[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
STRENGTHENING OUR HEALTHCARE SYSTEM: LEGISLATION TO LOWER CONSUMER
COSTS AND EXPAND ACCESS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
MARCH 6, 2019
__________
Serial No. 116-12
[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
36-535 PDF WASHINGTON : 2020
--------------------------------------------------------------------------------------
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
MICHAEL C. BURGESS, Texas
ELIOT L. ENGEL, New York Ranking Member
G. K. BUTTERFIELD, North Carolina, FRED UPTON, Michigan
Vice Chair JOHN SHIMKUS, Illinois
DORIS O. MATSUI, California BRETT GUTHRIE, Kentucky
KATHY CASTOR, Florida H. MORGAN GRIFFITH, Virginia
JOHN P. SARBANES, Maryland GUS M. BILIRAKIS, Florida
BEN RAY LUJAN, New Mexico BILLY LONG, Missouri
KURT SCHRADER, Oregon LARRY BUCSHON, Indiana
JOSEPH P. KENNEDY III, SUSAN W. BROOKS, Indiana
Massachusetts MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California RICHARD HUDSON, North Carolina
PETER WELCH, Vermont EARL L. ``BUDDY'' CARTER, Georgia
RAUL RUIZ, California GREG GIANFORTE, Montana
DEBBIE DINGELL, Michigan GREG WALDEN, Oregon (ex officio)
ANN M. KUSTER, New Hampshire
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........................................... 2
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 4
Prepared statement........................................... 5
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 6
Prepared statement........................................... 7
Witnesses
Peter V. Lee, Executive Director, Covered California............. 9
Prepared statement........................................... 12
J. P. Wieske, Vice President, State Affairs, Council for
Affordable Health Coverage..................................... 24
Prepared statement........................................... 26
Answers to submitted questions............................... 195
Audrey Morse Gasteier, Chief of Policy and Strategy,
Massachusetts Health Connector................................. 36
Prepared statement........................................... 38
Submitted Material
H.R. 1385, the State Allowance for a Variety of Exchanges (SAVE)
Act............................................................ 86
H.R. 1386, the Expand Navigators' Resources for Outreach,
Learning, and Longevity (ENROLL) Act of 2019................... 90
H.R. 1425, the State Health Care Premium Reduction Act........... 95
Letter of March 5, 2019, from Hon. Angie Craig, Cochair, Health
Care Task Force, New Democrat Coalition, et al., to Hon.
Richard Neal, Chairman, House Ways and Means Committee, et al.,
submitted by Mr.Schrader....................................... 105
Letter of April 12, 2013, from Mr. Upton, et al., to Kathleen
Sebelius, Secretary, Department of Health and Human Services,
submitted by Mr. Griffith...................................... 110
Letter of June 28, 2013, from Tim Murphy, Chairman, Subcommittee
on Oversight and Investigations, House Committee on Energy and
Commerce, et al., to Kathleen Sebelius, Secretary, Department
of Health and Human Services, submitted by Mr. Griffith........ 113
Letter of August 29, 2013, from Mr. Upton, et al., to navigator
grant recipient, submitted by Mr. Griffith..................... 116
List, undated, navigator grant recipients, submitted by Mr.
Griffith....................................................... 120
Letter of September 30, 2013, from Mr. Upton to Gary Cohen,
Deputy Administrator and Director, Center for Consumer
Information and Insurance Oversight, Centers for Medicare and
Medicaid Services, Department of Health and Human Services,
submitted by Mr. Griffith...................................... 123
Letter of March 5, 2019, from Deborah P. Brown, Chief Mission
Officer, American Lung Association, to Hon. Angie Craig, a
Representative in Congress from the State of Minnesota,
submitted by Ms. Eshoo......................................... 129
Letter of March 5, 2019, from Deborah P. Brown, Chief Mission
Officer, American Lung Association, to Ms. Castor, submitted by
Ms. Eshoo...................................................... 131
Letter of March 5, 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.......................................................... 132
Statement of the American Cancer Society Cancer Action Network,
March 6, 2019, submitted by Ms. Eshoo.......................... 134
Letter of March 4, 2019, from Justine Handelman, Senior Vice
President, Office of Policy & Representation, Blue Cross Blue
Shield Association, to Ms. Eshoo and Mr. Burgess, submitted by
Ms. Eshoo...................................................... 137
Statement of the Asian & Pacific Islander American Health Forum,
March 6, 2019, submitted by Ms. Eshoo.......................... 139
Letter, undated, from the Young Invincibles to Mr. Pallone, et
al., submitted by Ms. Eshoo.................................... 142
Report, ``Exploring the Impact of State and Federal Actions on
Enrollment in the Individual Market: A Comparison of the
Federal Marketplace and California, Massachusetts, and
Washington,'' by Washington Health Plan Finder, et al.
submitted by Ms. Eshoo......................................... 144
Statement of America's Health Insurance Plans, March 6, 2019,
submitted by Ms. Eshoo......................................... 158
Letter of March 6, 2019 from Mary R. Grealy, President,
Healthcare Leadership Council, to Mr. Pallone and Mr. Walden,
submitted by Ms. Eshoo......................................... 180
Brief of March 4, 2019, ``How Affordable are 2019 ACA Premiums
for Middle-Income People?,'' Kaiser Family Foundation,
submitted by Mr. Burgess....................................... 182
Article of March 5, 2019, ``ACA premiums rising beyond reach of
older, middle-class consumers,'' by Amy Goldstein, Washington
Post, submitted by Mr. Burgess................................. 187
H.R. 1510, the Premium Relief Act of 2019, submitted by Mr.
Burgess........................................................ 189
Letter of March 6, 2019, from Justine Handelman, Senior Vice
President, Office of Policy & Representation, Blue Cross Blue
Shield Association, to Mr. Burgess, submitted by Mr. Burgess... 193
STRENGTHENING OUR HEALTHCARE SYSTEM: LEGISLATION TO LOWER CONSUMER
COSTS AND EXPAND ACCESS
----------
WEDNESDAY, MARCH 6, 2019
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:00 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, Lujan, Schrader, Kennedy, Cardenas, Ruiz,
Dingell, Kuster, Kelly, Barragan, Blunt Rochester, Rush,
Pallone (ex officio), Burgess (subcommittee ranking member),
Upton, Shimkus, Guthrie, Griffith, Bilirakis, Long, Bucshon,
Brooks, Carter, Gianforte, and Walden (ex officio).
Also present: Representatives Peters and Soto.
Staff present: Jacquelyn Bolen, Health Counsel; Jeff
Carroll, Staff Director; Tiffany Guarascio, Deputy Staff
Director; Zach Kahan, Outreach and Member Service Coordinator;
Saha Khaterzai, Professional Staff Member; Una Lee, Chief
Health Counsel; Samantha Satchell, Professional Staff Member;
Andrew Souvall, Director of Communications, Outreach, and
Member Services; Sydney Terry, Policy Coordinator; C. J. Young,
Press Secretary; Mike Bloomquist, Minority Staff Director; Adam
Buckalew, Minority Director of Coalitions and Deputy Chief
Counsel, Health; Margaret Tucker Fogarty, Minority Staff
Assistant; and J. P. Paluskiewicz, Minority Chief Counsel,
Health.
Ms. Eshoo. Good morning, everyone. Welcome to the
witnesses. 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
Today is the second legislative hearing of the Health
Subcommittee in the 116th Congress. We are going to examine
legislation today to drive down costs and increase options in
the private insurance markets created by the Affordable Care
Act.
Democrats made a promise to the American people to lower
their healthcare costs and undo the Trump administration
sabotage of the ACA. Today we are continuing to deliver on that
promise by examining legislation that creates a reinsurance
program for all States, funds States that did not initially set
up State-based insurance marketplaces to set up these State-run
private exchanges, and restore funding for patient navigators.
If an individual is not enrolled in Medicare or Medicaid,
does not get their insurance through their employer, or is a
small business owner or self-employed, the legislation we are
considering today will help bring down the cost of health
insurance. The bill gives States the funding and flexibility to
improve the private marketplaces created by the ACA and
increase choices for Americans who purchase their health
insurance from these exchanges.
Representatives Angie Craig and Scott Peters have written a
bill which provides funding for State-based reinsurance
programs and establish a Federal reinsurance program similar to
the one established in the Affordable Care Act that expired in
2016, so all Americans can benefit from lower premiums in the
individual marketplace. Reinsurance programs add money to the
health insurance market created by the ACA to cover the costs
of patients with high medical costs such as those with
preexisting conditions.
This will drive down costs for middle-class Americans who
don't receive the ACA tax credit. By providing payments that
enroll high cost patients, many of whom have preexisting
conditions, reinsurance protects against premium increases and
will bring down the cost of health insurance coverage for those
who buy their insurance from ACA exchanges. For anyone who
cannot afford health insurance on the private market today,
this bill will bring premiums down next year and help
individuals afford high quality, comprehensive coverage.
We will also examine the bipartisan SAVE Act introduced by
Representatives Andy Kim and Brian Fitzpatrick which provides
funding to States to set up State-based insurance marketplaces
like the original ACA did. I am very proud of Covered
California that is California's State-based insurance market. I
think it is the gold standard for these programs and currently
has enrolled 1\1/2\ million Californians. That is a lot of
human beings that have coverage today that never had coverage
before. If a State originally chose not to establish their own
State-based marketplace when the ACA became law, this bill
gives those States the funding they need to establish a
marketplace that meets their needs while maintaining the
minimum benefits established by the ACA.
Lastly, we will consider Representative Castor's ENROLL
Act. It provides funding for navigators who assist small
businesses or self-employed individuals with guidance and
information to determine the best health insurance option for
their needs.
[The prepared statement of Ms. Eshoo follows:]
Prepared statement of Hon. Anna G. Eshoo
Good morning everyone, welcome to the witnesses. The Chair
now recognizes herself for 5 minutes for an opening statement.
Today is the second legislative hearing of the health
subcommittee in the 116th Congress. We're going to examine
legislation today to drive down costs and increase options in
the private insurance markets created by the Affordable Care
Act.
Democrats made a promise to the American people to lower
their healthcare costs and undo the Trump administration's
sabotage of the ACA.
Today we're planning to deliver on that promise by
examining legislation that creates a reinsurance program for
all States, funds States that did not initially set up State-
based insurance marketplaces to set up these State-run private
exchanges, and restores funding for patient navigators.
If an individual is not enrolled in Medicare or Medicade,
does not get their insurance through their employer, or is a
small business owner or self-employed, the legislation we're
considering today will help bring down the cost of health
insurance. The bill gives States the funding and ability to
improve the private marketplaces created by the ACA and
increase choices for Americans who purchase their health
insurance from these exchanges.
Representatives Angie Craig and Scott Peters have written a
bill which provides funding for State-based reinsurance
programs and establishes a Federal insurance program similar to
the one established in the Affordable Care Act that expired in
2016 so all Americans can benefit from the lower premiums in
the individual marketplace.
Reinsurance programs add money to the health insurance
market created by the ACA to cover the cost of patients with
high medical costs such has those with preexisting conditions.
This will drive down costs for middle-class Americans who don't
receive the ACA tax credit.
By providing payments that enroll high cost patients, many
of whom have preexisting conditions, reinsurance protects
against premium increases and will bring down the cost of
health insurance coverage for those who buy their insurance
from ACA exchanges.
For anyone who cannot afford health insurance on the
private market today, this bill will bring premiums down next
year and help individuals afford high quality comprehensive
coverage.
We will also examine the bipartisan SAVE Act introduced by
Representatives Andy Kim and Brian Fitzpatrick, which provides
funding to States to set up State-based insurance marketplaces
like the original ACA did.
I'm very proud of Covered California, that is California's
State-based insurance market. I think it's the gold standard
for these programs and currently has enrolled one and a half
million Californians. That is a lot of human beings that have
coverage today that never had coverage before.
If a State originally chose not to establish their own
State-based marketplace when the ACA became law, this bill
gives those States the funding they need to establish a
marketplace that meets their needs while maintaining the
minimum benefits. established by the ACA.
Lastly, we will consider Representative Castor's ENROLL
Act. It provides funding for navigators who assist small
businesses or self-employed individuals with guidance and
information to determine the best health insurance option for
their needs.
I promised that I would yield a minute of my time to
Congressman Ben Ray Lujan. I'm happy to yield to the gentlemen
from New Mexico for the remaining time.
Ms. Eshoo. I promised that I would yield a minute of my
time to Congressman Ben Ray Lujan. Is Ben Ray here? Yes, he is.
So I am happy to yield to the gentleman from New Mexico for the
remaining time.
Mr. Lujan. Thank you, Madam Chair. Democrats made a
commitment to the American people that we would lower their
healthcare costs, and with their support we are now in the
majority. It is the expectation of the American people that we
move forward in a bipartisan way to address this major issue.
Ms. Craig's and Mr. Peters' bill is strong. In fact, the bill
is modeled after the reinsurance program that made its debut in
the Republican repeal effort.
Now what I am concerned about is what we will hear today is
that congressional Republicans are more focused on interjecting
an abortion fight into an unrelated debate, that they are
making sure families can't see their doctors. I do not
understand that, but what I do know is the Democrats are going
to forge ahead in our goal to lower healthcare costs for the
American people.
I am ready and willing to work with my colleagues across
the aisle when they want to join forward in this progress. I
thank the Chair and I yield back.
Ms. Eshoo. I thank the gentleman.
The Chair now recognizes 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. Well, thank you for the recognition and thanks
to our witnesses. Today we are convened to discuss, according
to the title of this hearing, legislation to lower consumer
costs and expand access to healthcare. Legislation that my
friends on the other side of the dais have put forth today is
once again disappointing. I do believe there are some areas
where we could have worked together, particularly on the area
of reinsurance, but there was no effort to work in a bipartisan
way on that issue.
Republicans have supported reinsurance when coupled with
additional structural reforms to improve healthcare markets and
have led efforts to establish a patient and State stability
fund to provide States with the funding and the flexibility
that they need to successfully set up and implement cost
reduction programs.
While I see that much of this language may be similar to
that which we have supported before, there are some critical
provisions that are missing from the text. The benefits of a
smart and thorough reinsurance policy would allow States to
repair markets damaged by the Affordable Care Act while
honoring federalism. Unfortunately, the bill before us today is
particularly restrictive and does not provide States with
adequate flexibility to use those funds. It also fails to
include critical and longstanding Hyde protections.
I have introduced H.R. 1510. It includes a responsible
reinsurance policy that enables States to use funds for a wide
variety of initiatives from helping high-risk individuals to
enrolling in coverage to promoting access to preventive
services, providing maternity coverage and newborn care. It is
important to mention that this bill would also provide Hyde
protections.
Next, I would like to turn to the issue of navigators. As a
physician, as a Member of Congress, and just your average
simple country doctor, I like to base my decisions on evidence-
based research. I found it interesting as I read the Democrats'
memo that they are trying to sell us this legislation to
increase funding for navigators without outlining the impact
that navigators have had in enrolling individuals.
Navigators are not a new phenomenon. We have sufficient
data to show that they have been only minimally effective,
spending 36 million in 2018, prior to that 63 million, all to
enroll less than 1 percent of the fee-for-service market.
However, CMS data shows that agents and brokers have helped 42
percent of fee-for-service enrollment plan for 2018,
substantially more cost effective than navigators. The agents
and brokers cost $2.40 per enrollee.
The final bill before us today would provide $200 million
to create State exchanges, which is another effort that has
proven to be astonishingly efficient in wasting taxpayer
dollars. Seventeen States have spent a total of four and a half
billion dollars to establish exchanges, many of which have
failed. The Subcommittee on Oversight under Chairman Upton
found that the CMS was not confident that the remaining State-
based exchanges would be sustainable in the long term.
Additionally, it found that only one State had complied with
the Affordable Care Act's requirement that all State-based
exchanges publicly publish costs related to its operations.
Again it is disappointing that not only none of these bills
adequately address the affordability of health insurance, I am
disappointed that there was only a minimal attempt to work on
the reinsurance and no attempt to even discuss the other two
bills. Bipartisanship means asking for my input, not just my
vote.
If you had asked for my input, I would have suggested that
we look at language like I have introduced in H.R. 1510, a bill
that includes reinsurance coupled with structural reforms to
the Affordable Care Act, gives States more choice on how to
repair their markets that have been damaged by Obamacare, and
the legislation is, in fact, fully offset by stopping bad
actors from gaming the system, and includes language that
affirms the longstanding consensus that taxpayers should not
foot the bill for abortions.
I thank the gentlelady for the time and I yield back.
[The prepared statement of Mr. Burgess follows:]
Prepared statement of Hon. Michael C. Burgess
Thank you, Chairwoman Eshoo. Today, we are convened to
discuss, according to the title of this hearing, ``legislation
to lower consumer costs and expand access'' to healthcare.
Alas, the legislation that my friends on the other side of the
dais have put before us today is once again disappointing. I do
believe that there are some areas here where we could have
worked together, particularly on the issue of reinsurance, but
there was little effort to work in a bipartisan way on this
issue.
Republicans have strongly supported reinsurance when
coupled with additional structural reforms to improve
healthcare markets and have led efforts to establish a patient
and State stability fund to provide States with the funding and
flexibility they need to successfully set up and implement
cost-reduction programs. While I see that much of this language
may be similar to that which we have supported before, there
are some critical provisions that are missing from the text.
The benefits of a smart and thorough reinsurance policy
would allow States to repair markets damaged by the Affordable
Care Act, while honoring federalism. Unfortunately, the bill
before us today is particularly restrictive and does not
provide States with adequate flexibility to use the funds. The
bill also fails to include critical and long-standing life
protections that exist in current law.
I have introduced a bill that includes a responsible
reinsurance policy that enables States to use funds for a wide
range of initiatives, from helping high-risk individuals enroll
in coverage, to promoting access to preventive services, to
providing maternity coverage and newborn care. It is important
to mention that my bill also includes Hyde protections.
Next, I would like to turn to the issue of navigators. As a
physician, a Member of Congress, and as your average Joe
consumer, I like to base my decisions on evidence-based
research. I found it interesting as I read the Democrats' memo,
that they are trying to sell us this legislation to increase
funding for navigators, without outlining the impact that
navigators have had in enrolling individuals. Navigators are
not a new phenomenon, and we have sufficient data to show that
they have been minimally effective.
The Centers for Medicare and Medicaid found that during the
plan year 2018 open enrollment period, navigators received $36
million, but enrolled less than 1 percent of the fee-for-ervice
enrollment population. In 2017, when navigators received a
larger sum of grant funding, $63 million, they still only
enrolled less than 1 percent. CMS data show that agents and
brokers helped with 42 percent of the fee-for-service
enrollment for plan year 2018. This was substantially more cost
effective than navigators, as agents and brokers only cost
$2.40 per enrollee. Why buy a faulty product when there's a
better one on the market? Especially when, under this bill, an
individual would be essentially forced into an ACA plan as
navigators not required to be knowledgeable on alternative
forms of coverage, such as short-term limited duration and
association health plans.
The final bill before us today would provide $200 million
to create State exchanges, which is another effort that has
previously been proven to be a remarkable waste of taxpayer
dollars. Seventeen States spent a total of $4.5 billion to
establish exchanges, many of which failed. The Subcommittee on
Oversight and Investigations released a detailed report in 2016
that found that CMS was not confident that the remaining State-
based exchanges will be sustainable in the long term.
Additionally, it found that only one State had complied with
the Affordable Care Act's requirement that all State-based
exchanges publicly publish costs related to its operations.
Again, I find it disappointing that not only do any of
these bills adequately address the affordability of health
insurance. I am also disappointed that our friends on the other
side of the aisle made only one attempt to work on reinsurance
and no attempts to even discuss the other two bills.
Bipartisanship means asking for my input, not my vote. I yield
back.
Ms. Eshoo. I thank the ranking member.
Now it is my pleasure to recognize the chairman of the full
committee, Mr. Pallone, for 5 minutes.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Madam Chair. The bills we are
considering today reflect Democrats' continued commitment to
deliver on our promise to make healthcare more affordable and
accessible to all Americans and to reverse the Trump
administration's sabotage of the Affordable Care Act. This
legislative hearing comes several weeks after we held another
legislative hearing on bills that were important first steps in
lowering healthcare costs and protecting consumers with
preexisting conditions.
Today we will be discussing three more bills that will
reduce consumers' costs and improve access to care. And one way
to ensure that people have access to healthcare is to provide
them the support and information they need to make the right
decision. So we will be discussing a bill introduced by Ms.
Castor that would reverse the Trump administration's harmful
cuts to the navigator program.
The Trump administration has gutted funding for the
navigator program by over 80 percent, leaving huge swathes of
the country without access to fair and unbiased enrollment
help. We should restore this critical funding and ensure that
navigators can provide fair and impartial information on
people's enrollment and financial assistance options.
We also have to look at providing States another round of
funding to establish State-based marketplaces. The SAVE Act was
introduced by Representatives Andy Kim and Brian Fitzpatrick.
As you may recall, some State legislatures who wanted to
establish State-based marketplaces were unable to do so due to
the opposition of the Republican Governors. In my State of New
Jersey, former Governor Chris Christie, in 2012, vetoed a bill
to establish a State-based marketplace for the residents of New
Jersey.
While all States have been negatively affected by the Trump
administration's sabotage of the ACA, State-based marketplaces
have been better able to weather these storms. In 2018,
premiums in these marketplaces were 17 percent lower than in
the Federally Facilitated Marketplace, and enrollment in these
States has outpaced enrollment in the Federally Facilitated
Marketplace States. The State-based exchanges framework also
gives States the opportunity to tailor the program to meet the
needs of their State residents, and the bill provides us
another opportunity to make healthcare more affordable.
And, finally, we will consider a bill introduced by Ms.
Craig and Mr. Peters to provide 10 billion in reinsurance
funding for States that set up their own reinsurance programs.
States may also use this funding to provide financial
assistance to help lower premiums and out-of-pocket costs for
consumers and beyond the ACA's subsidies. Reinsurance pays for
the costs of people with serious medical conditions whose
healthcare costs are significantly higher than the average
person. This support helps reduce premiums through the
individual market, making healthcare more affordable.
Seven States have successfully implemented State-based
reinsurance programs through the 1332 waiver program, including
my State of New Jersey. These programs have significantly
lowered premiums and have had widespread bipartisan support.
Now the bill that we are considering today would build upon the
success of these programs, but the funding would come from the
Federal Government.
I believe that that is the right approach. A sustained
Federal commitment is needed in order to lower costs for all 50
States and the District of Columbia. Like with the Part D
program, reinsurance should be a permanent part of the
individual market and it should be a federally financed
responsibility.
Now the bills that Ms. Craig and Mr. Peters have introduced
are modeled after the reinsurance program that all the
Republicans on this committee supported in the repeal bill of
last year. We all agree that Congress must take action to
reduce costs for middle-class consumers and we all agree that
reinsurance is a good thing. And that is why I was disappointed
that we were unable to get to bipartisan agreement on
reinsurance.
My colleagues on the other side of the aisle have made it
clear that they will not support any reinsurance bill without
Hyde language. There is no reason, in my opinion, to drag
Republicans' anti-choice politics into this discussion. There
is bipartisan consensus that reinsurance is effective in
bringing down costs for middle-class consumers. A number of
States under Republican leadership such as Maine, Maryland, and
Wisconsin, happily took Federal money for reinsurance without
raising the issue of Hyde and we should take this opportunity
to allow States to make healthcare more affordable for their
residents.
[The prepared statement of Mr. Pallone follows:]
Prepared statement of Hon. Frank Pallone, Jr.
The bills we are considering today reflect Democrats'
continued commitment to delivering on our promise to make
healthcare more affordable and accessible for all Americans,
and to reverse the Trump administration's sabotage of our
healthcare system. This legislative hearing comes several weeks
after we held another legislative hearing on bills that were
important first steps in lowering healthcare costs and
protecting consumers with preexisting conditions. Today, we
will be discussing three more bills that will reduce consumers'
costs and improve access to care.
One way to ensure that people have access to healthcare is
to provide them the support and information they need to make
the right decision. We will be discussing a bill introduced by
Ms. Castor that would reverse the Trump administration's
harmful cuts to the navigator program. The Trump administration
has gutted funding for the navigator program by over 80
percent, leaving huge swathes of the country without access to
fair and unbiased enrollment help. We should restore this
critical funding and ensure that navigators can provide fair
and impartial information on people's enrollment and financial
assistance options.
We should also look at providing States another round of
funding to establish State-based marketplaces. The SAVE Act was
introduced by Representatives Andy Kim and Brian Fitzpatrick.
As you may recall, some State legislatures who wanted to
establish State-based marketplaces were unable to, due to the
opposition of their Republican Governors. In my State of New
Jersey, former Governor Chris Christie in 2012 vetoed a bill to
establish a State-based marketplace for the residents of New
Jersey.
While all States have been negatively affected by the Trump
administration's sabotage, State-based marketplaces have been
better able to weather these storms. In 2018, premiums in these
marketplaces were 17 percent lower than in the Federally
Facilitated Marketplace, and enrollment in these States has
outpaced enrollment in the Federally Facilitated Marketplace
States.
The State-based exchange framework also gives States the
opportunity to tailor the program to meet the needs of their
State residents. This bill provides us another opportunity to
make healthcare more affordable.
Finally, we will consider a bill introduced by Ms. Craig
and Mr. Peters to provide $10 billion in reinsurance funding
for States to set up their own reinsurance programs. States may
also use this funding to provide financial assistance to help
lower premiums and out-of-pocket costs for consumers, above and
beyond the ACA's subsidies.
Reinsurance pays for the costs of people with serious
medical conditions whose healthcare costs are significantly
higher than the average person. This support helps reduce
premiums throughout the individual market, making healthcare
more affordable. Seven States have successfully implemented
State-based reinsurance programs through the 1332 waiver
program, including the State of New Jersey. These programs have
significantly lowered premiums and have had widespread
bipartisan support.
The bill that we are considering today would build upon the
success of these programs, but the funding would come from the
Federal Government. I believe that this is the right approach.
A sustained Federal commitment is needed in order to lower
costs for residents of all 50 States and the District of
Columbia. Like with the Medicare Part D program, reinsurance
should be a permanent part of the individual market, and it
should be a Federal financial responsibility.
The bill that Ms. Craig and Mr. Peters have introduced is
modeled after the reinsurance program that all the Republicans
on this committee supported in the repeal bill of last year. We
all agree that Congress must take action to reduce costs for
middle-class consumers and we all agree that reinsurance is a
good thing.
That's why I am disappointed that we were unable to get to
bipartisan agreement on reinsurance. My colleagues on the other
side of the aisle have made clear that they will not support
any reinsurance bill without Hyde language.
There is no reason to drag Republican's anti-choice
politics into this discussion. There is bipartisan consensus
that reinsurance is effective in bringing down costs for
middle-class consumers. A number of States under Republican
leadership, such as Maine, Maryland, and Wisconsin happily took
Federal money for reinsurance without raising the issue of
Hyde. We should take this opportunity to allow States to make
healthcare more affordable for their residents.
I look forward to the discussion today and I yield back.
Mr. Pallone. So I want to yield now, the minute or so left,
to Mr. Peters, if I could, Madam Chair.
Mr. Peters. Thank you, Mr. Chairman or Chairman Pallone for
yielding me time and thanks to Chairwoman Eshoo and Ranking
Member Burgess for holding this hearing today.
I am grateful to the committee for their consideration of
H.R. 1425, the State Health Care Premium Reduction Act, a bill
that I recently introduced with Representative Angie Craig. I
would also like to thank Reps Schrader, Underwood and Kuster
for their early support of the bill.
Let's be honest. Stabilizing the individual marketplace may
not be a bipartisan priority, but lowering healthcare insurance
premiums and reducing out-of-pocket costs for working Americans
certainly is. And it is widely acknowledged by both Republicans
and Democrats that one of the best ways to lower premiums is to
provide adequate Federal funding to create State reinsurance
programs.
H.R. 1425 creates a dedicated stability fund that States
can use to lower premiums and out-of-pocket costs for all
individuals by defraying the costs of high-cost enrollees. Our
bill is expected to lower premiums for individuals by
approximately 10 percent. So Representative Craig and I look
forward to working with both our Republican and Democratic
colleagues to provide millions of Americans with swift relief
from the rising costs of healthcare, and I thank you for the
time.
Ms. Eshoo. I think I would now like to introduce the
witnesses that are here today and welcome them and thank them
for being willing to share their expertise with us.
First, Mr. Peter Lee. I am going to move off of script and
say to everyone that Mr. Lee comes from one of the most
distinguished families in California and our country. I am
going to go way back many, many years. I think it was your--was
it your grandfather that founded--he was Dr. Lee--founded the
Palo Alto Medical Clinic? He had five sons, all M.D.s, at
least--and a daughter--well, you are ahead of me--a daughter
that was also a doctor.
And out of those five sons, one served in two
administrations in the healthcare arena. So Mr. Lee comes to us
not only with great genes, but with having implemented the ACA
in California. We are really honored to have you here today and
thank you for your commitment, unswerving commitment that has
traveled through more than one generation of your family. You
are a gift to the country.
Mr. Wieske, welcome to you. He is the Vice President for
State Affairs at the Council for Affordable Health Coverage.
Ms. Audrey Morse Gasteier, who is the Chief of Policy and
Strategy for the Massachusetts Health Connector, again, thank
you.
I am going to recognize each witness for 5 minutes for
their opening statement. There is a lighting system. The light
will be green when it first comes on, then it will be followed
by yellow, then you will have 1 minute remaining, so we ask you
to stay within the 5 minutes.
So I am going to begin with the distinguished Mr. Lee.
STATEMENTS OF PETER V. LEE, EXECUTIVE DIRECTOR, COVERED
CALIFORNIA; J. P. WIESKE, VICE PRESIDENT, STATE AFFAIRS,
COUNCIL FOR AFFORDABLE HEALTH COVERAGE; AND AUDREY MORSE
GASTEIER, CHIEF OF POLICY AND STRATEGY, MASSACHUSETTS HEALTH
CONNECTOR
STATEMENT OF PETER V. LEE
Mr. Lee. Good morning, Chairwoman Eshoo, Ranking Member
Burgess, and distinguished members of the subcommittee. I do
want to note that as you see I am Mr. Lee, not Doctor, so
clearly the gene pool dilutes over time, but I want to very
much appreciate your remarks about my family. I serve as the
executive director of Covered California and am honored to
participate in this hearing to help inform your deliberations.
Remarkable progress has been made throughout the country
with the Affordable Care Act, but recent Federal policy actions
are having significant negative effects on millions of
Americans. I welcome the fact that today's hearing is about
building out and improving the Affordable Care Act which is
what we need to focus on.
Well, Covered California, for 6 years, has effectively used
all the tools of the Affordable Care Act to improve
affordability for coverage, promote competition, give choice to
consumers, and drive improvements in the delivery system. We
have made investments in marketing, in outreach, in navigators,
and the results show that we have a 20 percent healthier
enrolled population which means our premiums are 20 percent
healthier than in the Federal marketplace would have if they
had our risk mix.
We made remarkable progress in California and across the
Nation, but recent Federal policy actions are posing challenges
such as the Federal elimination of the individual mandate
penalty, promotion of limited benefit plans, and significant
reductions in marketing and outreach that don't affect
California, but affect 39 States relying on the Federal
marketplace. These policies are having the direct effect of
raising premiums and pricing millions of Americans out of
coverage.
Today, California, Massachusetts, and Washington exchanges
released an analysis showing a very different story of what
happens in States like ours that lean in to support consumers,
compared, sadly, to what has happened in consumers served by
the Federal marketplace. The findings in that report are stark.
Since 2014, Federal marketplace States have had a
cumulative premium increase of over 85 percent. In our three
States the increase has been less than half of that. This means
that if the Federal Government had spent roughly--because of
that the Federal Government spent roughly $35 billion--$35
billion more in premium tax credits than it would have if their
premium increases had matched ours. But the biggest impact has
been felt by millions of middle-class Americans who get no
financial help who have been priced out of coverage.
This analysis shows the importance of the mandate penalty
also. California and Washington have leaned in to promote
insurance. We have good risk mixes. But this last year we saw
significant drops in new enrollment. The State of
Massachusetts, who you will hear from more today, saw a 31
percent increase in their new enrollment. That is because they
had a mandate that predated the Affordable Care Act that is in
place today. Their consumers know about it. So while recent
Federal actions are taking us backwards, I am encouraged that
today's hearing focuses on ways to move forward and build on
the Affordable Care Act.
The first proposal relates to reinsurance to help stabilize
markets. Reinsurance can have a profound effect on coverage
affordability particularly for middle-class Americans who don't
qualify for premium subsidies. It would directly benefit them
by lowering premiums and creating greater carrier participation
that provides market stability to encourage health plans to
play. We have 11 carriers in California. Many parts of America
have one or two. Reinsurance helps bring plans to the market.
Now I would note, State-based reinsurance programs may work
for some, but it is not a viable strategy for the vast majority
of States. Most States will not come up with State funds to
invest in the risk of uncertain Federal pass-throughs. H.R.
1425 would not only fund reinsurance but would allow States the
option of investing in targeted ways in their States to reduce
costs for their consumers. This proposal provides State
flexibility, State choice, and would lower premiums across the
board.
H.R. 1385 would fund States that seek to establish their
own marketplaces. Now, Covered California benefited from
establishment funds. We got a lot of money to get started. We
have paid that off many times over by reducing premiums for
Californians. Other States need funds to get set up.
The final legislation is to support navigator funding. As
you consider this, I would look back at not only the dramatic
cuts that we have seen federally, but California has a robust
navigator program. That program we have funded at about $6.5
million for each of the last 4 years. But you need to consider
this program in concert with our broad, $100 million
investments in marketing and outreach and our support for over
12,000 licensed insurance agents. All of those should be done.
All of those are necessary tools to keep robust enrollment, to
keep premiums down by having a healthy risk mix.
So I would close by noting that we really are at a pivotal
time in healthcare. To the extent Federal policy discussions
can now turn to building on, repairing, fixing, and having the
Affordable Care Act work better, we are at a good place for
California and for the Nation. I look forward to your
questions. Thank you very much.
[The prepared statement of Mr. Lee follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you, Mr. Lee, excellent testimony.
Now I would like to recognize Mr. Wieske for his 5 minutes
of testimony. Welcome and thank you.
STATEMENT OF J. P. WIESKE
Mr. Wieske. Thank you, Chairman Eshoo and Ranking Member
Burgess, for the opportunity to testify on the issues
surrounding the Affordable Care Act and more specifically the
individual health insurance market through the proposed
legislation regarding exchanges, reinsurance, and navigators.
When I spoke before the committee in February of 2017, I
focused on the nature of the individual market. Since that
time, little has changed. It has remained a very small market,
less than 5 percent of almost every State's population, dwarfed
by employer coverage, Medicaid, and Medicare. In 2019, we have
seen a drop from the very sharp rate increases, but premium
rates remain too high. Of course the subsidized insurance
market consumers have largely been insulated from those rate
increases. In some cases, consumers even have the option of
choosing no premium Bronze plans due to the issue of silver
loading, a process by which a State allows insurers to apply
cost-sharing reduction expenses exclusively to on-exchange
plans.
The question before the committee is the same as it was in
2017. The ACA has done many good things for consumers, but it
has also created new problems. So how can we fix this market? I
think you can see from my written testimony that we support the
same goals. We need to stabilize the insurance market. We need
more outreach. We need more States' flexibility and State
ownership of the ACA.
Please allow me a brief aside. Last November I attended an
InsureTech conference. It was filled with innovators from
across the globe looking at insurance problems. And I was
struck by one----
Ms. Eshoo. Excuse me. What was that conference? I didn't
get----
Mr. Wieske. An InsureTech conference.
Ms. Eshoo. InsureTech?
Mr. Wieske. InsureTech conference, correct.
Ms. Eshoo. I see.
Mr. Wieske. InsureTech conference, and I was struck by one
presentation in particular. It was from an entrepreneur who had
figured out how to provide crop insurance to rural Africa
through their nonsmartphones. What was fascinating about this
is that this innovator had found a way, is unlikely to make any
effort and make any money off his effort, but that wasn't the
goal. The goal was to provide financial stability to rural
farmers in Africa. A financially stable farmer is better able
to provide for his family and for his neighbors. The solution
did not come from government. It came from a private company
looking to solve a problem. Similarly, the goal of reinsurance,
exchanges, and navigators is not just to provide money for
those programs, but to stabilize the market, encourage
consumers to make an informed decision in purchasing health
insurance coverage.
While I still hope you read my eight pages of testimony, I
can encapsulate it this way. CHC has long supported reinsurance
and ACA 1332 waivers to improve the markets, including Collins-
Nelson and Alexander-Murray efforts in the Senate who recognize
that reinsurance doesn't reduce costs directly, it shifts who
pays. We addressed the long, hard work of improving risk pools
and lowering costs in a letter we recently sent to Senator
Alexander which we would be happy to make available to members
of the committee.
Navigators, again our experience in Wisconsin was that
navigator approach didn't have a huge impact. In my written
statement I recommend both closer engagement with traditional
brokers and agents as well as new technologies to help
consumers find coverage. Finally, we recommend going beyond
State exchanges to allow private exchanges and web-based
alternatives and direct enrollment to connect people with
coverage. Again thank you for the opportunity to testify and I
will be happy to answer any questions.
[The prepared statement of Mr. Wieske follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. We thank you, especially for not attempting to
read eight pages of testimony into the record.
Now I would like to recognize Ms. Audrey Morse Gasteier. Am
I pronouncing your name correctly?
Ms. Gasteier. Gasteier, that is right.
Ms. Eshoo. Thank you very much for being here and you are
recognized for 5 minutes.
STATEMENT OF AUDREY MORSE GASTEIER
Ms. Gasteier. Thank you. Good morning, Chairwoman Eshoo and
Ranking Member Dr. Burgess, and members of the subcommittee. My
name is Audrey Gasteier and I serve as Chief of Policy and
Strategy at the Massachusetts Health Connector. Thank you for
the opportunity to testify today and share perspectives for
Massachusetts on expanding coverage and lowering costs.
Massachusetts has a unique history of bipartisan health
insurance expansion efforts spanning several decades. The
advantage of time has given us perspective on what health
reform and State marketplaces can look like when given stable
regulatory environments and tools to promote affordability and
enrollment. This historical view may be useful as the
subcommittee builds upon the initial years of ACA
implementation.
Today Massachusetts enjoys a strong health insurance market
and the Health Connector is a high functioning and competitive
marketplace with nine carriers and 280,000 enrollees. Three key
building blocks have been critical to our market's success.
First, one of our most effective tools for promoting
affordability is our ConnectorCare program for individuals
earning up to three times the poverty level.
ConnectorCare provides additional State subsidies in
addition to ACA subsidies. Enrollees have access to zero or
low-dollar premiums, zero or low-dollar copays, and no
deductibles. This level of affordability assistance helps
retain widespread enrollment among a population that would
otherwise be at higher risk of uninsurance.
Second, for decades our market has featured the basic
protections consumers have come to expect following the ACA,
such as protections for people with preexisting conditions,
guaranteed issue and renewability, community rating and strong
standards for minimum medical loss ratios. In addition, our
State has its own market rules and coverage standards and
engages in robust market monitoring which together results in
little room for noncompliant plans, keeping our risk pool
stable and our residents in coverage that is there for them
when they need it.
Further, since 2007, the Commonwealth has had its own
individual mandate ensuring that people do not buy coverage
only when they expect to need it, driving up premiums for
everyone else. Third, the Health Connector has seen firsthand
the powerful role that outreach and consumer assistance play in
drawing residents into coverage. Outreach is an integral part
of successful coverage expansion and an essential component of
stable risk pools by drawing healthier risk into the
marketplace, improving affordability for all.
The Health Connector runs a robust navigator program
partnering with 16 organizations with longstanding, trusted
presence in their communities. These three building blocks of
reform have resulted in a number of successes for our
residents. Specifically, Massachusetts has achieved nearly
universal coverage with 97 percent of our residents now
covered.
The Massachusetts Health Connector had the lowest average
premiums of any marketplace in the country in 2018 at $385 per
member per month before any subsidy was applied. We note for
the subcommittee that these lowest-in-the-Nation premiums are
situated within a State market with robust benefit requirements
and protective cost-sharing limits, clarifying that cost
savings need not come at the expense of consumer protections.
Further, we note that Massachusetts' overall healthcare
system is one with relatively high medical costs, illuminating
that the marketplace model has the potential of bending the
curve for consumers even while the State and Nation still have
work to do in bringing down the underlying healthcare costs
that drive premiums. We support this subcommittee's interest in
ensuring that States have resources and tools to foster
stability and affordability.
We support the proposed State options for further advancing
affordability for consumers whether they are low and moderate
income, and affordability would be achieved through a State
wrap program designed to meet State and local needs or a
reinsurance program that could lower premiums across the
commercial market helping unsubsidized enrollees as well. Each
State's affordability challenges are likely to be unique and it
is important for States to have flexibility to address the
needs of their populations and market conditions above and
beyond the baseline protections of the ACA.
With respect to the navigator proposal, the Connector's
experience suggests that a robust navigator program is a vital
component of ensuring coverage for the populations that need
the most help getting insured and that the work they do
contributes to the overall stability of the commercial market
risk pool.
Lastly, the Health Connector recognizes the subcommittee's
interest in supporting States that are interested in
establishing new State-based marketplaces. The successes
Massachusetts has experienced would simply not be possible
without a State-based marketplace. Working side by side, day in
and day out with market participants, State-based marketplaces
can successfully bring the promises of health reform and
coverage expansion to life.
Thank you again for the opportunity to speak with you today
and your interest in hearing about our experiences in
Massachusetts. I look forward to working with you and welcome
your questions.
[The prepared statement of Ms. Gasteier follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you very much.
Congratulations to each one of you. You did really well
with your allocation of 5 minutes.
My question of the three of you is we are considering the
three bills today, 1386, 1425, and the SAVE Act. Do you all
support the three bills? Do you think that they are going to
make a difference to reduce costs and allow for more choice and
more people being enrolled and being insured with good health
insurance policies?
Mr. Lee?
Mr. Lee. Covered California doesn't take positions on
legislation and so I am speaking more to the substance of what
is in the bills that may take different forms. I noted in my
testimony reinsurance is a valuable tool, reduces premiums and
also directly addresses the issue that the individual market
will always be more expensive than the rest of the market.
Bringing those costs down through reinsurance is a good
vehicle.
I noted also that navigators provide a vital piece of a
broader whole for market----
Ms. Eshoo. I do. I think we all agree to that. Yes. I have
learned that people know exactly what their premium costs, but
they don't know always what they are buying.
Mr. Lee. Right.
Ms. Eshoo. And so navigators are so important to assist
people and answer the questions that they have.
Mr. Wieske?
Mr. Wieske. I think I have some concerns with the navigator
piece. I mean I think we have seen some value.
Ms. Eshoo. Why?
Mr. Wieske. We have seen some limited value in the State of
Wisconsin related to navigators, so, you know, I think as a
program there is some value there. I think it has been much
more effective to use agents. I think our understanding is most
of the navigators, a lot of the navigators and certified
application counselors in the State of Wisconsin actually refer
a lot of clients to agents.
Ms. Eshoo. What about the rest of the country? You are
naming Wisconsin. What about the rest of the country?
Mr. Wieske. My impression from other States is that there
are some concerns with the navigator program in other States as
well.
Ms. Eshoo. But it is in and around whether they are
licensed agents. Is that what you are referring to?
Mr. Wieske. Correct, licensed insurance agents.
Ms. Eshoo. Thank you.
Ms. Morse Gasteier?
Ms. Gasteier. Like Mr. Lee, we don't take positions on
specific legislation, but the tools and the concepts I think
promoted here are ones that we recognize in our own experience
that the availability of navigators' in-person assistance,
being a State-based marketplace, and tools like reinsurance are
very powerful and evidence-based.
Ms. Eshoo. I want to just take a moment and recognize all
the white coats that are in the hearing room today. Welcome to
you and thank you for your professionalism and what you do for
people across the country. I don't know where you are from, but
I have no doubt that wherever you are from that you do
magnificent work, so thank you. We all want to thank you for
that.
What of the three of you believe would be the most
effective tool in order to create affordability for those that
are in the private market and to afford a good health insurance
policy? What are the most effective tools? I know you don't
want to take a position on legislation, but just maybe spend a
minute each telling us what you think is the most effective
tool.
Mr. Lee. So then I will start and----
Ms. Eshoo. The middle class has taken a hit. There is no
question in my mind about that. And that is not acceptable for
any of us.
Mr. Lee. I think that you are absolutely right, Chairwoman,
that middle-class people who make more than 400 percent of
poverty, but that doesn't mean they are rich, have been hit
hardest. They don't get Federal subsidies. So the two things
that could be done, well, there is three things, I think, could
be done. Number one is reinsurance. That lowers premiums for
everybody. It saves the Federal Government money, but it saves
money for people that over 400 percent of poverty. Second,
targeted subsidies. Governor Newsom in California has proposed
providing State subsidies and tell the Federal Government act
to get rid of the cliff for people that make from four to six
hundred percent of poverty.
Ms. Eshoo. Thank you.
Mr. Lee. We have people in northern California in your
district who are being forced to spend 30 percent of their
income to afford insurance. They can't afford it. So directed
subsidy--and the third thing is market and outreach. Health
insurance must be sold. You need to remind people, cajole,
nudge, those three elements are needed; would make a vital
difference.
Ms. Eshoo. Mr. Wieske?
Thank you, Mr. Lee.
Mr. Wieske. I would just add onto the discussion that I
think there needs to be some movement to fundamentally improve
the risk pool. I think California has indicated they have a
good risk pool, Wisconsin on the other hand does not. The
average age is much higher than the average ages across the----
Ms. Eshoo. Are you from Wisconsin?
Mr. Wieske. I am from Wisconsin, yes.
Ms. Eshoo. I see.
Mr. Wieske. So that is----
Ms. Eshoo. What was my first clue? All right.
Mr. Wieske. So, and across the country it varies State to
State, but it can be very expensive. So changing the dynamics
of that risk pool to get more younger folks in is a sort of
key.
Ms. Eshoo. Healthy people, good mix.
Ms. Morse Gasteier?
Ms. Gasteier. Thank you. I would agree on reinsurance and
keeping risk pools stable and broad and not allowing for the
proliferation of plans that will siphon healthier people out of
the risk pool. And I think the flip side of that is outreach to
the people who because they are price-sensitive and maybe
younger, people who don't anticipate having health needs,
whether you have tools that promote continuous enrollment or
whether you are doing very proactive outreach to those
populations to bring them in, I think those can be very
powerful tools.
In Massachusetts we have also found that applying
additional subsidies to lower-income individuals can, in fact,
incentivize very competitive dynamics for carriers that also
bring down costs for unsubsidized enrollees as well, although
there is more work to do there.
Ms. Eshoo. Thank you very much.
The Chair now recognizes the ranking member, Dr. Burgess,
for his 5 minutes of questioning.
Mr. Burgess. Thank you, Chairwoman.
And I would also just like to make a general statement to
all of the physicians who are in the audience. This is the
committee who brought you Cures for the 21st Century, so those
tools that you are going to have at your disposal that no
generation of doctors has ever known, this is the committee
that helped you achieve that goal. This is also the committee
that brought you the Affordable Care Act, so there is obviously
some good along with the bad. But you all are smart and young
and you have got good computers, and I trust that you will help
us figure this out.
Mr. Lee, let me just ask you on the individual mandates
since you referenced it, we had another panel of witnesses here
earlier that Mr. Tom Miller from AEI who suggested that zeroing
out the penalty for the individual mandate was as a practical
matter no significance because no one really paid the penalty
in the individual mandate.
Do you have a sense of the number of people who paid the
individual mandate penalty in California and what the dollars
collected were?
Mr. Lee. In California, because of the removal of the
penalty, we think we have dropped coverage by about 300,000.
Mr. Burgess. Prior to the----
Mr. Lee. The penalty, paid penalty in the last year we know
was about $500 million. So there were people that paid it that
did not take insurance, but also it provided that economic
nudge to about 300,000 people that the market has dropped and
because of that I note last year our premiums went up about 9
percent. Half of that increase was health plans pricing for a
sicker population because of the drop of people because of the
mandate.
Mr. Burgess. $500 million and they still have no money to
put to their healthcare and they still get stuck with silver
loading.
Mr. Wieske, you have--and it is really a shame you couldn't
read the entirety of your statement into the record. I may just
take the time to do that myself. But there is one line here
that really caught my attention. And in your discussion of
navigators you talk about a number of factors that have
contributed including a robust economy, very low unemployment,
which should lead to higher rates of employer-based insurance
coverage.
In the last 2 years we have seen a significant increase in
the number of people employed, people coming out of the ranks
of long-term unemployed to perhaps having the availability of
employer-sponsored insurance. I have not gotten, been able to
get the Congressional Budget Office to give us coverage numbers
for what would be the result of that increase in employment. Do
you have a sense of that?
Mr. Wieske. So I don't. Unfortunately there is a
significant lag in looking at coverage issues, and with the
time and the CBO it is usually about a 2-year lag, so it will
take some time to figure out.
Mr. Burgess. So as if--and I have a number of questions and
I will have to ask for written responses. Also in your written
responses, if you have an inclination as to where we might look
for that information outside of the CBO if there is any outside
group that might have looked at that, I think that would be
helpful information for the committee to consider.
Let me, because I am going to run out of time, let me ask
you, Mr. Wieske--and I appreciate your testimony here in
February of 2017. Many people forget that we actually had
hearings before we did our healthcare bill, and your testimony
on the experience you had on risk pools in Wisconsin was very
helpful in crafting that part of the bill that dealt with
reinsurance, that plus the Health Affairs article that dealt
with the hybrid plans in the State of Maine, the risk pools
reinsurance hybrid that came about in that State.
So yesterday--this phenomenon of silver loading, I mean I
get more complaints. Yes, I get people who are concerned about
preexisting conditions, but the overwhelming number of
complaints I get in my office are people who are outside the
subsidy window, phenomenon of silver loading that affects them.
In my district, a teacher and a policeman with two children are
both in the individual market because of the way insurance is
structured in our State for those professions, and they don't
get any help. They get no subsidy. So the cost of the benchmark
silver plan increases--``What, me worry? I have a subsidy, so
my premium didn't go up''--but that teacher and policeman now
are really, really strapped.
So are there ways that this Congress and this
administration can increase the options for those Americans?
Mr. Wieske. So the silver-loading issue is caused by the
cautionary reduction subsidy. It is not paying the cautionary
reduction subsidy. There is no budget, Federal budget number
that was attached, no appropriation, and so that would affect
the silver loading from that standpoint that, if that were
funded, then States would not be required to do silver loading.
Mr. Burgess. Let me just ask unanimous consent to include
for the record the article from the Kaiser Family Foundation
and yesterday's Washington Post, the Daily 202, which
referenced how risk pools and reinsurance may actually help
this situation, and again urge members to look at H.R. 1510 as
a vehicle to achieve that, and I will yield back.
Ms. Eshoo. I thank the ranking member.
Is Mr. Pallone--no, not here.
I now have the pleasure of recognizing the gentlewoman from
California, Ms. Matsui.
Ms. Matsui. Thank you very much, Chairwoman Eshoo and
Ranking Member Burgess, for holding this important hearing, and
to our three witnesses for being here with us today. And I am
particularly happy to welcome Mr. Lee, who is from my home
State of California and who I see an awful lot in Sacramento.
I was struck by a few things that all our witnesses agree
upon. We all agree that the ACA has resulted in numerous
positive changes for Americans, consumer protections, expanded
access to coverage, and historic lows in the number of
uninsured Americans. We also agree there is an opportunity to
build on the law, the remaining gaps in coverage, affordability
challenges for consumers, and market challenges for insurers.
As we heard from Mr. Lee, California has made a significant
investment in marketing outreach and enrollment assistance for
consumers. A key component of this investment was funding the
California navigators program, which plays an important role in
enrolling populations especially underserved populations in
health insurance. A new law taking effect this year in
California bans the sale of short-term, limited-duration
insurance in the State. Last month our committee held a hearing
on these types of junk insurance plans and learned how
consumers can be duped into buying these products without
knowing they don't cover preexisting conditions or certain
essential health benefits.
Mr. Lee, does California's navigator program help
Californians enroll in these types of junk insurance plans?
Mr. Lee. Thank you for the question. Absolutely it does
not. They cannot. The short-term plans, actually, in California
are not allowed as a matter of law and we make sure that our
navigators and our certified agents are promoting policies that
actually provide good essential benefits.
Ms. Matsui. So you don't at all advocate, great.
Like California, we have heard about the success of
Massachusetts at achieving nearly universal coverage. As we
heard from Ms. Morse Gasteier----
Ms. Gasteier. Gasteier.
Ms. Matsui [continuing]. This happened through strategic
investments, outreach, and policy. Ms. Morse Gasteier, in your
testimony you note that the Massachusetts Health Connector uses
data to better understand and reach individuals without
coverage and communities at greater risk of uninsurance. Can
you elaborate on how you reach these populations and help them
enroll in affordable coverage?
Ms. Gasteier. Thank you for the question. We do, we use
both national U.S. Census Bureau and local sources of data to
understand population and demographic dynamics around
populations that have a higher risk of uninsurance and then we
use that data to actually select our navigators that we include
in our program. We work with 16 navigators and they are
strategically selected to help us make inroads in those
particular populations. Not just because of their physical
presence and their sort of trusted role in the community, but
because they have particular tools to overcome the barriers
that we think people in those specific populations may be
facing, whether it is language barriers or accessibility to in-
person assistance.
Ms. Matsui. That is wonderful. I am pleased that Covered
California--and we have Mr. Lee here joining us to share in the
State's success story. As we heard today, Covered California
has been on the front lines of implementing the ACA, serving
over 3.4 million Californians since 2014, lowering our eligible
uninsured rate to 3 percent, and working to keep our premiums
about 20 percent lower than the national average.
Mr. Lee, what are the unique characteristics of Covered
California that allowed you to steadily increase enrollment and
keep costs low and maintain competition?
Mr. Lee. Well, first I would note we aren't unique. We were
thrilled to do this report jointly with the State of
Washington, the State of Massachusetts, other States that have
leaned in, have used all the tools----
Ms. Matsui. Right.
Mr. Lee [continuing]. Specific to their State. But I would
note it has been number one, focusing on market and outreach.
Number two, having common patient-centered benefit designs that
when people sign up for our plans whether they pick Kaiser,
Blue Shield, or Anthem, they have the same knowledge that when
they go to see a doctor there won't be a deductible they need
to pay before they see the doctor. That means consumers see the
value of insurance.
That, and finally I would note we actually focus on the
underlying cost of care. We have contractual requirements with
our 11 health plans to have them look at the delivery system
making sure people get the right care at the right time. Those
factors together we think are part of our formula for building
what we hope will be success for over the long term.
Ms. Matsui. Thank you.
Ms. Morse Gasteier, your State has also taken a proactive
approach going back to before the ACA. What lessons can you
continue to apply from Massachusetts to the Federal
marketplace?
Ms. Gasteier. So I would say that we focused again on
trying to bring in healthy, low-risk people into the
marketplace by doing data-driven outreach to them and also
really work to have a very stable regulatory environment where
we keep our eyes on the road in terms of keeping the markets
stable. We work really closely with our carriers which is
something that we are able to do as a State-based marketplace
in being in very close contact with them.
And I would just say more broadly in Massachusetts we have
had sort of a bipartisan cross-stakeholder support for our
health reform and that has continued through the 13-year
experience of our coverage expansion efforts which has been
critical.
Ms. Matsui. Well, thank you very much and----
Ms. Eshoo. I thank the gentlewoman. I now would like to
recognize the gentleman from Michigan, and a gentleman he is.
He is a former chairman of the full committee, Fred Upton.
Mr. Upton. Well, thank you, Madam Chair. It is a delight to
be here, obviously, and I appreciate the testimony from our
witnesses.
Mr. Wieske, I would like to go back to your very beginning
of your statement talking about how States could have more
flexibility, and to date I would note that 14 States have
submitted waivers under section 1332. Eight of the States have
active waivers, seven of which are for State reinsurance
programs. And I would have to say that it is my understanding
that these waivers are budget-neutral to the Federal
Government. Is that correct?
Mr. Wieske. That is correct, sir. It is a requirement of
the 1332.
Mr. Upton. And it is also true that States have
demonstrated that they can take steps under section 1332 to
stabilize their markets without new Federal money? In fact, the
pass-through funding or savings generated from those market
stabilization programs can be reinvested onto the program
further reducing premiums. Is that correct as well?
Mr. Wieske. Correct. We use the program in the State of
Wisconsin to do exactly that.
Mr. Upton. Yes. Now, Dr. Burgess--I am sorry he left, but I
know he is coming back--yesterday introduced legislation that
would provide additional Federal resources for States to
establish market stabilization programs. And it is my
understanding that that would then incentivize additional
premium reductions across the country; is that right?
Mr. Wieske. Yes. I think coming from Wisconsin and seeing
it on the front lines, I think States need a lot of flexibility
and having a one-size-fits-all program has never sort of
worked.
Mr. Upton. I would note that CBO previously projected that
one of the most effective ways to stretch premium reductions is
to have a State option with a Federal fallback, which is in a
sense what Dr. Burgess said does, or a Federal default allowing
for States to innovate as they see fit.
Would you agree that States should be given choice instead
of control when it comes to repairing their markets' damage?
Mr. Wieske. Yes. I think in my experience in Wisconsin as
deputy commissioner there, I think it was important for us to
have a lot of flexibility and I think a lot of the problems
that we face in the ACA would have been made better if we would
have had more flexibility in how we implemented it.
Mr. Upton. In your experience in Wisconsin, what other
States would you highlight are on that same path?
Mr. Wieske. So our reinsurance program was copied from
Minnesota's almost whole cloth. We made some changes which was
moved off of Alaska's. So I think in a lot of cases States are
talking to each other. And we talked when I was there, still
there, we talked to a number of States about our program as we
were going through the development.
So I think through the NAIC, National Association of
Insurance Commissioners, and other pieces, there is a lot of
discussion among States to sort of get commonality and to
figure out what the best approaches are and the best approaches
are not necessarily the same State to State.
Mr. Upton. Great.
Yield back, thank you. Thank you, Madam Chair.
Ms. Eshoo. I thank the gentleman. I now would like to
recognize the gentlewoman from Florida, Ms. Castor.
Ms. Castor. Thank you, Chairwoman Eshoo, for scheduling
this hearing on how we lower healthcare costs for our neighbors
and provide meaningful coverage for American families.
I want to start by thanking our hardworking, nonprofit
partners who have fought with us for affordable healthcare over
the years and to ensure that independent, unbiased navigators
are available to American families, especially Rob Restuccia,
the longtime executive director of Community Catalyst, who died
over the weekend from pancreatic cancer. Rob was a champion of
empowering consumers to fight for better healthcare and he will
be missed.
And I want to thank the witnesses. After reading your
testimony I was really struck by how difficult it has been for
American families to keep up. The Trump administration has
really socked it to them. We were making such good progress on
lowering the uninsured rate and lowering healthcare costs and
now, you know, it is like death by a thousand cuts.
Removing the individual mandate and promoting junk
insurance plans, a tax on the insurance pool, whittling away
the protections for preexisting conditions just have really
socked it to consumers in their wallet and we want to get back
to doing everything we can to lower healthcare costs for them.
The Trump administration also has slashed funding for our
independent, unbiased navigators who are very effective. Yes,
they work in concert with agents and brokers, but you need them
both on the field. There is just no substitute for that
independent, unbiased advice.
So my bill, H.R. 1386, Expand Navigators' Resources for
Outreach, Learning, and Longevity, the ENROLL Act, will secure
vital services for navigators so that they can continue serving
our neighbors. And I want to thank my colleague Congresswoman
Blunt Rochester along with Representatives Wilson, Crist, and
Murphy for being original cosponsors on this important bill.
Families across the country have been aided by unbiased
navigators to help them determine the best health insurance
option for them. Unfortunately, the Trump administration
attacked this crucial initiative by slashing it by over 80
percent since 2016, as well as big cuts to outreach and
advertising efforts.
So my ENROLL Act will guarantee that navigators remain on
task to ensure that our neighbors understand the financial
assistance and coverage options available to them.
Specifically, the ENROLL Act will fund the navigator initiative
in the Federal ACA marketplace at $100 million per year. It
will require HHS to ensure that grants are awarded to
organizations with demonstrated capacity to carry out the
duties of a navigator. It would reinstate the requirement that
there be at least two entities at each State; that they have a
physical presence in the State. Oftentimes, navigators
determine that the more appropriate and affordable option might
be the Children's Health Insurance Program or it might be
Medicaid, so it would clarify that navigators can provide that
advice on enrollment.
In Florida we are very fortunate that the University of
South Florida has been the lead navigator and has worked with
other nonprofit partners all across the State and their efforts
have paid great dividends to families across my State. We
continue to lead in the number of enrollees in the healthcare
marketplace.
But they have told me this year that those dramatic cuts
had a very serious impact. That they were not able to get out
especially into rural areas to make sure that families
understood what their options were and had the ability to sign
up. This directly impacts affordability for everyone.
And, Ms. Gasteier, could you speak to the importance of a
broad-based insurance pool to lowering costs and the role that
navigators play in that?
Ms. Gasteier. Thank you for the question. We believe in
Massachusetts that we all do better when everybody is in the
same market and the same risk pool with strong comprehensive
standards sort of holding up that market so that people know
that the coverage they have they can count on. And we see
outreach as an effective, proven method for drawing in people
who might otherwise think that they can go out without coverage
who may tend to be younger people.
And so we have found that those efforts are very important
both for those people so they are protected, even though they
may not expect something to happen to them and that we think
that that has been part of why we have been able to keep our
premiums so stable in Massachusetts.
Ms. Castor. And, Mr. Lee, do you agree with that?
Mr. Lee. Very strongly and including in particular your
note that it is not just navigators, it is navigators with
agents. Twelve thousand agents in California, but we have 100
nonprofit groups we directly fund to fill in the gaps. We
target them to serve areas that are not well served by agents.
Ms. Castor. And that investment helps everyone by lowering
costs; is that correct?
Mr. Lee. Absolutely. We have lower costs in California
because of the effective outreach, and again we use navigators
to target where agents aren't effectively reaching. So it is
not an either-or, agents in California get paid $130 million in
commission payments. It is a lot of money. We pay our navigator
program about 6.5 million. And so, yes, they enroll fewer than
agents, great, but we target them to outreach to Spanish-
speaking communities, African American communities, LGBTQ
communities, rural communities. So that is the role that
navigators--to pick up the gaps that agents and other outreach
isn't addressing effectively otherwise.
Ms. Castor. Thank you very much. I yield back.
Ms. Eshoo. We thank the gentlewoman for her legislation.
I now would like to recognize Mr. Shimkus, the gentleman
from Illinois and a good friend and my E911 partner and----
Mr. Shimkus. Yes, ma'am.
Ms. Eshoo [continuing]. Away we go.
Mr. Shimkus. Thank you, Madam Chairman. This is a great
hearing, and I appreciate you all being here.
Mr. Lee, I want to--and the way I like to do it, I like to
breeze through the testimony, but I like to hear the questions
and answers and I scribble a lot of notes and questions taken
off of--so you mentioned that because the individual mandate
was not enforced, 300,000--is that the right--300,000 dropped
off.
And then I think I heard through the other questions is
that California, and I think my colleague Ms. Matsui mentioned
California has a law that says you can't have other than the
standard ACA-type plans. So these 300,000 have no option then,
is that--I am trying to figure where they--are they covered
somewhat?
I mean, a lot of States have options. I have been through
the whole debate. I was here when we passed. A lot of folks
liked the plan they had, the Congress and the President decided
to change that. So then they got thrown into plans that they
didn't like that was so too costly and the premiums were high
and the deductibles were ridiculously high. And they just
begged for me--and I have four from just recently in October
and November and December--to just go back to the plan they had
in the past, a lot of my constituents.
So I am trying to figure out where is the--does these
300,000 have no coverage?
Mr. Lee. Our understanding is the vast majority go to be
what we call bare. They go without insurance. And again, this
happens also in the employer market. About 20 percent of the
people who----
Mr. Shimkus. Yes, I got that. But wouldn't something be
better than nothing?
Mr. Lee. In many cases not, because the issue about that
something, often that something, a short-term plan may mean
that if they get cancer it is not covered. So often it is faux
coverage. The point of encouraging people to sign up for
coverage that matters is to encourage people to get coverage
that will be there for them when they get sick.
Mr. Shimkus. Right. And we had a hearing earlier as was
identified and I brought up associated health plans as an
option with either associations--I mean California is a big
State, Illinois still a relatively big State. If our farm
bureau decides to either State-wise to develop a covered pool
in associated health plans that has the same requirements as
outlined under the ACA, does California support association-
type health plans?
Mr. Lee. Again I don't speak for the State of California.
What we have done in California as a State though is try to
make sure that the insurance offerings will be there when
people need them. And so examples of, there are products today
in California that are under sharing ministries that mean you
buy it and there is a $250,000 lifetime cap per incident.
Mr. Shimkus. Right, OK. Fine, I got that.
Mr. Lee. And so that is part of the----
Mr. Shimkus. I want to get to another couple questions, but
I would just from my experience in my district is many people
lost insurance that they liked and was thrown into insurance
that they couldn't afford and they couldn't use. And I want to
go to Morse Gasteier for a second, because you mentioned how
Massachusetts really changed the Affordable Care Act in one
interesting provision.
When we had this debate in the legislation, what was
mandated was if you get sick you can immediately buy. And I
think I heard either in your testimony or in response to a
question you said we have changed that. How have you changed
that and what did you do?
Ms. Gasteier. Thank you for the question. I am not sure we
have changed anything. We had our own individual mandate
already in Massachusetts prior to the Affordable Care Act so
there was----
Mr. Shimkus. Can people--I think one of the problems was
people were if they got sick today they could go buy insurance,
which when you are talking about pools and people buying in
that escalates costs.
Ms. Gasteier. It does. So we have always used open
enrollment periods to try to make sure that people are not sort
of, quote unquote, jumping and dumping and coming in and out of
coverage just when they get sick or think they may need an
expense. And we have found that having tools like that in the
market where there is sort of an expectation that everybody is
always in the pool has helped keep----
Mr. Shimkus. So I may have misunderstood that response to
your question.
Ms. Gasteier. That is fine.
Mr. Shimkus. So then I apologize. That is what I wanted to
ask.
Mr. Wieske, this silver loading--no. I don't want to ask
that question. I want to ask, do you have empirical data on the
benefits or the lack of benefits that you have seen in that
navigator population? I am a big dealer and broker, folks. I
understand spreading it out. But, really, the question is cost-
benefit analysis and are they really delivering for what versus
kind of what we hear?
Mr. Wieske. There may be a difference between States that
have an exchange and can control their navigator programs and
States that don't. What we saw as a problem in Wisconsin is we
never knew what was going on with navigators despite
requirements for licenses, despite requirements for CAC
licenses and registration of assisters.
We had numerous occasions where we had to investigate
navigators who we later found out in some cases were and in
other cases were not navigators, were holding this out. So it
was a little bit confusing for us despite the fact that we had
some regulatory authority.
Mr. Shimkus. Thank you, Madam Chairman, appreciate the
time.
Ms. Eshoo. Thank you, Mr. Shimkus.
I have to excuse myself from the hearing for a bit, but
certainly all the doctors in the audience will be pleased to
know that we have M.D.s on both sides of the aisle. And so Dr.
Raul Ruiz is going to take this chair.
Mr. Ruiz [presiding]. And with that I would like to
recognize Congressman Schrader from Oregon for 5 minutes.
Mr. Schrader. Thank you very much, Mr. Chairman. I
appreciate the hearing today. It is a great hearing, actually,
indicative of hopefully where this Congress is going to go in
terms of fixing some of the problems, a few of the problems
with the ACA and recognize that it serves a great deal of value
for a lot of folks.
And I am a proud cosponsor of 1425. It is probably the
single most important thing we can do to help stabilize the
individual marketplace which, based on the Republicans' work in
the last Congress, would be a goal of theirs as well as a goal
of Democrats, so a nice area of bipartisanship.
I wanted to also note that earlier this week I led a letter
with 76 other of my colleagues from the New Democrat
Coalition--Chairman Pallone, Chairman Scott, and Chairman
Neal--making it a priority for this Congress to bring down
costs and make sure that healthcare is affordable to everybody
through the Affordable Care Act, which as I said went a long
way to getting us there.
So I would like to ask consent, unanimous consent, that we
can enter that letter into the record.
Mr. Ruiz. So ordered.
[The information appears at the conclusion of the hearing.]
Mr. Schrader. OK. Thank you, Mr. Ruiz, Dr. Ruiz.
I would also like to note for the record that Blue Cross
Blue Shield is also a big supporter of 1425 because they
recognize the value of reinsurance also.
I guess a basic question for Mr. Lee, a number of States
pointed out by the ranking member and others have established
their own reinsurance programs through the 1332 waivers, which
I think is a great thing, everyone has testified, and I think
everyone here acknowledges is a great opportunity for States to
innovate, you know, not a one-size-fits-all.
But there are probably some limitations and some
opportunities that a Federal reinsurance program or high risk
pool type of thing could offer. Could you talk a little bit
about how that might relate to what some of the States who are
already doing some reinsurance programs and how it might help
them?
Mr. Lee. Yes, I would be happy to, thank you. So first, as
you note, seven States have done the State-based reinsurance,
but they range in what the Federal Government has matched to a
low of 30 percent, meaning the State had to come up with 70
percent of the dollars, other States got a hundred percent,
others 70. And most States are struggling with their own State
budgets, so that is one uncertainty.
The other thing I would flag is the 1332 provisions, as was
noted earlier must be deficit-neutral. Now I understand the
importance of deficit neutrality, but that actually means a
State that uses a program and enrolls more people is hit
because enrolling more people will affect the deficit. The goal
of the Affordable Care Act should be to get more people
covered.
And that is one of the reforms I think that isn't on the
table, but in thinking about to use a 1332 waiver mechanism
that in essence punishes a State for getting more people
insured is a bad mechanism. So those are two problems.
The other is--and I want to really appreciate the
thoughtfulness in your legislation--is some States will say
reinsurance, reinsurance if we use California by the formulas
in your bill would reduce premiums by about 7 percent. That is
a lot. But it might be better invested to target those people
just from four to six hundred and your allowing a State the
flexibility to do that I think gives State flexibility, which
is exactly what many States like California would look to do.
Mr. Schrader. Thank you very much for the response, and I
agree. I mean, there is a nice synergy here between the Federal
Government supporting some of these programs in a thoughtful
way and enabling the States to use it in a flexible manner that
best serves their needs. That was the genesis of the work that
the New Democrats did with their solutions over politics in the
last Congress. It is the genesis of the bipartisan legislation
came out of the Problem Solvers Caucus. It included
reinsurance, had the cost sharing subsidies, and expanded
exactly what you are talking about, the 1332 waivers.
But it kept the essential benefits package that you guys
have also acknowledged is critical so that consumers aren't
being deceived. And the more people you get into the
marketplace, the more the risk is shared, the less cost
shifting that goes onto these individual marketplace people
that are suffering, if you will, under these premium/deductible
increases while other people are benefiting.
The last comment I would make real quick is to the Hyde
language. I mean I really hope that my colleagues on the other
side of the aisle are willing to move past that. I would point
out that in our previous legislation, whether it was the ACA or
the Problem Solvers one, we did not try and get rid of the Hyde
Amendment, you know, that has been a longstanding agreement, or
by both sides of the aisle. We recognize people have different
faith-based concepts and support that.
I think it is a little unfortunate that some of our
colleagues on the other side of the aisle are trying to, you
know, prevent States from using their own funds or nonprofits'
funds or individuals' funds in the arena of family choice. That
is unfair. That is an expansion of the Hyde Amendment that I
think makes fixing the Affordable Care Act and fixing the
marketplace, getting at the preexisting condition thing a real
problem. And I yield back. Thank you.
Mr. Ruiz. Next is Congressman Guthrie.
Mr. Guthrie. Thank you very much. Thanks, Chairman, for
yielding. I appreciate the opportunity and all of you to be
here today.
I want to focus on the background of the State-based
marketplaces. The State-based marketplace grants were awarded
between 2010 and 2015 in compliance with the law. No planning
or establishment grants could be awarded after December 31st,
2014. I think we all agree with that. In all, CMS awarded over
5\1/2\ billion to 49 States, the District of Columbia, and four
territories for the purpose of planning and establishing health
insurance exchanges.
The available money was unlimited, the amount of money was
unlimited, and in definite authorization and appropriation the
5\1/2\ billion included grants for exchange planning, exchange
establishment, early innovators and administrative supplements
to any of these grants. Every State except Alaska applied for
these grants.
Florida and Louisiana were awarded planning grants but
later returned their entire grants. Other States returned some
of the money they received but kept some. For 2018 planning
year, 34 States had Federally Facilitated Marketplaces, 12
States had State-based marketplaces, and 5 States had State-
based marketplaces using the Federal platform.
So in all, 17 States have 12 based marketplaces or State-
based marketplace that uses the Federal platform. Those 17
States accounted for roughly 4.5 billion of the 5\1/2\ billion,
but only 12 States had their own State-based marketplace. So in
summary, of the 5\1/2\ billion dollars awarded in grants, 12
States have exchanges.
So, Mr. Wieske, when you with Wisconsin's insurance
department--and this gets--I think you talked about some
innovative things you wanted to do when Congressman Upton asked
you questions. But my question is, when you were with
Wisconsin's insurance department, if you were given a slice,
your slice of the 5.5 billion without all the mandates that
came with it, what creative and efficient ways would you choose
to utilize Federal dollars?
Mr. Wieske. We actually started going down that path at one
point and we actually are one of the States that returned the
money. What we found was there was some lack of flexibility in
the ability for us to design the exchange and it was going to
be very expensive. And let me be more specific. We were looking
for a single-door entry into both our Medicaid and our State
system. We were looking a variety of other pieces to make it
easier for consumers. Unfortunately, the requirements that the
Federal Government had in place made it impossible for us to
continue and we ended up dropping off of that.
So I think at that time we were looking at a single-door
entry, I just didn't think we under the Federal rules think it
was possible. On top of that, the cost of doing it for a
smaller population in a State like Wisconsin where there is
about 200,000 people enrolled in the exchange, if you look at
$20 million a year to spend that is $100 a person, $100 a
person to be able to afford the exchange. That is a very
expensive fee on top of what the overall costs were. So the
risks were very high for us as well.
Mr. Guthrie. Thanks. When we were debating the Affordable
Care Act and repeal and replacement of it, Wisconsin came to
the forefront in preexisting condition coverage and a lot of
debate here was talked about what Wisconsin did and how people
who had, particularly cancer survivors and so forth, had better
coverage under the Wisconsin pre-ACA model than after the
mandate, after the ACA. Would you kind of talk about what you
guys did for preexisting conditions?
Mr. Wieske. Yes. I think the important message here, I
think, from a State perspective is that States have an interest
in insuring their residents as well. I think both, you know,
everybody here at the table understands that and believes that.
And Wisconsin actually had a very comprehensive high-risk pool.
You could see any doctor in the State. We subsidized that high-
risk pool. It was expensive, make no mistake. It was more
expensive than standard coverage because we didn't subsidize
it, so there should have been pieces that--there were pieces
that could have been improved upon.
But I think we still have some folks who have an interest
in going back to that. However, moving forward, you know, it is
clear that the ACA has provided some subsidies for folks who
had affordability issues in that market as well. So, you know,
Wisconsin could have done a bit more if they had more
flexibility.
Mr. Guthrie. Thank you.
And, Ms. Morse Gasteier, you talked about continuous
coverage and tools for ensuring continuous coverage. I
understand the open enrollment gives an incentive. Is there
other tools that you would suggest? I mean just in open
enrollment if I have guaranteed issue and I don't sign up and
then I get sick, then I can buy health insurance coverage when
open enrollment comes again. I get you are in it for the
interim. Is there other tools that you would suggest to be able
to do?
Ms. Gasteier. Thank you for the question. I think we take
the allure of affordability very seriously in Massachusetts and
have tried to construct a very competitive marketplace that in
addition to those tools incentivizing people to keep continuous
coverage we see as drawing people into the ranks of the insured
through our exchange which covers 280,000 people now. And I
have noted some of the policy features of the way we have
approached our subsidized program also has benefits for
unsubsidized individuals as well who also have access to these
lowest-in-the-Nation premiums.
So we see all those tools as working together, those
incentives through our individual mandate to incentivize
coverage as well as making sure affordability is of paramount
significance and presence for people in our market.
Mr. Guthrie. Well, thank you. My time has expired and I
yield back.
Mr. Ruiz. Thank you.
Representative Kuster, you have 5 minutes.
Ms. Kuster. Thank you very much. And thank you to our panel
for being with us. I want to start by associating myself with
the remarks of Representative Schrader. I think we do have
options to shore up the Affordable Care Act and they are
bipartisan and we should work together to get that done. I am
very concerned about the efforts of this administration to
sabotage the Affordable Care Act, and I do agree that some of
our colleagues on the other side of the aisle are trying to
throw, really, a monkey wrench in terms of the status quo of
the Hyde Amendment and trying to disrupt our ability to provide
health insurance for all Americans.
I want to talk about H.R. 1425, the reinsurance bill, and I
am a proud supporter cosponsor with my colleagues Angie Craig
and Scott Peters. Why would a State--and I will direct this,
Mr. Lee, at you--why would a State seek to develop its own
reinsurance program if there was a Federal reinsurance? That is
a place to start.
Mr. Lee. A really good question, I think, that a State
wouldn't. If the mechanism was reinsurance they would probably
go with a Federal administration. The issue is if
proportionately a State could get the same amount of funds that
would have been used for reinsurance and instead target it in a
different way, States might do that.
I gave the example of our Governor Newsom has said we want
to bring back a penalty and expand subsidies, targeting people
right above the cliff. We have working middle-class Americans;
I am sure, in New Hampshire as well in California that really
need help. Reinsurance lowers costs for everybody, saves the
Federal Government a lot of money, but it may make a State, for
a particular State to say we want to target particular
populations, but it would not make sense to me. I can't imagine
a State that would take the money and just do reinsurance.
Ms. Kuster. And I agree with you we want to target that. I
was visiting with a hospital the other day that has dropped the
uninsured population showing up at their hospital from 9
percent down to 3 percent, but it is how to get at that 3
percent, the working low-income people and younger people,
honestly.
You mentioned the increased riskiness of the individual
market making reinsurance a tool to control costs. Is there a
point at which the market becomes too risky for even
reinsurance to work--and again back to the sabotage by this
administration--making these markets unstable?
Mr. Lee. I think there is. I am not sure what it is, but
you look at it again--Massachusetts, California, Washington,
other States with State-based marketplaces--we have maintained
enrollment over the last years. Federal marketplace States have
seen mammoth drops in new enrollment. Many of those States have
seen premiums rise so high that people without subsidies are
largely only sick people because healthy people have been
priced out entirely.
Reinsurance would help. I don't think in many of those
States it would help enough. A 7 percent reduction in premiums
when those States have seen an 85 percent premium increase in
the last 5 years is good, but is it enough, probably not. And
so I think one of the challenges, it is reinsurance is a tool,
but it needs to be part of a broader issue of doing outreach,
doing outreach, a whole range of things that in much of the
Nation is not currently happening.
Ms. Kuster. And I want to get out the sabotage again
because they have created a catch-22. This administration is
sabotaging the Affordable Care Act and then turning around and
saying rates have gone up. But you mentioned the proliferation
of junk health plans and other efforts by the Trump
administration to sabotage.
Are you concerned that the efforts of this administration
over the last year may push these markets past a tipping point,
and again tying into your comment about how reinsurance can be
helpful?
Mr. Lee. Well, I think absolutely encouraging healthy
people to buy products that look cheap but might not be there
for them when they get sick both is risky for those individuals
that buy the products and damages the risk pool, raises costs
for everybody. I do think--I am not sure what a tipping point
is, because while we continue to have the subsidies people that
get subsidies will always have a market. The only problem is
without doing marketing they won't even know it is there.
Ms. Kuster. And I do have legislation around the 1332
waivers that to try to keep us from reaching that point.
Ms. Morse Gasteier, as a New Hampshire neighbor to
Massachusetts I am especially interested, why didn't
Massachusetts seek a 1332 waiver for reinsurance?
Ms. Gasteier. It is something we have looked at.
Massachusetts, you know, looks at different options for
flexibility and if we find opportunities that can help our
market in terms of affordability and stability, you know, we
are interested in those so long as they don't, you know,
deteriorate any of the important market conditions or consumer
protections that we have long held as critically important.
Our market right now is largely stable. We will continue to
look at opportunities for reinsurance. But as Mr. Lee noted, it
does require at present a lot of State resources to invest in
these 1332 waivers. So it is something we will continue to look
at, but to date hasn't struck us as compelling for our market.
Ms. Kuster. Well, and hopefully if we can get this
bipartisan legislation passed you will have that option, so
thank you.
I yield back, Mr. Chair.
Mr. Ruiz. Thank you.
Now Representative Griffith, you have 5 minutes.
Mr. Griffith. Thank you very much, Mr. Chairman. I do
appreciate it. This committee had significant concerns about
and accordingly extensively studied the navigators program in
the previous administration. And I would like to introduce into
the record the following letters sent by the committee in 2013:
an April 12, 2013 letter to Secretary of HHS Kathleen Sebelius;
a June 28, 2013 letter to then-Secretary of HHS Kathleen
Sebelius; an August 29, 2013 letter sent to 51 grant recipients
in 11 States that received 61 percent of navigator dollars at
the time and a list of those grant recipients who received the
letter; and a September 20th, 2013, letter to then-Deputy
Administrator and Director of the Center for Consumer
Information and Insurance Oversight, CCIIO, at CMS, Gary Cohen.
May that be admitted, without objection?
Mr. Ruiz. So ordered.
[The information appears at the conclusion of the hearing.]
Mr. Griffith. During plan year 2017, navigators received
more than $62 million in grants and enrolled only 81,426
individuals, less than 1 percent of the total enrollees but at
a cost of over $750 per person. By contrast, agents and brokers
assisted with 42 percent of federally facilitated exchange
enrollment for the plan year 2018, which cost the FFE only
$2.40 per person or per enrollee to provide technical and
training assistance.
So, Mr. Wieske, I have questions about whether we should,
you know, be putting more good money after bad results. H.R.
1386 would redirect a hundred million annually to the failed
navigator program. Based on your experience in Wisconsin, can
you speak to whether the navigator program was a good
investment for taxpayers there?
Mr. Wieske. Look, what we saw in the State is if you look
at the other lines of insurance they have moved away from sort
of the face-to-face. They have moved into different methods to
get customers. And while navigators have some value, certainly,
in certain populations, I don't think we had a feeling that
they had a strong presence in our rural communities that were
also largely uninsured and in other spots. So, you know, we
felt that agents were much more effective and that there were
other methods to encourage enrollment.
Mr. Griffith. Thank you. During your time as deputy
insurance commissioner of Wisconsin, did Wisconsin experience
any fraud, waste, or abuse within the navigator program?
Mr. Wieske. So we had a number of cases that we had to
investigate. Mostly people who were posing as navigators who
were not, in fact, navigators, that had problems. We didn't
actually have any problems, we had a----
Mr. Griffith. So you didn't have any problems with the real
navigators, it was with the fake navigators.
Mr. Wieske. Real navigators. We had problems with fake
navigators, correct.
Mr. Griffith. All right. And based on your experience with
the navigator program, do you believe that redirecting a
hundred million annually to the navigator program as H.R. 1386
intends to do would be a wise investment for the taxpayer?
Mr. Wieske. I think we are hoping to encourage more
flexibility in the way consumers can sign up for coverage,
should get them where they actually buy coverage today.
Mr. Griffith. All right, I appreciate that. I did think it
was interesting to note that several of my colleagues have
talked about the cost of the insurance. Mr. Lee spoke about 85
percent in most of the Federal markets, the price has gone up
in the States that have their own markets that is less than
half of that, about 39 percent, in his written testimony, and
that this really affects the middle-class family, the average
family that are above that 400 percent of poverty level rate.
What is interesting about that is that when this plan was
being discussed, and it is one of the things that we have to
look at when we are looking at the new promises to lower rates,
people of my district were promised--that the President came to
the district when he was campaigning and said he was going to
reduce the average cost of healthcare for the average family by
$2,500 a year.
And now we are talking about if we pass new bills we might
get a 7 percent reduction in an 85 percent increase. Clearly we
are not anywhere near the goals that this plan promised and we
are experiencing--and my constituents complain all the time.
And so I appreciate you mentioning that, Mr. Lee. You know,
their copays have gone up, their out-of-pockets have gone up,
and their insurance premiums have gone up and they have just
been hit hard and it is a whole lot more expensive than what
they were facing before Obamacare.
Hopefully we can find some bipartisan resolutions to bring
down these costs, but I don't think that it can ever get to
that point where the families actually see, average American
family sees a reduction under Obamacare, as he promised at
Virginia High School in my district, a $2,500 decrease. I yield
back.
Mr. Ruiz. Ms. Kelly, you have 5 minutes.
Ms. Kelly. Thank you, Mr. Chair, and thank you all for your
testimony today. Since the Affordable Care Act's passage,
approximately 20 million Americans have gained health coverage
through the laws' various coverage protections. An additional
nine million low- and moderate-income Americans receive health
insurance subsidies that help them pay for healthcare. In 2019,
more than 7 in 10 consumers on the ACA marketplaces can get
coverage for $75 or less per month after tax credits. These tax
credits make healthcare affordable for millions of Americans.
Ms. Morse Gasteier, thank you for your testimony today. You
discussed Massachusetts' subsidy program known as ConnectorCare
which supplements ACA subsidies and helps your State's
residents pay for healthcare. You briefly mentioned how the
program benefits consumers who are not eligible for subsidies.
Can you describe how the program helps lower premiums for all
enrollees in your State?
Ms. Gasteier. Absolutely. Thank you for the question.
So our program ConnectorCare provides subsidies, extra
State subsidies on top of Affordable Care Act subsidies and
further brings down the cost of premiums and cost sharing for
individuals up to 300 percent of the Federal poverty level. And
those products that become available through that program are
built on top of a commercial silver market tier plan. And what
the structure of the program does is it strongly incentivizes
participating carriers to lower premiums to compete to be in
that program because they show up to as the lowest cost plan
and they get a lot of enrollment by being very cost-
competitive. The benefit for unsubsidized individuals is those
low-base silver plans then become available to unsubsidized
enrollees as well.
And in Massachusetts we also have small businesses in the
same risk pool, so small businesses also benefit from those
lower premiums that carriers are competing to get the attention
of price competitive shoppers with. So that is one of the ways
the program itself is helpful both to those low-income
enrollees who are enrolled in the program as well as middle-
class unsubsidized enrollees as well and small businesses too.
Ms. Kelly. Thank you. For other States that are looking at
this, what are some of the challenges that they might face?
Ms. Gasteier. So of course coming up with the funding to
create those State wrap dollars is critical, so I would think
if another State were pursuing something like this that would
be sort of priority one for them to determine how to finance
that. We, I think are very advantaged by being a State-based
marketplace. In administering something like this we are able
to aggregate all the different funding streams, the Federal
subsidies, the State subsidies, the enrollee contributions and
we are able to do that by doing premium aggregation which is a
benefit of being a State-based exchange.
And so States that are pursuing things like this would need
to think about the mechanics of how it all works together and
we would certainly be happy to provide technical assistance to
any State interested in that. But I would say resources are the
top order issue for a State pursuing something like this.
Ms. Kelly. And just share how you did come up with the
resources and just--OK.
Ms. Gasteier. Absolutely. So it was a number of different
funding sources that the State identified and this was all a
part of our original State reform effort back in 2006. So we
worked with our Medicaid program and Federal partnership with
CMS. There are a number of State-based revenue streams that
come into a trust fund that our Connector administers. And so
that has kind of gone back to 2006 and then we restructured the
program in 2014 to complement the Affordable Care Act.
Ms. Kelly. Thank you. And I want to thank you and I commend
you for all the work you are doing to help make healthcare
affordable for your State's residences. A lack of funding is
certainly challenging for States which are interested in
setting up similar programs, but hopefully you will get some
phone calls.
Ms. Gasteier. Thank you.
Ms. Kelly. Thank you and I yield back.
Mr. Ruiz. Thank you.
Mrs. Brooks, you are up for 5 minutes.
Mrs. Brooks. Thank you, Mr. Chairman.
Mr. Wieske, in your testimony you mentioned that many
insurers who were offered coverage in the individual market
just a few years ago have left. Can you discuss further why,
from your studies, why these insurers are finding business in
the individual market untenable?
Mr. Wieske. Yes, I think in the State of Wisconsin they
lost roughly $500 million in the individual market and that
made it absolutely unaffordable for them to provide coverage. I
think we saw a market that just became--it was interesting. In
my home city of Green Bay, the second-least-cost silver went up
105 percent from 2016 and 2017. And that became--2017 to 2018--
that became an untenable sort of solution. And the concern I
think that the insurers had was that the market had
deteriorated so far that they didn't want all of the risk even
in a given region. So it was just unaffordable for them to
continue to maintain coverage.
Mrs. Brooks. Can you elaborate on ways in which the section
1332 waivers have actually increased access to care that have
those approved waivers?
Mr. Wieske. And I will say, you know, in my home State,
since I worked on it directly in my former role, so we had a
$200 million reinsurance program that we went through in a
bipartisan effort through the legislature and got it passed.
That reduced the premiums by 11 percent over where they would
otherwise have been, a net 5 percent decrease year over year,
so not just a decrease of the increase, but an actual decrease
year over year on average. And we believe that that expanded
coverage in the State of Wisconsin from where it otherwise
would have been.
Mrs. Brooks. Can you talk a little bit about what else the
Federal Government might be able to do to increase enrollment
in health insurance aside from spending more money on marketing
and navigators? How else can we be bringing people into--
because we all want people to have access to health insurance
and understand their options, but what else might we be doing?
Mr. Wieske. Sure. And in my prior role I think, you know,
we dealt with life insurers and health and P&C insurers. And if
you look at those other lines of insurance they are becoming
increasingly active in other spaces to provide coverage and
becoming increasingly active in their consumer's life to
provide broader opportunities. There are even groups that are
having individuals in shopping malls to download apps in order
to buy coverage. And people are purchasing their entire
coverage on an app, through their phone, and getting everything
delivered.
That seems to be, you know, while there is some
availability, and there is some availability in the health
space, that doesn't seem to be as much widely available in the
individual market as it is in other lines of insurance and in
employer coverage. So I think a lot more flexibility on the
State level for States to be able to do some different things
and to have different options, because States operate very
differently and look very differently. Massachusetts is very
different than Wisconsin and California is very different than
Wisconsin as well.
Mrs. Brooks. I am curious, Mr. Lee, excuse me. Do you have
any other ideas of how we might be increasing enrollment in
healthcare?
Mr. Lee. Yes. First, I would note that we in California
have 11 carriers, have had since day 1. Massachusetts, I
believe, eight; Washington nine. So the experience of many
States that have not done marketing things that have worse risk
pool is unstable for plans. We want a market that works for
consumers which means plans competing, so that is number one,
competition works.
Number two, I would note, and I mentioned it earlier in my
testimony having patient-centered benefit designs. In
California, our standard benefit designs mean there isn't a
$2,000 deductible between patients and their primary care
doctor. That means even healthier people don't say it is not
worth me having insurance. They see value.
The third thing I would note is subsidies. Healthcare as
many of us have noted is too expensive in America. And even at
what Massachusetts has done, below 400 expanding subsidies,
above 400 percent subsidies--California, we issued a report to
our legislature on how to improve affordability. A lot of it is
subsidies, it is reinsurance with a penalty, but it is too
expensive. People need financial help and I would encourage the
committee to look at this report as options.
Mrs. Brooks. Thank you. I yield back.
Mr. Ruiz. Thank you. The Chair now recognizes himself for 5
minutes.
Thank you all for your testimony. Since day 1 the Trump
administration has taken actions that have increased premiums
and out-of-pocket costs for Americans. I am just going to list
a few here since there has been so many administrative actions
to change, repeal, and sabotage the ACA.
In 2017, the Trump administration stopped the cost-sharing
payments that helped reduce out-of-pocket costs for low- and
middle-income Americans. This act alone increased premiums by
20 percent. Health insurance companies and CEOs said that it
would, the action was taken, and they did. While subsidized
consumers are largely protected from these premium increases,
unfortunately many unsubsidized middle-class consumers bear the
brunt of this and have of these premium increases.
Last year, the administration expanded these junk plans,
harming Americans who need comprehensive coverage and get their
health insurance through the ACA. They offer these very
inexpensive premiums, relatively speaking, but they don't cover
much so deductibles are very high and a lot of out-of-pocket
costs are incurred by the patients. In States that opt not to
regulate these plans, consumers will see their premiums
increase and their options dwindle.
The administration issued new 1332 guidance that would
allow States to raise healthcare costs for individuals with
preexisting conditions and undermine the consumer protections
for people with preexisting conditions. The administration
sabotages raising the cost of healthcare for hardworking
Americans.
Mr. Lee, I understand that 2018 premiums in California
increased by double what it would have otherwise been because
the Trump administration terminated these cost-sharing
payments. Is that correct and can you elaborate?
Mr. Lee. Absolutely, it is correct. But I think it is
really important to note that stopping direct cost-sharing
payments meant that States across the Nation did what is called
silver loading, but it is actually a CSR surcharge. Plans have
to pay for that benefit. What we did in California is direct
our plans to not put that surcharge on the off-exchange
product. So in California and many States, unsubsidized
individuals did not have to pay that 12 percent surcharge that
plans had to put on to cover their costs of that program which
is required.
Mr. Ruiz. Did other States that couldn't do that were those
costs then given to the consumers?
Mr. Lee. In many States they had policies to protect off-
exchange individuals, other States did not. Some of the
concerns that we have with the potential of Federal policy to
ban silver loading is it would shift the cost of paying for a
required program on unsubsidized Americans and lower coverage,
raise costs for everybody.
Mr. Ruiz. Can you discuss how these actions by the Trump
administration has impacted access to affordable healthcare
particularly for Americans who are not eligible for the ACA
subsidies?
Mr. Lee. Well, again the----
Mr. Ruiz. Do you have any numbers in terms of people who--
--
Mr. Lee. I don't have numbers, and again there is a number
of policies that have had big effects, the CSR rollback and
caused confusion, many States have worked around that. Bigger
issues in Federal marketplace States are not doing marketing
and promoting plans that don't offer coverage that encourage
healthy people to buy a product that they think is a good deal
that isn't.
Mr. Ruiz. Yes.
Mr. Lee. It is going to cost them later. It costs all of us
in the near term.
Mr. Ruiz. Ms. Gasteier, can you describe the impact of the
Trump administration's termination of these cost-sharing
payments on your State's residents' access to affordable
coverage?
Ms. Gasteier. Yes. So similar to California, we did
everything we could to try to avoid that outcome where the
Trump administration stopped making those CSR payments which
they announced right before the beginning of open enrollment
2018. But we had worked with our Division of Insurance to
prepare for a plan B in the event that they did that. Similar
to other States, we permitted carriers to add that load of CSR
value onto the silver tier plans only on exchange and then we
worked with the population of impacted, unsubsidized people to
make sure they understood they had other options.
But it was incredibly disruptive to our market, of course,
and Massachusetts actually stepped in to cover the cost
exposure of our carriers in the last quarter of 2017.
Mr. Ruiz. One of the things that I want to make clear is
that oftentimes these cost-sharing reduction payments get
characterized as industry bailouts. They are not industry
bailouts, because they are point of care only when needed by
people who only meet certain criteria to help them pay for
their care. So it is not a health insurance bailout, especially
when health insurance companies are making record profits
during this entire time.
I yield back the time and next speaker is Mr. Carter from
Georgia.
Mr. Carter. Thank you, Mr. Chairman. And thank all of you
for being here, we appreciate your attendance.
Mr. Wieske, I am going to start with you. You testified
before this committee, I believe, before the subcommittee in
February of 2017 and talked about how States could improve our
healthcare system and the role that they could play in
improving it. Beyond reinsurance, what are some ways that you
think we could use stability funds to help patients in the
exchange marketplace?
Mr. Wieske. Yes, I think from the perspective that I came
from then and the perspective that I come from now, I think
there are ways to design more affordable benefit options for
consumers to add some flexibility. I think there are ways to
provide some risk sharing. I think if you look at some of the
issues that we have seen with younger folks who are not signing
up for coverage, you know, we may have 13 carriers in the State
of Wisconsin, but they are regional and in some cases we are
seeing no younger folks signing up because of value
propositions.
Redesigning those sort of subsidies, I think re-looking at
the way we, you know, the cost-sharing reduction subsidy issue
related to whether or not you use, you know, payments or
whether or not you use an account-based solution that would
provide some value to consumer, I think there are ways to sort
of, you know, for States to become laboratories of democracy
and experiment and find out what the best solution would be
similar to the way Massachusetts started.
Mr. Carter. OK. Well, thank you for that. Let's move on to
the State-based exchanges bill, the one that we are discussing
here. And correct me if I am wrong, but I believe that you of
the 12 State-based exchanges that you said that only half of
them received, that over half of them received a D or an F
grade; is that correct?
Mr. Wieske. Yes. I think we had some issues with the level
of information that is available through the exchanges. And
this is part of the reason why we support looking at some
private competitive versions in the State and new ways to
enroll. That, you know, what we are looking at now is different
than what we looked at in 2014 and time has moved on for a lot
of the ways consumers shop.
Mr. Carter. And I believe you said that almost three-
fourths of them were worse, or scored worse than the Federal
exchanges.
Mr. Wieske. Yes. And we are seeing that you know, States
are certainly making efforts to improve, but it is a very
expensive process and it is very intensive. And the people who
are bearing the cost of those in a lot of cases, either the
State through general tax revenue or more likely it is through
the consumers who are purchasing coverage through the exchange
for access to that Web site.
Mr. Carter. OK. All right, let's move on to talk about the
navigators. In 2017, we spent 62\1/2\ million dollars on
navigator grants and it yielded us only a 1 percent increase in
ACA enrollment out of those grants? That doesn't seem like it
is a very efficient use of money to me.
Mr. Wieske. Again what we have seen in other lines of
insurance and in other places that there are different ways for
people to get access to coverage, so it is not just that. So I
think navigators are important, a small important piece of that
to do outreach for underserved consumers, but consumers are
buying their coverage in different ways. And a 22-year-old, 27-
year-old is not going to go into a navigator in the same way
other folks are.
Mr. Carter. Right. And the same thing in rural areas. Am I
correct?
Mr. Wieske. Correct. Correct.
Mr. Carter. So that is really something we need to be
concentrating on, younger people as well as our rural areas.
Mr. Wieske. Mm-hmm.
Mr. Carter. Well, thank you for that. I appreciate it.
Mr. Chairman, and I realize you are sitting in for the
chairman, so but I do have to get this on record. And that is
here we are in our third hearing in the subcommittee that has
the broadest jurisdiction over healthcare of any subcommittee
in Congress, and yet already the Oversight and Reform Committee
has had a drug pricing hearing. The Ways and Means Committee
has had a drug pricing hearing and they are on their second one
this week. The Senate Finance Committee has had two hearings.
And this week, the Senate Committee on Aging is having two
hearings on drug pricing.
Now this committee, the Energy and Commerce Committee, has
a record of working in a bipartisan fashion. We have come up
with Cures. We have come up with 21st Century Cures. We have
come up with a number of different things in a bipartisan
fashion. Can you give me an idea or at least relate to the
chairman an idea of when we are going to start talking about
drug pricing that impacts all----
Mr. Ruiz. Yes, sir. Yes, sir.
Mr. Carter [continuing]. Americans and it is a bipartisan
issue?
Mr. Ruiz. Yes, sir. Yes, sir. And I recognize you are the
one pharmacist in our committee.
Mr. Carter. Yes, sir.
Mr. Ruiz. So I appreciate your concern. It reminds me of a
scene in ``The Karate Kid'' where the Master told the Karate
Kid, patience, Daniel-San, patience.
Drug pricing will be a priority in this committee. In fact,
the first hearing is going to be next week and we are going to
tackle this issue straight on and you are going to be gleaming
with happiness when we do.
Mr. Carter. Thank you, Mr. Chairman. I yield back, Daniel-
San.
Mr. Ruiz. Great.
Next, Ms. Blunt Rochester, please.
Ms. Blunt Rochester. Thank you, Mr. Chairman, and thank you
to the panel.
Over the past 2 years, the Trump administration's funding
cuts have prevented marketplace navigators from providing
counsel to consumers looking to enroll in health insurance
plans that work best for them. In Delaware, only one navigator
organization received Federal funding for 2019 open enrollment,
making it even harder for Delaware families to sign up for
coverage. Navigators help communities in my State learn about
their coverage options and enroll in affordable healthcare.
According to the Kaiser Family Foundation study, 40 percent
of uninsured Americans are unaware of the marketplaces and over
75 percent of consumers sought help from navigators because
they either lacked confidence to apply on their own or needed
help understanding their plan choices. For many of the 24,000
Delawareans participating in the individual marketplace,
enrollment specialists are a trusted source they can rely on
when making deeply personal decisions about their health
insurance plan.
Ms. Gasteier, I understand that uninsured Americans are
less likely to be aware of the availability of coverage or even
that subsidies can help them pay for coverage. Is that true?
Ms. Gasteier. That is correct. We found that in
Massachusetts and we work with our navigators to make sure that
we have in-person resources available to educate people about
how affordable options can be for them and people are often
surprised when they find out what they qualify for.
Ms. Blunt Rochester. And can you describe how gutting this
funding for the program, the navigator program, impacts
enrollment, because we just heard from Mr. Carter that it was
only a 1 percent increase in enrollment. Can you talk a little
bit about that?
Ms. Gasteier. Absolutely. So that doesn't square with what
our experience has been in Massachusetts where our navigators
provide immense in-person support in the communities that need
the most help getting into coverage.
So just as an example, our navigators this past open
enrollment period held 400 informational events around the
State educating people about their options, and we find that
the uninsured population even in a well-covered State like
Massachusetts is always churning. It is a new group of people
that need assistance and so their in-person presence in those
communities where they are sort of trusted leaders for many
other services are really key.
I would also like to note that navigators do more than just
get people into coverage once and then walk away. They provide
year-round support to people who need to make updates to their
income information, add a baby, had a life change, and we find
that that assistance for particularly low-income populations is
key to not just getting into coverage but staying covered as
well.
Ms. Blunt Rochester. You know, I was going to ask you, you
brought up the term ``churning,'' and I saw that in your
testimony and was going to ask you if you could expand a little
bit on the concept of churning, the population churning.
Ms. Gasteier. Absolutely. So we find in Massachusetts,
again even with a less than 3 percent uninsurance rate, the
uninsured population is a mix of some people who are
chronically uninsured, but also people who have gaps of 6
months, 12 months in between other kinds of coverage who kind
of fall through the cracks. And that could be because somebody
loses a job and loses job-based coverage, somebody who moves to
Massachusetts from another State and doesn't really know kind
of where to go for help.
And so we try to kind of catch people, you know, people who
may be weighing a COBRA option if they are leaving a job, or
people who may be in between some other kind of life
circumstance, getting a divorce, et cetera. And we find that
that kind of active presence to make sure that the new people
coming into the ranks of the uninsured we are there to catch
them right away.
Ms. Blunt Rochester. Excellent. And my last question was
really another thing I noticed in your testimony was about the
diversity of your State, but also all of the players that are
involved in helping to do the outreach. You mentioned
everything from focusing on 21 different languages to the
different community-based organizations, 16 of which--can you
talk a little bit about that as well?
Ms. Gasteier. Absolutely. So like most States,
Massachusetts is diverse and we have very dense urban
population areas as well as rural areas in the western part of
our State and our navigators are spread out to be present in
places where we know there is a higher risk of uninsurance.
And, for example, in urban areas we find language access and
awareness about affordability programs is a key thing for those
navigators to work on. In our rural areas we will work with
navigators to make sure they are sending people out into the
community.
So in our more rural Greenfield area, for example, the
Franklin County Community Health Center will send their folks
out to drive 20, 30 minutes to meet people at food pantries and
farms and make sure they are providing the kind of assistance
people in those less populated areas need.
Ms. Blunt Rochester. Thank you so much. I yield back.
And well, before I yield back I did want to say I am a
proud cosponsor of this bill and thank Ms. Castor for that and
also the support on the MORE Health Education Act. Thank you.
Mr. Ruiz. Thank you.
Now, Mr. Long, you have 5 minutes.
Mr. Long. Thank you, Mr. Chairman. I appreciate also my
friend Larry Bucshon, here, next to me who yielded his place in
order. I was a little late and missed the gavel. I was actually
cleaning up a spill out in the hallway and somebody said did
you spill something? And I said no, but I am cleaning it up so
somebody else doesn't fall. So, you know, no good deed goes
unpunished, so I was late for the gavel.
Mr. Wieske, if memory serves, when we were talking about
implementing the Affordable Care Act and talking about
navigators, it is in the back of mind it seems like navigators
were not allowed to be navigators if they had any background in
the insurance field. And to me that would be kind of like
taking your car to a mechanic, but oh, you have to pick a
mechanic that has never worked on a car before.
So that being said, you said that the loss of agents in the
individual health insurance market has created many problems
and that navigators are just not a substitute for driving
enrollment. Could you talk about the differences in how agents
and brokers operate compared to navigators both before and
after consumers purchase their insurance and why are not
navigators a substitute for agents?
Mr. Wieske. Yes. When we looked at creating our own
navigator program, which by the way in Wisconsin we are going
to call badgigators, we saw the same issue that you saw that
there was some limited ability for folks with ongoing industry
background to be able to be a navigator, so that created a
concern.
I think in the individual market we have seen insurers stop
paying commissions to a lot of agents in Wisconsin. Again that
reflects at $500 million of lost revenue as they have exited
the market. We may have 13 carriers but they are regional in
nature. They are all small carriers, so those expenses are very
high. That makes it difficult for the folks in the community to
be able to access sort of coverage and expertise. And the
expertise that we require a navigator to have in Wisconsin in
their license is nowhere near what we require what an agent is
required to have.
Mr. Long. You also note that the Federal navigator program
operates largely outside of the current healthcare system and
in many cases the navigator program is centered around large
population centers which we kind of talked about earlier in not
serving the rural areas. What effect does this have for those
rural communities and how important is the role of agents and
brokers in advising consumers out in these rural areas? I
represent a lot of rural areas in Missouri.
Mr. Wieske. We had two sort of issues. We had navigators
come in who were under a navigator grant that we had no idea
existed and were papering a local community with, papering a
local community and we were never told, they were never
registered. They turned out to be licensed through a different
entity so they were OK, we had some concerns with that.
I think rurally, I think in places like Rhinelander,
Wisconsin where my wife is from, there is just not as much
availability. There is just not as many people. They have to
drive hours just to get to a dermatologist, let alone anything
else. But that is an issue in those reasons that they are
primarily served by their local insurance agents.
Mr. Long. And could you talk about how the medical loss
ratio is affecting agents and brokers? Is it inhibiting agents'
and brokers' ability to operate?
Mr. Wieske. Yes. I think again in Wisconsin prior to us
doing the $200 million reinsurance program, our insurers had
loss ratios in excess of a hundred percent after the various
government programs provided reinsurance back to them. That
means that you know, the medical loss ratio, those losses made
it unaffordable for them. They had to cut expenses somewhere
and largely they have cut it out of agents.
And I think in other States where you are cutting it closer
to the 80 percent, we have seen agents, you know, the loss of
agents serving individual consumers, you know, across the
country.
Mr. Long. And do you think that instead of focusing solely
on navigators, which enroll less than 1 percent of the total
enrollees for the plan in the year 2017, we should be
considering amending the medical loss ratio provisions to
ensure greater access to agents and brokers in order to drive
enrollment?
Mr. Wieske. Yes, I think that would, you know, from our
perspective I think that would provide some value. And I think
on top of it, I think allowing some flexibility in enhanced
direct enrollment and some private exchanges, some other folks
who are incentivized to find people who are uncovered and have
some incentives to get there.
It is certainly, you know, different approaches work in
different States so what works in California and Massachusetts
may not work in Wisconsin. But I think incentivizing States to
have a different approach would make some sense.
Mr. Long. OK, thank you. And once again I would like to
thank my friend Larry Bucshon for giving me his slot here. And,
Mr. Chairman, I yield back.
Mr. Ruiz. Thank you.
Mr. Cardenas, you have 5 minutes.
Mr. Cardenas. Thank you very much, Mr. Chairman. I would
like to thank all of you for testifying today and thank you for
bringing your expertise and your perspectives on this very
important issue. Since the ACA's passage I would like to remind
America that 20 million Americans have gained coverage that
otherwise didn't have it before then. The uninsured rate fell
from a high of 18 percent in this country to 11 percent at the
end of 2016.
What is unfortunate is that this Trump administration has
been actively undermining the law and attacking Americans'
access to healthcare. For example, the administration cut their
advertising enrollment budget from $100 million to $10 million,
then they gutted funding for the navigator program by 80
percent. This program helps American families learn about the
coverage options that are available to them.
As anyone can tell you, understanding different healthcare
plans can be difficult and, thankfully, under the Affordable
Care Act we have these navigators, these medical professionals
who can guide people over the phone on the different options
they have to protect their families is very important. This
program is critical for people who might have difficulty
understanding the difficult options or who might be short on
time, for example, single patients working multiple jobs,
families already struggling with their finances, and Americans
who don't speak English as their first language.
English was not my first language but English is now my
most dominant language. I have gone to college, I have an
electrical engineering degree. But going through the coverages
before the Affordable Care Act when I used to provide
healthcare for my employees was always complicated and
difficult. Now that I have my own coverage as a public servant,
it is still very difficult to navigate through that.
So let me make that very, very clear. The Affordable Care
Act did not make healthcare complicated in America, it was
already complicated. The good thing about it is, it is still
complicated. However, 20 more million Americans now have
healthcare that otherwise didn't have it.
I grew up when I was born under healthcare when my father
was a union worker. Later on he became a self-employed
gardener. I was number 11, child number 11, and shortly
thereafter he went off to be a private business owner and that
is when healthcare coverage was unaffordable to them. Now
people in my district like my father who are gardeners now have
access to healthcare and these navigators are very, very
important.
So with that, Mr. Lee, can you describe how navigators help
Californians access affordable coverage? Can you give us a good
example that is working well in California?
Mr. Lee. I absolutely can. I think that--I want to note
that we use agents, licensed agents, 12,000. They cost a lot,
1.7 percent of premium goes to paying agents. That is a lot. It
is over $130 million. We have a $6.7 million navigator program
where we target communities that don't have as many agents
serving them, in particular Spanish-speaking communities.
We do a lot of studies and looking at the fact that agents
are less apt to be serving Spanish-speaking people, so we
specifically contract with entities that serve Spanish-speaking
communities. Similarly, we have seen agents are less apt to
serve African Americans. We target grants to navigators
anchored in the Crenshaw district, anchored in parts of the
community that are otherwise underserved.
So it is very much a complement to a broad program and it
is not just to be scored by enrollment, scored by doing
outreach. The outreach function as you heard from Ms. Morse
Gasteier is part of getting the word out that is particularly
important in Federal marketplace States that as you noted have
abandoned doing marketing. We in California spend $60 million
on marketing and advertising. The Federal Government now spends
10 for 39 States. That money means people know to find
navigators, know to find agents, so it is a complementary
program.
Mr. Cardenas. So basically navigators are helping people
potentially save money, also end up getting coverage that is
more applicable to their situation and their family, and then
on top of that does it translate into Americans having better
access to healthcare when a navigator helps an individual get
to that point?
Mr. Lee. So we study this closely, people that use
navigators or agents make better decisions. They are more apt
to choose a health plan that is right for them than those that
do online only. Whether a web broker or whether other, getting
help means they make a better choice. It also means more people
enroll, they are healthier which lowers costs for everybody. So
it really is one of those things, investing and helping people
understand insurance and get insurance and use insurance means
they get access to care when they need it, better, and lowers
costs for everybody.
Mr. Cardenas. Are navigators needed in rural areas?
Mr. Lee. Absolutely.
Mr. Cardenas. Are navigators, when available, are they
utilized at high rates in rural areas?
Mr. Lee. By high rates--we actually are going to be, we are
re-upping our navigator program in California to fund more
navigators. In some rural areas we don't have enough. So it is
one of the issues we do that we base on analysis and target
where the needs are.
Mr. Cardenas. Thank you very much, Mr. Chairman. I yield
back my time.
Ms. Eshoo [presiding]. I thank the gentleman from
California, excellent questioning. And it really, I think,
brings together a highly diverse State and one that may not be
diverse, and how navigators work it is instructive.
I now would like to recognize 5 minutes for questioning,
the gentleman from Indiana, Mr. Bucshon.
Mr. Bucshon. Thank you.
Mr. Wieske, H.R. 1386 seeks to significantly increase the
funding for the navigator program. In the 2016 and 2017
enrollment year in Indiana, the total amount of grant funds for
navigators was $1,635,961. Three entities in the State were
awarded grants. The total estimate for the number of
individuals who would be enrolled in the ACA the estimate was
3,314, but in reality only 606 people were enrolled for a cost
of nearly $2,700; to be exact, $2,699.61 per enrollee. If the
grant recipients had met their goals, the per enrollee cost
would have been $493.65.
So do you know of any requirements that grant recipients
attain their enrollment goals or penalties for nonattainment?
Mr. Wieske. I am not aware of any.
Mr. Bucshon. OK, neither am I. Do you think there should be
a per-enrollee cap and that assuming we have navigators and
that any unspent funds should be returned to the government?
Mr. Wieske. So, you know, I think the funds, to be honest,
are spent at the time that they are granted. The awards come
very, very late. It is very difficult for the navigator
entities to be able to plan ahead based on when they have
received those grants. And so there have been issues and this
goes back, all the way back to 2014. So, you know, if they are
not spending the money, yes, they should.
But I think, by and large, they are almost required to
spend it the day they get it. And I think, you know, in
Wisconsin we had less than 50 navigators registered, I think,
year to year in any given year.
Mr. Bucshon. Yes, I mean I have strong concerns that it
seems like there is really an incentive to enroll fewer people
because there is no penalty and the legislation doesn't seem
to, this legislation doesn't seem to address the problem. I
mean it seems to me that $2,700 per enrollee is quite a lot
when you were expected to be less than $500 per enrollee. And
it seems like we need to maybe have some guardrails in that
program.
Mr. Wieske. I think what we hope as an organization is that
there are more opportunities for other entities to be able to
enroll, that some of them are much more effective especially
with distinct populations.
Mr. Bucshon. OK.
Mr. Wieske. And so we are hoping for more enhanced direct
enrollment and more private exchanges, more other options, more
flexibility for the individual plans to be able to sign people
up and make it easier from a path perspective instead of making
it harder, especially through the Federal exchange.
Mr. Bucshon. Thank you.
Mr. Lee, California has spent roughly a hundred million
dollars every year for the last 3 years, I think it was 99;
that I mean this year it is estimated at 111.5 million on
advertising. Three years ago, how many people were in
Obamacare, enrolled in Obamacare in California?
Mr. Lee. In the individual market, about 2.4 million.
Mr. Bucshon. OK. And how about after 3 years of a hundred
million in marketing, what is the number?
Mr. Lee. About the same because 40 percent of the people
leave our market every year. So we have to market with a
hundred million because people leave job-based coverage and you
have got to bring them in. So this is like any product, if we
stop marketing we would dwindle away. And by staying constant
we have kept that risk pool which again is 20 percent healthier
than the Federal marketplace which translates directly into 20
percent lower cost, so our 1 percent of premium goes to
marketing.
Mr. Bucshon. OK, so I get that.
Mr. Lee. OK.
Mr. Bucshon. So, but the national experience hasn't been
the same with a large amount of marketing. It really didn't
change the overall enrollment nationally, which is your
experience in California. Three years, a hundred million
dollars, and you have the same number of people. They may not
be the same people, I get that. But that seems like a lot of
money. That is your decision, I am fine with that.
Do you think there is anyone in America that doesn't know
that they have an option to get healthcare on the exchanges, on
Obamacare?
Mr. Lee. Sadly, yes. I know that even in California, where
with our advertising the average Californian sees or hears us
59 times during open enrollment, even in California.
Mr. Bucshon. Well, the question was, is do you think there
is anyone in the United States that doesn't know that if they
don't have healthcare they can't get it on the exchange under
the ACA?
Mr. Lee. Yep. There are absolutely many Americans in
California and across the Nation that don't know that, that
are----
Mr. Bucshon. Yes, I would be interested in you submitting
that estimate to the committee, because I would argue that I
don't know anyone that I come across that doesn't know that
after all the years and the debate on the national level about
Obamacare both pro and con that doesn't know that if they don't
have health coverage--you know, it is one of those things
where, you know, it is not like McDonald's.
You drive by McDonald's and you say, hey, I am hungry, I am
going to stop and get something, right? It seems like
healthcare is more of a destination restaurant where you
decide, hey, I am hungry and I am going to go to this
restaurant specifically, you are not driving by. And I think to
many, in many respects, that maybe you don't agree with that,
that you know, people understand that they can get healthcare
through the exchanges and it is a decision they are making not
to or to do it. I just----
Mr. Lee. I would be happy to----
Mr. Bucshon. That is why I want to say, at the national
level, I just don't see it is justified to spend millions and
millions of dollars marketing something that everybody knows
about.
Thank you, I yield back.
Ms. Eshoo. I thank the gentleman.
Just as an aside, there are millions of people in the
country that don't know that the ACA and Obamacare are one and
the same. So, hard to believe, but it is still the case.
I now would like to recognize the chairman of the full
committee, Mr. Pallone, for 5 minutes of questioning.
Mr. Pallone. Thank you, Madam Chair. In his testimony, Mr.
Wieske recommends that we dismantle the Federal and the State-
based marketplaces where of course millions of Americans
receive health coverage. So I wanted to get a response to that
from Mr. Lee and Ms. Gasteier.
Mr. Lee, can you comment on Mr. Wieske's recommendations
that we shut down the marketplaces and privatize it instead,
and then I am going to ask Ms. Gasteier to answer the same
question.
Mr. Lee. Certainly. So Covered California partners closely
with hundreds of licensed agents, many of which are web-based
entities, web-based brokers. We believe there is a vital role
for them in the private sector. But we are also deeply
concerned that private entities have one purpose, to earn money
based on commissions paid differentially by different insurance
companies and different insurance products.
We in the public sector have one purpose, to lower health
costs for Americans or specifically to California. Web-based
brokers are--I have known them well--are good, bad, and ugly.
There are some great ones. There are some really lousy ones.
And some of their tools are good, some are terrible. But they
have a very different motivation.
Our job in the public sector is to help millions of
Americans get public dollars to lower healthcare costs and to
make healthcare more affordable. Web-based brokers are seeking
to get a best return, and I will note some agents might get 20
percent for one product, 2 percent for another. I would be
quite nervous about what is going to happen to consumers. We
put them first all the time.
Mr. Pallone. And, Ms. Gasteier?
Ms. Gasteier. Similar. We find that having a publicly run
exchange is really critical for the integrity that people know
they will find when they come and shop for products on our
shelf. We offer a curated, competitive marketplace experience
for people that people know when they come and get coverage
from the Health Connector in Massachusetts or healthcare.gov
they are getting safe, trustworthy coverage. And that they can
make apples to apples comparisons, that is helpful for
everybody in terms of affordability and understanding their
options.
I would also say part of the exchange's responsibility is
to administer taxpayer dollars in the way of subsidies and so
we think there is an important role for the public oversight
component of being a public entity and doing that and ensuring
that there is program integrity to these important functions.
Mr. Pallone. I appreciate that because, I mean, obviously,
as you said, the Federal and State-based marketplaces have to
certify plans to ensure that only the products that offer
comprehensive coverage are available for sale and the exchanges
verify eligibility to ensure that low- and moderate-income
Americans who qualify for financial assistance receive the ACA
subsidies.
But let me ask Mr. Lee kind of in the same vein, can you
discuss the risk to consumers if the marketplaces are
privatized?
Mr. Lee. Well, first, we do look very closely at every
health plan that wants to be in our marketplace. They have to
be clear they have good networks, the right benefits and,
sadly, healthcare is one of the areas that has actually failed
consumers. Web-based brokers can sell not just qualified health
plans, but in many States that offer skimpy benefits and they
may get better commissions, those could be looking right next
to products that are there and meaningful. Consumers don't know
and may not know.
And again the danger of the incentive for one agent or
broker is very different than a group like ours which is
publicly accountable. We bring together consumer advocates,
doctors, and others to say what are the right benefit designs,
how do we position plans so that consumers can choose right. I
would be very concerned about many consumers being steered
wrong if we just threw it to the market.
Mr. Pallone. I mean, I agree, you know, many people, you
know, from what I can see end up buying these junk plans and
then have no idea of the lack of coverage.
Ms. Gasteier, similarly, can you discuss the risk of
shifting this responsibility to private insurance companies
given billions of dollars, you know, in subsidies that are at
stake?
Ms. Gasteier. Sure. So I think again it comes back to
exchanges play a really important role in being a source of
trusted, comprehensive coverage where people know what they are
getting is not going to be something that exposes them to costs
if they get sick or that there is sort of tricks in the
coverage itself in terms of what is sold to people. And so in
having a place that is publicly accountable where we are
engaging with carriers, consumer advocates, providers, and
others to design products that are safe and trustworthy for
people, there for them when they need it, is really a critical
component of the public role for exchanges and we found that to
be very effective in Massachusetts.
And again similar to California, we have placed a real
premium on standardizing benefits so that we can ensure that
people when they shop and compare their options really
understand what they are getting and what the differences may
or may not be, but that everything there is safe and reliable.
Mr. Pallone. And I agree. I mean I am very concerned that,
you know, we have billions of dollars in Federal subsidies and,
you know, they could be at risk from fraud, abuse, and waste.
That is my concern.
Thank you, Madam Chair.
Ms. Eshoo. I thank the chairman.
I now would like to recognize the gentleman from Montana,
Mr. Gianforte.
Mr. Gianforte. Thank you, Madam Chair, and thank you for
the panel being here today. Time and time again I hear from
Montanans about the rising cost of healthcare in our State. For
many in Montana, Obamacare has been unaffordable. Watching
their premiums and deductibles continue to grow, while their
benefits shrink has been a frustrating and in some cases a
devastating experience for them. Thankfully, the Trump
administration has proposed real solutions to halt the rise in
healthcare costs. Improving access to short-term, limited
duration insurance plans, eliminating the individual mandate
penalty, and expanding association healthcare plans is giving
choice back in control to Montanans and putting them back in
charge of their healthcare needs.
Unfortunately, the ENROLL Act is not innovative and is a
prime example of policies that misunderstand the needs of rural
communities. Our rural hospitals in Montana are hurting. And
across this country since 2010, 98 rural hospitals have been
closed and almost 700 are vulnerable to closure. Our
communities depend on these vital institutions. When a hospital
closes in a rural community, not only do we lose access to
care, but the community is less sustainable. The region loses
jobs and financial viability.
We need to be working to make sure that people not only
have coverage but also have access to care. A navigator won't
be around to help when a farmer needs emergency medical
services and their local hospital has closed. We need to ensure
that our rural providers are stable and available in case of
emergencies and I look forward to working together to continue
encouraging innovation, affordability, and access to care for
all.
Mr. Wieske, I would like to direct a couple of questions to
you. In your testimony you say that navigators are typically
centered around large population centers with limited
availability in rural communities. Can you speak as to why the
navigator program is less effective in rural areas and frontier
communities like Montana?
Mr. Wieske. I mean it is a matter of economics. I mean the
population is not there and the ability to drive the number of
people you can see in a given time frame in a rural community
is, you know, the distances as you know are significant and so
the effectiveness is an issue.
Mr. Gianforte. OK. In our business we are constantly
looking for ways for continual improvement. When we found a
program in our business that wasn't working we would stop
focusing resources on that program and look to invest
elsewhere.
Mr. Wieske, do you believe that there should be a shift in
our resources away from navigators to other areas that provide
better outcomes for Americans?
Mr. Wieske. I do think there are other ways that we can
provide better access in rural communities in the same way that
you are seeing other insurance lines, you are seeing medical
care and other things delivered in different ways in those
rural communities in order to give them access, so.
Mr. Gianforte. So there might be better ways to use the
money----
Mr. Wieske. Yes.
Mr. Gianforte [continuing]. In rural areas in particular.
OK.
And then, Mr. Wieske, you also talked in your testimony
about transparency in the navigator program. And I constantly
hear from Montanans that they want--they are frustrated with
the lack of transparency, generally, in our healthcare system.
What changes could we make from your experience to make this
program more transparent?
Mr. Wieske. I think for, you know, I think one of the
issues that we have seen is that this is something that States
should be primarily responsible. I think California and
Massachusetts certainly highlighted the way they deal with the
navigator program. I think if States are responsible for the
navigator program directly, I think that will make it a much
more effective program because they understand how the State
works, where the needs are, work with the Medicaid department,
work with the insurance department in order to make that work
better.
Mr. Gianforte. So as we look at public policy, we should
really have a design requirement around more local control at
the State level. You would agree with that?
Mr. Wieske. Yes.
Mr. Gianforte. OK. Thank you so much.
And with that I yield back--yes, I would.
Mr. Burgess. You know, you have reminded me that one of the
principal failures of the Affordable Care Act was when we
allowed Speaker Boehner, Leader Reid, President Obama, to
remove Members of Congress from being forced to go into the
exchanges. That was a mistake.
I did not accept the subsidies that all Members of Congress
get for going in the DC exchange. I went through
healthcare.gov, one of the most miserable experiences I have
ever been through in my life, but it would be important for
Members of Congress to experience what our constituents were
feeling as they faced the very dire prospects of healthcare.gov
not working on its rollout, and then of course the very
expensive and unsubsidized premiums that we faced in the
individual market.
And I am just like anybody else, I bought on price. I
bought a Bronze plan. I had a $6,800 deductible, never
understood why I couldn't couple that with a Health Savings
Account. It was difficult to do that. We could have made it
easy and that would have been easier had we all been required
to go through what we were putting our constituents through.
I thank the gentleman for yielding and yield back to him.
Mr. Gianforte. And, Madam Chair, I yield back.
Ms. Eshoo. I thank the gentleman.
I think, Dr. Burgess, you made a big mistake by not
enrolling because it is terrific. It works beautifully for me.
It has gone beyond my expectations because of its coverage.
Mr. Burgess. But if I----
Ms. Eshoo. No.
Now I would like to recognize the gentleman from Florida. I
did see him, where is he? There, way down there.
Mr. Soto, you have 5 minutes to question.
Mr. Soto. Thank you, Madam Chairwoman. And, first, I am
from Florida, home of the largest Federal exchange for the ACA
in the Nation, with over 1.7 million Floridians. We had an
increase this year. One of the big reasons that the ACA has
been so successful in Florida is because we don't have a lot of
folks with access to employer-based health insurance. So, for
large States like us, this was made to help. My wife and I are
on the insurance plans from the DC exchange. She recently had
surgery which was pretty much covered, so it has been a good
experience for the Soto family.
I want to go through each of the five ways that President
Trump has sabotaged the Affordable Care Act and get an idea
from our witnesses whether it increased or decreased access and
what it would relate to costs. So starting just brief answers
with each of our witnesses going through first the five ways,
one is, it eliminated cost sharing; two, ending high-risk
corridors; three, cutting enrollment dollars and marketing
dollars in half; four, eliminating the individual mandate; and
five, eliminating mandatory Medicaid expansion.
So let's start with the first of these five plagues on
Obamacare, the eliminating of the cost-share subsidies.
Mr. Lee, did this increase access or decrease access by
eliminating the subsidies?
Mr. Lee. I think on the margins it decreased access. But
the fact of silver loading meant some consumers with subsidy
actually had more money to work with so it is actually a trade-
off. It definitely cost the Federal Government more money. It
caused confusion that I think in many markets led health plans
to pull out of their markets, so it is a market-by-market
issue.
Mr. Soto. So, but you would say overall it decreased
access?
Mr. Lee. Overall, decreased.
Mr. Soto. Ms. Gasteier, did it increase or decrease access
or costs?
Ms. Gasteier. It reduced access for the unsubsidized
middle-class population.
Mr. Soto. And, Mr. Wieske, did it increase or decrease?
Mr. Wieske. It increased costs and created some
instabilities.
Mr. Soto. What about on ending the high-risk corridors, Mr.
Lee? How did that affect access and costs?
Mr. Lee. That I think also ended up having--well, I am
actually, I am not sure.
Mr. Soto. OK. You are not sure.
Mr. Lee. So I will pass.
Mr. Soto. What about Ms. Gasteier? How did it affect access
or costs?
Ms. Gasteier. I would say all of the reductions or
disruption to any of the three Rs--risk corridors, reinsurance,
and risk adjustment--have been, have reduced access and
stability just in general to the extent that each of those
programs have either been ended or they have hit turbulence in
various ways.
Mr. Soto. And, Mr. Wieske?
Mr. Wieske. I think with the three Rs, I think the decision
early on to federalize them and not to go State by State
created significant issues in the market outside of it, which
predates most of the issues surrounding it.
Mr. Soto. What about cutting marketing dollars and
enrollment time, Mr. Lee? How did that affect access and costs?
Mr. Lee. Dramatically reduced access, dramatically has
increased premiums across much of the Nation except for those
States that have State-based marketplaces that continue to do
marketing.
Mr. Soto. And, Ms. Gasteier, how did that affect costs and
access?
Ms. Gasteier. I would presume elsewhere it has reduced
access. Like California, Massachusetts has been able to stay
level with respect to its investment in outreach and marketing
so has stayed the same.
Mr. Soto. Mr. Wieske?
Mr. Wieske. We just didn't see that effect, that negative
effect.
Mr. Soto. OK. What about eliminating the individual
mandate? Mr. Lee, how did that affect access and cost?
Mr. Lee. It has raised premiums across both California and
the Nation and decreased enrollment. Many fewer, hundreds of
thousands of fewer Californians have insurance because of that.
Mr. Soto. Ms. Gasteier?
Ms. Gasteier. We have stayed insulated from those impacts
in Massachusetts because we have our own individual mandate,
but we imagine if we didn't have a tool like that either State-
or federally based it would reduce access.
Mr. Soto. Mr. Wieske?
Mr. Wieske. Specifically in Wisconsin, our rates were so
high that we are not convinced that it had a significant impact
on enrollment.
Mr. Soto. OK. And, finally, not requiring Medicaid
expansion, I realize the courts helped in that, how did that
affect access and costs?
Mr. Lee. Well, I think that in States like Florida, the
reason you have a big exchange is you have many, many
Floridians who do not benefit from the Medicaid program, and I
think Californians benefit. I think there are millions of
Americans not benefiting from that coverage expansion.
Mr. Soto. Ms. Gasteier?
Ms. Gasteier. Similar, I think the Affordable Care Act put
puzzle pieces in place with the assumption that Medicaid
expansion would catch a particular population of people and
ensure that they had guaranteed coverage, so obviously
Massachusetts has taken advantage of that to great effect. And
so I would expect that that has dramatically reduced coverage
elsewhere where that has not been mandatory.
Mr. Soto. Mr. Wieske?
Mr. Wieske. And we haven't seen a negative impact from that
in where I was in Wisconsin. We saw a positive impact.
Mr. Soto. Thank you.
Mr. Wieske. And we had a unique approach.
Mr. Soto. Thank you. My time has expired.
Ms. Eshoo. I thank the gentleman for his excellent
questions.
Now I have the pleasure of recognizing Mr. Bilirakis from
Florida to question for 5 minutes. And I would like to note
that for those that may not know, his father preceded him in
Congress and was the chairman of this subcommittee, a wonderful
chairman and still a wonderful friend. So you have 5 minutes to
question, Mr. Bilirakis.
Mr. Bilirakis. Thank you. I appreciate that. Thank you so
very much. It is an honor to serve on this committee and to
serve under you as the chairwoman, and also the ranking member.
I won't forget that.
So anyway, thank you very much and thank you for your
testimony. I appreciate it very much.
Mr. Wieske, in your testimony you talked about how in
Wisconsin the insurance markets were damaged by the exchanges.
The number of insurance companies withdrew from the market and
premiums kept moving up. That problem isn't isolated just to
Wisconsin. In Florida we have less participation in the
exchange today than 2014 and the majority of counties only have
one insurance carrier. As a matter of fact, the county that I
represent, I represent three counties, one of the counties only
has one insurance and it is a carrier and it is--I think the
population is close to 500,000.
Last year, Wisconsin received a 1332 State innovation
waiver to reestablish a reinsurance program and other States
have applied or received a waiver for reinsurance in other
programs. Are 1332 waivers still available for States to use?
This is for again Mr. Wieske.
Mr. Wieske. They are, yes.
Mr. Bilirakis. They are. OK, thank you.
Does it make sense to move a standalone reinsurance bill by
itself with no reforms in it, and wouldn't it be better to move
legislation to reform the 1332 State innovation waiver to give
greater flexibility to States to reform and repair their
insurance markets? What do you think of that?
Mr. Wieske. Yes, I think given the issues surrounding the
risk pool that we have all sort of talked about especially in
States like Wisconsin, Iowa, and other States, I think it is
important not to just look at reinsurance. Reinsurance shifts
who pays, as I stated, but we need to find some new ways to
sort of improve that risk pool. So I think a broader 1332 will
have some value for States.
Mr. Bilirakis. OK. This question is regarding State
exchanges again.
Mr. Wieske, one of the bills under consideration today
would spend $200 million for more State-based exchanges.
Wouldn't it make more sense to have private entities running
the exchanges rather than government entities? What do you
think of that?
Mr. Wieske. I think Wisconsin and a lot of other States
like it could not afford with the 200 million to run its own
exchange. So in order to have a first-class experience, I think
looking at private entities to be able to offer additional
options makes a lot of sense.
Mr. Bilirakis. OK. Wouldn't it make more sense again as you
said to have the private entity running the exchanges rather
than the government entities? Can we have businesses assume the
financial risk of running an exchange rather than the Federal
Government bankrolling the States? What are the barriers to
having private exchanges provide this particular service?
Mr. Wieske. I think one of the things to understand is that
there is still a State regulatory process in place that reviews
the plans, reviews the insurers, licenses the agent, licensing
the insurers, checks their financial solvency, does everything
soup to nuts, currently, in a number of States. And they can
serve, continue to serve that role and it changes,
functionally, a Web site and an outreach entity to be able to
get consumers to sign up for coverage. They existed before the
ACA. They exist now, after the ACA.
And I think what our thought is, is that having a first-in-
class experience and having an entity, entities offering with
State oversight the in-exchange role makes a lot of sense
financially. There is a lot less risk.
Mr. Bilirakis. Thank you very much.
Unless the ranking member would like the balance of my
time, I yield back.
Mr. Burgess. Well, thank you. In fact, I would like to take
just a minute.
Mr. Bilirakis. I figured you would.
Mr. Burgess. It is not really the subject of what this
subcommittee is considering today, but, Madam Chair, I just
feel like this committee has had such a good relationship with
Dr. Scott Gottlieb over the last 2 years and certainly I don't
know what was involved in his decision to make his announcement
yesterday, but I will just say he will be missed certainly by
me personally and I believe by the subcommittee generally. And
we certainly want to wish him well in whatever his future
endeavors.
I do not know that we have ever had a brighter witness here
at the witness table than Dr. Gottlieb and he was never shy
about telling us that also, but he will be missed. And I really
appreciated the enthusiasm with which he took the job of
administrator of the Food and Drug Administration and, really,
under his leadership some very positive changes occurred at
that agency.
So that is all I wanted to say. I will yield back to the
gentleman from Florida.
Mr. Bilirakis. And I will yield back, Madam Chair. Thank
you.
Ms. Eshoo. Just to thank you, Mr. Bilirakis.
I would like to add my voice to that of the ranking member.
I think that our country has been fortunate to have had Dr.
Gottlieb as the commissioner of the FDA. It is an agency that
the American people, I believe, trust. They always want it to
uphold the highest standards because it stands between them and
God knows what if the wrong decisions are made.
So I think that we have been more than fortunate to have
him as FDA commissioner. I think that he has worked very well
with the committee, both sides of the aisle. In his statement
he said he was getting tired of commuting from Connecticut. And
I thought I wished I had known that ahead of time, because I
would have called him and encouraged to keep commuting, because
I make a much longer commute across the country every week to
California, not to Connecticut.
So I know that on behalf of this subcommittee that we wish
him well, and we thank him. We thank him for, I think,
exemplary public service.
So with that I will ask unanimous consent to enter into the
record the following, and it is kind of a long list: a
statement from the American Lung Association in support of
H.R.1425; a statement from the American Lung Association in
support of H.R. 1386; a letter from the American Medical
Association in support of H.R. 1386, 1385, and 1425; a
statement for the record from the American Cancer Society
Cancer Action in support of H.R. 1386, 1385, and 1425; a letter
from the Blue Cross Blue Shield Association in support of 1386,
1385, and 1425; written from the Asian and Pacific Islander
American Health Forum in support of H.R. 1386, 1385, and 1425;
a letter in support of H.R. 1386 from the Young Invincibles; a
report on ``Exploring the Impact of State and Federal Actions
on Enrollment in the Individual Market: A Comparison of the
Federal Marketplace and California, Massachusetts, and
Washington''; a statement from the American Health Insurance
Plans; and a letter from the Healthcare Leadership Council.
So we ask that that--I am asking unanimous consent that we
enter all of what I just read into the record, including what
the ranking member had raised earlier.
Do you have something that you would like to add?
Mr. Burgess. Yes, if I could be recognized for additional
unanimous consent.
Ms. Eshoo. Certainly.
Mr. Burgess. I would like to ask unanimous consent to
insert into the record the text of the bill that I introduced,
H.R. 1510, and I would like to introduce into the record a
letter from Blue Cross Blue Shield Association in support of
that Bill 1510.
Ms. Eshoo. So ordered.
[The information appears at the conclusion of the hearing.]
Ms. Eshoo. I want to thank again--I started out by thanking
the witnesses, I want to close by thanking you. You know, it is
not very often said around here that we are so dependent upon
experts in our country. It never ceases to amaze me the
knowledge that resides in experts on so many issues.
And so when you come forward and answer our questions that
all becomes part of the record and that stays there for a long
time, but it also remains with us because we learn from you. No
one can say to any of you, you don't know what you are talking
about. You have lived it. You have done it. You have brought
your expertise here, and we are, on behalf of all of our
constituents and the American people, really very grateful to
you for the time and the expertise that you have shared with
us.
So with that the subcommittee is adjourned. Thank you,
everyone.
Mr. Burgess. And we have 5 days.
Ms. Eshoo. Oh, we have 5 days for Members--I said that at
the beginning of the hearing.
Mr. Burgess. Oh, OK.
Ms. Eshoo. But I will say it again--time for Members to
submit their comments for the record.
[Whereupon, at 12:32 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[all]