tv Federal Officials Testify on Affordable Care Act Waste Fraud and Abuse CSPAN January 31, 2017 2:01pm-3:35pm EST
capitol hill. gao officials and health and human services department inspector general testifying in a hearing that just got under way, house subcommittee, hearing about potential areas of fraud and abuse in the 2010 health care law. you're watching live coverage here on c-span 3. >> welcome mr. mitchell to the committee this afternoon. let's start with opening statements and get right to our witnesses and we appreciate our witnesses being here today, talking about an important -- this important subject. health insurance premiums are soaring. president obama and the administration promised multiple times that affordable care act would lower health insurance premiums by $2500. american families are still waiting to see those reductions. instead, the health insurance premiums have skyrocketed under the affordable care act. there's about 25% average
increase in premiums just this year. some americans have experienced even higher premium increases and had to drop coverage because it became too darn expensive. under the affordable care act, they are not just rising premiums. many have seen massive increases in the cost of their deductible. health care cost are one of the top care costs for families and people with insurance often times can't afford to use it, especially individuals enrolled in high deductible health plans under the aca. there are promises from the administration about increased competition. in fact though, in most parts of the country there are only one or two insure yrs participatingn the exchange. losses on the exchange are reaching into the billions of dollars. several large insure urs aers a pulling out of the ex change.
there were 12 participating in north carolina. today only two are participating in the exchanges in that state. in many areas, there is only one carrying coverage on the exchange. the american affordable care act was sold as one -- on one of the biggest political misleading statements of all time. if you like your plan, you can keep it. if you like your doctor, can you keep your doctor. even the president today apologize for that one. as we examine health care proposals, it is important to keep this in mind. while many received coverage under the affordable care act, many more are harmed by the skyrocketing health care costs. today i want it hear from health and human services inspector general and gao of the health care act and their work in this area. both of these agencies have done excellent work reviewing affordable care act premiums and
i want it hear their recommendations on how we can use lessons learned from implementation of some of these programs to improve future programs. the work of hhsoig is critical to ensuring health and human services programs and i'm constantly impressed with the great work that comes out of their office. i look forward to hearing about the oig's work relating to the affordable care act. thank you, mrs. robinson, for testifying on behalf of oig's office today. the office has done great work examining early impact of affordable care act on private health insurance markets and i look forward to learning more about their finings. thank you for testifying on behalf of gao today. we are pleased to have mr. jonathan seagull to hear about his experiences under the aoc. i look forward to your discussion today. congress needs to find way it make sure americans have access
to affordable health insurance and can choose among a variety of plans. with that i would now yield to our ranking member for his opening statement, then right to our witnesses in our hearing. gentlemen, from illinois is recognized. >> thank you, mr. chairman. thank you to our witnesses for joining us today. millions of people now have high quality affordable health care as a result of the affordable care act. one of my constituents wrote this to me and i quote, we are so grateful for the changes brought about by the aca in our situation. they have truly been life-changing for us. for the first time our family has access to dental coverage. this means we actually good to the dentist. before this, was a rare thing and only when in pain. for the first time our preventative care is covered. this means my children are up-to-date on their vaccines and physicals because it is not costing me hundreds of dollars out of pocket. for the first time, we have hope
that we may be able to dig out of the mountain of medical debt we have accumulated through a 10,000 a year deductible plan that we were locked into because of preexisting conditions because we now can get reasonable coverage through the market place. mr. chairman, there are millions of people with similar stories all across the country and all of our offices are flooded by correspondents relating the same. in addition, as a former small businessman, i know that the aca has allowed entrepreneurs to flourish because they don't have to worry that starting a new business means they can't afford health care. when people have high quality affordable health care they can afford to follow their dreams, their talent, become entrepreneurs like myself, start businesses, create jobs and grow the economy. when they are fearful about losing their health insurance or are buried under medical debt, none of those things are possible.
the affordable care act empowered millions of people. one of them is a witness today, mr. jonathan seagull and thank you, sir, for joining us. he will testify that guarantee of affordable coverage under the aca enabled hip m to start a ne business. there is fear those gains will be taken away by house republicans if and when they repeal the affordable care act. in fact, today, house rep republicans have not offered an alternative to replace@ca that offers the same coverage at a similar or lower cost. let me repeat that. today house republicans have not offered alternative to replace@ca that offers the same coverage at a similar or lower cost. the consequences will be seriously harmful to americans. first, a recent cbo and joint committee on taxation analysis estimate that 18 million
americans would lose their health insurance in just the first year following repeal without replacement. second the cbo and joint committee estimate that premiums would increase by 20 to 25% more than currently projected in the first planned year following repeal. these consequences are not limited to those who bought their health care on exchanges. aca protections apply to all health plans including those that many americans get through their employer. employer provide insurance plans would no longer be required to offer the same level of care that they do today. employees with preexisting conditions would have restrictions placed on their care. the lifetime cap on out of pocket expenses would disappear. and we would return to the days when parent could no longer have young adult children under 26 on their plans. removing these protections will hurt businesses, workers and families in my district and across the country. third, and finally, the economic
consequences of repeal without replace would be catastrophic. my home state of illinois stand to lose over 100,000 jobs and $13 billion in gross state output. my district alone would lose 4,000 jobs. ohio, your state, your home state, sir, could lose up to 126,000 jobs. repealing without replacing is full hardy and reckless. what house republicans have proposed so far inspires little trust their plans will actually help americans. we will not sit idly by while the aca is torn down with no replacement. reneed a replacement that offered coverage at similar or lower cost. i yield the balance of my time. >> thank you, gentlemen. we have three goals for today hearing. one, the impact of aca on health insurance market including afford gilt quality and access too.
we want to see how tax dollars were spent. if there is any waste, frayed in those areas.uyed in those areas.ed in those areas.d in those areas. we have a big debate in congress and we want as much information as we can get. so those are our three goals. well hold the record open for five legislative days for any members who would like to submit a written statement and i want it recognize mr. growthman for being here. first time he has been part of the subcommittee and recognize if he would like a short opening statement. our new vice chair, mr. walker, from north carolina. >> jim, thank you for your work as chairman. and hope we are able to really fulfill our promises to the american people in getting to the bottom of some of the issues and concerns we have with@ca as a whole. i have been privileged to work with you the last few years.
we look forward to seeing what we can get done. thanks. privileged to be part of it. >> ms. vicki robin sson is withs today as well as mr. john dicken, director of health care at government accountability office. and jonathan seagull, welcome. all will be sworn in. please rise and raise your right hands if you would please. do you solemnly swear or affirm the testimony you are about to give will be the truth, whole truth and nothing but the truth so help you god? please show each of you have answered in the affirmative. you are way ahead of me. let's start with our first witness, ms. robinson, you ha.
>> good morning. thank you for the opportunity to discuss our work overseeing the federal and state health insurance marketplaces established under the affordable care act. we are committed to combatting fraud, waste and abuse and impro monthsing integrity and effectiveness in programs run by the department of health and human services. our work looks retrospectively to determine whether programs have worked as they should and prospectively to identify weaknesses to avoid and best practices to replicate in the future. to oversee the marketplaces we examined core program integrity questions. our taxpayer funds being expended correctly for their intended uses. are the right people getting the right benefits. is the department managing and administering the programs effectively and efficiently?
we identified three types of vowelenerbilities. one, the need for tighter payment controls to prevent wasteful spending. two, the need for more reliable processes to insure accurate ability terminations for applicants. and three, the need for improved management. our findings and recommendations are detailed in my written testimony and in our reports. let me offer some examples starting with cms. cms was hampered in its administration of the advanced premium tax credit that provides subsidies to help consumers afford insurance. at the start, cms used a manual financial process that did not collect data on enrollee by enrollee policy level payments. rather cms collected only aggregated payment data from
insurers. as a result we found that cms was not able to verify the accuracy of payments to insurers nor than enrollees benefitting from the payments had paid their portion of the premium as required. we also found efficiencies in th the establishment grant program. most states we examined failed to allocate cost properly between their establishment grant funding and funding for other programs that shared systems with the marketplaces such as medicaid. this resulted in states overclaiming federal establishment grant funding. further, we found vulnerabilities and eligibility verification processes about the federal and state marketplaces. for example we found the marketplaces did not always properly verify social security numbers, citizenship, and
household income. finally, we identified weaknesses in management of the federal marketplace including poor oversight of the many contractors engaged to build it. for example, cms waited far too long no hire a systems integrated to coordinate the work of the contractors. we examined cms's management of the federal marketplace across the five-year period. we identified many missteps that contributed to the poor launch of the healthcare.gov website. we also identified better management practices that contributed to subsequent improvement. these included for example a signing clear project leadership and fully integrating technical and policy staff. our work offers important lessons to inform management of complex policy and technology projects now and in the future. to close, protecting taxpayer investments and consumers
requires vigilance and sustained focus. program integrity should remain a priority for the designed a operation of current and future programs. preventing, detecting, and remediating problems is our collective mission. thank you again for inviting me to appear today and i look forward to answering your questions. >> thank you, ms. robinson. mr. dicken, you're recognized for five minutes. >> thank you. i'm pleased to be here today as subcommittee discusses the patient protection and affordable care act. ms. robinson highlighted some of the inspector general findings related to program integrity. my comments focus on the affordable care act in relation to health insurance markets highlighting findings from recent gao reports on insurer availability variation in ream yums and enrollee satisfaction.
many of these provisions took effect in 2014. for example the act prohibits issuers from denying coverage or premiums based on health status or gender. there are tooeriers, gold, silv and platinum. also haej insurance exchanges in each state from which participants select from a plan. about 11 million puarticipants purchased in 2016. the law required gao to report on competition and concentration in health insurance markets. in a 2016 report, we found that health insurance markets were
concentrated among a small number of issuers in most states from 2010 through 2014. before the three margelargest is had at least 80% of enrollment. during the first year, it was generally more concentrated among a few issuers and true for overall markets. gao is also reported on consumers access to health plans offered through the exchanges. in 38 states for which gao had sufficiently reliable data, most had six or more broad, virl asi and gold tier plans available. for example, 94% of counties had at least six silver tier plans available in 2015. since gaoish i'd the report, hhs reported the decline in the number of issuers participating in the federally facilitated exchanges in 2017.
according to hhs all consumers continue to have multiple plan ochgss but for about 21% of them the options were limited to plans offered by sage issuer. gao also reported on the considerable variation on premiums available to consumers in 2014 and 2015. for example, in a arizona in 2015, the lowest cost silver plan for a 30-year-old consumer was $147 per month. but in may, the lowest cost silver plan for 30-year-old was $237 per month. the range of premiums also varied considerably by state. while the lowest cost silver plan for a 30-year-old arizona, the highest cost silver plan was $545 per month. a difference of 270%. in contrast, in rode island 2015 premiums for silver plans
available to 30-year-old range from $217 to $285 per month. a different of just 3 it%. more recent analysis by hhs found premiums for exchange plans increased more in 2017 than in earlier years. average of 25% from 2016 to 2017 for the second lowest cost silver plans in states that use federal facility of exchange. in comparison average premiums for these plans increased 2% from 2014 to 2015 and 7% from 2015 to 2016. finally, rhelet me close with k findings from a 2016 gao report on enrollee experience answers health plans offered through the exchanges. most exchange enrollees report being satisfied overall with their plans in 2014 through 2016. according to three thagsal surveys. this report satisfaction was
either somewhat lower than or similar to that of enrollees and employer sponsor plans. while most enrollees express overall satisfaction, concerns in enrollees experiences with exchange plans were revealed in other information gao collected from literature. often consistent with long standing consumer concerns about private health care insurance generally such as fordbility of out of pocket expenses and coverage terminology. mr. chaermirman, this concludes statement. i'm here for questions anyone may have. >> thank you, mr. seagull, you're recognized. >> thank you, mr. chairman. ranking member. members of the committee. a pleasure to be here today. i come as a husband, father and intend ept businessman but most of all as a citizen of our belov beloved country. here is my story.
i was laid off with a high school child and other just graduated. wa i was lucky. i was given a severance and cobra insurance to cover in 2013. the effective launch of aca was only year away. because of aca i would start this business knowing my family would get affordable insurance no matter how the business is. without aca i wouldn't have had the courage to launch my own business but would have sought traditional employment. we purchased our insurance without subsidy, the gold plan. we pay $1300 a month plus $60 a nor dental. because new york took the med cad expansion, i knew my family would get affordable health care. afford gilt is a big issue.
my spouse of 30 years has ms. she is the bravest person i know. t giving herself shots for years. the cost is $30,000. people have access to their meds without charge but we don't know when it will end. there is the cost of ongoing visits. my children are now 21 and 23. they are working at jobs that do not provide health insurance. we make sure they have it today. it a great comfort to an aging parent to know the aca will continue to have affordable coverage when they turn 26 no matter their employment situation. all of these ways@ca enhances security, and furthers freedom. we find that employer based insurance just didn't work or isn't available to them. possible replacement of aca with
insurance options that are unwise, inat kwat and discriminatory threatens us. we aren't making much more than the point of sub is you dis. about 20 to 25% of our income goes for health care today.is y. about 20 to 25% of our income goes for health care today.you . about 20 to 25% of our income goes for health care today.dis. about 20 to 25% of our income goes for health care today. what happened if without the aca the cost goes up to $3,000 or more a month. how can anyone afford that. my spouse is after all only 57 years old. what happens if no one will insure her at any price. i got to tell you there are few words more frightenings that those the term is a misstatement. my spouse is an high risk p. we don't know what illness will strike us or when. this is real complaint some
about my spouse. once it is clear that the cost not the risk that is a problem it is obviously why so many of us fear high risk pools to work for the patient you have to have clear rules, food gets put in them. you have to insure they don't pay for more insurance than others would way and ensure they get the care they need. i yet to see a proposal that provides protections. instead vague promises of federal and state support. high risk pools are not health care, they are just vicious cruelty to ordinary americans who have played by the rules but had wad luck. a better name for high risk pools is death pools. my view it is to shun off one side the folks that cost too much. let mem die out of sight and out of mind. my spouse is not someone to cast away. she is a human being who has as much right to quality health
insurance and care at a price affordable to my any of us. the object of this professal seems to reduce el a gentlemigi. the real goal is punishing low income people for being low income. my children and all people with low income do not dezefb this. they are children of god just like the rest of us. in cloeing the story of the aca is not just my story or the story of millions of other people, it is first and mofor mt a story about democracy. the argument over health care insurance is the latest battle in the never ending struggle that lincoln described many years ago, struggle that to me defined the united states and high purposes of zit zen shil, the government of the people by the people and for the people shall not perish from the earth. thank you. >> thank you, mr. siegel.
>> you are not receiving a subsidy from the government in a form of a tax credit or anything else? >> no, correct. no subsidy. >> you pay for your insurance on your own? >> entirely. have since day one. >> just wanted to make that clear. >> thank you, mr. chairman. mr. siegel, thank you for the courage you expressed today in sharing your story. i'm impressed as to how much you love your wife. me too. my wife is a nurse. married 24 years. worked in refugee camps of europe. seen destitute, health, funerals, you name it, been across the board. i'm also concerned about the millions of people who have been damaged by even unintentional,
by the affordable care act. if you want to get down to raw numbers, 11% of north carolynians don't have insurance of any kind. i don't want to get into all of the bits and pieces but according to the most neutral polling in 25% of population have been damaged by higher premiums, lost insurance or something along when it comes to dealing with obama care, affordable care act. even moving from the individual aspect and getting it to the business it was president clinton and minnesota governor who recently talked about the damage that aca cost for small businesses. according to a gal yum poll not too long ago, 77% believe it should be altered, overhauled or completely repealed. my questions today after giving a fe fossa there is specifically i would like it talk to mr. dicken about questions that we have on broken promises when it
comes to the treasury. under obama care insurance section 1341, directed hhs to collect $5 billion. and send it directly to united states treasury to pay for bomb care's cost. the treasury was disregard end american people as of 2015, hhs denied the treasury and taxpayers $3.5 billion they were owed. so i don't have a lot of questions but one major one here is, would be this, if i would answer. in september of last year, gao issue he a ruling considering hhs's actions. what did gao determine he with this report? >> thank you, congressman, walker. you're correct, the last gao did issue a legal opinion looking at
the payments under the program as you indicated affordable care act indicated payments collected were to be provided some to the general treasury and some in reinsurance comments to the payers. in fact the collections were less than the amount what hhs had fully intended to include in the reinsurance and paid all of that insurers instead. legal opinion indicated that in fact those palts should have been to the general treasury. >> obviously this is a pattern for the last three years. can you share what reasoning was as far as disregarding the treasury which as we know is basically taxpayers money. why was it disregarded? can you brief us on that? >> yeah. i would defer to hhs attorneys,
the legal reasoning there. but in general because collections were less than the amount they are authorized, that was the priority that hhs made in giving reinsurance to the assurors first without payments to treasury. >> do you still -- let me ask this. do you have any idea how much is owed to previous administration refused tore denied to pay? >> i don't have that at my fingertips but certainly can follow up. >> do you have any kind of ballpark? billions of dollars? >> i think the requirement was for several billion treasury. those o could still be made because the collections were 2016 would be made in 2017. some of that is still being reconcileed. >> thank you. the chair yields back. >> thank you. now to the ranking member from illinois for his five minutes. >> thank you. i would like it yield to the ranking member of the general committee it make a few comments, please.
>> thank you, very much. boy like to take the opportunity to officially welcome congressman morthy to his first oversight committee hearing. we're very fortunate to have him on our committee. he brings valuable perfective as a small businessman and entrepreneur and is a lawyer and public service. servant. serving on this subcommittee. this subcommittee takes up some of the most important issues that commee before our committe not the least of which is the affordable care act. recent polls show, that number
one issue, even beyond this, is another that he has at some point that is the cost of prescription drugs. that the number one issue with independent, democrats and republicans. so in recent hearings we've had testimony about how mr. chairman and ranking member about how the cost of prescription drugs, these folks he who are improperly and because of greed in raise is prices of these drugs that too is going into the cost of health care and very significant.prices of these dru is going into the cost of health care and very significant. we are truly at a crossroads of the aca. mo moving forward to repeal the law without having a replacement, as a matter of fact they didn't maid make the deadline.
it would be disastrous for tens of millions of americans who have gained coverage thanks to the aca. it would also be disastrous of americans with employer-provide insurance who have benefitted from the aca's many consumer protections. people with employer provided insurance no longer have caps, the annual and lifetime coverage benefits. they now have free preventative care like cholesterol screenings and mammograms. and there is no price that you can pay or put on prevention. no price that you can put on wellness. they cannot be treated any differently by their insurance company because of a preexisting condition. repealing aca would also have disastrous effects on our economy. repeal would completely destabilize the insurance market. drive premiums up and cost
millions of jobs across our entire country. this is not what american people want and certainly not what they need. all types of statistics have been cited with regard to people who want to repeal. but you need to dig into those numbers and discover that there are a whole group of people that want to expand the affordable care act. and so we've got a situation here where we have to keep in mind that health care should not be a privilege. it must be a right. when you have an unhealthy society you have a society that cannot be all that god meant for it to be. so i am excited about our new ranking member. i know that he will bring much to this discussion. he is hear for a reason and that is to make a difference. i would only say this.
mr. ranking member, you weren't here when we voted for the affordable care act. but i've told my constituents many times that in my 14 years as a member of the legislature and my 21 years as a member of this legislature, there is nothing i can done that is more important than pulling that lef for the affordable care act. i have absolutely unequivocally no doubt that we have saved lives and will continue to save lives. we can repair things that need to be done but we must make sure that the american people are healthy. and with that, i would thank the chairman for -- ranking member for yielding. and i yield back. >> i thank the gentlemen. the ranking member is recognized. >> thank you mr. ranking member. i agree with your comments that it appears to me we should mend the aca, not end it.
mend, don't end it. i have a couple questions. thank you so much to the witnesses for coming today. i was heartened to learn from mr. diblgen that people on the aca were about as satisfied as far as their satisfaction levels as compared to those in employment plans. is that generally correct? >> yes. the surveys we saw, they were generally satisfaction levels in 70 to 8 will 0%. and similar to somewhat lower for spopsor plans. >> i would surmise their levels would go down if they had no health coverage. if there is repeal without replacement, correct? >> this is satisfaction with health plans. so i can't speak to what satisfies would be without health plans. >> right. ms. robinson, thank you for your testimony in investigating issues related to the aca. i presume you didn't look waste
fraud and abuse. >>. [ inaudible ] >> thank you. sorry. thank you for that question. we have done a lot of work in looking at fraud use an abuse in medicare and hhs programs before the affordable care act. our jurisdiction is to look at programs of the department so if you are asking whether we looked at sort of private insurance before the affordable care act, we did not. >> right. >> mr. siegel, i want it sincerely thank you for appearing today. i know you run a small business and you are taking time-out of your small business to be here today. i know that's a big sacrifice on your part. i want to ask a few questions about your experience with the aca. you testified after being laid off in 2012 you wouldn't have had the ability to start your
own business had it not been for@ca. can you explain why that is? >> i wopt have had the courage. the reason why i wouldn't have had the courage is pause the prospect of not having insurance especially for my wife is frightening. you can spend tens of thousands of dollars year for medication for ms. even if you don't have relapses or other problems, which we have been spared. and she was 53. i got 53 -- 52 oor 53, whatever it was. at least 12 years to medicare. i can't screw around with that. i can't take a chance. she has to have insurance. and the private market in new york before aca, as i said, was incredibly expensive. it is cheaper under the aca than it was before. that's not true of every state, but it is true of new york. >> as small businessman myself,
i understand the risk of going out on your own. we want more people to do what you did. we want people to go out on their own and create new businesses and new jobs. that's how we create economy. worries about health insurance, whether it is affordable or cover preexisting conditions, can hold perspective entrepreneurs back. and economic effect of repeal are not just anecdotal. according to the common wealth funding with the repeal aging t aca would lose 2 million jobs alone mostly from the private sector. can you tell committee the effect of repeal. >> with the aca repeal, i'm not sure i could get insurance for my wife. my kids, i don't know. they will turn 26, 27 soon
enough. and i'll pay for them as long as can i get them insurance, but i don't know. it is about that simple. what does that do to db-what are your anxiety levels? >> i haven't slept that well since the inauguration, to be honest. >> it affected your health? >> it afaeaffected my anxiety. i don't know about anything else yet. we will see. i hope not. >> mr. siegel, can you tell us about your business and how it has grown since you started? >> sure. we are small market research firm. we domainly survey research on product development and we have grown from essentially nothing our first year to this year, i'm not going to tell how much we make because we are an llc and that will tell you how much i make, but i made a good living this last year. i will put it that way. >> great.
thank you. >> thank the gentleman from illinois. mrs. robinson, in your opening statement, you talk about how most statements didn't have any type of accurate accounting for how aca dollars were allocated whaen they got for the feds. something about that effect in your opening statement. >> thank you, chairman. i think you are referring to the work we did looking at the establishment grant program which looked at cost allegation. so if you've got a marketplace in the states, it is sharing a system. you need to allocate costs between the funding for the establishment grant for the marketplace and other programs that may share the same system such as medicaid eligible -- >> states weren't accurately counting. >> correct. states weren't accurately -- >> did the inaccurate accounting, did it state in more federal dollars coming to the state or less? >> what it resulted in often was too much establishment grant funding going to the state. >> imagine that.
they errored on the side where they got more. imagine that. >> in some cases, some could be allocated to medicaid. so we recommend that cms and states -- >> you also said insufficient payment controls that led to wasteful spending. and that you said cms lacked control to suggest that atcp payments were made for these making their premiums. seems like a lot of screwing up going on. >> we found a lot of liabilities in our work, yes. >> and the gao, you did, it looks like, an experiment here where you had 15 fictitious folks. 15 fictitious poem applied fpeo applied for coverage.
how many got coverage, subsidy, coverage for it all. >> right. in 2016 we had 15 fictitious applicants. all initially received coverage that would have been subsidized -- >> every single one? >> especially, yes. >> so they didn't try to catch anyone who rigged the system, did they? >> over time you know, one was not retained, it was terminated but initially we did receive all 15 approvals for -- >> even though some fictitious dock the were sent along after the initial entry, right? >> that's correct . >> wow, batting a thousand. in ripping off the taxpayer. not so much as gao guy but citizen, are you familiar with the name jonathan gruber? >> i'm familiar, yes. >> do you remember some of the statements he made back when this thing -- when they were passing the law and statements that came from the administration.
do you remember some of those? promises that were made? >> i have seen some of dr. gruber's research -- >> i just want your comment to know if these were true. when this was being debated with be they said if you like your plan, keep your plan. did that turn out to be accurate? you can give me sort answers. i've got a lot of questions. >> certainly there were people who were -- >> you have to give me shorter answers. >> did change to other plans. >> and if you like your doctor you can keep your doctor. >> certainly to the extent that individuals change plans different networks. >> lots of people today get new doctores. have premiums gone down? >> we have seen -- it is hard to compare premiums before and after for a number of reasons. we have seen premium increases
as you mentioned the most recent year of 25%. >> so premiums didn't go down average of $2500 did they? >> we have not compared premiums but in the most recent year gone up 25% spp. >> when this was rolled out, did this work very well when it was first rolled out. >> certain lay number of technical challenges and problem p.m. >> was all of this private information under control? >> there are recommendations to help security. >> yeah, because it wasn't security. >> i don't believe gao's evaluated -- >> they went up dramatically. what about co-ops. that are supposed to be apple pie wonderful. be all, end all, save all. 23 created, how have they done? >> we evaluate those. five are offered in 2017.
>> so 23 originally. 18 went bankrupt? >> and one is trying in the pr receives trying. >> deductibles have increased dramatically when they said they would decline. nine false statements. so we are misled now we find out what plan is put in place, most states don't have an accurate accounting how dollars were spend. inefficient payment controls leading to wasteful spending. cms lacks control to ensure that aptc payments were made for enrollees who made premiums. and 15 made-up folks who signed up for it, they all got subsidy
yet we have people say, oh, this is wonderful. we got to keep it. that's mazing to me. this thing hat s got to go. that's what we will be working on here over the next several weeks. health care cost less when obamacare is gone. with that i would yield to, if the gentle lady is ready, ms. norton. oh, go to mr. cummings and then go to -- >> does the gentleman yield? >> actually, yeah. >> let me ask you. president trump has said would he provide health care for everyone that it would be cheaper. can you tell us about that plan so we can -- so the american people -- are you aware of it of
how that will work? chairman? chairman? >> i thought you were asking our -- >> i'm asking you. >> i'm not sure what mr. trump had in mind. i don't know what you have in mind sometimes when you make statements. but what i do know is what i just outlined. stalls statements made when the affordable care act was given to the american people. >> i reclaim my time. thank you. i just wanted to know so that general public would know what the president is talking about. let's take a few minutes to discuss what we can expect our health care system to look like under trump administration. president trump has claimed his replacement to aca would provide and i quote health care that is far less expensive and far better than the aca. end of quote. but based on the actions taken
so far, the only thing that trump care seems to be doing is creating chaos in the insurance market and leaving millions of people uncertain about their health care. on january 20th president trump issued an executive order directing federal agency to to quote wave, defer, grant exem s exemptions from. what this will maep for people with the aca insurance isn't entirely clear. since the order is short on concrete details. but it does raise serious doubts about whether consumers, including those with employer sponsored insurance. better than what they received under the aca such as no caps on annual and lifetime limits. free preventative air. inskpee yensive coverage
inskpee sns /* pl mr. siegel, how does this uncertainty impact you and your ability to run your business?nskpee sns /* pl mr. sw does this uncertainty impact you and your ability to run your business?skpee sns /* pl mr. si does this uncertainty impact you and your ability to run your business?ns /* pl mr. siegel, h this uncertainty impact you and your ability to run your business?/* pl mr. siegel, how uncertainty impact you and your ability to run your business?pl uncertainty impact you and your ability to run your business?mr uncertainty impact you and your ability to run your business? >> as i said, i haven't slept well since the election. to the extent i'm focused on that instead of focussing on business, it takes time away. how do i put this? i don't know that this new administration understands and what people don't understand, it makes it very hard to plan for the future at all because you don't know what they are going to do. >> the uncertainty is also affecting insurance companies, mr. siegel. urban institute releasing
findings with executives with 13 insurance companies that offer coverage in the individual market in 28 states. most of the executives interviewed warn that appealing the individual mandate would drive up premiums up to 20% more than currently expected. and some insurens warn they might leave the market all together. mr. dicken, have you studied the insurance market closely, have you not? >> yes. gao has. >> does it surprise that you insurens are weary of repealing fundamental aspects of the aca without having a comparable replacement plan in place? >> certainly insurers in the next few months will set benefits and premiums for 2018 and so certainly you need to understand the federal and state rules they will be working under. >>. >> so in addition to creating instability, uncertainty among consumers, it appears the trump
administration is taking steps to actively prevent people from enrolling in coverage, according to a recent political article last week, trump administration cancelled tv advertisements for open enrollment that had already been in plis and paid for even though the last day to enroll wasn't until today. but mr. robinson, as you stated in your written testimony, the central mission is to -- mr. robinson, rather, is to quote protect the integrity of the federal programs. do you plan to look into this issue? i think they reversed that now. in other word, i think they put the ads back on. by the way, i was in my district on monday telling my constituent to enroll. go ahead. >> thank you asking that question. i don't know the detail p i've seen the same reports that some other have seen. >> even if money that was wasted
on ads that never aired is recovered it is deeply concerning that the trump administration would sabotage the open enrollment in this way. especially we know that young and healthy people tend to wait until the last minute to enroll. if there is any indication of the future of trump care, aep as primary oversight body of the house, i hope that we will do the same. so we will continue to look over this again. health care in the great country called the united states should not be a privileged but a right. i oyield back. >> before i join this esteemed body, ways retired as ceo of an education group. we had 650 employees. a fair number were part-time.
anybody scheduled more than nine hours a week had health care. they had health care for themselves and could buy health care for their families relatively inexpensively. affordable care out increased costs for part-time employee by 50% year one for my company. so my question for ms. robinson, did you do any analysis? look at immediate impact on health insurance premiums for privately sponsored health care programs and what impact was in the first few years? >> we have not directly looked at changes in employee sponsored premiums. there are surveys that look at that by other organizations. >> did hhs look at this issue? >> we have not looked that issue. our focus is on hhs dollars and
expenditure of hhs funds. >> whether their money they pay for premiums, whether money or tax dollars they pay the federal government, it is their money. in terms of immediate and long-term em impact on health care costs in america by looking what is suddenly the change in cost were as indicated from our company was dra mat ek p.m. and. >> certainly, we're god to have work with subcommittee on looking at health care cost and trends in markets. certainly employers, long standing increases over all in health insurance cost even for federal employees seeing increases in health care cost in recent years. >> let me change directions. there are concerns with those receiving subsidies or payments. can you tell me how many people in year one received subsidies that are improper or determined inaccurate the first year?
>> that's a very important question. we don't have the number of folks but what we did look at the risk of programs for potentially weak controls on eligibility. >> let me ask you, why, we he are subjected to audits as company. trs why would trs. >> they a >>. >> how do we not investigate that and not know? >> congressman, my office does investigate when we get allegations of an improper person being in the marketplace. our work initially set out to figure out whether there were adequate safe guards to prevent fraudulent or improper information for impacting eligibility -- >> so we still don't have any sense of the approximation of the payments that should not
have -- >> my office does not have that. >> does hhs in general have that? >> i don't know. >> we don't know how much those inappropriate payments total up to be to the taxpayers? is that correct? >> i do not have that information. >> mr. dicken, do you have that information? >> no. but i will note ago recommended that hhs develop a fraud risk assessment to get at questions you are getting at. for an overall understanding of how they can manage those risks. >> i admit, as they say, i'm subject to freshman hazing as freshman in congress. i have to say, oh, my god, how is it we don't have a means by which to figure out those that we didn't and how much it cost us and we are analyzing fraud and abuse and how did we not think it was a problem? >> congressman, i think you are raising an important question of transparency in government. one thing we have been
recommending in marketplace is to look at things like the right kind of data to be able to figure these things out and so for example, in our work looking at the accuracy of the subsidies, what we -- >> but if we are making a payment to private carrier we certainly would insist on that kind of prance parncy. wouldn't we? >> yes, congressman. >> so we fail to undertake a basic function of the department in the department which is to make sure we are not throwing money out the window. >> that's why we look at controls cms has on the accuracy of payments to make recommendationes it strengthen those controls. >> thanks very much. i yield back. >> i thank the gentleman. i think it is a great line of questioning. we can't get an answer to the number of individuals would who got payment inappropriately, fraudulent payments, but we can
allo can conclude that those he who did apply got paid. because you ran the experiment. 15 fictitious payment. not one, not two, continue ten. not 14. it was 15 out of 15. mr. mitchell's question is entirely appropriate. think about that. based on the little experiment you all ran where you found they were batting a thousand, anyone applying fraudulently might have got money they weren't entitled to. all the misleading statements, false statements, lies told to the american people before this thing was passed. we would like that number as quickly as possible. we appreciate the gentleman's policy. now recognize the lady from the district of columbia. >> thank you. this is reported it is the last day to sign up for the affordable health care act. and people have been signing up.
in huge numberes. people are afraid of a big structural change. and how that might affect those as part of the aca but a sixth of the economy. and how fooling with this aspect of it could have an effect on the economy itself. and i represent the district of columbia, a lot of people have health care because they work for the federal government. but a hundred thousand d.c. residents would lose their insurance if the affordable health care act were repealed and estimated cost to d.c. would be $1.1 billion. that a city of 700,000 people.
imagine what this means large across the country p.m. i'm interested in mr. siegel. when most people think of the affordable health care act they may not think of enrollees like mr. siegel. but the largest group of enrollees is the self-employed. i would be interested in your views on what affect guaranteed access to private insurance has had on the security of your business as a business. >> i always had access. affordable enrollment and coverage made a huge difference. and the reason it makes a -- >> to your business? >> yes. >> to your business itself h. >> i buy it on the exchange. the business doesn't buy it. so the business makes a big difference because it would not
have me as a participant if it was not for the aca. and we started out for three parte partners and our youngest partner died after six months. you can't run a business with one person. so our business probably would -- that's my guess. fz without affordable health care act? >> that's my guess. counter factual, right? >> let's look at potential affects of repeal on your fam y familiar access, business access, to affordable health care coverage. >> new york is a state that will do something. i know private insurers had it take anybody. that made our costs -- but you didn't have to buy. so only people who needed it bought it so it made it expensive. my fear is we will go back it that and if i can get insurance at all, it will probably now be, and i don't know.
but $2600, $2700, $3,000 a month. it was about $2,000 a month before aca. you will receive a -- that the level i will have to find a job working for an employer. i'm 61 years old. in market research, that is notes a hey. i'm tired of being a boss and tired of having bosses. i have love running a business with a partner i admire p. serving clients that i like. and taking care of my family that way. and i don't want to go back. >> mr. siegel, finally, let me ask you about plan i read about in the republican study committee guide. that would replace the long-standing tax exclusion for employer based coverage with a standard tax deduction. knew we know that would put health care out of the reach of lower brackets of her cans.
but i don't see how it would account for geography or age or health status. you have any view on such a replacement? >> i don't have any view on the technical side of it. >> i can tell you about something we will deduct -- >> what about a standard tax deduction? >> i imagine i would benefit from it but i don't ne that my kids would.kne that my kids would.ne that my kids would.one that my kids would.wne that my kids would. that my kids would. >> employer plans get a much better deal. so just having a dedungs for ct the private side. i'm not an expert on the tax system. sorry. >> no one's an expert on how this would work, can i tell that you much. thank you very much. mr. chairman? >> i thank you gentle lady.
>> mr. dicken, you told us a little bit about the number of options americans have as the number of insurance companies involved just dropped. can you recite the numbers for the last couple of years and options? >> sure. for planned options that would be on the different metal tiers, silver or gold, most consumers had six or more plan openings. in the most recent years the number offi issuers, the plans declined, and we have seen that hhs requirement is that this year 21 consumers have options but only from one insurer. one insurance company. >> so have you a monopoly, correct? 21%? >> for the exchanges, with you different, silver or gold plans
but just from the same insurer. >> at this rate, we don't know how many yet, but how many plans for 2018? >> yeah. a lot of concern. what the future years will bring. insurance companies it is very concentrated with many states having only one or two or three insurers having 80% of the market. >> it shot up from like 5% to 21% in one year, correct? >> i don't have early numbers. but it increased. only one issuer. >> so some areas would have no issuer hes? >> it would be important to make sure that current consumers under the current system that have plans are available. certainly that's a local decision. local decisions by insure ins in those areas. >> and down from 3 or 4 or 5 options to one option it is
entirely reasonable to assume we would no options, right? >> that hasn't been an experience but a concern. >> what effect does that have as the competition is disappear sfg. >> in general, expecting that less competition would mean less pressure on keeping -- >> is that true? >> we've not done a causal study but that would be the expectation. >> premiums shot up in this past year, correct? >> on average about 25% increase. >> and i would say one of the reasons is that there is no competition, right? >> arrange of issues for that as experienced exchanges has led insurers to increase premiums. >> can you tell us why the number of insurance companies keep disappearing? >> i think a variety of reasons. a couple mentioned today saw plans available such as co-op plans. making operations large insurers changed markets they are operating in and left exchanges.
>> can you list why they left? a few years ago they were apparently gunniparen were apparently gung ho. can you speculate for us why companies keep leaving the current market that was originally envisioned? >> yes. the cost of individuals he that they are covering and relative premiums and that market, some have made business decisions that they are not going to compete in that market. >> so over time given current framework insurance companies cannot operate. correct? or they wornt keuldn't keep pul out. no insurance companies are jumping in, largely? >> we did look at exits were among smaller insurers. there have been new entrance as
well. >> okay. mr. robinson, you looked at gra grant funds. it isn't spent in accordance with your requirements. what is the money misspent required to be returned to government? >> on established grant funding i think most recommendations are still open and we are following up. >> are they refunding money? >> not as far as i know. >> so they make them refund money or is this par for the course now? >> we work to follow up on those recommendations. i don't have on my fingertips but would be happy to follow up with respect to the specific amounts we have identified. >> and how many states does that include, do you know? >> we have looked at, we looked at establishment grants, six states that we have.
that we looked at. >> okay. problems p in all six? >> yes. problems in all six. one without problems. >> so one out of seven. okay, thank you. >> we are glad it welcome gentleman from california is recognized. >> thank you, mr. chairman. mr. dicken, you know, we're all watching the affordable care act underperform and we are all concerned that what it sought to achieve one would say it at least partially achieved. there are millions of people on the plan. let me go through a couple of comparisons a little outside your briefing but well within your competence. you are under fhapb, correct? >> correct. >> and you are familiar with the programs that are offered the 250 plus different options? >> nationwide there are many,
yes. >> if we were to contrast the 111 million plus people, federal employees, retireees a entheir families, contrast options between what you have to have in 2017 in affordable care act as it is and what the -- half the number of people. but federal workers and their families have. >> right, about 8 million nationwide. 200 plans offered. that includes some national plan offerings. mostly ppos as well as local hmos. they are available in specific markets. >> right. to include kaiser, blew cross, all the major names. >> correct. federal employees, retirees and independence he, largest is the
standard options cuffing two third of enrollees. >> under the plan, if you go on to a cobra, you pay to which ever health care plan you were in as you continue, right? >> paying individual within the same premium. >> which means health care provider accepts a check from the individual. >> and yeah, i don't know the actual transfer of the money, where it would be coming from. >> but in all cases, essentially private companies who made a decision to proo vied a program to whatever amount of people, if you will, any and all from the federal work force current or in the case of cobra cobra, that choose their plan. correct? >> yes. >> just going through a couple of points, they are not gender discriticism nant, right? >> it is available it all -- >> they same charge the same
rate regardless of chaj. so whether this are not worried about if is age or premium and your child can stay on it. >> up to 26. >> or 27th birthday? >> 26th birthday. >> and no problem switch as fed ra federal worker from program it pray pro gragram. >> yes. during open enrollment for special reasons. >> it is fair it say that with 200-and some, a great money plans, more than the affordable care act in most areas. in fact offers same protection to consumer that ca handles, right? >> my understanding is that the plans meet the requirements.tha right? >> my understanding is that the plans meet the requirements.ght right?
>> my understanding is that the plans meet the requirements.att handles, right? >> my understanding is that the plans meet the requirements. ca right? >> my understanding is that the plans meet the requirements.aca right? >> my understanding is that the plans meet the requirements.hat right? >> my understanding is that the plans meet the requirements. >> they are stripped down to, like the postal plan, a pretty good one rbite? >> some are high deductible offerings, yes. >> so i taxed your expertise for a reason. is there any reason that if the affordable care act were to go away and transition to enjoying the same programs offered to the federal work force and virtually everyone now or has retired from the federal work force is there any reason that wouldn't be viable considering they are insm insurance companies that want access to the 8 million people that are are now insured. they bid on it every yeah. and even the businesses, is there any reason to believe the program and he wouldn't be able to serve the same purpose especially considering a subset
phrma is of the same. >>fphrma is of the same. >>aphrma is of the same. >>rphrma is of the same. >>hphrma is of the same. >>phrma is of the same. >>hrma is of the same. >>rma is of the same. >>ma is of the same. >>a is of the same. >> is of the same. >>. >> that is important for that risk pool as there is not risk adjustment -- >> there is risk adjustment because they he bid actually? >> it is based on their experience. >> if over time the federal work force gets old older, sicker, whatever, they adjust. >> yes. >> so loost last question, you know, children. it was not considered originally but there are private programs. children. it was not considered originally but there are private programs. so when people, and i'm not trying to be partisan, trying to be very open here, what do we do in the event you'ual reality, y
couldn't have the government insure through contracts with local and not local companies, there is no inherent reason that couldn't be offered as viable al tern piff recognizing that there is a risk pool change.altern pi there is a risk pool change. they start off with 8 plus million people they don't want it walk away from if others are allowed to enjoy. is that a fair question? again we are. thatting your expertise for a question. >> we have not eval yited whuat that could be. certainly law and consideration and to risk pools and individuals involved. some left fhpb over time. there would be concerns whether or not to parties nate that. >> thank you.
>> i think the gentlemen -- we can did a question question or two. another minute or minute and half? all right. another minute and half. >> then we will come back to the d side and finish pup sfp fz up. >> we will take two. give you one and half, take two. >> ms. robinson, you have row views of the insurance exchange programs and identified vulnerabilities to contracting and oversight and cms management of the fa simtcilities. through those case studies, what lessons have been gathered? >> thank you for the opportunity to talk about our case study work. where we did look across management, there were a number of lessons certainly the lesson around needing good acquisition
strategies and good contract planning. lessons around needing clear leadership for projects. an important lesson, especially for technologically and process is to integrate policy staff and thinking and contractors and the employed staff in working together without frag men dags, without silos. certainly when we saw that at cms it helped improve their management across the marketplace program. for. >> thank you. one more question. there are other areas we heard that only 26% of america, and only one choice. and given that this is fallen over time, three or four, now they have one, did does is it concern you for fellow americans for number of companies drop off
that is that it is possible, maybe as early as next year, there would be no options at all. does that concern you on behalf of your fellow americans as you watch on the current -- >> i only speak for myself. i don't pretend toe speak for my fellow americans. of course it concerns me. i'm not in the insurance industry. i won't speculate why there is only one company in some places. can i tell new new york which has long tradition of robust regulation of insurance markets, and a commitment in many ways to providing insurance for as many people as possible we by and large have pretty robust choices. i had a choice this year. i had somewhere between 12 and 20 plans. i can't tell how many because i can't remember the big wide 8 1/2 by 11 or 14 thing that i
saw. >> okay. i'll come back it mr. dicken. again, there are some people and i fought it and i think everybody else up here fought it, say we gat littoot little obamacare, continuing, the market will collapse on its own. when you see 26 in the area with 1%, common sense will tell you if we let this go, there may be some marks that the don't have any plan and others that have no plan and the rates will continue to go up 25 or 26%. we could just sit here and watch the train wreck and blame president obama. i think almost every republican has stepped forward and said no we cannot afford to have this train rec happen to the american
people. given the disappearance of insurance firms from the market, how much of america will only have one company or maybe no company if would he don't act by 2019 oor 2020? >>or 2020? >>roor 2020? >> 2020? >> i cannot speculate but i will note this is the fourth year and it is dynamic in exchanges. we saw some creases up to 2015 and as you've noted, that's concern for the private health insurance market a as whole. as our work required by the affordable care act indicated insurance markets are very -- so a competitive market, whether it is the exchange or insurance over all, that is a challenging -- >> i think the gentleman's point is the trend lines aren't good. pattern isn't good.
two years ago 23 co-ops started, today there is 5. 18 went bankrupt. three years ago most had 5. today down to one. when you look at patterns, look at the pattern you all good. they all good subsidies. so all the patterns in this law are terrible. and that's the point. and we appreciate your point even though it was a fill bustenbust buster in the second point. just kidding.a bust buster in the second point. just kidding.bust buster in the second point. just kidding.ust buster in the second point. just kidding.st buster in the second point. just kidding.t buster in the second point. just kidding. buster in the second point. just kidding.buster in the second point. just kidding. >>. >> can i have the same time? >> yes. >> we are on record breaking pace for the number of enrollees
for the aca in the coming year? >> yes. >> and in your money, to do you think that fact that there were almost 40 million uninsured folks before the aca aep nnd no has dramatically fallen is a positive trend line for america? >> i think it is a wonderful trend line for america. >> and sir, would you agree with me that there hasn't been any contractry evidence presented today that there were private insurance in the market prior to the aca, is that right? >> i did not hear about private insurance fraud at all. >> would you agree there's no evidence presented that there would be millions of jobs lost in the aca repealed without a replacement as my honorable colleagues on the erj side
propose to do. >> i did not hear a discussion of job loss at all. . >> and would you surmise that people in the lawyer market have protection against preexisting conditions he and other similar protections would lose those protections once@ca is repealed? >> i don't know whether some states have protection but if that is the end of federal protection he and your state didn't step up, yeah. i think you would be screwed. >> thank you for that colorful -- >> sorry. i apologize it that is a violation of etiquette. i don't do this everyday. >> that's why you're such a convincing witness. >> mr. siegel, what do you say to the gentleman who says he it is clear that@ca has to go? >> i would say if you think real
willing insurance, representatives cummings said it should be a right. i don't like right talk. but i will tell you i think it is a necessity for today's world for any reason to have acard, health care available to them. in our country we do it through health insurance and we must have that if you want people to be able to live lives where they have reached their potential and therefore contribute as much as they can as citizens as ta payers apple employee. >> the aca improved your life, correct? >> the aca made the life i have today possible, yes. >> sir, i need to squ you about small business because of aca. are you aware of others in your friends circle, family circle, who similarly benefitted
from@ca? >> to be honest, i don't have a frepd that start friend that started a business in line for the health insurance. i don't know. i have friends who get their health insurance through the aca as well but aren't necessarily in business. >> got it. >> the honest answer to that is i don't know. >> got it. sir, i just want to thank you so much for your testimony to. >> you're welcome. >> just to close, i would maybe say look i didn't say it wasn't a necessary et pip allity. all i did is point out facts. the facts are there were statement made six years ago about the affordable care act that turned out to be lies.
you can take the architect of obamacare, he told it would mislead. now we have the aca come along, it's the law and we see where things are going as evidenced by what mr. issa and mr. growthman pointed out. we started off with five choice, now down to one in lots of places. started with 23 and now down to 5 because they went bankrupt. they looked at taxpayer dollars. they took taxpayer money and lost it. and we have fraud going on as evidenced by the study they took which is 15 for 15. if you are down to one insurer in that an area that will drive up cost because that's a monopoly situation. that's startry of the aca. not to mention the increased premiums, increased deductibles
for families all across this can untry. that's why we are looking to repeal this law just like we told the voters we would do. just like we promise them we would do. just like they sent us here to do and we need to do that. there was be a election where that is one of most important issues. thank you to witnesses for being here. thank you for members for participating. we are adjourned.
>> in case you missed it, here are a few programs c-span viewers saw last week. mike pompeo swearing in as cia director. >> i will well and faithfully discharge the duties of the office on which i am about to enter. so help me god. >> congratulations. >> thank you. >> senators questioning secretary of health and human services nominee congressman tom price. here is senator ron wyden. >> you bought over 400,000 shares at discounts that were as many as 40% cheaper he than the price on the australian stock exchange. and you were sitting on the time on committees that have jurisdiction over major health care programs and trade policy. yes or no? doesn't this show bad judgment?
>> british lawmakers discussing their prime minister's visit to washington. >> in her forge coming meeting with president trump he this will be prepared to off up for sacrifice the opportunity of american companies to come in and take over. parts of our nhs or our public services. >> president trump's visit to department of homeland security. >> president of homeland security working with myself and my staff will begin immediate construction of a border wall. >> house democratic leader nancy pelosi reacting to president trump's claim of voter fraud. >> all we want is the truth for the american people. i frankly very sad about the president making this claim. i felt sorry for him. i even prayed for him. but then i prayed for the united states of america. >> freshman congresswoman liz cle clen cheney addressing enhanced
interrogation. >> i do support enhanced interrogation. i think it has helped us in the past save lives. so i was happy to see president trump take that step. >> representative michael burgess, a physician on keeping medicaid expansion to repeal and replace obamacare continue. then boeing, walmart and wells fargo benefit officials talk about challenges of keeping their work force healthy and providing affordable insurance plans. okay. okay. i want to thank