[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
A FINANCIAL REVIEW OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES AND
ITS FISCAL YEAR 2014 BUDGET
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
APRIL 18, 2013
__________
Serial No. 113-33
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania GENE GREEN, Texas
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee LOIS CAPPS, California
Vice Chairman MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California
CORY GARDNER, Colorado BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Health
JOSEPH R. PITTS, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee JIM MATHESON, Utah
PHIL GINGREY, Georgia GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey JOHN BARROW, Georgia
BILL CASSIDY, Louisiana DONNA M. CHRISTENSEN, Virgin
BRETT GUTHRIE, Kentucky Islands
H. MORGAN GRIFFITH, Virginia KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina HENRY A. WAXMAN, California (ex
JOE BARTON, Texas officio)
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 3
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 4
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 5
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 6
Witnesses
Kathleen Sebelius, Secretary, Department of Health and Human
Services....................................................... 8
Prepared statement........................................... 10
Answers to submitted questions............................... 52
A FINANCIAL REVIEW OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES AND
ITS FISCAL YEAR 2014 BUDGET
----------
THURSDAY, APRIL 18, 2013
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10 a.m., in room
2123 of the Rayburn House Office Building, Hon. Joe Pitts
(chairman of the subcommittee) presiding.
Present: Representatives Pitts, Burgess, Murphy, Gingrey,
Lance, Cassidy, Guthrie, Griffith, Bilirakis, Ellmers, Barton,
Upton (ex officio), Pallone, Dingell, Engel, Capps, Schakowsky,
Matheson, Green, Butterfield, Barrow, Christensen, Castor,
Sarbanes, and Waxman (ex officio).
Staff present: Clay Alspach, Chief Counsel, Health; Sean
Bonyun, Communications Director; Matt Bravo, Professional Staff
Member; Brenda Destro, Professional Staff Member, Health; Paul
Edattel, Professional Staff Member, Health; Steve Ferrara,
Health Fellow; Julie Goon, Health Policy Advisor; Debbee
Hancock, Press Secretary; Sydne Harwick, Legislative Clerk;
Sean Hayes, Counsel, Oversight and Investigations; Robert
Horne, Professional Staff Member, Health; Carly McWilliams,
Professional Staff Member, Health; Katie Novaria, Professional
Staff Member, Health; John O'Shea, Professional Staff Member,
Health; Monica Popp, Professional Staff Member, Health; Andrew
Powaleny, Deputy Press Secretary; Krista Rosenthall, Counsel to
Chairman Emeritus; Heidi Stirrup, Health Policy Coordinator;
Lyn Walker, Coordinator, Admin/Human Resources; Alli Corr,
Democratic Policy Analyst; Amy Hall, Democratic Senior
Professional Staff Member; Elizabeth Letter, Democratic
Assistant Press Secretary; Karen Nelson, Democratic Deputy
Committee Staff Director for Health; Anne Morris Reid,
Democratic Professional Staff Member; and Matt Siegler,
Democratic Counsel.
OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Pitts. The time of 10 o'clock having arrived, the
subcommittee will come to order. The chair will recognize
himself for an opening statement.
First, I would like to thank Secretary Sebelius for
appearing before the subcommittee to discuss the
Administration's fiscal year 2014 budget request for the
Department of Health and Human Services.
While the budget request is 65 days late, and both the
House and Senate have already passed their respective budget
resolutions, it is still important that the country know what
the Administration's priorities are for the upcoming fiscal
year.
As implementation of the Affordable Care Act is now a major
item in the President's request, this hearing will allow
members to ask the Secretary questions about the law on behalf
of our constituents.
The law is simply not working as advertised. It was sold to
the American people as a job creator. The Administration put
forward an estimate that 4 million jobs would be created.
Instead, red tape and a new employer mandate are discouraging
companies from creating new full-time jobs. In many instances,
workers are seeing their hours cut to part-time or only finding
part-time jobs available. Even the Federal Reserve has noted
that the uncertainty being created by the law is holding back
hiring. I have personally heard from constituents who have been
harmed by the mandate.
When the government makes it more expensive and more
complex to hire workers, companies will hold back on hiring.
That is just a simple economic principle. However, that doesn't
seem to matter with many government regulators. The law was
sold as saving the American people money. Yet today, wherever I
go I hear from individuals and businesses facing insurance
premiums that are growing by double digits.
Now, you may say that this is because everyone is going to
have gold standard, government-approved insurance. Let me
remind you that the American people were told by the President
that each family would save $2,500 a year. Now, that wasn't a
promise that came with a caveat. In fact, that promise was made
with a deadline that it would happen in the first term. That
first term is over, and the nonpartisan PolitiFact rates that
as a broken promise.
Businesses and individuals are seeing their premiums rise
as a direct result of the law. I know that some may shake their
heads and wonder why Republicans don't just move along and
learn to tolerate the ACA. Well, we should not tolerate a
government law that makes it harder for our constituents to
find and keep a full-time job. Congress should not tolerate
regulations that drive up costs for struggling businesses.
Finally, we should not stand by and watch Americans with
preexisting conditions be left out of the plan that was
intended to give them coverage.
I will continue to look for ways to make health care more
affordable, more accessible and simpler for the American
people. While it might be best if we could start by repealing
the ACA, that law will not stop me and my colleagues from
proposing constructive health care reforms.
Madam Secretary, we hope that you will stay in order to
answer all of our questions, and, with only 5 minutes of
questions per member, we ask that you try to keep your answers
concise and to the point.
The constituents we hear from every day, including those
who are able to be here in the audience today, deserve answers.
[The prepared statement of Mr. Pitts follows:]
Prepared statement of Hon. Joseph R. Pitts
The subcommittee will come to order.
The Chair will recognize himself for an opening statement.
First, I would like to thank Secretary Sebelius for
appearing before the Subcommittee to discuss the
Administration's FY2014 budget request for the Department of
Health and Human Services.
While the budget request is 65 days late, and both the
House and Senate have already passed their respective budget
resolutions, it is still important that the country know what
the Administration's priorities are for the upcoming fiscal
year.
As implementation of the Affordable Care Act is now a major
item in the President's request, this hearing will allow
Members to ask the Secretary questions about the law on behalf
of our constituents.
The law is simply not working as advertised. It was sold to
the American people as a job creator. The administration put
forward an estimate that 4 million jobs would be created.
Instead, red tape and a new employer mandate are
discouraging companies from creating new full time jobs. In
many instances, workers are seeing their hours cut to part-time
or only finding part-time jobs available.
Even the Federal Reserve has noted that the uncertainty
being created by the law is holding back hiring. I have
personally heard from constituents who have been harmed by the
mandate.
When the government makes it more expensive and more
complex to hire workers, companies will hold back on hiring.
That's just a simple economic principle. However, that doesn't
seem to matter with government regulators.
The law was sold as saving the American people money. Yet
today, wherever I go, I hear from individuals and businesses
facing insurance premiums that are growing by double digits.
Now, you may claim this is because everyone is going to
have gold standard, government-approved insurance. The American
people were told by the President that each family would save
$2,500 a year. That wasn't a promise that came with a caveat.
In fact, that promise was made with a deadline, that it would
happen in the first term. That first term is over, and the non-
partisan Politifact rates that as a broken promise.
Businesses and individuals are seeing their premiums rise
as a direct result of the law.
I know that some may shake their heads and wonder why
Republicans don't just move along and learn to tolerate the
ACA.
We should not tolerate a government law that makes
it harder for our constituents to find and keep a full-time
job.
Congress should not tolerate regulations that
drive up costs for struggling businesses.
Finally, we should not stand by and watch
Americans with pre-existing conditions be left out of the plan
that was intended to give them coverage.
I will continue to look for ways to make health care more
affordable, more accessible, and simpler for the American
people. While it would be best if we could start by repealing
the ACA, that law will not stop me and my colleagues from
proposing constructive health care reforms.
Madam Secretary, we hope that you will stay in order to
answer all of our questions, and, with only five minutes of
questions per Member, we ask that you keep your answers concise
and to the point.
The constituents we hear from every day, including those
who are able to be here in the audience today, deserve answers.
Thank you, and I yield back. The Chair now recognizes the
Ranking Member, Mr. Pallone, for five minutes for his opening
statement.
Thank you. The Chair now recognizes the Chairman of the
full Committee, the gentleman from Michigan, Chairman Upton for
five minutes for his opening statement.
Thank you. The Chair now recognizes the Ranking Member of
the full Committee, Mr. Waxman for five minutes for his opening
statement.
Mr. Pitts. Thank you, and I yield back and the chair now
recognizes the ranking member, Mr. Pallone, for 5 minutes for
his opening statement.
OPENING STATEMENT OF HON. FRANK PALLONE JR, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairman Pitts, and I want to
welcome Secretary Sebelius here this morning.
Before I address the Secretary, though, I do have to say
that I do not appreciate the comments about the ACA. I know you
are saying that you want constructive reforms but I think that
if the mantra of the Republican leadership is going to continue
to be that we have to repeal the ACA, it is going to be very
difficult in that poisoned atmosphere to talk about
constructive reforms, and the fact of the matter is that even
after the last November election, we continued to hear the
Republican leadership both on the committee as well as in the
full House speak out and say that their priority is repealing
the ACA, and of course, we see that in the Ryan budget that
passed the House, and too would like to move towards
constructive reforms in the health care system but this
constant notion that the priority is to repeal the ACA and that
that has to go and that is the most important thing that we
have to do for constructive reform. It really does poison the
atmosphere and makes it very difficult for us to sit down on a
bipartisan level and look at things that we could do together.
So I will just say that.
Today we are going to hear about the President's fiscal
year 2014 Health and Human Services budget proposal. I want to
commend Secretary Sebelius for your agency's hard work this
past year to implement the Affordable Care Act. Because of
these efforts, Americans are enjoying greater access to health
benefits, and I recognize the challenge your agency faces in
implementing this law with limited resources.
When the Affordable Care Act passed, we did not anticipate
that States would give up the opportunity to tailor programs
directly to their individual State's needs and opt for federal
exchanges, and I regret that my State, New Jersey, is one of
the 26 States that will rely on federal exchanges rather than
run its own. Again, I think this is pure politics on the part
of our Republican Governor, but despite this, I urge the
Administration to remain committed to fully implementing the
Affordable Care Act.
I was pleased to see the inclusion of increased funding for
access to mental health services to protect children and
communities in the fiscal year 2014 proposal. I said before, it
is time to focus more attention on improving mental health
services to make sure troubled kids don't fall through the
cracks, that the fiscal year 2014 budget proposal is an
important step towards making mental health issues a national
priority and adequately funding these efforts.
I also support the FDA's Food Facility Registration
Inspection fee and the Food Importer fee included in the
Administration's proposal. These fees will help ensure that the
FDA has the resources needed to fully implement the FDA Food
Safety Modernization Act, which of course originated in this
committee.
Along the same lines, I was pleased to see that the budget
proposal includes new user fees to support FDA's Cosmetic
Products program. Cosmetics are used extensively throughout the
United States by all types of people, and last Congress I
joined with my colleague, Mr. Dingell, to introduce the
Cosmetic Safety Enhancement Act of 2012 to help address the
lack of authority at FDA to regulate cosmetics. Like the
President's budget proposal, our bill included facility
registration fees to defray the costs of cosmetic safety
activities. So I hope we can work together on modernizing the
cosmetic regulations.
Before I conclude, I would like to note some concerns.
First, I am disappointed that the funding proposal for the
Children's Hospital Graduate Medical Education program is only
$88 million, a two-thirds cut from the fiscal year 2012 level.
Reducing the federal investment in pediatric will only threaten
the pediatric workforce and threaten access to primary care.
The small class of hospitals that receive this funding, which
includes the Children's Specialized Hospital in my district,
represents about 1 percent of hospitals nationwide that trains
approximately 40 percent of all pediatricians. Underfunding
this program would have a major negative impact on access to
primary care and a devastating impact on access to specialty
care for children.
And finally, I have long advocated for strengthening
Medicare and Social Security, and I am concerned that this
budget makes some hurtful cuts to the programs, and I really
would urge the Administration to do what they can to strengthen
Medicare and Social Security and move away from some of the
cuts that the President has proposed.
I know we are going to have more questions about the ACA
and some of the funding for implementing your outreach, and I
want to bring that up during my questions, but thank you, Madam
Secretary.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the chairman of the full committee, the gentleman
from Michigan, Chairman Upton, for 5 minutes for his opening
statement.
Mr. Upton. Well, thank you, Mr. Chairman, and knowing that
we have votes on the floor in about an hour, I am going to
yield back my time and submit my statement.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Mr. Chairman, thank you for holding this important hearing.
I want to welcome Secretary Sebelius back to the committee.
This morning, we will review the president's proposed
fiscal year 2014 budget for the Department of Health and Human
Services, which calls for nearly $1 trillion in spending--a
budget larger than the estimated 2012 federal expenditures of
the country of Brazil. With such massive spending levels, and a
debt topping $16.5 trillion, we owe it to American taxpayers to
diligently review the administration's proposals.
Today's hearing will not just be an opportunity to review
the president's budget proposal, but it will also serve as an
opportunity to bring the questions and concerns of our
constituents about the resident's health care law directly to
the secretary, with the hope of getting answers.
Even though the majority of Americans oppose Obamacare and
do not want it implemented, they still need to know what they
need to do to comply with the law. The administration has had
three years to provide guidance, but many important questions
remain unanswered. The lack of answers has caused confusion and
concern across this country on issues that are central to
Americans' lives, like whether small business owners can
continue to provide health care to their employees.
Take the case of a business in my district. They are a
family-owned business with a history of good stewardship in the
community. They treat their employees like family and have been
proudly protecting them against injury or illness for many
years. But they are worried about how the health care law
creates a perverse incentive for employers to stop offering
health care coverage. In a recent meeting with them back in
Michigan, they told me that their long history of providing
health coverage might end if one of their competitors decides
save money by forcing workers into the exchanges and paying a
small penalty. If other companies like the one in my district
do not follow suit, they will not be able to remain competitive
and their entire business could go under.
Americans are now faced with many hard choices because of
this law. With less than nine months until the new health care
law is fully implemented, Americans are watching closely and
becoming increasingly concerned about the law's impact on their
health care, their jobs, and their well-being.
There is also cause for alarm when those with intimate
knowledge of the law, its own authors, are predicting a ``huge
train wreck coming down'' as Senate Finance Chairman Max Baucus
said just yesterday.
My hope is that this hearing will be an informed discussion
on the department's intentions for this budget and the
implementation of the president's health care law. The American
people deserve answers, and I hope they get them today.
# # #
Mr. Pitts. The chair thanks the gentleman and now
recognizes the ranking member of the full committee, Mr.
Waxman, for 5 minutes for his opening statement.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much, Mr. Chairman. Despite the
fact that we are going to have votes in an hour, I want to make
some comments welcoming Secretary Sebelius to our committee. It
has been a year since you have been here, and it has been a
productive and busy year, and I want to commend you and your
team for your tireless efforts on implementing the Affordable
Care Act.
It is difficult for most Americans to realize the enormity
of the task you and others at HHS are undertaking to this law,
but for the millions of uninsured in our country and those for
whom insurance fails to provide the security and guarantees
that they are looking for, there is certainly appreciation for
the difference this law will bring to their lives as they now
gain access to health care.
The President's budget, which is the topic of today's
hearing, includes key proposals to continue the journey
forward: additional funding for CMS to support health insurance
marketplaces, building the infrastructure needed to ensure
consumer protections and engagement, continuing improvements in
Medicare, and further investment in the successful Health Care
Fraud and Abuse Control program.
The President's budget also expedites the timeline for
closing the Medicare Part D donut hole, a provision that has
already brought critical relief, providing $2.7 billion in
savings to beneficiaries in 2012 alone. The budget proposal
also recaptures rebates for dually eligible seniors, a proposal
that I have long supported, enabling us to capture over $120
billion in savings through better drug prices over 10 years.
Those are the things that are major pluses, and I support all
of those effort in the President's budget.
I am concerned about some of the proposals in the
President's budget such as raising costs on Medicare
beneficiaries. I know that this is put in the context to be
part of a broader balanced package that includes both spending
cuts and increased revenues. However, Medicare beneficiaries
have lower incomes than younger Americans, more chronic
conditions and health care needs, and pay significantly more
out of pocket already. It makes little sense to shift more
burden on to their backs. Such policies may inadvertently
create barriers to appropriate care for vulnerable seniors, and
I hope we can continue a dialogue on this issue.
I also have a number of concerns, and have heard from a
number of constituents, both providers and beneficiaries,
regarding the dual-eligible pilot programs, especially in
California. I hope I have your commitment to closely monitor
and evaluate these dual demonstrations to assure these
demonstrations for dual-eligibles, to assure protection of our
vulnerable seniors and people with disabilities.
I appreciate the Administration's continuing commitment to
public health. Specifically, I applaud the inclusion of the
proposal for food safety registration and inspection fees,
which will provide much-needed resources to support the Food
and Drug Administration's implementation of the Food Safety
Modernization Act of 2011. I hope we can work together to get
those critical fees enacted into law.
I am also pleased to see a strong investment in biomedical
and behavioral research at the NIH of and continued support for
the National HIV/AIDS Strategy, including through prevention,
surveillance and treatment activities at the Centers for
Disease Control and Prevention and Health Resources and
Services Administration.
The proposals that continue our commitment to community-
based primary care, providing additional funding for Community
Health Centers and the Title X Family Planning program, are
also important.
And finally, as a Nation, we are appropriately focusing
more of our attention on the impact of gun violence in our
communities and the critical importance of promoting mental
health and the early detection and treatment of mental illness.
I appreciate the President's leadership on this and am pleased
that his budget reflects these priorities, by expanding support
for gun violence surveillance and research at the CDC and
proposing funding for both mental health training in our
communities and for additional mental health professionals.
I would be remiss, though, if I didn't mention the need to
fully implement mental health parity. We are anxiously awaiting
the final rule on this important legislation, and I appreciate
your assistance in securing this.
I certainly do appreciate your being here and look forward
to your testimony, and I yield back the balance of my time.
Mr. Pitts. The chair thanks the gentleman. That concludes
the opening statements of the members. Thank you.
We have one panel today. Our distinguished witness is the
Honorable Kathleen Sebelius, Secretary, Department of Health
and Human Services. Madam Secretary, welcome again. Thank you
for coming today. You will have 5 minutes to summarize your
testimony, and your written testimony will be placed in the
record. Please make sure your microphone is on. Please speak
clearly into it. You may proceed.
STATEMENT OF HON. KATHLEEN SEBELIUS, SECRETARY, DEPARTMENT OF
HEALTH AND HUMAN SERVICES
Secretary Sebelius. Well, thank you, Chairman Pitts and
Ranking Member Pallone and Ranking Member Waxman and Chairman
Upton for having me here this morning to discuss the
President's 2014 budget for the Department of Health and Human
Services.
This budget supports the overall goals of the President's
budget by strengthening our economy and promoting middle-class
job growth. It ensures that the American people will continue
to benefit from the Affordable Care Act, and it provides much-
needed support for mental health services.
The Affordable Care Act is already benefiting millions of
Americans, and our budget makes sure we can continue to
implement the law. By supporting the creation of new health
insurance marketplaces, the budget will ensure that starting
next January, Americans in every State will be able to get
quality health insurance at an affordable price.
Our budget also addresses another issue that has been on
our minds recently: mental health services and the ongoing
epidemic of gun violence. While we know that the vast majority
of Americans who struggle with mental illness are not violent,
recent tragedies have reminded us of the staggering toll that
untreated mental illness can take on our society. That is why
our budget proposes a major new investment to help ensure that
students and young adults get the mental health care they need
including training 5,000 mental health professionals to join
our behavioral health workforce.
Our budget also supports the President's call to provide
every child in America with access to high-quality early
learning services. It proposes additional investments in new
early Head Start childcare partnerships, and it provides
additional support to raise the quality of childcare programs
and promote evidence-based home visiting for new parents.
Together, these investments will create long-lasting positive
outcomes for families and provide huge returns for children and
society at large.
Our budget also ensures that America remains a world leader
in health innovation. The significant new investments in NIH
will lead to new cures and treatments and help create good
jobs.
Our budget will further provide support for the development
and use of compatible electronic health records systems that
have huge potential for improving care coordination and public
health.
Even as the budget invests in the future, it also helps
reduce the long-term deficit by making sure that programs like
Medicare are put on a more stable fiscal trajectory. Medicare
spending per beneficiary grew at just \4/10\ths of 1 percent in
2012, thanks in part to the $800 billion in savings already
captured in the Affordable Care Act, and the President's 2014
budget would achieve even more savings. For example, the budget
will allow low-income Medicare beneficiaries to get their
prescription drugs at the lower Medicaid rates, resulting in
savings of more than $120 billion over the next 10 years. In
total, this budget will generate an additional $371 billion in
Medicare savings over the next decade, on top of the savings
already in the Affordable Care Act.
To that same end, our budget also reflects our commitment
to aggressively reducing waste across our department. We are
proposing an increase in mandatory funding for our health care
fraud and abuse control program, an initiative that saved
taxpayers nearly $8 for every $1 we spent on it last year. And
we are investing in additional efforts to reduce improper
payments in Medicare, Medicaid and CHIP, and to strengthen our
Office of Inspector General.
This all adds up to a budget guided by this
Administration's north star of a thriving middle class that
will promote job growth and keep our economy strong in years to
come while also helping to reduce the long-term deficit.
Now, I know, Mr. Chairman, that many of you have questions
and I am happy to take those now. Thank you very much.
[The prepared statement of Secretary Sebelius follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. The chair thanks the gentlelady for her opening
statement and will now begin questions from the members, and I
will begin the questioning and recognize myself 5 minutes for
that purpose.
Madam Secretary, the President promised that the ACA would
help to make health insurance cheaper for the American people,
but unfortunately, exactly the opposite is happening. That is
why one of the law's early supporters, the Roofers Union,
announced this week that they are now calling for the law's
repeals. I have a couple of guests here with us today. Sam and
Elaine Stoltzfus are constituents of mine. They are owners of
Keystone Wood Specialties in Lancaster, Pennsylvania, and their
company makes kitchen cabinets and similar wood products, so
Sam and Elaine, welcome. You can identify yourself.
Sam recently wrote to me to say ``We are faced with a 25
percent increase in health care insurance for our employees and
have no idea of where the additional $95,000 is coming from.
Help.''
Madam Secretary, can you tell us this morning what help
does the President's budget either through its implementation
of the ACA or other programs offer to Americans like Sam, and
tell us what changes you are proposing in the budget to help
Sam.
Secretary Sebelius. Well, Chairman Pitts, we intend to
complete the implementation of the Affordable Care Act with the
resources requested in this budget, and one of the things that
happens is the full implementation includes marketplaces in
every State in the country, so small business owners,
individuals who purchase health insurance in the individual
market will have competitive insurance for the first time.
Americans with preexisting health conditions will not be locked
out or priced out of the marketplace, and there will be larger
risk pools established in every State in the country. As you
know, insurance regulation remains under State regulation. We
are seeing nationally a trend that has the lowest level of rate
increases in the private market that we have seen in over a
decade, but the insurance marketplaces are not fully
implemented until January of 2014.
Mr. Pitts. Madam Secretary, the law passed with a provision
designed to help small businesses like Sam's, and I am talking
about the SHOP Act, but there is no funding, there are no
funding allocations for it in the President's budget. Will that
provision be able to help them come January 1, 2014?
Secretary Sebelius. Yes, sir. I have no idea your
constituent's size or what kind of employer market he may be
in, but the SHOP Act will be open in every State in--I mean the
SHOP market--excuse me--will be open in every State in January
of 2014. Employers will have an opinion to choose among
competitive plans in every State in 2014.
Mr. Pitts. Madam Secretary, did you not recently announce a
delay for implementation of exchanges for small business until
2015?
Secretary Sebelius. No, sir. We----
Mr. Pitts. What did you do?
Secretary Sebelius. In the federal marketplaces in the
States where we will be running the market, the portions of the
SHOP market that will be delayed one year are employers being
able to offer their employees multiple plans to choose from.
Every employer will be able to choose from a variety of plans
and offer the plan of his or her choice to those employees, and
the employers who qualify for the tax credit because of the
size of their workforce and the level of the employee's income
will also get a tax credit in the SHOP market but it won't be
until year two that that wider employee choice will be
available only in the federally facilitated marketplaces.
States may offer it starting in 2014.
Mr. Pitts. Madam Secretary, I also hear from constituents
who are being hurt by the ACA two or three times a week. Mostly
I hear from constituents who had their work hours cut as
companies try to avoid skyrocketing costs imposed by the law.
Just yesterday, it was reported that a national movie chain
with theaters in my district has cut some employees' hours as
they struggle to provide insurance for full-time employees, and
right now there are fewer Americans working than at any time
since 1979.
My constituents are looking for full-time jobs but the ACA
is making those jobs harder to come by. I have had another
constituent from Lancaster County who wrote recently saying he
retired last year after 26 years as a police officer but still
needs to work, and his hours have been cut. He can only now
work 3 \1/2\ days a week. Basically he is saying, and this is
his quote, ``Obamacare limits me to working 29 hours a week.''
Tell us what help the President's fiscal year 2014 provides
this man.
Secretary Sebelius. Well, Mr. Chairman, I don't have any
idea why the employers have restricted hours. There is
absolutely nothing in place in the Affordable Care Act in the
year 2013 that would impose any burden on an employer or have
him cut work hours. What we know is in 2014, there will be new
markets set up and an employer responsibility. Employers who
have 50 or more full-time workers or the equivalent of 50 or
more full-time workers will be responsible for offering health
insurance to those employees, and what we know, Mr. Chairman,
is that 94 percent of employers in that market right now offer
health insurance but often pay 18 to 20 percent more than their
large competitors because they are in a very volatile and very
expensive market. Creating competitive options and choices for
those employers is part of what the Affordable Care Act is all
about.
Mr. Pitts. Thank you, Madam Secretary. My time is expired.
The chair recognizes the ranking member, Mr. Pallone, 5 minutes
for questions.
Mr. Pallone. Thank you, Mr. Chairman, but with all respect,
the Republican leadership on the committee as well as in the
House just rabidly attacks the ACA every day. It has been going
on for 3 years, actively trying to defund or undermine its
implementation. The chairman is asking questions about no
funding for small businesses and the health exchange, but is
the Republican leadership willing to fund any of these things?
I mean, I would be glad to provide more funding in the budget
or through the appropriations process for implementation but I
don't believe for one minute I would get any support from the
GOP. So, you know, it is a little crazy to come here and say we
should repeal the ACA, we should defund the ACA, we should
defund the ACA, we should get rid of this and get rid of that
and then at the same time say oh, you know, you are not
implementing because you are not providing enough funding.
I mean, the same thing with jobs. The GOP is saying oh, you
know, there aren't any jobs. Well, the sequester, which the
President keeps putting out proposals every day to try to
eliminate and have some sort of sensible budget proposals here
is furloughing people left and right. I mean, in my district, I
don't care where it is, it is not just public jobs, it is
having an impact on the private sector as well. So you can't
come in here and say oh, you know, people are working part
time, meanwhile you support a sequester that furloughs people
all across the country, tens or hundreds of thousands of
people. Whatever.
You know, some Republicans, now of course they are talking
about the marketplaces and the exchanges won't be ready in time
and so I wanted you to talk, if you could, about the status of
implementation of the exchanges, which is on everybody's mind
and, you know, give you a chance to update what progress you
are making toward setting up the exchanges and implementing
them. But again, if you would like to comment on the fact that
Congress is not providing enough funding for outreach, States
like New Jersey that rely on federal exchanges may get even
less funding. So please don't hesitate to say that if you are
going to do outreach and implement these things that you need
money that we are not giving you because we are not. I mean,
that is the reality, but whatever. I am obviously very
frustrated. Go ahead.
Secretary Sebelius. Well, Congressman, the budget before
you has a request for an additional $1.5 billion in
implementation funding to fully set up marketplaces throughout
the country. We are definitely going to be open for open
enrollment in every State in the country starting October 1,
2013, and we will be beginning plan years and benefit years for
individuals who currently either don't have insurance or have
expensive insurance or locked out or priced out of the
marketplace because of preexisting conditions starting in
January 2014.
We are very pleased that 31 States and the District of
Columbia are running all or part of their partnership programs,
marketplaces either in partnership with HHS or doing it on
their own. In the other States where the States had opted not
to be engaged or involved, we will be running the marketplaces.
We are setting up as we speak the federal hub with the call
center and outreach. The resources that we had hoped to get in
the Continuing Resolution deal with outreach and education, a
huge issue of or people to actually understand what the reality
is of the law, what benefits are coming their way, what kind of
choices they will have, but we have reallocated some resources
within the Department and fully intend to give people the
information and the facts about the law as we move forward.
Mr. Pallone. Well, look, I think it is highly unlikely that
the House Republicans are going to give you this money for
outreach that you are asking for, but again, they can't come
back here and criticize if the outreach doesn't occur if they
are not funding it.
Let me ask a question about the GME, the Children's
Hospital Graduate Medical Education program. I see that the
White House is proposing $88 million, which is one-third of
current funding. I don't think that is a good idea given the
struggles these hospitals have in training of pediatricians.
Wouldn't scaling back that program take us back to the same
flawed system we had in the past, and why would the
Administration seek to reverse the success we have had in this
area? You know, I always ask you about this, and you don't have
a lot of time here.
Secretary Sebelius. Congressman, the funding level
recognizes the direct costs of training pediatricians, an
incredibly important task that a lot of children's hospitals
engage in. What we don't have is the overhead and
administrative costs as part of that proposal, and in a better
budget time, we would have included both, but all of the direct
costs of the residency programs are included in that budget
recommendation.
Mr. Pallone. I am hoping that we on a bipartisan basis, Mr.
Chairman, can address that because I do think that is one thing
where Democrats and Republicans can come together to avoid that
cut.
Thank you, Madam Secretary.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the chairman emeritus of the committee, Mr. Barton,
5 minutes for questions.
Mr. Barton. I thank the chairman. I want to apologize to
the chairman and the ranking member and our esteemed witness
for not being here to hear the opening treatment. We are always
honored to have you, Madam Secretary, and we look forward to
dialog.
My staff and the committee staff encouraged me to tweet and
ask the American people for a question or two to ask you. I
guess they decided that I wasn't up to it. I am not sure. But
in any event, we did it and these are two questions from real
people who I don't know. We had in the neighborhood of 100
tweet questions come back in. In the interests of transparency,
we thought we would give the American people an opportunity to
ask you a direct question or two. The first one is a tweeter
named @JoshMertz, and his question is--I assume it is a he--
``How is the typical small business going to be able to comply
with the thousands of pages of new regulations that Obamacare
requires? Where are these business owners going to find the
money to pay for the compliance? Many of them expressed how
they will have to hire new administrative personnel and spend
countless hours with their attorneys figuring out just what
they have to do.'' This is from @JoshMertz.
Secretary Sebelius. Do you want me to take that and then
ask the second one?
Mr. Barton. Well, let us give you a chance to answer that
one and then we will hold the second one in reserve.
Secretary Sebelius. Well, Congressman, the small business
owner tweeter, welcome to Twitter land. I am a new tweeter
myself. Depending on the size of this small business, the law
may or may not impact the business at all. So if this employer
has fewer than 50 full-time or the equivalent of 50 full-time
employees, there is absolutely no impact except for the fact
that in the SHOP exchange, in the SHOP market, if he wants to
provide health insurance for his employees, he will have an
opportunity to have some competitive plans and one-stop shop
and go forward.
Mr. Barton. Let us assume they are just over that limit.
Secretary Sebelius. And if he falls into the over 50 full-
time equivalent, there will be for the first time ever again a
one-stop shop coming in through a Web site. He will not have to
hire administrative personnel. He will be able to determine
from a choice of plans what plan is best suited to his
employees, offer that to his employees, and if he indeed
qualifies for a tax credit, depending on the wages of that
employees, that will automatically be part of the package
moving forward.
Mr. Barton. Your basic answer is, he is not going to have
any compliance costs?
Secretary Sebelius. Well, depending on--I mean, there are
no additional forms and things to fill out. The goal is really
to make this as seamless as possible for small business owners
and for individuals so that their experience is relatively
simple as they come into the market.
Mr. Barton. Well, let me go to the second one, and you will
know that I don't know this person when I give the name. It is
EricTheBanker@YankeesFanatic6, and I am a Ranger and Astro fan
so there is no way I know this guy. ``How does the Obama
Administration justify the rising cost of health care including
rising premiums and a reduction in work hours even before
Obamacare is fully in effect, even though President Obama and
your Department specifically promised that premiums would not
rise and health care costs would go down?'' So his basic
question is, how do you justify, in spite of what was said
before the fact, that rising costs of health care including
rising premiums are going up?
Secretary Sebelius. Well, as I said to the chairman a few
minutes ago, first of all, the increases in private health
insurance are at a slower pace than we have seen in well over a
decade over the last 3 years, and that has been documented. The
other kind of good news is that there finally is some stability
in the small employer marketplace who were shedding policies
prior to the passage of the ACA for well over a decade, so that
has stabilized, and there is nothing in place right now in the
legislation that would require any employer to change work
hours, and we don't think there is going to be--so whatever is
happening to work hours, I think, is impossible to tie to the
Affordable Care Act because there is no connection here in
2013.
Mr. Barton. Well, Mr. Chairman, my time is expired. I hope
the two tweeters that we use will tweet some more questions. I
think it is good to give the public a chance. And I do want to
compliment you, Madam Secretary, for coming before the
committee. I know it is difficult, and your time is limited,
but we do appreciate you coming.
With that, Mr. Chairman, I yield back.
Mr. Barton. The chair thanks the gentleman and now
recognizes the ranking member of the full committee, Mr.
Waxman, for 5 minutes.
Mr. Waxman. Well, thank you, Mr. Chairman, and Madam
Secretary, it is a tweet to have you here.
Secretary Sebelius. That is so bad.
Mr. Waxman. That is terrible. Wait until you hear my
question. That was the high point of my 5 minutes.
The Republicans fought against the Affordable Care Act. In
fact, Republicans fought against Medicare, but they certainly
hated the Affordable Care Act. I never could understand that
because it is based on a lot of Republican principles,
proposals that Senator Dole and others had put forward, and
they would love to repeal it. They would have liked the Supreme
Court to throw it out. They would have liked for the election
to go otherwise. And so they are making life as difficult as
possible for you moving forward to implement the law.
But I would just like to ask you, what would the world be
like for health insurance if we let the insurance companies be
in charge? Because that is what the Republicans would have if
they repealed the Affordable Care Act. Insurance companies are
businesses, and for them, it is better to get healthier insured
patients than the sickest. So they try to exclude people who
are sick. If you have got a preexisting condition, they don't
want you. They can discriminate against you. They can charge
you a lot more. In fact, if you a woman, they think just being
a woman is a preexisting condition.
Secretary Sebelius. And I am.
Mr. Waxman. That is almost as bad as my comment. So they
would allow insurance companies to discriminate against people
they look at as maybe costing them money, and then not only
that, they could raise the rates if you got sick, they could
drop you, they have these rescissions they were doing. They
have all sorts of way of making it difficult for people who are
not just healthier enough to cover. So tell us, what would
happen to American families, consumers, seniors, particularly
those with preexisting conditions, if Republicans repeal health
reform and put the insurance companies back in charge?
Secretary Sebelius. Well, Congressman, as you know, I
served for 8 years as the elected insurance commissioner in
Kansas and have worked on the insurance side of this puzzle for
a long time, and what I saw and what we continued to see,
frankly, until 2010 was from the industry point of view, a
death spiral. That is terminology used by insurers, which means
they had fewer and fewer customers and the prices continued to
rise because the people who stayed in the marketplace were
older and sicker and needed the coverage. The people who
dropped out were younger and healthier.
Mr. Waxman. Well, you really can't blame the insurance
companies. They are in business to make a profit.
Secretary Sebelius. Well, and they were experiencing, or
consumers were experiencing double-digit rate increases year in
and year out in that market, and being locked out and priced
out if you had a preexisting condition----
Mr. Waxman. I want to move forward because there are some
other questions and I am looking at the clock tick by. There is
a Prevention and Public Health Fund that we set up in the
Affordable Care Act. This fund is there to help fund a lot of
important efforts to keep people well and yet there has been an
ongoing attack on its since its creation. The Republicans have
sought to repeal, rob and otherwise destroy this fund. Just
yesterday in this committee, Republicans argued that the fund
is merely a slush fund, its resources are being used
inappropriately to pay for public lobbying efforts, for
example, that the Obama Administration itself is guilty of
stealing from the fund to support activities related to the
implementation of the Affordable Care Act, and in brief, they
contend that the fund is not being used as intended and
therefore should be available to support other worthy health-
related initiatives such as an extension of the PCIP program. I
would like you to take this opportunity to set the record
straight on exactly how the Prevention Fund is and isn't being
used and why we need it even though you had to borrow money
from it because the Republicans wouldn't give the
Administration the funds to go forward and fully implement the
Affordable Care Act.
Secretary Sebelius. Well, Congressman, I think there is a
great track record so far with the Prevention Fund, the first
time ever in the United States that we have focused serious
dollars on preventing people from getting sick in the first
place, a great track record on our anti-tobacco efforts, quit
lines around the country, smoking-cessation efforts and those
are beginning to show up in the drop in smokers. Work on
chronic disease in communities continues, and you are right, we
did this year appropriate about $340 million from the
Prevention Fund for 2013 to outreach and education around the
Affordable Care Act. In the long run, that will ensure that
lots of Americans who currently have no primary health home,
who have no insurance coverage, who have no ability to get
preventive care will indeed be connected with the benefits of
the Affordable Care Act.
Mr. Waxman. Well, nothing is more important than preventing
disease and promoting good public health, and I hope this fund
can be used for the purpose for which it was intended.
Mr. Pitts. The gentleman's time is expired. The chair
thanks the gentleman and now recognizes the vice chairman of
subcommittee, Dr. Burgess, 5 minutes for questions.
Mr. Burgess. I thank the chairman for the recognition. Let
me just start off, it has been a tough morning. We all
acknowledge that our friends and neighbors down in the town of
West, Texas, just 100 miles north of Waco are suffering this
morning as they dig out from under that rather horrific
explosion that occurred last night, so we continue to pray for
the people in Boston. We also need to pray for the citizens of
West.
Now, Madam Secretary, I also appreciate you being here
because it has been almost a year since we have had an
opportunity to talk. It has been too long. Please come back to
our committee frequently. In fact, I would recommend to the
chairman that we do have frequent visits because, as you know,
October 1st becomes a very important day in the history of our
country where your exchanges are going to go live online by
statute. They are to go live online on October 1st. And I guess
the question on everyone's mind this morning is, will you be
ready?
Secretary Sebelius. Yes, sir, and the exchanges----
Mr. Burgess. I will take that as a yes.
Secretary Sebelius [continuing]. Won't be October 1st. Open
enrollment will start October 1st. The exchanges will be up and
running on January 1st.
Mr. Burgess. Open enrollment?
Secretary Sebelius. Yes.
Mr. Burgess. Now, I do have to ask you a question about the
Prevention Fund. I had difficulty finding that in your budget
in the expected outlays for the Prevention Fund, but it is
written in statute. It is in the so-called Affordable Care Act,
section 4002, and it lays out the monies that will be available
for successive fiscal years up to fiscal year 2014 where it is
$1.5 billion and then for 2015 and every year thereafter it is
$2 billion, so it is a significant amount of money even in
Washington, D.C. Is that not correct?
Secretary Sebelius. Yes, sir.
Mr. Burgess. And you have pretty broad transfer authority
within that fund. Is that not correct?
Secretary Sebelius. Transfer authority within the fund?
Mr. Burgess. That is what it says, subsection D, transfer
authority, that the transfer of funds in the fund to be for
eligible activities under this section subject to subsection C,
which delineated the activities you could fund and one of those
activities----
Secretary Sebelius. You can expend funds within the fund,
if that is what you are asking, yes, sir.
Mr. Burgess. Yes, you can transfer funds to spend for
education and outreach, for example. Education and outreach is
going to be a big part of what happens with the Affordable Care
Act this summer, is it not?
Secretary Sebelius. Yes.
Mr. Burgess. So in other words, to implement the Affordable
Care Act, you are going to take funds from the Prevention Fund
for advertising for the benefits of the elysian fields of
Obamacare that start this fall. Is that not correct?
Secretary Sebelius. We are going to reach out to people who
currently have no health insurance and who are underinsured or
uninsured and inform them about the benefits of the Act and
connect them with the Act.
Mr. Burgess. And how much money are you going to spend on
that informing activity?
Secretary Sebelius. Sir, we transferred about $332 million
from the Prevention Fund to be used for outreach activities.
Mr. Burgess. This is an important point, and I want people
who are watching to understand this. The Prevention Fund
actually is like a bankbook that you can use and make a
withdrawal to pay for advertising to advertise about the
Affordable Care Act, correct?
Secretary Sebelius. Sir, we are not talking about
advertising. We have recently put out, for instance, a grant
that will be available to community organizations, faith-based
groups, provider groups in States around the country so that
they will actually work--I don't know if you are familiar with
the Senior Health Insurance Patrol program. Individuals work
with----
Mr. Burgess. Reclaiming my time because our time is
limited. We do need to talk about these people who are----
Secretary Sebelius. I am trying to.
Mr. Burgess [continuing]. In the preexisting-condition
program, which unfortunately ended. Chairman Pitts had a
hearing----
Secretary Sebelius. It hasn't ended, sir.
Mr. Burgess. Well, enrollment has been suspended.
Secretary Sebelius. That is correct. We are----
Mr. Burgess. So Chairman Pitts has a hearing and we hear
from a young woman who is a lawyer in private practice,
unfortunately contracted lymphoma. She has been paying her
claims as best she can, waiting to fulfill the 6-month
uninsured requirement to get into the preexisting-condition
program, and the day before she is to enroll, she is told
sorry, sister, we are now closed. So is it Obamacare or Obama
don't care? Tell me which it is.
Secretary Sebelius. Well, for the individual you are
talking about, the good news for her and millions of Americans
is that beginning January 1, 2014, no American ever again will
be locked out of an insurance pool because of a preexisting
health condition, and that will benefit millions of people
including the woman that you have discussed.
Mr. Burgess. Here is the question: rather than spend the
money on advertising for a program that may not even work come
October 1st or January 1st, why should we not transfer money
from that fund to actually help the people that you promised to
help, the people with preexisting conditions?
Secretary Sebelius. Well, sir, the preexisting-condition
pool, as you know, was always designed to be a temporary bridge
to full insurance coverage. What I hear from people all over
this country is they are eager for the day when the rules will
change once and for all for insurance companies. They will
never again be able to lock anyone out because a preexisting
health condition, and that is very different from segregating
them into a high-risk pool, which most people cannot afford.
Mr. Burgess. But the important thing is that this
individual and many individuals like her are essentially lost
at sea until January 1st at the very least, and we have----
Secretary Sebelius. The good news is----
Mr. Burgess. And we have the ability to prevent that from
happening, which would be the Prevention Fund.
Thank you, Mr. Chairman. I will yield back.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the ranking member emeritus, Mr. Dingell, 5 minutes
for questions.
Mr. Dingell. Mr. Chairman, thank you for your courtesy.
Madam Secretary, thank you for being here today to talk to
the committee about the Administration's 2014 budget. I want to
take a moment to thank you for the fine work you have been
doing to implement the Affordable Care Act in the face of some
rather nasty opposition by all kinds of folks including some
members of this committee. You and your staff have worked
tirelessly to implement health reform, a historic undertaking,
and I look forward to continuing to work with you as this
process continues.
I would also like to note that you are the daughter of a
former member of this committee, and you are always welcome. I
am sure you view this as something of a home too, so welcome.
Secretary Sebelius. Thank you.
Mr. Dingell. In any event, Madam Secretary, yes or no
questions. You are working now on the FDA Food Safety
Modernization Act. The legislation made historic improvements
in our food safety system and provided new authorities to help
FDA to prevent food safety problems before they occur
throughout the food supply. This legislation, which I authored,
included a dedicated source of funding for the implementation
of food safety through a facility fee, a reinspection and
recall fee and a fee for importers and exporters.
Unfortunately, some of our friends on the other side of the
Capitol did not see the wisdom of the fees that they passed
overwhelmingly here in the House. The President's fiscal 2014
budget requests $225 million in resources through fees to help
fund the implementation of the food safety law. Is that
correct?
Secretary Sebelius. Yes, sir.
Mr. Dingell. Now, these proposed fees include a food
facility registration and inspection fee and a food importer
fee. Is that correct?
Secretary Sebelius. Yes, sir.
Mr. Dingell. Madam Secretary, can you explain briefly what
these activities and these fees will be used for?
Secretary Sebelius. Well, there is no question that in the
70 years between the time that Congress passed the new food
safety measure a few years ago and the last time food safety
measures were updated that the market has changed dramatically.
We have a global market. About half of our fruits and
vegetables and two-thirds of our seafood come in from overseas.
We have a different kind of----
Mr. Dingell. Huge imports occupy a very high proportion of
American consumption.
Secretary Sebelius. Yes, sir.
Mr. Dingell. And we are finding that that seems to be about
the only way we can get the FDA properly funded to carry out
its mission. Is that right?
Secretary Sebelius. They definitely need new resources to
build a new food safety system.
Mr. Dingell. Particularly in the area of new drug
approvals. Is that right?
Secretary Sebelius. That is correct.
Mr. Dingell. Now, Madam Secretary, do you believe these
fees help FDA to implement the food safety law effectively and
in a timely manner? Yes or no.
Secretary Sebelius. I do.
Mr. Dingell. Another area of interest to me is cosmetics.
FDA's authorities over this industry are woefully outdated. The
industry itself has requested improved authority for the FDA in
this area to better ensure the safety of cosmetics, and I know
the industry has requested this to their great and lasting
credit. The Administration has proposed a cosmetic user fee of
$19 million. Is this correct?
Secretary Sebelius. Yes, sir.
Mr. Dingell. Madam Secretary, can you explain the fees'
purposes and the activities that this user fee will be used to
support?
Secretary Sebelius. Again, it will be used to really update
the regulatory capacity and add new technical expertise. As you
say, it is requested by the cosmetics industry so we are very
hopeful to work with Congress on implementing this update to
the reinventing cosmetic fee initiative.
Mr. Dingell. Now, Madam Secretary, this business of fees
for FDA began when this committee worked out a deal with the
pharmaceutical industry to enable the pharmaceutical industry
to get better service from FDA on new drug applications. Is
that right?
Secretary Sebelius. New drug applications and new device
applications, yes, sir.
Mr. Dingell. Well, actually it has moved through new drug,
new devices, over-the-counter and all kinds of things, and that
has worked out very, very well from the standpoint of industry
and the standpoint of government and consumers. Is that right?
Secretary Sebelius. It has definitely expedited the ability
to put things on the market more quickly.
Mr. Dingell. And it is actively supported by the industry?
Secretary Sebelius. Yes, sir.
Mr. Dingell. And prior to the time of that legislation, it
is interesting to note that Food and Drug would take as much as
10 years of the 17-year period on the patent, the end result of
which was that the industry lost hundreds of millions or even
billions of dollars. People were denied the availability of
useful new pharmaceuticals, which could help deal with some of
the serious medical and health problems in the country. Is that
right?
Secretary Sebelius. That is correct. We were losing to
global competitors because of the pace of approvals.
Mr. Dingell. Madam Secretary, thank you for being here, and
good luck in implementing the legislation that is so important,
the Affordable Care Act. Thank you.
Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the gentleman from Pennsylvania, Dr. Murphy, 5
minutes for questions.
Mr. Murphy. Thank you.
Madam Secretary, I appreciate you being here today. I have,
first of all, a question, and I recognize in your position you
may not get the letters that we send over, but there was a
bipartisan letter sent to your office signed by myself,
Chairman Upton, Ranking Member Waxman, Diana DeGette and others
regarding a follow-up on number of mental health issues. I am
not sure if you saw that, but we had asked for a response in
February. We have not received a response yet. I brought
another copy here. Can I get that to you and get it right to
your desk?
Secretary Sebelius. Yes, sir.
Mr. Murphy. I appreciate that. It is important as we make
sure. And I appreciate your focus on mental health. I am a
psychologist myself. I also know in your statements you had
requested some funding increases in a number of areas.
Another thing, and I hope you can take this message to the
President as well is, I have reviewed or tried to review what
the federal government spends on mental health in a wide range
of areas: in HHS, Judiciary, Education, Department of Defense,
Veterans Administration. It appears that no one has a handle on
how much money we spend in mental health in a broad
perspective. No one has ever done an inventory on that. So
Representative DeGette and I sent a letter over to the Office
of Management and Budget with a copy to the President asking
for an inventory of all that we do, and I think that would be
important because we need to know how much we spend, where we
spend it, and following that, is it even effective such as does
it get to the level of the patient. When you are talking about
one in five people at any given time have a mental health
disorder and that perhaps only 40 percent of those with mental
illness get treatment, that we heard before during a hearing we
did post Newtown from the head of NIMH that it is about 112
weeks before someone even gets treatment for a psychotic
disorder, and you also pointed out in your testimony that it is
about ages 14 to 25 when some of these disorders appear and
that every one of these mass murderers was generally in that
age range, I think all but one was male, psychotic symptoms and
other things. We recognize severe mental illness are not all
violent. A vast majority are not. But it is an area that we are
all deeply concerned. We need to know what we are doing and are
we doing the right thing. And so will you be able to get us a
response to that letter?
Secretary Sebelius. Yes, sir, we will definitely.
Mr. Murphy. Thank you. Another issue has to do with mental
health parity. That bill was passed over 4 years ago, and we
still have not seen regulations. Do we have a date yet by which
we might see something?
Secretary Sebelius. We are committed to finalizing the rule
this year and are in the process of doing just that. We do have
interim final rules that have been promulgated 2 years ago and
so those are in place right now.
Mr. Murphy. Thank you. And another area, we were talking a
little bit about the FDA here. I noticed recently a substance
by the name of Jacked with a backwards 3 and therefore the
letter E was recently put out as a ban because some substance
within it was perhaps associated with--we don't have a direct
link--but perhaps correlated with a couple deaths. I know the
military has asked that all these products be removed from
commissaries and exchanges on military bases. I don't know if
you have had a chance to look at this but my question is, are
these products still being sold online or in stores, and if you
could get back to me with information on that, because I
recognize we don't want a dangerous or potentially dangerous
substance out there for people to take.
Another area I wanted to bring to your attention to in
terms of supplements, the December issue, I think it was
Military Medicine, said that with regard to supplements, they
did a survey of supplements sold on military bases. They found
that only 12 percent of manufactured supplements actually had
an independent body verify what is in it. We have seen studies
that said even vitamin D content in vitamin pills may range
from less than 10 percent of what it is supposed to have 140
percent of what it is supposed to have. So 12 percent have an
independent verifier. About 28 percent verify themselves the
content whatever that is, a mineral, a supplement, a vitamin,
and the rest, 60 percent, have nobody verifying at all what is
in them. Somewhere within your agency I am sure someone is
taking a look at that, and I would appreciate information back
on that. It is a massive industry in America geared to help
people stay healthy. We want people to stay healthy. But I sure
would like to know what is in that.
Secretary Sebelius. Well, Congressman, I can tell you, we
would love to work with you around that issue. A lot of these
supplements and additives fall into a very gray area where they
are not sold as medical products, they are not sold as
pharmaceuticals, they are sort of food additives and that often
is kind of outside the FDA jurisdiction, but we would love to
pursue that issue with you.
Mr. Murphy. Thank you. I look forward to meeting with you.
Thank you very much, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the gentlelady from California, Ms. Capps, 5 minutes
for questions.
Mrs. Capps. Thank you, Mr. Chairman, and welcome, Madam
Secretary.
As you know, my State of California has consistently taken
a leadership role in health reform implementation, and now I
have heard concern from hospitals in my district about the
financial impact of the disproportionate-share hospital, the
DSH program cuts, and reductions on the providers who are in
States like California making a good-faith effort to implement
the Affordable Care Act. Could you speak to the proposed DSH
reduction schedule and how this proposal will help facilitate a
smooth transition of full ACA implementation?
Secretary Sebelius. Congressman, we were hearing similar
reports from hospital executives around the country, and in the
midst of an attempt to really fully engage in the health market
so the determination that we have made recently is that the
Medicare cuts, which have a specific timeline around DSH, will
proceed with implementation in 2014. We are committed to fully
reducing DSH payments by the amount suggested in the ACA
schedule but not beginning the Medicaid DSH reductions until
2015.
Mrs. Capps. When DSH cuts are set to take effect, how is
CMS going to recalculate the hospital's needs for the funds?
Will hospitals in States like California where we are embracing
a Medicaid expansion have a fair shot at the funds when up
against the--in other words, do we get our fair share? Thank
you.
Secretary Sebelius. Well, and the goal, as you know, when
you authored or helped to author the Affordable Care Act is
that as additional Americans were able to be covered by health
insurance or by Medicaid expansion, that would reduce the level
of uncompensated care that hospitals currently experience. So
it is designed to be a complement but we are conscious of the
notion that that won't be a direct match and we are looking
very carefully and doing a lot of outreach about what is the
most effective way to implement the cuts that are proposed in
the law.
Mrs. Capps. Well, I appreciate that and your willingness to
do all you can to ensure a smooth transition as the ACA goes
into full effect. We want to be partners with you, and I want
to highlight, however, that we are watching carefully. It would
be unfair if States that are acting in good faith like
California are harmed because of other States' policies, and I
am sure you are aware of that and I know you are going to keep
that in mind.
One last question. This delay in DSH reductions is just a
proposal, right?
Secretary Sebelius. It is proposed in the budget this year.
Mrs. Capps. Right, a proposal.
Secretary Sebelius. I know it was proposed. I just wanted
to make sure.
Mrs. Capps. Exactly. This is an important distinction. I
believe as implementation continues to be hampered by politics,
some governors are using the proposed delay in DSH cuts as an
excuse to delay in making a decision on Medicaid expansion. I
think this is irresponsible and pretty cruel to constituents.
Anyway, while cut delays are just a proposal, the impact of
delaying the decisions is not.
There is a little over a minute left. As someone who was
formerly a visiting nurse myself, I believe the renewed
commitment to maternal, infant and early childhood home
visiting programs is just excellent and a good preventive and
cost-saving way to deliver health services. Their support is
bipartisan, and they are evidence based. These programs work
and they are critical to improving health outcomes for women
and children and really for families. Could you detail the
proposed investment in these programs over the next 10 years?
There is not much time to do it but highlight it so we can
follow up.
Secretary Sebelius. Well, I think one of the very exciting
second-term initiatives that the President believes in very
strongly is an infrastructure around early childhood starts. So
it includes Health and Human Services, increases in investments
in home visiting programs which, as you say, are evidence based
and not only are wonderful for health but also very proven to
reduce violence and is a great strategy for resilience in
children, increases in our early Head Start childcare
partnership effort, and then in the Department of Education
budget is a significant increase in pre-K programs in
partnership with States around the country and that
infrastructure, to make sure that by the time children are 5
and hit school, they are not only ready to learn but they are
socially and emotionally ready to be in a classroom we see as a
critically important investment to make in the future.
Mrs. Capps. Thank you, and this really gets at our
disparities in health care as well in a very clear way.
Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentlelady and now
recognizes the gentleman from Dr. Gingrey, for 5 minutes for
questions.
Mr. Gingrey. Thank you, Mr. Chairman.
Madam Secretary, as one of the physician members of the
committee, you know I have always been unwavering in my
commitment to the full repeal of Obamacare, but now as we
approach full implementation, however, I believe that we must
chip away at the most egregious parts of the law, and to that
point, Secretary Sebelius, you stated in a speech in
Philadelphia in late March of this year that some men and
younger customers could see their insurance rates increase
because of the Patient Protection and Affordable Care Act. Do
you think that it is fair that young people will pay higher
insurance rates because of this law?
Secretary Sebelius. Sir, I think we don't know what the
rates will look like until the insurers file their plans, and
the very good news is that State insurance departments around
the country have additional resources to review those----
Mr. Gingrey. In the interest of time, I am asking you a
simple question. Do you think that it is fair that Obamacare
asks young people to pay higher insurance rates? I know you
don't know what they will be but is it fair? Do you think it is
fair?
Secretary Sebelius. Well, there is nothing in the law that
asks young people to pay higher rates.
Mr. Gingrey. Well, Secretary Sebelius, actuarian Oliver
Wyman's firm produced a study that identified how wealthy a
young person had to be before their health costs went up
because of Obamacare. I ask you this: Do you happen to know how
wealthy a young person in 2014 when you have fully implemented
these exchanges will have to be, how wealthy that person would
have to be to not pay higher out-of-pocket insurance premiums?
Secretary Sebelius. It is an impossible question, but what
we know about young people right now who are not insured, a
number of them are on their parents' plans until age 26.
Mr. Gingrey. Well, we are talking about, assume that this
person is 27 years old.
Secretary Sebelius. Then anyone under 400 percent of
poverty will quality for a tax subsidy, an upfront tax subsidy,
and will have insurance policies with far lower copays and
coinsurance and out-of-pocket----
Mr. Gingrey. Well, Madam Secretary, the answer, according
to this actuarial study, is $25,000. Secretary Sebelius, do you
think that asking a young person who makes $25,500 to pay more
for their insurance under Obamacare, is that fair?
Secretary Sebelius. Well, that isn't accurate,
unfortunately. Somebody who is making $25,500 would definitely
qualify for a subsidy if he or she is purchasing coverage in
the individual market so they will not pay more out of pocket
than----
Mr. Gingrey. I don't know how much that subsidy might be,
Madam Secretary, but even with the subsidy, they will be paying
more under Obamacare than they would be paying 4 years ago for
the same insurance coverage.
Secretary Sebelius. That is absolutely not true.
Mr. Gingrey. That is absolutely true, and let me ask you
this next question. Has your Department created contingency
plans in the event that young people like I just described
choose to pay the penalty instead of purchasing the insurance
that they can't afford? Have you developed a contingency plan
in the event that that occurs?
Secretary Sebelius. No, sir. We intend to implement the
law, but I think educating young people about what options they
will have that they do not have now, that they will be in a
larger pool, that there are subsidies available to them which
they absolutely do not know and that they will have full
insurance coverage. Young women know that no longer will it be
legal for an insurance company to charge 50 or 75 percent more
for exactly the same coverage.
Mr. Gingrey. Well, I only mentioned young men because that
was who you addressed in that speech in Philadelphia. And look,
you are lot more optimistic obviously about how this is going
to work in these exchanges on January 1, 2014, than I am, but I
would highly recommend to you, Madam Secretary, that you do
develop a contingency plan in the event that so many of these
young people look at that and say hey, look, here I am straight
out of college, I am now 27 so I am not on my parents' policy,
and furthermore, they kicked me out of the basement, I have got
$250,000 worth of higher education debt, I am engaged, I am
trying to build a life, I have got a job. I strongly suggest
that your Department create this contingency plan, and I would
suggest that you submit that to me and this committee and
furthermore not let a train wreck or any other excuse slow it
down, and I yield back the balance of my time.
Secretary Sebelius. Well, Congressman, the other thing that
is available to your young person who is engaged is a choice of
a fully insured plan or a catastrophic plan. What we know is
putting that young person in a large pool automatically by
entering the marketplace will be significantly more beneficial
than he or she shopping in the individual market where they
have no rules and no protection, and if indeed they get any
kind of preexisting condition, they could be booted out in a
heartbeat.
Mr. Gingrey. Mr. Chairman, since you let her go a little
bit over, just let me address the issue of age banding because
of your rules, you are going to force these young people to pay
higher rates than somebody 58 years old who can well afford to
pay better than they can, and you ought to let the States
decide that.
Mr. Pitts. The gentleman's time is expired. The chair
recognizes the gentleman from Utah, Mr. Matheson, 5 minutes for
questions.
Mr. Matheson. Thank you, Mr. Chairman, and Madam Secretary,
thanks for coming before the committee today.
In the Department's fiscal year 2014 budget is included the
implementation of copayments for Medicare home health
beneficiaries per MedPAC's recommendations. The new copays on
home health would be a tool to reduce overutilization and
create savings for the program. Now, looking at ways to reduce
the overutilization and create savings is something we all want
to do. I do have some concerns, though that with the proposals
that ask beneficiaries to pay more out of pocket, particularly
those who would be paying are probably a little more sick, less
financially secure. And allied to that, I have concerns with
asking seniors to pay more when there are strong indications of
fraud and abuse in certain geographic areas of our country in
the home health care industry because MedPAC's March report
identified--there are basically five big ones, five specific
geographic areas where there is strong reason to believe that
fraudulent billing practices are in play in the home health
care industry. For example, it is a nice comparison, there are
about 190,000 Medicare beneficiaries in my State and there are
about that many in Miami-Dade County. In Utah with the same
number of beneficiaries, we have about 100 home health care
providers. In Miami-Dade County, it is nearly 700. The average
benefit per beneficiary in Miami-Dade County is five or six
times what it is in Utah.
So we have a situation where in a few geographic areas,
there seems to be some bad actors, if you will, and it strikes
me that there is something wrong in places like Miami-Dade
County. So I guess my point, which I am sure you understand,
is, in terms of looking for savings and efficiency, it seems to
me we might be looking at situations where those geographic
disparities reflect that there may be some activities going on
that are not right. And I was wondering if you looked at what
your authority might be or using your authority to limit
issuance of new provider numbers in these geographic regions
which have strong indications of this type of overutilization.
Secretary Sebelius. Well, Congressman, we are doing more
than looking at re-credentialing providers. We actually have at
the President's direction really ramped up our antifraud
efforts around particular durable medical equipment where there
are very erratic billing patterns. Home health is another high
target. We recently have seen some mental health services and
some pharmaceutical services. We have a very active strike task
force, a HEAT task force including U.S. attorneys and on-the-
ground folks from our Inspector General's office working
together in Miami-Dade County and a number of other areas. They
are not in Utah right now because we are not seeing that kind
of billing practice but fraud and abuse we are taking very
seriously. We have returned historic returns to the Medicare
trust fund and in fact to Medicaid programs around our strike
efforts, which is why we are asking for new mandatory funding,
frankly, because we are returning about $8 for every dollar
that we are appropriated, and I think that is an incredibly
important investment to make sure that people don't steal from
these programs and that the services are delivered to people
who want them and need them.
Mr. Matheson. Do you feel like you have the appropriate
authority based on legislation to use data analysis and
analytics to really target these areas that have these
problems?
Secretary Sebelius. Actually, we have finally for the first
time built over the last couple of years predictive modeling,
the same kind of computer analysis that credit card companies
and other banks have used for years. Medicare has never done
that. So we are actually able not only to target areas where
they are great billing irregularities but actually target the
types of services and focus a lot of time and attention with
our prosecutors, with our investigators, and our goal is to
shut it down before it happens, not to continue to do the pay
and chase but actually to move in and shut down these
operations.
Mr. Matheson. Are there any particular impediments you see
in front of you that are limiting your ability to do this?
Secretary Sebelius. Well, the biggest impediment is
resources. Ironically, the return is so great and yet for the
last number of years we have not gotten the appropriation even
up to our budget limit. So I would just urge the committee, I
think fraud and abuse is something that people agree on. We
have a great track record. We can show you dollar for dollar
what is going on but our restrictions are really on resources.
Mr. Matheson. Thank you, Madam Secretary. I yield back, Mr.
Chairman.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the gentleman from Louisiana, Dr. Cassidy, for 5
minute for questions.
Mr. Cassidy. Thank you, Madam Secretary. As you know, we
have got 5 minutes, so if I seem like I am speaking like an
auctioneer, I am, and if I occasionally interrupt, it is not to
be rude; it is to maximize our time.
I will start off with a couple yes or no questions. In
January 2012, the President announced plans to streamline
government agencies like the Department of Commerce with this
statement: ``Our economy has fundamentally changed as has the
world but our government has not. Often it has grown more
complex.'' He has also stated that he supports reforms to
federal agencies that result in more efficiency, better service
and leaner government. Yes or no, do you believe that federal
agencies should be mindful of our current economy and operate
in ways that result in more efficiencies?
Secretary Sebelius. Yes.
Mr. Cassidy. Second yes or no. The President's fiscal year
2014 budget proposal for HHS is $967 billion and seeks $80
billion in discretionary spending, roughly $60 billion more
than last request. Yes or no, understanding the President's
commitment to efficient government agencies and knowing the
difficult budget situation our Nation faces, could you accept a
2 percent reduction in your agency's total HHS request?
Secretary Sebelius. No, sir.
Mr. Cassidy. And if you can't, can you defend all the
expenditures in the agency as outlined in the President's
budget, not even a 2 percent cut anyplace?
Secretary Sebelius. I am happy to do that in a more robust
conversation but I think the 5 minutes probably won't allow
that to happen.
Mr. Cassidy. Well, thank you, and I understand that, and I
appreciate your sensitivity to the time.
Next, following up on what Ms. Capps said, my State also
has a lot of uninsured. Our governor has not yet indicated that
he is going to accept the Medicaid expansion. It is going to
cost our taxpayers $1.2 to $1.8 billion in State tax money to
implement. But I am a doc that takes care of the uninsured. The
DSH program, as we know, has helped support care for those
folks. If a State does not accept the Medicaid expansion,
obviously there is concern that they would lose the DSH based
upon a decrease in the national uninsured rate, although the
uninsured rate within the State may still stay higher.
We sent a letter to your office dated February 11th asking
for a reply by March 1st. It may have been a tight timeline. I
apologize. But have really not received a reply since. Can I
give you a clean copy of this letter and ask if you guys can
respond to it? I don't mean this as a gotcha. I mean it totally
as a fellow who is advocating for his uninsured.
Secretary Sebelius. Certainly.
Mr. Cassidy. Thank you. Next, my gosh, don't we all still
have a heartbreak for the issue of mental illness in our
Nation? There was an article in the Wall Street Journal from
2006 but apparently still apropos, ``A Death in the Family''
regarding William Bruce. Mr. Bruce was hospitalized with severe
schizoaffective disorder, I believe, and there is an agency
that got federal dollars, Protection and Advocacy for
Individuals with Mental Illness who, according to the article,
and I have been in communication with the father, they actually
coached the young William as to how to give his answers to
providers that he could get released. He did. The providers did
not inform the family that he was still psychotic, and he went
out and he murdered his mother. Incredible. Now, this agency,
we have looked to see if they put in reforms to ensure that
they are no longer doing this, have been unable to. I do see
that they continue to receive $36 million a year. Can you
provide us follow-up or some guarantee that the Protection and
Advocacy for Individuals with Mental Illness receiving $36
million a year in some way is no longer doing this?
Secretary Sebelius. Well, Congressman, I have no idea what
the agency is or does or what they advocate.
Mr. Cassidy. I accept that.
Secretary Sebelius. I can tell you, though, that about 65
million Americans who currently have no mental health or
substance abuse benefits either through access to new
marketplaces and new affordable health insurance or Medicaid
expansion will finally have----
Mr. Cassidy. I don't mean to interrupt. And that again was
not a gotcha question and I didn't expect you to know that kind
of micro level, but I think we all are concerned that this is
not being funded by our federal government, or if it is, that
there is some reform. So we will give you some information on
that if you could reply please.
Next, in his Now is the Time plan to address gun violence,
the President promised to do the following: address unnecessary
legal barriers, particularly related to HIPAA, which may
prevent States from making information available to background
check systems; two, releasing a letter to health care providers
clarifying no federal law prohibits them from reporting threats
of violence to law enforcement authorities; and three, starting
a national dialog on mental illness. Can you just give us an
update of progress as regards these three things?
Secretary Sebelius. Sure. The letter to providers went out
fairly immediately after the President's announcement of the
package of administrative initiatives that we were going to put
in place, and I would be happy to provide this committee with a
copy of that letter, reminders providers that there actually is
a duty to warn and there are no HIPAA barriers against coming
forward when somebody is likely to be dangerous to themselves
or others. Secondly, we have just put an ANPRM, an Advanced
Notice of Proposed Rulemaking, that would ask the States to
identify what they see as the barriers. Our frustration is, we
don't think there are barriers to collecting the information
that is requested. States have said that they see those
barriers, so we want to know what they are so we can directly
address them, and that has gone out this week, and we are in
that dialog, and within the next month or so, we intend to
launch the national dialog. We already are working with mayors
and community groups in communities across this country. It
will be a public-private partnership, privately funded,
community dialogs, toolkits by our office, meetings in
communities, but the dialog will be a yearlong effort to really
bring mental health conditions out of the shadows and make it
clear to people where they can go for help.
Mr. Cassidy. If I can help you, please let know.
Mr. Pitts. The gentleman's time is expired. The chair
recognizes the gentleman from Texas, Mr. Green, 5 minutes, sir.
Mr. Green. Thank you, Madam Secretary, for your time, and I
commend you and the President for writing a budget proposal
that as a whole puts our country's health system on the right
path forward.
My first question, I am a strong supporter of the
Affordable Care Act and I look forward to the next few months
to learn how it will be implemented across the country,
especially in my home State of Texas, and I know you were there
last year and we talked briefly about this in one of your
visits to one of our level I trauma centers in Houston. We have
spoken about the importance of providing a robust exchange in
States like Texas that opt out of creating their own system.
Our time today is so short and so it is not necessary to get
into it now, but in the next few days could you or your office
provide us in writing a status report on the creation of the
implementation of the Texas State exchange? Again, you don't
have a partner so we need to make sure, and I know we are not
the only State that is in that boat. We may be on Medicaid but
not on that.
Secretary Sebelius. We would be glad to do that.
Mr. Green. My next question is something we haven't
contacted you about, about the disproportionate share hospital
payments. It was recently brought to my attention in an
informal process that CMS changed their DSH payment procedures
to children's hospitals in certain instances. As I understand
it, children's hospitals having their DSH payments reduced
because of commercial insurance revenue is counted as Medicaid
revenue. It is important to note that despite CMS continuing
insisting that this is double dipping, it is my understanding
that this happens even though the patients may be enrolled at
Medicaid, that their private insurance is paying the bills.
There is no payment for Medicaid being made and the children's
hospitals never include these children in their Medicaid cost
reports in any way because they are never considered Medicaid-
program patients. However, for some reason, CMS determined that
these are Medicaid payments and reduces their DSH payments. Are
you familiar with the problem?
Secretary Sebelius. I am somewhat familiar but would love
to have a chance to get back to you with specifics.
Mr. Green. OK. What I would like to do is work HHS to
remedy the problem, and we have a great hospital and medical
center in Texas Children's Hospital and we have hospitals all
over the country that are children's, and erroneous reductions
have come close to eliminating their DSH payments, and they do
cover a lot of uninsured children who are not under Medicaid.
In States like Texas where Medicaid may not expand, DSH is a
critical revenue stream, so TCH provides a valuable service to
our community and it should receive all the funding they are
entitled to under the law, and this is an urgent issue, and I
don't think it is the intent of HHS to harm our children's
hospitals, and it cuts across State lines. This is not a Texas-
only problem.
Secretary Sebelius. We would be very willing to follow up
with you, Congressman. I think the issue that was trying to be
addressed was in the dual-eligible area if you double count
what is happening, but I am a little unclear how exactly that
impacts children and what is happening in the children's
hospitals.
Mr. Green. We will get you some information. I appreciate
it. My next question deals with sequestration and the effect on
Part B drug payments to providers such as cancer clinics. It is
my understanding that because of the sequester and because of
the way the underlying ASP is calculated to include prompt
payment discount, many providers have been reimbursed less than
they pay for the drug. Madam Secretary, does HHS have any
flexibility if access to providers becomes an issue for
beneficiaries to modify the payments so that providers are
reimbursed at a rate that allows them to continue to offer
those drugs?
Secretary Sebelius. We do not have any flexibility with the
sequester implementation.
Mr. Green. And I understand that the sequester was brought
on by Congress and we are tasked with finding a way out. On
this Part B drug matter, my colleagues, both Mr. Whitfield on
the majority side and Ms. DeGette and I have a bill that we
have introduced for the last few sessions. This bill would
exclude the prompt payment discount from the ASP calculation.
And Mr. Chairman, I think we should seriously consider
taking this bill up in our committee to mitigate the problems I
have described, and again, I will yield back 43 seconds to you.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the gentleman from Kentucky, Mr. Guthrie, 5 minutes
for questions.
Mr. Guthrie. Thank you, Mr. Chairman, and thank you, Madam
Secretary, for coming today. I appreciate you being here.
I want to talk about prevention funds in the budget or the
use of prevention funds, and I have been to a dialysis center.
As you walk through, and it is not just the numbers of the
money we are spending in dialysis centers, it is the lives, and
a lot of that is preventable. So I am for prevention. The last
time you were here, we spoke specifically about using
prevention funds for lobbying State and local ordinances.
Secretary Sebelius. I am sorry. Could I interrupt for one
second? Dr. Cassidy, I have just learned that the rulemaking
that I mentioned, it goes out tomorrow, so I just wanted to
clarify. It isn't out the door yet but it goes out tomorrow. I
am so sorry.
Mr. Guthrie. No problem. The prevention funds we talked
about last time, and I remember you saying that the examples I
cited were State and local lobbying so therefore it wasn't
lobbying as prevented by the federal. It was only limited to
the federal government, which that actually wasn't accurate
according to the law.
The second thing that you said that the grants that I cited
went out prior to the Labor and HHS rider in the appropriations
bill, therefore, it wasn't covered by the lobbying prevention,
but actually 18 U.S.C. governed it as well, and we talked about
that, and your own internal regulation A.R. 12 governs that.
And so after that exchange, I thought you would go back and
look at the programs and say OK, these would be covered by
those, and I was even interviewed. I don't have the transcript
but somebody asked me about the Department. I said I have all
faith that they are going to go back and correct the way these
grantees are behaving, and I don't think they behaving
incorrectly to themselves because their actual grant proposals
stated exactly what they were doing. So I sent a letter along
with Congressman Whitfield, and the letter came back and it
concerned me because it said the HHS staff has determined that
they believe the activities are not lobbying, and what is
frustrating about it, it appears, it is like, OK, these groups
were advocating for local and State policy. They put it in
their grant requests, and let us find some interpretation of
the law that allows them to do it, and the letter quoted a 1989
DOJ interpretation of 18 U.S. Code 1913 that was updated in
1992. So we have a 1989 interpretation of a law dated in 1992.
And even your own A.R. 12 says any activity designed to
influence action in regard to a particular piece of pending
legislation would be considered lobbying, and it says federal
or State levels--so it just seems like we did bring this up and
brought it to your attention and you said you would address it,
and then we are back here now saying well, that really didn't
violate, we have an interpretation and they can continue to go
the way that they were going. And that was frustrating to me
because I thought we were going to be able to address that.
Secretary Sebelius. Well, Congressman, I can tell you that
CDC, the Centers for Disease Control and Prevention, takes
their rider that Congress added to the legislation and the
provisions that govern the anti-lobbying seriously. They have
revisited the grantees. They have put out new technical
assistance. They are proceeding to inform people as the money
goes out the door, there is now language that goes with every
grant that a grantee has to sign which reminds them about the
prohibition to do lobbying at the State, local or federal
level. So we are trying to be very responsive to both the
Congress direction and the original law.
Mr. Guthrie. But it is not just--but if you don't define
what they are doing as lobbying, then they can continue to move
forward.
There was one in South Carolina, you said--well, you didn't
say but the letter we got, there was a South Carolina one that
was noted as a violation, and it said they sent email message
and scheduled a press conference for purpose of getting a city
ordinance, but there was one that wasn't. It was Nevada that
said they advocated for the passage of Senate Bill 27, and so
we just want to make sure we know that lobbying, according to
the regulation, is any activity, not just if it is large scale
of heavily funded. That is what the interpretation of 1989
says. I guess that is what was disappointed. We thought we were
going to get that addressed, and when the letter that I
received back, and I am sure you have it, was that that really
didn't violate the law or not.
Secretary Sebelius. Well, again, I think CDC takes those
responsibilities seriously and we are trying to make sure that
grantees do too.
Mr. Guthrie. And then the letter was about a year late
coming back--not a year late. It was a year later, so for
oversight, it would be better if we could do it more promptly.
I appreciate that very much.
Mr. Pitts. The gentleman's time is expired. The chair
recognizes the gentlelady from the Virgin Islands, Dr.
Christensen, 5 minutes for questions.
Mrs. Christensen. Thank you, Mr. Chairman, and welcome,
Madam Secretary. Let me just say before I ask my questions, the
country is very fortunate to have you as Secretary at this
particular time, not only bringing your experience as governor
but insurance commissioner as we implement the Affordable Care
Act.
I am going to try to ask my questions all at once in the
interest of trying to get through my 5 minutes. We have the
first-ever national strategy to eliminate health disparities,
and we thank you for that, but it relies heavily on the Offices
of Minority Health, both the one in your office and the other
agencies. So what I would like to know is, how does your budget
and how do your plans support strengthening the Offices of
Minority Health and supporting and funding those in the other
agencies.
The second one is on REACH. REACH has been widely
documented as being extremely effective--the Racial and Ethnic
Approaches to Community Health--in eliminating or reducing
health disparities, and I know that the Department thinks that
the community transformation grants and the community putting
prevention to work initiative are good replacements, or that is
what I understand the Department thinks. But looking at the
increasing health disparities in communities of color, I think
that that requires some specific targeted attention, and so I
would like to know what evidence the Department has that
supports that those would be good programs to replace REACH,
which we don't think they are. There is a non-discrimination
provision in the Affordable Care Act and we would like to know
when the regulations for that will be issued.
Two more, one concerning the Navigator program. Why does it
only reimburse for recruiting for exchanges and not for
enrollment in Medicaid? That is one question on that. And also,
there is a great concern that organizations from inside the
communities that are going to be approached by the navigators
are the ones that would be receiving the grants. We have
experience with the Minority Age Initiative where organizations
from outside communities came in, and they don't have the trust
of the communities so we want to be assured of that.
And the last one is, how are we doing with the health care
workforce? As a physician, I am particularly interested in
physicians. For example, the Department projects that
urologists would be facing a 32 percent deficiency in the
number of providers needed in 2030.
So that is OMH, REACH, Navigator program, adequacy of the
workforce, and non-discrimination provisions.
Secretary Sebelius. Well, Congresswoman, you know that I
share your keen interest in not only documenting health
disparities but closing them. I don't think there is any
question that the full implementation of the Affordable Care
Act with Medicaid expansion and affordable health insurance is
probably the single biggest step we can take to addressing
health disparities and so we are eager to work with you on that
full implementation. I know that there is question about
resource allocation to REACH and to other programs. We have
targeted the community transformation projects in areas where
there are large numbers of health disparities as part of the
criteria for doing this and actually in a better budget time I
think we would fund everything but we had to pick and choose
and make some decisions going forward. But again, I think the
combination of the implementation and the specific community
projects aimed at communities of color and the National HIV/
AIDS Strategy which, again, is targeting for the first time
resources to those most in need have great potential for moving
forward. Health homes around chronic conditions is another
area, I think, that isn't look at as health disparities but
will actually impact communities of color significantly.
We share your concern about navigators coming from the
community, being of the community, and that will be part of the
criteria looked at as those funding proposals come in, and you
will see in the 2014 budget request for resources, particularly
in HRSA but also now with the mental health professionals to
not only enhance workforce nurse practitioners, physicians
assistants, more National Health Service Corps folks but also
5,000 mental health workers, which are part of the President's
Now is the Time agenda, so we are keeping a keen eye on
workforce issues.
Mr. Pitts. The chair thanks the gentlelady and now
recognize the gentleman from Virginia, Mr. Griffith, 5 minutes
for questions.
Mr. Griffith. Thank you, Mr. Chairman. Thank you, Madam
Secretary, for being here.
In an address to the Democratic National Committee in
September 2012, you stated first if you already have insurance
you like, you can keep it. Madam Secretary, I hear from
constituents every week lamenting the fact that they have lost
or at risk of losing their employer health insurance plan that
they like because of Obamacare, and here is the dilemma that
many business folks are being put into. A constituent of mine
called me and sat down with his accountants and his experts and
his medical people, and what they said to him was, you have
three choices. The business that you have owned for 33 years
that you started out with small and started growing and
growing, you have 59 employees, so here are your choices. You
pay the $43,000 fine, you close down the third shift that is
the least profitable of your three shifts, just get rid of that
and then you don't have to do anything, or you pay even more
than the $43,000 to insure all of your employees. Now, most of
his employees are already covered or a large number of his
employees he already pays for them, and he pays for them in
full, and he is struggling with these dilemmas, knowing that
some of his people won't be able to afford the insurance that
he is already paying for if he drops it completely, and he has
not made a decision, but that is the dilemma that businessmen
and women across the United States are having to go through.
And again at the DNC you said but for us Democrats,
Obamacare is a badge of honor because no matter who you are,
what stage of life you are in, this law is a good thing. And I
have to ask you, can you really believe that to the 7,000
employees who are part-time employees for the Commonwealth of
Virginia who are facing a cutback in the number of hours
because the Commonwealth has decided based on trying to make
sure that they keep their costs in control that they are not
going to allow the part-time employees to have more than 29
hours, do you really believe that to those people it is a badge
of honor or that Obamacare is a good thing? Because now their
hours are going to be cut. Yes or no.
Secretary Sebelius. Well, sir, I don't like anybody's hours
to be cut. We need to actually make sure that people get paid
and work to take care of their families----
Mr. Griffith. But you do understand----
Secretary Sebelius [continuing]. But health costs are part
of that overall----
Mr. Griffith. I have to move on because I only have a
limited amount of time, but the examples go on. In my district,
we have a county, Wythe County, Virginia. They hire retired law
enforcement folks to work court security as court security
employees. Now, many of these people already have insurance.
They are usually retired, or a lot of them are. They have
insurance or they have Medicare. Now the county is going to
have to cut back their hours because they don't want to have to
pick up insurance for people who already have insurance, and so
they are going to have to cut back their hours, and for many of
that folks, that translates into a 30 percent pay cut for their
retirees. I don't believe that is a good thing, and I will take
your previous answer as the answer to that question as well,
that you hate to see that happen but sometimes things happen.
And do you really believe that the 30-year-old----
Secretary Sebelius. Sir, I didn't answer any question that
way.
Mr. Griffith [continuing]. Whose premiums will skyrocket
next year, do you think he thinks that Obamacare is a good
thing? And how about my 82--I have to keep going because my
time is running out. How about my 82-year-old mother enrolled
in a Medicare Advantage program, which is a highly popular
program, which has been cut to pay for the ACA, can you really
believe--deep down in your heart, can you really believe that
she thinks Obamacare is a good thing?
Secretary Sebelius. The good news, your mother is paying
less now than she did. I don't know about your mother's plan
but Medicare Advantage plans are down 10 percent, enrollment is
up almost 20 percent, so your mother actually is in better
shape than she was before the Affordable Care Act.
Mr. Griffith. Well, and she also got a lot of her stuff
done. When she saw this coming down the pike, she said anything
that I know is wrong with me now, I am getting it fixed. And
how about Susan Zurface, the 42-year-old single mother who was
recently diagnosed with leukemia and turned away from
enrollment in the High Risk Pool program because the ACA
established fund was depleted? I can't believe that she thinks
that Obamacare is a good thing.
Secretary Sebelius. If repeal had gone forward, there would
be no preexisting plan whatsoever.
Mr. Griffith. And what I would have to say, Madam
Secretary, is that for so many of these folks who are facing
uncertainty as to what is going to happen, who may not be able
to pay, the employers who like to pay for their long-term
employees who may not be able to afford to do that. They don't
think Obamacare is a good thing. They don't see it as a badge
of honor. I have to tell you, Madam Secretary, and I know we
disagree on this, but when I talk to my constituents, it
appears to me that thinking that Obamacare is a good thing and
is a badge of honor is just wrong thinking, and in fact, I
believe it is going to make a majority of Americans losers in
the health care arena.
Mr. Chairman, I thank you so much for the opportunity and I
yield back.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the gentlelady from Florida, Ms. Castor, 5 minutes
for questions.
Ms. Castor. Thank you, Mr. Chairman, and welcome. I want to
thank you, Secretary Sebelius, and the President and your team
here because what this budget does, it stays true to American
families, especially our parents and grandparents that stay on
Medicare. This is very interesting what my colleague has raised
because what we know about the Republican budget that was
passed is their plan for Medicare is to turn it into a voucher.
That doesn't save anybody money. It simply shifts costs to the
beneficiary, probably including the family members of my
colleagues, and what it will do over time is really force
Medicare to wither on the vine. Meanwhile, the contrast here
with President Obama's budget is it again strengthens Medicare,
lengthens the life of the Medicare trust fund and does so in a
smart way. It is something that we have all discussed, and that
is, by moving from a fee-for-service system that has proven
wasteful to a new value-based system. Did you all know that 10
percent of Medicare beneficiaries now are involved in these
value-based coordinated-care models that are saving significant
money? These are many times voluntary efforts by doctors and
hospitals and health systems that have realized now that the
way we deliver health care in America has to change. So that is
the good news out of this budget. Sure, you can pick certain
circumstances and with the implementation of the ACA there are
a lot of challenges ahead, but we would do better by working
together to make it happen for our families, to lengthen the
life of the Medicare trust fund, not turn into a voucher. That
is the Republican vision. And we haven't even started on
Medicaid because under the Republican budget for Medicaid, they
in essence break the promise to our older neighbors and our
parents and grandparents. What Medicaid means to me, I think of
my neighbors down the street that are able to stay out of a
nursing home because Medicaid has been there for them or at the
end of their life they had to rely on skilled nursing, they
could go there. But under the Republican budget, in contrast to
this one before us, the Republicans in essence take that safety
net away entirely. I mean, have you looked at the numbers of
the Republican budget cuts when it comes to Medicaid? So I am
sorry, I sat through budget hearings a few weeks ago and it is
very apparent to me, so I am sorry, Madam Secretary to take up
time that I wanted to ask questions on that. But there is a
very important contrast in the visions for this country for our
older neighbors, and if it is not apparent after looking at
these budgets, then you all really need to do some studying.
Madam Secretary, I want to change the subject a little
because another piece of good news in this budget is a new
innovative proposal that I think holds great promise for this
country, and that is the new innovative plan for brain
research, the collaboration with our academic institutions, the
NIH, the private sector on brain research. This is an ambitious
project that is necessary and important to develop the tools
now as we confront greater diagnosis of Alzheimer's, mental
illness, and others. Could you give us an outline of how this
collaborative effort will work and your vision for the coming
years here?
Secretary Sebelius. Well, Congresswoman, I share your
enthusiasm for this new frontier, and Dr. Collins, who is the
head of the National Institutions of Health, has
enthusiastically put together this plan with colleagues in the
academic sector and the private sector, feeling that it is very
much like the Human Genome Project, that we need to map the
brain, we need to understand what is happening and what is not
happening, and that will lead a much faster pathway to cures
and identification of how to deal with everything from
Alzheimer's to autism and, as you say, very parts of mental
illness. So there are certainly some federal government new
resources. There are also private partners in foundations
stepping up, academic researchers, and we put together what Dr.
Collins describes as sort of the dream team, some of the
foremost authorities at universities across this country who
are going to be leading this initiative and effort. Also, our
colleagues at the Department of Defense are very much involved
because brain injury is one of the most significant impacts
from the wars in Afghanistan and Iraq. Returning warriors are
often suffering everything from post-traumatic stress syndrome
to issues around the brain, so understanding what is going on
and having ways to effectively deal with that, I think, help
our entire country.
Mr. Pitts. OK. The gentlelady's time is expired. I now
recognize the gentleman from Maryland, Mr. Bilirakis--or
Florida. Mr. Bilirakis for 5 minutes.
Mr. Bilirakis. Thank you very much. I appreciate it. Thank
you, Madam Secretary, for being here. Thank you, Mr. Chairman.
Madam Secretary, I am receiving calls, an increasing amount
of calls and correspondence from my constituents who are
concerned about what to expect in 2014 with regard to the ACA.
Many are certain that the law means higher costs, increased
taxes and less jobs. As a matter of fact, I have a tweet here
from @TheKipWilson. She wants to know why middle-class workers
are going to be subject to increased premiums and more taxes
under Obamacare. I keep hearing that.
Yesterday in your testimony before the Senate Finance
Committee, your responses left one of the law's leading
architects to conclude that the implementation of this law
might be ``a train wreck.'' I must tell you, that leaves me, my
constituents and the American taxpayers with even less
confidence that we had before the law was passed. I guess it is
beginning, you are going to launch it October 1st. Secretary
Sebelius, I want to give you an opportunity to respond to the
questions yesterday by our Senate colleagues. With thousands of
pages of regulations issued, hundreds of new Washington
acronyms and uncertainty mounting, can the Department share a
written timeline and implementation with this Committee and to
the American people so they can better understand what the
Administration's intent is and what they can expect. If you can
elaborate on that, I would appreciate it.
Secretary Sebelius. Yes, sir. What I said yesterday and
here today and will continue to say is, starting October 1st in
every State in the country, new marketplaces will be available
for open enrollment. Some of those will be federal marketplaces
but contain private market plans, choices and competition, and
some are going to be run by the States in advance of that.
Hopefully this summer there will be individuals trained to
answer questions and do outreach so people can become aware of
what is developing and the choices they can make for themselves
and their family. There is an up-and-running Web site with a
very clear timeline, healthcare.gov, which gives steps along
the way. We will have open enrollment by October 1st where
people by Web site or on paper can pre-enroll in plans that
will be up and running on January 1, 2014, in every State in
the country.
Mr. Bilirakis. What about again the tweet that I just
received from @TheKipWilson? Are we going to be subject to
increased premiums and higher taxes under Obamacare?
Secretary Sebelius. Well, the insurers right now,
Congressman, are just beginning to file their planned rates for
the new marketplaces. There is then a negotiation period either
at the State level or with the federal marketplaces about what
those rates are, so I think any description of what people will
be paying I think is just invented at this point. The rates are
not filed, they are not certain, and we are very confident that
not from our standpoint but from the Congressional Budget
Office analysis that the combination of competition,
elimination of a lot of the overhead costs and subsidies
available to a lot of these Americans who for the first time
will have full insurance coverage, they will be looking at a
much more competitive rate and lower prices than they are
paying right now if they have insurance coverage.
Mr. Bilirakis. So you don't anticipate increased premiums
under Obamacare?
Secretary Sebelius. I do not anticipate the kind of rate
shock that people are describing, and again, there are no rates
filed so anyone who is giving quotes about what rates will be
paid is just really inventing that.
Mr. Bilirakis. Thank you, Madam Secretary. Next question.
According to reports, HHS believes it has the authority to
shift money from certain accounts to fund any remaining
expenses related to implementation of the new health care law,
specifically from any non-reoccurring expense fund. Yes or no,
do you believe you have such authority to shift funds between
HHS accounts to cover expenses related to implementation of the
health care law? Yes or no, please.
Secretary Sebelius. I do have legal transfer authority that
is part of and it is limited. The non-recurring expense fund is
a specific Congress that established within the Department of
Health and Human Services that is for one-time IT costs, so
those are two different things.
Mr. Bilirakis. Can you please provide a list of the
authorized accounts you believe you have the ability to use to
make such transfers for implementation purposes and accounting
of what funds have been transferred or used for such purposes
and also the legal analysis for such authority?
Secretary Sebelius. Yes.
Mr. Bilirakis. Thank you very much. I yield back.
Mr. Pitts. The gentleman's time has expired.
We are voting on the floor. We have 8 minutes plus before
the vote ends. I would like to ask the members if they can be
as concise as possible. Everybody can then ask a question or
two. And the gentleman from New York, Mr. Engel, is recognized.
Mr. Engel. Thank you, Mr. Chairman. Madam Secretary, I have
watched you as you have been Secretary. You have done an
outstanding job, and your testimony here today just continues
it, so thank you very much for the job you are doing.
I am from New York, and many New York hospitals are working
hard to move toward more effective and efficient systems by
participating in ACOs and bundled payment programs. The reality
is, these reforms are going to take many years to fully
implement. In the meantime, I think there needs to be a
recognition that funding streams such as GME DSH or bad-debt
payments are essential for hospitals investing in delivery
system or form. Hospitals need these various funding streams to
treat those who will remain uninsured even after the ACA and
train our next generation of physicians. Of course, in New York
we train a lot of physicians. So in the face of significant
cuts year after year, it adds another layer of certainty to a
rapidly evolving and challenging health care system for our
hospitals. So Madam Secretary, what is HHS doing to help ensure
our Nation's hospitals have the resources, stability and
flexibility they need for the coverage expansions included in
the ACA as well as move toward providing higher quality, more
coordinated care?
Secretary Sebelius. Well, we are working very closely with
hospital leaders across the country who are key health care
leaders, and I think what is incredibly impressive is the
amount of transformative care underway, trying to get to a
higher quality of care for every patient and deliver it at an
affordable cost. I think it is also very good news that the
President has nominated Marilyn Tavner, who not only was a
practicing nurse but ran hospital systems and is very closely
attuned to the needs and economics of hospital care moving
forward. She has been nominated to be the Administrator of the
Centers for Medicare and Medicaid Services, and we are hoping
that she will be confirmed shortly.
Mr. Engel. Thank you. Let me ask you one other quick
question and I will yield back some of my time, as the chairman
asked. I was very pleased with this Administration's efforts to
develop and implement a national HIV/AIDS strategy. It is a
roadmap to help us reach the point where new HIV infections are
rare, and when they do occur, every person has access to high-
quality treatment. We have made strides forward, but with
approximately 50,000 new HIV infections each year, we still
have a long way to go. As a member of this committee and as
ranking member on the House Foreign Affairs Committee, I have
had the opportunity to work on legislation that has made a
significant impact in the fight against HIV and AIDS.
The President's budget recognizes the critical role played
by the Centers for Disease Control in preventing new HIV
infections and monitoring the epidemic and also directs vital
treatment funding provided through the Ryan White program. So
can you share with us how we are moving forward with the
National HIV/AIDS Strategy and how this strategy is reflected
in the President's budget priorities?
Secretary Sebelius. I think the President shares your
commitment and concern and also the opportunity to really look
forward to an AIDS-free generation in the future. So we are
doing important research at NIH. We will continue and be part
of the funding that NIH will hopefully receive through the
allocations in the budget with the CDC work not only in
communities throughout the United States but internationally
has been hugely impactful and effective, and I think we
certainly intend to continue that, and we have re-gathered
resources and focused them on communities most at risk where
the infection rate is the highest, where the transmission is
still underway in an attempt to stop transmission, cut down on
the number of new infections and really focus on communities
that need not only initial testing but connection to treatment,
and the Affordable Care Act again offers a huge step forward
for a lot of patients right now who have been diagnosed and
determined but do not have insurance coverage to move forward
with ongoing treatment.
Mr. Engel. Thank you, Mr. Chairman. I yield back.
Mr. Pitts. The chair thanks the gentleman and he yields
back 27 seconds. And I might say, I was just notified that Mr.
Griffith's mother just tweeted that her Medicare Advantage
rates were just increased.
Secretary Sebelius. I can give her a list of plans that she
can look for an open enrollment that have gone down.
Mr. Pitts. The chair recognizes the gentlelady from North
Carolina, Ms. Ellmers.
Mrs. Ellmers. Thank you, Mr. Chairman, and Secretary
Sebelius, thank you for being here, and I have a lot of
questions for you so I am going to blow through this as quickly
as possible, so if you can answer with a yes or no, that would
be very, very helpful because I am being respectful of my
colleagues.
Number one: On April 5, the federal court issued a ruling
requiring that the morning-after pill or Plan B pill can be
available for all people of all ages including young
adolescents. Do you plan to appeal this ruling? Yes or no.
Secretary Sebelius. It isn't a yes or no. I have no
jurisdiction over a federal judge.
Mrs. Ellmers. OK. No jurisdiction, so you do not plan to
approach this in any way?
Secretary Sebelius. The Justice Department is currently
evaluating an appeal.
Mrs. Ellmers. They are evaluating an appeal at this time,
the Justice Department?
Secretary Sebelius. Yes. That is not our jurisdiction.
Mrs. Ellmers. OK. Thank you. I would like to move on. You
know, there again----
Secretary Sebelius. I would like answer your question.
Ms. Ellmers. No, I appreciate that, but I only have so many
minutes. Now, there again, reaching out, the idea of the ACA, I
have a constituent back home who just contacted my office 2
days ago. He has 200 employees. He cannot afford to provide
health care for them at this time. He knows that he is going to
be hit with a $2,000-per-person penalty. He basically is saying
look, 80 percent of my employees are minority, I will have to
lay off 60 employees just to be able to deal with the penalty
itself. In doing some research, doing some homework here, 61
percent increase in insurance rates in North Carolina, there
will be a 61 percent. According to the Kaiser Family
Foundation, for a family of 4, there will be a $5,600 for an
insurance plan with, that is a 20 percent increase as a result
of the ACA. My staff has done some research as well. For a plan
for a family of four, the cost would be $271 per month with a
$25,000 deductible. That is unbelievable.
My question to you, ma'am, because you have talked about
this ACA creating a thriving middle class, helping create jobs,
does what I just laid out to you create a thriving middle
class? Yes or no.
Secretary Sebelius. There are no rates filed in the new
marketplaces so I have no idea what you are quoting.
Mrs. Ellmers. As it is right now, so what you are saying is
that the cost----
Secretary Sebelius. There is no implementation.
Mrs. Ellmers [continuing]. Of insurance would drop that
drastically for a family?
Secretary Sebelius. Ma'am, all I am telling you is, I have
no idea what rates you are quoting but that is not an effect of
the Affordable Care Act.
Mrs. Ellmers. The Kaiser Family Foundation.
Secretary Sebelius. They may be quoting what is happening
right now in the marketplace----
Mrs. Ellmers. OK. Let us move on. I also had my staff reach
out to the, as you stated it, a one-stop shop Web site.
Incredibly, non-user-friendly, categorizes Medicaid for the
poor, under 26, co-op plans. There is one standard plan to
compare anything to. How can anyone plan for the future,
employees, individuals? How can anyone plan for the future? I
know you keep citing the 2014 date. However, we live in real
time. Americans are scared.
Secretary Sebelius. And in real time, insurers are
currently filing rates. Insurers are currently making their
plans to come to the market.
Mrs. Ellmers. OK. Let us move on. I have a minute and 30
seconds. To the issue of the 2 percent sequester, there was an
OMB memo that went out to federal agencies about the cut asking
that life, safety and health of Americans be protected. Now, it
is my understanding, I believe I heard you say that CMS has
absolutely no ability to act on this, no ability to address the
2 percent cut. Yes or no.
Secretary Sebelius. That is correct.
Mrs. Ellmers. As it is right now?
Secretary Sebelius. Yes, that is correct.
Mrs. Ellmers. OK. The reason that I am asking is because
right now as you know, there are cancer patients who are being
turned away from community cancer centers who need their
chemotherapy if they have Medicare. Is that correct? And you
did--I did hear your Ways and Means testimony and you said that
right now there are patients who are being turned away.
Secretary Sebelius. Part of the sequester was a 2 percent
across-the-board cut for every division of CMS, every program,
every category. That is what was implemented by the United
States Congress.
Mrs. Ellmers. OK. And it affects physicians who are giving
lifesaving treatments to patients, correct? Because it attacks
the Part B. Yes or no.
Secretary Sebelius. A 2 percent cut is in effect because of
sequester, yes, ma'am.
Ms. Ellmers. Well, I would like you to know that I have a
piece of legislation, H.R. 1416, that addresses this issue.
There are families in crisis right now who have received an
incredible devastating piece of information. However, I would
like to further this by saying that the President's budget
actually increases that formula, decreases payment in
reimbursement to those physicians by another 1 percent. It
makes it an ASP plus 3 percent rather than the 4.3 percent. Are
you aware of this?
Secretary Sebelius. I am aware of it, but the way the
President's budget would be implemented is that there would be
far more flexibility, which we did not have in the sequester,
to actually----
Mrs. Ellmers. And by flexibility, are you referring to the
fact that the manufacturers would be required to provide the
rebates as directed by the Secretary? Is that the flexibility
we are talking about?
Secretary Sebelius. No, we are talking about the ability to
administer the administrative costs differently than the costs
of the drug. The important thing is to----
Ms. Ellmers. So you have that jurisdiction but you do not
have jurisdiction to----
Secretary Sebelius. The way the sequester bill was written,
Congresswoman, we were told to cut across the board every
program, every category 2 percent for Medicare and that is what
we did.
Mrs. Ellmers. Even though the OMB directed to protect life,
safety and health?
Secretary Sebelius. OMB directives don't overrule Congress,
and you passed a bill that----
Mr. Pitts. The gentlelady's time is expired.
Mrs. Ellmers. Thank you.
Mr. Pitts. I apologize for interrupting. The time has run
out on the floor. We are going to try to wrap this up. The
chair recognizes the gentleman from Maryland, Mr. Sarbanes.
Mr. Sarbanes. Thank you, Madam Secretary. I think you are
doing a terrific job. It is a big challenge. We have run out of
time all over the place on the floor, in this committee. You
have to leave, I know.
We had a hearing the other day with some representatives
from the business community, and what became clear is, until
the issue of whether implementation of the Affordable Care Act
was going to go through was settled by the outcome of the
election, there were, I think, many small businesses around the
country that frankly I can understand this didn't really take
the time to learn the rules and regulations and what was coming
down because they didn't know whether it would be in place.
What is happening, I think, is, as they focus in on something
about which they got a lot of misinformation over time, they
are discovering to their relief that there really is a lot of
support there for small businesses, and many of us were
motivated to support the Affordable Care Act because of the
relief we thought it would bring to small businesses across the
country.
I don't have a question, but I just wanted to make a
suggestion. I think it would be terrific, and I am sure that
the Department is working on this, to sort of put together, you
know, the 1040EZ version of what benefits are now going to be
available to small businesses out there because they are primed
now to be looking for that information, and I think we have
provided them with accurate information about these
opportunities. It will come as a relief to them, and they can
really kind of invest in the opportunity that it presents. So I
hope the Department is working on something like that that we
can turn around and share with our constituents and small
businesses across the country.
Secretary Sebelius. We are working on it. We would be glad
to provide it to you. And we are doing presentations with the
colleagues in the Small Business Administration across this
country. So we are happy to do a number of things. But you are
absolutely right. I think a lot of the misinformation once it
is corrected and people understand what the rules are and what
is going to be available to small business owners who often are
paying 15 to 20 percent more for insurance right now, they are
very pleased about what opportunities they may have.
Mr. Pitts. The chair thanks the gentleman. I have been
notified, the leader is holding the vote for us. We will have
one follow-up. Dr. Burgess.
Mr. Burgess. Thanks for staying with us, Madam Secretary.
Dr. Gingrey brought up the issue of contingencies. Gary Cohen
in addressing the AHIP Foundation a couple of weeks ago brought
up the issue of contingency. So you indicated this morning in
your answer to Dr. Gingrey's question, there are no contingency
plans, and yet there is discussion that I am aware of, of
people talking about actually narrowing the scope of the ACA.
It is called descoping. So are you in your Department talking
about descoping or narrowing the scope of ACA provisions?
Secretary Sebelius. No, sir.
Mr. Burgess. Are you talking about work-around plans?
Secretary Sebelius. No, we are not. We are moving ahead. We
have the federal hub on track and on time. We are moving ahead
with the marketplaces that we will be individually responsible
for and we are working very closely with our State partners on
their plans and their timetable for the State-based
marketplaces.
Mr. Burgess. So the federal hub will be available?
Secretary Sebelius. Yes.
Mr. Burgess. Unless it is not, and if it is not, you have
no contingency plans.
Secretary Sebelius. At this point, our energy and resources
are focused on getting it up and running, and we are on track
and the contracts have been led and we are monitoring it every
step along the way.
Mr. Burgess. Let me just say that if the promises that you
will be ready and you are not, I think the United States
Congress, which does hold the ability to fund things at the
federal agencies, would have to look seriously about putting
any other money into that exercise. You have had 3 years and
billions of dollars. If you are not ready, I think the Congress
needs to hold your agency accountable.
Secretary Sebelius. Well, I appreciate that, Congressman. I
think that the CBO analysis when the bill was passed was that
we would need about $10 billion in implementation money. One
billion dollars was appropriated. I can tell you we are on
track. We have judiciously used those resources and we intend
to be open for open enrollment around the country October 1st.
Mr. Burgess. Thank you, Mr. Chairman. I will yield back.
Mr. Pitts. The chair thanks the gentleman, and thank you,
Madam Secretary, for your time.
As we move closer to implementation and enrollment in the
exchanges, could you please agree to come before the committee
again before October 1st?
Secretary Sebelius. We will make every effort.
Mr. Pitts. Thank you, Madam Secretary. We appreciate your
information, your testimony today.
If members have additional questions, I will ask them to
submit the questions and we will send them to you immediately.
We ask that you please respond promptly to the questions.
Members should submit their questions by the close of business
on Thursday, May 2nd.
Thank you very much, Madam Secretary. You have been very
generous with your time. Without objection, the subcommittee is
adjourned.
[Whereupon, at 12:10 p.m., the Subcommittee was adjourned.]
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