[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
STRENGTHENING OUR HEALTHCARE SYSTEM: LEGISLATION TO REVERSE ACA
SABOTAGE AND ENSURE PREEXISTING CONDITIONS PROTECTIONS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 13, 2019
__________
Serial No. 116-6
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
36-502 PDF WASHINGTON : 2020
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COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois GREG WALDEN, Oregon
ANNA G. ESHOO, California Ranking Member
ELIOT L. ENGEL, New York FRED UPTON, Michigan
DIANA DeGETTE, Colorado JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California CATHY McMORRIS RODGERS, Washington
KATHY CASTOR, Florida BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland PETE OLSON, Texas
JERRY McNERNEY, California DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice BILL JOHNSON, Ohio
Chair BILLY LONG, Missouri
DAVID LOEBSACK, Iowa LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon BILL FLORES, Texas
JOSEPH P. KENNEDY III, SUSAN W. BROOKS, Indiana
Massachusetts MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California RICHARD HUDSON, North Carolina
RAUL RUIZ, California TIM WALBERG, Michigan
SCOTT H. PETERS, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
------
Professional Staff
JEFFREY C. CARROLL, Staff Director
TIFFANY GUARASCIO, Deputy Staff Director
MIKE BLOOMQUIST, Minority Staff Director
Subcommittee on Health
ANNA G. ESHOO, California
Chairwoman
ELIOT L. ENGEL, New York MICHAEL C. BURGESS, Texas
G. K. BUTTERFIELD, North Carolina, Ranking Member
Vice Chair FRED UPTON, Michigan
DORIS O. MATSUI, California JOHN SHIMKUS, Illinois
KATHY CASTOR, Florida BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland H. MORGAN GRIFFITH, Virginia
BEN RAY LUJAN, New Mexico GUS M. BILIRAKIS, Florida
KURT SCHRADER, Oregon BILLY LONG, Missouri
JOSEPH P. KENNEDY III, LARRY BUCSHON, Indiana
Massachusetts SUSAN W. BROOKS, Indiana
TONY CARDENAS, California MARKWAYNE MULLIN, Oklahoma
PETER WELCH, Vermont RICHARD HUDSON, North Carolina
RAUL RUIZ, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire GREG WALDEN, Oregon (ex officio)
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
LISA BLUNT ROCHESTER, Delaware
BOBBY L. RUSH, Illinois
FRANK PALLONE, Jr., New Jersey (ex
officio)
C O N T E N T S
----------
Page
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, opening statement............................... 1
Prepared statement........................................... 3
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 4
Prepared statement........................................... 6
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 7
Prepared statement........................................... 9
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 10
Prepared statement........................................... 12
Witnesses
Katie Keith, Associate Research Professor and Adjunct Professor
of Law, Georgetown University.................................. 13
Prepared statement........................................... 16
Answers to submitted questions............................... 169
Jessica K. Altman, Commissioner, Pennsylvania Insurance
Department..................................................... 24
Prepared statement........................................... 26
Answers to submitted questions............................... 172
Grace-Marie Turner, President, Galen Institute................... 34
Prepared statement........................................... 36
Answers to submitted questions............................... 176
Submitted Material
H.R. 1010, To provide that the rule entitled ``Short-Term,
Limited Duration Insurance'' shall have no force or effect,
submitted by Ms. Eshoo......................................... 96
H.R. 986, the Protecting Americans with Preexisting Conditions
Act of 2019, submitted by Ms. Eshoo............................ 98
H.R. 987, the Marketing and Outreach Restoration to Empower
Health Education Act of 2019, submitted by Ms. Eshoo........... 100
H.R. ___, the Educating Consumers on the Risks of Short-Term
Plans Act of 2019, submitted by Ms. Eshoo...................... 104
Article of January 31, 2019, ``Ads For Short-Term Plans Lacking
ACA Protections Swamped Consumers' Online Searches,'' by Steven
Findlay, Kaiser Health News, submitted by Ms. Eshoo............ 111
Letter of February 13, 2019, from Joyce A. Rogers, Senior Vice
President, Government Affairs, AARP, to Ms. Eshoo and Mr.
Burgess, submitted by Ms. Eshoo................................ 116
Letter of February 13, 2019, from Michael L. Munger, Board Chair,
American Academy of Family Physicians, to Ms. Eshoo and Mr.
Burgess, submitted by Ms. Eshoo................................ 119
Testimony of Sam Bloechl before Senate Democratic Policy and
Communications Committee, August 16, 2018, submitted by Ms.
Eshoo.......................................................... 121
Letter of February 12, 2019, from Charles N. Kahn III, President
and Chief Executive Officer, Federation of American Hospitals,
to Ms. Eshoo, submitted by Ms. Eshoo........................... 123
Letter of February 12, 2019, from James L. Madara, Executive Vice
President and Chief Executive Officer, American Medical
Association, to Ms. Eshoo and Mr. Burgess, submitted by Ms.
Eshoo.......................................................... 125
Letter of February 12, 2019, from Deborah P. Brown, Chief Mission
Officer, American Lung Association, to Ms. Blunt Rochester,
submitted by Ms. Eshoo......................................... 128
Statement from the American Lung Association in Support of
Legislation Repealing 1332 Guidance, submitted by Ms. Eshoo.... 129
News release of February 8, 2019, ``Bill Would Reverse
Administration Rule Allowing Short-Term Insurance Plans,''
American Heart Association, submitted by Ms. Eshoo............. 130
News release of February 6, 2019, ``Bill Would Overturn Guidance
Permitting States to Undermine ACA Patient Protections,''
American Heart Association, submitted by Ms. Eshoo............. 131
Statement of Association for Community Affiliated Plans by
Margaret A. Murray, CEO, February 13, 2019, submitted by Ms.
Eshoo.......................................................... 132
Statement of America's Health Insurance Plans, February 13, 2019,
submitted by Ms. Eshoo......................................... 136
Letter of December 18, 2018, from the Adult Congenital Heart
Association, et al., to Secretary Alex M. Azar II, Department
of Health and Human Services, et al., submitted by Ms. Eshoo... 142
Letter of February 13, 2019, from Thomas P. Nickels, Executive
Vice President, American Hospital Association, to Ms. Eshoo,
submitted by Ms. Eshoo......................................... 146
Statement of Families USA by Shawn Gremminger, Senior Director of
Legislative Affairs, February 13, 2019, submitted by Ms. Eshoo. 148
Statement of the Coalition to Protect and Promote Association
Health Plans, February 13, 2019, submitted by Mr. Burgess...... 149
Article ``The Health 202: Association health plans expanded under
Trump look promising so far,'' by Paige Winfield Cunningham,
The Washington Post, submitted by Mr. Burgess.................. 158
Final Vote Results for Roll Call 69, February 9, 2018, submitted
by Mr. Burgess................................................. 163
STRENGTHENING OUR HEALTHCARE SYSTEM: LEGISLATION TO REVERSE ACA
SABOTAGE AND ENSURE PREEXISTING CONDITIONS PROTECTIONS
----------
WEDNESDAY, FEBRUARY 13, 2019
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:30 a.m., in
the John D. Dingell Room 2123, Rayburn House Office Building,
Hon. Anna G. Eshoo (chairwoman of the subcommittee) presiding.
Members present: Representatives Eshoo, Butterfield,
Matsui, Castor, Sarbanes, Lujan, Welch, Kennedy, Cardenas,
Schrader, Ruiz, Kuster, Kelly, Barragan, Blunt Rochester, Rush,
Pallone (ex officio), Burgess (subcommittee ranking member),
Upton, Shimkus, Guthrie, Griffith, Bilirakis, Long, Bucshon.
Brooks, Mullin, Hudson, Carter, Gianforte, and Walden (ex
officio).
Also present: Representatives Schakowsky and Soto.
Staff present: Jeffrey C. Carroll, Staff Director; Waverly
Gordon, Deputy Chief Counsel; Tiffany Guarascio, Deputy Staff
Director; Zach Kahan, Outreach and Member Service Coordinator;
Saha Khatezai, Professional Staff Member; Una Lee, Senior
Health Counsel; Jourdan Lewis, Policy Analyst; Alivia Roberts,
Press Assistant; C. J. Young, Press Secretary; Mike Bloomquist,
Minority Staff Director; Adam Buckalew, Minority Director of
Coalitions and Deputy Chief Counsel, Health; Jordan Davis,
Minority Senior Advisor; Caleb Graff, Minority Professional
Staff Member, Health; Peter Kielty, Minority General Counsel;
Ryan Long, Minority Deputy Staff Director; Brannon Rains,
Minority Staff Assistant; Danielle Steele, Minority Counsel,
Health.
Ms. Eshoo. The Subcommittee on Health will now come to
order.
The Chair now recognizes herself for 5 minutes for an
opening statement.
OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
First of all, welcome to the first legislative hearing of
the Health Subcommittee in the 116th Congress. Last week we
heard testimony and examined what the devastating effects would
be if the case Texas v. United States were to stand, most
especially on those who have preexisting conditions and the
medically complex children who rely on the Affordable Care Act.
We also discussed how the Trump administration's sabotage
of the ACA and the expansion of junk insurance plans are
driving up cost by diverting the healthy out of the individual
market and weakening patient protections with preexisting
conditions.
Today, the four bills before us address short-term
insurance plans, waivers to weaken insurance regulations on the
private market, funding for marketing and outreach, and
legislation that would require short-term insurance plans to
carry an advisory informing consumers what the plan does not
cover and what ACA requirements the plan does not meet.
It is a top priority of the majority to protect patients
with preexisting conditions. On the campaign trail and in our
hearing last week, our Republican colleagues voiced their
support for preexisting condition protections. They asked for
specific legislation, and that is what we are here to discuss
today.
Our first bill will rescind the short-term limited duration
insurance for junk insurance policies, regulation the Trump
administration finalized last August, which expands these junk
plans from the current 3-month limit, making them available for
up to 3 years.
We know these plans do not cover preexisting conditions,
they do not have out-of-pocket and lifetime limits, and they do
not protect women from being charged more than men.
Representative Castor's bill would rescind the rule that
expanded these junk insurance plans.
Representative Kuster's bill revokes the Section 1332
waiver guidance issued by the administration last October,
which weakens requirements of private insurance plans to
provide compressive coverage at an affordable price.
Section 1332 of the Affordable Care Act requires States to
meet standards for what qualifies as healthcare coverage. The
Trump administration guidance changes these standards to be
less comprehensive and less affordable for patients who rely on
private insurance purchased on the individual market.
It also allows tax credits, Federal dollars, to be spent on
these expanded and extended junk plans. My Republican
colleagues have been highly critical about funding tax
subsidies to help Americans afford comprehensive health
insurance but support allowing more people to access Federal
money for these short-term junk insurance plans that do not
even cover basic services.
Representative Kuster's bill rescinds that guidance so that
all Americans will have health insurance coverage that meets
the same standards.
We are also considering the bill authored by Representative
Lisa Blunt Rochester to restore the marketing and outreach
funding the Trump administration cut by 90 percent in 2017 and
banning this funding from being used to advertise the junk
insurance plans.
An article published in Kaiser Health News earlier this
month described how consumers searching online to enroll in
comprehensive ACA plans are most often redirected to websites
and brokers selling junk plans without disclosing that the
coverage will not be comprehensive.
And I ask unanimous consent to enter this article into the
record. Hearing no objections, we will do that.
[The information appears at the conclusion of the hearing.]
Federal dollars should not support advertising coverage
that will not protect patients with preexisting conditions.
The last bill, my legislation, will require junk insurance
plans to display up front what is and what is not covered so
that consumers will know exactly what they are buying. My bill
also requires a disclosure that these plans do not meet the
Affordable Care Act's requirements for cost sharing and
lifetime limits and prohibits these plans from being sold
during the individual market open enrollment.
I want to be clear about the following. I believe the Trump
administration's rule that expanded the maximum duration of
these so-called short-term plans up to a year and allows them
to be renewed for up to 3 years should be rescinded.
[The prepared statement of Ms. Eshoo follows:]
Prepared Statement of Hon. Anna G. Eshoo
Welcome to the first legislative hearing of the Health
Subcommittee in the 116th Congress.
Last week we heard testimony and examined what the
devastating effects would be if the case Texas vs. United
States were to stand, most especially on those who have
preexisting conditions and the medically complex children who
rely on the Affordable Care Act.
We also discussed how the Trump administration's sabotage
of the ACA and the expansion of junk insurance plans are
driving up costs by diverting the healthy out of the individual
market and weakening patient protections for those with
preexisting conditions.
Today the four bills before us address short-term junk
insurance plans, waivers to weaken insurance regulations in the
private market, funding for marketing and outreach, and
legislation that would require short-term insurance plans to
carry an advisory informing consumers what the plan does not
cover and what ACA requirements the plan does not meet.
It is a top priority of the majority to protect patients
with preexisting conditions. On the campaign trail and in our
hearing last week, our Republican colleagues voiced their
support for preexisting condition protections.
They asked for specific legislation, and that's what we're
here to discuss today.
Our first bill will rescind the short-term limited duration
insurance--or junk insurance--regulation the Trump
administration finalized last August which expands these junk
plans from the current 3-month limit, making them available for
up to 3 years.
We know these plans do not cover preexisting conditions, do
not have out-of-pocket and lifetime limits, and do not protect
women from being charged more than men.
Representative Castor's bill would rescind the rule that
expanded these junk insurance plans.
Representative Kuster's bill revokes the Section 1332
waiver guidance issued by the Trump administration last October
which weakens requirements of private insurance plans to
provide comprehensive coverage at an affordable price.
Section 1332 of the Affordable Care Act requires States to
meet standards for what qualifies as healthcare coverage. The
Trump administration guidance changes these standards to be
less comprehensive and less affordable for patients who rely on
private insurance purchased on the individual market.
It also allows tax credits--Federal dollars--to be spent on
these expanded and extended junk plans.
My Republican colleagues have been highly critical about
funding tax subsidies to help Americans afford comprehensive
health insurance, but support allowing more people to access
Federal money for these short-term junk insurance plans that do
not even cover basic services.
Rep. Kuster's bill rescinds that guidance so that all
Americans will have health insurance coverage that meets the
same standards.
We're also considering a bill authored by Representative
Lisa Blunt Rochester to restore the marketing and outreach
funding the Trump administration cut by 90 percent in 2017 and
banning this funding from being used to advertise junk
insurance plans.
An article published in Kaiser Health News earlier this
month described how consumers searching online to enroll in
comprehensive ACA plans are most often redirected to websites
and brokers selling junk plans without disclosing that the
coverage will not be comprehensive.
I ask unanimous consent to enter this article into the
record.
Federal dollars should not support advertising coverage
that will not protect patients with preexisting conditions.
The last bill, my legislation, will require junk insurance
plans to display up front what is and what is not covered so
that consumers will know exactly what they're buying.
My bill also requires a disclosure that these plans do not
meet the Affordable Care Act's requirements for cost-sharing
and lifetime limits and prohibits these plans from being sold
during the individual market open enrollment period.
I've learned over the years that people know very well what
they pay, but they don't always know what they're buying.
I want to be clear--I believe the Trump administration's
rule that expanded the maximum duration of these so-called
``short-term'' plans up to a year and allows them to be renewed
for up to 3 years should be rescinded.
But as long as short-term insurance plans are being sold,
the American people should know what the policy does not cover
and that information should be displayed prominently.
I'm pleased we're discussing legislation today that will
protect Americans with preexisting conditions and address the
sabotage of the Affordable Care Act. I hope these bills will be
an opportunity to work across the aisle to help the American
people.
Welcome to our witnesses and we look forward to your
testimony.
Ms. Eshoo. I see that I am over my time, and at this point
I would like to recognize Dr. Burgess, the ranking member of
the subcommittee, for 5 minutes for his opening statement.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. I thank you for the recognition, and today we
have been convened once again to discuss issues that will not
improve the affordability of health insurance for Americans.
Unsustainably high premiums and issues related to silver
loading are increasingly becoming a reality for families that
rely upon healthcare.gov for their insurance.
Yet, the bills before us today will not make a marked
increase in the availability of reasonably priced plans. I am
encouraged to see that we are at least discussing some
legislative ideas today, unlike last week's hearing, which I
think everyone agreed was an exercise in futility.
Once again, I would like to make it clear that there is
bipartisan support for protecting coverage for individuals with
preexisting conditions. Many on our side have expressed that
sentiment.
Certainly, we have people that we know in our families or
in our--amongst our employers when we--employees when we were--
before we came to Congress or in our medical practices that are
affected by the status of preexisting conditions.
But the constituents in my district are struggling to
afford their health insurance, and I am sure the district I
represent is not unique in that regard.
What good is health insurance if you are afraid to use it
because you cannot afford your deductible? I have a lot of
people that I represent who cannot afford a flat tire, let
alone a $6,800 deductible in the bronze plan sold by
healthcare.gov.
This is the issue that I would like to see us tackle, and I
am disappointed that none of the bills before us today will
move that.
What I find most troubling about today's hearing is that
our colleagues are questioning the flexibility that they put
into their own law. Section 1332 of the Affordable Care Act
provides States the opportunity to apply for State Innovation
Waivers.
These waivers allow States to come up with inventive ways
to insure their population while safeguarding their access to
quality insurance. Section 1332 of the Affordable Care Act
explicitly authorizes the Department of Health and Human
Services and the Treasury Department to waive certain ACA
coverage requirements it has written into law.
To be clear, I did not vote for this law, nor did I receive
positive feedback from my constituents about the law's
implementation.
However, States like Alaska have had success with these
waivers, which gives States room to repair their markets that
have been damaged by the Affordable Care Act.
This hearing is another attempt to distract from the
Democratic Party's agenda to establish Government-run, single-
payer healthcare. Last week it was said that there are other
committees in the House that are holding hearings and drafting
legislation to establish such a plan.
On February 7th, the magazine Modern Healthcare published
an article that says a draft version of the House Democrats'
upcoming Medicare-for-all bill proposes a national system that
would prepay hospitals with lump sums while keeping fee-for-
service models for individual physicians.
This news outlet obtained a 127-page draft that was dated
January 14th, but I have yet to see such a draft. It is
concerning that the media knows more than the members of this
subcommittee about the details of this proposal.
Based on what I have read about the supposed draft, I am
concerned. I will tell you, as a physician I know that the
critical doctor-patient relationship is threatened, and I do
not believe that the Government should hinder a doctor's
ability to act in the best interest of his or her patient.
According to the Modern Healthcare article, this proposal
would implement a global budget and, once that is set,
hospitals and institutions would need to stick to it for all
outpatient and inpatient treatment.
So that is what is truly concerning about this. What
happens if the budget runs out? Are patients told, well, we are
sorry we are out of money--maybe you could try this again next
year.
This is a recipe for waiting lines. This is a recipe for
rationing care, and the sooner people understand that the
better. Meanwhile, there is a greater percentage of Americans
in employer health coverage than at any time since the year
2000.
The number of Americans with employer-sponsored health
coverage has increased by at least 2.5 million and probably
much more than that since President Trump took office. Where
are the CBO coverage figures on the expansion of employer-
sponsored health plans because more people are working now than
there were before the President took the oath?
The President's Council of Economic Advisors projects that
the administration's recent actions will create $453 billion in
net benefits for consumers and taxpayers over the next 10
years.
Again, as a holder of one of the so-called junk policies, I
had a health savings account before the previous administration
told me I didn't know what I was doing and couldn't manage it
and took it away from me.
I welcome the fact that the administration has provided
this flexibility, and I will yield back my time.
[The prepared statement of Mr. Burgess follows:]
Prepared statement of Hon. Michael C. Burgess
Thank you, Chairwoman Eshoo. Today, we have been convened
once again to discuss issues that will not improve the
affordability of health insurance for Americans. Unsustainably
high premiums and issues related to silver loading are
increasingly becoming the reality for folks that rely upon
individual market insurance, yet the bills before us today will
not make a marked increase in the availability of reasonably
priced plans. I am encouraged to see that we are at least
discussing some legislative ideas today, unlike last week's
hearing, which nearly all of the witnesses agreed was an
unnecessary exercise.
Once again, I would like to make it clear that there is
vast, bipartisan support for protecting coverage for
individuals with preexisting conditions. Many of us on our side
of the dais have experience with preexisting conditions in our
own families, or providing insurance for the employees of their
businesses.
The constituents in my district are struggling to afford
their health insurance, and I am sure that my district is not
the only one suffering from sky-high premiums and deductibles.
What good is healthcare insurance if you are afraid to use it
because you can't afford your deductible? This is an issue that
I would like to see us tackle, and I am disappointed that none
of the bills before us today will move that ball down the
field.
What I find most troubling about today's hearing is that
our Democratic colleagues are questioning the flexibility that
they put in their own law. Section 1332 of the Affordable Care
Act provided States with the opportunity to apply for State
Innovation Waivers. These waivers allow States to come up with
inventive ways to insure their populations while safeguarding
their access to quality insurance.
Section 1332 of the ACA's text explicitly authorizes the
Department of Health and Human Services and the Treasury
Department to waive certain ACA coverage requirements. This is
written into law. I did not vote for the law, nor did I receive
positive feedback from my constituents about the law's
implementation; however, States like Alaska have had success
with these waivers, which give States room to repair their
markets that have been damaged by the Affordable Care Act.
This hearing is another attempt to distract from the
Democratic Party's agenda to establish Government-run, single-
payer healthcare. As I said last week, there are other
committees in the House that are holding hearings and drafting
legislation to establish such a plan. On February 7th, Modern
Healthcare published an article that says ``A draft version of
the House Democrats' upcoming Medicare for All bill proposes a
national system that would prepay hospitals with lump sums
while keeping a fee-for-service model for individual
physicians.''
The news outlet obtained a 127-page draft that was dated
January 14th, but I have yet to see such a draft. It is
concerning that the media knows more than the members of this
committee about the details of this proposal. Based on what I
have read about this supposed draft, I am concerned. As a
physician, I know howcritical the doctor-patient relationship
is, and I do not believe that the Government should hinder a
doctor's ability to act in the best interest of his or her
patient. According to the Modern Healthcare article, Ms.
Jayapal's proposal would implement a global budget and once
that is set ``hospitals and institutions would need to stick to
it for all outpatient and inpatient treatment.'' That is what
terrifies me. What happens if the budget runs out? Are patients
told, ``Sorry, we ran out of money, try again next year?''
Meanwhile, there is a greater percentage of Americans in
employer health coverage than at any time since 2000. The
number of Americans with employer health coverage has increased
by more than 2.5 million since President Trump took office.
Additionally, the President's Council of Economic Advisers
project that the administration's recent actions will create
$453 billion in net benefits for consumers and taxpayers over
10 years.
Again, while I appreciate the effort to consider
legislation today, I believe that the bills before us do not
actually address the root of the problems in our healthcare
system today. I yield back.
Ms. Eshoo. I thank the ranking member.
Just something for the record to the ranking member: I
don't agree with your characterization of the last hearing that
we had. Everyone does not agree with your characterization. I
think your side does, but our side doesn't.
With that, I would now like to recognize the chairman of
the full committee, Mr. Pallone.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Madam Chairwoman.
Today, this committee begins to fulfill the promise we made
to reverse the repeated sabotage of our Nation's healthcare
system by the Trump administration, in addition to make
healthcare more affordable and to protect the more than 133
million Americans with preexisting conditions.
We will be discussing four bills that will make a real
difference in people's lives. The first bill, introduced by Ms.
Castor, would reverse the Trump administration's regulation to
expand junk insurance plans known as short-term limited
duration health insurance.
The Trump administration expanded these junk plans from the
current 3-month term and made these plans available for up to 3
years. These junk plans are exactly that: junk.
They discriminate against people with preexisting
conditions. They set higher premiums for people based on age,
gender, and health status. They deny access to basic benefits
like prescription drugs, maternity care, and mental health and
substance abuse treatment, and they set arbitrary dollar limits
for healthcare services, leading to huge surprise bills for
consumers.
Expanding these junk plans also makes health insurance more
expensive for people with preexisting conditions by undermining
the market for comprehensive coverage. The business model of
the companies that sell these junk plans is to spend as little
as possible on the health of their enrollees.
They accomplish this by denying coverage of preexisting
conditions, kicking people off their health insurance if they
get sick or seek medical treatment, and pocketing their premium
dollars as pure profit.
This profiteering at the expense of people's health is
simply unacceptable. It is why we passed the Affordable Care
Act in the first place--to rein in exactly these types of
abuses by health insurance companies.
And yet, the Trump administration would give insurance
companies the green light to once again discriminate against
people with preexisting conditions.
Now, Ms. Castor's bill is an important step in
strengthening the individual market and reversing the harm
caused by the Trump administration. Ms. Eshoo's bill requires
these short-term plans to bear a consumer warning.
As we will hear from our witnesses today, junk plans are
often deceptively marketed as comprehensive coverage, and
consumers are not always aware of the fine print. This is about
a consumer's right to know.
The bill would require issuers of these plans to display a
clear, prominent warning advising consumers that the plan does
not cover preexisting conditions, is temporary, and may not
cover most healthcare costs, and that coverage can be
terminated when someone gets sick or seeks medical treatment.
And I believe this bill works in conjunction with Ms.
Castor's bill. While consumer disclosure is important, we must
also prevent all of the problems associated with expanding
these plans to 3 years.
We will also be discussing Ms. Kuster's bill to rescind the
Trump administration's 1332 guidance. Section 1332 of the ACA
was designed to give States the ability to examine system
reforms that would improve the well-being of their residents.
The key word there is improve. States are also required to
maintain the affordability and comprehensiveness of coverage
and keep the same number of people insured as under the ACA.
But the Trump administration's 1332 guidance turns the
statute on its head, giving States the green light to undermine
protections for preexisting conditions. The guidance also gives
States the green light to provide taxpayer subsidies for junk
plans and reinvigorates ideas from the failed Republican repeal
bill, such as the flat tax credits that do not keep up with
rising premiums and shift costs onto working families.
This guidance is bad for consumers, bad for individuals
with preexisting conditions, and bad for taxpayers. It exceeds
the administration's authority and is contrary to congressional
intent.
And, finally, we will be discussing Ms. Blunt Rochester's
bill to restore consumer outreach and enrollment funding that
is so important to making healthcare more accessible and
affordable.
The Trump administration gutted funding for consumer
outreach and marketing by 90 percent. The administration's
refusal to invest in outreach and enrollment is making it
harder for Americans to get healthcare, and this is leading to
lower enrollment numbers.
The administration has overseen 3 consecutive years of
decline in enrollment, and new enrollment is down by 50
percent. The administration's sabotage has resulted in the
highest uninsured rate in 4 years.
So Ms. Blunt Rochester's bill would fund critical outreach
and enrollment at $100 million, which was the level before
Trump's sabotage. Her bill also prevents the administration
from using these funds to promote junk plans, and her bill is
an important step in lowering healthcare costs and expanding
coverage to more Americans.
Now, all four bills we are considering today are important
first steps in lowering healthcare costs and protecting
consumers with preexisting conditions, and I commend all four
Members for their leadership and look forward to continuing to
work with my colleagues as we make healthcare more affordable
for all Americans.
And, again, I want to thank the chairwoman. I think this is
a very important hearing and this will lead to legislation
being passed.
Thank you, Madam Chair.
[The prepared statement of Mr. Pallone follows:]
Prepared statement of Hon. Frank Pallone, Jr.
Today this committee begins to fulfill the promise we made
to reverse the repeated sabotage of our Nation's healthcare
system by the Trump administration, to make healthcare more
affordable, and to protect the more than 133 million Americans
with preexisting conditions.
We will be discussing four bills that will make a real
difference in people's lives. The first bill, introduced by Ms.
Castor, would reverse the Trump administration's regulation to
expand junk insurance plans known as short-term limited
duration health insurance. The Trump administration expanded
these junk plans from the current 3-month term and made these
plans available for up to 3 years.
These junk plans are exactly that: junk. They discriminate
against people with preexisting conditions. They set higher
premiums for people based on age, gender, and health status.
They deny access to basic benefits like prescription drugs,
maternity care, and mental health and substance abuse
treatment. And they set arbitrary dollar limits for healthcare
services, leading to huge surprise bills for consumers.
Expanding these junk plans also makes health insurance more
expensive for people with preexisting conditions, by
undermining the market for comprehensive coverage.
The business model of the companies that sell these junk
plans is to spend as little as possible on the health of their
enrollees. They accomplish this by denying coverage of
preexisting conditions, kicking people off their health
insurance if they get sick or seek medical treatment, and
pocketing their premium dollars as pure profit. This
profiteering at the expense of peoples' health is unacceptable.
It is why we passed the Affordable Care Act in the first place,
to rein in exactly these types of abuses by health insurance
companies. And yet the Trump administration would give
insurance companies the green light to once again discriminate
against people with preexisting conditions.
Ms. Castor's bill is an important step in strengthening the
individual market and reversing the harm caused by the Trump
administration.
Ms. Eshoo's bill requires these short-term plans to bear a
consumer warning. As we will hear from our witnesses today,
junk plans are often deceptively marketed as comprehensive
coverage, and consumers are not always aware of the fine print.
This is about a consumer's right to know. The bill would
require issuers of these plans to display a clear, prominent
warning, advising consumers that the plan does not cover
preexisting conditions, is temporary and may not cover most
healthcare costs, and that coverage can be terminated when
someone gets sick or seeks medical treatment.
I believe this bill works in conjunction with Ms. Castor's
bill. While consumer disclosure is important, we must also
prevent all of the problems associated with expanding these
plans to 3 years.
We will also be discussing Ms. Kuster's bill to rescind the
Trump administration's 1332 guidance. Section 1332 of the ACA
was designed to give States the ability to examine system
reforms that would improve the well-being of their residents.
The key word there is improve. States are also required to
maintain the affordability and the comprehensiveness of
coverage, and keep the same number of people insured as under
the ACA. The Trump administration's 1332 guidance turns the
statute on its head, giving States the green light to undermine
protections for preexisting conditions. The guidance also gives
States the green light to provide taxpayer subsidies for junk
plans, and reinvigorates ideas from the failed Republican
repeal bill, such as flat tax credits that do not keep up with
rising premiums and shift costs onto working families. This
guidance is bad for consumers, bad for individuals with
preexisting conditions, and bad for taxpayers. It exceeds the
administration's authority and is contrary to congressional
intent.
Finally, we will be discussing Ms. Blunt Rochester's bill
to restore consumer outreach and enrollment funding that is so
important to making healthcare more accessible and affordable.
The Trump administration gutted funding for consumer outreach
and marketing by 90 percent. The administration's refusal to
invest in outreach and enrollment is making it harder for
Americans to get healthcare. This is leading to lower
enrollment numbers. The administration has overseen 3
consecutive years of decline in enrollment and new enrollment
is down by 50 percent. The administration's sabotage efforts
have resulted in the highest uninsured rate in 4 years. Ms.
Blunt Rochester's bill would fund critical outreach and
enrollment at $100 million , which was the level before Trump's
sabotage. Her bill also prevents the administration from using
these funds to promote junk plans. Ms. Blunt Rochester's bill
is an important step in lowering healthcare costs and expanding
coverage to more Americans.
All four bills we are considering today are important first
steps in lowering healthcare costs and protecting consumers
with preexisting conditions. I commend all four Members for
their leadership, and look forward to continuing to work with
my colleagues as we make healthcare more affordable for all
Americans.
I yield back.
Ms. Eshoo. I thank the chairman.
And now I would like to recognize the distinguished ranking
member of the full committee, Mr. Walden, my friend.
Mr. Walden. Good morning, Madam Chair.
Ms. Eshoo. Good morning.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Thank you for having this hearing, and as I
said in the hearing down below, I know the Dingell family is in
all of our thoughts and prayers this morning as they cope with
this terrible loss of our distinguished chairman for whom the
big hearing room is named, and I know that he taught us all how
to legislate and despite, as I said downstairs, our best
attempts to emulate his yes-or-no questioning, nobody else
pulls it off like John Dingell could pull it off. So he is in
our thoughts.
So good morning, and given the title of today's hearing, I
too am concerned for the second time is as many hearings in
this subcommittee that we are really not addressing the real
challenges the consumers are facing, which is the high cost of
healthcare.
Madam Chair, I said it last week, I'll say it again. We
need to work together to help States stabilize health markets
damaged by the ACA, cut out-of-pocket costs that consumers are
having to pay with these high deductibles, promote access to
preventive services, encourage participation in private health
insurance, and increase the number of options available through
the market.
Unfortunately, today's hearing and these bills I don't
think are adequately addressing any of these goals.
Why would our Democratic colleagues be opposed to States
innovating on behalf of their citizens? Why would they be
opposed to providing patients flexible and affordable insurance
options that best fit those patients' needs? I just don't think
it makes sense.
The administration is allowing 10 million Americans more
choices and more affordable health insurance options. The
Democrats' Medicare-for-all proposal would force over 150
million Americans to lose their employer- or their union-
sponsored health insurance, and I think that is wrong.
You want to talk about sabotage, that is what we should be
having a hearing on, is Medicare for all and what is coming. I
also want to reiterate my call that the Energy and Commerce
Committee hold hearings on that bill.
So today, instead of having a constructive, bipartisan
dialogue about helping States innovate, about providing options
for patients who are struggling to make ends meet, we are here
for the second time in as many weeks casting the blame of
Obamacare's failures on the current President.
The fact is, we all support protecting people with
preexisting conditions and we share a desire to stabilize the
individual health insurance market. Last Congress, I advocated
for policies that would achieve both of these goals, first
through the AHCA's Patient and State Stability Fund, and I made
two more attempts at bipartisan stabilization reforms last
Congress, working with my colleagues in the Senate.
Unfortunately, House Democrats repeatedly blocked our
creative solutions--solutions like improving 1332 waivers to
better meet States' unique needs and modernize programs to
stabilize premiums.
Now, my home State of Oregon, which celebrates its birthday
tomorrow, we have an active 1332 waiver for a cost-based
reinsurance program. I supported my home State's application
and approval. I was the only Republican in our congressional
delegation.
Why? Because it represents the very fabric of federalism.
What works best for Oregon may not work best for California,
Madam Chair.
Take Alaska, for example. In studying their individual
market, they found that a conditions-based reinsurance program
would better serve their residents. Before they received a
waiver, 2017 rates were projected to increase 42 percent.
But after shifting individuals with one of 33 medical
conditions into a separate pool, premiums for the lowest-cost
bronze plan fell by an astounding 39 percent. And in Oregon,
the reinsurance program kept premiums 6 percent below what they
would have been without it.
These are real savings for patients in my State. Oregon and
Alaska--one pretty traditionally blue, the other pretty
traditionally red--found a way to take advantage of 1332
waivers to best serve their citizens.
They are not alone. Today, eight States have active
waivers: Alaska, Hawaii, Minnesota, Maryland, Maine, New
Jersey, Oregon, and Wisconsin. Eight diverse and unique States,
but they have at least one thing in common, Madam Chair, and
that is each of these eight active waivers were approved under
the Obama administration's 1332 guidance.
Yet, today we are here to discuss nullifying the Trump
administration's 1332 guidance. Why not first observe how
States react and reform their markets through the new guidance?
We should understand that better. Perhaps a better use of
our time would be spent discussing bipartisan solutions to
reform and improve these waivers. We all want markets that
work. We do.
We all want patients to have access to high-quality,
affordable-priced health coverage. Unfortunately, the
ironically named Affordable Care Act had made insurance for
many unaffordable, and I heard it again yesterday from wheat
growers in my district.
Together, and with the States as partners, not
subordinates, we can achieve the shared goals of well-
functioning and stable markets that provide Americans
affordable healthcare options.
So one thing is clear: We need to guarantee our healthcare
system works better for all Americans. That we can agree on,
and that is why our goal should be to advance solutions to
protect patients, stabilize healthcare markets, encourage
greater flexibility for States, and promote policies to help
Americans get and keep coverage.
So, Madam Chair, thank you for having the hearing today. We
look forward to working with you, and I yield back.
[The prepared statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
Good morning, Madam Chair. Given the title of today's
hearing, I am concerned that for the second time in as many
hearings in this subcommittee, we are not addressing the real
challenges that consumers are facing, which is the high cost of
healthcare.
Madam Chair, I said it last week, and I'll say it again: We
need to work together to help States stabilize health markets
damaged by the ACA, cut out-of-pocket costs, promote access to
preventive services, encourage participation in private health
insurance, and increase the number of options available through
the market.
Unfortunately, today's hearing, and these bills are not
adequately addressing these goals. Why would our Democratic
colleagues be opposed to States innovating on behalf of their
citizens? Why would they be opposed to providing patients
flexible and affordable insurance options that best fit their
needs? This just doesn't make sense.
The administration is allowing 10 million Americans more
choices and more affordable health insurance options. The
Democrats' Medicare for All proposal would force over 150
million Americans to lose their employer or union sponsored
health insurance. You want to talk about sabotage, that is what
we should be having a hearing on. I want to reiterate my call
that Energy and Commerce hold hearings on this issue.
So today, instead of having a constructive, bipartisan
dialogue about helping States innovate and providing options
for patients who are struggling to make ends meet, we're here
for the second time in as many weeks casting the blame of
Obamacare's failures on our President.
The fact is we all support protecting people with
preexisting conditions and we share a desire to stabilize the
individual health insurance market.
Last Congress, I advocated for policies that would achieve
this goal. First, through the ACA's Patient and State Stability
Fund. And I made two more attempts at bipartisan stabilization
reforms last Congress, working with our colleagues in the
Senate. Unfortunately, House Democrats repeatedly blocked our
creative solutions. Solutions like improving 1332 waivers to
better meet States' unique needs and modernize programs to
stabilize premiums.
In Oregon, we have an active 1332 waiver for a cost-based
reinsurance program. I supported my home State's application
and approval as the only Republican in our congressional
delegation. Why? Because it represents the very fabric of
federalism. What works best for Oregon may not work best for
California, Madam Chair.
Take Alaska, for example. In studying their individual
market, they found that a conditions-based reinsurance program
would better serve their residents. Before they received a
waiver, 2017 rates were projected to increase 42 percent. But
after shifting individuals with one of 33 medical conditions
into a separate pool, premiums for the lowest-cost bronze plan
fell by an astounding 39 percent. And in Oregon, the
reinsurance program kept premiums six percent below what they
would have been without it. Those are real savings for patients
in my State.
Oregon and Alaska--one State traditionally blue, the other
traditionally red--found a way to take advantage of 1332
waivers to best serve their citizens.
And they're not alone. To date, 8 States have active
waivers: Alaska, Hawaii, Minnesota, Maryland, Maine, New
Jersey, Oregon, and Wisconsin. Eight diverse and unique States.
But they have at least one thing in common, Madam Chair. Each
of these eight active waivers were approved under the Obama
administration's 1332 guidance. Yet, today, we're here to
discuss nullifying the Trump administration's 1332 guidance.
Why not first observe how States react and reform their markets
through the new guidance? Perhaps a better use of our time
would be spent discussing bipartisan solutions to reform and
improve these waivers.
We all want a market that works. We all want patients to
have access to high-quality, affordably priced health coverage.
Unfortunately, the ironically named Affordable Care Act has
made insurance unaffordable for many Americans seeking
individual insurance coverage. Together and with the States as
partners, not subordinates, we can achieve the shared goals of
well-functioning and stable market places that provide
Americans affordable health insurance options.
One thing is clear: We need to guarantee our healthcare
system works better for all Americans. That's why our goal
should be to advance solutions to protect patients, stabilize
healthcare markets, encourage greater flexibility for States,
and promote policies to help Americans get--and keep--coverage.
Ms. Eshoo. And I thank the gentleman.
I now would like to welcome our witnesses for today's
hearing. First, Ms. Katie Keith, the associate research
professor and adjunct professor of law at Georgetown
University. Thank you for joining us.
Ms. Jessica Altman, commissioner, Pennsylvania Insurance
Department. Very important job. Welcome to you.
And to Ms. Grace-Marie Turner, president of the Galen
Institute, we thank you for accepting our invitation to join us
today, and we look forward to your testimony.
And I am going to recognize each witness for 5 minutes to
provide your opening statement, and just a little housekeeping.
Our lighting system--what is in front of you is a series of
lights. The light will initially be green, and then it will
turn yellow when you have 1 minute to go, kind of like the
League of Women Voters debates that we have all been in, right,
with the lighting system. And we don't have a bell--we have a
lighting system--and after that you will have 1 minute
remaining, and at that point the light will turn red when your
time expires--not when you expire, but when your time expires.
So let me begin with Ms. Katie Keith. You are recognized
for 5 minutes, and welcome again and thank you to you.
STATEMENTS OF KATIE KEITH, ASSOCIATE RESEARCH PROFESSOR AND
ADJUNCT PROFESSOR OF LAW, GEORGETOWN UNIVERSITY; JESSICA K.
ALTMAN, COMMISSIONER, PENNSYLVANIA INSURANCE DEPARTMENT; GRACE-
MARIE TURNER, PRESIDENT, GALEN INSTITUTE
STATEMENT OF KATIE KEITH
Ms. Keith. Thank you very much, Chairwoman Eshoo, Ranking
Member Burgess, and members of the committee.
My name is Katie Keith, and I am a faculty member at
Georgetown University, where I study private health insurance.
I am also the author of the following: The ACA Blog Series for
the Health Policy Journal of Health Affairs, where I am
responsible for tracking and chronicling implementation of the
Affordable Care Act, including many of the changes that the
Trump administration has made in recent years.
My testimony today will focus on just three of those
changes, although there have been many more than that, as you
all know. The actions I will discuss today undermine the ACA
risk pools, leave consumers who become sick without access to
healthcare, and drive up premiums for people with preexisting
conditions.
I will begin with short-term plans. Last August, three
departments issues a new regulation allowing short-term plans
to be sold for up to 12 months and extended for up to 3 years.
Short-term plans do not have to comply with the Affordable Care
Act, and they are allowed to discriminate against patients with
preexisting conditions.
These plans are medically underwritten and do not have to
cover entire categories of benefits. A recent study showed that
43 percent of these plans do not cover mental health services.
Seventy-one percent do not cover prescription drugs.
In the midst of an opioid crisis, 62 percent do not cover
substance use services. And none of these plans covered
maternity care.
Some had out-of-pocket maximums as high as $30,000 and
lifetime limits on care. These plans, which are highly
profitable for the insurers that sell them, tend to only work
for those who are healthy.
The harm to consumers from this new rule is twofold. First,
these policies pose a significant risk to the individuals who
enroll in them, only to find that the care that they need is
not covered when they become sick.
Many newspapers are filled with stories these days of
consumers who have enrolled in these plans only to wind up
facing hundreds of thousands of dollars in unpaid medical
bills.
Second, these policies drive up premiums for those with
preexisting conditions, particularly for middle-income families
who do not qualify for ACA subsidies.
Moving on to Section 1332, the Trump administration
recently issued guidance that encourages States to offer
skimpier coverage, including short-term plans. The new guidance
relaxes the previous interpretation of what we refer to as the
statutory guardrails under Section 1332.
This could result in State efforts to advance less
comprehensive coverage and drive up premiums for people with
preexisting conditions. It is worth noting that there have been
questions raised about the legality of both the short-term plan
rule and the Section 1332 guidance.
The short-term plan rule has already been challenged in
court and a lawsuit brought by consumer and patient advocates,
including the Little Lobbyists, who I believe testified before
this subcommittee last week.
These patient advocates have sued over the rule because of
its impact on people living with HIV, people with mental health
issues, and people with other chronic conditions and
disabilities.
The 1332 guidance has not yet been challenged, but approval
of a waiver under that guidance would likely be challenged
quickly.
Finally, the Trump administration has made dramatic cuts to
funding for ACA marketing and outreach. This includes immediate
cuts during the final week of the 2017 open enrollment period
followed by a 90 percent reduction for 2018 from $100 million
to $10 million.
Those cuts were maintained by CMS for 2019, and CMS has
reduced funding for the navigator program by 84 percent. These
funding decisions were made even though outreach and marketing
helps bring in younger, healthier consumers, which in turn
helps keep premiums stable.
At the same time, awareness of the marketplaces and the
financial assistance that many people are eligible for remains
low. We are finding that enrollment of those key features is
still low even after many years. That is particularly true
among the uninsured.
We are also seeing that enrollment of new consumers, who
tend to be younger and healthier, is down. Enrollment of new
consumers has dropped by about 50 percent since 2016 alone.
According to one estimate, there are at least 2.3 million
fewer new enrollees that would otherwise be in the marketplace
due solely to cuts to outreach and advertising.
In closing, most people are healthy most of the time. But
everyone eventually gets sick and needs access to comprehensive
health insurance. The actions discussed today do nothing to
advance high-quality affordable health insurance.
Instead, these actions divide the risk pool between the
healthy and sick and increase premiums for people with
preexisting conditions.
Thank you again for inviting me. It is an honor and
privilege to be here, and I look forward to your questions.
[The prepared statement of Ms. Keith follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you, Professor Keith.
I now would like to recognize Ms. Jessica Altman, again,
the commissioner from Pennsylvania Insurance Department. You
have--you are recognized to present your testimony to us.
STATEMENT OF JESSICA K. ALTMAN
Ms. Altman. Thank you, and good morning, Chairwoman Eshoo,
Ranking Member Burgess, and members of the Health Subcommittee.
As mentioned, my name is Jessica Altman, and I am
privileged to serve as insurance commissioner for the
Commonwealth of Pennsylvania.
I want to thank you for convening today's important
discussion regarding short-term plans and for the opportunity
to voice concerns about the potential harms for consumers and
for the health insurance market, more broadly.
As the name says, short-term plans were created to fill
brief gaps in coverage. The plans generally have lower premiums
but significant coverage limitations, as the protections of the
Affordable Care Act, which I will call ACA, do not apply.
By recently extending the duration and renewability of
short-term plans, the Federal administration is seeking to make
short-term plans look and act like a viable alternative to
comprehensive major medical insurance without extending the
protections of the ACA.
Today, I will highlight my four primary concerns
illustrated by actual consumer complaints and conclude by
sharing with you a little bit about my department's approach to
short-term plans. Please reference my testimony for a more
thorough perspective.
The first primary concern with the plans that I raise today
is one Katie covered well. They have very limited benefits and
consumer protections. Short-term plans do not have to cover
essential health benefits, and in Philadelphia the same study
Katie mentioned found that less than 60 percent covered mental
health, only one-third in the midst of the opioid crisis that
is hitting Pennsylvania very hard covered substance use
disorder treatment or prescription drugs, and none covered
maternity care.
Short-term plans can impose lifetime and annual limits on
coverage, do not include appeal rights, and are not subject to
a medical loss ratio requirement that sets a floor for the
percent of premium spent on actual medical care.
Instead, for the two short-term insurers with 80 percent
market share, less than 50 cents of every dollar collected in
premiums was spent on actual medical care.
Recently, my department worked with a woman who fainted at
work and hit her head--something that could happen to any of
us--and it resulted in emergency transport to the hospital.
The short-term plan paid $200 for the ambulance, leaving
the patient with $1,250. At the ER, the plan provided $250
while the bill was over $2,400. Then she was admitted to the
ICU, where the benefit was, again, $1,250 for a bill that was
$9,300.
Finally, the plan paid another $1,250 for an outpatient
test while the bill was $4,900. After considering cost sharing,
the plan covered just over $1,300, the consumer $16,000.
My second concern is the lack of consumer disclosure
regarding benefits and benefit exclusions. The plans are sold
without a consumer's access to provider directories,
formularies, sample coverage documents, summaries of benefits
and coverage, and a uniform glossary, all of which are required
to be provided with Affordable Care Act plans.
The lack of consumer disclosure is so troubling in the
short-term market that we are creating our own consumer
awareness campaign to try to cut through the noise of
robocalls, well-placed online advertising, misleading website
URLs, and a lot of fine print that are currently bombarding
consumers across the country to purchase these plans.
A recent study found that consumers shopping online for
health insurance, including those using search terms like
``Obamacare'' or ``Enroll ACA,'' will most often be directed to
websites and brokers selling short-term plans or other non-ACA-
compliant coverage, and this is, of course, exacerbated by the
lack of comprehensive ACA information, outreach, and
enrollment.
The third issue is claims practices. I am most concerned by
the use of a practice called postclaims underwriting, which
often results in recision or denial of coverage.
As short-term plans often exclude coverage for preexisting
conditions, policy holders who get sick may be investigated by
the insurer to determine whether a recently diagnosed condition
could be considered preexisting and therefore excluded.
We are currently working with a consumer who purchased a
short-term plan and was diagnosed with heart failure. After he
filed a claim for services, he was denied coverage based on the
preexisting condition. But he had never been diagnosed, never
sought, and never received care for his heart.
But instead, the insurer indicated that the claim
manifested in such a way that an ordinary, prudent individual
would have sought medical treatment and advice in the year
prior to purchasing the plan.
Through the course of working to resolve consumer
complaints, the claims practices of short-term plans have
repeatedly demonstrated an inclination to deny coverage rather
than provide it.
Lastly--and I see my time ticking down so I will be quick--
encouraging the proliferation of short-term plans has the
potential to destabilize and drive up costs for the ACA market,
especially for those with preexisting conditions, by segmenting
healthier people out of the market.
The Federal Government does also continue to push for the
proliferation of short-term plans through regulatory actions
such as the 1332 guidance, and a waiver like that under the new
guidance would not be one that Pennsylvania would pursue.
Thank you. I will shorten my remarks and welcome any of
your questions.
[The prepared statement of Ms. Altman follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you very much.
It is my understanding that Ms. Altman was an intern with
Mr. Waxman of the Energy and Commerce Committee. So
congratulations on your climb.
Ms. Altman. Thank you.
Ms. Eshoo. And your great foundational learning here at our
committee and, of course, thank you for your testimony.
Now I would like to recognize Ms. Grace-Marie Turner. You
are recognized for 5 minutes, and welcome, and we look forward
to hearing your testimony.
STATEMENT OF GRACE-MARIE TURNER
Ms. Turner. Thank you, Chairwoman Eshoo. Thank you, Ranking
Minority Member Burgess, and members of the committee for
inviting me to testify today.
I am with the Galen Institute, a nonprofit organization
focusing on ways to ensure access to affordable health coverage
for all Americans. Enrollment in the individual health
insurance market is falling. In 2018, 3 million fewer people
had individual coverage than in 2015. The primary concern is
the cost of coverage.
The administration's new 1332 guidance is designed to allow
States to repurpose some ACA money and improve their markets to
help those shut out because of high costs. Eight States have so
far created programs to separately subsidize patients with the
highest healthcare costs, lowering premiums and leading to
increased enrollment.
In addition to Alaska and Oregon, Maryland is seeing huge
price drops of 43 percent net this year. Putting the sickest
pool of people in the same pool with others, as the ACA does,
means premiums are higher, often much higher for those without
subsidies.
Virginia State Senator Bryce Reeves told us of an email he
received from a constituent in Fredericksburg who makes a good
living and tried to provide for his family but said his
insurance premiums now cost $4,000 a month. ``That is more than
my mortgage,'' he told Senator Reeves, asking what he's
supposed to do.
Cost relief is essential. The Trump administration last
year did finalize rules to expand access to temporary bridge
policies, short-term limited duration plans. These policies
help people with gaps in employment, early retirees waiting to
qualify for Medicare, young people and the gig economy, people
returning to school, and entrepreneurs starting new businesses.
These short-term plans typically cost less than half of the
cost of ACA plans. Under the Obama administration's previous
rule, people would lose their short-term plans after just 3
months even if they acquired a medical condition within that
period.
By extending the contract period to a year, people can be
protected and have coverage until the next ACA open enrollment
period. While consumers do need to be informed about these
plans, for many they may mean the difference between having the
security of coverage for a major medical event and being
uninsured.
The Council of Economic Advisors issued a report just last
week estimating that these policies produce an economic benefit
of $80 billion over the next 10 years.
I would like to turn to preexisting conditions. There is a
strong bipartisan support for these protections, as Mr. Walden
and Dr. Burgess both have ensured. The ACA assures that people
cannot be turned down or have their policies canceled because
of their health status, and these protections remain in place.
People with chronic conditions are vulnerable and do need
protection. But a woman with a serious health problem provided
us with a testimonial about why more changes are needed.
Janet reports that in 1999 she was diagnosed with hepatitis
C. She lives in Colorado and applied for coverage in the
State's high-risk pool and was accepted. Her premiums in 2010
were $275 a month. Then her liver failed. She needed a
transplant. The $600,000 bill was covered 100 percent with
$2,500 out of pocket.
Colorado's high-risk pool, however, was closed when the ACA
took effect. So she moved into the marketplace. Her premiums
rose to $450, and by 2018 they were $1,100 a month with a
deductible of $6,300.
She said those of us who are self-employed but make more
than the threshold of tax credits wind up footing the whole
bill ourselves.
Finally, regarding navigators--legislation proposed by
Representative Blunt Rochester would provide $100 million a
year for the navigator program. But CMS found that, in 2016, 78
percent of navigators failed to achieve their enrollment goals,
and navigators enrolled fewer than 1 percent of enrollees while
spending $62 million that year.
CMS now funds navigators based upon their ability to meet
their enrollment goals during the previous year and relies more
on brokers and insurance agents, who enrolled 42 percent of
enrollees.
California spent heavily on marketing last fall to increase
enrollment in its State exchange, yet it experienced a 24
percent drop in new enrollees. Marketing doesn't work when the
main reason that people don't sign up for coverage is because
of cost.
I would welcome the opportunity to work with you in
developing new ways to help lower the cost of health coverage
while maintaining quality and consumer protections, including
preexisting condition protections.
Thank you, Madam Chairman.
[The prepared statement of Ms. Turner follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you, Ms. Turner, for your testimony, and
we have now concluded the opening statements. We are going to
move to Members' questions, and I will start by recognizing
myself for 5 minutes.
I have a lot of things in front of me that have been
suggested that I ask. But after listening to your verbal
testimony, I want to mix this up a little bit.
We heard the first two witnesses, Ms. Keith and Ms. Altman,
talk about the shortcoming of these short-term plans and the
plan of the administration to stretch them out over 3 years.
Now, Ms. Turner, you said we have a commitment to
preexisting conditions in the coverage. Why is it not included
in these short-term plans?
I would also like to give 30 seconds to Ms. Keith and Ms.
Altman to ask any questions that they would like of Ms. Turner
because there is a difference between your testimony and Ms.
Turner's.
But first, can you talk about what--I think the word
commitment is conflated in its use. There is a difference
between a commitment to and actually practicing what you say
you have a commitment to.
So I don't see these very important insurance reforms that
we brought about with the ACA and you say that you have a
commitment to preexisting conditions and the other insurance
reforms.
So can you just in a minute or less explain why there is a
difference between your commitment and what is in these plans?
Ms. Turner. Short-term plans are really gap coverage.
People buy them because they can't afford coverage that has all
of the ACA protections.
Ms. Eshoo. Let me ask you this: Are you opposed to an
advisory in plain English on the cover of these policies to
inform the potential consumer what is not included so that it
is very clear about what they are buying?
Ms. Turner. Oh, absolutely. Absolutely. I think consumers
very, very much need to be informed about their policy.
Ms. Eshoo. OK. Good. Good.
All right. Now, Ms. Keith, do you want to ask a question or
have a comment?
Ms. Keith. Yes. I don't have a question. Thank you,
Chairwoman. What I would say is something that did not get
brought up in my oral statement yet, is that the limitations of
these plans, there is no magic about why these short-term plans
are cheaper than ACA plans.
They are, on average, about 54 percent less expensive.
There is no secret to that. The reason is because they can
exclude people with preexisting conditions. That fact alone
allows them to be 38 percent cheaper than ACA plans.
When you add in some of the benefit gaps and out-of-pocket
costs, that is what makes them half the cost of ACA plans. And
so the idea of giving people coverage, you know, is the product
worth buying if it doesn't cover anything when you need to use
it, I think might be the question.
Ms. Eshoo. Ms. Altman?
Ms. Altman. I was going to bring up the same study, and to
put it another way, 70 percent of the price difference between
short-term plans and traditional ACA plans is due to
preexisting condition exclusions. The story you told----
Ms. Eshoo. Can you say that again?
Ms. Altman. Seventy percent of the difference in price
between short-term plans and Affordable Care Act coverage is
due to excluding preexisting conditions.
You know, the story you told from Colorado was incredibly
compelling and, to me, it really reinforces why people need
comprehensive coverage so that you can get coverage for that
expensive transplant and you can get coverage for your liver
failure and your hepatitis C.
You know, my only question is today you talked about how
the purpose of short-term plans is to fill gaps in coverage and
that is the intended purpose, and I suppose my question is, If
it is meant to fill a gap, why would it need to be 3 years?
Ms. Eshoo. Can you answer that, Ms. Turner?
Ms. Turner. I think that that is really up to consumers.
Many of the people who are uninsured now--many of the 3 million
are uninsured because they simply can't afford coverage.
State Senator Reeves' constituent desperately wants to
provide for his family until another option is better. So he
can't know how long he is going to need to have this
protection.
One of the reasons that the new rule extended that coverage
is because 3 months just is too short a time to give anybody
the security that they need coverage, and in Colorado Janet is
actually now in an ACA plan. Her meds are not covered under the
plan that she is in under the ACA, so she has $19,000 out of
pocket now.
Ms. Eshoo. Well, I think--if I might say this, I think it
is important for consumers to have choice. I am not opposed to
that.
What I am worried about is, I found this out in healthcare
the two basic things. Everyone knows what they pay in a
premium. Most people don't know what they are buying--what they
are getting--and this can be a really slippery slope for a lot
of people and--or maybe for a few that is going to make them,
especially if they are healthy and they are young, they are
betting on their immortality and that nothing is ever going to
happen to them. But it is--there are a lot of questions, so
thank you.
My time has certainly expired. I now would like to
recognize Mr. Griffith for his 5 minutes of questioning.
Mr. Griffith. Thank you, ma'am. Right here beside you.
Ms. Eshoo. Yes. Right. Sitting right next to me.
Mr. Griffith. I am glad to hear, Madam Chair, that you are
for consumers having choices. I think that is very important. I
also look forward to working with you on your bill--1147, I
believe--that deals with making sure that consumers have the
information that they need.
I would say, as we work forward on that piece of
legislation, it looks to me right now that it includes such a
huge volume that many consumers probably wouldn't read it.
So what we have to do is try to figure out where the sweet
spot is, and I look forward to working with you on that because
I do think it is important that consumers know, if they are
buying an alternative product, that, A, it is an alternative
product and, B, that it doesn't cover everything but here is
what it does cover, because, as you pointed out, Ms. Turner,
many folks are looking for something because they cannot afford
the plans that fall under the ACA with all the mandates that
are there.
Could you repeat the quote from Senator Bryce Reeves? Since
I am from Virginia, he is--while his district is about 4 hours
away, I do think it is instructive to hear from him again.
Could you repeat that for us?
Ms. Turner. Yes. Senator Reeves was at an event--speaking
at an event. He had just gotten an email from a constituent
saying that he had just received his healthcare bill to provide
for his family, and the premium was $4,000 a month, which he
said, ``That is more than my mortgage. What am I supposed to
do?''
Mr. Griffith. Yes. We hear stories similar to that 4 hours
away on the other side of Virginia. I represent the southwest
portion of the State.
We hear of a lot of people who can't afford the out-of-
pockets and the deductibles--that that is forcing them to look
at bankruptcy options--the same complaints we heard before that
the Affordable Care Act was supposed to fix. Hasn't worked for
my constituents.
It, clearly, hasn't worked on the other side of the
Commonwealth of Virginia. I can't speak to the country as a
whole. But from anecdotal evidence, it seems that the same is
out there.
And as you pointed out in your testimony, this is one of
the reasons why people are looking at some of these
alternatives. I think they ought to know what they are getting
because some people will just buy something because it is
cheaper. But some people buy something that doesn't cover
everything because they are desperate. Is that true?
Ms. Turner. That is true and, unfortunately, in many parts
of the country and especially Virginia, if you live in one
county you may not have a choice. This constituent had no other
choice in Fredericksburg, and so people are looking exactly for
that--to find other ways they can have health insurance they
can afford and protect their families but not have it--not be
able to pay their mortgage.
Mr. Griffith. It is interesting that you raise that point
about the choice because, under the ACA--I represent 29
different geopolitical subdivisions, and for those that aren't
from Virginia, we have separate cities.
So some of those are small cities as well as counties. But
I have 29. A fair number of those have but one provider. They
just--the market is just not there to support it.
I am surprised that that is the case in the Fredericksburg
area, because that is a much bigger area populationwise than
some of my jurisdiction. But you are saying they have that
problem too--there was just one provider of insurance?
Ms. Turner. Yes, and I would hope that Virginia would look
at the Section 1332 waivers to figure out how they can attract
more competitors back into the markets.
Mr. Griffith. And I would hope that that would be the case,
too. Let us talk about the woman you spoke of, Janet with
hepatitis C. Could you go over the numbers again of how much
she was paying under the plan that resembled the--what the
House was trying to do last year, or 2 years ago now, to do our
repeal and replace--with the high-risk pool? She was only
paying $275, I think you said, a month for her insurance?
Ms. Turner. When she was first diagnosed with hepatitis C
in 1999, her premiums in the State's high-risk pool were $275 a
month, and then they rose. When she had to first enroll, that
high-risk pool was closed so she had----
Mr. Griffith. So hang on. But before that high-risk pool
was closed, you indicated, she had to have a liver transplant?
Ms. Turner. She had to have--her liver failed and she had
to have a $600,000 liver transplant.
Mr. Griffith. And that was covered?
Ms. Turner. Totally covered by the high-risk pool. She had
$2,500 out of pocket. But then when the ACA took effect, her
premiums rose to $450, and by 2018 they were $1,100 a month,
and one of the things I didn't mention in my testimony is that
none of her antirejection drugs are covered under the new plan.
So she has to pay out of pocket $19,000 a year.
Mr. Griffith. Wow. Plus, there was a $6,300 deductible, I
think you mentioned.
Ms. Turner. Correct.
Mr. Griffith. And so what you are saying is that this high-
risk pool, which was an alternative before the ACA, was an
alternative to the ACA which would work for some people and we
should probably have more choice. Wouldn't you agree, yes or
no?
Ms. Turner. She said--yes--and she said, ``I want the high-
risk pool back.''
Mr. Griffith. All right. I thank you very much, and I yield
back.
Ms. Turner. Thank you, Mr. Griffith.
Ms. Eshoo. I thank the gentleman.
I will now recognize the chairman of the full committee,
Mr. Pallone, for 5 minutes.
Mr. Pallone. Thank you, Madam Chair, and I just, you know,
want to reiterate that, of course, in my opinion the problems
that we face with, you know, more people becoming uninsured and
increased costs are directly related to the sabotage that the
Trump administration has implemented, and that is why we are
having this hearing and trying to deal with these--with the
sabotage and coming up with legislation that would turn that
around.
But I wanted to talk about the 1332--Section 1332 of the
ACA. Ms. Turner--my questions are of Ms. Keith--but Ms.
Turner's testimony appears to conflate the October 2018 Trump
guidance with the Section 1332 reinsurance waivers that were
approved both under Obama initially and then now under Trump.
So, Ms. Keith, can you walk us through the Section 1332
reinsurance waivers? Those are the ones that, you know, were
initially under Obama, now under Trump. What are they, and how
long have they been in existence, and have those reinsurance
been successful in reducing premiums in the States that have--
where they have been enacted? Including my own, I guess.
Ms. Keith. Thank you, Chairman.
Yes. So a number of States--seven of the eight States with
an approved Section 1332 waiver now have done that for a State-
based reinsurance program. I think this is evidence that
Section 1332 as is, is working--you know, Congressman Griffith
mentioned this, Ms. Turner has mentioned this--using those
Section 1332 waivers that we already have. The Federal
Government has passed through about--almost $1 billion in
Federal funds to help States come up with these solutions that
have brought down premiums, ranging from 7 percent on the low
end to more than 30 percent at the high end, and more States, I
would expect, are considering that this year to bring those
programs to their States as well. There has certainly been
bipartisan support, as you can tell, from States ranging from
Wisconsin to Maryland to Oregon to Alaska.
Mr. Pallone. And I agree with you, and certainly my State
is an example of what you said. But now I want to turn to the
Trump administration's recent 1332 guidance, which it issued in
October of 2018, and these are entirely unrelated to the
reinsurance waivers you just discussed.
The Trump administration's recent 1332 guidance creates new
standards that are wholly inconsistent, in my opinion, with
congressional intent, and the Trump guidance would allow States
to increase consumer costs, reduce coverage, and undermine
protections for people living with preexisting conditions--in
other words, more Trump sabotage.
So, Ms. Keith, do you believe that the new Trump changes to
the guidance are consistent with the law and the clear
statutory directive that States must provide coverage that is
as comprehensive and affordable as under the ACA?
Ms. Keith. Thank you for that question.
In my opinion, I think the guidance is quite inconsistent
with Section 1332 itself. Section 1332 absolutely gives States
the flexibility to be innovative, but it directs them to do so
in a way that builds upon the ACA and is consistent with the
goals of the law, which is to improve access to affordable
quality coverage, not to undermine it. The guidance itself, by
allowing or at least encouraging States to consider options
like subsidizing short-term plans, plans that do not cover
preexisting conditions, as we have discussed, to me flies in
the face of Section 1332 and what it was designed to allow
States to do.
Mr. Pallone. All right, and I just want to have you repeat
what you said with regard to junk plans specifically. I
understand that the Trump guidance would allow States to
redefine what counts as coverage to include junk plans. Is that
correct?
Ms. Keith. It would allow--it encourages States to bring
forth proposals that would allow that, yes.
Mr. Pallone. And then do you believe--obviously, you have
said you don't believe that this new definition of coverage is
consistent with the law, correct?
Ms. Keith. That is right.
Mr. Pallone. And then I also understand that the guidance
allows States to direct the ACA's affordability subsidies
towards junk plans, so subsidizing junk plans. Do you think
that is consistent with the law?
Ms. Keith. I do not. Section 1332 cannot be used to waive
any and all provisions of the Affordable Care Act. In
particular, it cannot be used to allow States to waive
community rating, guaranteed issue, protections for preexisting
conditions.
If a State were to try to subsidize plans that did do that,
I think it would be an end run around Section 1332 itself and
what the law requires.
Mr. Pallone. I thank you, and I agree with you. I think
that the Trump administration's guidance is blatantly unlawful,
contrary to the plain reading of the statute and wholly
inconsistent with congressional intent. It is part of the Trump
administration's ideologically motivated efforts to sabotage
Americans' healthcare coverage, and I want to commend Ms.
Kuster for her work on this important legislation to rescind
this guidance and hope that our Republican colleagues will join
us in these efforts.
And I just wanted to say, Madam Chair, you know, most--a
lot of the sabotage--most of the sabotage that the Trump
administration is doing, in my opinion, is totally illegal. So
you might say, well, then why are we trying to move and have
hearings on legislation if you don't think it is legal to begin
with?
Well, I guess that is a good question. But the bottom line
is that we are going to do it because we've got to make the
point that, you know, that their interpretation--the Trump
administration interpretation of the law is to allow all this
stuff that sabotage the ACA, so we are going to come back and
say, you know, that is not allowed under the law, but we are
still going to clarify it by moving forward legislation that
would make that clear and improve it.
Thank you.
Ms. Eshoo. I thank the chairman of the full committee.
And now I would like to recognize the gentleman from
Kentucky, Mr. Guthrie, for 5 minutes.
Mr. Guthrie. Thank you, Madam Chair. I really appreciate it
and appreciate all of you being here, and I want to start by
what I heard from Dr. Burgess and echo some of his opening
remarks on the cost of plans and talk about how it affects
people--people outside of being subsidized that--just looking
for alternatives to have some--have coverage because they can't
afford--you may have all the mandates and all the guaranteed
issues, but if they can't afford it, they can't afford it.
And, particularly, I have a constituent named Dustin
Jones--he is a resident of Glasgow, Kentucky--who has called
and said he had the coverage that he liked before the
Affordable Care Act. Now he is going to have to go uninsured
because he says he is just at the point he can't afford
insurance anymore.
And so I will be honest, I have had people stop me and say,
because of Medicaid expansion in Kentucky, they have had
coverage they haven't had before. So there are people--
everybody can point to cases such as that.
But I think all of us have people like Mr. Jones that are
in that middle-income area that health insurance has just
become unaffordable because so many of the mandates that are
there.
And we want to cover people with preexisting conditions,
and we need to do it in a way that is affordable. I think Ms.
Altman said that plans are 70 percent cheaper because they
don't do preexisting conditions, so I guess there is that
inverse, it would be 70 percent more expensive because--and
that is what we wanted to do in the Affordable Care Act,
replace that we looked at.
We got highly criticized, but it was examples--I think
Wisconsin had a highly functioning high-risk pool and people
said they were better off before where you socialize the cost
of preexisting conditions across the State instead of just
people in the individual market, because it puts people like
Mr. Jones out of being able to afford health insurance.
And so the--and the bottom line was that everybody was
covered with preexisting conditions. It was just a way to do it
that didn't put the burden on just people in the individual
market. It socialized those costs across the State.
But, Ms. Turner, in your testimony you mentioned the
additional consumer protection that the Trump administration
added for short-term limited duration plans. Just give you an
open to explain that further, the additional consumer
protections that the Trump administration added.
Ms. Turner. You mean in terms of allowing people to keep
these policies for a longer period of time--that they
previously, under the Obama administration, were limited to
just 3 months.
And for many people who may be retiring at age 63 or 64 and
they need gap coverage until they qualify for Medicare, people
who are starting a new company, people between jobs, that just
wasn't long enough and being able to give them the opportunity
to purchase these short-term bridge policies was very helpful.
And I agree that people need to be informed consumers. But
I think they do understand this is not permanent coverage. This
is to fill a need in a particular time for an estimated 2
million people.
Mr. Guthrie. So it is not only the Trump administration
giving the patients more healthcare products to choose from,
they are doing so in a way that has additional consumer
protections.
So I just want to--also, Ms. Turner, you mentioned how
States are working within the 1332 waiver to innovate as
laboratories of democracy. We have already seen eight States
get approved under the strict Obama administration guidance.
Do you anticipate even more innovation as States review and
reform their markets in compliance with the Trump
administration policies?
Ms. Turner. Yes, absolutely, and the States are doing
everything they can under the ACA to try to provide access for
people who are shut out of the market.
These are people in the individual market who generally
don't qualify for the subsidies under the ACA trying to afford
health insurance for their family like Senator Reeves'
constituent in Fredericksburg to try to provide a policy that
they can afford.
And there are other provisions that the administration is
providing as well: the association health plans so small
companies can aggregate to get some of the benefits and the
lower costs of larger companies; the new health reimbursement
arrangement rule that would allow companies to provide a
stipend to employees that may have the opportunity to get
coverage outside the market, maybe a spouse's coverage, and be
able to buy into that policy to get a family plan.
So they are really looking for ways to give people more
options and to give States more options to use the existing ACA
money in a way that works better for their citizens.
Mr. Guthrie. OK. Thank you very much.
Just one more example--a person who does transmission work
on cars--hopefully, you never have to do that, but if you do
that I--that I use and been to. It is a single-person shop, and
he runs his own shop and he told me--it was about 6 months
ago--that he closes from--he doesn't open until, like, 9:00 and
then he closes from 3:00 to 5:00 and then comes back and does
an evening, and what he's doing, he is driving a school bus to
pay for his health insurance.
And he said by the fact that he went to work for the county
system driving a school bus, by the time he does all of his
premiums he really doesn't make any money doing it but he said,
``But I am making $1,600 a month, because that is what I am
saving in my health insurance.''
So there are people really struggling with this, and we
need to be mindful of the Affordable Care Act didn't solve
everybody's problem.
So thank you very much, and I yield back my time.
Ms. Turner. Thank you, Congressman.
Ms. Eshoo. I thank the gentleman from Kentucky.
Now I am pleased to recognize the gentlewoman from
California, Ms. Matsui.
Ms. Matsui. Thank you very much, Madam Chair, and I want to
thank the witnesses for being here today. It has been very
enlightening and interesting here.
The topic of this hearing is incredibly important to me and
my constituents and actually all Americans whose lives have
been changed by the Affordable Care Act.
Just last week, this committee heard testimony from
families whose lives have been fundamentally changed by the
protections of the ACA, and that brings us to today's
discussion, and, very sadly, the sabotage of the Trump
administration disguised in a disingenuous attempt to expand
coverage is shameful.
This administration has done nothing to expand coverage.
Rather, they have undermined the progress made by the ACA,
leading to further market destabilization and harming patients
along the way.
Now, these junk insurance plans sound good. However, they
discriminate against people with preexisting conditions and set
higher premiums based on age, gender, and health status.
Promoting the use of junk insurance plans is particularly
frustrating when this administration has also slashed outreach
funding for open enrollment into healthcare marketplaces.
Expanding junk insurance will undermine the market, taking
young, healthy individuals out of the risk pool and making
health insurance less affordable for consumers with preexisting
conditions.
The Trump administration has even acknowledged that the new
rule would raise premiums for ACA-compliant plans and could
result in adverse selection against individual market risk
pool.
Ms. Altman, according to the Kaiser Family Foundation, if
an individual loses coverage under a short-term policy, then
they may not be eligible for a special enrollment period under
the ACA.
In other words, the individual would experience a lapse in
coverage. Given this information, I am concerned that these
junk insurance plans could put many more individuals at risk.
Could you reiterate to the committee how--before the
implementation of the ACA--how a lapse in insurance coverage
impacted your financial situation and physical health?
Ms. Altman. Certainly. I think before the ACA, lack of
insurance coverage or lack of comprehensive insurance coverage
impacted people in the same way that it could today: Their
inability to seek the care that they need, their inability to
afford the care that they need, and potentially financial
devastating debt.
I think one of the perhaps less talked about benefits of
the Affordable Care Act has been reductions in Americans going
into debt due to medical bills and the reductions in
uncompensated care and the burden that is on the economy and on
our healthcare system as well.
Ms. Matsui. Right. Could I just say this too? And I hear
from my constituents, both patients and physicians, who are
frustrated they are receiving high unexpected medical bills,
and part of this is because they are enrolled in a junk
insurance plan like we are discussing today that have an
incredibly high deductible.
A $10,000 deductible doesn't count as real insurance if you
have to spend $10,000 out of your pocket before your insurance
kicks in. What does that really buy you, and shouldn't
consumers fully understand what they are signing up for?
Now, Ms. Altman, your testimony talking about this--what
steps does your department take to alert consumers to the fine
print of these plans?
Ms. Altman. Thank you for that question.
One of the greatest challenges with these plans is trying
to counter all of the noise in the marketplace. A lot of the
marketing is very aggressive. Some of it is outright untrue,
and some of it is in a gray area and misleading, at best.
We have undergone a number of efforts to try and get
accurate education out in the marketplace, accurate information
about short-term plans, about the Affordable Care Act, about
the difference about when to enroll--all of those questions.
But it is definitely an uphill battle as consumers are
being bombarded with the marketing that is out there. We are
now working on our own campaign that will highlight the
questions consumers should be asking themselves and try to be
proactive in getting that level of information out in the
marketplace.
Ms. Matsui. And shouldn't CMS be a part of this, in
essence, to educate the public about all the plans, in essence,
of junk plans included, about what they include or do not
include?
And I have just got a short question here. I think it was
brought up--the extension of a plan to 3 years, it was said,
actually helps consumers. How could it help consumers if they
can be kicked off the plan at any time?
Ms. Keith?
Ms. Keith. Sure. Thank you for that question. I do think
that is the right question--how is being in a plan for a longer
period of time that offers what can sometimes be illusory
coverage. So the idea that these plans are offering coverage
but can at any time exclude coverage because of a preexisting
condition or engage in postclaims underwriting--the idea of
extending those plans when the coverage may not be there when
the person really needs it, I wouldn't call that a consumer
protection.
Ms. Matsui. OK. Thank you. I have run out of time.
I yield back.
Ms. Eshoo. I thank the gentlewoman.
Now I would like to recognize the gentleman from Illinois,
Mr. Shimkus, for 5 minutes.
Mr. Shimkus. Thank you, Madam Chairman.
When my colleague from California was talking about that
plan, I thought she was talking about an Obamacare plan.
In March 26th, 2018, I got this email from Ms. Penny from
Centralia, who said, ``We are a small company that employs five
people. We just received our new health insurance premiums for
2018 with a rate increase of $650 per month''--that was an
increase of $650 per month--``and a higher deductible ranging
from $3,200 to $4,000.
``Nothing has been done to resolve the health''--and then
she goes--just complains about being forced to buy an insurance
product that she can't use.
And in rural America we heard this quite a bit. Small
businesses forced to buy insurance they can't use because they
can't use--it costs so much and then the deductible is so high
that they're not covered.
So that is why this is a really important discussion. I am
also glad finally my colleagues--I was up at a telecom, or down
at a telecom hearing so I missed some of this debate. But it
sounds like we are talking about, quote, unquote, ``junk
plans.'' So let us--what are--what are these junk plans?
Well, we will see. The Trump administration has permitted
workers in small businesses to pull together to buy insurance
known as association health plans. I have always been a
supporter of that. Farm bureau, manufacturing association,
chamber of commerce--bigger pools negotiating.
Obviously, my colleagues call all these junk plans, even
though most of these so-called junk plans comply with ACA
mandates. They aren't charging people different premiums based
upon health conditions, and they are not banning people with
preexisting conditions from enrolling.
So, Ms. Turner, do you think labeling association health
plans as junk is a fair description for coverage that many
hardworking Americans seek out and choose to buy for their
family?
Ms. Turner. I am very supportive of giving small companies
in particular more options for health insurance, which is what
association health plans do, and individuals also need other
options, which is what the short-term limited duration plans
provide.
There was a study recently--I think just last week--about
association health plans, and they were in fact providing
coverage as comprehensive as larger companies, and they were
not excluding people with preexisting conditions.
Mr. Shimkus. I think one of the things that fired us up so
much about this debate was the debate who is to determine what
policies we have. When we thought this was going to go to the
Supreme Court, we thought it would stand on the inability of
the National Government to tell you what you had to buy.
In fact, when this was debated here in the halls of
Congress, that was the arguing point. We said this is not
constitutional.
Then the administration fought for constitutionality based
upon not the right of the individual to make a choice what they
want to buy, but on the right to tax.
So that is why it was upheld, not on the individual being
forced to buy something, especially my constituents were being
forced to buy something that they can't use, as Ms. Penny has
highlighted here, and she is trying to provide for her
employees and she can't do it.
So the employees across the country are already taking
advantage of this option to provide more affordable insurance
to their workers. In fact, 28 AHPs have formed already with
some showing up to 30 percent savings on premiums.
The Las Vegas Chamber of Commerce is in the process of
signing up 500 employees for an AHP, which could save some
employees more than $2,000 per year.
Ms. Turner, do you--again, if these plans are junk, why are
they so attractive to business owners and their employees?
Ms. Turner. People are just desperate for choices. They
feel shut out of the market not only because of the premiums
under the comprehensive coverage under the ACA but also because
of the deductibles, which can be $10,000 a year in the ACA
plans.
And so people are looking for other options--short-term
limited duration plans or bridge coverage and other ways to get
economies of scale through association health plans and letting
States have more power through their 1332 options.
Mr. Shimkus. Yes, and I will end this. I appreciate it.
We Republicans believe in markets and competition, not
centralized control dictates from the National Government
authority, and that is why we are--I am glad we are having this
hearing today, and I look forward to more discussions.
And with that, Madam Chairman, I yield back my time.
Ms. Eshoo. I thank the gentleman. Just for the record, this
hearing is not about association health plans. We are talking
about the short-term, what they cover, what they don't. And so
I think it would be wise to stay away from conflating things
and putting words in other people's mouths that they haven't
uttered.
Mr. Shimkus. Will the gentlelady--will the gentlelady
yield----
Ms. Eshoo. No, I want to move on.
Mr. Shimkus [continuing]. For discussion?
Ms. Eshoo. No, because this hearing is on these short-term
plans, not on association health plans. So I think it is
important to----
Mr. Shimkus. So you appreciate association health plans? Is
that----
Ms. Eshoo. I Do----
Mr. Shimkus. OK. Very good.
Ms. Eshoo [continuing]. Except for what the administration
is doing to some of them. We can have a hearing on that. But
today's hearing is not about association health plans.
I now would like to recognize the gentlewoman from Florida,
a valuable member of our committee always, Ms. Castor, for 5
minutes of questioning.
Ms. Castor. Well, thank you, Madam Chair. Thank you for
holding this very important hearing on our legislation to
address the Trump administration's sabotage on affordable
healthcare for our families back home, including my bill, H.R.
1010, that will stop the expansion of these junk health
insurance plans.
See, working families across America, they remember well
the attempt by the Trump administration and Republicans in
Congress to repeal the ACA in its entirety, including the
protection on preexisting conditions.
What the Congress--the Republican Congress was not able to
accomplish, here they are now trying to accomplish through
administrative rule, and that is where they have now adopted an
administrative rule that would expand the use of these junk
insurance plans that do allow discrimination for--if you have a
preexisting condition like a cancer diagnosis or diabetes or
asthma or something like that.
These junk plans also deny basic health benefits. So that
is why I filed H.R. 1010 along with my colleagues,
Congresswoman Barragan and other Members, to address these
plans that really don't protect our neighbors as they should.
It really is difficult to understand why the administration
is promoting plans that do not provide adequate coverage. It
really appears to be a cynical ploy to lure families into these
plans that were too prevalent before the Affordable Care Act,
where benefits were excluded and families faced massive
healthcare bills.
I am very concerned that the public is being snookered
here, and Commissioner Altman, I would like to ask you a few
questions about this--about these junk plans. I understand that
these plans often impose lifetime and annual limits on care. Is
that right?
Ms. Altman. That is correct.
Ms. Castor. So can you describe what these plans typically
look like, how they are marketed, what kind of coverage they
provide?
Ms. Altman. Sure. I think to the average consumer the plans
can look like they cover a lot of things. They have coverage
for hospitalization, coverage for ambulance transport, coverage
for doctor's visits--some of those things.
But when you begin to look beneath that, first of all,
there are many exclusions, both in terms of certain benefit
categories like mental health and prescription drugs and
maternity, but also for any care related to a preexisting
condition, whether determined before the plan was issued or
after, exclusions for any injury that results from sports
activities or other risky activities--things like that.
Then you have cost sharing, high deductibles, copayments,
coinsurance. Then you have annual limits on coverage--
potentially lifetime limits on coverage--although as a short-
term plan, it is unlikely someone would be able to retain this
plan for a lifetime.
And then you get into what they actually cover within those
categories of benefits. I think the story I shared in my
testimony is very indicative of the fact that the coverage
levels are not reflective of the cost of services.
So a consumer may see it covers $100 or $200 for an
ambulance ride, and that may sound reasonable to them and,
like, coverage. But, of course, we know an ambulance ride
generally costs well over $1,000.
Ms. Castor. So then they are stuck paying that?
Ms. Altman. Correct.
Ms. Castor. Unlike an Affordable Care Act policy. So we
have heard a lot of discussion about choice here today, and
choice is important--that under the Affordable Care Act
individual market policies in your State, I read in the
testimony you actually have more--had another insurer come into
the marketplace. Is there adequate choice among those policies
that are being offered in Pennsylvania right now?
Ms. Altman. That is correct. We have put in a lot of work
to get our individual market in a very good place. I approved
statewide average decreases this year. We have----
Ms. Castor. Wait. Wait. You have increased competition and
choice, and Pennsylvania is now lowering costs?
Ms. Altman. Correct. We have a new entrant. Thirty of
Pennsylvania's 67 counties had more insurers offering coverage
this past year compared to the year before, and we reduced our
single-care counties from 20 to 10 simply by working to make
the market a place for----
Ms. Castor. But if we had more junk health plans, it would
seem that that would be a false choice for folks because they
would be on the hook for substantial costs. Is that right? Do
you agree with that?
Ms. Altman. If they chose that route and, of course, for
over one in four Pennsylvanians who have preexisting
conditions, those plans are no choice at all.
Ms. Castor. And I would like to offer the groups that are
now endorsing H.R. 1010. If folks are confused by some of the
debate here today, here are some trusted organizations that now
support the expansion of junk health plans: American Heart
Association, American Lung Association, AARP, Cystic Fibrosis
Foundation, March of Dimes, to name a few.
Thank you, and I yield back.
Ms. Eshoo. I thank the gentlewoman. I thank her for the
legislation that she is offering.
It is now my pleasure to recognize the ranking member of
the full committee, Mr. Walden, of Oregon.
Mr. Walden. Good morning again.
Ms. Eshoo. Yes.
Mr. Walden. You must be torn as I am with the other hearing
going on downstairs. I know your passion for telecommunications
issues as well.
Ms. Eshoo. In fact, I am going to ask Ms. Castor to come to
this chair, take the gavel, and have you proceed.
Mr. Walden. Perfect. Thank you.
Thank you, Madam Chair, and I want to thank our witnesses.
This is a really important issue for all of us to contemplate,
and I know--I met with some wheat growers from my district
yesterday, as fate would have it, and guess what issue came up?
It was high cost of healthcare and health insurance--both the
cost of individual items in the healthcare continuum, but also
the health insurance.
And I am trying to remember--I should have made a note on
it--but I think one of the growers talked to me about how his
rates per month had gone from, like, $300 to $600 to $900. Now,
it is, like, $1,000 a month for him and his wife, and the
deductible, I am going to say, was somewhere between $6,000 and
$8,000.
So to my friend's comment about the consumer picking up the
difference in charge, there are a lot of consumers now as a
result of these enormously high deductibles you have to do to
get a premium you might be able to afford, you are paying it
out of pocket through your deductible.
And so I think what I am trying to get at, and Republicans
are, is how do we have choices out there that fit families that
they can afford that will actually give them first dollar--not
first, but an affordable family dollar health insurance and not
something that amounts to something that is catastrophic.
I do hope we do hearings on association health plans. I do
think we have the right to talk about them in the context of
this hearing, by the way, and I do hope we will eventually hear
from the majority--Democrats--about a hearing on Medicare for
all, because we know by the estimates that would cost $3.2
trillion and do away with the health insurance that 150-plus
million Americans have through their unions or their employers.
And with the strength of the economy, more and more people are
showing up on those plans and probably fewer on the others.
And maybe, Ms. Turner, you could address this. My
understanding is, under the Obama administration, there was a
3-month period for short-term limited duration plans. The Trump
administration simply said to States, you can go up to 12. But
States have the right to step in here and regulate as they see
fit, right? Is that correct?
Ms. Turner. Yes, absolutely.
Mr. Walden. And so there are some 33 States that have left
the door open for this innovation to occur, correct?
Ms. Turner. Yes.
Mr. Walden. And so, when you're looking at options people
can afford that work for them, do these plans that are out
there, do you think they give them options that work, or not?
Ms. Turner. Consumers will determine that, and I absolutely
agree that having State flexibility allows the States to--I
mean, they are much better, frankly, at regulating local health
insurance markets in their State than Washington can be and
really figuring out what other consumers need--more information
about these plans----
Mr. Walden. Right.
Ms. Turner [continuing]. To make sure they are buying
insurance that works for them and that they are smart, informed
buyers.
Mr. Walden. Uh-huh.
Ms. Altman, I am intrigued that the rates went down in
Pennsylvania, correct? Is that right? So that is this year? Was
that for all the plans?
Ms. Altman. In the individual market.
Mr. Walden. In the individual market. How much over the
last five----
Ms. Altman. But that is the statewide average. Not all of
the plans were done on their own, but on average, yes.
Mr. Walden. Yes. Understood. Yes.
Over the last, say, 5 years, what has happened in terms of
rates in Pennsylvania in the individual market, on average?
Ms. Altman. Sure. There is no question that rates have gone
up in this market. I think there are----
Mr. Walden. How much?
Ms. Altman. I don't know off the top of my head the
increase.
Mr. Walden. How much did they go up the year before?
Ms. Altman. So the year before, they went up around 25 to
30 percent.
Mr. Walden. And how much did they----
Ms. Altman. But that is an important year, because they
should have gone up 6 percent, and in that year the reason they
did not was because of the decision to cease paying cost-
sharing reductions and uncertainty created by the----
Mr. Walden. How much did they go up the year before that?
Ms. Altman. Around I want to say--you are testing my
memory--about 15 percent and about 8 the year before that.
Mr. Walden. So 8, 15, 20, what?
Ms. Altman. And then at 20----
Mr. Walden. Twenty.
Ms. Altman [continuing]. And then minus two.
Mr. Walden. And minus two. So they went down, but they went
down 2 percent after they had gone up. I am trying to remember
that first year with the cost-sharing deal. Twenty-five percent
they went up?
Ms. Altman. Sure. It should have been 15.
Mr. Walden. Fifteen and 8. I am a journalism major, so I
will let somebody else do the math. But the long and the short
of it is, consumers didn't get a $2,500-per-year reduction in
their premiums along the way, right?
Ms. Altman. Well, of course, 80 percent of consumers in
that market received financial assistance that largely shields
them from those----
Mr. Walden. Correct. And so my wheat grower friends that
aren't eligible for that are small entrepreneurs. They have
gotten socked with rate increases. They don't get the
subsidies. They are the kind of working middle-class folks that
are just off the subsidy side because they are just at that
realm.
I had a town hall 1, 2 years ago in Arlington, Oregon, and
actually we had this debate there, and this farmer got up and
talked about what his family had faced, and this person who was
very much in support of the ACA--Obamacare--went up to him
afterwards and said, ``I didn't know people like you existed.''
He was very serious about it.
So we have this gap out there that some of us are trying to
figure out a way to fill, and that is what Republicans are
talking about--how do we fill that gap for those people that
don't get the subsidies you get on the exchange if you are the
right income but you are still left out with a high deductible
and premiums off the charts?
My time has expired, Madam Chair? Thank you for your
indulgence.
Ms. Castor [presiding]. Thank you.
Mr. Schrader is recognized for 5 minutes.
Mr. Schrader. Thank you, Madam Chair, and I appreciate the
previous gentleman's discussion--the ranking member of the
committee--and there has been a lot of discussion about the
cost of the premiums, the deductibles, in the individual
marketplace.
I think it is important for America and a lot of people
here to understand that that is only one facet of the
Affordable Care Act, and the rest of the Affordable Care Act,
ostensibly, is working very well.
We heard last Congress of the repeal-and-replace debate
that, frankly, a lot of red State people were very pleased that
the Medicaid situation changed dramatically for them.
Many millions of Americans had healthcare for the first
time. So I guess I would like to look to my colleagues and say,
``Hey, let us work on the individual marketplace.'' I am fine
with that, and I think there is an opportunity for us to work
together and maybe adjust the cost-sharing stuff, the
reinsurance issues or risk pools or--and maybe expand the 1332
waivers, but under constraints.
You know, the people forget--I come from Oregon--people
forget that the goal of healthcare is to provide better health.
It is not to get insurance. And, ostensibly, getting better
health means you don't have to read the fine print all the
time.
There is some commonality in these plans that are out
there, and you have the opportunity to buy a product that
covers what people would call essential health benefits--that
overall that someone had a mother, someone has got a daughter
out there. I mean, you know, being a woman and having maternity
care should be an option.
I mean, everyone benefits from that over the long haul, and
the goal of insurance--to provide healthcare--is to prevent
people from getting too sick to begin with, and that has gotten
lost, I think, in a lot of the debate.
So I am hoping that we actually get to that.
Ms. Turner, real quickly, with these short-term plans and
the expansion of the short-term plans, how do you actually
justify that when the rules of the road clearly state that the
waivers that are granted under 1332 are only supposed to be for
those plans that provide coverage that is at least as
comprehensive as the coverage under the exchanges and that the
coverage and cost-sharing protections are as affordable?
In other words, they go together--again, getting at the
fact the undermining of these essential benefits I think is
disingenuous to a lot of American consumers. What is the
justification for doing that in these newer short-term plans
the administration has put forward?
Ms. Turner. The administration has spent I think about a
year with a lot of career Federal officials looking at this and
how can you write the rule in a way that is compliant with the
text of the ACA to make sure they are comprehensive, they don't
increase the deficit, they are at least as affordable to make
sure that that would be allowed. So the rules would have to
allow to make sure if people did buy short-term plan that it
fit these criteria.
So all the short-term plans are not junk plans. In fact, I
think very few of them are. Buyer beware. People need to be
aware, they need to be informed, and there are protections if
they are going to use a subsidy for these plans to make sure
that they are compliant with the ACA.
Mr. Schrader. Well, and I think you write the rules in the
way you would like to write the rules, and I think that is
challengeable and we are going to see, I think, that reverse
either in the courts or in this particular Congress.
Ms. Altman, a lot of discussion about 1332 waivers and the
ability for them to give States the opportunity to innovate. I
totally agree with that. Oregon has been doing that for years.
The Affordable Care Act really, I think, points that out as
a great opportunity for States. I don't think there is any
disagreement with that, and it is being done and has been done
prior to this current administration very successfully. But it
has been with these essential health benefits in play, and it
hasn't been, I think, a curse or restrictive.
Please talk a little bit about the role those essential
health benefits play in the waiver programs.
Ms. Altman. Sure. So essential health benefits are sort of
10 categories of core benefits that the Affordable Care Act was
supposed to guarantee access to so that people with healthcare
needs could have the benefits that they need to get the
treatment they need regardless of the type of condition that
they have.
Those are what ensure that whether you have a mental health
issue, a physical health issue, an emergency or cancer, those
benefits will be available, and they were intended through the
guardrails in the ACA to be extended to any coverage offered
through the 1332 waivers.
Mr. Schrader. Thank you.
And Ms. Keith, I mean, given the fact that ostensibly the
Health and Human Services Department of the United States of
America's goal is to help Americans get quality, affordable
healthcare, how do you think the current administration
justifies curtailing the enrollment outreach programs? That
makes no sense to me.
Ms. Keith. I won't try to speak for them or on their
behalf. My understanding is they think this is a more cost-
efficient way, and that they believe that outreach in
enrollment funding is not cost effective.
I would counter there have been other examples from other
States--Covered California is an example--that attributes a
decline in 6 to 8 percent of premiums just from the outreach
and marketing work that they did to bring in healthy consumers.
So it does, certainly--has been shown to help stabilize
premiums.
Mr. Schrader. Thank you very much, and I yield back.
Ms. Castor. Thank you.
Mr. Long is recognized for 5 minutes.
Mr. Long. Thank you, Madam Chairwoman.
Ms. Turner, I would like to talk about the roles that
navigators and independent agents and brokers played. You note
in the plan in your--you note that for the plan year 2017
navigators received more than $62 million in Federal grants
while enrolling less than 1 percent of all enrollees. Seventeen
of these navigators enrolled fewer than 100 each at an average
cost of $5,000 per enrollee.
The top 10 most costly navigators spent over $2.5 million
to enroll 314 people. One grantee received $200,000 and
enrolled one person, and over three-quarters of navigators
failed to achieve their enrollment goals while spending more
than $50 million.
Ms. Turner, under the Trump administration CMS has changed
how navigators receive funding based on performance measures.
Do you think that these changes help ensure accountability
within the navigator program?
Ms. Turner. CMS has said in its report that it really is
trying to respect that taxpayer dollars be spent wisely and,
basically, they are making the following year's grant
contingent on a navigator meeting their previous year
enrollment goals.
And as you say, even with this generous funding, the
navigators enrolled fewer than 1 percent of all enrollees in
healthcare.gov. And so I think that does need to--we need to
look at how can we get the best benefit, and they looked at
private brokers and agents who live and breathe in this space,
and they were much more successful, enrolling 42 percent of
enrollees.
Mr. Long. The subject of this hearing is about reversing
ACA's sabotage. Do you consider these efforts by CMS as
sabotaging the ACA?
Ms. Turner. No, and the navigators were particularly--when
the ACA was new, people didn't even know what a deductible was.
So people needed to be educated about the fundamental
principles of insurance.
But now that we see in California, for example, there has
been a 24 percent drop in new enrollees, despite their spending
$100 million on marketing navigators last fall. But they are
finding many more people are having their coverage renewed and
sometimes automatically renewed.
So we are in a different space now with the ACA.
Mr. Long. According to the Missouri Department of
Insurance, since 2011 the annual cost of coverage per
individual has increased by an estimated 235 percent in the
individual market, and now there is only one option on the
marketplace for my entire district--7th District of Missouri.
Do you see the efforts of the Trump administration to give
States more flexibility to lower premiums and provide more
insurance options for individuals as positive steps that can
benefit consumers?
Ms. Turner. Absolutely, and I think that is what they are
trying to do both with the bridge plans as well as the
association health plans, and as well as the Section 1332
flexibility.
Being able to tailor the insurance funding to the needs of
their citizens is something that States can do much more
effectively than the Federal Government.
Mr. Long. So I am assuming you don't consider these efforts
as sabotaging the ACA?
Ms. Turner. I think they are really trying to give
consumers new options, particularly those who are shut out of
the market because of costs, and even many of the people with
ACA coverage say, ``I might as well not have coverage because I
can't afford the $6,000 to $10,000 deductible.''
Mr. Long. Thank you.
And before I yield back, as a point of personal privilege,
I was born in 1955. John Dingell was sworn into Congress in
1955. I had the great honor to serve with him for two terms.
Of course, the room downstairs is named after him.
Yesterday morning, after an hour delay because of weather, we
loaded up two planeloads of congressmen, headed to his funeral
in Dearborn, and got up there and circled for an hour waiting
for the temperature to raise 1 degree.
If it would have raised one degree we would have made it,
and we didn't. We were low on fuel, and so a legend in his own
time, John Lewis--Representative John Lewis--and Speaker
Pelosi, who weren't on the flight, along with Chairman Upton,
Chairman Walden was there, Anna Eshoo.
I am not going to name all the names because I will leave
people out. But we held an impromptu service for John at 30,000
feet, and I just want to send out my best to Debbie. I know
that John followed his father in Congress and Debbie has
followed him and she has done an outstanding job on this
committee, and I just wanted to send my best and thoughts and
prayers out to Debbie and the entire Dingell family because we
are sure going to miss him.
I yield back.
Ms. Castor. Thank you, Mr. Long, for your comments about
the Dean of the House, John Dingell.
Mr. Ruiz is recognized for 5 minutes.
Mr. Ruiz. Thank you, Ms. Chairwoman.
I, and everybody in this room, agrees that we need to do
something about costs. The premiums are skyrocketing in the
exchange. That is not the issue that we are debating here.
When we look back at why the costs have gone up so much,
all we have to do is listen to the insurance companies
themselves, which have said and have warned that if we don't
pay the cost-sharing reduction subsidies, they are going to
increase costs.
The other thing is they talked about the changes that were
made by Senate Republicans to the risk corridors. They
increased costs because of those. The other is because of the
expired reinsurance programs, et cetera, and all of these have
been a part of the repeal efforts of the ACA.
So when we look at the junk plans, this is not a solution
to the problem of high costs. In fact, these junk plans will
make costs higher in the exchange because this will siphon low,
healthy, high-corporate-profit-type patients into this lower-
risk pool--junk plans--leaving behind the higher-risk, more
expensive type of patients for everybody else.
So healthcare costs for everybody else will go up, and if
there is something that I have learned as an emergency
physician, is that not every healthy person stays healthy
forever.
So I have seen a 48-year-old man in a motor vehicle
collision who was previously completely healthy who will now
have traumatic brain injury, symptomotologies for the rest of
their lives, and be paralyzed and require very expensive care
and lots of medications.
I have seen a 52-year-old man who comes in with yellow eyes
and yellow skin who has been newly diagnosed with severe liver
problems due to hepatitis, which is going to require expensive
medications.
And I have seen young and healthy 30-year-old women who
come in with anxiety or depression with new diagnoses of
clinical depression and also with a mass in their breast with a
working diagnosis of breast cancer that has metastasized, which
would require expensive chemotherapy.
So, even if those younger and healthy individuals buy this
junk plan, healthcare costs will be more expensive for them
because under these junk plans they can choose not to cover
their medication. They can choose not to cover their mental
health coverage. They can start implementing a cap in lifetime
coverage for these individuals that will need more care for
longer periods of time.
We are not invincible. The whole purpose of health
insurance is, what if you get sick, what if you get injured
during an accident? And I have seen them and I have counseled
family members and patients about their terrible diagnoses or
their terrible prognoses, and it is not a fun thing to do.
So I have some questions in regards to costs. Ms. Keith,
would junk plans increase costs for everybody else and can you
explain it further, please?
Ms. Keith. Yes, that is correct. Every analysis, including
the Trump administration's own analysis, has found that
expansion of these short-term plans through this new rule are
increasing premiums in the ACA marketplaces.
A study by the Kaiser Family Foundation that looked at what
insurance companies actually said about their premiums for 2019
showed that short-term plans, the individual mandate, repeal
and the association health plan have increased premiums on
average by 6 percent in 2019.
Mr. Ruiz. And so, you know, in one way I am hearing this
opposing kind of arguments--yes, we are for preexisting, but we
need a reduced cost--but it seems like by this junk plan they
are going to eliminate protections for preexisting illnesses in
order to keep costs down because corporate insurance companies
would love not to cover the sick. They would like to cover the
wealthy and healthy.
So can you have it both ways in this junk plan? I mean, do
they discriminate with people with preexisting illnesses?
Ms. Keith. They absolutely do. I believe that is their
business model, yes.
Mr. Ruiz. So if you support junk plans you are supporting
the idea that--to take us back to a time where health
insurances were allowed to deny or charge higher premiums or
charge for higher--or not cover certain procedures for those
conditions. Is that correct?
Ms. Keith. Yes, it is.
Mr. Ruiz. Can you describe the medical underwriting process
that Americans are subject to under these plans?
Ms. Keith. Sure. So it varies by insurance company but,
essentially, if you are applying to enroll in a short-term
plan, you would fill out a very detailed health questionnaire
about your own health, about the health of your family members
and maybe a medical history.
You would also grant that insurance company access to all
of your medical records. They would look at what prescription
drugs you have taken. They would look at what medical exams you
have taken.
They would take that information and they would give you a
price, or they would decline to cover you at all, or they would
use that to dictate what benefits they will and will not cover.
Mr. Ruiz. Thank you.
Ms. Castor. Thank you.
Dr. Bucshon, you are recognized for 5 minutes.
Mr. Bucshon. Thank you, and just in light of my friend Dr.
Ruiz's comments, it is about choice. If you have a preexisting
condition, don't choose a short-term health plan that is cheap.
They don't discriminate at all, because it is a consumer
choice. So to say that a plan specifically discriminates
against people, that is just factually not true. They don't
discriminate, because it is about consumer choice.
We are here today discussing legislative proposals that
really do nothing, in my opinion, to address the high cost of
healthcare and the lack of affordable insurance options for
patients.
One thing--again, Congress is here discussing the cost of
health insurance plans but, again, we are not really addressing
the true problem, in my view, which is the cost of the product
is too expensive.
And so if we all continue to chase a product that is too
expensive and try to cover it, we are never going to catch up,
in my view.
The other thing is, is insurance is about risk. That is
what insurance is about. So your description, Ms. Keith, of all
of these things--about being assessed for what your risk is--
that is what insurance is about. And so we need to figure out a
way to cover people who have a lot of risk, and that is what
Republicans did in our healthcare bill.
We did it with high-risk pools. What is it, 4 percent of
the people or 5 percent of the people in the country are 40 to
50 percent of the healthcare costs?
So we want to cover people with preexisting conditions, but
we just want to do it in a different way. If you put everybody
in the same pool, there is no way, based on the history of
insurance and how it works, that actuaries will tell you that
you can get the costs down for everybody and keep the costs
low. It just doesn't work.
So we want to cover people with preexisting conditions. I
was a physician before. I had people that I took care of that
didn't have coverage. That is wrong. We just want to do it in a
different way.
So, Ms. Turner, do you think that any of the legislative
proposals today would address the high cost of healthcare
plans?
Ms. Turner. I actually think they would. They would remove
options for many consumers. Three million people had dropped
out of the individual market before the first short-term
limited duration plan under the Trump administration rules was
available.
People are dropping out of coverage because they couldn't
afford it. They want some options, and bridge coverage through
the short-term plans provides many people an option. They
should definitely be informed about these policies.
But if they buy a policy and they--say they buy a year
policy and they are diagnosed with cancer when they have that
coverage, they are covered, and if they didn't have that
option, they would be completely exposed to those costs.
Mr. Bucshon. Yes. I think everyone here agrees on both
sides of the aisle we need more probably disclosure to
consumers and make sure consumers--like someone mentioned, have
it in big print right on the front page--you know, what your
choice is here--you know, what the cost is, number one, but
number two, what actually is included in these plans, right.
And it may--you are right, if you have--if you are
underwritten and you are high risk, you are probably not going
to be able to get insurance through one of these plans. That is
not the point. That is not what we were trying to cover.
But under the Affordable Care Act, I hear from constituents
all the time that the plans are just not affordable in the
Affordable Care Act, and so we need to work together to try to
find a way to improve that and, you know, one of the things I
think that we can do is work on the cost to the product, and I
keep saying that because Congress always works on trying to
provide coverage but not trying to get the cost of healthcare
down.
So, Ms. Turner, how do you think repealing the Trump
administration's guidance on Section 1332 innovation waivers
would impact the affordability for patients in States with
waivers?
Ms. Turner. The States that have received waivers so far
have been able to reduce premiums anywhere from 43 percent to 7
percent in the States so far that we have numbers for, and so
those citizens would definitely be adversely impacted by being
thrown back into the same pools that don't provide States with
the same flexibility and the same options that they would have
under this new guidance to be able to provide more affordable
options for their residents.
And about the essential benefits, the essential benefits in
the ACA may not be everything that somebody needs. Janet, that
I talked about in my example----
Mr. Bucshon. Right.
Ms. Turner [continuing]. Needed to have her antirejection
medicines covered, and they were not covered under her ACA-
compliant plan. So States need to be able to make sure the
plans work for their citizens.
Mr. Bucshon. I want to briefly talk about cost-sharing
reduction payments, which everyone is saying is sabotage of the
ACA. That was a bailout, in my opinion, put into the law so
that if the pools didn't work--insurance companies were losing
money--they had a Federal backstop with taxpayers footing the
bill.
I yield back.
Ms. Castor. Thank you.
Ms. Kuster is recognized for 5 minutes.
Ms. Kuster. Thank you, and thank you for your testimony. I
appreciate it.
I want to join my colleagues in honoring John Dingell and
our mile-high memorial yesterday for him, and we will all be
together with Debbie Dingell, our colleague, and her family
tomorrow.
I just want to move on to the Section 1332 and direct my
questions, if I could, to Professor Keith. There is clear
statutory directive in Section 1332 that States must provide
comprehensible and affordable coverage to a comparable number
of residents under the ACA.
But, unfortunately, last fall the Trump administration
issued new guidance, and I am afraid that that is going to hurt
people with preexisting conditions like my dear friend Bodie,
who is a young man with spinal muscular atrophy in my district,
necessitating a wheelchair to get around.
Thanks to the ACA, there is no longer broad-based
exclusions to wheelchairs or to all the other affordable
healthcare that helps Bodie lead a fulfilling life.
But for Americans like Bodie, this concerns me in this
Trump guidance because it runs counter to the statutory
directives. So last week, I introduced H.R. 986, the Protecting
Americans with Preexisting Conditions Act, to nullify the new
guidance.
I have heard from my Republican colleagues this morning
that they want to protect Americans with preexisting
conditions, and I would encourage them to sign on to my bill.
If I could, Professor Keith, I would like to suggest a
quick lightning round about my concerns of these short-term
limited duration insurance products so that Americans will
understand our concerns.
If you could just respond--under these plans are insurers
allowed to refuse to offer a policy to an individual with a
preexisting condition?
Ms. Keith. Yes, they are.
Ms. Kuster. And are insurers allowed to exclude coverage
for preexisting conditions?
Ms. Keith. Yes.
Ms. Kuster. And are insurers allowed to charge higher
monthly premiums based on health status and factors such as age
and gender?
Ms. Keith. That is correct.
Ms. Kuster. And are insurers allowed to impose annual or
lifetime dollar limits on care?
Ms. Keith. Yes.
Ms. Kuster. And are insurers allowed to opt not to cover
entire categories of benefits? Here, I am thinking of mental
health services, prescription drugs, or maternity care.
Ms. Keith. That is correct.
Ms. Kuster. And are insurers--even in States like
Pennsylvania, New Hampshire, West Virginia, that had been so
hard hit by this opioid epidemic--allowed to offer policies
that do not include coverage for substance abuse treatment?
Ms. Keith. That is correct.
Ms. Kuster. And are insurers allowed to retroactively
cancel coverage once care is needed?
Ms. Keith. Yes. That has been one of the biggest abuses and
something that the Affordable Care Act prohibited.
Ms. Kuster. And are insurers allowed to impose much higher
out-of-pocket costs than under the Affordable Care Act?
Ms. Keith. That is correct.
Ms. Kuster. And so I would simply ask you or Commissioner
Altman, if you could, we have heard from Ms. Turner about her
opinion that these plans protect consumers and bring down
costs. Are there alternatives--waivers such as reinsurance
products that could bring down costs for consumers?
Ms. Altman. Absolutely. There are other mechanisms out
there--and reinsurance is a great example--that can lower costs
for those to help afford premiums without putting people in the
position of having to choose between no coverage or substandard
coverage like the short-term plans provide.
Ms. Kuster. So it is your professional opinion that rather
than this list that we have gone through this morning of ways
that insurance companies are choosing to make higher profits--
and I believe you have testified the profits are as high as 50
percent of every premium dollar?
Ms. Altman. Actually, there are some even higher than that.
The two largest carriers, with 80 percent of the market, do
spend less than 50 cents of every premium dollar on care. The
rest is some administrative cost, and the rest profit.
Ms. Kuster. Which is shocking to the American people.
Rather than all that premium dollar going into profit while
families are put at risk, you believe there is alternative that
this committee could consider to focus on reinsurance or risk
pools?
Ms. Altman. I do, so that no one has to choose between
their health and their financial well-being.
Ms. Kuster. Thank you. My time is up, but I very much
appreciate that.
Ms. Altman. You are welcome.
Ms. Kuster. I yield back.
Ms. Castor. Thank you.
Mr. Gianforte is recognized for 5 minutes.
Mr. Gianforte. Thank you, Madam Chair, and I thank the
panelists for being here and your testimony.
Hardworking Montanans regularly tell me how their
healthcare costs continue to rise and benefits shrink. I just
had a town hall this week, and individuals in Missoula and
Livingstone, Montana, both raised this very issue. It is a real
burden on families in Montana.
Obamacare has not provided an affordable option for many
Montanans. In the first year of Obamacare, more than 20,000
Montanans lost their coverage because of the law, and in the
first 3 years under Obamacare, Montanans' premiums have shot up
66 percent, and we had testimony you have had similar
experience in Pennsylvania.
Unfortunately, premiums continue to skyrocket for Montanans
and Americans across the country under the current scheme.
Thankfully, the Trump administration is empowering States to
address these rising healthcare costs by allowing States
greater flexibility with the strict Federal mandates of
Obamacare.
The Department of Health and Human Services is effectively
allowing more Americans to get coverage that best suits their
needs. The administration has implemented rule changes that
expand State Innovation Waivers to improve access to short-term
limited duration insurance plans, eliminate the costly
individual mandate penalty, expand association healthcare
plans. These measures entrust consumers to pick the best
healthcare for their family.
Let us be frank. Obamacare has robbed consumers of choice.
Obamacare asserted that a Washington bureaucrat knows an
individual's healthcare needs better than she does. The Trump
administration changes are empowering consumers so they can
make healthcare decisions that work best for themselves and
their families, providing waivers, empower States to promote
innovation that benefits patients and consumers.
The State Innovation Waivers, originally born in the Obama
administration and expanded under President Trump, allow States
to be creative with healthcare solutions while saving money and
lowering premiums, which is the issue I hear over and over
again as I travel our State.
Alaska has taken advantage of the waivers. We have talked
about this. They saw premiums drop in some plans by over 40
percent. We heard testimony today--similar experience in
Maryland and other States.
Unfortunately, for a second week in a row, members of the
majority here have put on a political theater. They want the
American people to believe that there are lawmakers who oppose
protections for Americans with preexisting conditions.
I don't know of any Democrats or Republicans on this
committee that are in favor of this, who want to strip
protections for Americans with preexisting conditions. We all
agree on that. There is broad bipartisan support here.
I think we should work together to find permanent
legislative solutions that protect people with preexisting
conditions.
I also think we should work together to continue empowering
States to innovate and address healthcare affordability--I know
that is the issue back in Montana--and we should encourage
innovation and affordability, not terminate efforts to improve
healthcare and make it more affordable.
Ms. Turner, these State Innovation Waivers that allow for
flexibility and creativity for the States who want to find
cost-saving solutions, do you think that we would continue to
see this sort of cost savings and innovation if we move to a
single-payer, Government-run, Medicare-for-all program?
Ms. Turner. No, and I think what we would find is that the
American people would see--they would not have any choice. It
would be the single-payer Government program, whatever form
that takes.
And what we are seeing is the States are so much better
able to be able to fine tune funding to the needs of their
citizens. The American Health Care Act that this Congress
passed in 2017 provided specific money to the States, $123
billion, to be able to help with those high-cost patients. So
they had better protection than being thrown into the same pool
and often having benefits denied.
Mr. Gianforte. Yes. So what would the effect be of stopping
the State Relief and Empowerment Waivers on individuals in the
States where that ability to innovate was taken away?
Ms. Turner. The States would basically become functionaries
for the Federal Government. It would really undermine our
system of government, I think, in giving the Federal Government
so much control.
One of the things that we have learned through these
waivers and through the 70-changes-plus that have been made to
the ACA so far is that we need to have more flexibility and
more State control.
Mr. Gianforte. OK. Thank you, and I yield back.
Ms. Castor. Thank you.
Mr. Sarbanes, you are recognized for 5 minutes.
Mr. Sarbanes. Thank you, Madam Chair. I thank the panel for
your testimony.
Ms. Altman and Ms. Keith, maybe you could tell me--the
short-term plans that we have been talking about, the people
offering those plans can and do deny people or reject people
based on a preexisting condition, do they not, in some
instances?
Ms. Keith. They do. That is correct.
Mr. Sarbanes. Yes. So it is incompatible, it seems to me,
to claim, as we are hearing from a lot of the Members on the
other side, that they absolutely want to protect people against
discrimination based on preexisting conditions, on the one
hand, but to defend these short-term limited duration plans on
the other hand, because those plans actually put people in that
position of being able to be denied, based on that situation.
Would you agree there is some incompatibility there?
Ms. Keith. I think that is correct, and these short-term
plans exacerbate, I think, many of the out-of-pocket costs that
everyone in this hearing has said they are concerned about. So
folks who maybe are healthy enough to enroll in a short-term
plan but then become sick can face catastrophic costs that
should concern all of us.
Mr. Sarbanes. It is this distinction that we were able to
focus on when we put the ACA together originally, where people
are seduced into thinking that they have got their health
situation covered and are doing that relatively inexpensively,
only to then find if they do get sick that they are out of luck
because the deductibles are incredibly high or the benefits
that they thought they would be entitled to are not available
to them. There were the caps that the insurance industry would
place on how much it would cover.
So, in a sense, you are buying the healthcare equivalent of
a pig in a poke when you are buying these short-term limited
duration plans.
Why, by expanding the duration of them up to a year, we
wouldn't view that as going back to the bad old days, which
produced all these stories of heartache that motivated us to
try to make these changes, I can't--I can't understand for a
moment why anyone would support that kind of a policy shift.
But I wanted to ask you a specific question, which is that
these short-term junk plans, as we are calling them over here
on this side, where they can reject a beneficiary based on HIV
status, based on weight, pregnancy, other kinds of things,
could somebody apply for one of those plans, check a box saying
they don't have a preexisting condition because they are not
aware?
And that was the other things we discovered when we were
doing this. How many things qualify as preexisting conditions
that no one would ever imagine would disqualify them from
coverage?
So somebody could get into a plan and then, when they go to
get the benefits of it, they would discover then that they are
not qualified for those based on this preexisting condition
disqualification.
Could that happen? And so then you are trying to access it
and, boom, you can't access it and you are--and not only that,
you are thrown off the plan at that point because they say
``Oh, you know, you weren't qualified in the first place''
after you have paid premiums for I don't know how many months,
and I don't know whether you would get those back. But is that
a fair dilemma that people can find themselves in?
Ms. Keith. That is absolutely correct. What you are
describing is something called postclaims underwriting that an
insurance company would use to go back and see if there is
something that the consumer did not disclose or something, in
their view, they omitted.
What the insurance company would typically do is
retroactively cancel the policy altogether.
Mr. Sarbanes. Yes. So basically these--did you want to
comment?
Ms. Altman. I am just going to add I think it is important
to note that we are not talking about cases where patients
intentionally did not disclose----
Mr. Sarbanes. Right. Right.
Ms. Altman [continuing]. Because fraud--true fraud has
always been a reason. Cases where something was noted on a
medical record that they may not have remembered, potentially
didn't even know about because their doctor----
Mr. Sarbanes. Right.
Ms. Altman [continuing]. Wrote it in the notes without
explaining to them, or in the case that I listed in my
testimony, they were never diagnosed or sought care but
experienced symptoms for which the insurer deems they should
have sought care.
Mr. Sarbanes. I mean, this is--I have to yield back my
time, but just to say we are inviting people back into a world
with mirrors and trapdoors that was exactly the place we wanted
to get away from when we passed the ACA. So we got to really
push back against these junk plans.
And with that, I yield back my time.
Ms. Eshoo [presiding]. Thank you, Mr. Sarbanes.
I now would like to recognize the gentleman from Georgia,
Mr. Carter.
Mr. Carter. Thank you, Madam Chair, and thank all of you
for being here. Certainly an important area that is affordable
healthcare costs.
You know, before I became a Member of Congress I practiced
pharmacy for over 30 years. I started when I was 2. But,
nevertheless, you know, one of the things that I heard so often
was the cost of healthcare and particularly the cost of
insurance, and that is something that I was committed to work
on and I am committed to work on and continue to work on as a
Member of Congress.
Ms. Turner, I read an article in Axios the other day that
said that 42 percent of people participating in the individual
marketplace weren't able to use their insurance because out-of-
pocket costs were so high or their deductible was so high.
And it is my understanding that that is why we have the
1332 waivers, is so that States can actually address this
issue. I believe in your testimony you gave examples of some
States where it has actually worked--maybe Alaska, Oregon.
Can you repeat that for me, please?
Ms. Turner. Yes, Congressman.
The 1332 waivers really are designed to give States
flexibility to separately subsidize the people with predictably
high healthcare costs that are driving up the premiums for
everyone else.
They are the ones who are causing premiums to go up as the
healthy people drop out. And a number of States have applied
for waivers to in different ways subsidize them.
Alaska said, we will look at these 33 categories and if
people qualify for those, then they will be able to get
separate subsidies. Others have reinsurance, high-risk pools,
invisible high-risk pools.
States are working to figure out how to do this, with
dramatic results. We see, for example, in Alaska that premiums
went down by almost 20 percent. Enrollment went up by 7
percent. In Minnesota, premiums went down again by almost 20
percent. Enrollment went up by 13, 14 percent, and on and on
where you see----
Mr. Carter. And that is the point I am trying to make. I
mean, obviously, this has helped. It has helped tremendously,
and expanding it has helped. Yet, the impetus for the hearing
today is a set of bills that are actually going to constrict
this, so we are not going to have the ability to expand on this
like--and enjoy the benefits of it working like it has worked.
I am really confused by that because this is our second
hearing in the committee that has the broadest jurisdiction
over healthcare costs of any other committee in Congress, and I
am just trying to figure out where we are going.
The first week we had a hearing on a lawsuit that is still
in litigation. It has not been settled yet and may not impact
anyone.
Here we are having a hearing this week on what is going on
and how we can actually constrict the affordability and make
healthcare costs even more expensive for people. And yet, when
I go--when I am in my district people are talking about, what
about prescription drug pricing.
We haven't even discussed prescription drug pricing yet.
Yet, there are other committees in this House--the Ways and
Means Committee yesterday had a hearing on prescription drug
pricing, the Oversight and Government Reform Committee has
already had a hearing on drug pricing--and yet here we are in
the most broadest jurisdiction of healthcare, and we haven't
had a prescription drug pricing hearing yet.
Madam Chair, I certainly hope that we will get to that at
some point here, because it is extremely important. The point
here is that people being able to buy health insurance doesn't
help anyone if they can't use it.
You know, when I first went into business I read something
and it said, When is a deal not a deal? It is not a deal when
you buy something you don't need or you can't use, and that is
what people were being forced to do: buy insurance that they
can't afford to use. That is not helping them, and that is what
we need to be addressing here and what I hope that we can
address.
Let me ask you, Ms. Turner--when folks have a gap in
coverage and employment or people who retire and are not yet
eligible for Medicare, what are the options for them?
Ms. Turner. Previously under the Obama administration they
had the option to buy a short-term plan. These have been around
for decades. But it had to--it could only last for 3 months,
and people generally, if they are in gaps in coverage, they
need coverage for longer than that. So this is what the Trump
administration did. They said that you can have the policy for
up to a year and it can be renewable for another 2 years.
Mr. Carter. And in these plans there are options. So they
give these people who are in this gap, if you will, the ability
to actually fill in that gap and the ability to have coverage,
which we all want.
Ms. Turner, I really appreciate all of you being here and
appreciate this opportunity, and Madam Chair, again, I look
forward to the hearings that we are going to have on
prescription drug pricing, and I yield back.
Ms. Eshoo. I thank the gentleman. I look forward to them as
well.
I now would like to recognize the gentlewoman from
Illinois, Ms. Kelly.
Ms. Kelly. Thank you, Madam Chair, and thank you to all the
witnesses, and I too want to salute Congressman John Dingell
for all of his work, and he will be sorely missed.
The Trump administration has recklessly expanded junk
health plans that do not offer comprehensive coverage. These
junk plans could unwittingly leave, as we have heard, families
on the hook for thousands of dollars of healthcare costs.
According to an article in the New York Times, Kevin
Conroy, a patient from California, had a heart attack and
underwent triple bypass surgery 2 months after enrolling in a
short-term junk plan. His insurance company refused to pay for
any of his treatment, leaving him with a $900,000 bill.
In another case, United Health refused to cover a patient's
breast cancer treatment, leaving her with a $400,000 bill. The
insurance company claimed that breast cancer was a preexisting
condition even though the patient was not diagnosed with cancer
until after she bought the junk plan.
Ms. Altman, according to your testimony, I understand that
in your State several consumers have been stuck with large
unpaid medical bills because a short-term policy denied
coverage even for medical conditions arising after an
individual enrolled in a policy.
These conditions should, theoretically, be covered since
they arose after individuals enrolled in the plan, but often
the insurance company, as we have discussed, that sell these
junk plans refuse to pay out.
You have explained about postclaims underwriting, and also
we talked about how consumers need to be more educated. But I
want to know where does all the money go if these insurance
companies are not using premium dollars to pay for healthcare?
Ms. Altman. Sure. So, as we have talked a little bit about,
Affordable Care Act plans are subject to a medical loss ratio
that ensures that they spend at least 80 cents of every premium
dollar on care with the remainder going to administrative costs
and profit, and if they don't meet that standard they are
required to refund dollars to their policy holders.
The short-term market, on the other hand, averages, based
on a study, 64 cents on every dollar, the largest carriers
average less than 50 cents a dollar spent on care, with one of
those carrier spending only 34 cents on the dollar.
So the remaining funds would go some to administrative
costs and the remainder to profit. I think all evidence points
to these being very profitable lines of business for the
insurers that sell them.
Ms. Kelly. Thank you.
And also I agree with my colleagues. I would--I want us to
work together too and get something done for the American
people. But, as I recall, in the last years all I have been
given the opportunity to do is vote to repeal the Affordable
Care Act or tear up some part of it.
And, Ms. Turner, I know you have been more negative about
the navigators but also besides the marketing the time period
was cut so short so people--it was harder for people to
register.
And we talk about the economy is better, so I would like to
think we went down some because people got jobs and so they did
have health insurance. So I just want to know from you, do you
think the ACA has been helpful to anybody?
Ms. Turner. Oh, absolutely, and actually California
extended its enrollment period to I think the middle of
January, and they still were down 24 percent in new enrollment.
So I think that the real issue is how do we make these
plans more attractive to people so that they can afford both
the premiums, especially if they are not in the subsidized
market, as well as the deductibles are low enough that they
feel they could actually access the insurance, and that is what
I am hopeful that States will take advantage of the 1332
flexibility in the law to allow that.
Ms. Kelly. OK. Thank you for your answer.
I just want us to also recognize that there were many, many
millions of people that had no insurance, and just like people
can talk about the stories they are hearing there are many
stories that, even in my own family, how people that weren't
insured have insurance and they are very happy.
Ms. Turner. And they are grateful, yes.
Ms. Kelly. I yield back.
Ms. Eshoo. I thank the gentlewoman from Illinois.
And I now am pleased to recognize the gentleman from North
Carolina, Mr. Hudson.
Mr. Hudson. Thank you, Chairman Eshoo, and this is my first
chance to publicly congratulate you on taking the gavel. I look
forward to finding common ground and working with you
throughout this Congress.
When I noticed today's hearing title, ``Strengthen Our
Healthcare System: Legislation to Reverse ACA Sabotage and
Ensure Preexisting Conditions Protections,'' one word really
stood out to me--the word ``sabotage.''
I know my colleagues and I on this panel agree that we
should strengthen our healthcare system. I talk to constituents
of mine every time I am home who need better access to more
affordable care, and I know my colleagues and I want to ensure
protections for preexisting conditions. That was universally
accepted at our hearing last week.
But the word ``sabotage'' really stuck out at me.
Unfortunately, this conversation around healthcare has become
increasingly partisan. We saw this with the Affordable Care
Act, and we saw it again with the American Health Care Act last
Congress.
But this conversation should be bipartisan because
healthcare is an issue that affects every single American. From
the time we are born until the time we die, there will never be
a time when the healthcare industry doesn't touch our lives.
I was talking to a constituent last week who--he and his
wife are in their 50s--he told me his wife couldn't afford to
buy health insurance on the exchanges. But, because of the
short-term insurance plans now being offered, she was finally
able to purchase insurance that they could afford.
He noted that on a previous insurance, if they paid all
their premiums and met their deductible, they would have spent
$18,000 out of pocket before they accessed the first bit of
healthcare.
So that brings me to today and this word ``sabotage.'' I
don't think these short-term plans are a long-term solution for
people buying health insurance, and the administration agrees
with that, which is why they are only available for up to 3
years.
But they do help provide option for folks back home who
feel like they have no place else to go. I definitely don't see
them as sabotaging the ACA--more so as enhancing the intent,
however misguided the execution of the ACA, of providing more
people with health insurance.
Ms. Turner, in your testimony you noted these plans were
helpful for early retirees like my constituent who needed to
bridge the gap after losing employer-sponsored healthcare. I
think that is definitely true with the folks I have talked to.
But one criticism of the short-term plans I have heard
today has been that consumers may not be sufficiently educated
on the restrictions and limitations that come with these
policies. They may not understand the tradeoffs for lower
premiums.
In my conversation with my constituent, he recognized his
wife did not have coverage for everything but that the plan
covered everything they needed.
Ms. Turner, yes or no: The final rule provides a disclosure
notice that must be prominently featured on the insurance
materials. Is that correct?
Ms. Turner. Yes, sir.
Mr. Hudson. It appears from my anecdotal experience that
those disclosure notices are working. Would you agree with
that?
Ms. Turner. Yes, sir.
Mr. Hudson. I appreciate that. One other issue that has
been raised--and if I could stick with the John Dingell yes-or-
no answers--Ms. Keith, I believe New Jersey and California have
limited or banned the sale of short-term limited duration
insurance plans. Is that correct? Yes or no.
Ms. Keith. That is correct, yes.
Mr. Hudson. And Commissioner Altman, do other States have
the authority under the Trump administration's action to limit
or ban short-term limited duration plans if they choose?
Ms. Altman. Yes.
Mr. Hudson. So if that is true, then, that if any State
doesn't like the new arrangements, they are free to pass their
own laws limiting or banning short-term limited duration
insurance plans.
I think that is just important to note for the record that,
you know, States have the option here and States are looking
for solutions for their constituents, a lot of them in the
cases like the one I described of my constituents who are just
trying to bridge a gap, who are trying to find a way to afford
insurance for their families.
So I think it is important to note that we are not forcing
anyone into this. We are giving flexibility to the States, and
I would love to see us do an extended hearing, Madam Chair,
where we bring in some folks from the States to talk about are
these plans really working.
We hear a lot of discussion from the other side about this
could do that, it could be that. But let us look at what the
facts are and what is really happening on the States. I think
that would be really important.
So with that, I will yield back.
Ms. Eshoo. I thank the gentleman.
I now would like to recognize the gentlewoman from
Delaware, Ms. Blunt Rochester, a new member of the committee.
We are thrilled that you are here. You are recognized for 5 big
minutes.
Ms. Blunt Rochester. Thank you, Madam Chairwoman, and also
thank you to the witnesses today. I also would like to send my
condolences to the Dingell family on the passing of such a
legend as John Dingell.
In 2017 in January, the Trump administration halted all ACA
marketplace outreach for the final week of the 2017 open
enrollment and then slashed ACA enrollment funding for
advertising and outreach by a staggering 90 percent--90
percent.
Delaware's marketplace, forced to do more with hundreds of
thousands of dollars less in funding, saw a decrease in
enrollment every year since then, down 20 percent since the
State's peak enrollment in 2016.
The administration's repeal efforts and damage to the
Affordable Care Act have resulted in new enrollments going down
and costs going up for the over 22,000 Delawareans and 8.5
million Americans receiving their health insurance through the
individual marketplace.
These Delawareans are now paying more than $100 in premium
costs over what they paid before over the national average, and
I really--I heard my colleague Mr. Hudson's point about the
word ``sabotage,'' and as I was sitting here thinking of what I
would even say, you know, the saying ``If it walks like a duck
and quacks like a duck, it must be a duck'' came into my head.
And it came into my head because, when you shorten the
amount of time that people have to apply and then you couple
that with slashing information and outreach to people, it
appears and it feels like sabotage, and I am really proud to
have been able to introduce the MORE Health Education Act to
restore funding for educational outreach.
All of the bills that we are discussing here today will
help Americans enroll in quality comprehensive plans in the
marketplace, and they will ultimately lower costs. But, more
importantly, the goal is to make Americans healthier.
And so my first question is, number one, I just want to
clarify, Ms. Turner, that this particular bill was for
marketing and outreach and not the navigators. But you will
probably see more coming forward.
But I wanted to ask Ms. Keith to clarify something that was
stated, that marketing doesn't work. Can you just talk about,
does marketing work? People say, ``We already know about the
ACA, why do we need to have marketing?''
Can you share a little bit about that?
Ms. Keith. Thank you for that question. It is very
important.
Multiple studies, including studies conducted by CMS
itself, have shown the value of advertising and marketing
outreach under the ACA in particular. One of the changes by
making such dramatic cuts to the advertising budget is that,
beginning in 2018, CMS ran no TV advertisements, even though
that was one of the most cost-efficient ways of reaching people
and had a measurable impact on people enrolling.
I think Ms. Turner has cited California having lower new
enrollees this year. I think it is worth noting that California
has had the same enrollment overall, and I think part of that
is that new enrollees--California had strong enrollment of new
enrollees in previous years, and I think the State would point
to things like loss of the individual mandate as reasons why
perhaps new enrollment is lower. But I did want to clarify
that, that enrollment in California is stable.
Ms. Blunt Rochester. Got you. Great. And also, I wanted to
follow up with that. Why do you think we still need outreach
and marketing?
Ms. Keith. Awareness remains low. Documented studies have
shown this. Even as of November of last year there were about
69 percent of uninsured consumers and consumers who had
purchased individual coverage who did not know the deadline was
December 15th or had the date wrong. Sixty-nine percent of
folks who we are trying to reach for this type of coverage who
would be eligible are not aware of their options, and outreach
and marketing plays a key role in that.
I would just emphasize that we are seeing very aggressive
marketing of the short-term plans as well, and so, as we have
seen cuts to ACA outreach and marketing, it is being filled,
this void is being filled by these short-term plans, and it is
very confusing for many consumers.
Ms. Blunt Rochester. And Commissioner Altman, can you talk
about the State of Pennsylvania and what impact these kinds of
cuts have had?
Ms. Altman. Sure. So Pennsylvania, under a prior
administration, chose to use the Federal exchange. So we rely
on CMS and the Federal Government to operate our exchange, and
marketing and outreach are supposed to be a core element of
that.
And so, in my perspective, when the Federal Government
ceased doing that and ceased trying to reach out to
Pennsylvanians, they weren't meeting those obligations. But
they still needed to be met because people are not aware--the
number of consumers I talk to who don't know basic information.
We have tried to fill that gap with our own campaign, but
our resources are certainly limited.
Ms. Blunt Rochester. Great. Thank you so much for your
questions.
I would yield back my time in a minute just to say that,
even as a Member of Congress, we were limited in what we could
say. So I applaud the work of the committee, and I yield back
the balance of my time.
Ms. Eshoo. I thank the gentlewoman, and we are thrilled
that you are part of the committee.
It is a real pleasure to recognize the gentlewoman from
Indiana, a wonderful colleague and a good friend, value added
no matter where she is in the Congress--Mrs. Brooks.
Mrs. Brooks. Thank you, Madam Chairwoman, and I just want
to also have the opportunity--this is my first opportunity to
publicly congratulate you on leading this important committee,
and I look forward to continuing our work that we have done in
the past, particularly on Pandemic All-Hazard Preparedness Act
and many other areas, and look forward to your work and working
with you on this most important subcommittee.
I want to focus a little bit on the marketing, because my
colleague talked about marketing and, Ms. Turner, marketing and
outreach is an incredibly important aspect of any product. I
assume you would agree with that.
However, the more products and the more choices there are,
marketing--there have to have products that people want to
consume and/or want to--and/or understand what it is they are
consuming.
And, like so many others, I have many Hoosiers who have
shared with me that the high cost of the premiums and the high
deductibles are what so many--you know, their barriers have
been to purchasing a lot of the products.
So can you help us understand why having more choices--
however, it needs to be informed choices, and I agree that
there is a concern whether it is with different types of
products--people have to understand what they are buying, and
that is, I think, what the biggest problem is with these short-
term products, is they don't quite understand what is covered
and what is not covered.
Can you please talk with us about why having more choices
is better for healthcare overall for consumers regardless of
their health status?
Ms. Turner. It does give them options. It gives them
options of networks, doctors, the hospitals that are available
to them and, unfortunately, and I think about half of counties,
people in ACA coverage have a choice of one plan. It is take it
or leave it, so there is really no choice there at all.
And people who can't afford that coverage are now being
given other options through short-term plans and other
administrative ideas.
Mrs. Brooks. Can you share with us a little bit about how
the Federal Government might be able to increase enrollment?
Are there other ideas that any of you might have as to how the
Federal Government might be able to increase enrollment in
health insurance aside from spending money on marketing and
navigators?
Ms. Turner. If the policies were more affordable, if there
were more competition in the market so that the one provider
doesn't have the opportunity to buy up all the doctors and
hospitals and charge higher premiums, giving people more
competition in these markets--so looking at the anticompetitive
monopolies that some of these hospitals and systems have is
important, but also providing more options through Section 1332
for States to tailor their risk models so that the highest-risk
people are not in the same pool with everybody else and driving
up premiums, driving the healthy people out. I think this has
got to be a State-based solution and the 1332 that was a part
of the original ACA was envisioned to give States that
flexibility.
Mrs. Brooks. Talking a bit more about that, how have
Section 1332 waivers--have they increased access to care in the
States that have approved waivers, and can you give any
examples----
Ms. Turner. Absolutely.
Mrs. Brooks [continuing]. Of access to care?
Ms. Turner. Access to care--and which is, of course, in
many people's case it is access to coverage to help finance
that care. But in Arkansas, Minnesota, Oregon, Maryland, Maine,
New Jersey, Wisconsin, those are many of the States that
already have requested waivers to spend some part of the ACA
money themselves in a way that does a better job of risk
mitigation--high-risk pools, reinsurance, invisible high-risk
pools--to give--to separately subsidize the people who have the
highest costs so that you can then lower premiums for others in
the individual market and attract more people, which then
further lowers premiums.
Everybody wants more healthy people in these insurance
pools. The ACA is working against that. Section 1332 gives
States tools to be able to get more healthy people into their
markets.
Mrs. Brooks. Thank you. I yield back the balance of my
time.
Ms. Eshoo. I thank the gentlewoman.
And it is a pleasure to recognize from California another
new member of our subcommittee, and she is so welcome, the
gentlewoman Ms. Barragan.
Ms. Barragan. Thank you, Madam Chairwoman.
I want to thank you all for joining us here today. We have
heard a lot about these junk plans in my first term as a
first--as a new Member of Congress. It feels like we just had
all kinds of conversations about healthcare and it was centered
around repealing the Affordable Care Act, which would limit
access to healthcare to people.
So it is nice to be able to have this conversation and
actually have a debate on what some of what has been happening
over the last 2 years is doing to pricing and as a result of
some of the policies that have been implemented for the last 2
years.
I myself am a cosponsor of what we are talking about
today--to eliminate these junk plans--and I want to talk a
little bit about that. One of my colleagues on the other side
said, let us talk about the facts--let us talk about what is
happening.
You know, we received the story of Sam Bloechl from
Chicago, and I want to share his story because I think it is
important to highlight what is happening and what people are
going through.
Now, Sam's story was brought to us by the Leukemia and
Lymphoma Foundation. Sam unknowingly enrolled in a junk plan
after he was deceptively steered into it by a broker.
Now, Sam had been experiencing back pain and he was
completely transparent about this when he talked to the broker
about his condition. Sam writes in a letter to the committee
that he thought it would be smart to talk to a broker about
upgrading his coverage so he could have better healthcare
access for any future medical care.
Now, the broker assured Sam that the junk plan was the
right insurance plan for him, given his back pain. After
enrolling in the junk plan, Sam was diagnosed with an
aggressive form of blood cancer--non-Hodgkin's lymphoma.
After undergoing 6 months of chemotherapy and radiation,
his insurance company informed him that they were not going to
pay for the treatment, leaving him with $800,000 in medical
bills.
The insurance company also refused to pay for a bone marrow
transplant, treatment necessary to allow Sam to achieve lasting
remission. Now, Sam writes in his letter that the insurance
company claimed that cancer was a preexisting condition because
he had previously visited a chiropractor for his back pain.
Sam was left with almost a million dollars in medical bills
and no insurance--and no health insurance for the treatment
that he needed in order to stay alive.
Now, while fighting cancer, Sam is also trying to figure
out how to avoid bankruptcy. Sam is only 32 years old and a
business owner. He writes that instead of planning for his
future with his fiance and building his business, he is left up
at night wondering how to stay afloat.
So I want to start by entering Sam's letter to the
committee into the record now. And I also--Madam Chairwoman,
can I enter that into--thank you very much.
[The information appears at the conclusion of the hearing.]
Ms. Keith, can you discuss how insurance companies are able
to essentially defraud patients like Sam?
Ms. Keith. Certainly. So it sounds like Sam was a victim of
something called postclaims underwriting, which is something we
have been discussing where his back pain, which he disclosed,
was used as a reason to deny coverage for his cancer treatment
and care, leaving him on the hook for all these bills.
I think other ways that short-term plans have exposed
consumers to high out-of-pocket costs like this is through
their refusal to cover preexisting conditions, the benefit
gaps.
But even when you think you fully understand the product
and you disclose your back pain and you think you know what you
are getting, to be surprised that your cancer treatment
wouldn't be covered I think is something that is very troubling
for patients and consumers--the stories that we are hearing all
across the country.
Ms. Barragan. Right.
Commissioner Altman, could you describe the impact of the
Trump administration's decision to expand the junk plans on
patients who may be in a similar situation to Sam?
Ms. Altman. Yes, and thank you for sharing that story. I
think that story is so indicative of many of the pieces we have
talked about today, from limited benefits to deceptive
marketing practices which are, for the record, illegal, to
postclaims underwriting and, frankly, also to the fact that
something like this can happen to anyone, and that is why every
person needs comprehensive health insurance to cover things
like unexpected cancer diagnoses, and the story is also one
that demonstrates the short-term plans are not that.
Ms. Barragan. Well, thank you. I know. Sam writes that
somebody shouldn't have to worry about filing for bankruptcy or
getting stuck with $800,000 in medical bills. I agree. I think
that is why we are having the hearing today. I also think that
is why having legislation to protect individuals like Sam and
reverse the administration's attacks on Americans with
preexisting conditions is important.
And with that, I yield back.
Ms. Eshoo. I thank the gentlewoman.
I am now pleased to recognize the ranking member of the
subcommittee, Dr. Burgess, for 5 minutes.
Mr. Burgess. Thank you for the recognition. Thanks to our
witnesses for being here. I know it has been a long morning and
now afternoon, but I appreciate your input into this important
subject.
Ms. Turner, let me ask you--probably 2 years ago, I guess
in March of 2017, the Health Affairs published the article on
the invisible high-risk pools that the State of Maine had used
to rescue its insurance industry after their attempt at
community rating guaranteed issue got them into so much
difficulty in the individual market. The invisible risk pool
was a way to sort of reconstitute that market. Would you
qualify those as junk plans?
Ms. Turner. I think that the risk pools actually provide
the social safety net so that, if somebody does wind up in a
situation like Janet that I describe in Colorado who had
insurance but when she was diagnosed with hepatitis C, the
high-risk pool in the State was there to provide her care and,
ultimately, pay for her $600,000 liver transplant. So there are
other options available than the ACA, and we have seen those in
the past, and Maine is another example.
Mr. Burgess. Great. Thank you.
Madam Chairwoman, just before we finish up, I am going to
have another--a couple of unanimous consent requests so that I
don't get gaveled out. I just would like to make that
information available to you.
Now, Ms. Turner, staying with you, one of the issues I
brought up in my opening statement was the issue of global
budgeting. Can you speak to how a global budget system would
impact patients and the healthcare system at large?
Ms. Turner. Whoever controls the money is going to control
the choices, and whoever is controlling that global budget,
whether it is a regional health administrator, whether it is a
Federal bureaucracy, whether it is a hospital system, is going
to control the choices for that patient and they are going to
allocate the money in a way that I am sure they will believe is
going to be the fairest way possible, but it always winds up
they wind up with shortages, they wind up with waiting lines.
We have seen in California--I am sorry, in Canada--that
hospitals have to close in December because they have run out
of money. So I think that it significantly diminishes
individual patient choice, and it often leads to rationing of
care.
Mr. Burgess. While we are on the subject of Canada, it is
my understanding that Canada is opposed to the system in the
United States where, if a bill is submitted by CMS it is paid.
In Canada, there is a fixed budget and, once that budget is
exhausted, the bills are held until the next year. So a
fundamental difference in the approach.
One of the things that has concerned me for some is that
you do see that there is an effort to create a single-payer,
Government-run system, and you see this not just in the United
States.
I mean, this has been something that has been ubiquitous
across the world. Why is that? Why does a country want to
control something that inherently should be an individual
issue?
Ms. Turner. Now, I have thought about this for many years,
and I do believe that there is a sense of fairness--that if
everybody is in the same system that everybody will be treated
the same.
But that is not the way that it works in any country that
has some form of a Government-centralized healthcare system.
The affluent people always find a way to buy out of it, and
people who have fewer means always wind up with their care
rationed and limited.
Mr. Burgess. So does it concern you, some of the statements
we have heard about pushing to that type of system,
particularly those that say we are going to void any private
insurance? The large group market would disappear of necessity
under a single-payer system in this country.
Ms. Turner. With 173 million people in the employer health
insurance market that value their coverage, I think that would
be very problematic. When you have 60 million people on
Medicaid that value that coverage and that would see it
compromised if we had another 200 and what would be 70 million
people on that program.
So I think that there--the system as it is has evolved over
decades, and I think it is important to build on that system
and figure out how do we help these 15 million people who are
in the individual market who are the most exposed to the high
premiums and the high cost, the high deductibles, and the
possibility of losing their coverage.
Mr. Burgess. I do know when I ran my medical practice,
obviously, I was in the small group market when I bought
insurance for my employees. I would have welcomed the ability
to go into an association health plan.
If county medical societies across the country had put
together a group health insurance model, that would have been
welcome news for me and those patients would have been
protected from preexisting conditions, unlike others in the
individual market.
So thank you so much for your time today, and I will yield
back.
Ms. Eshoo. Thank you, Dr. Burgess.
Let us see. It is now my pleasure to recognize the
gentleman from California, Mr. Cardenas.
Mr. Cardenas. Thank you very much, Madam Chair and Ranking
Member, for putting this very important hearing together in
full view of the public, and I want to thank the witnesses for
being here as well--the ones I agree with and the ones I
disagree with. Thank you so much for providing your
perspective.
Since the passage of the Affordable Care Act in 2010, more
than 20 million Americans have gained meaningful access to
insurance coverage. Before Donald Trump became President, the
uninsured in this country fell from 18 percent to 11 percent,
the biggest jump in any period of time in the country's
history.
Yet, basically, since day one the Trump administration has
actively undermined the law and attacked Americans' healthcare.
The administration cut the advertising and enrollment budget
from $100 million to $10 million. This has had a very real
consequence, and I have heard stories from my own district
where constituents mistakenly believed that the healthcare
exchanges ended with the Presidency of President Obama.
The administration's sabotage efforts have resulted in the
highest uninsured rate in 4 years. According to a Kaiser Family
Foundation study, over 80 percent of uninsured adults were not
aware of the deadline to enroll in coverage in 2017. Again, it
was this Trump administration that reduced the enrollment
administration's advertising budget from $100 million to $10
million.
Another survey by the Commonwealth Fund said that 41
percent of uninsured adults are still unaware of the ACA
marketplaces or that subsidies are available to help them pay
for coverage.
The Trump administration is strangling healthcare for
millions of people and undermining the law of the land.
Ms. Keith, I understand that uninsured Americans are less
likely to be aware of the deadlines or availability of
affordable coverage. Is that a correct statement of today?
Ms. Keith. That is correct, yes.
Mr. Cardenas. OK.
Also, Ms. Keith, can you briefly describe how gutting
funding for outreach and enrollment impacts new enrollments?
Ms. Keith. Certainly. New enrollees tend to be younger and
healthier. As you can imagine, patients who are older and have
health conditions are very motivated to enroll in coverage.
It is really younger and healthier consumers who aren't
aware and need to better understand the marketplace options
available to them. What we have seen is since 2016 new
enrollment through healthcare.gov is down by about 50 percent.
We need younger and healthier consumers to help keep the
risk pools stable and help keep premiums down. I believe I
mentioned earlier Covered California attributes its marketing
in 2015 and 2016 to a reduction in 6 to 8 percent in premiums.
So advertising can pay off in terms of sort of bringing in
younger and healthier people who need coverage for themselves
but also help the risk pool.
Mr. Cardenas. Now, Ms. Keith, can you describe how what you
just described--younger, healthier patients not enrolling--how
that affects other Americans' ability to get comprehensive
healthcare?
Ms. Keith. Sure. By not having younger and healthier folks
in or having fewer and fewer new enrollees, there is a
possibility that premiums will increase.
Mr. Cardenas. OK.
Ms. Altman, what is the level of awareness among consumers
in Pennsylvania, for example, about the ACA and their
healthcare options in the ACA marketplaces?
Ms. Altman. I would say that my experience in speaking to
Pennsylvanians is very reflective of the study that Ms. Keith
mentioned. In particular, there seems to be a significant lack
of awareness about the financial support available under the
Affordable Care Act.
Many consumers come to enrollment events and think there is
no way they will be able to afford the coverage, only to find
out that it is all more affordable than they ever thought it
could be.
Mr. Cardenas. Thank you. And also, Ms. Turner, you
mentioned something that, as a former business owner, on the
face of it I would probably agree with but I don't agree with
in this case about how we are trying to provide comprehensive
healtcare to as many Americans as possible, and I quote,
``individual patient choice.''
When I was a little boy, my parents had an individual
patient choice, and they chose to go without insurance coverage
because it was too far out of reach for my family's single-
income, first-grade-education immigrant father who was a
gardener.
He couldn't be a CEO--didn't aspire to be, or what have
you. But he provided food on the table for 13 people every
single day, and I am so proud of him and my mother for doing
what they could with what little they had.
Also, my parents' individual choice was to not participate
in preventative medicine practices like going to see a doctor
because even that was too expensive for us to do as a low-
income family.
My parents' individual patient choice was to look at us and
pray for us when we got a bad fever or something and then, now
and again, once in a while, say it is time to go--time to take
us to the emergency room.
Not to our regular care doctor, not to a place where we
could actually be preventative in these measures, but the
dangerous choice of waiting to the last minute to decide, ``I
think my child is in very serious danger. Now it is time to go
to see a doctor.'' That is individual choice that the
Affordable Care Act, as flawed as it is, has been trying to
overcome, and it was able to overcome that for tens of millions
of people that before were like my family when I was growing
up.
Thank you very much, Madam Chair. I yield back.
Ms. Eshoo. I thank the gentleman. You just saw and heard
passion on display.
Now, we have two Members that have been waiting very, very
patiently. They are members of the full committee. Ms.
Schakowsky is also a chair of a subcommittee, and the rules of
the committee allow for Members that are not part of this
subcommittee to come and to participate, but they have to come
last.
So thank you to the gentlewoman from Illinois and for her
great service on this subcommittee in previous Congresses. I
recognize her for 5 minutes of questioning.
Ms. Schakowsky. I thank you, Chairman Eshoo, for allowing
me to waive onto the subcommittee, a subcommittee I served on
for 16 years, and I am happy to be here today.
I just wanted to point out that the State of Illinois
passed legislation preventing these short-term--we call them
junk plans, because there was a robust debate about those.
And while we saw 7 percent lower enrollment, I think it
could have been even higher had--that we could have done better
had the--I call it--I do call it sabotage of limiting the
navigators.
Ms. Turner said that only 1 percent of the navigators had
anything to do with it. Has the public program that was
essentially defunded been helpful, and would we have had more
enrollment had we had the dollars to advertise the programs?
Both of you, actually.
Ms. Keith. Absolutely, and I think when we talk about
navigators, who we are really talking about is community-based
organizations, United Ways, legal aid societies, American
Cancer Society, organizations like that who are sort of bedrock
institutions in the community.
Although some of that data I think has been disputed on
navigators, I will say under the statute navigator enrollment
is only one of the five things that navigators are supposed to
work on. Their real goal is to help folks with limited English
proficiency, lower-income folks.
They have a lot of other things they are doing that aren't
just enrollment. So I think having those navigators there is
really helping families with complex conditions, families who
need a little bit of extra help to get enrolled.
And then to your question, I tend to agree--if we had
outreach and marketing funding you would--the marketplaces sort
of remain stable even with these cuts, but at least one study
has showed that we should have 2.3 million more new enrollees
at a minimum. So the marketplace should be much bigger than it
is.
Ms. Altman. Just speaking for Pennsylvania, I can say that
the navigator organizations in Pennsylvania are incredibly
committed and incredibly effective in reaching people and
helping the most challenged individuals through their
healthcare questions and issues and enrolling people both in
the marketplace and in Medicaid as well, particularly with the
expansion, and especially in reaching groups of people who are
not going to be reached otherwise--those who have specific
healthcare needs.
One of our navigator organizations focuses on individuals
with mental health conditions, focusing on groups for whom
English is not their primary language. We have other navigator
organizations focused on certain communities in that category.
And so they do fill a very unique void.
Ms. Schakowsky. Let me interrupt. I have little time left.
I wanted to refer to a bill, H.R. 1143, that Representative
Eshoo sponsors. But I wonder if either of you are knowledgeable
about the Georgetown University Health Policy Institute
findings about really what has happened when brokers are
telling people about these plans and how they concluded that
insurance brokers selling these plans engaged in deceptive
marketing practices.
Ms. Keith. Thank you for that question. This was a study
done by my colleagues on the really aggressive marketing and
outreach we've seen in short-term plans. By and large, there
are a lot of ads funded going towards marketing of these short-
term plans.
Brokers--we found instances where brokers were very
aggressive by phone--you have a lot of robocalls--brokers who
would refuse--really wanted someone to purchase while they were
on the phone and refused to provide written information at all.
You are seeing plan--or website, web brokers saying that they
sell ACA plans and short-term plans but then only allowing
enrollment in short-term plans. I worry----
Ms. Schakowsky. And did some of those people think they
were getting a comprehensive ACA plan?
Ms. Keith. I am sure that is true. It is very confusing.
The other thing I was going to add is that we have seen
steering. So even when patients might be eligible for subsidies
or consumers might be eligible for subsidies through the
marketplace, being directed to a short-term plan when they
might qualify for a much cheaper, more comprehensive policy.
Ms. Altman. I will just add very quickly that my department
has had to revoke the insurance licenses of a number of agents
and brokers who have done exactly what you said and lied to
consumers and told them these plans are things that they are
not, and it is falling to States to do what we can to be
vigilant in a very active marketplace with a lot of marketing
that is very questionable.
Ms. Schakowsky. Let me just say choice is a good thing. It
needs to be informed choice. People really need to know what is
going on, and these plans--I am happy that they were outlawed
in the State of Illinois.
I yield back. Thank you very much for letting me be here.
Ms. Eshoo. Thank you for your patience and your attendance.
I now would like to recognize another member of the full
committee--not of the subcommittee but always welcome here and
a new member to the full committee, the gentleman from Florida,
Mr. Soto. You are recognized for 5 minutes.
We are going to vote pretty soon, too.
Mr. Soto. Thank you. Yes, I will be efficient. Thank you,
Chairwoman Eshoo.
So sabotage of the ACA--allow me to count the ways. Let me
just go through the top five as I see it: first, eliminating
cost-sharing subsidies, that raised rates; second, cutting
enrollment period in half; third, cutting marketing dollars in
half or more; fourth, eliminating high-risk corridors, hurting
competition; and fifth, eliminating individual mandates.
One that we still need to talk about is, there was an
attempt to eliminate preexisting conditions in the Trumpcare
bill that did not pass, thank God, but if we didn't stop them,
we would have seen even that sabotaged.
I think all parties can agree this was a big issue in the
last election and that Americans want us to get to work on
bipartisan solutions on it. I come from the State of Florida,
home to the largest Federal exchange in the Nation--1.7 million
Floridians are on the ACA exchanges, up 50,000 from last year.
So, first, I would like to get a potential consensus here
from the witnesses. Yes or no: Did eliminating the cost-sharing
by the Trump administration and the last Congress raise rates
altogether?
Yes or no, and we'll start with Ms. Keith.
Ms. Keith. Yes, it did.
Mr. Soto. Ms. Altman?
Ms. Altman. Absolutely.
Mr. Soto. Ms. Turner?
Ms. Turner. It was not--funding was not included in the
original law, and this Congress was trying to provide the
funding in context of larger reforms.
Mr. Soto. So I will take that as a no. OK.
And then, for my second and final question: Why would a
State like Florida still have an increase in ACA enrollment
even with these five clear sabotages of the ACA opinions?
We will start with Ms. Keith.
Ms. Keith. One response is that there is still continued
demand for the type of coverage that the ACA provides for
comprehensive, affordable, quality coverage. At the same time,
you still have subsidies available for most folks who enroll
through the marketplace, and that has been, I think, the
enduring stability of these programs.
Mr. Soto. Ms. Altman?
Ms. Altman. Just reiterating, I think that demonstrates the
value proposition that the comprehensive coverage along with
the financial assistance available on the marketplace provides
to millions of Americans.
Mr. Soto. And Ms. Turner?
Ms. Turner. Maybe sort of ending on a bipartisan note,
there is such broad agreement that we need to help people to
purchase coverage who are shut out of the market for whatever
reason and make it more affordable. I hope to work with you in
doing that.
Mr. Soto. Just to conclude, you know, Florida is a giant
State, third largest in the union, and a lot of our
constituents don't have access to the foundational plans of
this Nation--employer-based plans--that so many Americans are
on, particularly because they may work in the service industry
or the agriculture industry, which is why the ACA continues,
despite all the sabotages, to be a smashing success in my
State, because this is really the only option people have.
So from Florida's perspective, we cannot let this fail, and
despite attempts to make it fail it has still thrived for us to
still be the largest Federal exchange in the Nation.
So I look forward to hearing from all of you on that in the
future and work with the committee, and thank Chair Eshoo for
the opportunity.
And with that, I yield back.
Ms. Eshoo. You are always welcome here. I would--I think
that this is--we have concluded the questioning of both the
guests of the subcommittee and all the Members.
I want to thank the witnesses again. I think that each one
of you did an outstanding job. I don't necessarily agree with
you, Ms. Turner, but you worked hard to answer the questions,
and I certainly appreciate that.
Ms. Turner. Thank you, Chairman.
Ms. Eshoo. I also want to thank the authors of the
legislation. They are not here now, but I think to say this for
the record that they have worked hard on these bills, and I
want to thank Congresswomen Castor, Kuster, and Blunt
Rochester.
And I also would like to ask for unanimous consent to place
into the record the following: the letter of endorsement from
the AARP for all of the bills that were discussed today, a
letter of endorsement from the American Academy of Physicians,
the testimony for the record from Sam Bloechl, a letter of
endorsement from the Federation of American Hospitals--that is
an endorsement of the legislation that was discussed today--the
same from the American Medical Association on the four bills,
the letter from the American Lung Association in support of
H.R. 987, letter from the American Lung Association in support
of H.R. 1010, statement from the American Lung Association in
support of legislation repealing 1332, statement from the
American Heart Association in support of H.R. 1010, statement
from the American Heart Association in support of H.R. 986,
statement for the record from the Association for Community
Affiliated Plans, a statement for the record from America's
Health Insurance Plans, a letter from 23 health partners and
patient advocacy groups to the Trump administration expressing
strong concerns with the Section 1332 waiver guidance, a letter
from 23--I am almost done--23 health partners and patient
advocacy groups to the Trump administration expressing strong
concerns with the short-term limited duration insurance final
rule, a letter from the American Hospital Association, and a
statement of support from Families USA.
Not hearing any opposition, these items will be placed in
the record.
[The information appears at the conclusion of the hearing.]
And I would like to recognize Dr. Burgess for his request
for items to be placed in the record.
Mr. Burgess. So, Madam Chair, I have a unanimous consent
request to place into the record a statement for the record
submitted by the Coalition to Protect and Promote Association
Health Plans.
I also would like to submit for the record an article from
the Washington Post, ``The Health 202: Association health plans
expanded under President Trump look promising so far,'' and I
appreciate your offer to have a hearing on association health
plans.
We have heard some discussion about lifetime limits, and I
would point out that even under Medicare there are sometimes
what are called therapy caps. Therapy caps were repealed for
physical therapy and occupational therapy last year in the
bipartisan Budget Act of 2018.
But I would just like to submit for the record the members
of the committee who voted against that and therefore voted
against repeal of therapy caps in the bipartisan Budget Act,
and I thank you for the consideration.
[The information appears at the conclusion of the hearing.]
I will yield back.
Ms. Eshoo. I thank the gentleman.
We don't often enough say ``thank you'' to the staff to the
committee, and so on behalf of all of the members of the
subcommittee I want to thank both the majority staff and the
minority staff for the work that they do to help prepare us, to
bring the witnesses forward, to draw up some of the talking
points and the answers to questions that may be asked, and it
is sincere thanks from all of the members of the subcommittee.
So with that, I think we will make it over to the floor and
maybe even be there, Dr. Burgess, before the bells ring.
Thank you again to the witnesses, the time that you have
given to us, and, you know, your commitment to these issues by
dedicating your lives to them. It is in no small measure, I
think, a gift to the country.
Mr. Burgess. So do we have five legislative days to submit
questions for the record?
Ms. Eshoo. We do, and we have 10 business days to submit
additional questions for the record to be answered by the
witnesses who have appeared and, of course, we trust and I ask
that the witnesses respond promptly to any questions that you
may receive, and we have already placed what we wish to place
into the record.
So at this time, the subcommittee is adjourned.
[Whereupon, at 1:28 p.m., the committee was adjourned.]
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