two are doable in your
professional, learned experience, to do what the President said
had to be done and to keep the essential programs that are
popular with the public? That's why the public is demanding a
replacement, just not merely a repeal. Are they doable at all?
Mr. Troy. Thank you for the question, sir.
First of all, I'd like to state that I am not a
spokesperson for the Trump administration or the Obama
administration.
Mr. Grijalva. Nobody is. That's not the point here.
Mr. Troy. And I was happy to reclaim my First Amendment
rights when I left government 7 years ago.
But I would like to make the point that there are a number
of serious plans that would reduce the overall cost of premiums
on average according to CBO analysis, and I think that is the
best way to go forward in order to incentivize people to
purchase health care on their own without subsidies for some
and an overall mandate. Thank you.
Mr. Grijalva. Yeah. Let me follow up, if I may.
Mr. Troy, part of what you also hear is that we have to
eliminate the mandate, we have to eliminate the subsidy, we
have to eliminate the medical device tax, high-end fees and
taxes, and we have to eliminate issues that are revenue
generation that allow many of the important things, like Indian
health care that's part of the Affordable Care Act, that would
go out the window. Community health centers and the trust fund
established for community health centers that are essential in
rural America and in poor America for services, those would all
go out the window.
So how can on a wish that costs of premiums will go down,
when in reality the balance of revenue and program offerings
under ACA are intrinsically tied together? How do you eliminate
all the revenue generation and still have a program?
Mr. Troy. So we do oppose elimination of many of the taxes,
including the Affordable Care Act, the Cadillac tax in the
Affordable Care Act. In terms of CBO projections being a wish,
that is how public policy is made. We make projections based on
what CBO assumes that the policies will do and that's how
they're voted on. And I was pleased to see that this one
particular CBO study showed that the costs would be reduced if
a number of these programs in totem would be put together to
lower the costs on individuals and their premiums.
Mr. Grijalva. I'm sorry, Mr. Eddy, but if you have any
comment on either one of those points.
Mr. Eddy. Thank you, Congressman.
I really tell myself I should have no comment here, but
what I would like to say is I think we've all learned a good
bit about what works and what doesn't work in the last five
years, six, seven years of ACA. You know, from my standpoint as
a small-business owner, I would hope that there could be a
balance created between this group, actually, to work towards
what does work better. I have no answer for you on that,
though. Thank you.
Mr. Grijalva. I appreciate it.
I yield back, Madam Chair.
Chairwoman Foxx. Thank you very much.
Mr. Bishop, you're recognized for five minutes.
Mr. Bishop. Thank you, Madam Chairwoman, and thank you for
the opportunity to be a part of this committee hearing today.
Thank you to all the panelists. A special thank you to Ms.
Schlaack, a fellow Michigander. Also, I want you to know as a
parent, husband, my heart goes out to you and your family. I do
want you to know that your testimony here today makes a
difference. And oftentimes people don't think that, but your
being here today, your personal story makes a difference, and I
want to thank you for that.
Higher premiums and uncovered out-of-pocket expenses for
the most part are devastating families and entrepreneurs and
everyday Americans of all backgrounds. The ACA has caused
cancelled policies, rising costs, poor coverage, and lack of
choices for families, business owners, and employees alike.
Many Americans simply can't afford health insurance. In
fact, in 2015, 8 million Americans chose to pay the individual
mandate tax penalty rather than to purchase insurance at all.
I hear from constituents every day and business owners. I
have spent the last couple of years traveling the state. And
just reflecting what I'm seeing in Michigan, plans in Michigan
exchanges saw deductibles go up an average of $492 in 2017.
ObamaCare exchange rates will jump nearly 17 percent in
Michigan regardless of what Congress does this year. Insurers
are leading the exchanges, private practices are folding over,
and our doctors are being forced into retirement because they
cannot afford the cost to stay in practice to comply with all
of the incredible regulation.
Nationally, those who currently have a plan under the
exchange can expect an average premium increase of 73 percent,
while individuals who are now just joining will see a 96
percent increase in premiums. The average cost to the new
consumer in the individual market is expected to rise $1,800
per year.
We often hear, as we absolutely did here today, the
argument that if ObamaCare isn't implemented, costs would rise
anyway. And I know, Dr. Troy, you've answered that question on
more than one occasion. And just building on what Mr. Guthrie
had asked you, as a healthcare policy expert, can you tell me -
- obviously, prices would continue to increase. But would the
cost of health care increase at the same rate under the
previous system but for the implementation of ObamaCare?
Mr. Troy. So the healthcare inflation rate continues to be
higher than the overall inflation rate. There has been some
moderation in the healthcare inflation rate. So it's still
higher than overall inflation in the last couple of years. CBO
has looked at this and wondered what the effect of -- or the
cause of this was. It looked at the ACA as one possibility, but
it said that the biggest factor was the lingering effects on
the recession in terms of moderating the healthcare inflation
rate. Also, some of the premium hikes that we have seen in the
last couple of years in the ACA exchanges suggest that new
studies going forward might find even higher rates.
And then the other thing I would say is that employers have
done a lot of work in recent years to try and bring the down
costs. And we've seen some improvement in the costs in
employer-sponsored care even as they face the additional
effects of the ACA costs.
Mr. Bishop. Okay. We could have a lot of this conversation
for many days.
Doctor shortage. You just were asked -- you were just
brought into that discussion as well, the fact that the current
immigration plan may have an impact on that. But can you share
with me the extent to which the result of rising costs on the
current practitioners and the current costs with regulation
compliance has an impact on the number of our doctors,
especially those freestanding specialists who are leaving the
practice of medicine?
Mr. Troy. I'm glad you raised that, because that study that
I wrote back at Hudson Institute in 2013 did talk about the
cost of the Affordable Care Act on our medical profession and
suggested that we might have problems filling the number of
doctors we need as a result of the costs imposed by the ACA,
but also the lack of discretion imposed on doctors of the ACA.
Doctors want to see that they actually have the ability to make
decisions, and the more their decisions are constrained, the
less likely they are to go into the profession.
Mr. Bishop. What exactly is, what's the biggest regulation
that doctors face that is causing the most consternation among
the practitioners that's making them leave the practice almost
overnight?
Mr. Troy. So I hear a lot of doctors complain to me about
the electronic medical records and the way that it forces them
to look at the screen instead of at the patient. And when you
look at the patient, that's when you get to make better
decisions about the patient's health. But I would, also, I know
we're short on time, I would ask that entire paper that I wrote
about the ACA's impact on doctors be submitted for the record.
Thank you.
Mr. Bishop. Thank you very much, Dr. Troy.
And I yield back.
Chairwoman Foxx. If the gentleman from Michigan would like,
we can insert that study into the record.
Mr. Bishop. I would. And I move to admit that to the
record.
Chairwoman Foxx. Without objection.
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Chairwoman Foxx. Ms. Adams, you're recognized for five
minutes.
Ms. Adams. Thank you, Madam Chair, and thank you, Ranking
Member Scott, for hosting today's hearing.
And thank you to all of the panelists.
Much of what has been discussed today includes the impact
of ACA on the health and economic security of our country.
Repealing it would take away vital health insurance, as we've
heard, for nearly 30 million Americans, and with more than 129
million Americans with preexisting conditions would be denied
coverage.
Madam Chair, I'd like to ask unanimous consent to enter
into the record a letter from seven children's groups.
Chairwoman Foxx. Without objection.
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Ms. Adams. Thank you very much.
Ms. Schlaack, first of all, you've experienced a terrible
tragedy. Again, I want to add my thought and sympathy to you
and your family and commend you for having the strength to
share your story.
You describe in detail the impact of ACA in terms of
coverage both for your daughter and your son, and in your
testimony you mention that having ACA allowed you to have
coverage for your daughter without having to quickly go back to
work simply to get the benefit of health insurance.
So it does sound like ACA allowed you to be flexible with
deciding when to go back to work after your husband's death. Is
that the case?
Ms. Schlaack. That's correct.
Ms. Adams. Okay. I also want to raise with you, you know,
oftentimes with great personal tragedy comes the need to access
mental health services. Under ACA, more individuals have access
to such services. As someone who has experienced personal
tragedy and currently working with those who have, how
important is that mental health service, such as grief
counseling, how important is that to be accessible and covered
under health plans?
Ms. Schlaack. Thank you. Not only for myself to be able to
effectively parent and continue on with my life, but also for
my daughter.
It is statistically shown that children who suffer a loss
of a parent or live with a parent with a serious illness often
have difficulty processing that, and it then translates into
school issues, behavioral issues beyond their young years, well
into college, making not necessarily the best choices. And the
fact that she and I are both able to continue with counseling,
therapy for our own mental health has been invaluable because
it is a very expensive service that we couldn't have afforded
otherwise.
Ms. Adams. Okay. And so after actually working in this
field, you believe it's important for other families to access
it as well?
Ms. Schlaack. Very much so. I work with groups, peer
groups, and many times that's not quite enough. A lot of times,
especially children don't want to talk about things like this
with their parents, with someone in their home, and they need a
third party who they can express what they're feeling and help
them work through the emotions that they often don't even
understand.
Ms. Adams. Right. Okay. Thank you.
So you talked about your son -- or you mentioned it in your
written testimony -- who was able to stay covered under an
employer-sponsored plan after serving in the Peace Corps. What
has it meant to him to have the coverage a young adult starting
out in the world?
Ms. Schlaack. Well, as he was right out of -- he finished
his bachelor's program, went straight to a master's program, as
we were able to continue to cover him then, so he didn't have
to work full time and go to school. And then in the interim,
between graduating and starting the Peace Corps, which he did
have full coverage from the government as a Peace Corps
employee, but then once that service was up, he transitioned
back into the U.S., his benefits stopped.
And until he was able to attain his own full-time
employment, which thankfully he does have, I was able to keep
him covered. So it was one less thing that he -- because,
frankly, the medical care he could get in Mongolia where he was
serving wasn't exactly stellar, and he was able to come back
and have the coverage he had in the past and before he started
out on his own as an independent adult.
Ms. Adams. Thank you. And as his mom, I know you have peace
of mind.
Thank you very much. I yield back, Madam Chair.
Ms. Schlaack. Yes. Thank you.
Chairwoman Foxx. Mr. Byrne, you are recognized for five
minutes.
Mr. Byrne. Thank you, Madam Chairman.
Lady and gentlemen, thank you for being here today.
Most people expect to get their health insurance through
their employer. Most people work for small businesses. So the
topic we've been talking about today and the impact on small
business is a big deal.
I represent southwest Alabama. We don't have too many big
employers. Virtually everybody works for a small business.
Between 2015 and 2016, for the urban county in my district,
Mobile County, the increase for small businesses for their
insurance premiums is 14 percent. That turns out to be about
$2,000 per employee in 1 year. For small businesses, that's a
big hit.
And, Mr. Bollenbacher, I'm informed that you actually had a
156 percent increase and that you wrote President Obama about
that. So I would like to ask you, sir, did you hear back from
President Obama? Have you received any subsidy from the Federal
Government to help you with that increase? And if you don't
receive a subsidy and you get an increase of that magnitude,
what do you, as a small-business owner, what do other small-
business owners that you work with, what do you all do with
that?
Mr. Bollenbacher. Yes. I don't think my microphone is
working.
Chairwoman Foxx. Turn on your mike, please.
Mr. Bollenbacher. Yes. I did write a letter to President
Obama.
Mr. Byrne. Did you hear back?
Mr. Bollenbacher. I had somebody call me from the
healthcare marketplace to the SHOP.
Mr. Byrne. Did you hear back from the President that you
wrote to?
Mr. Bollenbacher. No, I did not, but 156 percent increase
is not feasible.
Mr. Byrne. Did you get a subsidy to help you with it from
ObamaCare?
Mr. Bollenbacher. No.
Mr. Byrne. So how do small-business people deal with an
increase with like that, if the President won't talk to him or
write him back and won't give him a subsidy like he had given
in other parts of the program?
Mr. Bollenbacher. What we were forced to do is look at
options, and there were no good options. Basically, there was
one plan that we ended up having to pick, which was a 78
percent increase. I've had other companies, other clients I
work with, have dropped their insurance altogether. They just
cannot afford it. They've laid people off to get under the
full-time employee equivalent.
Mr. Byrne. And maybe, Dr. Troy, Mr. Eddy, make you all can
answer this for me. As a result of this, have we seen a decline
in the number of businesses and employees working for small
businesses that have insurance? Have small businesses just
said, ``Look, we can't afford it''?
Mr. Troy. I'm not aware of statistics on that specifically,
but I do know there are concerns among small businesses. And
I've heard stories, including by some of your colleagues today,
about limitation of hiring by small businesses as a result of
the ACA.
Mr. Byrne. How about you, Mr. Eddy?
Mr. Eddy. Again, I agree with Dr. Troy. I don't have any
specific statistics, but I know how it affects us, and it
curtails our hiring capabilities as well as our capital
investments, which lead to additional hiring. So we plan, as
long as we can afford, to cover our employees with as much
coverage as we can. You know, with the high deductibles that we
have today and the continuing uncertainty in the future costs,
I'm not sure how long that will be able to be sustained. Thank
you.
Mr. Byrne. Mr. Bollenbacher, I'm sorry you didn't hear back
from the President of the United States. You wrote him. You're
a citizen of this country. You have a legitimate concern. And
you had a right to get a response. He's not President anymore,
so there's nothing we can do about that.
Madam Chairman, I really do worry about what's going to
happen to all these employees in America that work for small
businesses and want to get their health insurance, expect to
get their health insurance through their employer, and their
employers have just gotten to the point where they can't afford
it.
And so the employers are left with one or two choices.
Either they continue to pay the high cost of this, in which
case they've got to figure out a way to recoup that somewhere
else, and my fear there is there will be less hiring, fewer
jobs; or we figure out a way to get some real relief to small
businesses by getting this incredibly expensive burden off of
them and let small businesses do what they've done through the
history of this country, which is grow and prosper and hire and
provide benefits and good wages to the people of America.
And I yield back.
Chairwoman Foxx. The gentleman yields back.
Ms. Shea-Porter, you're recognized for five minutes.
Ms. Shea-Porter. Thank you.
And, Ms. Schlaack, first, let me say I'm sorry for your
loss, and I understand how challenging it is when there's
somebody in your family, because I had a family member who had
decided -- he was a registered nurse, and he decided that he
wanted to do ministry with music. He's a gifted musician, and
he wanted to go to nursing homes and work with Alzheimer's
patients. And so he was able to do that with the Affordable
Care Act. And then shortly thereafter, he was diagnosed with
advanced prostate cancer. And the Affordable Care Act saved his
life, because he had access to treatment. So while our outcome
was certainly better, it was a terrifying time.
I am also concerned about small businesses, and so I urge
my colleagues on the other side to work with us to help to
reduce the costs and figure out more. The fact that we haven't
been able to work together I think is a tragedy.
But since the Affordable Care Act began expanding access to
health insurance in my home State of New Hampshire, 63,000
people who didn't have it before have gained that peace of mind
that we have all been talking about and the financial security
that coverage provides. Now, their coverage and many others is
at risk.
Despite the fact that Republicans have had seven years to
come up with a so-called replacement plan, the current plan
looks like repeal and collapse. Insurers make decisions over
the coming months about whether to offer plans for next year
and you're still hearing the story, the dog ate my homework.
The stakes cannot be higher.
If congressional Republicans go down this road, the Urban
Institute estimates that 118,000 people in my State alone could
lose coverage and 30 million nationwide. Just yesterday, the
Economic Policy Institute released a report that repeal would
cost 4,600 jobs in New Hampshire. This wouldn't just erase the
gains that we've made, that would send us backward, and I don't
believe anybody wants to go backwards here.
My constituents are deeply concerned, and rightfully so.
I'd like to read some testimony from two of them. First is
Jameson from Somersworth, New Hampshire, who shared this, and I
quote: ``The ACA gave me the opportunity to purchase affordable
health care when I needed it most. It allowed me to get the
medical service I needed without me going into more debt or
standing up time after time after time just waiting in the
emergency room. Although I'm not a profitable insurance
policyholder, I surely am a grateful one. Repealing the ACA
would be inhumane, irresponsible, and outright foolish.''
And there's Jack from Rollinsford, New Hampshire, who said
``Before the ACA, I was uninsured due to a preexisting genetic
condition and high medical costs, struggling to afford even the
most basic tests to keep myself healthy. Today, I have great
affordable coverage and the help I need to live a long,
productive life.''
So my question to you, Dr. Troy is, today's hearing
concerns the quote, unquote, ``failed health law.'' What
benchmarks would you allow Jameson and show Jameson and Jack to
defend your allegation the healthcare law has failed in New
Hampshire and around the country? The uninsured rate? Average
medical debt? The number of plans that have comprehensive
substance abuse treatment? The number of issuers offering
coverage in our individual market? Because all of those have
shown dramatic improvement.
You work with numbers. Are there any statistics you could
show Jack and Jameson about access to coverage and care in New
Hampshire that could possibly support the idea that this law
has somehow failed to improve health care for my constituents?
Mr. Troy. Thank you very much for that question.
I believe and I've written that there are three basic
metrics for judging whether the law is a success. Number one is
coverage. While you say that the law has increased the number
of people covered, that is absolutely true, more people are
covered subsequent to the ACA, but, A, not as many as the law
said it would or CBO projected that it would cover. And we
still do not have the level of universal coverage that I
believe that we should strive for in this country.
Number two is costs. President Obama said that the law
would reduce costs, bring down costs for individuals, bend the
cost curve down. As Dr. Brat was saying earlier, our long-term
costs are still quite high, and we've seen very high increases
in the premiums at the exchanges in recent years.
And then the third, and I think really the key question
that will determine whether the American people believe the law
is a success, is President Obama's promise if you like your
health care you can keep it. And we have seen disruptions in
the individual markets that some people have not had the
coverage they had previously as a result of the ACA.
And then there are questions that the costs we were talking
about throughout this hearing imposed on employers. And if
employers are changing the health care they're providing as a
result of the costs of the ACA, then the answer to the question
of that is no.
Ms. Shea-Porter. Okay. Well, let me stop you there, because
I'm running out of time. But first of all, the fact that the
coverage isn't 100 percent but so much closer hardly seems a
reason for you to complain. It seems to me you would want to
say, well, that's wonderful, we've expanded coverage and let's
do even better and get 100 percent.
And your second point, where the costs have not dropped,
can you point out anything anywhere, starting from your sale of
your home or whether you rent or whether you buy groceries,
anywhere where the costs have dropped? We all know that the
rate of increase has dropped. And you, yourself, introduced
some of those numbers earlier in your testimony.
So I'm not sure what you're saying here. If you're saying
that I didn't get everything I wished for, and that's how it
sounds here, I didn't get everything I wished for yet, what
would be the purpose of going backwards and taking away when
you've acknowledged that the increase of people who are covered
went much higher? What is wrong here?
Chairwoman Foxx. Ms. Shea-Porter, your time has expired.
And we'll ask Mr. Troy to submit his answer for the record.
Mr. Troy. I will.
Ms. Shea-Porter. Thank you. And I yield back. And I would
very much appreciate an answer to that. And thank you.
Chairwoman Foxx. Mr. Allen, you're recognized for five
minutes.
Mr. Allen. Thank you, Madam Chair.
And, again, I appreciate the panel participating today. I,
too, have learned a little bit about what you're dealing with.
Just 2-1/2 years ago I sat in your seat, Mr. Eddy, as a
small business and dealing with not only the economy but the
increase in benefit costs and stagnant wages, which is still a
major problem. I think that probably, too, we should understand
that really health insurance benefits came out of the business
community. In fact, it exploded during World War II when there
were wage controls and the war board allowed the companies to
extend benefits, health benefits and other benefits, to compete
for employers. And, of course, now the government is heavily
involved.
And we know that, again, costs are increasing. In fact, I
have met with lots of groups that are involved in the markets.
And, of course, the health insurers are getting a little bit --
well, they're getting a bad rap because they are blamed for the
increase. But I know for a fact that most of them submitted
certain reforms to the administration that would drive down
costs and they were totally ignored.
And that brings me to my point here that I want to make
today. And, again, I don't know if this is the first time
you've testified here in Congress, but you obviously see the
very partisan part of what -- in fact, I'm ashamed of it,
really, of what happens here that we can't come together. We
can send somebody to the moon, but we can't come together and
do what's right for the American people, and that's sad.
But we're going to work on it. We're going to continue to
work on it. Your testimony is very important to us, and we
thank you for that.
With that, again, you've listened to us, and we've listened
to you. Dr. Troy, I would like to start with you, and just
we're getting to the end of this. Can you summarize in your
mind where you see us going and what's best for the American
people?
Mr. Troy. Thank you for that question, and I applaud your
call for bipartisanship. Before the ACA, every piece of major
social welfare legislation in this country had passed on a
bipartisan manner, and that's one of the reasons that these
laws were accepted and the American people moved on
subsequently. When you have a law passed in a unipartisan
manner, you have this situation where there's continued
contentiousness about the law seven years later.
I would like to see some kind of bipartisan reform going
forward so that it would be more lasting. I would like to see
it along the lines of what we were talking about earlier in
terms of building on the basic building blocks of American
health care, which includes employer-sponsored care, which
covers 177 million people, but also works to reduce the overall
costs, thereby incentivizing people to purchase it on their own
and not having to do it via mandate. Thank you.
Mr. Allen. Now, what's important about what you said there
is incentivize. I learned that in the business world, that the
best way to get the production from your workforce is to give
them incentives to do these things rather than mandates.
Mr. Eddy, do you have any comments about how to solve this?
Mr. Eddy. I'd be in Congress if I had the ability to solve
it.
Mr. Allen. Well, that's the reason I'm here. I'm not sure
I'm getting anywhere.
Mr. Eddy. As I said, I depend on you all to work together
to do this.
But along with the repeal of the taxes, I'd like to see us
consider reducing some of the reporting requirements. The
mandates generate a lot of reporting requirements, a lot of
compliance issues.
Also, the greater flexible. I'd like to see the proposals
and see options and flexibility improved.
Thank you.
Mr. Allen. Ms. Schlaack, my heart goes out to you for your
loss.
Ms. Schlaack. Thank you.
Mr. Allen. What is your recommendation knowing that we're
$20 trillion in debt. And you've got a child. I have 12
grandchildren. How do we do this?
Ms. Schlaack. Again, fortunately, I'm on this side and not
yours -- your side of this table, I'll put it.
But, I mean, to have a productive, efficient workforce you
need healthy, happy employees, mentally and physically. And I
know it's dollars and cents, but it comes down to loyal,
healthy employees that you can count on to be at work and to
maintain their job.
Mr. Allen. Let the record show that maybe was the most
important thing that was said here today at this hearing.
Mr. Bollenbacher.
Mr. Bollenbacher. I believe for small businesses we need
options. We need flexibility. We need more than one choice to
provide for our employees.
Chairwoman Foxx. The gentleman's time has expired.
Mr. Allen. I yield back.
Chairwoman Foxx. Mr. DeSaulnier, you're recognized for five
minutes.
Mr. DeSaulnier. Thank you, Madam Chair.
Let me start at the beginning, just agreeing to the
comments by my friend from Georgia and by the chair. It would
be wonderful if we could approach this more in a problem-
solving perspective, acknowledging that we have philosophical
differences as to how to accomplish that. And I say that from
the perspective of being a small-business owner for over 35
years.
Mr. Bollenbacher, I hesitate to use this phrase, but I feel
your pain. I owned restaurants in the bay area for a long time.
And before the ACA, one of the problems I had was the cost,
that it was going up. So for my employees, who I was able to
pay 100 percent of their costs, I found situations before the
ACA where I had a manager come to me in tears because she
couldn't afford the copay. I contributed the copay.
So when we compare this and Dr. Troy, I would like to go
back to the ranking member's comments and how we get to a
perspective of more problem solving in a bipartisan fashion as
you affirmed would be preferable.
But in addition to owning a small business, Ms. Schlaack, I
also have great empathy for your perspective as a survivor, so
far, of incurable blood cancer. I, fortunately, had insurance
that I paid for, that has helped me pay for the very large
costs for my treatment.
I will say, and I'd be curious about your experience, but
perhaps just personally, as to the question about electronic
records. There's somewhat of a joke about those of us who have
gone through treatment, and I tease my oncologist that I see
more of his back as he looks at my CAT scans and my blood. But
he will say, but that's where the information is.
So understanding that there's a process to introducing
technology and understanding that we should have done it faster
when it came to electronic records, there's still a long term
and a short-term benefit for me. I'm an example of it.
And at some point, a wonderful book, ``Rise of the
Robots,'' where they talk about automization. And for
specialists in the medical field, I always ask when I go out to
research facilities: How much is the oncologist in my case
interpreting the results of my examinations and how much is a
computer interpreting it and telling him or her what the
diagnosis should be and what the treatment should be? And what
I always get is over the course of time the computer is doing
more and more of that work.
So to Dr. Troy, to follow on the ranking member's, if we're
going to be rational about this, more than opinion, an opinion,
even research that's based on a biased perspective, from my
experience it would be better to look at where other similar
examples have worked historically and where they work right
now.
So in the industrialized world, one of the reasons I was so
supportive of ACA and supportive of universal health care and
Medicare for all, is that that's my perspective of who we
compete with. And most of those countries that we compete with,
their percentage of costs of health care is smaller than their
GDP than the U.S. and their outcomes have historically been
better -- Mongolia not included in this, by the way.
So the ranking member's question about if your theories are
in play right now and practiced in a similar industrialized
community, where is it? What can we learn from that? And why
can we be so certain that your suggestions will worked when
they are applied to a very complex country?
And I'll just say, lastly, from my perspective having been
very involved in the implementation in California when I was in
the legislature, we had huge struggles. We continue to have
huge struggles. We worked with the California NFIB. We delayed
some of the requests in the mandates on small businesses. As a
small-business person, I wanted to make sure that they didn't
incur undue burden, as my friend from Alabama said.
So in the short time left, maybe you could just elucidate a
little bit on your response from the ranking member. If you're
going to be rational and evidence based and rely on as much
empirical, nonbiased research as possible from either
perspective, it would suggest to me that we go to places that
have implemented health care, dealt with this, and either from
your perspective, being more market based or more driven closer
to universal health care, where has it worked and where hasn't
it?
Mr. Troy. Thank you very much for your question. I
certainly try to avoid the word ``certainty'' when it comes to
public policy, because I think it behooves us to have modesty
in our approaches and not be completely certain about anything
about the previous policies or going forward.
One of the reasons we spend more on health care is that we
are, in many ways, a more generous country. We spend dollars
until the last minute of life in ways, and some of these
countries, some of our Western allies do limit treatments at
the last hours of life in ways that we don't.
The results are certainly mixed. To some degree, we do have
lower life expectancy, but part of that is unfortunately due to
higher road deaths and higher gun deaths. So there are other
factors at work.
I don't have the perfect plan in another country. I have
seen some positive results from Singapore, which does have
people have some kind of catastrophic plan and also combines it
with some kind of has that can be transferred generation to
generation, and that has showed some impact in moderating
healthcare costs. But, again, Singapore is a small homogeneous
country, and obviously, we are a very large heterogeneous one.
So it is, obviously, a difficult public policy conundrum.
Mr. DeSaulnier. Thank you, Dr. Troy.
And thank you for indulging me, Madam Chair. I have some
articles on the Treasury report issued on January 12 that I
would like to submit for the record.
Chairwoman Foxx. Without objection.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairwoman Foxx. Mr. Grothman, you are recognized for five
minutes.
Mr. Grothman. Okay. Mr. Bollenbacher, you are kind of what
I think was going to happen until the ACA stepped in. You are
somebody who, the way it is described, for a relatively small
employee -- what, 11 employees over there? -- you are doing a
great job of managing your costs.
I'd like to know what your costs per employee was or did
you feel you had your costs per employee under control with a
combination of HSAs and giving some money toward your
employees?
Mr. Bollenbacher. Yes, I do. We were seeing increases, you
know, 8 to 12 percent. The health savings accounts the
employees really liked. They were able to save money to put
away for those future unexpected claims. It was manageable for
us to continue that.
Mr. Grothman. And your costs were still going up 8 or 9
percent?
Mr. Bollenbacher. I'm sorry?
Mr. Grothman. Your costs were still going up 8 or 9
percent? Or you felt you got your costs under control with a
combination of HSAs and --
Mr. Bollenbacher. Yes, sir.
Mr. Grothman. Okay. So you were happy to live with the 8 or
9 percent.
Mr. Bollenbacher. A lot better than 156 percent.
Mr. Grothman. Okay. And is that after the ACA kicked in or
before?
Mr. Bollenbacher. The 8 to 12 percent was before. We were
seeing 156 percent last year.
Mr. Grothman. Right. Okay.
I'll go to Mr. Eddy. There are a variety of problems that
business has. And I don't know whether I caught how you're
handling your healthcare costs. But could you give us in
general the type of plan you were offering your employees
before the ACA kicked in?
Mr. Eddy. It was a common plan with a thousand dollars for
a single and a thousand-dollar deductible for the family plan.
As I said, it was about $13,500 per year for the family plan.
I'm not sure how to describe the plan, but it was full
coverage. We paid the entire amount of the plan for our
employees.
Mr. Grothman. Okay. Do you know, and I guess this is either
for you or Mr. Bollenbacher, have you or other people involved
in NFIB -- are you with NAM? Is that what you're involved with?
Mr. Eddy. Yes, I'm here with NAM.
Mr. Grothman. Right. Stories of employees being conscious
or other employers being conscious of both a desire to hold
employees' hours below 30 hours or employees conscious of the
cliffs in which they're going to lose their subsidies? Have you
heard stories like that?
Mr. Eddy. Well, I've heard the stories, but we don't -- you
can't experience that. That's not something that I think is
pretty common.
Mr. Grothman. Okay.
Mr. Bollenbacher. Yes, sir. I've been dealing with that
almost on a daily basis where my self-employed clients, the
farmers, the pastors at churches, where they're right at that
cutoff, and it's a cliff. And if they go over that cliff, they
may pay $7,000 or $8,000 back, and it hurts them badly.
Mr. Grothman. Bingo. I'm glad you're a CPA. Because that's
what we want. At first I was thinking I was asking you as an
employer. But I'm not asking you as an employer. I'm asking you
as a CPA. So you see that your customers, the people you fill
out tax returns for, are conscious of the fact that they cannot
make more money. Or, in other words, they are maybe
artificially holding down their compensation to make sure that
they don't hit the cliff.
Mr. Bollenbacher. Absolutely. It's a big number for most of
my clients.
Mr. Grothman. Okay. And do you find employees sometimes
conscious of that as well?
Mr. Bollenbacher. Not as much as the self-employed. But,
yes, I have had individuals where they're an employee, they get
a paycheck, maybe they sell some stock, and it puts them over
the cliff, and all of sudden they owe $2,000 or $3,000 back
that they weren't expecting.
Mr. Grothman. Okay. Mr. Troy, you talked about the
different taxes out there. I think you talked about the -- oh,
the Cadillac tax and that sort of thing. And you advocate
repealing them. But what would happen if we repealed them?
Would that make ObamaCare that much more fiscally impossible?
Mr. Troy. I do believe that the Cadillac tax does not bring
in nearly as much revenue as the CBO or the JCT, Joint
Committee on Taxation, suggests it would. I think that the
Affordable Care Act has a lot of spending itself. And so if the
committee goes forward and the Congress goes forward with
repealing it, along with the taxes, then it wouldn't make the
ACA more fiscally responsible, but it would reduce both the
costs and some of these revenues from taxes.
Mr. Grothman. I guess the point I'm trying to make is if we
repeal the taxes, the money is going to have to come from
somewhere else, Right?
Mr. Troy. If you maintain the ACA as it is, but just minus
taxes. But I don't think that's a working plan on the table.
Mr. Grothman. Right. But that is what would happen. I mean,
when people talk about continuing the ACA, if you continued the
ACA and got rid of these harmful taxes, the money would have to
be made up from somewhere else, correct?
Mr. Troy. As with any program, yes.
Mr. Grothman. All right. Okay. Thank you for --
Chairwoman Foxx. Thank you. The gentleman's time has
expired.
Mr. Courtney, you're recognized for five minutes.
Mr. Courtney. Thank you, Madam Chairman.
So at midnight last night this enrollment period for 2017
came to a close. This morning I checked in with the folks in
Hartford about how the final numbers came in. The answer that
came back is that we just about pretty much held steady in
terms of last year's enrollment. It was a little bit of a dip,
partly because they didn't use insurance agents to help with
enrollment, which they're going to reverse that for next year.
That was a bad move they made. But nonetheless, I mean, it
pretty much held steady.
And I make that point just because we've heard a lot of
talk today and over the last few weeks about whether or not the
law is in a death spiral. There was an interview recently that
was reported with the American Academy of Actuaries, which I
think we would all stipulate doesn't have a partisan bone in
its body, about whether or not in fact there is a death spiral
going on, and Cori Uccello, the organization's senior health
fellow, answered, ``I don't see any evidence of that happening
right now. The problem with the argument,'' according to
Uccello, ``is that ObamaCare's enrollment is actually holding
steady and not dropping off.'' And we know that from the
national exchange as well. A death spiral is when people really
start running towards the exits, and it just concentrates the
sickest in the pool. And as Uccello points out, the age
distribution for 2017 is pretty much holding steady.
In my district, which we've driven the uninsured rate down
to 3.6 percent, I think it's almost the lowest of any member's
district on this committee, and that's because of a grassroots
effort with libraries, community health centers, hospitals,
insurance agents up until last year, who really just flooded
the zone in terms of trying to get people help and assistance
that took place.
And I would just share this, because as a former employer I
think the description of your problem is exactly the sore spot
that we need to address, Mr. Bollenbacher. But, frankly, it is
not a monolithic story that's out there.
Willimantic Waste, which is a trash hauler in my district,
they have about 200 employees, I got a letter from the HR
director who indicated to me, and I'll just read it quickly,
``I was skeptical about the claims that the ACA would help
level out the cost of our company-sponsored health plan. But
the numbers have come in, and over the past three years we have
seen a decrease or no increase in our premiums every year.
2015, minus 2 percent. 2016, minus 1 percent. 2017, zero
percent.''
And, again, I'm not saying that to diminish your comments.
But the fact is it is really not monolithic that's out there.
And what we ought to be doing is focusing on questions about
whether to have a reinsurance mechanism, which was in the bill
and unfortunately got stripped. It was part of the Republican
Medicare Part D plan as a way of leveling off premiums through
that. Very successful. We use it for flood insurance.
Again, and this is coming from Connecticut where we have a
lot of insurance companies, that's the biggest weakness that
they identify in terms of why the 2017 spike increased. But
Standard and Poor's even then said it appears to be just a one-
year phenomenon.
So, Madam Chairwoman, I would like to submit this story
from the Academy of Actuaries, as well as Willimantic Waste
paper for the record.
Chairwoman Foxx. Without objection.
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Mr. Courtney. Thank you.
And just to go back to -- I mean, one bipartisan ray of
hope here is on the Cadillac tax. As many know, we teamed up
last year on a bipartisan basis, pushed it back to 2020. A
bunch of us did it back in 2010 and pushed it out to 2018. But
nonetheless, I mean, there is, again, a strong feeling that
this is a really totally inefficient way of trying to
accomplish some type of goal, which is really just to shift
costs to businesses and employees.
And I would just say, Dr. Troy, I mean, you point out that
the CBO study, it really is not a traditional tax analysis.
It's assuming an income windfall that will happen as employers
don't incur as much costs in terms of paying higher premiums. I
just wonder if you could comment in terms of really -- there
really is no study that has ever really demonstrated that sort
of backboard basket that they're describing, is it?
Mr. Troy. Thank you so much for that question, Mr.
Courtney, and I would like to applaud you for your bipartisan
efforts to eliminate the Cadillac tax. Thank you for that.
We have done a number of studies at the American Health
Policy Institute about the deleterious impact of the tax, and
we looked very carefully at this question of how much revenue
it would supposedly raise. In doing so, we found that not only
would it not bring in as much revenue as the CBO and the JCT
projected, but also that to the extent that it is imposed and
employers are trying to reduce costs in reaction to it, that
the reduced costs are not necessarily going to employees as the
CBO study projects or assumes. We talked to employers, and 71
percent said that it would not lead to increased wages. So I
just think it's on unfounded assumptions.
Thank you for your leadership.
Mr. Courtney. Thank you. H.R. 173, and I think we could do
it on the consent calendar if it was brought up tomorrow. Thank
you.
I yield back, Madam Chairman.
Chairwoman Foxx. Thank you very much.
Mr. Thompson, you're recognized for five minutes.
Mr. Thompson. Madam Chair, thank you for this hearing.
As someone who arrived in Washington to serve in January of
2009 when this original -- and I won't say it was even a
debate. I came here with 28 years of healthcare experience,
nonprofit community healthcare experience. In my time off, I
volunteered as an EMT, showing up at the homes of my neighbors
at all times of the day and night -- or mostly the night when I
was home -- to respond to healthcare needs.
And there was no debate in 2009. In fact, those of us who
came here, and there was a lot, my good friend from Tennessee,
Dr. Roe, came here as a physician, there was a lot of us with
healthcare experience. A lot of friends across the aisle who
had great experience. None of us were welcomed to the table.
And we wound up with this very partisan legislation that was
shoved down the throats of the American people.
So I appreciate this hearing. I think this is a part of a
dialogue that we have had for some time with the American
people, but also among ourselves. I respect that there are
differences. But the fact that we are proceeding in a way with
transparency to do better.
I happen to believe that our Nation's healthcare policy
should be one that promotes the healing and the health of all
Americans without hurting millions. And that's not what we have
today.
And I also believe this debate should be conducted based on
facts, not fear. So I really caution all my colleagues, and
especially those across the aisle that I've heard just in the
past few days, it's been about the fear, driving the fear. That
doesn't help this process.
One of the things I heard was that we have no plans. And so
I want to -- I'm going to be offering this, request unanimous
consent for the record. But this is a submission for the record
I have. This is a compilation of replacement plans or
improvement plans or whatever you want to call it, plans for
health care.
Just some of the titles on this first page: Patient Freedom
Act, Obamacare Replacement Act, A Better Way: Our Vision for a
Confident America. It's more of a vision. Patient Choice,
Affordability, Responsibility and Empowerment Act. H.R. 5284,
the World's Greatest Healthcare Plan Act. That was creative, I
guess, in title. Empowering Patients First Act, which by the
way, was a version of something that I had cosponsored back in
2009, before the Affordable Care Act came out of the back
offices here in Washington, and that's been introduced in both
the House and the Senate. And the American Health Care Reform
Act, which actually the prime author of that is my good friend
from Tennessee, Dr. Roe, that he referenced. That's page one of
six.
So I request unanimous consent to present this, a list of
detailed plans on how to reform the health sector for Members
of Congress. Some of these are from Presidential candidates,
some scholars and think tank community, and other top
conservative thought leaders.
Chairwoman Foxx. Without objection.
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Mr. Thompson. Thank you, Madam Chair. I really do
appreciate that.
I have some questions. I have some concerns in terms of
access. My observation is just because you have coverage
doesn't mean you have access to health care. And I think that
was the flaw of the Affordable Care Act. It focused on health
insurance, not health. And I just look at premiums and -- I'm
sorry, deductibles. I mean, we can look at it all differently.
But the deductibles, which we really haven't talked about
today.
It was reported to me about a constituent I have that was
recently diagnosed with cancer, that because his deductibles
are so high today, dramatically higher than what they were,
grew faster than what they should have, he's made a conscious
decision not to pursue care or treatment because when he looks
at that annual deduction, at his age, he would really like to
be able to pass something along to his children and
grandchildren. That's an awful situation that we have put that
individual in with these deductibles. And, again, you can have
a card in your purse or your wallet that says you have
coverage, but do you really have health?
So I like this debate we're having, and I look forward to
it. And I've managed to use all of my time, but Dr. Troy, you
mentioned innovation and flexibility in employer-sponsored
benefits can help reduce the cost of health care for employees,
retirees, and dependents. Can you give me just one example of
that innovation?
Mr. Troy. Sure. So just one example, right now I have been
working with a group of employers on something called the
Health Transformation Alliance. This is a collection of over 30
employers who are working together, sharing data, looking at
how to proceed based on actual facts and data -- we talked
about that here in the panel -- in a way to improve the health
of employees. And then they're going to go forward with a
pharmaceutical initiative, a medical network initiative. And
based on the data that they come together with, in order to get
better results and better costs.
Mr. Thompson. Thank you, Chairwoman.
Chairwoman Foxx. The gentleman's time has expired.
And I recognize now, Mr. Mitchell, who's been very patient.
Mr. Mitchell. Thank you, Madam Chair.
Actually the witnesses have been very patient, and we
should commend you for your endurance if nothing else. Thank
you for being here.
I am from Michigan. We have 15 counties that have one
insurance carrier right now. Another 25 have only two. Eighty
percent of the plans in Michigan are much narrower now in terms
of providers than they were in 2007.
Dr. Troy, is there any mechanism within the ACA or any hope
within ACA that situation will improve in Michigan, which is,
in fact, a national phenomenon as well? Do you see anything
coming out of ACA that could possibly fix that?
Mr. Troy. I don't see anything coming out of ACA that would
fix that. I mean, ACA is kind of a static thing right now, and
the conversation right now is not about putting something, a
new mechanism into ACA that would lead to those improvements
that you're seeking.
Mr. Mitchell. I'm not sure we could identify a new
mechanism which would cure that. But, yes, I don't see anything
there either.
Before I joined this esteemed body, I was the CEO of a
midsize company, not a small company, a little larger than
yours. The impact, however, was similar in that year one,
health insurance costs are going to go above 50 percent in year
one, not quite 157 percent.
Question for the two employers in the group. How did you
manage the cost increase within your price and your operating
structure? How did you manage that cost? I doubt you were able
to pass that on down the chain. How did you manage that?
Mr. Eddy. Again, the timing couldn't have been worse. As
was stated, I've been with the company 21 years now, and I
started as the new CEO, president and CEO, on January 1, 2009.
I'd heard a lot about the potential for the Affordable Care Act
coming. We saw our premiums, our deductibles, you know, the
mandates, the costs. Again, I'm not sure how you manage without
-- with uncertainty. I mean, you know, one of my sayings to my
management group is, as we lose control, increase your options.
Okay? And ACA took all of that away. So that really took one of
my management philosophies away.
But when you're looking at annual increases in the mandates
and the health care, the health insurance industry fees, you
know, 3 percent per year of our premium costs increasing, 2.5
percent per year from the mandates changes. And these have
continued. It's not a one-time increase. These are annual
increases.
Mr. Mitchell. Were you able to just pass those costs along,
Mr. Eddy, to your consumers?
Mr. Eddy. We have not had the ability to increase our
prices for the last five or six years because we haven't seen
any GDP growth, so our company hasn't grown but maybe 2.5 to 3
percent on average. That's in revenues. Our profitability is
down significantly. With the increase in the mandates and
insurance and taxes and fees is one thing, but the others are
the increases in premiums. It's taken away, as I said, I would
like to have grown significantly more than we have. We have had
the ability to increase our international markets, but we
haven't been able to do that as fast as we would like to.
Mr. Mitchell. Another question, Mr. Bollenbacher or Mr.
Eddy. We talked a little bit briefly, a colleague talked about
deductibles. We haven't talked about much of that here. I know
I've seen the deductibles go wild for myself and the people
close to me. What's been your experience in terms of deductible
costs, the increases of the last several years?
Mr. Bollenbacher. The deductibles I'm seeing have increased
from 5 to 8, up to 12,000 recently.
Mr. Mitchell. In your opinion, I mean, you're close to your
employees, does that adversely impact their willingness or
ability to actually access care? I agree with my compatriots
that health insurance doesn't mean you can access health care
these days. What impact does it have on your employees?
Mr. Bollenbacher. It definitely does. It's a big hurt for
them.
Mr. Mitchell. Mr. Eddy, any feedback on that?
Mr. Eddy. Well, we're a little different. Again, we have a
fully employer-funded HRA, the Health Reimbursement Accounts.
So it's a little different for our employees. We still cover
100 percent of the deductible.
Mr. Mitchell. That's admirable and not commonplace, I don't
think.
Mr. Eddy. Again, it's admirable, and it creates a lot of
challenges, and we know it's not sustainable.
Mr. Mitchell. Thank you.
And I'll yield back, Madam Chair. Thank you very much.
Chairwoman Foxx. Thank you very much.
Mr. Lewis, you're recognized for five minutes.
Mr. Lewis. Thank you, Madam Chair. I'm so glad we're
talking about employer-sponsored care today and the effects the
ACA has. I do want to talk a little bit about the individual
market that has been hit the hardest. If, in fact, you look at
Minnesota, it's been hit the hardest. The State of Minnesota
had to just do an emergency $310 million subsidized premium
plan. We'll call it that. So when we look at what repeal and
replace might look like or repeal and repair or fix might look
like, we know what the status quo looks like.
Before I came to Congress, I was a sole proprietor like
many of your member businesses. I went through three insurers
in 5 years. My premiums tripled to the point where we were
paying $2,200 a month for a $10,000 deductible. A lot of folks
here have said health insurance is not health care access, and
that's certainly true. Has that been the experience of some of
your members?
Mr. Bollenbacher. Yes, it has. And I would add that before
the ACA most of my clients had insurance, if not all of them
had insurance, and many of them have been dropped from their
insurance and been forced to go in the marketplace.
Mr. Lewis. Let's talk a little bit about the employer-
sponsored market, because it hasn't just been the individual
market. The 10 essential wellness benefits, the minimum amount
of coverage that came down from the ACA so that you as business
men and women had to buy this particular plan that the ACA
dictated. Repealing some of those, Mr. Eddy, would that solve
some of the problem, repealing some of those mandates?
Mr. Eddy. I believe that it would, Congressman, yes. Again,
that is one of the options that we're looking to improve upon,
having that as maybe another option that we can choose from.
Mr. Lewis. You know, this committee and this Congress is
dedicated to making certain no one slips through the cracks.
We're going to have high-risk pools or some mechanism for
people with preexisting conditions. But I want to get your take
on portability and how that applies to people who have that
very real problem of preexisting condition and can't get
coverage.
When people get their insurance at work and they work 30
years or 25 years, and then they get a little older like me and
a little sicker, and then they lose their job, they're thrown
into that individual market, and now they're trying to buy
insurance for the first time and telling the insurance
industry, well, I'm going to have a lot of claims here, but I'm
just starting my premiums. If we could unlock some of that tax
advantage from the corporate side to the individual side, would
it increase portability and solve some of that problem?
Dr. Troy, go ahead.
Mr. Troy. Yes, as I was saying in my testimony earlier,
that some of the Republican plans call for something along the
lines of association health plans, which would allow
individuals to band together and purchase health care in a tax-
preferred way in mechanisms other than just through their
employer. That would include your civic organization, your
religious organization, perhaps your union. And I think that
would help unlock the job lock you're talking about and also
provide possible additional portability.
Mr. Lewis. Mr. Eddy.
Mr. Eddy. Obviously I think it's a good thing to be able to
have portability supportive of the preexisting, you know, not
having preexisting conditions. So, yeah, I think that would
help tremendously.
Mr. Lewis. And of course the best way for people to be able
to afford health care is to have a good, robust, productive
job. And to the degree that these sorts of regulations,
including the ACA, have hindered the economy and hindered your
ability and your members' ability to employ people, that has a
real impact on health care access too, does it not?
Thank you all. I yield back my time.
Chairwoman Foxx. The gentleman yields back.
We were expecting Mr. Smucker, I believe. And there he is.
Mr. Smucker, you're recognized for five minutes.
Mr. Smucker. Thank you, Madam Chair.
I appreciate the testimonies from all of you. I can tell
you businesses in my community, I've been out throughout the
last year during a campaign talking to individuals and
businesses, and then just recently during one of our weeks back
in the district met with a few businesses, the Affordable Care
Act and the impact on health insurance in their organizations
and for their employees is top of the list in terms of their
concerns about issues that will impact their ability to
continue to do business as they have in the past.
They're very worried -- I'm thinking of one husband and
wife who own a company, about 15 employees, who see their
employees as a family, and then being able to help provide for
their medical needs is an important part of sort of how they
feel about their employees and the makeup of the company.
And so I'm glad that this is a top priority for us here,
and I look forward to building a better healthcare system,
working with everyone here to build a system that will work for
everyone.
Dr. Troy, as you know, ERISA is the backbone of the
employer-sponsored healthcare system that we're talking about.
Since 1974, it has allowed multistate employers to offer
uniform benefits to their employees across the Nation, reducing
costs and allowing for innovation. ERISA's preemption of State
laws is a key component in the law and one that you said needs
to be strengthened. As we consider reforms to the healthcare
system, how would you recommend the committee strengthen the
ERISA preemption?
Mr. Troy. Thank you very much for that. A good question.
First of all, ERISA significantly reduces administrative
costs by allowing multistate employers who self-insure to offer
a uniform set of health benefits that are generally not subject
to the 50 different State laws. So in terms of strengthening it
going forward, we have been concerned about the increase in
State fees and taxes on self-insured health employer benefits
in recent years. Some States have imposed fees on healthcare
claims of self-insured employers, including Alaska, Kentucky,
Maryland, Massachusetts, Rhode Island, Vermont.
So we're concerned about those kinds of taxes going
forward, and we want to make sure that as we talk in the ACA
repeal and reform effort about ways to use State flexibility,
which I applaud, that we make sure that we still maintain the
ability for employers to have better ERISA preemption.
Mr. Smucker. Thank you very much. I appreciate that.
And, again, I'm very much looking forward to working with
my colleagues and this committee, with the chair, and with
other Members of the assembly to rebuild an effective
healthcare system where everyone can have access to the health
care that they need at a price that they can afford and with
the doctor that they choose.
Thank you.
Chairwoman Foxx. Do you yield back?
Mr. Smucker. I do.
Chairwoman Foxx. Thank you very much.
Well, even though I think I have the very best questions, I
saved mine to the end so that if people want to be going other
places, they can do that since I know I'm going to be here
until the end. So I want to say again thank you to all of our
witnesses for being here.
Mr. Bollenbacher, yours is a story we've heard over and
over again. The healthcare coverage you had as a small business
before ACA was working for your company and what your employees
wanted. However, the ACA forced you out of that coverage --
several times, in fact, as you've described -- and added costs
and burdens of lesser coverage.
Can you tell us what your employees liked about the
previous coverage that you're not able to offer them today
because of this failed law?
Mr. Bollenbacher. The plan we had before met their needs.
It was affordable. They really liked the health savings account
feature. Most of my employees are fairly young, fairly healthy,
and they were able to put money away. As an employer, we put in
up to $3,000 per year to their accounts. Even when one lady had
a baby, she had money in her has to help pay for that, so she
had no money out of pocket.
Chairwoman Foxx. So it sounds as though what they liked is
having control, more control over their healthcare dollars and
their healthcare costs than is available to anyone under the
ACA?
Mr. Bollenbacher. Yes, ma'am. That's correct.
Chairwoman Foxx. That's wonderful. Thank you.
Mr. Eddy, you mentioned in your testimony that one of the
most challenging aspects of the ACA is the effect that it's had
on your employee-employer relationship. Most employers fiercely
protect that relationship and do not want to do anything to
harm it. Can you talk about how the ACA forced this tension
between you and your employees? Did your employees understand
that it was the ACA and the Federal Government placing new
requirements and costs on the company that was forcing you to
make difficult decisions?
Mr. Eddy. Of course I tried to educate our employees, but
more specifically our United Steel Workers Union, that their
best interests as always are our best interests and that we try
to take care of them.
The tension obviously arose when we were trying to
negotiate an increase -- or actually not an increase, but for
the first time ever that they would have to copay a little bit.
And with that, they know because I told them that it was ACA,
but they look to us to take care of them. So from their
standpoint, it was a company responsibility to take care of
that.
We have had a situation where for years since I've been the
CEO, I see every employee on the floor on their birthday, as
well as many other days during the year, and they were
impressed with that. But after the negotiations on our last
contract and having to implement, and even with the staff rep
agreeing to it, a little bit of copay, again, $35 per pay,
there were several folks that felt that we let them down. And
explaining to them that the cost increases were not -- we
couldn't sustain as a company, obviously the union agreed to
it. But we also had to increase their pay rate over the life of
the contract 4 years to help offset those costs. So it cost us,
but, again, we were trying to incorporate more accountability
for them.
Chairwoman Foxx. Thank you.
Dr. Troy, there were some comments made about other
societies in the world these days who provide, quote, ``free
health care'' to their citizens. And you mentioned Singapore
being a rather homogenous society, much smaller than we are.
We're often compared to Switzerland. I don't know the exact
population of Switzerland, 7 million people or something;
Canada, 35 million people. We have about 300 million people.
Is there any other similar culture to ours that provides
free health care, quote, ``free health care'' to its citizens.
Mr. Troy. Look, we are a unique Nation. I am a proud
believer in American exceptionalism, and I know that we are
different. We have also tried to be more reliant on private
sector health care and market. We are not completely there
because it's a mixed system. So I think it is hard to compare
our approach to different countries and say we should adopt,
let's say, the British model or the Canada model. Even though
we are close friends with those nations, we have different
systems, and I don't think their systems would work if imported
here.
Chairwoman Foxx. Thank you very much.
I would like to thank again our witnesses for taking the
time to testify before the committee today. Other members have
said to you thank you and that being here does make a
difference, and I would like to say that to you also.
I would now like to recognize Ranking Member Scott for his
closing remarks.
Mr. Scott. Thank you, Madam Chair, and thank you for having
this hearing. It gives us an opportunity to flesh out many of
the problems. This one witness said we all want less cost and
more flexibility. We have a plan, the Affordable Care Act,
where the costs have gone up, but the studies have shown the
costs have gone up at about one half the rate they've been
going up before. People with preexisting conditions can get
insurance at the standard rate. There are no lifetime or annual
caps on coverage. Women aren't paying more than men. And
instead of millions of people losing their insurance every
year, 20 million more people have insurance than they did.
There are improvements we know we can make. We could insert
a public option so in those States where the competition isn't
what it should be, you would at least have an opportunity to
buy the equivalent of a Medicare card. Or you can go to a
single-payer plan, which would get the health care out of the
employer costs. There are a lot of things we can do.
But we still have complaints about the present situation,
but it's hard to debate when there is no credible alternative.
One thing that is conspicuously omitted is, well, what could we
do better? We have heard about the problems with small
businesses. We didn't hear about the horror stories of small
businesses if one of your employees happened to have diabetes
or you had extremely high costs, you were unlikely to get
affordable health care under the old days. Now you can get it
at the standard rate.
But what is the alternative? We haven't heard that. We have
seen some initiatives taken by this administration that have
been counterproductive. We had an executive order right after
the inauguration which essentially suggested a repeal of the
Affordable Care Act without details, causing great concern and
confusion in the insurance market. We have the executive order
on immigration which, as many of the hospital associations have
indicated, disrupts their ability to get students and
professionals from other countries. We had the ads pulled at
the last minute, making it more likely that the healthy,
younger enrollees might not get the word and might not enroll.
That just increases the costs for everybody.
So we have a lot of work to do. But until we have some
credible alternatives, it's hard to have a coherent debate. I
would just hope that we would agree that we're not going to do
any repealing until we have a replace ready to go, and if that
is the discussion, we have something to talk about. But if the
idea is to repeal and inject total chaos in the insurance
market, making it likely that nobody can buy insurance, we're
not going to be very cooperative in that effort.
So, Madam Chair, thank you for having the hearing and
allowing these issues to be voiced.
Chairwoman Foxx. Thank you, Mr. Scott.
I also am going to enter into the record some facts about
our situation before the Affordable Care Act and during the
Affordable Care Act, key facts on ObamaCare and health care.
There have been so many numbers tossed about here. Your
members, you've just said 20 million more people have gotten
health insurance, but your Members have thrown around the
number 30 million are going to lose their insurance. So it's a
little difficult to keep track of all of these numbers that are
being thrown around. But I do intend to put a fact sheet into
the record today.
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Chairwoman Foxx. Forty-eight million Americans did not have
health care before the Affordable Care Act. I happen to have
the numbers on that, and I'll be entering that into the record.
I think I just heard you say again that there are no credible
alternatives, and yet Mr. Thompson just sat here five minutes
ago and presented six pages of bills that have been presented
as credible alternatives. So I think we have to constantly do
fact-checking around here to give the real facts about what's
happening.
Ms. Schlaack, I want to say, along with my colleagues, that
we're sorry for your loss. But I was very intrigued in your
comments that all of the examples you used about the great
coverage that you got came under your employer-sponsored health
care as a result of your husband's terrible illness and not as
a result of the ACA, and yet it was implied that the coverage
that you got came under the ACA. So we all want to share our
concern and support for you in your loss. But I noted that in
your written testimony, as well as in your spoken testimony.
So I do think that the hearing today has been helpful and I
think has brought out a lot of good information about the
negative impact of the ACA, particularly on working people in
this country. That's where I think the real problem has been.
And I would like to thank you all for coming again and tell you
that we look forward to working with you on an alternative to
this.
And with that I --
Mr. Scott. Madam Chair, may I make a brief comment, just
very brief, because I think Ms. Schlaack's comment was she had
employer-based coverage as well, but her husband died.
Ms. Foxx. Right.
Mr. Scott. She lost the employer, but had the marketplace
as the safety net.
Chairwoman Foxx. Thank you very much for that
clarification, Mr. Scott.
There being no further business, the committee stands
adjourned.
[Additional submissions by Mrs. Foxx follow:]
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[Additional submission by Mr. Scott follows:]
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[Questions submitted for the record and their responses
follow:]
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[Responses to questions submitted for the record follow:]
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[Whereupon, at 1:01 p.m., the committee was adjourned.]