[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
TWO WEEKS UNTIL ENROLLMENT: QUESTIONS FOR CCIIO
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 19, 2013
__________
Serial No. 113-84
Printed for the use of the Committee on Energy and Commerce
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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 FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon ANNA G. ESHOO, California
LEE TERRY, Nebraska ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado PETER WELCH, Vermont
MIKE POMPEO, Kansas BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Oversight and Investigations
TIM MURPHY, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
Vice Chairman Ranking Member
MARSHA BLACKBURN, Tennessee BRUCE L. BRALEY, Iowa
PHIL GINGREY, Georgia BEN RAY LUJAN, New Mexico
STEVE SCALISE, Louisiana JANICE D. SCHAKOWSKY, Illinois
GREGG HARPER, Mississippi KATHY CASTOR, Florida
PETE OLSON, Texas PETER WELCH, Vermont
CORY GARDNER, Colorado PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia GENE GREEN, Texas
BILL JOHNSON, Ohio HENRY A. WAXMAN, California (ex
BILLY LONG, Missouri officio)
RENEE L. ELLMERS, North Carolina
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
C O N T E N T S
----------
Page
Hon. Tim Murphy, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 3
Hon. Henry A. Waxman, a Representative in Congress from the state
of California, opening statement............................... 4
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 6
Hon. Diana Degette, a Representative in Congress from the State
of Colorado, opening statement................................. 8
Hon. Fred Upton, a Representative in Congress from the state of
Michigan, prepared statement................................... 66
Witnesses
Gary Cohen, Deputy Administrator and Director, Center for
Consumer Information and Insurance Oversight, Centers for
Medicare and Medicaid Services, U.S. Department of Health and
Human Services................................................. 17
Prepared statement........................................... 19
Answers to submitted questions............................... 72
Submitted Material
Minority memorandum.............................................. 10
Article entitled, ``Randolph Hospital dismisses flap over
navigator grant letter from Congress,'' the Business Journal,
September 12, 2013, submitted by Mrs. Ellmers.................. 67
Majority memorandum.............................................. 69
TWO WEEKS UNTIL ENROLLMENT: QUESTIONS FOR CCIIO
----------
THURSDAY, SEPTEMBER 19, 2013
House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:19 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Tim Murphy
(chairman of the subcommittee) presiding.
Members present: Representatives Murphy, Burgess, Gingrey,
Scalise, Harper, Olson, Gardner, Griffith, Johnson, Long,
Ellmers, Shimkus, DeGette, Butterfield, Castor, Welch, Tonko,
Green, Yarmuth, Dingell, and Waxman (ex officio).
Staff present: Sean Bonyun, Communications Director; Karen
Christian, Chief Counsel, Oversight; Noelle Clemente, Press
Secretary; Julie Goon, Health Policy Advisor; Brad Grantz,
Policy Coordinator, Oversight & Investigations; Sydne Harwick,
Legislative Clerk; Brittany Havens, Legislative Clerk; Sean
Hayes, Counsel, Oversight & Investigations; Andrew Powaleny,
Deputy Press Secretary; John Stone, Counsel, Oversight; Tom
Wilbur, Digital Media Advisor; Phil Barnett, Democratic Staff
Director; Brian Cohen, Democratic Subcommittee Staff Director,
Senior Policy Advisor; Hannah Green, Democratic Staff
Assistant; Elizabeth Letter, Democratic Assistant Press
Secretary; Karen Nelson, Democratic Deputy Staff Director;
Stephen Salsbury, Democratic Special Assistant; and Matthew
Siegler, Democratic Counsel.
OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Murphy. Good morning. I convene this hearing of the
Subcommittee on Oversight and Investigations. Well, in less
than 2 weeks enrollment in qualified health plans under the
Patient Protection Affordable Care Act will begin. It is the
law of the land. Today we hope to discuss the many challenges
and issues that may arise over the coming weeks. Most of the
concerns about the law currently can be reduced to one
question: Is the Administration ready?
Since passage of the President's Healthcare Law, the
Administration has consistently told us that the government
will be ready when open enrollment begins on October 1 and the
exchanges start on January 1. Yet our experience has shown that
rosy predictions about the future of the Healthcare Law often
given way to the results of this rushed and rocky
implementation.
The law has many problems and so much so that half of it
was simply done away with for a year. While individuals must
comply with the law's requirements starting on January 1 or pay
a penalty, this is not so for businesses and companies who are
able to delay the employer mandate for a year.
Despite the Administration's promises about lower premiums,
evidence continues to mount that some individuals will face
extreme rate hikes when the exchanges open, as much as double
the price they are currently paying. And the Administration's
promise that if you like your coverage you can keep it rings
especially hollow now with news reports almost every day about
businesses moving the spouses and families of their employees
or their retirees into the exchanges. If the President's
promises were true, we wouldn't hear stories about major
airlines losing millions of dollars to the Healthcare Law, and
we wouldn't hear about the spouses of thousands of employees
losing their coverages.
Meanwhile, any sort of oversight over the Healthcare Law
remains taboo for the law's defenders. Last month this
committee sent letters to many of the recipients of federal
funding to participate in the Navigator Program under the law.
We asked some fairly basic questions. How many people are you
hiring? What are you paying them? Are you performing background
checks? We should expect that groups receiving federal dollars
to enroll people in exchanges should have answers to those
questions as enrollment begins in less than 2 weeks.
In the course of this investigation the committee has had
many productive calls with recipients of Navigator funding. I
have had some personal meetings myself which have been very
fruitful. In fact, many of the organizations were prepared to
answer our questions we believe will be ready to properly
perform their Navigator duties. Yet, we have also seen that the
Navigator Program, like many of the programs created under the
Healthcare Law, has been impacted by the Administration's delay
in implementing the law.
According to a GAO report issued in June, the
Administration issued the Navigator grants 2 months behind
schedule. The Administration had planned to issue the first
round of awards in June but did not end up issuing them until
August. The Administration had originally planned to begin
Navigator training in July, but HHS did not finalize the
training programs until August 29. This delay naturally reduced
by almost half the time available to Navigators to begin
training and preparing for enrollment.
So today we will ask Mr. Gary Cohen, the Director of the
Center for Consumer Information and Insurance Oversight, to
explain how the abbreviated training schedule for Navigators
will affect the program. We will also ask Mr. Cohen to address
some of the concerns we have identified in our review of the
grant applications.
We learned that some Navigators are planning on going door
to door to conduct enrollment activities. A report issued
yesterday by the Oversight and Government Reform Committee
indicates that CCIIO representatives are aware of problems
linked to door-to-door outreach activities such as scammers
knocking on doors and falsely representing that they are
Navigators, and yet this activity is still permitted under the
Navigator Program.
We have also learned that the return on taxpayer dollars
varies wildly among Navigator grant recipients. The
Administration is paying one Navigator $80,000 to enroll 312
people. That is $80,000 of taxpayer funding to enroll not even
a person a day.
On the other hand, other groups clearly have incredibly
high expectations. Another applicant estimated that they would
enroll approximately 75 percent of the individuals directly
contacted, resulting in hundreds of thousands of enrolled
individuals. There is a wide difference in expectations and
workload.
Our concerns over the safety of consumer data and health
information remain as well. One Navigator plans to survey and
track those who attend community meetings and another promises
additional pay if a Navigator enrolls a certain amount of
individuals. I have concerns about paying for that.
Meanwhile, one Navigator told committee staff that they
believe background checks are important, yet these are not a
required action. Our responsibility in conducting oversight of
Federal programs is to identify waste, fraud, and abuse, and
the best case, asking questions about Federal spending and
shining a light on programs can identify problems before
taxpayer dollars are wasted and allow those problems to be
corrected. A wait-and-see approach to oversight of the
Healthcare Reform Law does not seem appropriate when its
implementation has been regularly botched by delays and
uncertainty.
Let me add to this. As a clinician and psychologist myself,
it was hardly ever appropriate for me or my colleagues in the
medical field to wait until problems were at a severe or
critical level. We like to know problems early and take action.
That is the appropriate thing to do, and any claims that we are
doing otherwise are inappropriate and spurious at best.
So I welcome Mr. Cohen, and I look forward to asking
questions about what we can expect in the coming weeks.
[The prepared statement of Mr. Murphy follows:]
Opening statement of the Hon. Tim Murphy
In less than two weeks enrollment in qualified health plans
under the Patient Protection and Affordable Care Act will
begin. Today we hope to discuss the many challenges and issues
that may arise over the coming weeks. Most of the concerns
about the law currently can be reduced to one question: ``Is
the administration ready?''
Since passage of the president's health care law, the
administration has consistently told us that the government
will be ready when open enrollment begins on October 1 and the
exchanges start on January 1. Yet, our experience has shown
that rosy predictions about the future of the health care law
often give way to the results of the administration's rushed
and rocky implementation.
The law is so problematic that half of it was simply done
away with for a year. While individuals must comply with the
law's requirements starting on January 1or a pay a penalty,
this is not so for businesses and companies who were able to
delay the employer mandate for a year. Despite the
administration's promises about lower premiums, evidence
continues to mount that some individuals will face extreme rate
hikes when the exchanges open--as much as double the price they
are currently paying. Finally, the administration's promise
that ``if you like your coverage you can keep it'' rings
especially hollow now, with news reports almost every day about
businesses moving the spouses and families of their employees,
or their retirees, onto the exchanges. If the president's
promises were true, we wouldn't hear stories about major
airlines losing million of dollars to the health care law, and
we wouldn't hear about the spouses of thousands of employees
losing their coverage.
Meanwhile, any sort of oversight over the health care law
remains taboo for the law's defenders. Last month, this
Committee sent letters to many of the recipients of federal
funding to participate in the Navigator program under the law.
We asked some fairly basic questions: how many people are you
hiring? What are you paying them? Are you performing background
checks? We should expect that groups receiving federal dollars
to enroll people in exchanges should have answers to these
questions, as enrollment begins in less than two weeks. In the
course of this investigation, this Committee has had many
productive calls with recipients of Navigator funding-in fact,
many of the organizations were prepared to answer our questions
and we believe will be able to properly perform their Navigator
duties.
Yet, we have also seen that the Navigator program, like
many of the programs created by the president's health care
law, has been impacted by the administration's delay in
implementing the law. According to a GAO report issued in June,
the administration issued the Navigator grants two months
behind schedule. The administration had planned to issue the
first round of awards in June--they didn't end up issuing them
until August. The administration had originally planned to
begin Navigator training in July--but HHS did not finalize the
training program until August 29. This delay naturally reduced
by almost half the time available to Navigators to begin
training and preparing for enrollment.
Today, we will ask Mr. Gary Cohen, the Director of the
Center for Consumer Information and Insurance Oversight, to
explain how the abbreviated training schedule for Navigators
will affect the program. We will also ask Mr. Cohen to address
some of the concerns we have identified in our review of the
grant applications. We learned that some Navigators are
planning on going door-to-door to conduct enrollment
activities. A report issued yesterday by the Oversight and
Government Reform Committee indicates that CCIIO
representatives are aware of problems linked to door-to-door
outreach activities, such as scammers knocking on doors and
falsely representing they are Navigators. And yet, this
activity is still permitted under the Navigator program.
We have also learned that the return on taxpayer dollars
varies wildly among Navigator grant recipients. The
administration is paying one Navigator $80,000 to enroll.312
people. That's $80,000 of taxpayer funding to enroll not even a
person a day. On the other hand, other groups clearly have
incredibly high expectations: another application estimated
that they would enroll approximately 75 percent of the
individuals directly contacted, resulting in hundreds of
thousands of enrolled individuals.
Our concerns over the safety of consumer data and health
information remain as well. One Navigator plans to ``survey and
track...those who attend community meetings'' and another
promises additional pay if a Navigator enrolls a certain amount
of individuals. Meanwhile, one Navigator told Committee staff
that they believe background checks are important, yet these
are not a required action.
Our responsibility in conducting oversight of federal
programs is to identify waste, fraud, and abuse. In the best
case, asking questions about federal spending and shining a
light on programs can identify problems before taxpayer dollars
are wasted--and allow those problems to be corrected. A ``wait
and see'' approach to oversight of the health care reform law
does not seem appropriate when its implementation has been
regularly botched by delays and uncertainty.
I welcome Mr. Cohen and I look forward to asking him
questions about what we can expect in the coming weeks.
# # #
Mr. Murphy. I now recognize Ranking Member DeGette for her
opening statement, but she is going to yield to Mr. Waxman
because he has another commitment this morning.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you, Mr. Chairman. Thank you,
Representative DeGette, for yielding to me this time to make an
opening statement.
Oversight is important and valuable, but the Affordable
Care Act oversight of the last 3 years has not been to
enlighten the committee or improve the law. It appears to be
part of the efforts by the Republican party to engage in
partisan attacks on this law and if they could do it, even
sabotage the Affordable Care Act.
I released a report last month highlighting the
unprecedented Republican campaign to undermine the law. Forty-
one repeal votes, refusals to expand Medicaid to cover millions
of low-income Americans, and the imminent threat to shut down
the entire Federal Government or force a catastrophic
government default if the law is not repealed. There is no
legitimate purpose served by the letters to 51 Navigators who
are community groups, food banks, community health providers,
and many similar non-political organizations tasked with trying
to help inform the public about the Affordable Care Act
benefits. This request was ill-timed and a serious mistake, and
I find it amazing to hear the Chairman talk about how they
haven't had enough time to do their job but now we are trying
to, by the committee, divert them from doing their job by
answering all sorts of questions.
The letters sent to them were without a predicate or
evidence of wrongdoing. They serve only to burden and
intimidate these organizations just as they are beginning their
critical work. My staff yesterday released an analysis of the
Navigator Program. Our investigation found that Navigators will
help millions obtain health insurance coverage, that they have
extensive experience assisting individuals with federal and
state benefit programs, and they have effective privacy
protections in place.
In short, the Republican rhetorical attacks on the
Navigator Program I believe are unjustified and inconsistent
with the facts. It is hard to escape the conclusion that it was
designed to intimate these groups and discourage participation
in the program. Thanks to the Affordable Care Act millions of
Americans will be able to get high-quality, affordable
insurance. The worst abuses of the insurance companies have
been ended. This Republican approach, I believe, is bad for the
country.
I want to now yield the balance of my time to the gentleman
from North Carolina, Mr. Butterfield.
Mr. Butterfield. Thank you, Mr. Waxman, for yielding time,
and thank you for your extraordinary leadership. You not only
wrote the Affordable Care Act, but you got it through this
committee. Thank you very much.
Mr. Chairman, I am pleased to announce that tens of
thousands of my constituents in North Carolina have already
benefited from the Affordable Care Act. One-hundred and thirty
thousand seniors are now eligible for Medicare preventative
services, 41,000 children can no longer be denied coverage
based on pre-existing conditions, 8,200 young adults now have
coverage on their parents' plans. It has been a long path, and
we are almost there with the beginning of open season on
October 1, less than 2 weeks away, we will be one step closer
to helping many Americans receive affordable and quality
healthcare. The opening of the marketplace, the education and
support provided by, yes, the Navigators and the outreach by
HHS will help directly enroll 1.1 million uninsured people and
assist an additional 7.3 million uninsured people to receive
health insurance.
But instead of touting the success of soon having nearly
every American insured, my Republican friends have forced more
than 40 votes to dismantle and defund the Act. The chairman of
this committee in my opinion abused his investigatory authority
by launching a fishing expedition of Navigators who received
funding solely for the purpose of discrediting the program.
This, Mr. Chairman, distracts the Navigators' attention. You
know it, and I know it, from their mission of helping families
to access health insurance.
Someone said that many of these Navigators will be going
door to door. I hope they will be going door to door to enroll
every uninsured American. A North Carolina newspaper recently
reported that one of my North Carolina Republican colleagues
who serves on this committee said that she would be pleased if
the Congressional Navigator inquires stymies the non-profit is
Navigator work, and she is quoted in that article as saying,
``If this ended up resulting in a delay, I wouldn't be unhappy
about it.''
This is an outrage, Mr. Chairman. I would hope that October
1 that we would unite and make sure that every American gets
access to affordable healthcare. The American people deserve
it, and we need to bring this debate to a close.
Thank you, Mr. Waxman. I will yield back to you, sir.
Mr. Murphy. The gentleman yields back. I now recognize for
5 minutes the gentleman from Texas, Dr. Burgess.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. Well, thank you, Mr. Chairman. I appreciate
the recognition, and here we are a dozen days from the start
date of October 1 where the open enrollment is going to occur.
I don't know a whole lot more than I did the last time Mr.
Cohen was here at the end of April of this year. Since that
time I have been told time and time again by officials from
Health and Human Services, Center for Medicare, Medicaid
Services, Treasury, the White House, and of course, even you
when you were here, Mr. Cohen, that the exchanges would
definitely be ready to go live on October 1, 2013.
In addition, the federal hub that is supposedly going to be
operational in a couple of days we have not had made available
to us any of the testing data that reportedly has been done,
and that obviously is an important aspect that many of us
continue to have a great deal of interest.
Even more concerning is the fact that federal officials
have assigned much of the responsibility for the education and
outreach to federally-funded Navigators.
Now, similar to the Administration's other delays, while
Health and Human Services had initially planned to issue the
first round of Navigator grants in June and begin training in
July, the grants were issued on August 15, and a training
program was not available to the Navigators until the end of
that month. You got $67 million, $13 million more than
originally budgeted, $67 million of taxpayer money taken by
threat by the IRS from taxpayers across this country, $67
million has been given out to Navigators across the Nation, and
we don't know the purpose of that money.
Now, I am going to reference an article from August 4 of
2012, so this is over a year ago it appeared in the ``New York
Times.'' The article says, ``Federal officials are looking for
private contractors to provide in-person assistance to
consumers and to operate call centers. A contractor will also
help the government decide who gets federal subsidies, expected
to average $6,000 a person, and who is exempt from the tax
penalties that will be imposed on people who go without
insurance.''
Again, this is August 4 of 2012, so it is not like the
agency didn't know this was coming. The article goes on to say,
``Mr. Hash, the Director of the Federal Office of Health
Reform, said that federal exchanges will operate essentially in
the same manner as the state-based exchanges, however, they
differ in a significant way. States have done their work in
public, but planning for the federal exchanges has been done
almost entirely behind closed doors.''
I think that is one of the problems that many of us on this
committee have with that.
``Sabrina Corlette,'' continuing in the article, ``Sabrina
Corlette, a Research Professor at Health Policy Institute of
Georgetown University, said the federal exchanges were much
more opaque than the state exchanges.'' You have to wonder what
value is there in opacity in that situation from an
Administration who said it valued transparency.
Yesterday morning people who received their copy of the
``Wall Street Journal,'' were greeted with the headline,
``Burden Shifts on Insurance. Firms Change Health Coverage,
Walgreen to Give Workers Payments to Buy Plans.'' You know,
when the healthcare law was sold by the President across this
country, it was sold with the admonition if you like what you
have, you can keep it. If you like your doctor, you can keep
your doctor. If you like your health plan, you can keep your
health plan but apparently not if you work for Walgreen's.
You know, we get criticized on this side of the dais
because of attempts to reign in the Affordable Care Act. No
apology for the number of times that legislation has come to
the floor of the House to try to pull this thing back. It has
never been popular, it has never enjoyed popular support, it is
becoming increasingly clear how dangerous this law is to
people's health and healthcare, how dangerous it is to our
economy.
But seven times the President has signed one of those bills
into law. So gone are the 1099 provisions, gone are the Class
Act, gone are several other things. But here is a point that
people miss. Seven other times the President has decided
himself that parts of the law were unimportant, and the law
that he signed was not, in fact, going to endure. What about
the Pre-Existing Condition Program? This law was sold on the
backs of people with pre-existing conditions across this
country, and yet when someone showed up on February 1 of this
year to enroll in the PECP Program, they were told, sorry,
sister, the program is closed. So for 11 months people with
pre-existing conditions who had been promised relief are just
simply wondering the country wondering what they are supposed
to do.
The shop exchanges were supposed to open January 1, 2014.
You put it off to 2015. Removing the reporting requirements and
relying on self-attestation, delaying final contracts with
contractors, delaying the employer mandate, removing out-of-
pocket caps, no premium information. This was promised to me by
the Administrator of CMS----
Mr. Murphy. The gentleman's time----
Mr. Burgess [continuing]. In July in this committee, that I
would have this information by September 15. Mr. Cohen, we are
going the long way now to September 15 and if you go----
Mr. Murphy. The gentleman's time----
Mr. Burgess [continuing]. To the Web site today on
healthcare.gov, it says come back and see us in a few weeks. We
are busy trying to get it ready.
Thank you, Mr. Chairman, for your indulgence. I will yield
back my time.
Mr. Murphy. Thank you. Now go to Ms. DeGette for 5 minutes.
Ms. DeGette. Thank you very much, Mr. Chairman. Before I
make my opening statement I would like to recognize the newest
member of the Energy and Commerce Committee, Congressman John
Yarmuth from Kentucky. We are very glad to have him.
[Applause.]
Ms. DeGette. And I would ask unanimous consent to allow him
to participate in the hearing today. He doesn't have
subcommittee assignments yet, but we know he is going to be on
this fabulous subcommittee very soon.
Mr. Murphy. Without objection.
OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Ms. DeGette. Thank you very much.
Mr. Chairman, we have spent more than our share of time in
this subcommittee on the Affordable Care Act talking about
implementation. It is our seventh hearing this year, and we
really haven't seen any problems come up in all the hearings.
So I want to thank Mr. Cohen for coming back again during a
very busy time in his schedule as the exchanges open on October
1.
On this subcommittee it is our job to unearth the facts in
an objective and non-partisan manner. So with 2 weeks to go
before the marketplaces go live, I want to talk for a moment
about what we have seen this year.
We have obtained documents and conducted extensive
investigation of health insurance premiums under the ACA, and
what did we find out? The ACA is going to allow millions of
Americans to obtain affordable insurance for the first time
ever. HHS this week released a new report showing that nearly
six in ten currently uninsured Americans, 23.2 million people,
would be eligible to get insurance coverage for under $100 a
month. A Kaiser Family Foundation study released earlier this
month concluded that premiums are generally lower than
expected. A new RAM study reached similar conclusions.
The facts also show that individuals with health insurance
coverage are already benefiting from the Act. The HHS revealed
that 6.8 million customers saved an estimated $1.2 billion on
their premiums in 2012, due to the rate review provisions in
the ACA.
This committee also conducted an investigation into the
contractors responsible for implementing the ACA's
marketplaces. This was one of my favorite hearings because what
did the facts show? They showed that the contractors will be
ready on October 1, that they are taking appropriate steps to
protect consumer privacy, and as an added benefit, they are
creating thousands of jobs.
Last month, Mr. Chairman, you opened an investigation into
the ACA Navigator Program. That is what we are here today for.
You sent dozens of letters to dozens of civic and community
groups that received grants to help their neighbors sign up for
ACA benefits. In a letter to Chairman Upton, Ranking Member
Waxman expressed his concern that this investigation was
designed not to enlighten the committee but to intimidate the
Navigators, and I am sorry to say I kind of agree with those
criticisms.
There seems to be little reason to put these burdens on the
Navigators just as they were starting to get their work going
with the public, and the Committee's investigation shows there
is no basis for the allegations about the Navigators.
Yesterday the minority staff released a supplemental memo
summarizing its review of the Navigator documents. Mr.
Chairman, I would like to ask that that be made part of the
record.
Mr. Murphy. Without objection.
[The information follows:]
[GRAPHIC] [TIFF OMITTED]
Ms. DeGette. The investigation found that Navigators would
help millions of people obtain health insurance coverage. They
have extensive experience assisting individuals with federal
and state benefit programs. Most Navigators are non-profit,
non-partisan community service providers, and they have
effective privacy provisions in place. Those are the facts, and
they show good news.
Mr. Chairman, you talked in your opening statement about
these false Navigators that are going door to door, and that is
a concern. That is why we have to have the real Navigators in
place so they can sign people up, and just yesterday HHS, DOJ,
and the FTC announced a massive anti-fraud effort. I would
suggest we all work together to stop any kind of fraud in the
system and with that, Mr. Chairman, I want to yield the balance
of my time to Representative Castor.
Ms. Castor. Well, I thank the Ranking Member for yielding
time.
I wanted to relay today the enthusiasm I am hearing back
home from so many of my neighbors, particularly when it comes
to now the bar against discrimination for our neighbors who
have pre-existing conditions. Just over the past few weeks I
have met with leaders and communities with multiple sclerosis,
diabetes, HIV Aids, cancer that now see hope. They have hope
because they will be able to get insurance for a change and not
be discriminated against.
Now, since September of 2010 children with these chronic
diseases and chronic conditions have been able to get insurance
in the greater Tampa Bay area. That has meant 237,000 children
have been able to get insurance where before they couldn't.
Now, beginning January 1 this will apply to adults. So they are
particularly enthused, but at the same time they are very
troubled by the Republican obstruction and sabotage. They don't
understand why now people are going to block access to the
doctor's office and affordable care.
So I look forward to discussing that today.
Mr. Murphy. Thank you. The gentlelady's time has expired.
By the way, I also want to recommend the Chairman of
Environment and the Economy here, Mr. Shimkus, is going to sit
on this hearing. Thank you for being here.
I will now swear in the witness.
I will introduce him. Mr. Cohen is the Deputy Administrator
and Director of the Center for Consumer Information and
Insurance Oversight, recently served as General Counsel for
California Health Benefits Exchange, and we will swear in the
witness.
[Witness sworn.]
Mr. Murphy. You are now under oath and subject to the
penalties set forth in Title XVIII, Section 1001 of the United
States Code. You may now please give a 5-minute summary of your
written testimony.
TESTIMONY OF GARY COHEN, DEPUTY ADMINISTRATOR AND DIRECTOR,
CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT,
CENTERS FOR MEDICARE AND MEDICAID SERVICES, U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
Mr. Cohen. Good morning, Chairman Murphy, Ranking Member
DeGette, and members of the subcommittee. I look forward to
answering your questions regarding CMS's ongoing work to
implement the Affordable Care Act, including the Navigator
Program.
As we approach the beginning of open enrollment, CMS and
all of our partners across the country are focused on helping
people sign up for affordable healthcare coverage that begins
on January 1. We are already seeing competition works. The
creation of new marketplaces is encouraging insurers to offer
plans at competitive rates.
As a result, in 16 states preliminary rates are 19 percent
less expensive than the CBO projected. States are using their
improved rate review powers to help keep rates affordable and,
according to recent estimates as Congresswoman DeGette
mentioned, many consumers may be able to pay $100 or less per
person per month for coverage in 2014.
When open enrollment begins on October 1, it is one more
step toward putting in place one of the core promises of the
Affordable Care Act: affordable, accessible health coverage
that begins next year. We are working hard to ensure that
consumers have the information they need about their coverage
options. Healthcare.gov has received more than 3 million unique
visits since its re-launch this summer, and as required by the
law, CMS has awarded grants to over 100 organizations to serve
as Navigators.
These grantees are groups and organizations with a proven
ability to reach out to likely marketplace consumers in their
local communities. Navigators include the Pennsylvania
Association of Community Health Centers, which since 1981 has
been supporting community health centers across the state in
their mission of providing access to quality primary
healthcare. There are organizations like Ascension Healthcare,
which is the Nation's largest Catholic and non-profit health
system; the Martin Luther King Health Center, which has been
serving the people in Shreveport, Louisiana, since 1986; the
University of Mississippi Medical Center; the United Way of
Metropolitan Tarrant County, which will be collaborating with
17 other organizations in assisting Texas residents and which
has been helping people in the Fort Worth and Arlington areas
for 90 years; and the University of Georgia, which was founded
in 1785, as the Nation's first state-chartered university.
I find the suggestion that these organizations, that the
United Way or the University of Georgia or any of the rest are
going to prey on people by stealing their identities to be
utterly without foundation. Helping people is the reason that
these organizations exist.
Navigators are prepared to provide accurate and impartial
assistance to consumers shopping for health insurance coverage.
They will be required to adhere to strict privacy and security
standards including how to safeguard a consumer's personal
information. Navigators will be required, the individuals will
be required to complete approximately 20 hours of initial
training to be certified, will take additional training
throughout the year, and will renew their certification yearly.
The work they will be doing is similar to work that has
been done for years by SHPS to help Medicare beneficiaries
understand their options. I find it really unfortunate that
many of these organizations are facing distracting scrutiny
while they prepare to begin this important work.
One organization, a group prepared to serve individuals in
four states, withdrew from the program as a result of this
scrutiny. This type of scrutiny risks creating an insinuation
that these well-respected organizations and institutions like
food banks, large state universities, and United Way chapters
have somehow done something inappropriate before they have
spoken to a single consumer. These groups are trying to do the
same type of work they have done in their communities for years
and in some cases decades, and it is unfortunate that they are
the subject of inquiries that suggest they are doing something
wrong by helping people in their communities enroll in
healthcare coverage. They are feeling obligated to spend time
responding to inquiries and insinuations that they are hiring
unqualified staff or won't follow federal grant regulations
instead of beginning the task of helping people in their
communities. It is disappointing that their resources and
attention have been diverted at this critical time.
I have been asked countless times over the last year
whether we will be ready for day one, and it often brings to my
mind the implementation of Medicare Part D. Now, I wasn't at
CMS during Medicare Part D implementation, but I read the news
stories like everyone else, and I understand that there were
some serious challenges; seniors not enrolled correctly in
plans, beneficiaries turned away from pharmacies without their
medications. But CMS solved these problems, and the Part D
Program is now strong and successful.
And if you ask beneficiaries about Part D today you won't
hear, oh, that is the program that had so many problems when it
launched. Instead you will hear, that is the program that helps
me afford my medication.
And I believe that will be the story of the Affordable Care
Act. The people actually benefiting from the law won't be
talking about what happened on October 1 or on January 1. They
will talk about how their child can get health coverage even
though he has a pre-existing condition. They will talk about
how they no longer have to pay more for premiums just because
they are women. They will talk about how they finally decided
they could retire because they can now afford coverage they buy
on their own. They will talk about the security of not having
to face bankruptcy due to a diagnosis.
We may encounter some bumps when open enrollment begins,
but we will solve them because it is what we do. We are here to
help people get health insurance, and we at CMS take this
responsibility very seriously.
Thank you, and I am happy to answer your questions.
[The prepared statement of Mr. Cohen follows:]
[GRAPHIC] [TIFF OMITTED]
Mr. Murphy. Thank you. I now recognize myself for 5 minutes
and start out by saying, Mr. Cohen, I want you to understand
the function of this committee. Lack of readiness or
preparation on your part does not constitute a reason that
Congress gives up its responsibilities to have oversight. So I
hope you have an open mind as we go through this. You have
previously been here at a hearing before. You told us
everything was fine. It was like the scene in ``Animal House,''
where the person is saying, remain calm, all is well, while
chaos reigns.
So let me ask you a few things here. On July 22 members of
this committee wrote to Secretary Sebelius requesting
information on the price of health insurance to be offered in
the federal and federal state exchanges. HHS still hasn't
announced the approved plans and premium prices. Am I correct?
Mr. Cohen. That is true.
Mr. Murphy. OK. Now, that letter was sent requesting what
plans and prices would be available to consumers in the federal
exchanges. When will this information be made public?
Mr. Cohen. Consumers will be able to go online and see what
plans are available to them on October 1.
Mr. Murphy. So are you able today with less than 2 weeks
before enrollment begin to provide any information on prices
and availability for federal exchanges?
Mr. Cohen. My understanding is that we will be putting out
some information on rates soon.
Mr. Murphy. And certainly it is important for the
Navigators to know what kind of products they are selling, and
training was essential for that. So they do not have this
information, yet, either?
Mr. Cohen. Navigators will not be selling any products.
Mr. Murphy. They will be advising people about products
that they can then choose themselves. Am I correct?
Mr. Cohen. They will be advising, providing information,
impartial information about consumers' options for purchasing
affordable healthcare through the marketplaces. Yes.
Mr. Murphy. I understand that, which is advising them of
the things the person can then choose.
So turning to the Navigators more, now, originally this
program was intended to cost $54 million. Correct?
Mr. Cohen. At one time we put out a funding opportunity
announcement for $54 million.
Mr. Murphy. That is right, and then you ended up spending
$67 million. Correct?
Mr. Cohen. We increased in order to be able to provide more
outreach----
Mr. Murphy. Right.
Mr. Cohen [continuing]. And more help for people across----
Mr. Murphy. Well, in June, 2013, a GAO report stated CMS
expected to spend $54 million in the program. Are you familiar
with that report?
Mr. Cohen. There have been a lot of GAO reports.
Mr. Murphy. Well, this relates to what you do for a living,
so I would hope you would see that one. On July 21, 2013, CMS
Administrator, Marilyn Tavenner, wrote to this committee
answering some questions we had about the Navigator Program. In
that letter she stated that the Navigator Program would cost
$54 million. Two weeks later HHS announced that the Navigator
grants would total $67 million, a $13 million increase.
So when did HHS make that decision to increase funding for
the Navigator Program? Do you have any idea of the date of
that?
Mr. Cohen. I do not.
Mr. Murphy. And what funding did HHS use for this 13
million increase in the budget for what you do?
Mr. Cohen. I am sure we can get that information for you.
Mr. Murphy. You have no idea? Suddenly it appeared and you
don't know where it came from?
Mr. Cohen. No. I know that we have had an ongoing interest
in making sure that we can do as much outreach and help as many
people get enrolled in coverage as possible, and additional
resources were----
Mr. Murphy. Yesterday the Administration announced new
initiatives to combat fraud under the Healthcare Law by
creating a call center along with rapid-response measures to
address privacy and cyber security issues. Can you address what
these will entail?
Mr. Cohen. I know that we have a call center now. The call
center is live now. I think the announcement was that there
will be a way for people to report any instances of fraud, and
we are working interagency to work with the FDC, for example,
to make sure that the appropriate people get that information.
Mr. Murphy. So you agree the potential for fraud exists
then?
Mr. Cohen. There has actually been fraud before the
Affordable Care Act, and so this is not the first program that
has ever been subject to fraud, and I imagine that there will
be fraud that occurs.
Mr. Murphy. But you are aware it is a possibility, and you
are going to watch this very carefully?
Mr. Cohen. We are.
Mr. Murphy. We will be following up on that. Now, privacy
is extremely important. Are the Navigators bound by the HIPAA
laws with regard to the laws for healthcare people and----
Mr. Cohen. Well, the Navigators will have absolutely no
access to personal health information.
Mr. Murphy. But they may get some in the process. Someone
may say which plan will cover, I have this kind of an illness,
I have this sort of problem. They may get that not necessarily
soliciting it, and so will there be any laws binding them to
confidentiality in not keeping those records.
Mr. Cohen. Well, the terms of the grant and the terms of
the cooperative agreement that we have with Navigators spells
out very clearly their obligations with respect to keeping----
Mr. Murphy. Correct, but I know I talked to one navigator
group from Pennsylvania who I think is going to do a good job
on this because they are already bound by HIPAA laws but not
all have that in terms of how they will keep their records,
what they will tell employees to do. And so my question is are
there any laws in place that prevent people from maintaining or
sharing information that may be healthcare related?
Mr. Cohen. So there are, and the Affordable Care Act in
particular provides a $25,000 fine per occurrence if anyone
uses any information obtained in the course of helping someone.
Mr. Murphy. That is obligation for the Navigators?
Mr. Cohen. Yes.
Mr. Murphy. OK. Will Navigators be going door to door?
Mr. Cohen. We will be issuing instructions to Navigators
that they should not be going door to door.
Mr. Murphy. So that will be the ruling you will have with 2
weeks left, they will not be doing that?
Mr. Cohen. That is right.
Mr. Murphy. They will remain in other public places?
Mr. Cohen. They can't be enrolling anyone now because no
one can be enrolling now, so in terms of going door to door to
solicit people to enroll in coverage, they will be instructed
not to do that, and it is timely because no one can be going
door to door enrolling anyone because no one can enroll today.
Mr. Murphy. Thank you.
I now recognize Ms. DeGette for 5 minutes.
Ms. DeGette. Thank you, Mr. Chairman.
Now, briefly, Mr. Cohen, what is the purpose of the
Navigator Program?
Mr. Cohen. The purpose of the Navigator Program is to
educate people with respect to the benefits under the
Affordable Care Act and then to provide objective, impartial
help to them if they want it, in finding out what they are
eligible for and enrolling in coverage.
Ms. DeGette. And can you move your mike a little closer?
Thanks. And who decides who these certified Navigators are
going to be?
Mr. Cohen. We had a grants process much like every grants
process that is----
Ms. DeGette. So you had a panel that edited the
applications, and they tried to choose people who had
experience and some kind of presence in the community. Correct?
Mr. Cohen. First they were screened by the Office of Grants
Management at CMS and then there was an independent panel that
selected the ones that had scored----
Ms. DeGette. OK, and in order to receive a Navigator grant,
the applicant has to demonstrate they have existing
relationships or could establish relationships with employers.
Is that correct?
Mr. Cohen. Correct.
Ms. DeGette. And Navigator awardees have to complete a
training program, including 20 to 30 hours of an HHS-developed
program. Is that right?
Mr. Cohen. That is true.
Ms. DeGette. And they have to pass an exam. Is that right?
Mr. Cohen. Yes.
Ms. DeGette. And part of that exam includes understanding
privacy and affordability programs. Is that right?
Mr. Cohen. Yes.
Ms. DeGette. So those people to get the Navigator grants,
they have to certify that they are going to comply with any
privacy of HIPAA or any other law. Is that correct?
Mr. Cohen. Right.
Ms. DeGette. Now, under the Affordable Care Act--let me
back up. Right now when somebody signs up before the ACA, when
they signed up for health insurance, people would often have to
fill out applications as long as 35 pages. Is that correct?
Mr. Cohen. That is right.
Ms. DeGette. And those applications included divulging all
kinds of personal medical information because that was
necessary for the insurance companies to figure out what the
insurance rates, because they could discriminate on pre-
existing condition and gender and all kinds of other issues.
Right?
Mr. Cohen. Yes.
Ms. DeGette. But right now under the ACA none of that pre-
existing condition information is even relevant. Isn't that
right?
Mr. Cohen. That is true.
Ms. DeGette. So to sign up on the marketplaces and
exchanges, people aren't even going to have to divulge that
kind of information. Is that right?
Mr. Cohen. That is true.
Ms. DeGette. So even if a navigator went to the door and
was trying to explain to somebody about the exchanges, they
wouldn't have to get that information from somebody. Right?
Mr. Cohen. It is not part of the application. Correct.
Ms. DeGette. Right, but even if somebody just kind of off-
handedly talked about their information, the Navigator would be
trained that that is private. Right?
Mr. Cohen. Correct.
Ms. DeGette. OK. Now, I want to ask you some other
questions about the marketplaces. Now, are the marketplaces
going to be up and going on October 1?
Mr. Cohen. They will.
Ms. DeGette. Is the federal exchange going to be up and
going on October 1?
Mr. Cohen. It will.
Ms. DeGette. And that goes, as I understand, people can go
on the marketplace for a 6-month period to sign up. Is that
correct?
Mr. Cohen. That is true.
Ms. DeGette. So if somebody wanted, somebody like, for
example, a member of Congress, wanted to go on the federal
marketplace and look and see what plans were available, they
could go on October 1. Right?
Mr. Cohen. They will.
Ms. DeGette. But then they would have some additional time
to sort through all those plans and figure out what they
wanted. Is that right?
Mr. Cohen. Yes.
Ms. DeGette. Now, if they do sign up, their coverage starts
January 1, 2014. Is that right?
Mr. Cohen. That is the earliest they can start. Yes.
Ms. DeGette. Right. Now, 23 states including Colorado and
the District of Columbia are either running their own
marketplaces or they are doing a marketplace in partnership
with the Federal Government. Is that correct?
Mr. Cohen. Yes.
Ms. DeGette. Will those states be ready for enrollment for
the start of coverage on January 1?
Mr. Cohen. My understanding from our communications with
the states is that all of them will be opening for open
enrollment on October 1.
Ms. DeGette. OK. Now, can you give me a sense of the
milestones and benchmarks that this subcommittee should be
looking at to measure the progress over the next few weeks and
months, because we keep hauling people in here. Everybody says
they are ready. So I would like to know what are the benchmarks
that we should be looking for?
Mr. Cohen. Well, I think that there are two types of
benchmarks. One are the sort of internal types of benchmarks,
how is the call center response time working, how is the Web
site working, you know, those kinds of things that just--how
are our systems functioning, and then, of course, there are the
external--how many people are getting enrolled. I would say
that we don't anticipate a huge amount of enrollment
necessarily in October because as you've pointed out coverage
starts in January, and people have until December 15 to pay
their premium.
Ms. DeGette. Right. OK, and I guess you are prepared if
there are glitches to address those glitches quickly. Is that
right?
Mr. Cohen. Absolutely. We are very well mobilized.
Ms. DeGette. Mr. Chairman, I just want to say one more
thing. I said this before, but when we did Medicare Part D,
even though I voted against it and I opposed it, I did outreach
to my constituents, and I got my newsletter that I sent out to
everybody. I will let you look at it if you want to. We can put
it in the record, but I would suggest to everybody on both
sides of the aisle, it is incumbent to all of us as elected
officials to try to get as many people enrolled in this program
as we can who don't have insurance now. I think it would be a
good idea. I hope it works, and I think we should all hope it
works.
Thank you.
Mr. Murphy. Thank you, and I hope that all those people
from IBM, Xerox, and UPS who have been cut from their insurance
plan will be able to look at that.
I now yield 5 minutes to Mr. Burgess.
Mr. Burgess. Thank you, Mr. Chairman.
Mr. Cohen, if I heard correctly in response to a question
from Chairman Murphy, you said that the Navigators would not be
going door to door. Is that correct?
Mr. Cohen. The federal grantees will be getting
instructions that Navigators are not to go door to door for the
purposes of enrolling anyone. Yes.
Mr. Burgess. Could I ask you? You have an evidence binder
there next to you. Could I ask you to turn for a moment to Tab
2 in that binder? All right. In that project abstract summary,
so I assume this is the summary that the company or the group
provided you in their application to receive monies from the
Navigator Grant Program. The second paragraph of that summary
reads, ``The proposed program will deploy 25 exchange
Navigators in each of the targeted counties. Exchange
Navigators will seek out uninsured eligible country residents
by going door to door.''
Is that consistent with your statement to Chairman Murphy
that the Navigators would not be going door to door?
Mr. Cohen. Sure. We are going to tell them they shouldn't
be going door to door, and I am sure they are going to abide by
our terms and conditions.
Mr. Burgess. But they applied for a grant, and they told
you that they are going to seek out eligible individuals by
going door to door. Did you read the application?
Mr. Cohen. So first of all I want to say I have never seen
this before. I had no role at all in the grant award process,
so I am seeing it for the first time now. I understand that
that is what they said in there. I see those words. They are
going to be instructed from us as part of our agreement with
them not to go door to door, and I am confident, Congressman,
they will obey that instruction.
Mr. Burgess. Well, then I have this question for you. Do
you know how many money they received in their grant?
Mr. Cohen. I would have to look it up.
Mr. Burgess. It was $1.2 million. I will help you. My next
question is can we have the money back? They provided an
application to you which was approved in the Navigator Program
and yet they outlined an activity which you said is going to be
expressly prohibited.
Mr. Cohen. I am confident they will find other activities
that will be very well suited to helping people get enrolled in
coverage and that they will be a wonderful grantee.
Mr. Burgess. I am confident the taxpayer would like to have
their $1.2 million back if the grant application was approved
based on information which you said would make it ineligible
for approval.
Mr. Cohen. I didn't say that, Congressman.
Mr. Burgess. Let me ask you this, and I have a series of
questions, and in the time-honored tradition of this committee,
I am going to ask for a yes or no response. Will the enrollment
process be ready October 1 of this year?
Mr. Cohen. Consumers will be able to go online, they will
be able to get a determination of what tax subsidies they are
eligible for, they will be able to look at the plans that are
available where they live, they will be able to see the premium
net of subsidy that they would have to pay, and they will be
able to choose a plan and get enrolled in coverage beginning
October 1.
Mr. Burgess. Let me rephrase the question. Will the
enrollment process be ready by October 1 of this year?
Mr. Cohen. I have nothing further to add to my answer.
Mr. Burgess. Your answer sounded as if it could be a yes
but left room for a no. So we will mark down an equivocal
response to that question.
Will the excahnges be ready on January 1 of 2014?
Mr. Cohen. Consumers will be able--it is the same answer.
Mr. Burgess. Consumers will be able----
Mr. Cohen. To go online, get a determinant of what they are
eligible for in terms of the subsidy, find out what the subsidy
amount is. They will then be able to go and look at the plans
that are available to them where they live, and they will be
able to--see the premium net of subsidy, and they will be able
to choose a plan and get enrolled in a plan beginning October
1.
Mr. Burgess. And that will be ready on January 1 of 2014?
Mr. Cohen. That will be ready on October 1. That is my
understanding. Yes.
Mr. Burgess. Not your understanding. I need a yes or no
answer. You are in charge.
Mr. Cohen. Well, my answer is based on what I have been
told by the people who are building the IT System. So it is my
understanding.
Mr. Burgess. Will full implementation of the law on January
1 cause employers to alter or drop coverage for their
employees? Yes or no?
Mr. Cohen. I don't know the answer to that question. I know
that employers make lots of decisions for lots of reasons.
Mr. Burgess. OK.
Mr. Cohen. Some having to do with the Affordable Care Act,
many having nothing to do with the Affordable Care Act.
Mr. Burgess. I guess that is a no. Will full implementation
of the law on January 1 result in reduced costs for all
Americans as routinely promised by their President?
Mr. Cohen. Without accepting your characterization of what
the President said, I think what we are seeing that competition
in the marketplace is causing competitive rates to be available
to many consumers.
Mr. Burgess. After full implementation of the law on
January 1, will all Americans still be able to keep their
current coverage if they like it as promised by the President?
Mr. Cohen. Again, without accepting your characterization
of what the President said, grandfather plans are allowed to
continue to exist without change under the Affordable Care Act.
It is up to private insurance companies what products they
offer in the market.
Mr. Burgess. Thank you, Mr. Chairman. I hope we have time
for additional questions, but I will yield back at this point.
Mr. Murphy. The gentleman yields back.
Mr. Dingell, you are now recognized for 5 minutes.
Mr. Dingell. I commend you for these hearings. It is
important that we have proper, friendly, sympathetic, and
intelligent oversight to get this program off its feet and
going in the direction that we want it to go. This subcommittee
has a long and successful record of conducting such oversight,
and it has informed the full committee of the Congress of
critical facts. Used properly, strong congressional oversight
will lead to much good for the American people.
I am fearful that this current investigation into the
Navigator Program might be turning into something less
desirable, and I hope that we will work together to avoid it.
One of Michigan's Navigators is a group called Access, a
community-based social services organization I have worked with
for more than 40 years. There is nobody that knows our
communities better than them, and this is exactly the type of
group that we should be empowering to help people sign up for
health coverage. They are an institution which believe it or
not serves all parts of the society, all racial groups, all
religious groups, and does so without discrimination
whatsoever.
My questions are going to focus on strong protections that
exist in the Navigator Program and the status of ACA
implementation. My questions will elicit yes or no answers.
I am assuming, Mr. Cohen, that all of your Navigators meet
all of the standards of any Federal Government contractor. Is
that right?
Mr. Cohen. It is a grant program. Yes.
Mr. Dingell. In regards to discipline, integrity, and
proper behavior. Is that right?
Mr. Cohen. Yes.
Mr. Dingell. All right, and I hope as you need you will
submit additional answers and responses to the questions for
the record.
Are there grants CMS recently awarded to Navigators
required by the Affordable Care Act? Yes or no?
Mr. Cohen. Yes.
Mr. Dingell. Is the training Navigators must go through
comparable to the training of agents and brokers who currently
sell health insurance? Yes or no?
Mr. Cohen. Yes.
Mr. Dingell. Does the Navigator training include
information as to how to protect the privacy and security of
consumers? Yes or no?
Mr. Cohen. Yes.
Mr. Dingell. Are Navigators subject to the same kind of
careful screening as other entities seeking to do business with
the Federal Government? Yes or no?
Mr. Cohen. Yes.
Mr. Dingell. Will the Navigator grantees be overseen in the
same way as other CMS grantees are overseen and held to the
terms of their grants?
Mr. Cohen. Yes.
Mr. Dingell. Now I would like to move to talking more about
the opening of the new marketplaces which are less than 2 weeks
away.
In 2012, were insurers much less likely than in previous
years to request rate increases of 10 percent or more? Yes or
no?
Mr. Cohen. Yes.
Mr. Dingell. Would you submit for the record why that is
so?
Mr. Cohen. Yes.
Mr. Dingell. Do you believe that the rate review provision
in the Affordable Care Act is a factor which led to this
behavioral change on the part of insurers? Yes or no?
Mr. Cohen. Yes.
Mr. Dingell. Do you believe that the marketplaces are
working as intended by making insurers compete over price on
the business of consumers? Yes or no?
Mr. Cohen. Yes.
Mr. Dingell. Is it your expectation that the consumers will
have more and better information because of the structure of
the marketplaces?
Mr. Cohen. Yes.
Mr. Dingell. Would you submit some additional thoughts on
that, please.
Now, in the 16 states for which we have data, our
preliminary rates for health insurance in the marketplace, 19
percent less expensive than predicted.
Mr. Cohen. Yes.
Mr. Dingell. Would you submit additional comments on that
point, please.
Have some insurers submitted bids to participate in the
marketplace only to revise these bids and reduce their prices
when other insurers' rates came in lower? Yes or no?
Mr. Cohen. Yes.
Mr. Dingell. Would you submit additional information on
that question, please.
Will nearly half of consumers likely be able to pay $100 or
less per person for coverage in 2014? Yes or no?
Mr. Cohen. Yes.
Mr. Dingell. Would you submit additional information for
the record on that point, please.
Now, is it correct that eight and ten marketplace consumers
are expected to qualify for subsidies to make health coverage
more affordable? Yes or no?
Mr. Cohen. Yes.
Mr. Dingell. Would you submit additional comments on that,
please?
Now, we are just a few days away from seeing the full
implementation of the Affordable Care Act. I know that there
may be some bumps in the road, but we are headed for the right
direction. American people are suggesting us to set politics
aside and work together for the common good. I am hopeful that
we will take this as an opportunity to work together in a
bipartisan manner. Our constituents expect nothing less than
that.
One thing happened the other day. A spokesman for our good
friend, former member of this committee, Tom Coburn, now in the
Senate, said a government shutdown would be committing ritual
suicide on the order of bad strategy, said his communications
director in the ``National Journal Daily.'' The idea that we
can fully defund ObamaCare through the continuing revelation is
a Washington gimmick to advance political funding goals.
I yield back the balance of my time.
Mr. Murphy. The gentleman's time has expired.
I now recognize Mr. Olson for 5 minutes.
Mr. Olson. Thank you, Mr. Chairman, and welcome, again, Mr.
Cohen, for returning to answer our questions. I know it is a
busy time for you, so I appreciate your time this morning.
Since the last time you appeared before this committee, I
have been home talking to the people of Texas 22 about the
pending ObamaCare enrollment on October 1. Most hadn't heard of
open enrollment. They haven't heard if their employer will
continue to provide healthcare under ObamaCare, and now the
ones who are working 40 hours per week and working for minimum
wage are hearing that they are going to get their wages cut by
25 percent, down to 30 hours or less per week.
But they have heard about Navigators, and they are scared.
They have a lot of questions as, you can imagine, they want me
to ask you, so please give me a direct response and not a
filibuster.
The first question, there are now 104 entities that are
Navigators. Is that correct?
Mr. Cohen. I know it is more than 100. That sounds right.
Mr. Olson. OK. We will assume that is correct. How many of
these Navigators have hired people for the Navigator position
or currently have people in place to be Navigators that fulfill
these requirements? Any idea?
Mr. Cohen. Oh, I don't have the answer to that, but I am
sure we can work with you to get you that information.
Mr. Olson. So we are 7 business days away from this. We
have no idea how many Navigators, how many people have been
hired as Navigators.
Mr. Cohen. No. I didn't say that. I said I don't know, but
we have project officers that are in contact with the
Navigators on a regular basis and at least weekly, and I am
sure we have that information and would be happy to work with
you to get it to you.
Mr. Olson. About the ones that have been hired, now, you
don't know that, but do you know how many have completed or
begun their training yet?
Mr. Cohen. I do not know.
Mr. Olson. OK. About their training, can you provide me
some details about their training? I understand it is a 20-hour
syllabus, and there is some exam at the end. Is that a multiple
choice? How does that exam work? Some details about the
qualifications process.
Mr. Cohen. It is an open book. It is a 20-hour exam. It is
an online course. You go through the course. As you go through
the course, you're asked questions about the material, and you
have to score an 80 percent on each section in order to pass
and get certified.
Mr. Olson. Are applicants required to undergo background
checks like I am sure you did to have your job, like I did in
the Navy? Did Navigators have to have a background check?
Mr. Cohen. So the organizations obviously went through a
very rigorous scrutiny process in order to receive the grants.
The Federal Government has not required that background checks
for the individuals be given, but some states have adopted that
as a requirement as they are permitted to do.
Mr. Olson. And so the people on the street aren't required
to get background checks? You are telling me that the entities
of employment are, but the people actually knocking on doors,
not knocking on doors but getting information out, are not
required to have a background check?
Mr. Cohen. Like the CHIP Program, there is no federal
requirement for there to be background checks. People have been
helping people with Medicare for many, many years, no
background check requirement by the Federal Government. States,
like the CHIP Program, are able to impose that requirement if
they think that is something that is important in their
communities.
Mr. Olson. How about a drug test? You can't get a job out
in the Texas oil fields without a drug test. How about a
Navigator?
Mr. Cohen. There is no requirement that individual
Navigators be subject to a drug test. No.
Mr. Olson. How about guidelines? How much do Navigators get
paid, the people out in the streets? Any idea what the range of
their salary is?
Mr. Cohen. It is determined by each of the grantees. It is
part of the budget that they presented, and the budget
proposals were subject to review by the Office of Grants
Management at CMS like every grantee to make sure that the
amounts being paid were reasonable.
Mr. Olson. Does the program have some quality assurance
checks, like a so-called secret shopper, somebody that checks
up and sees what they are being told is accurate? Do you have
some sort of program to make sure that people give accurate
information? Are you checking up on that?
Mr. Cohen. We will be doing ongoing monitoring and
oversight of the Navigator Program, and it could include secret
shopper.
Mr. Olson. And one final question. I was a panelist for the
Chamber of Commerce Board back home talking about the rollout
of ObamaCare, and we had a couple State Representatives from
Texas on that panel with me. One said that he has heard that
the Navigators who are hitting the streets will have voter
registration cards. Have you heard that? Is that true or false?
Mr. Cohen. The Federal Voter Registration Law requires that
any, that a public program like Medicaid, any application,
people be given, offered information about voter registration.
That is a federal law requirement, and because the application
covers both Medicaid and CHIP and subsidies under the
exchanges, we are required to provide information about voter
registration to people.
Mr. Olson. Thank you. I am out of my time, and I yield
back.
Mr. Murphy. Thank you. I now recognize Ms. Castor for 5
minutes.
Ms. Castor. Well, thank you, Mr. Chairman, and thank you
for calling the hearing.
Mr. Cohen, we are not even in the month of Halloween and
yet the Republicans, one of their favorite scare tactics that
we hear regarding the ACA is that the Affordable Care Act is
going to lead to higher health insurance premiums and rate
shock, but while my Republican friends have made every effort
to convince Americans that everyone's health insurance premiums
are going up on January 1, now we have the data that
demonstrates that that is untrue. These assertions that health
insurance rates are going up simply is not borne out by a
number of analyses that have been conducted.
So let's walk through the information on the Affordable
Care Act health insurance premiums, starting at the beginning.
Mr. Cohen, when people shop for coverage through the
marketplaces, they will be able to compare plans and then
select a plan, sign up for the either private insurance or if
they have a state that expanded Medicaid, Medicaid. Is that
correct?
Mr. Cohen. That is right.
Ms. Castor. And if they have a household income below 400
percent of the poverty level, so if you are an individual at
about $46,000 or a family of four at about $94,000 on a sliding
scale, you will be eligible for tax credits. Is that correct?
Mr. Cohen. That is right.
Ms. Castor. Or Medicaid possibly.
Mr. Cohen. Correct.
Ms. Castor. Well, this week HHS released an analysis and
census data on the 41 million uninsured Americans. Twenty-five
percent of Floridians are uninsured. So you can see why these
new marketplaces will be a Godsend for them, but 41 million
uninsured Americans who will be eligible to enroll in coverage
through the marketplaces. Can you tell us in broad terms what
the analysis said?
Mr. Cohen. The analysis said that about eight in ten will
be eligible for tax credits through the marketplaces.
Ms. Castor. And did it say 23 million will be able to
purchase coverage for less than $100 a month?
Mr. Cohen. That is correct, including the subsidy. Yes.
Ms. Castor. I mean, that is pretty remarkable. Did you have
an idea that the coverage would be that affordable?
Mr. Cohen. You know, I think there were lots of predictions
about what rates would be. I think we have been just enormously
pleased that the marketplace and competition is working, and we
are seeing the availability of low-cost, affordable plans in
many places throughout the country.
Ms. Castor. And these findings have been echoed in recent
studies by the non-partisan RAND Corporation and the non-
partisan Kaiser Family Foundation, two of the most respected,
non-partisan health policy analysts. Are you familiar with
these studies from RAND and Kaiser?
Mr. Cohen. I am generally. Yes.
Ms. Castor. Tell us in broad terms what those studies
found?
Mr. Cohen. Well, Kaiser Family Foundation estimated that in
the 18 rating areas, so that is specific geographic locations
that they looked at, 15 would have premiums below the latest
projections that the CBO had made of what rates would be, and
they talked about a premium for a 40-year-old in the second
lowest called Silver Plan being $320 a month nationally. That
is before the application of subsidies.
Ms. Castor. And, Mr. Cohen, are the plans available on the
Affordable Care Act in the marketplaces, are they a good deal
for the quality of coverage that is being offered?
Mr. Cohen. Well, that is one of the most important things
because these plans all have to have the essential health
benefits that are required by the Affordable Care Act, and they
cannot have annual limits or lifetime limits. So they are going
to be there to provide coverage when people need it.
Ms. Castor. And at the beginning of the hearing I shared
with you and my colleagues the enthusiasm at home, especially
among many of our neighbors who have chronic conditions that
have been barred from insurance coverage. If you have had
diabetes or I talked with a gentleman with multiple sclerosis,
HIV, AIDS. I mean, we all have neighbors or family members that
have been barred from coverage because of these pre-existing
conditions, and this is really going to, like I said, it is
giving them hope. They can finally now obtain coverage, and so
will this high-quality coverage that is available for the same
price, will it be available for the same price even for many of
our neighbors that have those pre-existing conditions?
Mr. Cohen. That is exactly right. They cannot be charged
more because of the pre-existing condition.
Ms. Castor. So every Republican announces premiums under
the ACA. If you noticed, they ignore these key facts that
coverage has gotten better, that bar against discrimination for
our neighbors who have these pre-existing conditions now will
go away for 129 million Americans, and they ignore the tax
credits. In my State of Florida they said, let's conduct a
study, and we will show you that it is not affordable, but then
they didn't build into the study the tax credits that are
available for families and neighbors and small businesses, too.
And then the one that really takes the cake, do you know in my
home state, I love my state, but we need help when it comes to
healthcare coverage, but one of the things they did that
probably wins the award for obstruction and sabotage is they
actually took away the Insurance Commissioner's ability to
regulate rates and negotiate rates.
Is there any other state that has done that to your
knowledge?
Mr. Cohen. I don't believe so, and I was a State Regulator
as General Counsel to California Insurance Department, and I
know Kevin McCarty very well, and it is an excellent insurance
department, and it is unfortunate that their authority was
taken away.
Ms. Castor. Thank you very much.
Mr. Murphy. The gentlelady's time has expired.
Now got Mr. Johnson of Ohio for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman.
Mr. Cohen, first of all, good morning. Thank you for being
here today.
First question for you, whose department is responsible for
overseeing and administering these grants to the Navigators?
Mr. Cohen. It is a combination of my office and our Office
of Grants Management, both within CMS.
Mr. Johnson. OK, but you are responsible for overseeing
that process. Correct? You are the director.
Mr. Cohen. When you say process----
Mr. Johnson. Yes. The grant process.
Mr. Cohen. The process of selecting the grantees or the
process of overseeing the grantees and their work?
Mr. Johnson. Process of overseeing and selecting.
Mr. Cohen. Well, so I personally had no role in the
selection process. We do that through an independent review
panel.
Mr. Johnson. OK, but you oversee it. Correct?
Mr. Cohen. Well, I had no role on the selection process.
Mr. Johnson. No. Who oversees the grant process? What is
your role in the grant process?
Mr. Cohen. So in the grant selection process I had no role.
Mr. Johnson. What is your role in the grant process? I
didn't say the grant selection process. What is your role in
the grant process?
Mr. Cohen. My office is responsible for overseeing the
grantees' performance now that they have received the grant.
Mr. Johnson. OK. Did you review the criteria for the grant
applications to be reviewed?
Mr. Cohen. I did.
Mr. Johnson. You did? OK. Well, because earlier when you
were asked, you said I don't know. Repeatedly you said I don't
know, didn't have anything to do with that.
Mr. Cohen. No. That is not what I said. I didn't review the
applications. I certainly was part of putting together what the
program would be because that is part of my job but----
Mr. Johnson. OK. The criteria for reviewing the grants--you
stated in your answer to Dr. Burgess that when he asked you if
we could get the money back for those that are doing processes
like door to door that are going to be prohibited, you said
that you were confident that they would find other activities.
You know, I find this rather an odd way of going about
spending the taxpayer dollars because, I mean, if you don't
know where you are going, obviously any road will get you
there. This is consistent with the theme of let's pass the
healthcare law so we can see what is in it. Now you are trying
to tell the American people that we ought to award millions of
dollars in grants and then find out how they are going to spend
it. I would submit to you that that is exactly the kind of
irresponsible governance and irresponsible administration that
the American people have become so frustrated with. And leaders
who purport themselves to be directors, head of agencies that
fane, I don't know, and try to shrug our shoulders and say, I
didn't have anything to do with that, it is disingenuous, Mr.
Cohen.
Mr. Cohen. Well, I respectfully----
Mr. Johnson. First question, when you were evaluating----
Mr. Cohen [continuing]. Disagree with your characterization
of what I said.
Mr. Johnson. Reclaiming my time, Mr. Cohen. Let me ask you
a question. When you were evaluating the Navigator Grant
Program, were there standards on the appropriate amount of
grant spending per enrollee or per individual contacted about
enrollment? You told me you reviewed the criteria, so were
there any standards about that?
Mr. Cohen. I reviewed the criteria for the program. I was--
--
Mr. Johnson. Then you should answer yes or no.
Mr. Cohen [continuing]. Not involved in the budget
discussions with each grantee over what their costs would be.
Mr. Johnson. Was there in the grant process, you told me
you reviewed the criteria, you just got done saying that, were
there any standards on the appropriate amount of grant spending
per enrollee? That is a very simply question.
Mr. Cohen. And I don't recall.
Mr. Johnson. You don't recall. You don't know.
Mr. Cohen. I don't recall.
Mr. Johnson. It goes back to my first statement. Were there
any standards or minimums on the number of health fairs
attended or individuals contacted via advertisements?
Mr. Cohen. I doubt that the funding opportunity
announcement was----
Mr. Johnson. Tell me what you know about the criteria. You
reviewed the criteria. Tell me what you know about the
criteria.
Mr. Cohen. We put out a funding opportunity announcement
that describes the program.
Mr. Johnson. No. I don't want you to tell me what you did.
I want you to tell me what the criteria was. What is the
criteria for a grant?
Mr. Cohen. I don't know how to answer that.
Mr. Johnson. You don't know.
Mr. Cohen. I don't know how to answer your question.
Mr. Johnson. No, you don't know.
Mr. Cohen. No.
Mr. Johnson. And that is appalling to me. Turn to Exhibit
1, please. I think it is reprehensible that you would come
before the American people as a director of a department and
you don't know. You sit there and tell me that you reviewed the
grant process, you reviewed the criteria, and yet you don't
know. You can't give the first sentence about that criteria.
Turn to Exhibit 1, please.
Mr. Cohen. I have it.
Mr. Johnson. OK. This is a Navigators grant application
provided to the committee by the Administration. It shows a
Navigator applicant who expects to facilitate enrollment of 312
people into qualified health plans. You awarded this
organization approximately $80,000 of taxpayer money for only
300 people. Now, I acknowledge you said you didn't have
anything to do with the grant award, but you set up the
criteria.
Do you believe that this is an efficient use of taxpayer
dollars? I can do the quick math.
Mr. Murphy. The gentleman's----
Mr. Johnson. It is $266 per person.
Mr. Murphy [continuing]. Time has expired. We may go to a
second round, so if you have more questions, I will let you
come back to it.
Mr. Johnson. Am I----
Mr. Murphy. We will let you answer.
Mr. Johnson. Oh, I am not even checking the clock. Sorry,
Mr. Chairman. I yield back.
Mr. Murphy. We can go back.
Mr. Cohen. As I said I literally have not seen this before
today. I am happy to go back and look at it and answer your
questions. I just can't do that today.
Mr. Johnson. I am not surprised you haven't seen that
information. I am not surprised at all.
Mr. Cohen. Because I was not part of the grant application
and award process for reasons that I am sure you will
understand.
Mr. Murphy. We will follow up with that.
Mr. Waxman is now recognized for 5 minutes.
Mr. Waxman. Mr. Cohen, do you approve the budgets of the
Navigators?
Mr. Cohen. I did not.
Mr. Waxman. No. Do you?
Mr. Cohen. No, I don't personally.
Mr. Waxman. You don't. Your agency doesn't?
Mr. Cohen. Yes.
Mr. Waxman. Your agency does.
Mr. Cohen. Yes.
Mr. Waxman. OK. So what you did is help establish the
criteria for awarding these grants to Navigators who will help
people know what insurance options are available to them and
help them sort through a new law that they have heard a lot of
negative things about from partisan Republicans who want to
demonize the idea that people will be able to get insurance. I
think that the questions you just had were off the mark and not
appropriate for Congress. I don't think we ought to beat up on
people because they don't like the law.
So the criteria is to select people who can do the job as
Navigators. Right?
Mr. Cohen. Yes.
Mr. Waxman. And you have something to do with that?
Mr. Cohen. Correct.
Mr. Waxman. OK, and then the grants that are made to
different applicants to be the Navigators, who decides that?
Mr. Cohen. We have a process where our Office of Grants
Management, this is the same as every grant, CMS awards a lot
of grants.
Mr. Waxman. Yes.
Mr. Cohen. Every grant goes through a screening process
where they review the application, they review the management
of the applicant, they review the budget, they score them. That
then goes to an independent review committee that makes the
selections based on the criteria and the purposes of the
program.
Mr. Waxman. So no one has basis for criticizing you for
what an independent grant committee reviews and decides. Isn't
that correct?
Mr. Cohen. I agree with you.
Mr. Waxman. OK. Look, I don't even know what this hearing
is all about. We have had so many hearings by the Republicans
to beat up on the Affordable Care Act. They don't like it. I
got the idea. When they wanted to repeal it, they could have
gotten the message out by asking us to vote for it five times.
Instead they voted 41 times. It is because they have nothing
else to do but attack this Affordable Care Act. And why do they
want to do that? Because they want to confuse people. They want
to scare people. That is what this hearing is all about, and in
fact, the people who are doing the work of Navigators they are
called, are now being intimidated by the Republicans, who are
getting a long list of questions, asking them did they do
something wrong, I gather. That seems to me so unfair. You have
got a clinic, you have got people that work in a homeless
shelter, you have got people who work with an ethnic community,
people who are there in the community and know the community
well, and they have been selected and had to go through tests
and classes to be good Navigators, and they are going to do
their job. And now they get letters from members of Congress
asking them to fill out answers to a long list of questions. Do
you know what kind of questions they have been asked?
Mr. Cohen. They have been asked very detailed questions
about both the application process and about what their plans
are for what they are going to do before they have even started
work, before they have even hired their staff.
Mr. Waxman. This is nothing but intimidation by this
committee. Congress has a lot of power. When the Chairman or a
member gets the chance to ask questions, that is a lot of
power, but what we need to do is restrain ourselves from
abusing that power, and I haven't seen much restraint around
here, and I understand one Navigator has already dropped out of
the program because they just said we don't have enough money
to do the work of answering questions from Congress as well as
reaching out to the community. Isn't that right?
Mr. Cohen. Yes. That is true, and I have heard from others
that are very concerned. They don't know what to do with, in
response to this, to these inquiries that they have gotten.
Mr. Waxman. I just think this is such an abuse of power to
intimidate Navigators who are going to explain the new law to
people. In California we are running the program, and we
license people who sell private insurance, and the state has
taken over the responsibility of approving the Navigators,
hasn't it?
Mr. Cohen. Yes.
Mr. Waxman. So they have a job to do, they have been
checked out to be sure they are people who are capable of doing
the job. We don't call in private insurance salesmen to ask
them a whole bunch of questions, but when they are trying to
just get the community to understand something new, this
committee abuses its power and wants to ask all sorts of
questions, and at a time when they are trying to run this
program with a couple of weeks left before the opening of the
exchanges.
Mr. Cohen. And I would just add if I might that any state
that wanted to run their Navigator Program had the ability to
do that either by operating its own marketplace or by being a
consumer assistance partner with us. They could have taken over
the whole thing.
Mr. Waxman. Well, my state is doing a good job. We are
going to have a great success in California. I think we are
going to have success around the country unless Republicans
intimidate people, whether it is at the state level or the
federal level, to scare them about the idea that they can get
insurance that has been denied them in the past, and the
Republicans said nothing about it but denied them in the past
because they had pre-existing medical conditions----
Mr. Murphy. The gentleman's time has expired.
Mr. Waxman [continuing]. Or they couldn't afford the
insurance policy. And so I don't know what this hearing is all
about except to intimidate people, and I resent it, Mr.
Chairman, and I resent the kind of questions that our witness
has just been subjected to by my colleague.
Yield back my time.
Mr. Murphy. Yield for question and query. You had made a
reference to California is taking over these things, and they
also have laws for insurance agents who sell these policies.
Mr. Waxman. Yes.
Mr. Murphy. Are you saying that it would be under the same
guidance or rules or regulations as an insurance agent? Could
you clarify that for the record?
Mr. Waxman. Well, Mr. Cohen could probably do it better,
but as I understand it, California is going by the standards
set by the Federal Government. Isn't that right? Why don't you
answer?
Mr. Cohen. California because it is operating its own
marketplace has its own Navigator Program, and it is not
requiring Navigators to be agents and brokers. We have issued
regulations saying that states may not do that, but it has put
in additional requirements above and beyond the federal
requirements as states may do.
Mr. Murphy. Just for clarification I am just confused
because I know many states have rules about continuing
education, fingerprinting, background checks, licensing tests
for agents. So if they are under the California Program they
are not going to be part of those same sort of rules? There is
a separate level?
Mr. Cohen. I am not 100 percent familiar with what
California is doing, but I believe that California is requiring
backgrounds checks and fingerprints.
Mr. Murphy. Could you just let us know?
Mr. Cohen. Sure.
Mr. Murphy. Thank you very much.
Now recognize Mr. Scalise for five questions--5 minutes.
Mr. Scalise. Hopefully I can get to more than five
questions, but I will do my best to get through the questions I
have, and Mr. Chairman, I want to thank you for having this
committee. I think it is important that we have oversight over
a program that is involving not only $67 million of taxpayer
money but a new program where these Navigators, people will be
going throughout America trying to sign people up for the
President's Healthcare Law that has missed so many deadlines,
that has had so many problems. For somebody to kind of
insinuate that we should not be asking real tough questions,
American people have tough questions. That is why they sent us
here. I would hope, Mr. Cohen, you are here to give
straightforward answers to the questions that people have, and
anybody who thinks that sunshine and transparency will
undermine the law, maybe they are right. Maybe the fact the
more people find out about this law they don't like it. That is
not our fault. That is the fault of such a bad law that the
more people find out about it they don't like it.
Mr. Cohen. I always do my best, Congressman, to answer the
questions.
Mr. Scalise. I appreciate that, and do you think any of
these are unfair questions?
Mr. Cohen. I think I better not respond to that one.
Mr. Scalise. Not only are you under oath, but the President
that you work for, the President said on a campaign promise
that he would be the most transparent President ever, and all
of the sudden we start asking basic questions, and people are
feigning that we shouldn't be asking tough questions, because,
boy, that poor President, it might make his law look bad if
people find out just what is in it.
Mr. Cohen. Congressman, I have no problem with answering
questions of me. This is the seventh time that I have testified
before a Congressional committee or subcommittee since
December. I have always done my best to answer the questions. I
have always done my best to provide additional information when
I wasn't able to answer the question.
Mr. Scalise. OK. I just want to make sure----
Mr. Cohen. The concern that I have--so any questions you
have for me or for us as a department----
Mr. Scalise. I want to ask you about background.
Mr. Cohen [continuing]. The concern that I have is for the
scrutiny that these Navigators groups were put under even
before they ever----
Mr. Scalise. Let me ask you. If a Navigator----
Mr. Cohen [continuing]. Started their work.
Mr. Scalise [continuing]. And I want to ask you to get the
committee the name of any Navigators who dropped out of the
program because of scrutiny, I would ask you can you get that
information to this committee?
Mr. Cohen. Yes.
Mr. Scalise. Because if any Navigator dropped out of the
program because they didn't want to be held accountable for the
taxpayer money they are receiving, they don't belong in the
program. They ought to get out of the program.
Mr. Cohen. That wasn't the reason.
Mr. Scalise. Well, then let's see the names of those
people, and we will follow up.
Mr. Cohen. The reason that it was----
Mr. Scalise. We are asking real questions. They ought to be
providing answers just like you should.
Mr. Cohen. That wasn't the reason.
Mr. Scalise. They are getting taxpayer money. I want to ask
you about criminal background checks. This is a big concern of
a lot of people I know in my district and when I talk to
colleagues, others. Why is it that you did not choose to
include background checks on people that are going to be going
around asking people for very secured, personal information
about their health?
Mr. Cohen. First of all, they are not going to be asking
people information about their health.
Mr. Scalise. These people will be having----
Mr. Cohen. That is wrong.
Mr. Scalise [continuing]. Conversations with Navigators
about healthcare.
Mr. Cohen. They are not going to be asking----
Mr. Scalise. They are going to be trying to give them
advice, aren't they, about what kind of healthcare options they
have in these exchanges? Is that what----
Mr. Cohen. They are not going to be asking people for
information about their health. That is not part of the
application.
Mr. Scalise. They will be asking them healthcare questions.
Mr. Cohen. They are not going to be asking them for
information about their health. It is not part of the
application.
Mr. Scalise. So let me ask you this. If somebody just got
released from prison for a conviction on identity theft, would
that person be eligible to be a Navigator? Yes or no? You are
under oath.
Mr. Cohen. I am confident that the organizations that we
have given grants to----
Mr. Scalise. Can they be eligible? Are they eligible? It is
a yes or no question. I am sure what you hope, if you hope that
they are not eligible, why didn't you make that a rule? Am I
incorrect in saying that a person who was just released from
prison on identity theft can be a Navigator under your rules?
Is that an inaccurate statement?
Mr. Cohen. We have had----
Mr. Scalise. Because I am making that statement right now.
Your rules allow someone who committed identity theft to be
eligible to be a Navigator. If I am saying anything incorrect,
you just correct me right now.
Mr. Cohen. We have had experience for many, many years with
the CHIP Program. There was no federal requirement for
background checks in the CHIP Program.
Mr. Scalise. OK. So my statement is correct.
Mr. Cohen. I am not aware----
Mr. Scalise. If you correct me, then I will stop saying it,
but I just made a statement. If I said anything inaccurate,
please correct me, but if you don't, I will keep making that
statement.
Mr. Cohen. There is no federal requirement for background
checks or criminal record checks----
Mr. Scalise. OK. Stop right there.
Mr. Cohen [continuing]. In the Navigator Program. Some
states----
Mr. Scalise. Was there a concern----
Mr. Cohen. Excuse me.
Mr. Scalise. No. That is my time. He didn't answer my
question.
Mr. Waxman. Point of order. The gentleman ought to be given
the courtesy to answer the question.
Mr. Scalise. Well, he will be given the courtesy. I will
ask one follow-up question, and then I will let you have the
time.
Mr. Cohen. Congressman, I ask for your support here in
being able to answer these questions.
Mr. Murphy. One more question.
Mr. Scalise. The question I have is were you concerned that
invoking criminal background checks might limit the number of
people that would apply to be Navigators?
Mr. Murphy. Mr. Cohen, you may answer the question.
Mr. Cohen. We want to get as many--we had a number of
factors. It was not clear to us that we have the authority to
require the criminal background checks, and we wanted to make,
we left it up to the states to determine whether that was a
requirement that they wanted to impose.
Mr. Scalise. So that was a yes or no question I asked. I
would just ask if you could give a yes or no answer to a yes or
no question. Were you concerned that invoking criminal
background checks might limit the number of people that would
apply to be Navigators?
Mr. Cohen. The cost and the difficulty of doing criminal
background checks, yes, we were concerned about that.
Mr. Murphy. The gentleman's time has expired.
Mr. Cohen, would you be able to at some point in the near
future provide information on, you said some states have it,
some states don't, just so we can have that.
Mr. Cohen. Sure. I would be happy to.
Mr. Murphy. And those issues are obviously a concern I
think from members on both sides of the aisle to make sure that
the people coming through are trustworthy.
Now recognize Mr. Tonko for 5 minutes.
Mr. Tonko. Thank you, Mr. Chair, and Mr. Cohen, thank you
for returning to the committee and for your diligent work thus
far in trying to implement probably the biggest reform to our
Nation's healthcare system in our history. This is no small
task, and so we all appreciate, I would hope we all appreciate
the commitment and grace you have shown in taking on this work,
and I have some questions, and I will allow you to answer them
and not talk over you.
We have understandably heard a lot already today about the
exchanges which are the most visible piece of the ACA. So I
wanted to take the time to ask you about some of the other
insurance reforms under ACA that your center is responsible
for.
Under the ACA the center is charged with providing support
to consumers when insurance companies deny payment for a
service or treatment which have coverage guaranteed under ACA
such as preventative services. One such example of a guaranteed
benefit under ACA is BRCA testing and genetic counseling for
women meeting certain risk criteria for heredity breast and
ovarian cancer.
However, I have heard reports of several women in New York
who have been denied BRCA testing despite meeting the criteria
for testing and receiving medical advice to have the testing
done. My understanding is that this should not happen and that
your center is charged with ensuring that it doesn't.
What resources and assistance does the center offer for
consumers who need to appeal health insurance claims decisions,
and where could consumers gain easy access to these resources?
Mr. Cohen. So there is a requirement under the Affordable
Care Act for an external appeal process after someone goes
through the process through their insurance carrier, and New
York is probably running that appeals process. I would have to
go back and look. Some states are doing it. In some cases it is
the Federal Government that is doing it if the state doesn't
have a process that meets the required standard.
In addition, we work very closely with the state
departments and insurance when we learn of something that is a
systemic problem, so if it is not just, you know, one
particular individual or two, you know, but it looks as though
a particular carrier or even more broadly all the carriers in a
market or whatever are not abiding by the provisions of the
Affordable Care Act, we work very closely with state insurance
departments to make sure that they do.
Mr. Tonko. Thank you, and perhaps if you could look more
closely at that specific situation, I would appreciate it.
Mr. Cohen. We would be happy to.
Mr. Tonko. As you know, the implementation of the
Affordable Care Act will extend federal parity protections from
Mental Health Parity and Addiction Equity Act to more than 62
million Americans. However, given the delay in issuing final
parity regulations, it is doubtful the American people will
enjoy the full protections of mental health parity consistent
with the spirit of that legislation as the ACA goes into full
effect in 2014.
With another terrible tragedy unfolding again this week
here in DC, the need for a robust national commitment to mental
health has been highlighted yet again. We have heard from
numerous Administration officials that a final mental health
parity regulation would be finished by the end of the year, a
date which is rapidly approaching.
Can you provide us with any more details on when to expect
any such final parity rule?
Mr. Cohen. So we have committed that there will be a rule
out by the end of the year. I am confident there will be. I
know work is ongoing. I have been to meetings where we have
been reviewing the provisions of the final rule. It is moving
through our process. I can't give you an exact date of when it
will be coming out, but it will be coming out by the end of the
year.
Mr. Tonko. OK, and can you describe in detail the current
investigation and enforcement process that your office goes
through when it receives a complaint about parity violations?
Mr. Cohen. Sure. So as with many federal law provisions,
HIPAA, and mental health parity, again, the states are the
principle primary enforcer. So what we typically do when we
hear about problems, and we do have a hotline where people can
call and, you know, tell us about problems they are having with
their insurance company, we generally will reach out first to
the state department. There have been some instances since I
have been at CCIIO where the state has told us that they are
not able to deal with the problem, and we have dealt directly
with the insurance companies to make sure that they are
complying.
Mr. Tonko. Yes.
Mr. Cohen. We have also done some outreach and education
because I know that the requirements of the Mental Health
Parity Law are not as well-known and understood, and so we have
been doing some outreach and education both to the issuer
community and to the state insurance departments to make sure
they understand the provisions of the law.
Mr. Tonko. When these investigations, Mr. Cohen, of parity
violations are conducted, are the results of these
investigations made public?
Mr. Cohen. It depends. What we try to do normally is get
compliance, and if we are able to get compliance, then--and
there is no administrative action that is begun, then typically
that would not be public.
If we go to the point of actually beginning administrative
action and the possible imposition of civil monetary penalties,
that would be public.
Mr. Tonko. I know my 5 minutes are up, and with that I----
Mr. Murphy. I recognize Mr. Harper for 5 minutes. Thank
you.
Mr. Harper. Thank you, Mr. Chairman. Mr. Cohen, good to see
you again, and I have some questions. If I could get you to
look in the notebook and turn to Exhibit 4 for just a moment,
please. Exhibit 4. And if you will look at that, you will see
that number 14 says, incentives for quality connections and the
second sentence states they, meaning Navigators, have the
opportunity to earn $200 additional per quarter if they meet a
standard of 300 enrollments or screenings during the quarter.
Do you see that?
Mr. Cohen. I do.
Mr. Harper. Do you believe it is appropriate to pay
Navigators for the number of individuals enrolled?
Mr. Cohen. In the federal program we are not permitting
Navigators to be paid by the number of enrollments. I
understand this is an application, and it may be what they
thought that they were going to do, but we are not permitting
that.
Mr. Harper. So what are they getting? Just a straight
salary or a straight--so they get paid the same, you are
saying. This is not true?
Mr. Cohen. This is an application.
Mr. Harper. OK.
Mr. Cohen. But I am telling you that in the federal program
Navigators are not being paid by the number of enrollees.
Mr. Harper. OK, but didn't you approve this application?
Mr. Cohen. I did not, but there is a budget process that--
--
Mr. Harper. Somebody approved the application.
Mr. Cohen. We did. We did. OK. So there is a budget process
that goes through before a grant is awarded, and I don't know
the specifics of this particular applicant, but I am confident
that the budget that was worked out with this applicant did not
include payment per enrollee.
Mr. Harper. Can you check that----
Mr. Cohen. I can.
Mr. Harper [continuing]. To be 100 percent sure and get
back with us in writing on that?
Mr. Cohen. I would be happy to.
Mr. Harper. So is there another application, another form
that we should be looking at?
Mr. Cohen. Well, there is a grant award, there is a
cooperative agreement between the grantee and CMS. Yes.
Mr. Harper. All right.
Mr. Cohen. This is just the application.
Mr. Harper. Let me at least----
Mr. Cohen. Part of the application.
Mr. Harper [continuing]. Let me ask you this. If this were
true, would you believe that we should be incentivizing
Navigators to go enroll as many people as possible?
Mr. Cohen. In the federal program we made the decision not
to permit compensation based on number of enrollees.
Mr. Harper. OK. Well, but this is a document that you
provided to us if I am not mistaken.
Mr. Cohen. It is an application.
Mr. Harper. OK. Well, and that is what I am referring to is
the document. So just so I am clear are you saying then that no
Navigator is being paid additional money or bonus money by the
number of people signed up? That is what you are saying?
Mr. Cohen. In the federal program. Correct.
Mr. Harper. All right. Well, what about in any other
program or other entity?
Mr. Cohen. My understanding is that there may be some
states that are paying some portion of compensation for
enrollees.
Mr. Harper. And you would know which states those are.
Correct?
Mr. Cohen. We can get that information.
Mr. Harper. Would you do that and----
Mr. Cohen. Sure.
Mr. Harper [continuing]. What amounts and if they are
paying all Navigators the bonus based upon numbers, I would
want to know that.
All right. Are you going to issue any type of statement or
standards for Navigators or to the states directing them not to
do this?
Mr. Cohen. No. We have left, I mean, the states as
throughout the Affordable Care Act we have given the states a
lot of flexibility to design their programs in the way that
they think is best for their state, and so we are not telling
states that they can't do it. In the federal program Navigators
are not being paid per enrollee.
Mr. Harper. All right. Following up on other questions, my
understanding of what you are saying is that Navigators are not
subjected to or a criminal background check is not done.
Correct?
Mr. Cohen. There is no federal requirement for a criminal
background check. Some states are imposing a criminal
background check requirement on Navigators.
Mr. Harper. But it is not your requirement, a federal
requirement to do that.
Mr. Cohen. Right.
Mr. Harper. The Navigators are going door to door in some
situations. Correct?
Mr. Cohen. Navigators will be told that they should not go
door to door to solicit people to enroll in coverage.
Mr. Harper. They are being told not to.
Mr. Cohen. Not to.
Mr. Harper. OK. Do you know if they are doing that on any
state level?
Mr. Cohen. I don't.
Mr. Harper. OK. Can you let us know that, too, please----
Mr. Cohen. I can try to find that out.
Mr. Harper [continuing]. As one of the things here. If I
could get you now to turn to Exhibit number 8. Exhibit 8 is a
work plan from one approved Navigator. If you look through, you
will see it promises a complete 24,000 robo calls in the first
quarter, 72,000 robo calls in the second quarter, another 72 in
the third, and 72,000 more in the fourth quarter.
Do you see that document?
Mr. Cohen. Yes.
Mr. Harper. Do you believe that Navigators should be using
taxpayer dollars to fund robo calls?
Mr. Cohen. I am going to have to check to see what our
instructions are going to be about that. My understanding
generally is that our expectation is that when it comes to
enrollment assistance, we are expecting that people are going
to come to the Navigators rather than the Navigators going to
them.
Mr. Harper. Sure, but this is an application that was
approved. So this was an approved application, was it not?
Mr. Cohen. This grantee was awarded a grant. It doesn't
meant that every single thing in the application was, ended up
in the final end award.
Mr. Harper. All right, but they awarded a grant, and that
application did call for robo calls that you saw.
Yield back.
Mr. Murphy. Thank you. The gentleman's time has expired.
I now go to Mr. Green for 5 minutes.
Mr. Green. Thank you, Mr. Chairman.
Mr. Cohen, let me explain to you the district I represent.
I have a very urban district in Houston, and it has some of the
highest in the country of uninsured. Hidalgo County in South
Texas, the numbers in my district compare to some of the
poorest counties in the country. Some of the questions you are
hearing in looking at the exhibits, I know my Navigators are
not going door to door. They are prohibited from doing it. But
Enroll America, which is a non-profit group, is doing that. In
fact, I asked them to do that in my district. I want them to be
out there making people know that this law is available.
What you are hearing today is folks who don't like the law,
and that is OK. They didn't vote for it, but they are trying to
keep it from actually working, and in a district like I have,
this is the way those folks can go and have insurance for their
families.
And so it is frustrating to me when they were talking
about, you know, fingerprinting. You know, under state law
maybe my insurance agents are fingerprinted and do background
checks. I am not sure, but it is not in the federal law to do
that, and so in the State of Texas that is not an issue. Now,
insurance agents may be able to, but we don't hold these
Navigators to a higher standard than the federal law is.
So, again, their complaint is is that they really don't
want the Navigators to do their job to sign people up who come
in.
Also, I would be offended if I had to ask my insurance
agent, by the way, do you have a background check. You know,
that is just amazing that some of my colleagues would do it,
but, again, their point is they don't like the law, and they
are trying to stop, use any way they can to discredit it, but
it is working. I did an event in our district. We are doing
more events in our district because we want that outreach to be
there.
Let me ask you something. One of the questions about the
Navigators being paid incentives, and I am looking at Exhibit
number 4 on page 10. Navigators are paid a base wage of $10 an
hour with the expectation of meeting basic performance
guidelines they will have the opportunity to earn $200 more per
quarter if they meet 300 enrollment screenings. Federally-
qualified health center employees, I know in my district or
actually they have physicians to be able to sign people up, we
are talking about some of the folks who make some of the lowest
wages that we can imagine. And it sounds like to me it would be
a Republican thing to incentivize them to actually go out and
do it correctly, and that is what I think that is, you know,
welcome to Congress.
But let me talk a little bit about one of the issues that
have come up, and I have heard it a lot. On the floor last week
we were forced to vote on a bill that would force the HHS IG to
take an unprecedented role of certifying marketplace
verification systems before people could get financial
assistance. I want to ask you a series of questions about that.
When an individual applies for financial assistance through
the marketplaces, what steps are taken on the front end to
verify that they are not under-reporting their income in order
to get financial assistance?
Mr. Cohen. We check against available sources of data
including Internal Revenue Service data, including Social
Security Administration data, and if necessary, private
employer data through a database that is also part of that
system to see whether----
Mr. Green. So you have access to the IRS database, and you
also can be checked against Equifax, for example, for current
information?
Mr. Cohen. That is right.
Mr. Green. So there is upfront verification. What about on
the back end? If an individual's taxes at the end of the year
indicate they are not eligible for that financial assistance,
what do they have to do?
Mr. Cohen. The IRS is going to require that they reconcile
that at the end of the tax year, and if they have to pay money
back, they will have to pay money back.
Mr. Green. Well, and I know most folks, the last thing they
want to hear is that the IRS is going to come audit you because
you claimed less income than you actually earned, and you are
going to pay this back. Is there a penalty for them under, I
assume under IRS regs? There is probably a penalty that would
be added not only to the back taxes but to the penalty.
Mr. Cohen. And in addition, the information that they
provide, it says right on the application it is being provided
under penalty of perjury and that there are penalties just for
submitting false information if it is done, you know,
intentionally.
Mr. Green. My Republican friends have repeatedly asserted
the ACA would be right with fraud and suggested people would be
lining up in property to get financial assistance. First of
all, the financial assistance provided through the marketplace
may only be used to purchase health insurance.
Mr. Cohen. That is right.
Mr. Green. It is not correct they get a direct cash
assistance or sent to people's homes. That is incorrect.
Mr. Cohen. The money goes directly from--to the insurance
company that they have chosen.
Mr. Green. The carrier.
Mr. Cohen. Yes.
Mr. Green. And since they won't even see the money, it
would be credit applied against insurance premiums, it seems
unlikely that people are out there waiting to profit from this
program and to put money in their pockets when they won't even
see the money. Can you tell us about the uninsured who are
using the exchanges in particular, and again, the State of
Texas, we have to have a national exchange, and I appreciate
other states who took the incentives on their own, but I also
know HHS is supposed to put more resources in states that don't
have a state partner. So I appreciate that coming to Texas.
In particular I want to address the allegation I heard that
people who buy insurance in exchanges are fraudsters and
deadbeats. Is there any information on that? All people are
looking for is to be able to cover their families with
healthcare, and this is an opportunity to do it.
Mr. Cohen. They just want to take care of themselves and
their families. That is right.
Mr. Green. Thank you, Mr. Chairman.
Mr. Murphy. Thank you, Mr. Green.
Ms. Ellmers, you are recognized for 5 minutes.
Mrs. Ellmers. Thank you, Mr. Chairman, and thank you, Mr.
Cohen, for being with us again. I think you said this is the
seventh time. Is that correct?
Mr. Cohen. Not before this committee obviously, but, yes,
this is the seventh time I have testified since December.
Mrs. Ellmers. On the Hill.
Mr. Cohen. Yes.
Mrs. Ellmers. OK. Well, first off, I do want to go back to
one of the comments that you made about how you believe that
there is competition that is being created amongst the
insurance companies with the exchanges.
You know, very recently, I believe as recent as last week,
in North Carolina in my district, First Carolina Care Insurance
Company announced that they will not be part of the exchange.
They supply health insurance to thousands in my district. This
means less options for my constituents and now I believe for
North Carolina there are only two insurance companies. How does
this provide competition?
Mr. Cohen. So the results are different from state to
state. In many states we have seen new entrants coming in and a
lot of choice, and in other states we have seen less.
Mrs. Ellmers. OK.
Mr. Cohen. As I think you probably know, the existing
market is extremely highly concentrated in some states.
Mrs. Ellmers. So but for my, reclaiming my time, my North
Carolina constituents, though, will have less competition.
Mr. Cohen. Well, I don't know what's available to them off
the marketplace.
Mrs. Ellmers. Let's move on because they live in North
Carolina.
I would like for you to move to Exhibit 7, and this is part
of the approved application process. Now, in Exhibit 7 it says
that the applicant basically is going to spend money on
participant incentives by purchasing and giving out gift cards
to obtain consumer feedback on assistance provided and consumer
knowledge from the satisfaction of the event.
Do you believe that this is inappropriate use for the
Navigators to entice individuals with gift cards?
Mr. Cohen. Well, it doesn't sound as though it is enticing.
It sounds like they want to get feedback, and in order to
encourage people to give them feedback, they are going to give
them----
Mrs. Ellmers. So are you sure that the idea of the gift
card, so you know for sure that they would be basically given
the information and then you don't see that as enticement?
Mr. Cohen. That is what it looks like to me from here, but
I can check.
Mrs. Ellmers. So just to clarify, you don't believe that is
enticement.
Mr. Cohen. It doesn't look like it. No.
Mrs. Ellmers. OK. Well, I would like to go back to a couple
of the other issues. You know, now we have seen repeatedly that
there are many questions based on the letter that we put out
asking the Navigators, and of course, you know, those on the
other side of the aisle are saying that this is intimidation,
and certainly they have quoted me as well, and I don't believe
that Congress asking questions and doing oversight is
intimidation at all. We are charged with making sure that
taxpayer dollars are utilized correctly, and I know that
oversight is very important for you as well.
I would like to also go to the point here where it says in
a response, and I would like to submit this for the record
although we have it, that basically HHS reported that we trust
that our responsibility addresses your questions about the
Navigator Program and the guidelines and controls in place to
monitor the work of the awardees.
Now, there are a number of these situations where you are
going to be getting back to us with answers. Is that correct?
Some of the different applicants, the questions that have been
posed to you. It is unclear at this point how it is being
implemented, and you have repeatedly said that you would get
back with information and written statements.
Mr. Cohen. Right, and I have no objection or questions
whatsoever about----
Mrs. Ellmers. OK. So I guess----
Mr. Cohen [continuing]. Questions about this program
directed to us.
Mrs. Ellmers. OK. So do you not see that as a basis for a
delay at this point, that we would just continue to move on
with this process even though it is very, very unclear as to
how these applicants are really going to be utilizing good,
hard-earned taxpayer dollars?
Mr. Cohen. No, I don't.
Mrs. Ellmers. So you believe that we should continue as is?
Mr. Cohen. Absolutely.
Mrs. Ellmers. Regardless of being able to report back to
Congress on this issue so that we can make sure that the
taxpayers of this country know that their dollars are being
utilized?
Mr. Cohen. I don't think that your questions are a basis
for delay.
Mrs. Ellmers. So if I were, I am a taxpayer obviously. So
if you were speaking to one of my constituents right now, a
little lady that lives down the street from me, would you say
based on all of these questions that have been posed that her
taxpayer dollars are being utilized well?
Mr. Cohen. Absolutely, and I would say that----
Mrs. Ellmers. OK. Thank you.
Mr. Cohen [continuing]. She should be very proud----
Mrs. Ellmers. You have answered my question, but I would
also like to submit for the record to the points about the
issue of undermining and you know, being aggressive in this
effort. There is an article in the ``Business Journal,''
Thursday, September 12, 2013, and I would like to submit this
for the record, where my office actually reached out to
Randolph Hospital who is a Navigator applicantee, and let me
just read a quote from them. ``From my perspective and the
hospital's perspective we just see this as a they are doing
their due diligence and making sure the organizations that
receive these funds are going to be used, and the funds in the
manner in which they were intended, said Devin Griffith, Vice
President of Care Continuum and Support Services in Randolph.''
We don't foresee this as being a problem.
Thank you very much. I yield back the remainder of my time.
Mr. Murphy. The gentlelady yields back and now our new
member, Mr. Yarmuth, is recognized for 5 minutes.
Mr. Yarmuth. Thank you very much, Mr. Chairman. I
appreciate the courtesy of the committee, and I am very honored
to be a part of the committee, even though it appears I just
joined a game of Trivial Pursuit that we are worried about $10
gift cards when we are talking about a law that will affect 300
million Americans.
Before I get into one line of questioning, I would like to
plug my home State of Kentucky. Kentucky has embraced the
Affordable Care Act. Our governor has taken the opportunity to
provide insurance to 640,000 Kentuckians who are currently
uninsured. We have an exchange that is a model I think for the
country. It is called Kynect, K-y-n-e-c-t, and one of the great
ironies of this debate is that during our state fair last month
Kynect had a booth. A lot of people curious about what was
available to them under the law, and after talking to the
people at Kynect they walked away, many of them saying, wow,
this is a lot better than ObamaCare. So that is kind of what we
are dealing with.
There have been a couple of comments earlier today that
related to moves that certain corporations have made, and
Republicans have pounced on them as kind of making an argument
that they were somehow precipitated by the Affordable Care Act
and somehow resulted in a negative outcome.
One of them is UPS. UPS is not based in my district but the
global hub is there. They are our largest employer. So when I
heard about the fact that they were asking those employees who
had spouses who were eligible for coverage through another
employer to take their coverage there, and they were going to
stop providing dependent coverage to them, that this was
somehow something that the Affordable Care Act forced them
into. Republicans pounced on that. My Senator Mitch McConnell
did. So I talked to the UPS executives about this, and they
actually said, no, we are very upset about the way Republicans
have used us because what the Affordable Care Act did was allow
us to make this business move, which a number of companies have
done, and preserve our coverage at current rates and current
contributions for our employees, about 15,000 out of the
770,000 lives that they insure.
So it basically was nothing that the Affordable Care Act
did that resulted in a negative outcome, but my question to
you, Mr. Cohen, is before the Affordable Care Act, could UPS
have done what they did?
Mr. Cohen. I am not familiar with that particular
circumstance, but I don't believe so.
Mr. Yarmuth. But UPS could have dropped their coverage
entirely before the Affordable Care Act?
Mr. Cohen. Oh, of course.
Mr. Yarmuth. UPS could have made any changes they wanted
to, could have----
Mr. Cohen. Yes. Yes.
Mr. Yarmuth [continuing]. Given, provided inferior
coverage, anything they wanted to.
Mr. Cohen. Correct.
Mr. Yarmuth. And we all know that, I think most of us know
that when President Obama said if you like your coverage, you
can keep it, what he meant was that nothing in the Affordable
Care Act would force an employer to change their coverage. Not
that there might not be changes. In fact, some might be an
improvement, and the issue of Walgreen's was mentioned earlier
today. Walgreen's has decided to set up a private exchange for
its employees, not shoving them into any government exchanges,
so they have just chosen to make an alternative arrangement for
providing insurance for their 160,000 employees. Isn't that
correct?
Mr. Cohen. That is what I understand.
Mr. Yarmuth. And when they announced it, they said the
reason we were able to do that, the reason we wanted to do it
is because of the private exchanges, we can actually take,
expand the options that were available for our employees. Right
now they said there are only two high deductible plans, so we
could improve their situation.
So you could actually make an argument, I think, and I will
make the argument that because of the Affordable Care Act and
the creation of exchanges and the success that the exchanges
seem to project in terms of increased competition and lowering
costs, that this gave Walgreen's an opportunity to improve the
situation with their employees. Would you agree you could make
that argument?
Mr. Cohen. I agree, and I think it is important to
recognize that for many, many years employers have been
struggling with the ever-increasing costs of healthcare and of
health insurance, double-digit increases year after year, and
what we have seen in the last few years are significantly lower
increases in the cost of health premiums, and I think we will
continue to see that even more when the Affordable Care Act is
fully implemented and is a lot less uncompensated care that all
businesses have to pay for in their rates because more people
will have coverage.
Mr. Yarmuth. And as a reminder when we go back to the year
that this law was being debated in 2009, premiums for
businesses were going up in many places as high as 38 percent.
I think in California Blue Cross Blue Shield said everybody is
getting a 38 percent increase. So we have seen a dramatic
improvement since that time.
Mr. Cohen. That is right.
Mr. Yarmuth. Yes. Thank you very much for your testimony.
Mr. Chairman, thank you very much. I yield back.
Mr. Murphy. The gentleman yields back.
I now go to Dr. Gingrey for 5 minutes.
Mr. Gingrey. Mr. Chairman, thank you.
Mr. Cohen, I am going to read out to you some statistics
which you may or may not agree with, but a number of years ago
the United States Census Bureau came out with an estimate of 47
million people, 47 million people in this country without
health insurance. They got this information basically by
calling and saying, do you have health insurance? Yes or no? If
they had just lost their job and then off of health insurance
for 1 week, the answer was no. If the call had been received 2
weeks later, the answer very well may have been yes.
So 47 million people without health insurance is one thing,
but if it were for a full year without health insurance, that
would be a horse of an entirely different color.
In that 47 million, let's just assume there really were 47
million people who went uninsured for a full year. Eighteen
million of those people make more than $50,000 a year, 18
million of the 47 million. Ten million, it's estimated, of
those 47 million are in this country illegally. Fourteen
million are eligible for a safety net program, SCHIP, Medicaid,
they just don't bother to fill out the paperwork or maybe they
don't know, maybe they haven't been informed. But when you get
right down to it there are probably no more than eight to 10
million people in this country that do not have health
insurance because they are nearly poor. They are not eligible
for Medicare, they are not eligible for Medicaid. So the number
was so grossly inflated, and so when I hear from the other side
of the aisle that we Republicans who are totally opposed to
this bill, well, yes. We were, and that is one of the main
reasons we were.
Now, another statistic, 1950, the average individual spent
$500 a year on healthcare. In 2006, the latest year that I have
statistics for, the average individual probably spent $7,000 a
year for healthcare. But look at the life expectancy. The life
expectancy in 1950, was the late 50s. The life expectancy in
2006, 2007, indeed, today, is 80 years old practically.
So the value, yes, health costs in this country is too
high, and we need to constantly fight to lower it, find ways,
eliminate waste, fraud, and abuse, anything that we can do to
bring it down, but what is the value of each additional year of
a person's life because of what we have done. Yes, because it
is costly, but that is because of research and development,
durable medical equipment, medical devices, well-trained
physicians, super specialists, outstanding drugs, antibiotics
six generation now because of the GAIN Act. So, of course, we
were opposed to this bill. Now, look.
Let me get directly to a question for you. In 2 weeks the
rules say that the signup period on the exchanges commences.
Will individuals be able to sign up for a health insurance plan
on October the 1st, 2013?
Mr. Cohen. Yes. Consumers will be able to sign up for a
health plan on October, beginning on October 1.
Mr. Gingrey. They will actually be able to pick a plan,
whether it is Cigna, Aetna, Blue Cross Blue Shield, Platinum
Gold, Silver, Bronze, whatever, they will be able to do that on
October the 1st?
Mr. Cohen. That is my expectation based on the progress
that we have made and what I am told will be in place on
October 1. Yes.
Mr. Gingrey. Thank you, and this will be my last question
because I am running out of time. Most of ObamaCare is based on
the premise that by forcing younger people into the market,
they will help lower the costs for the older and the sicker
individuals. But because the penalty is so weak, there is a
real problem if all those young people don't show up, and I am
afraid they won't.
In my home State of Georgia the insurance commission
announced that for the average 27 year old no longer on their
parents' policy, out of the basement, living on their own,
premiums are set to rise anywhere from 85 to 198 percent. It
seems that a $95 penalty would do little to incent young people
like that to purchase coverage when faced with huge, huge
premium increases.
Mr. Cohen, a lot of the premise of ObamaCare is based on
getting these young people to enroll, to help broaden the pool,
lower the costs for the older and sicker. Have you heard any
concerns that because the penalty for ObamaCare is so weak
young people may stay out of the program in the first year, and
if they do opt out, what will this do to the cost for the
others?
Mr. Cohen. So yes, I have read things speculating that the
penalty is low and will not be a reason for people to sign up,
but I think our research shows that most people want
healthcare, and the barrier has been the cost, and that with
subsidies care will be--the coverage will be affordable, and it
will be high-quality care, and we are looking forward to
people, including young people, enrolling in coverage.
Mr. Murphy. Thank you.
Mr. Gingrey. Thank you, and Mr. Chairman, thank you for
your indulgence, and I yield back.
Mr. Murphy. Thank you, Doctor. Mr. Griffith is next, but he
is going to yield his time, I mean, yield first to Mr. Shimkus
to ask questions and then to Mr. Griffith.
Mr. Shimkus, you are recognized.
Mr. Shimkus. Thank you. I thank my colleague. I want to
thank the Chairman for letting me sit in. I am not on this
subcommittee, and I want to thank the Ranking Member.
Mr. Cohen, welcome. You are trying to do the job presented
to you, and this is a tough committee. So let me ask a couple
questions because I have been trying to get my, just like
regardless of how we feel on the law, if nothing changes, and
it gets enacted, members of the Congress are going to have to
address our constituents' concerns and deal with that.
So what I have tried to do is a couple things. I have tried
to meet with my grantees. I have met with one, but some are now
making themselves available to me, and I am just trying to do
it to get information. So I don't know what we can do from the
Administration's perspective to encourage the grantees to talk
to the elected members of Congress and the regions that they
are going to represent, but I would personally appreciate it
because I am trying to develop a relationship because
constituents are going to come to us. They do for Medicare,
they come to us for Medicaid, they do for Social Security,
veterans affairs. That is part of our job, and I just need
help.
So I just say that as a member appealing to the
Administration.
Mr. Cohen. So I think we would like to work with you on a
process for getting you the information that you want, and are
entitled to that won't be disruptive of the work that needs to
be happening, particularly at this particularly critical moment
when they are just getting ready to start their work.
Mr. Shimkus. Yes, and I get it, I mean, because I did meet
with one, and it was very helpful.
The other request I have is we have asked if we can get,
especially our staff member who deals, most of us have
constituent service people in our Congressional districts. I
have one that she is an expert now on Medicare and Medicaid. I
have another one who is an expert on veterans' affairs. We have
put forth a request to say can't I get this person trained? Can
they sit through the training?
Mr. Cohen. Yes.
Mr. Shimkus. We were told no. So----
Mr. Cohen. You were told no by?
Mr. Shimkus. I can get you the answers, but we were told we
can't, they wouldn't allow us to be trained. So----
Mr. Cohen. That doesn't sound right to me.
Mr. Shimkus. That is fine. I want my staffer to know as
much information as they can as they are going to have to deal
with this. Hopefully not but----
Mr. Cohen. No. Absolutely.
Mr. Shimkus [continuing]. My guess is they might have to
deal with this. So when I talked to the one grantee, this is
the point that they made. They have got 33 Navigators, they are
dispersed throughout healthcare. We have kind of vetted that
out in this hearing today.
But they only have two slots for training. There is a 20-
hour, I mean, there is an online training. I have learned that
much, and then I am from Illinois, so there is a 2-day
training, probably an overnight, and that is kind of where we
were researching to get our staffer involved in both those
trainings, but the real----
Mr. Cohen. At the state-required training or is that----
Mr. Shimkus. Yes. That is why I am trying to figure it out.
So but my point is this one grantee will before the operational
date of October 1, will only be able to get two of his
individuals through the training. I am just--and I can tell
you, I don't want to air, but I would be glad to talk to you.
Mr. Cohen. If our legislative folks could get in touch with
your staff----
Mr. Shimkus. Thank you.
Mr. Cohen [continuing]. I would really be very happy to
look into that in particular.
Mr. Shimkus. And then they also raised the issue that
getting a clearance for these people is basically the State of
Illinois providing clearance. They will not be ready to handle
this information because of the clearance process. So I am just
using this opportunity to show you some of the concerns that I
have, and I am very concerned because I want to, I don't like
the law, I voted against the law, but I know I am going to get
calls about how we can help my constituents, and I want to be
ready to do that.
Mr. Cohen. So I appreciate that very much. I have to say
that I am concerned that some states have put in requirements
which they are entitled to do, you know, but that are making it
a little bit more difficult for the Navigators to get ready in
time for October 1. So maybe we can work with you and try to
work through some of those issues.
Mr. Shimkus. I would appreciate it. Let me just go the
final question. It was kind of based upon listening to your
testimony today about, you know, whether you are going to go
door to door, and I don't have a dog in that fight, but I am
concerned that as we have people who are trained and qualified
that we have a process that someone can go back to a government
Web site and say, they are legit, they are not legit. Have you
all considered putting a list of names of the Navigators on a
.gov site or something?
Mr. Cohen. So we are working through that. I think the
latest discussion is that we will provide the list to the state
insurance departments so that there will be a local place where
people can go to make sure that folks are who they are supposed
to be.
Mr. Shimkus. And it is up to them if they put it online or
not?
Mr. Cohen. Right.
Mr. Shimkus. OK. Again, Chairman, thank you very much.
Ranking Member, thank you very much, and I yield back the time.
Mr. Murphy. I thank the gentleman from Illinois, and I
know, I think many offices would love to know how our staff can
also log on to get the training as well. Thank you.
Finally, Mr. Griffith is recognized for 5 minutes.
Mr. Griffith. Thank you, Mr. Chairman. I appreciate that
very much.
Let me follow up on that. It might also be good to get some
of these folks' IDs. In this morning's ``Bluefield Daily
Telegraph'' there is an article about door-to-door scammers
looking for prescription drug information. I know you can't
stop all the bad actors out there, but we have a group running
around in Tazewell County, Virginia, pretending to be part of
the Appalachian Agency for Senior Citizens, and even though you
are telling folks they are not supposed to do door to door, the
word out there is is that some people are going to do door to
door.
I would now draw your attention to Exhibit 2, and you will
notice in that proposal in the second paragraph it says that
they propose going door to door. So even some of the proposals
and some of the people who are supposed to be doing this
apparently have the misunderstanding they are supposed to go
door to door.
One of the other questions that I have for you and then I
will come back to Exhibit 2 so you might want to leave that
open is that the State Corporation Commission in Virginia,
Bureau of Insurance approved or certified as acceptable plans
at the end of July. It was their assumption that they would
have some information by now. They as of this morning do not
know whether or not their plans, because Virginia is not doing
its own exchange, it is going through federal exchange, but the
State Bureau of Insurance was sending plans that were approved.
They haven't heard anything back as of this morning, so they
don't know whether these plans are actually going to be
approved or not.
And so I would ask you to check on that, please, and get us
some help because we have got 7 business days left to go, and
the State of Virginia doesn't know what plans are going to be
approved by the----
Mr. Cohen. I absolutely will. That surprises me because I
know we have been in contact with the states on a regular
basis, but I will absolutely follow through on that.
Mr. Griffith. And I will just tell you we checked with him
this morning. I will tell you another concern is and this
happens in a lot of rural areas I am sure, is that there is not
going to be competition in ten of the jurisdictions I
represent. There is either only one shop plan or only one
individual plan, and five of those jurisdictions, the counties
of Buchanan, Grayson, Lee, Scott, and the city of Bristol,
there is only one shop plan and one individual plan. And so a
lot of my constituents do not have a whole lot of choices to
choose from, and obviously if there is a monopoly, that may
have affect prices as well, wouldn't you think?
That being said I will point you back now to the Exhibit 2.
Just so you will know that we are looking at this, you will see
on the first page the project abstract for the Navigator, and
it is going to cover two counties, one in Florida, one in
Texas. On the next page you will see further that the
application says they will have 50 exchange Navigators, and
then you have to follow through, and we have done some of the
math for you, and my time is running out, so I will lead you
through some of this and then ask you to comment.
On the next page you will see their enrollment goals, and
they state in the second bullet point that they want enrollment
goals about 75 percent of those they are trying to reach, and
they indicate that through provision of literature, et cetera,
a total of 288,750 per targeted county by the end of the
program year or a total of 577,700, and so what we have got is
we have got a Navigator in their statement saying that somebody
in your office approved that they are going to enroll 577,000
people plus by the end of the year, and that works out to
11,500 enrollees per Navigator when you take that 577,500
people and divide it by 50 Navigators. And, of course, remember
these are the folks who were also not only going to be doing
fairs and so forth but were going to be saying they were going
to go door to door.
Do you really believe that one Navigator can enroll 11,500
people, taking the time that they had originally when this was
done until the end of the year? It looks like it is 31 people a
day counting weekends and holidays. That is not really very
realistic, is it? I have done door knocking before, and I have
done a lot of voter outreach, and to reach that many people a
day and actually get them to say yes is not an easy
accomplishment.
Mr. Cohen. So I would say again, I mean, this is clearly a
proposal, an application. It was approved. This grantee was
approved. They got a grant. There is a budget process that
happens as part of that approval. I don't, I can't tell you. I
will commit to you to find out more information about this
grantee if you would like, but I can't tell you whether this is
how it ended up or whether there were any changes, and I don't
feel comfortable commenting on it because I literally have, am
just seeing it now. So----
Mr. Griffith. I understand it if you could give me some
comment later, I would appreciate that very much. These are
concerning numbers, and obviously there are some people out
there at least thinking they are supposed to go door to door,
and that is of concern because then when people start going
door to door it makes it much----
Mr. Cohen. Right.
Mr. Griffith [continuing]. Easier for particularly senior
citizens to be victims of bad actors and not the real
Navigators. They are not going to ascribe that to the real
Navigators but folks going out there and they know people are
supposed to be going door to door, people are coming by, and
the next thing you know they are finding out whether or not
they have prescription drugs, and then what they are doing
apparently in that particular county or what the sheriff fears
is that they will go back and rob the house, and they are more
interested in getting the drugs than they are getting TVs, and
they are just trying to figure out which are the prime targets.
And so that is of concern.
I will also tell you and I am not sure that this falls
under your jurisdiction, but we are having a real problem with
the doctor shortage in the Commonwealth of Virginia. There is
an article today about some people in the eastern part of the
state that are having a problem. I don't represent that
particular part of Virginia, and I will tell you that recently
one of my hospitals closed. Their number one reason was
ObamaCare, and the aspects, the cuts to Medicare, the double, I
call it the scissor where the states under the original plan
were supposed to but didn't have to on the Supreme Court
ruling, expand Medicaid and then the final straw for those
particular folks besides the war on coal which lowered the
economy in the area so you had less insured people, the final
straw was the fact that they couldn't get doctors to staff the
hospital in an adequate fashion and so now I have got folks
that are going to have to travel an hour to an hour and a half
to get cardiac care. It is a very serious concern. I am very
worried about the people who live in my district and whether or
not they are going to be able to get adequate healthcare under
this ObamaCare Program.
And like the others who have spoken, I, too, hope that you
will educate us on how to enroll people, because we will get
calls.
Mr. Murphy. OK. The gentleman's time has expired, and with
that, Mr. Cohen, we appreciate you coming for this committee
again today, and I ask unanimous consent that the written
opening statements of other members be introduced into the
record if they wish, and without objection those will be
entered into the record.
I also ask unanimous consent to enter the document binder
into the record subject to appropriate redactions by staff. I
also ask for unanimous consent to put an article into the
record from the ``Business Journal'' dated September 12, 2013.
So without objection that is so ordered. \*\
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also available at http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=101323
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Mr. Murphy. Again, Mr. Cohen, thank you so much for coming.
We appreciate your timely response also to members' requests
for assistance for their staff and others in providing
information and for the testimony that you and other members
have asked here and the devotion of members at this hearing
today.
The committee rules provide that members have 10 days to
submit additional questions for the record of the witness. And
with that this hearing is now adjourned.
Mr. Cohen. Thank you.
[Whereupon, at 12:26 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Opening statement of the Hon. Fred Upton
We are now less than two weeks away from when the health
law's enrollment officially kicks off. It has been a rocky
three and a half years to date.
Unfortunately, the law's implementation has been plagued by
confusion, uncertainty, delays, and missed deadlines. The
broken promises have reached near epidemic proportions. Hardly
a day goes by without workers losing the coverage the president
promised they could keep, or new figures detailing the looming
rate shock in store for millions of Americans. The president's
hometown Chicago Tribune lamented about the part-timing of
America, and many businesses have frozen hiring altogether to
avoid the law's costly mandates.
Since health care reform was signed into law, two programs
closed prematurely because they ran out of money: the Pre-
Existing Condition Insurance Plan and the Early Retiree
Reinsurance Program. The CLASS Act was repealed. Fundamental
requirements of the law, like the employer mandate, were
delayed with little fanfare, and hundreds of waivers were
handed out to health plans that could not meet the requirements
of the law.
In the last few weeks, even more of the law's consequences
for American families have come to light. Some employers have
announced that they will no longer cover spouses and children.
Others have decided that they will need to jettison their
retirees from company health care plans to the exchanges.
The American people deserve better than this. They deserve
better than a law that was crafted behind closed doors and
rammed through despite wide opposition. Although there was no
oversight of the law until Republicans regained control of the
House in 2011, some have still questioned why this committee
has investigated and conducted extensive hearings on the
implementation of the Affordable Care Act. I believe it is our
duty to ask questions and get the facts about how programs are
going to work, and what they will mean for the American people,
rather than sit back and wait until it is too late to ask
questions after taxpayer dollars have been squandered.
Mr. Gary Cohen, the Director of the Center for Consumer
Information and Insurance Oversight, has appeared before this
committee before and is here today to explain what we can
expect when enrollment begins in less than two weeks. In April,
Mr. Cohen testified that everything was ``on track''--but ``on
track'' to what? Just weeks after his testimony, the
administration delayed the employer mandate and rolled back the
verification process, opening us up for potentially billions of
dollars in fraud. With less than two weeks until launch, it is
time for the administration to be frank with the American
people. When will CCIIO finalize and announce the approved
insurance plans and premium costs? Will states be ready? Will
people who like their insurance plans be able to keep them? I
hope Mr. Cohen will be able to offer specific answers to these
questions today rather than vague assurances that everything is
on track.
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