[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


      ADVANCING PATIENT SOLUTIONS FOR LOWER COSTS AND BETTER CARE

=======================================================================

                                 HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 10, 2016

                               __________

                           Serial No. 114-151
                           
                           
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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                     Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
                         
                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            G.K. BUTTERFIELD, North Carolina
MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILLY LONG, Missouri                 JOSEPH P. KENNEDY, III, 
RENEE L. ELLMERS, North Carolina         Massachusetts
LARRY BUCSHON, Indiana               TONY CARDENAS, California
SUSAN W. BROOKS, Indiana             FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
  
                             C O N T E N T S
                             

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     2
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     3
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     5
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     6

                               Witnesses

Grace-Marie Turner, Founder, President and Trustee, Galen 
  Institute, Inc.................................................     8
    Prepared statement...........................................    11
Doug Holtz-Eakin, President, American Action Forum...............    19
    Prepared statement...........................................    21
Sara Collins, Vice President of Health Coverage and Access, 
  Commonwealth Fund..............................................    27
    Prepared statement...........................................    29

                           Submitted Material

Statement of the American Federation of State, County and 
  Municipal Employees, submitted by Mr. Green....................    87
Statement of the AFL-CIO, submitted by Mr. Green.................    89
Statement of AARP, submitted by Mr. PItts........................    91
Statement of the Association of Mature American Citizens, 
  submitted by Mr. Pitts.........................................    94
Statement of Blue Cross and Blue Shield Association, submitted by 
  Mr. Pitts......................................................    98
Statement of various organizations, submitted by Mr. Pitts.......
Article entitled, ``Charging Adults Higher Premiums could cost 
  taxpayers,'' The Commonwealth Fund, September 15. 2016, 
  submitted by Ms. Schakowsky....................................    99
Article entitled, ``Why the ACA's Limits on Age Rating Will Not 
  Cause `Rate Shock' Distributional Implications of Limited Age 
  Bands in Nongroup Health Insurance,'' The Urban Institute, 
  March 2013, submitted by Ms. Schakowsky........................   102

 
      ADVANCING PATIENT SOLUTIONS FOR LOWER COSTS AND BETTER CARE

                              ----------                              


                         Friday, June 10, 2016

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:16 a.m., in 
room 2322, Rayburn House Office Building, Hon. Joseph R. Pitts 
(chairman of the subcommittee) presiding.
    Present: Representatives Pitts, Guthrie, Murphy, Burgess, 
Blackburn, Lance, Griffith, Bilirakis, Bucshon, Brooks, Green, 
Schakowsky, Castor, Sarbanes, Matsui, Schrader, Kennedy, 
Cardenas, and Pallone (ex officio).
    Staff Present: Adam Buckalew, Professional Staff Member; 
Paul Eddatel, Chief Counsel, Health; Bob Mabry, Fellow, Health; 
Graham Pittman, Legislative Clerk, Health; Jennifer Sherman, 
Press Secretary; Heidi Stirrup, Policy Coordinator, Health; 
Josh Trent, Deputy Chief Health Counsel; Dylan Vorbach, 
Assistant Press Secretary; Jeff Carroll, Minority Staff 
Director; Tiffany Guarascio, Minority Deputy Staff Director and 
Chief Health Advisor; Samantha Satchell, Minority Policy 
Analyst; Andrew Souvall, Minority Director of Communications, 
Outreach and Member Services; Arielle Woronoff, Minority Health 
Counsel; and C.J. Young, Minority Press Secretary.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. Good morning. The subcommittee will come to 
order. The chair will recognize himself for an opening 
statement.
    Today's hearing will examine legislation designed to 
modernize the current health insurance market by empowering 
states to better regulate markets tailored to their unique 
conditions. Previously, this committee examined healthcare 
solutions that centered on promoting patient choice and 
innovation in the design of health coverage. This hearing is a 
natural follow-on to that.
    Current law is leading to an increase in healthcare 
premiums. Double-digit premium increases are hurting, not 
helping patients. It is no surprise that a recent Gallup poll 
revealed that healthcare costs top American families' financial 
concerns. Almost daily, headlines across the country offer 
frightening news on healthcare cost. This undoubtedly is 
contributing to the fears of the American people.
    And here are some of the numbers. In Virginia, nine 
insurers are looking to raise premiums at high as 37.1 percent. 
Three of the requests in Oregon are over 29.6 percent. One plan 
in New York is asking for a shocking 89 percent increase. For 
Texas, the biggest plan wants to raise its rate 60 percent. In 
Colorado, Golden Rule is seeking a 40.6 percent hike, Rocky 
Mountain HMO is seeking a 34.6 percent boost, and Colorado 
Choice wants a 36.3 percent increase. Connecticut has three 
plans wanting increases from 12 to 27 percent. In my home State 
of Pennsylvania, one insurer is seeking a 48 percent increase, 
while the insurance department says the average request is 23.6 
percent for individual plans.
    And this is why we are here today--to offer better care at 
a fair price. Our solutions aim to help patients stabilize the 
insurance markets, restore flexibility, provide more choices, 
and keep costs in check.
    Health care is the most personal of any political issue. 
When Congress gets involved in health policy, we are changing 
people's lives. Decisions we make in Washington can have a 
tremendous effect on the well-being of families and their 
budgets. States, on the other hand, are great innovators. When 
given the flexibility to tailor coverage and conditions, 
patients are the winners, with greater choices and more 
affordable options.
    The five bills before us today offer a variety of options 
to begin to reduce cost, including the Flores bill to align 
grace periods, the Blackburn bill, which requires eligibility 
verification, the Brooks bill, which adjusts age rating ratio 
for healthcare pricing, the Griffith-DeGette bill that allows 
individuals and families to purchase stand-alone dental plans 
either on or off the exchanges, and the Rick Allen bill, which 
establishes an audit process for failed state exchanges.
    Any unallocated or misspent Federal funds would be returned 
to the U.S. Treasury. The first thing health reform should 
accomplish is to stabilize or reduce the cost of health care. 
The number one complaint people have about health care is the 
rising cost.
    Yet the current law has done little to decrease healthcare 
spending. In fact, many Americans are paying higher premiums 
and deductibles for health insurance and care as a result of 
the law. We can do better. We must make healthcare costs more 
transparent, give people the freedom to choose the insurance 
they want, with the benefits they value most, at a price that 
is fair.
    More government bureaucracy, regulations, and spending 
never successfully reduce the price of health care. Yet, that 
is exactly the premise of how health insurance is regulated 
today, with top-down mandates that empower Washington and 
remove control over healthcare decisions from States, small 
businesses, families, and individuals. And this has to be 
changed if we truly want bottom-up solutions that provide 
better care at lower costs for patients. The bills before our 
committee today will do just that.
    Is there anyone seeking recognition on our side?
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    The Subcommittee will come to order.
    The Chairman will recognize himself for an opening 
statement.
    Today's hearing will examine legislation designed to 
modernize the current health insurance market by empowering 
States to better regulate markets tailored to their unique 
conditions. Previously, this committee examined health care 
solutions that centered on promoting patient choice and 
innovation in the design of health coverage. This hearing is a 
natural follow-on to that.
    Current law is leading to an increase in health care 
premiums. Double-digit premiums increases are hurting, not 
helping, patients. It's no surprise that a recent Gallup poll 
revealed that health care costs top American families' 
financial concerns.
    Almost daily, headlines across the country offer 
frightening news on health care costs. This undoubtedly is 
contributing to the fears of the American people.
    Here are some of the numbers:
     In Virginia, nine insurers are looking to raise 
premiums as high as 37.1 percent.
     Three of the requests in Oregon are over 29.6 
percent.
     One plan in New York is asking for a shocking 89 
percent increase.
     For Texas, the biggest plan wants to raise its 
rates 60 percent.
     In Colorado, Golden Rule is seeking a 40.6 percent 
hike, Rocky Mountain HMO is seeking a 34.6 percent boost and 
Colorado Choice wants a 36.3 percent increase.
     Connecticut has three plans wanting increases from 
12 to 27 percent.
     And in my home state of Pennsylvania, one insurer 
is seeking a 48 percent increase, while the Insurance 
Department says the average request is 23.6 percent for 
individual plans.
    This is why we are here today: To offer better care at a 
fairer price. Our solutions aim to help patients, stabilize the 
insurance markets, restore flexibility, provide more choices 
and keep costs in check.
    Health care is the most personal of any political issue. 
When Congress gets involved in health policy, we are changing 
peoples' lives. Decisions we make in Washington can have a 
tremendous effect on the well-being of families and their 
budgets. States, on the other hand, are great innovators and 
when given the flexibility to tailor coverage and conditions, 
patients are the winners--with greater choices and more 
affordable options.
    The five bills before us today offer a variety of options 
to begin to reduce costs--including the Flores bill to align 
grace periods; the Blackburn bill which requires eligibility 
verification; the Brooks bill which adjusts age-rating ratio 
for health care pricing; the Griffith/DeGette bill that allows 
individuals and families to purchase stand-alone dental plans 
either on or off the exchanges; and the Rick Allen bill which 
establishes an audit process for failed State exchanges. Any 
unallocated or misspent Federal funds would be returned to the 
U.S. Treasury.
    The first thing health reform should accomplish is to 
stabilize or reduce the costs of health care. The number one 
complaint people have about health care is the rising cost, and 
yet the current law has done little to decrease health care 
spending. In fact, many Americans are paying higher premiums 
and deductibles for health insurance and care as a result of 
the law.
    We can do better. We must make health care costs more 
transparent and give people the freedom to choose the insurance 
that they want--with the benefits they value most at a price 
that is fair.
    More government bureaucracy, regulations, and spending 
never successfully reduce the price of health care. Yet that is 
exactly the premise of how health insurance is regulated 
today--with top down mandates that empower Washington and 
remove control over health care decisions from states, small 
businesses, families and individuals. This has to be changed if 
we truly want bottom up solutions that provide better care at 
lower costs for patients.
    The bills before our committee today will do just that. I 
yield back.

    Mr. Pitts. With that, I will yield back and recognize the 
ranking member, Mr. Green, 5 minutes for an opening statement.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman. And I agree that the 
increases that are requested, although having served as a State 
legislator in Texas in the 1970s and 1980s and the very early 
1990s, I think we saw the same requests. Of course the health 
insurance market was not regulated in the State of Texas. But 
as a small-business manager, we saw 25, 30 percent increases 
over the years. So increase in health insurance cost is not new 
to the American public.
    Prior to the Affordable Care Act, the individual market on 
health care was deeply broken. People were sold junk plans at 
high cost. Individuals with preexisting conditions were 
essentially locked out of the market altogether. Women would be 
charged more just because of their gender. And plans could drop 
you at the moment you got sick, the time when you need the 
coverage the most.
    Three years after the Affordable Care Act, major health 
expansion went into effect. Approximately 13 million people 
have coverage through the marketplace and 15 more through 
coverage of Medicaid. Since the law was enacted in 2010, 20 
million more Americans are no longer uninsured and the 
uninsured rate is at a historic low. Both the newly insured and 
previously insured are protected from the worst abuses of 
issuers and what plans must cover is significantly more robust 
than ever.
    Overall, the coverage expansions are improving Americans' 
access to health care, the marketplaces are competitive and 
creating value for customers, and premium stabilization 
programs are working. The evidence is clear that the ACA is a 
success. The majority of people enrolled in marketplace plans 
or Medicaid report that they would not have been able to access 
or afford their care prior to getting their new insurance.
    It is important to recognize that marketplaces created 
under the Affordable Care Act are in their relative infancy. As 
with almost every new market, particularly in the healthcare 
space, there will changes and adjustments in early years. 
Insurers will both enter and exit as they navigate the 
landscape to the millions of new consumers, protections, and 
requirements. Medicare, when it was first created, experienced 
growing pains, as did Medicaid Advantage and part D plans.
    The Affordable Care Act is working. But like any law, it is 
not perfect. As I have been known to say, if you want something 
done perfectly, don't come to Congress. That is why, after 
passing major reforms, Congress revisits legislation coming 
together and improve on it.
    Of the five proposals we are considering today, aligning 
children's dental health coverage stands out as a bipartisan 
bill that has improved pediatric dental coverage. I am 
supportive of this legislation and appreciate that the 
committee is paying attention to this important technical fix 
for children. However, I am concerned that this bill was 
included in the legislative hearing evaluating several more 
controversial and I think irresponsible plans.
    The other legislative proposals we are considering today 
constitute a step backwards for consumers by forcing people out 
of the exchanges, making it more difficult for consumers to 
access affordable coverage using premium tax credits. We should 
be looking for ways to make the law work better on behalf of 
the American people rather than roll back reforms and 
protections designed to get more value from hard-earned dollars 
spent on coverage and put insurance back in charge at the 
expense of the consumers.
    Making it easier and more attractive to get coverage, 
expanding Medicaid, targeted outreach, these are ways to bring 
more stability and affordability to the health insurance 
market. Instead, most of the bills we are considering today 
will make it harder for people to get coverage, more expensive 
for people who need insurance, or only serve to help insurance 
companies rather than people.
    Health insurance is a product that Americans want and need 
and the Affordable Care Act is creating a system that lends 
truth to the principle that health care is not a privilege for 
the few but a right for all Americans. And while I welcome 
productive conversation on how to improve and make the ACA even 
better, we must not do anything that would undermine the 
progress that this important law has already made.
    And I look forward to hearing from our witnesses, Mr. 
Chairman, and I yield back.
    Mr. Pitts. The chair thanks the gentleman.
    Now filling in for the chairman of the full committee, Dr. 
Burgess, 5 minutes for an opening statement.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman.
    This is a very good hearing for us to be having right now 
and I am very grateful that you have called it. I am very 
grateful for the members that have participated and provided us 
bills for consideration today. We have got an excellent panel 
of witnesses in front of us this morning, with whom I have 
either agreed or disagreed over the years, but I know them to 
all be the best of the very best in healthcare policy, and I am 
looking forward to their testimony this morning.
    Regardless of how you feel about the Affordable Care Act, I 
don't think there is any question that the fractures are 
becoming apparent and they are growing. And somewhat 
ironically, at the very last weeks of the Obama administration, 
these fractures are likely to become fractures and real people 
are going to be affected by those fractures.
    It is important that we be talking and we be talking now 
about what we can do to help people when those inevitable 
failures do occur. The bills in front of us today make 
significant moves towards fixing some of those problems, but I 
am also anxious to hear from our witnesses what they see when 
they look over the horizon, not just for next year, but the 
year after, the year after. If something does not change, the 
likelihood is that we will have some very profound and real 
difficulties within the insurance market, within the provider 
space, and of course for patients themselves in this country.
    So, Mr. Chairman, I think you are to be commended for 
holding the hearing today. Certainly you have put a great panel 
of witnesses in front of us. And I will now yield to one of the 
authors of the bill, Mr. Griffith from Virginia, for his 
comments.
    Mr. Griffith. Thank you, Mr. Chairman.
    And thank you, Mr. Burgess. I appreciate that very much.
    I just want to let folks know that my little bill along 
with Diana DeGette, 3463, will in fact level the playing field 
by applying the same rules to coverage options for dental care 
offered on the exchange and off the exchange. Currently, 
unfortunately, the way the language has been interpreted, you 
can buy a stand-alone dental plan if you are in the exchange, 
but if you are out of the exchange it has to be wrapped into 
your health insurance.
    Oftentimes parents want to buy a better pediatric dental 
care plan for their kids than what is offered in a basic health 
plan. And so this bill would allow them that option and allow 
them to go out and buy a stand-alone dental along with a health 
insurance plan that otherwise qualifies except for the dental 
portions so that they are not just having their children's 
dental care taken care of after deductibles are met or taking 
care of for cleanings but not for filling cavities, et cetera.
    I think it is a good bill. And I appreciate Mr. Green 
saying that they recognize that it is an attempt to fix a 
little glitch and is a bipartisan bill.
    And with thatI would be happy to yield to anyone else that 
wishes time.
    Mr. Pitts. Anyone?
    Mr. Griffith. I yield back to Dr. Burgess.
    Mr. Burgess. I yield back to the chair.
    Mr. Pitts. The chair thanks the gentleman.
    I now recognize the ranking member of the full committee, 
Mr. Pallone, 5 minutes for an opening statement.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman.
    Congress passed the Affordable Care Act to ensure that all 
Americans had access to affordable quality health insurance and 
the goal was to achieve universal health coverage. Six years 
later, our uninsured rate is at an all-time low and our 
uninsured rate among young adults has dropped by 47 percent. 
Twenty million more people now have health insurance, and a new 
University of Michigan study shows that the ACA has reduced 
racial and ethnic disparities in coverage.
    And this is all good news. But we have a lot more to do. I 
believe there are ways we can strengthen and improve the law. 
However, I am concerned that this hearing is taking a cynical 
approach to doing so. Rather than have a legislative hearing on 
bills that would help get more people health coverage, three of 
the bills being discussed today are designed to make it more 
difficult for people to get healthcare coverage.
    One of the bills we are reviewing today would allow 
insurance companies to charge premiums that are five times as 
much for older Americans. Even more troubling, under this bill, 
a State could establish an age ratio even higher than 5:1. Many 
older Americans can't afford to pay five times as much as 
people who are younger than they, and we purposely included in 
the ACA ways to ensure that younger people have access to 
health insurance, such as staying on their parents' plan until 
the age of 26. So I am concerned this will force older 
Americans to go without coverage at a time when they need it 
the most.
    There are also potential unintended consequences. Studies 
have shown the 5:1 age rating band charges overcharges older 
consumers and undercharges younger consumers. Meanwhile, the 
increased tax credits to accommodate these higher rates for 
older Americans could cost billions of dollars.
    Another bill we are reviewing today would make it more 
difficult for people to enroll in coverage during a special 
enrollment period, known as an SEP. SEPs are necessary for 
people to enroll in coverage when something changes in their 
lives outside of the open enrollment period.
    It is important for SEPs to maintain some flexibility so 
that individuals can get coverage in a reasonable amount of 
time as they transition through important life events, such as 
the birth of a child, a marriage, or a permanent move. We have 
heard from insurers that SEPs aren't strict enough and are 
subject to gaming, and that is why the administration has taken 
major steps to prevent this. They have eliminated seven SEP 
categories and now require documentation to prove SEP 
eligibility for the five most common life events.
    In addition, starting June 17, CMS will require individuals 
asking to enroll in coverage through an SEP to provide 
documentation by a specific deadline. The individual will lose 
their coverage if the appropriate documentation is not received 
in time or is incorrect, and these are reasonable guardrails.
    Yet, although CMS is implementing stricter verification 
requirements, this bill goes a step further and requires 
someone to prove their eligibility for an SEP prior to gaining 
coverage, and I am concerned that collecting and submitting 
this documentation may prove difficult and could lead to gaps 
in health coverage. Cancer patients can't wait a month to get 
their health treatments.
    In addition, the Urban Institute estimates that fewer than 
15 percent of people eligible for SEPs use them to enroll in 
marketplace coverage and the rest are likely to remain 
uninsured. So I worry that stricter documentation requirements 
could deter all but the sickest individuals, since they are the 
most motivated to get coverage, while healthy individuals may 
choose to remain uninsured, and creating more barriers to 
access is only going to serve to keep more people out of the 
insurance market.
    I am also concerned by the bill that would shorten the 
grace period for those lower-income Americans who qualify for 
tax credits. Grace periods were put in because many of the 
people who were signing up are doing so for the first time. 
That population that is eligible for tax credits is also lower 
income and has more fluctuation in income, which is why we 
wanted to give them a chance to keep their insurance as part of 
the ACA. And under the bill before us today, just one missed or 
partial premium payment would result in someone losing their 
coverage until the next year, and this isn't good for 
consumers.
    I think I will yield. I have less than a minute left, and I 
would like to yield that to Ms. Matsui.
    Ms. Matsui. Thank you, Mr. Pallone.
    Because of the passage of the ACA, millions of American 
families have access to affordable quality health care and our 
country's overall uninsured rate has fallen to a historic low. 
We have come a long way from the days when patients were denied 
care because of preexisting conditions and young people were 
left without coverage as they searched for employment.
    There is much we can and should be doing to build on the 
success of the ACA and keep moving our health system forward 
and ensuring that patients get the right care at the right time 
in an efficient way. We can continue looking at models of care 
that reimburse value over volume. We can infuse technology into 
medical practice and more.
    Some bills we are considering today would, unfortunately, 
reverse some of the important progress we have made. I oppose 
any legislation that disrupts the continuity of care for 
patients. As families seek health insurance, we cannot make the 
process more burdensome for them by asking them to jump through 
unnecessary hoops. I hope that instead we can continue to build 
on the progress of the ACA in a way that benefits American 
families.
    Thank you, Mr. Chairman. I yield back.
    Mr. Pitts. The chair thanks the gentlelady.
    As usual, all the members' written opening statements will 
be made a part of the record.
    I have a UC request. I would like to submit the following 
documents for the record: statements from AARP, the Association 
of Mature American Citizens, a group of seven organizations on 
H.R. 3463, and the Blue Cross/Blue Shield Association.
    Mr. Green. No objection.
    Mr. Pitts. Without objection, so ordered.
    Mr. Green. Mr. Chairman, we also have some to submit for 
the record. Letters from the American Federation of State, 
County, and Municipal Employees, the AFL-CIO--and I think AARP 
sent us both the same letter--and the Alliance on Retired 
Americans, I would like to ask unanimous consent to place in 
the record.
    Mr. Pitts. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. At this time, I will introduce our panel of 
experts. We have three witnesses. I will introduce them in the 
order of their testimony. And your written statements will be 
made a part of the report. You will be each given 5 minutes to 
summarize your testimony.
    On our panel today we have, first, Ms. Grace-Marie Turner, 
founder, president, and trustee of the Galen Institute; 
secondly, Mr. Douglas Holtz-Eakin, president of the American 
Action Forum; and finally Ms. Sara Collins, vice president of 
health coverage and access, Commonwealth Fund.
    Thank you very much for coming today.
    And at this point, Ms. Turner, you are recognized for 5 
minutes for your summary.

   STATEMENTS OF GRACE-MARIE TURNER, FOUNDER, PRESIDENT AND 
 TRUSTEE, GALEN INSTITUTE, INC.; DOUG HOLTZ-EAKIN, PRESIDENT, 
  AMERICAN ACTION FORUM; AND SARA COLLINS, VICE PRESIDENT OF 
         HEALTH COVERAGE AND ACCESS, COMMONWEALTH FUND

                STATEMENT OF GRACE-MARIE TURNER

    Ms. Turner. Thank you, Chairman Pitts, thank you, Ranking 
Member Green and members of the committee, for the opportunity 
to testify today on legislation that I believe would advance 
patient solutions for lower costs and better care.
    The ACA was designed to provide people with choices of 
private insurance, with States in the forefront of organizing a 
new system of coverage. States had had decades of experience in 
regulating health insurance, but a battery of ACA rules really 
overrides these State laws that have been forged by decades of 
experience and I believe really threaten the future of the ACA 
and its stability.
    For health insurance to attract customers, policies must be 
affordable, and everyone in the pool must pay their premiums 
over time so that their insurance coverage is there to pay 
their bills. If people only purchase health insurance when they 
need expensive care, the pools break down. It would be like 
allowing a family to purchase health insurance only when their 
house is on fire. If too few younger people purchase health 
insurance, costs will soar and many of the young people will 
continue to drop out, increasing coverage for everyone, and 
that is one of the problems, I believe, with the age rating 
provisions in the ACA.
    Under these rules, insurers can charge their oldest 
policyholders no more than three times their youngest 
customers. However, the average 64-year-old consumes six times 
more, in dollar value and health costs, than the average 21-
year-old.
    One of the top experts on the workings of the ACA is 
Timothy Jost. He noted early on that age rating compression is 
going to force younger people to pay more in the individual 
market as older individuals pay less, making insurance too 
expensive for younger people. And we need people, not just the 
26-year-olds, but people that are up to 35, 40 years old in 
these pools. They drop out and it means that health insurance 
actually costs more for older people as we wind up seeing a 
spiral.
    Likewise, the special enrollment verification are designed 
to help people, as you said, Mr. Green, to obtain health 
insurance coverage through major life events, but we are 
finding that more and more people are purchasing health 
insurance when they need medical care and then dropping it 
after they receive the medical services they need. This really 
undermines the concept of insurance.
    The claim costs, according to the actuarial firm Oliver 
Wyman, found that in the first 3 months in 2014, for people 
enrolling in the special enrollment periods, their claims costs 
times were 24 percent higher than those who had enrolled during 
the regular enrollment period. In 2015, the difference 
increased to 41 percent. And these people are more than twice 
as likely to drop their policies after a short period of time.
    The administration has indeed taken preliminary steps to 
verify eligibility, but more needs to be done. I commend 
Congresswoman Marsha Blackburn for taking the lead on 
legislation to verify eligibility before allowing an individual 
to enroll in an exchange via the special enrollment period.
    Robert Pear has a piece in today's New York Times talking 
about the expected significant increases in many places in 2017 
for premium increases, and talking with experts and actuaries 
from Geisinger, for example, about why this is happening, and 
they are finding that people are gaming the system also through 
these grace periods. The law allows people to stop paying their 
premiums and still obtain coverage for another 90 days.
    Unfortunately, the incentives are basically designed to 
undermine the concept of real insurance. McKinsey & Company 
found that nearly a quarter of consumers stopped payment on 
their premiums in 2015, yet most repurchased a plan in the 
exchange the next year, many of them the same plans, without 
the need to pay their back premiums. Insurers must build the 
cost of this nonpayment of premiums into their costs for the 
following year, and this raises premium costs for everyone.
    Additionally, doctors and hospitals are on the hook to 
continue to provide coverage even for those patients who are no 
longer insured. Representative Flores' legislation would end 
this abuse by aligning the grace period for nonpayment of 
premiums before coverage ends with grace periods under State 
law. A 30-day rule would provide greater incentive for people 
to keep and maintain coverage, basically the standard in State 
law before the ACA overruled this legislation.
    Also, the failed State health exchanges, I think, is really 
an important issue to address. I know that your committee has 
issued a report, ``Misleading Congress,'' on this particular 
issue, focusing on the testimony by Acting CMS Administrator 
Andy Slavitt. States have decided that they can sue their IT 
managers who set up their Web sites when their Web sites have 
failed, and then they want to keep that money. That is really 
an abuse of taxpayer dollars.
    The Federal Government spent $5.5 billion in helping these 
States to set up their own exchanges. Oregon received 
approximately $305 million to establish an exchange. If it wins 
this lawsuit, it wants to keep the money. That is really not 
something that serves taxpayers well.
    And then finally, I also commend Representative Griffith 
and also Representative DeGette for your legislation, 
bipartisan legislation, to address the issue of really 
streamlining and unifying the dental plans for pediatric dental 
care.
    Thank you, Mr. Chairman. I will look forward to your 
questions.
    [The prepared statement of Ms. Turner follows:]
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    Mr. Pitts. The chair thanks the gentlelady.
    And I now recognize Mr. Holtz-Eakin 5 minutes for his 
summary.

                 STATEMENT OF DOUG HOLTZ-EAKIN

    Mr. Holtz-Eakin. Thank you, Chairman Pitts, Ranking Member 
Green, and members of the committee for the privilege of being 
here to discuss these five proposals to make changes to the 
Affordable Care Act in the interest of having State insurance 
markets work more efficiently and protecting taxpayer dollars. 
I think these are important issues.
    Let me begin with the issue of restrictions in the age 
variation of premiums. The ACA does restrict the variation to a 
ratio of 3:1, of the oldest versus the youngest, and the 
proposal is to allow this to go to 5:1 or a number that the 
State would pick. This matches some things that we know about 
the operation of insurance markets. It matches the ratio of 
average spending of 64-year-olds to 21-year-olds in a recent 
CBO study, in February 2016.
    We know from work we have done at the American Action Forum 
that this would lower premiums for younger purchasers of 
insurance by something like 6 to 8 percent for single 
individuals, by 7 to 10 percent for families. That would bring 
millions of additional young and healthy people into these 
exchange pools.
    That is something that the ACA needs. Right now, only about 
28 percent of the pool is 18- to 34-year-olds versus 36 percent 
of the eligible population. The absence of those low-risk 
purchasers is one of the problems in the ACA. And older 
purchasers of insurance would benefit over the long term from 
this change because, without those balanced pools, we are going 
to see increasingly higher premiums that older and sicker 
individuals will have to face for their insurance. So this is 
something that would stabilize those risk pools, bring people 
in that the ACA exchanges need, and benefit everyone in the 
long run.
    The special enrollment periods. It is a sensible request 
that we require verification prior to having the insurance. The 
purpose of a special enrollment period is to allow coverage for 
those people who are eligible for coverage, and it is a 
sensible thing to verify eligibility.
    It also turns out to be quantitatively important. About a 
fifth of the people in the exchanges got there through a 
special enrollment period, through a SEP, and these turn out to 
be more expensive risks in the pool. They are anywhere from 10 
to 55 percent more expensive depending on which source you go 
to. They appear to be becoming increasingly more expensive over 
time, and thus their impact as an issue of shifting cost to 
others and pushing premiums up, is becoming more important, and 
understanding their eligibility is important.
    And they are much more likely to lapse in their premium 
payments. And so this is a population that is, in its practice 
of purchasing insurance and letting it lapse, shifting their 
costs to others, undermining the functioning of an insurance 
market. And I think it is a good idea for the committee to look 
closely at this.
    Finally, the grace periods and their impact I think are 
important as well. The proposal to change from 90 days to 30 or 
31 to match State law does provide some basic equity between 
those who buy their individual market policy on the exchange 
versus those who buy it off the exchange. And getting the same 
treatment, I think, is an important matter of fairness.
    These generous grace periods do invite abuse. We know that 
in 2015 about a fifth of individuals stopped paying for their 
policies, and then half of them turned right around and bought 
exactly the same policy. This is cost shifting in the most 
fundamental form. Those costs don't go away. They show up as 
higher premiums. The higher premiums have proven to be 
undermining the ability of the ACA to provide broad, well-
balanced pools. And that is a concern that I think the 
committee should address.
    And then lastly, on failed exchanges and dental coverage, 
these strike me as things that the committee should simply just 
move ahead with. It is always in the interests of the committee 
to protect taxpayers against the abuse of their dollars. To 
audit and rescind the unobligated balances is, I think, a very 
sensible and straightforward thing to do, a matter of program 
integrity that everyone should endorse. And a technical 
correction on a bipartisan basis to pediatric dental coverage 
is something that no one should object to, and I applaud the 
committee for doing that.
    I appreciate the chance to be here, and I look forward to 
your questions.
    [The prepared statement of Mr. Holtz-Eakin follows:]
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    Mr. Pitts. The chair thanks the gentleman.
    And I now recognize Ms. Collins 5 minutes for your summary.

                   STATEMENT OF SARA COLLINS

    Ms. Collins. Thank you, Mr. Chairman and members of the 
committee, for this invitation to testify today on advancing 
patient solutions of lower costs and better care.
    Three years after the Affordable Care Act's major health 
insurance expansions went effect, nearly 28 million people are 
estimated to have coverage either through the marketplaces or 
Medicaid. There are 20 million fewer people uninsured since the 
law went into effect in 2010.
    There is considerable evidence that marketplace and 
Medicaid coverage is improving people's access to health care. 
The Commonwealth Fund's ACA tracking survey of 2016 finds that 
majorities of enrollees who have used their health plans, 
either marketplace or Medicaid, report that they would not have 
been able to access or afford this care prior to getting their 
new insurance. Majorities of marketplace or Medicaid enrollees 
are satisfied with their insurance. Federal data are indicating 
nationwide declines in consumer out-of-pocket spending growth, 
cost-related problems getting needed health care, and medical 
bill problems.
    Challenges remain. While the uninsured rate has fallen 
significantly among working-age adults, differences persist 
between lower- and higher-income adults. This is driven in part 
by the fact that 19 States have yet to expand their Medicaid 
programs, as well as dwindling resources for outreach and 
enrollment. News reports about high premium requests by several 
insurers and United Health Group's decision to pull out of 
several State marketplaces next year have raised concerns about 
the stability of the marketplaces.
    There are several reasons why these developments don't 
portend disaster: Most marketplace enrollees won't pay double-
digit increases in 2017, insurers premium requests are subject 
to State review, and 83 percent of marketplace enrollees 
receive tax credits to help them pay their premiums. Most of 
the increases will be absorbed by those credits.
    Research is finding that the marketplaces are competitive 
and creating value for consumers. Most participating insurers 
remain committed to the marketplaces in 2017. While risk pools 
remain in flux, the premium stabilization programs are working 
for the most part. However, the phase-out of the reinsurance 
program this year will likely lead carriers to adjust their 
rates upwards to accommodate the loss.
    Three bills under discussion today are aimed at addressing 
concerns about the marketplace. One bill would increase the 
amount that carriers could charge older adults from three to 
five times that of younger people. Research by Rand finds that 
this change would only modestly increase insurance coverage 
among young adults but would come with the hefty price tag of 
$9.3 billion in Federal spending and a loss of coverage for 
400,000 older people. Premiums would increase much more for 
older people than they would decline for younger people.
    Another bill would require verification of eligibility for 
special enrollment periods. The Urban Institute finds that 33.5 
million people are actually eligible for the special enrollment 
periods, the vast majority because of job loss, but only 15 
percent actually are using them.
    CMS has made adjustment to the special enrollment periods, 
including a new confirmation process that requires 
documentation to verify eligibility. People can still enroll 
while the verification process is underway. The proposed bill 
goes a step further by not allowing people to enroll until they 
have submitted this documentation. These tighter standards 
could lead to even lower enrollment through the special 
enrollment periods. Only the most motivated people might 
enroll, those who are most in need of health care, leading to 
less healthy risk pools.
    The third bill would decrease the grace period for 
nonpayment of premiums from 3 months to 30 days. While some 
have suggested that people use these periods to game the 
system, the rules governing them are restrictive and aimed at 
discouraging this behavior. This policy change could mean a 
loss of enrollment in the marketplaces among enrollees of very 
modest means and an increase in the number of people who are 
uninsured or have gaps in their coverage. The policy change 
would also seem to favor those who are the most motivated to 
retain their coverage, those in poorer health.
    It is encouraging that the committee is considering ways to 
improve the marketplaces. In considering these policy 
adjustments, it is important to remember that the fundamental 
purpose of the marketplaces is to provide coverage to those who 
currently lack health insurance and thus cannot get needed care 
and are currently suffering unnecessarily as a result.
    Thank you.
    [The prepared statement of Ms. Collins follows:]
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    Mr. Pitts. The chair thanks the gentlelady.
    That concludes the opening statements of the witnesses. We 
will now begin questioning, and I will recognize myself 5 
minutes for that purpose.
    Ms. Turner, in my opening statement I spoke about the 
tremendous premium increases that are dominating headlines 
across the country, and we are looking for some solutions to 
this. In your testimony, you said that the President's 
healthcare law was designed to provide people with choice. 
Would you expound on that, explain that? Under current law, do 
you think patients have choice? Please elaborate.
    Ms. Turner. Increasingly, unfortunately, Mr. Chairman, they 
don't, because many of the plans are dropping out in areas 
where they find that they are losing too much money to stay in 
the exchange market even though they made a commitment earlier 
on to try to participate in this marketplace. And one of the 
reasons is particularly because of the gaming of the system 
that that these bills are designed to address.
    I think it is very important, if we want to have a stable 
market of more affordable coverage, that these bills help 
stabilize the market. I know that there was a consumer advocate 
quoted in that New York Times article today from Pennsylvania 
who said that over time these markets will stabilize, that this 
is just a spike, because people are getting care that 
previously did not have health insurance. But it is not going 
to stabilize if people only pay their premiums when they need 
coverage and if they have paid their premiums for only 9 months 
and try to get 12 months of coverage.
    So I am concerned this is going to actually exacerbate 
problems going forward if these bills aren't allowed to address 
the problems.
    Mr. Pitts. And in addition to the premium increases, what 
about the deductibles? Can you speak to that?
    Ms. Turner. The deductibles are much higher. Many people 
are faced with a $6,000 deductible. They are paying $500 a 
month in premiums. And $12,000 out of pocket is often more than 
their mortgage payments. And so increasingly we have got to 
address this to give people more choices rather than the 
cookie-cutter kinds of plans that the ACA requires.
    Mr. Pitts. Thank you.
    Mr. Holtz-Eakin, you remarked that the President's law was 
signed with the goal of providing accessible, affordable health 
insurance. And I mentioned my home state, the percent increase 
in premiums for individual plans. And the numbers provide 
factual evidence that plans have little room to innovate and 
adapt in today's government-controlled exchange market. Might 
the bills in front of this committee today lead to lower 
patient cost as a result of giving states flexibility and plans 
the fairness to innovate? Would you elaborate on that?
    Mr. Holtz-Eakin. I think that is right. Our estimate, for 
example, of the benefits of allowing wider age rating bands is 
that something like three million younger Americans might be 
able to move into the exchanges. That would be an incredibly 
valuable addition of low-cost purchasers into these exchange 
pools.
    One of the deep concerns that I have is that we are seeing 
these exchange pools become progressively more expensive, that 
we are not in a dramatic death spiral yet, but we are moving in 
that direction. That serves no one well. Those who remain in 
the pools pay higher premiums. Others are excluded from health 
insurance coverage that was the basic goal of the law.
    Finding ways to innovate and allow low-cost insurance 
options instead of four colors that are getting increasingly 
expensive I think would be a very valuable thing, and the 
approaches that the committee has in front of it are a start on 
that course.
    Mr. Pitts. Ms. Turner, you mentioned that everyone must 
play by the rules. Can you talk a little bit about how people 
are gaming the system that hurts working families who are 
playing by the rules?
    Ms. Turner. I think that is really the important point, is 
that those people who figured out that they can get 90 days of 
coverage after they stop paying premiums, that really hurts the 
people who are playing by the rules and paying a full year's of 
premiums to get their coverage.
    So increasingly people will figure out: Oh, well, I can 
stop paying my premiums on October 1 and I can still get 
coverage until the end of the year and I can then go back and 
enroll in the same plan without having to pay the back 
premiums. That means that the insurance company has to build 
that nonpayment of premiums into the premium costs for next 
year, which gets to the problem that you asked Dr. Holtz-Eakin 
about, is that fewer and fewer people buy the coverage, making 
it more expensive for everyone.
    Mr. Pitts. And real quickly, so it is your view that giving 
states flexibility on grace periods and age bands, while 
tightening the special enrollment periods, could lead to lower 
costs for families?
    Ms. Turner. Absolutely. And states have much more 
experience, decades of experience, in learning that those kinds 
of regulations really do help to stabilize the market so it can 
become more affordable.
    Mr. Pitts. My time has expired.
    The chair now recognizes the ranking member, Mr. Green, 5 
minutes for questions.
    Mr. Green. Thank you, Mr. Chairman.
    And thank our panel for being here.
    Prior to the ACA, the individual market was deeply broken. 
And, again, having worked in health insurance, which wasn't 
regulated in Texas, we did regulate some policies, but the ACA 
has made great strides and to make coverage more meaningful and 
affordable and expand access and stabilize the individual 
insurance market. Many of the challenges in the individual 
market are intrinsic to the market and have been around long 
before the ACA. One example is this churn. It is a term 
describing people moving in and out of coverage every year.
    Dr. Collins, can you talk about the churn and how the 
individual market was previously broken and why changes like 
churn are not unique and will continue to happen?
    Ms. Collins. That is absolutely correct. The individual 
market has long been characterized by high rates of turnover. 
But prior to the Affordable Care Act it was extremely difficult 
for people to get policies when they tried to buy them. They 
were very expensive. People were priced out of coverage if they 
had a preexisting condition, or even turned down. We estimate, 
the Commonwealth Fund Biennial Health Insurance estimates that 
about nine million people who tried to buy a plan in 2010 were 
turned down or charged a higher price or had a preexisting 
excluded because of their health and didn't end up buying a 
plan.
    So the market was broken prior to the Affordable Care Act. 
The provisions that have been put in place under the law have 
made it vastly more accessible for people with health problems 
and people who have low incomes and couldn't afford to pay a 
premium.
    Mr. Green. OK. Of the legislative type proposals we are 
considering, I am particularly concerned about the bill that 
would change the current 90-day grace period to 30 days. It is 
worth mentioning that Medicaid Advantage has 60-days grace 
period, Medicaid has a 60-day grace period. After reading the 
bill, I am worried my colleagues have become focused on that 
fraction of the people who try to game the system that 
historically have always tried to game the system, and that 
they have forgotten the realities of everyday life.
    Under this bill, a person who is eligible for an advanced 
premium tax credit misses a single premium payment, they would 
lose their insurance after 30 days and not be able to get 
coverage until the next enrollment period. I understand the 
need for oversight, but especially for this population we 
should be looking for ways to keep people insured and not the 
opposite.
    Dr. Collins, can you talk a bit about the population that 
is eligible for this advanced premium tax credit?
    Ms. Collins. Right. So people who are eligible for the tax 
credits have incomes under 400 percent of poverty, low and 
moderate incomes. The vast of people who are currently 
receiving tax credits have incomes even lower than that, more 
in the 250 percent of poverty and below.
    I would also like to correct some statements that have been 
made about how the grace period works. Carriers are only on the 
hook for the first month of nonpaid premiums and they get a tax 
credit to cover those expenses, this claims cost in the first 
month. They are not on the hook for the second and third months 
of that grace period. They receive a tax credit, but they do 
not have to pay claims costs. Those tax credits have to go back 
at the end of the year.
    Also, individuals who don't pay their premiums for the full 
time of the grace period have to pay their tax credits back for 
that first month and also continue to owe the premium paid in 
that first month. So it is not true that carriers are on the 
hook for those claims costs in the second and third months when 
they are not receiving reimbursement.
    Mr. Green. OK. What impact do you think this policy would 
have on consumers in the risk pool?
    Ms. Collins. One of the biggest issues with enrollment 
right now is that we need to encourage people to come in rather 
than discourage them to come in. What a more restrictive grace 
period would do would make it more likely that healthy people 
would drop out because of failure to pay a premium in the first 
month. People who are highly motivated to stay in, the less 
healthy people, would likely try to make that premium payment 
in that first month and stay in. So it would skew the risk pool 
away from healthy people and more towards sicker people.
    Mr. Green. Well, one of the concerns I have on this 
legislation, some of it may be adjusted, but the biggest 
concern I have is in our district in Houston, Texas, I have 
50,000 people who would be covered if the State of Texas 
expanded Medicaid. I think that is something we ought to be 
concerned about instead of that.
    But also what happened because of the Supreme Court 
decision, we have people who are not poor enough to get 
Medicaid, but they also don't earn enough money to get the 
subsidies. So they are caught in the middle, and that is 
something maybe we ought to look at and see how we can fix that 
for these people who are not the poorest of the poor but very 
close to it, because in Texas you have to be pretty destitutely 
poor to get Medicaid.
    Mr. Chairman, thank you for the time.
    Mr. Pitts. The chair thanks the gentlemen.
    And I now recognize the gentleman from Pennsylvania, Dr. 
Murphy, 5 minutes for questions.
    Mr. Murphy. Thank you, Mr. Chairman.
    I thank the panel too for being here to give us some 
important insights.
    One of the subcommittees of this overall committee, the 
Oversight and Investigations Subcommittee, which I chair, has 
been conducting some pretty robust oversight over the state 
exchanges for more than a year. And specifically the 
subcommittee has been and continues to examine the expenditure 
of Federal funds on state-based exchanges' activities and long-
term sustainability challenges that these State exchanges face. 
And another significant component of this work is examining 
CMS' oversight over these.
    Ms. Turner, in its oversight of the state exchanges, the 
subcommittee has held hearings and requested CMS on the state-
based exchanges produce documents and information to our 
subcommittee and to the full committee. But most recently the 
subcommittee released a report detailing Acting Administrator 
Slavitt's misleading testimony before the O&I Subcommittee on 
December 8, 2015, about $200 million supposedly being returned 
from state-based exchanges.
    Based on its ongoing oversight, our committee remains very 
concerned about the long-term sustainability challenges the 
state-based exchanges face and CMS' lack of oversight over 
them. So given all this, I want to ask you, do you believe that 
CMS is performing adequate oversight over these state-based 
exchanges.
    Ms. Turner. I don't believe that there is significant 
evidence that they are. I believe that they have their hands 
full with many of the other provisions of trying to run this 
law and I think oversight of the states has really been lax. In 
particular with the failed state exchanges, they should have 
probably been more alert in the beginning to begin to see that 
States like Oregon and Maryland and Massachusetts were failing.
    And I commend you for the report, because when Acting 
Administrator Slavitt said that about $200 million had been 
returned and your committee found that his own data showed that 
only a little bit more than $21 million had been returned, I do 
think that they need to square what one CMS agency is saying 
with what the Administrator is telling Congress and really get 
to the bottom of that. The taxpayers require that.
    Mr. Murphy. Yes. And it is very important to us. Look, we 
want to make sure people have adequate health care, but between 
that unaccountability and other errors and fraud, we have heard 
from CMS that billions of dollars are unaccounted for. It is a 
problem for us. So what steps would you recommend that Congress 
take to make sure we have adequate oversight of these?
    Ms. Turner. Well, I think what you are doing with the 
hearings and with the oversight, and if it requires subpoenas 
to get the information about why there is this disconnect 
between what he is telling you in your hearings and what the 
reports are showing, I think that the taxpayers need to have 
that information. Continued oversight, I think, is tremendously 
important. Thank you for that.
    Mr. Murphy. So given that, are there any indications that 
CMS is actively trying to recoup taxpayer dollars that were 
provided to states for the purpose of providing these state 
exchanges? Do you see any evidence? We would like to know if 
there is anything positive.
    Ms. Turner. Well, I understand that they have provided some 
very limited and highly redacted memos to your committee. It 
does not appear that they are being as responsive as they need 
to be in order, once again, to make sure that taxpayers are 
being well served and their money is being spent on the intent 
of this law, as you point out, to provide affordable coverage 
to millions of people.
    Mr. Murphy. Thank you.
    Mr. Holtz-Eakin, good to see you again. I have a question 
for you on this issue about the most expensive plan can only 
cost three times more than the least expensive plan when it 
comes to the patients' ages, and this 3:1 band has led to some 
problems.
    I received a letter from an association last evening that 
said modifying age variation in premiums would help balance 
risk pools and stabilize markets, and that is one of the bills 
this committee is reviewing. Is it fair to say that working 
families and sick patients would benefit from other balanced 
risk pools and stabilize the marketplace overall? Do you think 
so?
    Mr. Holtz-Eakin. I believe so. I am concerned that we will 
see these exchange pools become increasingly unbalanced and 
thus expensive for those who remain in them and crowding some 
people out----
    Mr. Murphy. Particularly the younger?
    Mr. Holtz-Eakin [continuing]. And working families unable 
to purchase insurance. That is at odds with the intent of the 
law. And I think stabilizing the pools is a priority.
    Mr. Murphy. So one of the things we keep coming up with in 
reality, as was described among the panel here too, is that 
people may sign up for something and then drop it. It is sort 
of like people will buy car insurance when they need to get 
their car, and then they drop it immediately afterwards. I 
experienced that once being hit by a driver who dropped their 
car insurance. Didn't help me at all.
    But the issues here, do you think that lowering that price 
and balancing those risk pools will be an enticement to have 
people stay in with insurance?
    Mr. Holtz-Eakin. I do. I know there is an immediate concern 
about the older consumer under this proposal, and I understand 
that. But those consumers of exchange insurance are going to be 
increasingly harmed by unbalanced risk pools. It is in their 
long-term interest to get the young and healthier into the 
pools. This is one way to do that.
    And in the end, if you look at all of the things that are 
being considered in this front, costs don't go away. If they 
are not paid by an insurance company, they are going to be put 
into providers' rates and they are going to show up in 
insurance premiums regardless. And so having people pay for the 
medical costs they incur through the insurance that they have 
bought is the primary objective and anything that aligns those 
incentives you should pursue.
    Mr. Murphy. Thank you.
    I yield back. Thank you.
    Mr. Pitts. The chair thanks the gentleman.
    Now I recognize the ranking member of the full committee, 
Mr. Pallone, 5 minutes for questions.
    Mr. Pallone. Thank you.
    The Affordable Care Act has made great strides in expanding 
health coverage to an additional 20 million Americans, but 
there are still Americans who we have not reached. 
Unfortunately, 2.9 million Americans lack coverage because 
their states have not expanded Medicaid. But in the private 
insurance market there are still more than 10 million Americans 
who are uninsured and eligible for marketplace coverage, and 7 
million of them are eligible for tax credits to help them pay 
their premiums.
    Before we consider revising or even backtracking on the 
progress we have made, one important thing we can do to 
stabilize the individual insurance market is to grow it, and we 
need to reach these people so that they know they are eligible. 
And the more people enrolled, the greater the risk pool, and 
the more stability we will see.
    So my questions are of Dr. Collins. What can we do to reach 
the uninsured? Can you describe the importance of outreach 
efforts and navigators and the role that you might see 
navigators occupying as we move forward?
    Ms. Collins. A lot of research has shown that outreach is 
critical to both letting people know about what their options 
are and helping them enroll. We see greater enrollment among 
people who get assistance in the enrollment process.
    I also think on the issue of young adults, this is 
particularly important. Most young adults who are eligible for 
coverage under the law have incomes that make them eligible for 
the tax credits, incomes that make them eligible for Medicaid. 
But disproportionate numbers of people enrolled in Medicaid are 
actually young people.
    So the change in the rate banding really won't have much of 
an effect on enrollment of young people. It is really getting 
young people to enroll in the marketplaces and find out that 
they are eligible for subsidies, find out that they are 
eligible for Medicaid. States expanding their Medicaid programs 
would also significantly increase enrollment of young adults in 
the pools.
    The other important point about young adults is that they 
actually are a relatively large percentage of people enrolled 
in the marketplace. It is about 30 percent of people currently 
enrolled in marketplace plans are between the ages of 19 and 
34. Forty-six percent of those enrolled in Medicaid among the 
adult population are young people.
    So it is not really true that we don't have any young 
adults in the marketplace. This is actually a pretty sizeable 
number of people who are enrolled who are in that age group.
    Mr. Pallone. Now, what about navigators, do you want to 
talk about that and what role they could play as we move 
forward?
    Ms. Collins. So navigators continue to be very important. 
We do see that people are much more likely to understand the 
options they have available to them when they are choosing 
marketplace plans if they have some assistance. People are much 
more likely to complete the enrollment process if they have 
navigation.
    Mr. Pallone. Now, I use that term ``navigators.'' How would 
you define ``navigators,'' basically?
    Ms. Collins. Basically someone who helps people through the 
enrollment process. Brokers can also help people through the 
enrollment process and they have also been critical to getting 
people enrolled.
    Mr. Pallone. Just talk about insurance brokers. I think a 
lot of people don't even realize they can still use an 
insurance broker. Is that an area where maybe we need to do 
more, to have actual insurance brokers play a bigger role?
    Ms. Collins. So brokers can absolutely help people enroll 
in plans. They have been critical. They have also been very 
important for small businesses getting coverage under the----
    Mr. Pallone. But even for an individual, can use a broker, 
right?
    Ms. Collins. Even individuals can use a broker.
    Mr. Pallone. But not that many do, it seems. I am just 
doing anecdotally. I don't have any statistics. But it seems to 
me that people in the individual market rarely go to brokers.
    Ms. Collins. Right. So part of the outreach efforts could 
be to inform people that they can get help if they aren't able 
to do it on their own.
    Mr. Pallone. All right. Then the last question, would the 
bills before us today help to enroll the uninsured in any way?
    Ms. Collins. The bills today would likely have a depressing 
effect on enrollment, particularly the change in the special 
enrollment periods, making people provide documentation. We 
know that very few people are actually using special enrollment 
periods. They were designed expressly for people who lose 
coverage between open enrollment periods and most of those are 
as a result of a job loss. And so we should be trying to make 
this process easier, make people aware of it.
    The reduction in the amount of time for the grace period 
would also likely lead to a loss of enrollment in the 
marketplaces and probably among less healthy people. The rate 
banding change would mostly affect older adults. Many of them 
would see their costs go up exponentially. They actually will 
pay much more in premiums than their average expenses.
    And there would be only a marginal effect on enrollment of 
young adults. And most of the change in the enrollment of young 
adults that Rand is showing comes from a shift out of employer 
coverage and into the marketplaces.
    Mr. Pallone. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes Dr. Burgess, 5 minutes for questions.
    Mr. Burgess. Thank you, Mr. Chairman.
    And, first off, let me just address the special enrollment 
period. I can remember some hearings we had in the past and 
maybe even some forums we did in the Health Caucus where we 
talked about community rating and guaranteed issue and the 
experiments that were tried in some states in the 1990s and the 
predictable effect of escalating premiums and then, subsequent, 
people dropping out of coverage.
    It did come up in my district. We had a constituent case 
earlier this year. Right after the closure of the open 
enrollment period, a fellow who actually has a medical 
background in my district--he is a pharmacist, and he called, 
and he said, ``One of my employees is really, really sick. I am 
afraid she might have cancer. She has no insurance. Do you have 
any advice for me?'' And I said, well, the open enrollment 
period had just closed. Why didn't you encourage her to buy 
insurance then? He said, ``Well, she wasn't sick then.''
    And, that just kind of underscores--here is, again, someone 
with some medical knowledge. It just underscores the difficulty 
of what the special enrollment period can engender. Now, this 
individual, it turns out, our office helped, and she did have a 
legitimate claim to a special enrollment period and did receive 
the retroactive coverage.
    I have an e-mail that I received from healthcare.gov, and I 
don't know if you can read that well enough, but I actually had 
an unsubsidized individual market policy in the Federal 
fallback exchange in Texas. And I had that for a couple of 
years until it got too expensive and I had to find something 
else. But it was hard to get into ObamaCare, and then it was 
hard to get out of. And I do want to stipulate, this was 
unsubsidized. These were my own dollars that I was paying for 
this coverage.
    Three months, 4 months after I have left ObamaCare, I am 
getting these e-mails. ``The open enrollment period is closed, 
you missed your chance, but, doggone it, you can still get 
in.'' And there is a big, yellow button there that you can 
click on, and we can perhaps help you find a backdoor back into 
ObamaCare if you would like.
    Now, the good news for people who are worried about us 
spending too much money, the yellow button didn't work, and so 
there wasn't really a way back in.
    But it just underscores the problem that we have with the 
special enrollment period. It really does lead to, again, what 
was found to be a very difficult time in an experiment with 
guaranteed issue/community rating in some States that tried 
that back in the 1990s.
    I just wondered, Ms. Turner or Dr. Holtz-Eakin, if you had 
any thoughts on that.
    Ms. Turner. This really gets to what you said earlier, Dr. 
Burgess, about where is this going. And I think that you have 
to look at the incentives that these provisions allow. They 
allow people to wait until they are sick to get coverage. They 
allow people to really game the system in a number of different 
ways.
    And if people figure out they can do that, then you are 
going to wind up with unstable pools, you are going to wind up 
with higher and higher costs, and someone has to pay those 
costs. Maybe most of the people in the exchanges are 
subsidized, but the taxpayers are paying those costs. So, one 
way or the other, we are going to be paying for laws that 
encourage people basically to do the wrong thing.
    The individual mandate was designed to try to keep people--
have insurance and can keep it, but these provisions really 
undermine that goal and, I think, undermine, therefore, the 
goal of the law.
    Mr. Burgess. Well, and I of course opposed the individual 
mandate and continue to oppose it, but I guess it begs the 
question, is the individual mandate just not harsh enough? Are 
we not penalizing people enough to force them into these 
insurance policies?
    Ms. Turner. Doug Holtz-Eakin mentions that in his 
testimony.
    Mr. Holtz-Eakin. We testified last year on alternatives to 
the individual mandate, because it is clear it is not doing 
what it was intended to do in principle. And so some other 
approaches might be necessary.
    I mean, I think the history of those states that had 
guaranteed issue/community rating speaks for itself. I lived in 
New York State, and that was an insurance market that had self-
destructed, and there is not a happy history on that.
    I think it is ironic that we are having this discussion 
today about shifting costs and there are some who would defend 
the cost shift, because the entire Affordable Care Act was 
premised on the notion that it was inappropriate to have these 
cost shifts and we had to get everybody in the pool. That same 
principle should apply in the discussion today.
    And it is also important to recognize, as a matter of 
arithmetic, you can't count on the tax credits to cover all 
ills. ACA spending is projected to grow at a rate of 7.7 
percent per year over the next decade--much faster than our 
economy, much faster than revenue, which is going to be 4 
percent, and the most rapidly growing Federal health program. 
There are not infinite dollars to solve all problems.
    Mr. Burgess. Thanks, Mr. Chairman. I hope we will have time 
for a second round. I will yield back.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentlelady from Florida, Ms. Castor, 5 minutes 
for questions.
    Ms. Castor. Thank you very much.
    Thank the witnesses for being here.
    And I want to yield just a few seconds to Gene Green, 
because he wanted to follow up on a point.
    Mr. Green. After this exchange, I have been around a while. 
It seems like in the 1990s the Heritage Institute is the one 
who recommended the individual mandate because people ought to 
be self-reliant. Is that correct? Do you all remember that 
statement?
    Ms. Turner. The Heritage Foundation did. And they----
    Mr. Green. Seems like in 1993 and 1994----
    Ms. Turner [continuing]. Have since rescinded that.
    Mr. Green [continuing]. When we had the Clinton plan that 
that was one of the recommendations for that, so--but anyway.
    Thank you, and thank my colleague for yielding.
    Ms. Castor. Thank you.
    Well, thanks again.
    It is very important for us to continue to focus on 
improving the Affordable Care Act, but you can't deny the 
success on behalf of the families we represent back home. I 
mean, we are at the lowest uninsured rate in the history of the 
country, at about 9 percent. That is pretty remarkable, and 
that has been a godsend to so many families. The ability to end 
discrimination in health insurance so that our neighbors and 
family members with a cancer diagnosis or some serious 
preexisting condition, they now can access affordable health 
insurance.
    The policy that you buy is so much more meaningful than 
what it used to be in kind of this scattershot pre-ACA market. 
Plus, the policies usually promote better health because we 
focus on wellness and there are certain incentives for 
preventative care, like no co-pays for certain things.
    And then all of my neighbors that rely on Medicare, 
Medicare is stronger now after the Affordable Care Act. And one 
of the stats that I love for the State of Florida is how much 
money the ACA has helped put back into the pockets of my older 
neighbors--it is about $980 million--just because of the 
closing of the doughnut hole and their savings on prescription 
drugs.
    Also, in Florida, we were the leader in the Federal 
exchange. We had a very high uninsured rate, a completely 
unbalanced market. So 1.7 million Floridians now have been able 
to access affordable coverage. And it is important to focus on 
the cost. In Florida, 72 percent of the Florida marketplace 
enrollees obtained coverage for $100 or less. That is after the 
tax credits.
    And the competition is key. And in some states that don't 
have these robust marketplaces, one of the things we need to 
focus on is how we incentivize greater competition. In Florida, 
consumers could choose from an average of 42 health plans for 
2015, and we think this coming year it will be about that, if 
not a larger number of issuers and plans.
    And Ms. Collins is right that, prior to the ACA or as we 
were working through the early years, people were very 
concerned that younger folks would not enroll, but it is not 
true now. We have been pleasantly surprised that it is pretty 
balanced, and in Florida about 525 consumers under the age of 
35 are signed up for marketplace coverage. That is 33 percent. 
So that is pretty good.
    So, as a reminder, open enrollment begins November 1. Go to 
healthcare.gov to check out your options.
    Americans are doing what they do best: they are going 
shopping. It is another surprise that they are actually looking 
at these plans and switching. We thought that many people would 
just stick with that one issuer, but they are pretty discerning 
if they have the information they need. So that is another area 
where we could work together to improve, to ensure people know 
the providers and the doctors that are being offered.
    But I would like to focus on premiums, because I think we 
all agree it is incredibly important that premium prices on the 
exchanges remain affordable. But I worry that the bills that 
are under discussion today will actually increase costs and 
also harm access to insurance.
    And I am afraid that some of the headlines in the press 
sensationalize the premium rates and confuse consumers. For 
example, despite headline predictions in 2015 that, based on 
preliminary rate filings, there would be double-digit rate 
hikes in the marketplaces in 2016, the average cost of 
marketplace coverage for people getting tax credits went from 
$102 last year to $106, a 4-percent change, just $4 per month. 
And, in Florida, the premiums rose only 2 percent, the average 
monthly cost of $84 in Florida with the tax credits.
    So, Dr. Collins, why did the preliminary rate filings 
differ from the actual rates? Maybe you can help clear this up 
a little bit.
    Ms. Collins. So there are a few different reasons for that. 
The high prices that were seen by some requests--requests by 
some insurers are preliminary. They are subject to rate review. 
And in many states----
    Ms. Castor. At the state level. I mean----
    Ms. Collins. At the state level. At the state level. Many 
states will just adjust those down.
    The other major factor is that people will shop around. So 
just because carriers are charging high prices in some markets 
doesn't mean people are actually going to buy those plans. As 
you mentioned, 43 percent of people that shopped for plans 
changed plans last year. And we see the effect in the increases 
in premiums that people actually paid as opposed to those that 
we are hearing about now.
    So it is the rate review, it is people shopping, choosing 
the highest value plan for them, and it is the tax credits that 
protect them from these----
    Ms. Castor. And active state regulators that will push back 
on some of the insurers' requested rate increases.
    Ms. Collins. That is right.
    Ms. Castor. Great. Thank you very much.
    I yield back.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentleman from New Jersey, Mr. Lance, 5 minutes 
for questions.
    Mr. Lance. Thank you, Mr. Chairman.
    And good morning to the panel.
    I would like to concentrate on cost-shifting.
    Dr. Holtz-Eakin, you say that the ACA is likely to increase 
7.7 percent--was that the figure you gave?--over the next 
several years, regarding the costs?
    Mr. Holtz-Eakin. In the most recent CBO baseline, the 
average annual increase in ACA spending is 7.7 percent per year 
over the next 10 years.
    Mr. Lance. And this is clearly higher than anticipated 
growth in the economy. Is that accurate?
    Mr. Holtz-Eakin. Yes. The economy will grow at 4.1 percent, 
nominal, over the 10 years in their projection.
    Mr. Lance. And, therefore, in your professional judgment, 
how will the difference be made up?
    Mr. Holtz-Eakin. It will come arithmetically by either 
cutting spending in other programs, raising taxes, or borrowing 
even more.
    Mr. Lance. And I would certainly like the expert view of 
the other members of the panel--Dr. Collins--regarding that 
issue. And do you agree with the figures that have just been 
presented?
    Ms. Collins. Well, 7.7 percent is actually--what we are 
seeing in the marketplaces, in terms of rate increases, are 
very similar to what we are seeing in employer-based plans.
    Mr. Holtz-Eakin. It is not a premium. It is a Federal 
spending number.
    Ms. Collins. Right.
    But, also, the other important thing to keep in mind is 
that costs have been much lower than were originally projected 
by the Congressional Budget Office.
    Mr. Lance. I am speaking about where we are now, not where 
we may have been in the past. Are you in agreement that this is 
likely to be 7.7 percent each year, compounded I assume, over 
the next decade?
    Ms. Collins. I think that we can expect some growth in 
costs over the next year. We have seen a reduction in the rate 
of growth in healthcare costs----
    Mr. Lance. A reduction in the rate of growth. That is 
different from an increase.
    Do you agree or disagree--that is why we have experts on 
this panel who are not necessarily in agreement. Do you agree 
that it is likely over the next decade, a 7.7-percent increase 
in each of the next 10 years? And perhaps Dr. Holtz-Eakin is 
wrong. I am asking your professional opinion.
    Ms. Collins. That is a relatively moderate rate of growth 
in healthcare costs, relative to the past, over the next few 
years.
    Mr. Lance. I am sorry. I didn't understand that response. 
Is it likely to be 7 percent? Is it likely to be 2 percent? Or 
perhaps Commonwealth Fund doesn't know.
    Ms. Collins. I think that you have to look at estimates in 
the context of where we have been in the past, what was 
projected. And these are likely in line, maybe slightly higher. 
But they will vary over time. Estimates are estimates, and we 
will have to see how that plays out.
    Mr. Lance. Ms. Turner, your comments on what I am 
suggesting? I am persuaded that it is likely to be roughly 7 or 
8 percent, and, of course, only time will tell. And, from my 
perspective, the economy is not going to grow at that rate. I 
wish it were, but I don't think it is. And, therefore, I am 
asking where the difference has to be made up. And perhaps you 
disagree with me, but I would like your comments.
    Ms. Turner. Well, certainly, if it is 7.7 percent, as CBO 
says--and Dr. Holtz-Eakin, as former Director of the CBO, I 
think is our most expert witness on this panel----
    Mr. Lance. Yes.
    Ms. Turner [continuing]. Would suggest that it is growing 
much faster than economic growth.
    Mr. Lance. Yes.
    Ms. Turner. And if, in fact, these provisions, which could 
help stabilize pools and, therefore, premium rates, do not go 
into effect----
    Mr. Lance. Yes.
    Ms. Turner [continuing]. Then you are going to wind up with 
higher and higher costs of premiums. And even if the individual 
policyholder isn't paying that, the taxpayer is. And that is 
really what this number is about, is overall taxpayer spending, 
the rate of growth of spending on health care.
    Mr. Lance. Right. From my perspective, taxes could be 
increased. Those who were formerly insured and remain insured 
will have their premiums increase. Or, alternatively, as is 
always an option, there will be further deficit-spending in 
this country. I have seen estimates that the deficit annually 
is likely to increase at the end of this decade. We have done a 
better job since Republican control of the House of 
Representatives: $1.4 trillion, $1.3 trillion in the first 2 
years of the Obama presidency, now roughly $450 million. In my 
judgment, it is going to go up again unless we get a handle on 
this. And these are the issues that concern me greatly.
    Thank you. I yield back 18 seconds.
    Mr. Pitts. The chair thanks the gentleman, now recognizes 
Mr. Schrader, Dr. Schrader, 5 minutes for questions.
    Mr. Schrader. Well, thank you, Mr. Chairman. And I 
appreciate the hearing. It is fun to actually be talking about 
ways to improve the delivery of health care, so I appreciate 
the opportunity to embark on that.
    I notice that the title of the hearing is ``Patient 
Solutions for Lower Costs and Better Care'' and point out for 
my colleagues here that myself and Congressman Bilirakis have 
introduced a bill that talks about lowering drug costs through 
competition. I would like to maybe get a hearing on that at 
some point in time. As you know, some of these folks come in 
with their hedge-fund money and buy up these drug companies and 
then charge exorbitant prices that no one can afford. And so 
this is a nice market-based solution for that.
    Just a little perspective--and maybe I am wrong. We have 
experts that can correct me. But the individual market that we 
are worried about really constitutes only about 5 or 6 percent 
of the total insurance market out there. We have Medicare, we 
have employer plans and everything else. So while we are 
working very hard to fix the individual market in particular, 
keep it in perspective. It is a small portion of our healthcare 
market.
    That doesn't mean we shouldn't work on it. It doesn't mean 
that some of what happens there will influence certain 
healthcare costs in other arenas also. So I think this is 
worthwhile.
    I would also point out that the instability in the market 
is I don't think unexpected. I did not expect, with the advent 
of the ACA, everything was going to be great. No one had any 
idea of what the uninsured population out there would really 
bring. The rate at which young people would sign up was always 
in question. And maybe some of these ideas will hopefully 
address that.
    Some competing information that I am going to be looking at 
from Commonwealth versus some of the other studies, the 
McKinley study for instance, it would be very interesting to 
get to some of these things. And I, for one, would be 
interested in working on it.
    Let's talk about the age bands a little bit. My biggest 
concern isn't to the consumer; it is to the government. If we 
go to that 5:1 age band--I think, Ms. Collins, Dr. Collins, you 
alluded to it--the costs to the government could be 
significant. My understanding is the subsidies will go up to 
match the increased premiums for a lot of these people.
    So the out-of-pocket expense to the senior, who is going to 
be paying a higher rate, may not be that much more, but the 
cost to the government could be in the billions of dollars.
    Could you comment on that, Doctor?
    Ms. Collins. That is right. So this is from research that 
RAND has done. And what happens is that people--the higher rate 
bands means that premiums go up for older adults significantly, 
and because many of them are eligible for tax credits, it means 
the costs of those plans will go up----
    Mr. Schrader. Yes.
    Ms. Collins [continuing]. On the order of $9.3 billion. So 
that is the big source of----
    Mr. Schrader. So I think, as we discuss this, we want to 
make sure we know how we are going to pay for that. Is the 
taxpayer on the hook?
    Mr. Eakin, do you have a----
    Mr. Holtz-Eakin. If I could, that is one piece of the 
story, but, remember, there would be a reduction in premiums 
for younger Americans, and many of them will be having 
subsidized insurance coverage as well.
    As the Congresswoman from Florida pointed out, preventive 
care is an important part of the design of the ACA. Presumably, 
getting those young people in and undertaking preventive care 
will make them less expensive risks when they age, so they 
simply won't show up and be expensive, which is a cost the 
government would ultimately have to pick up. And an unbalanced 
pool is the greatest threat to the budget and to the premium 
costs.
    Mr. Schrader. Agreed.
    Mr. Holtz-Eakin. I think you have to look at all those 
factors, not just the rifle shot to older purchasers, in the 
moment when you make the change.
    Mr. Schrader. Well, we have to because CBO will score this, 
and we have to find a way under the current rubric to find a 
way to pay for it.
    And I agree with you that, over the long term, the ACA will 
be a huge plus because of the preventative care. And we are in 
the worst possible situation right now. We have to pay for the 
expensive population that hasn't had good health care and, at 
the same time, spend money to do the preventable healthcare 
work so that it won't cost us too much later.
    On the grace period, I think, clearly, 3 months is too 
long. It is interesting to hear about the gaming of the system. 
I think 1 month is way too short. And I think there is, 
listening to some of the testimony, maybe we keep it consistent 
with Medicare and some of the other insurance plans we have. 
Two months--pick a number--I think that would be something that 
could be a little more reasonable opportunity for folks.
    And I guess I will stop there, Mr. Chairman. I will stop 
there. And I yield back.
    Ms. Collins. May I just make one quick point on the tax 
credits?
    There actually aren't any savings for young adults that 
enroll, on the tax subsidies, on the tax subsidy side, because 
they are already receiving subsidies. So when the premium goes 
down for them, the premiums only go down very marginally, and 
there is really no offsetting savings for the young. There is 
very little offsetting savings from the lower premiums for 
young adults.
    Mr. Pitts. Did you want to continue, Mr. Holtz-Eakin?
    Mr. Holtz-Eakin. I will just agree to disagree and would be 
happy to provide our analysis.
    Mr. Pitts. All right. Thank you.
    The chair thanks the gentleman and now recognizes Mr. 
Griffith, 5 minutes for questions.
    Mr. Griffith. As I hear the various folks talking today and 
I hear both sides talking about costs increasing and costs not 
increasing as much, I am reminded that when the American public 
was sold this plan that the President said repeatedly it was 
going to save the average or typical family $2,500 in their 
insurance premium a year.
    Nobody is arguing that we are anywhere close to that. The 
question is are the costs going up more than they would have 
otherwise? This is a failed promise that was made by this 
administration, and there is no way around that.
    Now, where are we at? We have some bills in front of us. I 
have heard a lot of discussion about some of the bills, and I 
am glad that folks realize that I am just trying to fix 
something with my little bill that ought to be fixed.
    But I also know that my colleague Mr. Allen has a bill that 
basically says that if a state exchange fails and says, ``We 
are done,'' that there ought to be an audit to make sure that 
any moneys that the Federal Government has given those state 
exchanges--we can see what happened to it. We can figure out 
later if there is money left over and try to get it back, but 
if there is no money left over, we may not have an opportunity.
    And I am just wondering if the three of you all would 
comment on that, because I haven't heard anybody comment on 
that today.
    Mr. Holtz-Eakin. I will repeat what I said at the outset, 
which is I believe this is absolutely what the committee should 
do. These are taxpayer dollars. They should be spent wisely, 
and there should be the oversight to make sure that is taking 
place. And if there are moneys left over, they should come 
back.
    Mr. Griffith. Do any of our panelists disagree with that?
    Ms. Turner. Absolutely not.
    And I think that Congressman Allen's bill is very 
responsible. If a state exchange fails, then the Federal 
Government will go in to conduct an audit to require states to 
return any unspent funds to the Treasury. It is really hard to 
argue with being responsible for Federal taxpayer dollars, as 
this bill does.
    Mr. Griffith. Ms. Collins, any comment?
    Ms. Collins. I completely agree. Unspent funds should be 
returned. Spent funds is another issue.
    If anything, the marketplaces right now are struggling and 
in need of more dollars for outreach. So the issue before in 
much of the discussion has involved enrollment. States are 
facing dwindling resources for outreach and enrollment, so, if 
anything, more resources are needed to increase enrollment in 
the marketplaces.
    Mr. Griffith. Another part of the original plan included 
various levels. And we have heard some discussion today about 
how many different plans are available in various parts. I 
represent probably the most rural part of Virginia that you can 
get as a district in toto. And in many of my areas, there is 
only one provider, so we are having some difficulties with 
choice in some of the areas. Some of the areas have two or 
three, but there are areas in my district--I represent 29 
different geopolitical subdivisions, so it is a mix, but some 
of them only have one provider.
    And then I saw a headline recently that caused me concern, 
and that was that Group Hospitalization and Medical Services, a 
unit of CareFirst Blue Cross Blue Shield, will not offer the 
bronze-level plans through Virginia's health insurance exchange 
in 2017. And, of course, the bronze level was the lowest. You 
have to buy a plan, but you can buy the cheaper version if that 
is what you want. If you were relatively healthy and you didn't 
want to go to the expensive plans, you could buy this one.
    And some people think this might be an omen for the future 
that a lot of other companies will drop the bronze plan. But, 
in 2016, 23 percent of the purchasers in the exchange were 
bronze-level purchasers.
    I am just wondering if any of you all have any comments on 
what--is that an omen, that this group has decided not to carry 
the bronze plan or offer the bronze plan? And what does this 
mean for rates for those folks who are trying to buy the 
insurance but are on the end where they either don't want to 
spend more money or can't spend more money to get the silver or 
better plan?
    Ms. Turner. It is certainly not a good omen for 
participation in the marketplace by people who are just trying 
to afford the coverage they are required to buy. And if those 
policies aren't offered, I think we will see fewer people in 
the pools, leading to the kind of spirals we have been 
discussing today that really wind up harming everybody that is 
in the pools and discouraging others from purchasing insurance.
    Mr. Griffith. Is this just another sign of failure of the 
plan overall, the ObamaCare plan overall?
    Ms. Turner. I think it is a sign of the failure to be able 
to have the flexibility to provide the kinds of policies that 
people want. If they don't purchase the policies that are 
offered--and they are very cookie-cutter plans--then more and 
more people won't buy them, and I think we will see a 
destabilized market, really undermining the goal that I believe 
we all share of what health reform should do, and that is 
provide more affordable coverage to more people.
    Mr. Griffith. I don't have any problem, Mr. Chairman. Mr. 
Holtz-Eakin wants to say something, but I am out of time.
    Mr. Pitts. He may proceed.
    Mr. Holtz-Eakin. I just want to emphasize that, on top of 
the issues that Grace-Marie has raised, the issue of high-
quality competition, making sure there are many providers, many 
plans in every piece of geography, is a concern for me.
    And we have seen, if you do apples-to-apples comparison of 
the same plan that existed last year and then this year, in the 
most recent year the weighted average increase is 10 percent. 
That is sort of apples to apples. That is what is going on. 
With diminished competition, you can expect even worse 
performance, and I think that is a concern for the future.
    Ms. Collins. Most people are actually enrolling in silver-
level plans, so the majority of the marketplace is at the 
silver plan level. That is where the tax credits are. That is 
where the cost-sharing reductions are. So most people are 
enrolling in those plans.
    That is where the price competition really is, and we are 
seeing very strong competition in many markets. Some markets, 
some rural markets, maybe less so. But, on average, competition 
is really high. It is delivering value to consumers.
    Ms. Turner. But many of the people purchasing the bronze 
plans aren't eligible for those subsidies. And we want them in 
the plans--we want them to participate in insurance, as well. 
And that is a real concern.
    Ms. Collins. I agree that there should be a range of 
choices.
    Mr. Griffith. I yield back.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentlelady from Illinois, Ms. Schakowsky, 5 
minutes for questions.
    Ms. Schakowsky. Thank you, Mr. Chairman.
    You know, I am the co-chair of the Senior Task Force of the 
Democratic Caucus, so I am particularly concerned about the 
impact a 5:1 age rating policy could have on older Americans 
and on the marketplaces in general.
    Dr. Collins, the Commonwealth Fund conducted a study on 
this very issue last September, and one of the most striking 
and almost, I would say, counterintuitive findings from this 
report was that implementing a 5:1 band, age differential, 
would increase total Federal spending by $9.3 billion.
    Can you elaborate on that?
    Ms. Collins. That is right. So RAND found in its analysis 
that, first, about 400,000 older people would lose their 
coverage because of the rate band change, but people who 
remained, older people who remained in the marketplaces would 
see their premiums go up, and that triggers an increase in 
their tax credit amount.
    The amount of that tax credit RAND estimates to be $9.3 
billion a year, so a big, big increase in cost from the rate 
band being changed.
    Ms. Schakowsky. Well, thank you.
    And, Mr. Chairman, I would like to put at least a summary 
of the Commonwealth Fund report into the record.
    Mr. Pitts. Without objection, so ordered.
    Ms. Schakowsky. Thank you.
    [The information appears at the conclusion of the hearing.]
    Ms. Schakowsky. And I have another one from the Urban 
Institute, ``Why the ACA's Limit on Age Rating Will Not Cause 
Rate Shock.'' If I could put that in the record, as well.
    Mr. Pitts. And, without objection, so ordered.
    Ms. Schakowsky. Thank you.
    [The information appears at the conclusion of the hearing.]
    Ms. Schakowsky. I wanted to discuss the results of a 
different study about the Urban Institute study. This study 
concluded that a 5:1 age band would actually undercharge young 
adults relative to their actual expenses and overcharge older 
adults relative to their actual expenses.
    I wonder, Dr. Collins, if you could discuss this finding 
and any other relevant findings from these two reports.
    Ms. Collins. That is right. So the Urban Institute looked 
at people's average costs over their lifetime, and the 3:1 rate 
banding actually tracks those expenses pretty well. So people 
who are young pay close to what their average costs are, maybe 
somewhat higher. People who are older pay a little bit lower 
than their average costs are, or around the same, in a 3:1 
banding.
    When you change this to 5:1, you get premiums that are much 
higher for older adults relative to their actual spend, 
premiums that are lower for younger adults relative to their 
actual spend. So it actually is less efficient in terms of what 
people's actual spend is over their lifetime.
    Ms. Schakowsky. Thank you.
    I also wanted to go back to an issue that has been 
discussed before, and that is changing to a 1-month grace 
period. We have been getting a number of calls from people 
about that, and let me just tell you and give you a couple 
examples.
    A family of four from my district was told that their 
subsidy was included in their premium payments. When there was 
an error processing her subsidy, the insurance chose to 
terminate the coverage. Now this family is facing thousands of 
dollars in bills for the care they received during the months 
when their coverage was terminated, and it was really no fault 
of their own.
    Another constituent, who used auto-pay to make their 
premiums, received a letter stating that their insurance had 
been terminated because of some kind of glitch in the auto-pay 
that was from the insurance company. And despite making those 
payments, the insurer continues to refuse to reinstate their 
coverage, claiming they violated the 3-month grace period. And 
now they will be without insurance until the open enrollment 
period.
    And what this means for people, if they got kicked off in 
February and the next enrollment period isn't until January, 
they could be without insurance for a long time.
    So, this idea of gaming the system, we are talking about 
the most vulnerable people. Because they are getting subsidies, 
that means they make no more than 400 percent of the poverty 
level. And it just seems to me that 90 days would make--or is 
it 60? No, no, it goes to 30, but from 90, right?
    Yes, that changing from the 90 to the 30, I think, is 
really unreasonable, and that 90 is not unreasonable.
    I guess I am out of time. That must have to qualify as a 
statement then. Thank you.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentleman from Indiana, Dr. Bucshon, 5 minutes 
for questions.
    Mr. Bucshon. Thank you, Mr. Chairman.
    First of all, Ms. Collins, you said that there is a decline 
in out-of-pocket costs. Which group of patients are their out-
of-pocket costs declining specifically? And be short. Because I 
just don't believe that.
    Ms. Collins. So that estimate comes from CMS, from the 
national spending account data. And what they showed between 
2013 and 2014 was a slowdown in the rate of growth and out-of-
pocket expenses.
    Mr. Bucshon. OK. Let me repeat what you just said. It is a 
slowdown in the rate of growth. That is different than a 
decline in out-of-pocket costs. OK. There is no----
    Ms. Collins. But they also found a decline in----
    Mr. Bucshon. You are on my time.
    Ms. Collins. Sorry.
    Mr. Bucshon. OK. Thank you.
    Ms. Collins. Sorry.
    Mr. Bucshon. So it is a slowdown in the increase.
    And the reason I say that is because that is very 
important, because if a deductible goes from $1,000 to $6,000, 
if you have a medical problem, your out-of-pocket costs are 
going to be six times as much. And what I am hearing, from all 
of my constituents--I hear this every day, every business, 
every individual--deductibles are way up.
    So, a decrease in the rate of growth of out-of-pocket costs 
is totally different than saying there is a decline in out-of-
pocket costs. That is just factually not true. And so you can 
respond to that.
    Ms. Collins. Well, right, there is a decline in the rate of 
growth. This is across the population. But they also found an 
actual decline in out-of-pocket spending on hospital care. And 
that is really----
    Mr. Bucshon. For which group of patients?
    Ms. Collins. That is the entire----
    Mr. Bucshon. Now, in fact, that could be Medicaid, 
because----
    Ms. Collins. Right.
    Mr. Bucshon [continuing]. It is true that if somebody had 
no Medicaid before and now they have Medicaid, of course their 
out-of-pocket costs are down, because now they have coverage. 
Because there is no deductibles or anything for the Medicaid 
population, right?
    So I am going to----
    Ms. Collins. Right. But this is across the----
    Mr. Bucshon. I am going to need to move on.
    Ms. Collins. Uh-huh.
    Mr. Bucshon. Thank you for that.
    And the other thing you said is they need more money to 
tell people that coverage is available to them. I can tell you, 
since ObamaCare was put into law, if you don't know that there 
are possible options out there to get healthcare coverage in 
this country, you haven't turned on the TV or listened to any--
I mean, the constant thing that ``more people will sign up if 
we just convince them, if we just get the message to them that 
they can do this'' is just not factually true. The reason 
people aren't signing up is because it is too expensive and 
because they are making a personal choice not to acquire health 
care.
    And, by the way, 9 percent of the American people is 28 
million or 30 million people. And the number of uninsured 
before was about 47 million or 48 million people. So, I just 
want to make sure that we get all that stuff correct.
    So, normally, Dr. Holtz-Eakin, how do insurance companies 
determine their pricing? I mean, is it just a general--I mean, 
if you are an insurance company and you are going to determine 
prices for auto insurance, how do they do that normally?
    Mr. Holtz-Eakin. You look at the--based on history, the 
projected frequency of accidents, you look at the cost per 
accident, what kind of vehicles people are driving, and repairs 
are increasingly expensive, and you look at the structure of 
the policy and whether people would be paying deductibles, and 
look at what is left. And what is left, the premiums have to 
cover.
    Mr. Bucshon. Right. And you look at the type of risk you 
are assuming, right?
    Mr. Holtz-Eakin. Yes, who is driving.
    Mr. Bucshon. A 16-year-old who just got his license is much 
more risky. And, you can't necessarily extrapolate that to 
health care, but they are generally higher-cost people, right?
    Mr. Holtz-Eakin. Right.
    Mr. Bucshon. And the rate is set by professional 
actuaries----
    Mr. Holtz-Eakin. Yes.
    Mr. Bucshon [continuing]. That determine this. So, what we 
are doing in the ACA is we are creating a not-actuarially-sound 
system, so we are getting the result that we would expect. 
Would you agree or disagree with that?
    Mr. Holtz-Eakin. I would agree. I think the actuaries are 
struggling to price, and we are seeing these large premium 
increases as a reflection of their past failures, given the 
instabilities.
    Mr. Bucshon. Yes.
    So, you know, the average, it has been said, was one-five 
before, approximately? Just the average marketplace, the 
pricing difference, on average, was about that before, 
somewhere in that range?
    Mr. Holtz-Eakin. Yes. I think this is an important issue. I 
mean, the CBO in February put out a report that said that the 
spending for 64-year-olds versus 21-year-olds, the ratio is 
4.8:1. So that is the data on what is going on. The pricing 
should reflect that. And so 5:1 doesn't seem unreasonable.
    And I just want to emphasize, nobody in this individual 
market, on average, is paying the costs. It is a heavily 
subsidized market.
    Mr. Bucshon. Right.
    Mr. Holtz-Eakin. And so, on average, no one is paying their 
insurance costs.
    Mr. Bucshon. Yes.
    And, I was a practicing physician before, I was a cardiac 
surgeon. And so a lot of people ask me--because they know 
that--when I am in my district, they ask me about this subject. 
And when you create--and this will be a statement, and I will 
end, Mr. Chairman.
    When you create a non-actuarially-sound system, you get the 
expected result. We are just trying to make some modest changes 
here to get us back on track so that we can accomplish the 
goals that we all believe in and get everybody health coverage.
    I yield back.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes Mr. Cardenas, 5 minutes for questions.
    Mr. Cardenas. Thank you very much.
    I appreciate the opportunity to hear from you and your 
perspective on this important issue.
    And thank you for holding this hearing, Mr. Chairman.
    I was happy to see that the administration announced a 
series of actions which included a proposed regulation to help 
consumers who turn 65 make the transition to Medicare so the 
older consumers are served by the program designed for them to 
meet their healthcare needs.
    So, Ms. Collins, can you talk a little bit about how the 
administration's actions will help seniors strengthen 
themselves and help the marketplace pools, as well?
    Ms. Collins. So that is right. So helping people move into 
the coverage that they are eligible for is very important. 
There are multiple different paths to coverage across the age 
spectrum and also dependent on income, Medicaid, marketplace 
plans. And now the transition to Medicaid is very important.
    So helping people move into the coverage that they are 
eligible for is extremely important, getting the appropriate 
subsidies for them and making sure that they are getting the 
coverage and the care that they need.
    Mr. Cardenas. So one of the fundamental things of 
anything--private sector, public sector, et cetera--is if 
something is designed with actuarials in mind and formulas, et 
cetera, that are truthful and honest about how that should work 
if it plays out appropriately, part of that is that, in this 
case, that people are actually in the particular pools or in 
the particular categories, that helps it play out more to the 
reality of how it would work better than if it falls apart 
loosely.
    In this case, if people are not aware of their eligibility 
and they stay in one category versus another, that is part of 
what hurts any system. Right?
    Ms. Collins. That is right. So it is very helpful that 
people, as they age into Medicare, enroll in the Medicare 
program. And it is also better for them. If they continue on in 
marketplace plans, they are obviously losing subsidies. So it 
is very important from a financial perspective, from a coverage 
perspective that they are able to make that transition and are 
aware of it.
    Mr. Cardenas. OK. Thank you.
    One of the things that frustrates me as a legislator when I 
was at the state level and the city council level and now in 
Congress is that when we start arguing about what is wrong with 
the current system or policy and yet at the same time we are 
not being honest with the public by juxtaposing that against 
what the system was like before the change.
    Like, right now, one of my colleagues extracted from some 
of the panelists some of the truths. A lot of complaints from 
our American citizens here that, their deductibles go up a 
little faster, what have you, it is uncomfortable, they don't 
want to spend that money, et cetera.
    But isn't it true that, under the ACA, that the overall cap 
per individual, single person in a plan is $6,850 and it caps? 
And then, therefore, there is no more out of pocket. The plan 
takes care of the rest. And if you are a family, it can go no 
higher than $13,700. Isn't that part of the ACA currently, that 
fact?
    Ms. Collins. That is correct.
    Mr. Cardenas. OK.
    Secondly is, under the ACA, a person, whether they are on a 
public plan or private plan, et cetera, marketplace plan, they 
are not allowed to be kicked off for a precondition. Isn't that 
current, the law in the United States, when it comes to 
healthcare coverage? Fact?
    Ms. Collins. That is correct.
    Mr. Cardenas. OK.
    But, see, the thing is, what I think it is important for me 
to do in the last minute and a half of my time here is to point 
out that, before the ACA came into law, what was the deductible 
cap in America for healthcare coverage?
    Let me help because of the limited time. Did it cap at 
$100,000? Maybe in a particular plan. Did it cap at $200,000? 
Maybe in a particular plan. Wasn't it legal for someone to sign 
up for a plan, an insurance company to give them that plan and 
have an unlimited deductible?
    For example, if a family member or several family members 
under one plan actually got cancer, you could have deductibles 
of eventually 20 percent of whatever the expenditure was. So if 
that cancer treatment in that family was a million dollars--
which is not unlikely, correct, panelists? That is possible, 
right, in America?
    OK. That being the case, then the family could be on the 
hook for $200,000 in 1 year's worth of coverage. But, today, 
the worst-case scenario for a family if you have cancer is 
$13,700.
    And my last point that I want to make is that it is 
inappropriate for us as legislators to remind America about the 
things that we don't like about the Affordable Care Act without 
reminding them that if that family got cancer and then next 
year, for example, the father lost his job or what have you and 
then had to go to a different plan, before the ACA, they might 
not be able to find a plan because they had the right to be 
denied because of a precondition.
    And under today, one last question to the panel is, under 
the ACA, isn't it illegal for someone to be not allowed to have 
coverage if they have a precondition? Aren't they required to 
be able to be provided coverage by the private sector or the 
public sector?
    Ms. Collins. Yes.
    Mr. Cardenas. Yes.
    Yes?
    Yes?
    Thank you very much.
    I yield back.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the vice chairman of the subcommittee, Mr. Guthrie, 
5 minutes for questions.
    Mr. Guthrie. Thank you. Thank you so much.
    And the cap would actually lessen the impact of a rating 
band change, because if people are at the cap and it went from 
3:1 to 5:1, then they actually wouldn't see an effect if they 
were at the cap, so the cap would fix that.
    But one thing that we are talking about and, trying to 
reach out to encourage more people to get into the exchanges 
without spending Federal dollars, if the marketplace worked 
like it should, then the insurance companies would be doing 
that. They would be marketing themselves and trying to attract 
people to come into their insurance companies, because that was 
kind of the concept. And so it puts into perspective what the 
problem is: The insurance companies are exiting the exchanges.
    And a month ago, we talked about plans, including the 
Nation's largest insurer in the exchange. United has pulled out 
of over 25 states because they project $650 million in losses 
this year.
    And this hurts patients. Plans exiting exchanges has the 
potential to severely limit competition in some states where 
patients may have only one option. And Alaska is an example. 
This week, their state legislature acted out of desperation to 
save their last remaining plan from running away from 
ObamaCare. They set up a $55 million bailout fund, paid for by 
insurance companies, to subsidize enrollees that can't afford 
ObamaCare's premium hikes.
    In the next decade, the Federal taxpayer will spend $568 
billion on premium subsidies, $130 billion on cost-sharing 
programs, and, still, exchanges are collapsing. So all those 
people are getting benefits, but they are also coming at costs 
to the taxpayer that we have to balance.
    So, Ms. Turner, is the answer to a failed Federal program 
more Federal intervention?
    Ms. Turner. No. At some point, I think you realize that the 
rules and regulations of the ACA are becoming counterproductive 
because people are figuring out how to game the system. And I 
think that is really what we have to look at. Where is this 
going?
    And could I just correct the record earlier about Dr. 
Collins saying that the 3:1 age band really reflects more the 
consumption of individuals? It is really closer to 6:1.
    And the 5:1 rating band that would be allowed under this 
legislation really still gives the states the authority to 
override this. So it basically says, states, we understand you 
have been regulating health insurance for a long time. If you 
know best, then you do that, but let's not use wrong data.
    Mr. Guthrie. Well, Mr. Holtz-Eakin, would the age rating 
band change? How would that affect what is happening in Alaska 
today? Would that have a benefit to try to keep people into the 
marketplace?
    Ms. Turner. Absolutely. Absolutely. If you want to get more 
young people in and if you----
    Mr. Holtz-Eakin. I agree with her.
    Mr. Guthrie. You agree with that?
    Ms. Turner. Oh, I am sorry. Was he asking you?
    Mr. Guthrie. OK. Yes, you agree.
    Well, I asked for that, but that is fine.
    And in the time I have left--I was going to yield some time 
to Dr. Burgess, but he just stepped out, I guess. In the time I 
have left, I would like to call attention to another number. 
There are 23,000, that is the number of Alaskans that state 
lawmakers are hoping to save with a $55 million cash infusion.
    This is real life in the current law. It is not working.
    And, with that, I don't see him here. I will yield back.
    Mr. Pitts. All right. The chair thanks the gentleman and 
recognizes the gentlelady from Indiana, Mrs. Brooks, 5 minutes 
for questions.
    Mrs. Brooks. Thank you, Mr. Chairman.
    I am really pleased that our committee is focusing on 
market reforms for our healthcare system, particularly those 
that might give states greater flexibility to operate their 
individual markets in ways that reflect their respective needs.
    Before 2010, 42 different states allowed an age band rating 
of 5:1. In 2010, of course, it was restricted to 3:1. As we 
have heard, this change has resulted in higher premiums for 
younger Americans, who have stayed out of the marketplace. And 
with fewer young Americans in the marketplace balancing out the 
premium costs for older Americans, this is leading to that more 
older and more costly insurance pool, which is providing no 
cost relief to seniors' rates. So it seems to me to be a no-win 
situation, but it should have a solution.
    The State Age Rating Flexibility Act would give states the 
right to establish age rating bands that best fit their 
insurance market to be more reflective of the needs of their 
population. And it seems that our goal should be to attract 
younger, healthier patients to the healthcare plans. This would 
benefit everyone, the young and the elderly.
    And so I would like to continue to focus on that, and I 
will start with you, Ms. Turner. You indicated in your 
testimony making health insurance too expensive for healthier 
young people that we want in these insurance pools drives them 
away, increasing the cost of the insurance for everyone else 
who remains.
    Can we go deeper on this issue? And studies you have seen, 
analyses you have seen, moving that ratio back to 5:1, would it 
have an immediate impact on the cost?
    Ms. Turner. Actually, I think Dr. Holtz-Eakin may have some 
data here that would inform that.
    Mrs. Brooks. So, Dr. Holtz-Eakin, please.
    Mr. Holtz-Eakin. These are not average premiums for singles 
and for families--this includes both the older and the younger 
ones which would fall in these markets. That is a benefit. That 
is going to lower the out of pocket, the sort of premium costs 
for individuals. It is going to lower the taxpayer costs for 
subsidies. This is a beneficial move. It matches the data on 
spending by those groups, and it leads to better long-run 
stability.
    So I would be happy to provide this analysis for the 
record.
    Mrs. Brooks. We would certainly like that analysis provided 
for the record.
    And, I guess, Ms. Collins, how do you refute those studies?
    Ms. Collins. The RAND analysis shows an increase in 
premiums for someone who is 64 years old--this is the silver 
benchmark plan--of $2,000, relative to a decline, only a 
marginal decline, in someone who is 21 years old of about $700. 
So, much bigger increases in premiums for older adults.
    Mrs. Brooks. And so, Dr. Holtz-Eakin, how would you compare 
what that RAND--because I am sure you have seen that RAND study 
that differs from the studies that you have. So how do you 
explain this discrepancy?
    Mr. Holtz-Eakin. To be honest, I can't at the table. But I 
would be happy to provide, along with ours, our analysis of the 
RAND study and why they have come to a different conclusion. 
That seems perfectly reasonable.
    Mrs. Brooks. OK. I think that would be important to clarify 
this.
    Ms. Turner, would you like to comment?
    Ms. Turner. I think one of the things that--there is a new 
study out, actually, this week by the Council for Affordable 
Health Coverage that shows that fewer than 40 percent of 
enrollees in the exchanges are younger than 35 years old, 
although they are 50 percent of the potential exchange market.
    So I think that really shows that the premiums, even now--
and the first year, 2 years really did not reflect as much 
experience in premium setting as I think subsequent years 
were--already we see a smaller percentage of young people 
signing up for the exchange than are eligible for them. And I 
see that if we continue this same trend, allowing the gaming of 
the system and other provisions in this law, that is going to 
get even worse and we are going to see even more young people 
dropping out. And the costs are going to go up for older people 
in the exchanges, no matter what, if young people are not 
participating.
    Mrs. Brooks. That is the point that I think is so important 
here.
    Would you agree, Ms. Collins, that if fewer young people 
don't get into the exchange, prices will go up for seniors?
    Ms. Collins. That is exactly right. And----
    Mrs. Brooks. And our goal----
    Ms. Collins. Right.
    Mrs. Brooks [continuing]. Is to try to bring as many young 
people into the pool because that would lower the cost for 
seniors.
    Ms. Collins. Right. But most young adults who are outside 
the pool, outside the marketplace right now actually have 
incomes that make them eligible for the subsidies. So they 
wouldn't actually be affected by the change in the rate.
    Mrs. Brooks. Could you all respond to that?
    Ms. Turner. We want more people in the exchanges who are 
not eligible for subsidies. And the only way to attract them is 
to make the policies more affordable.
    Mrs. Brooks. OK.
    Dr. Holtz-Eakin?
    Mr. Holtz-Eakin. And it is not a bad thing to have premiums 
be lower and have the subsidies be less of a drain on the 
taxpayer.
    Mrs. Brooks. Thank you.
    I yield back. Thank you very much.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the vice chair of the full committee, Mrs. 
Blackburn, 5 minutes for questions.
    Mrs. Blackburn. Thank you all. And I know we are going to 
be running up against votes, so I am going to move on through 
this.
    I have legislation that would deal with this open 
enrollment period. And I am so appreciative of you all being 
here. And this is a particular concern of mine because of what 
we lived through in Tennessee with TennCare, which was the test 
case for HillaryCare.
    And, Ms. Turner and Mr. Holtz-Eakin, I know that you both 
are familiar with the failures of that program and some of the 
strain that was put on that program because of extremely 
generous open enrollment and not doing the verification on 
eligibility.
    And, Mr. Holtz-Eakin, I appreciated that you had called the 
ObamaCare special enrollment period extremely generous. That 
was how we defined what was happening in Tennessee.
    Back in December, Chairman Upton asked CMS for details 
about the special enrollment, and we were trying to get 
numbers. We are told the insurance companies have those 
numbers, that CMS does not have those. But what we did get was 
a list of the special enrollment exceptions, which is loss of 
minimum essential coverage, a permanent move, a birth, 
adoption, placement for adoption, placement for foster care, 
child support or other court order, or marriage.
    So my question would be--and, Ms. Turner, I will come to 
you because you had made the comment--and we saw this in 
Tennessee too--that a growing number of people are using 
ObamaCare as just-in-time insurance. They only get it if they 
think they are going to need it.
    So, in your view, would going into a pre-enrollment 
verification process and applying that to special enrollment 
avoid part of this problem that we are seeing with the special 
enrollment programs and the just-in-time insurance?
    Ms. Turner. Yes. And you can't, Congresswoman Blackburn, 
have a system in which people aren't following the rules of 
insurance. If you are going to have private health insurance 
system, it has to work like private health insurance. And if 
people can only buy the coverage when they are sick and then 
drop out afterwards and buy coverage again if they get sick 
again later, that is not going to work at stabilizing these 
pools over time.
    And people are figuring it out. A study with consulting 
firm Oliver Wyman said that people who enrolled during the 
special enrollment period were 24 percent more likely to have 
high costs in the first 3 months than regular enrollees and 41 
percent more likely in the next year. So, over and over, we are 
seeing that this is a trend, and it is not a trend that is 
going to be sustainable over the long term.
    Mrs. Blackburn. Well, based on that, wouldn't you say that 
doing pre-enrollment verification is really a fairness 
mechanism to be fair to everybody?
    Ms. Turner. Absolutely. And there should be exceptions. If 
somebody has problems with the electronics of the system, which 
some people do, then certainly there will be exceptions to 
protect people who are trying to play by the rules, but to make 
sure people who are not are not incentivized to misuse this 
insurance.
    Mrs. Blackburn. Yes.
    Ms. Collins, would you agree with that, that the pre-
enrollment verification would be fair to everybody involved in 
the process?
    Ms. Collins. I really think it would actually discourage 
people from enrolling. And we really do need to make sure we 
have a lot of people in the risk pools, have young adults in 
the risk pools.
    Mrs. Blackburn. Wait a minute. You think that having to 
prove worthiness would be unfair?
    Ms. Collins. The new guidance by the administration, by 
CMS, is requiring people to submit documentation proving that 
they lost their job, proving that they got married, proving 
that they had a baby, which is probably the big source of costs 
that insurers are seeing. Babies are, by definition, more 
expensive when they are born.
    And the other thing the administration is doing, they have 
made an adjustment in their risk adjustment program to allow 
for----
    Mrs. Blackburn. OK. Let me get back to the----
    Ms. Collins [continuing]. Partial enrollment.
    Mrs. Blackburn [continuing]. Topic, though. But you would 
say that to submit to pre-enrollment verification would be an 
unfairness?
    Ms. Collins. I think that people should be able to enroll 
before they provide documentation. So we don't want to----
    Mrs. Blackburn. Oh, so you think----
    Ms. Collins [continuing]. Discourage people from enrolling.
    Mrs. Blackburn [continuing]. They ought to be able to get 
the benefits before they prove who they are. I am going to 
disagree with you on that one.
    And, Mr. Holtz-Eakin, I am going to come to you on this. 
Because we are hearing that stability and balance in the 
programs, that is the goal--stability. And we know that 
verification leads to that.
    So wouldn't it behoove these programs to do their 
verification on the front end before they let somebody in, 
rather than letting them in, letting them get what they want, 
paying the bills, and then kicking them out, or them just not 
paying the bill?
    Mr. Holtz-Eakin. I think we have to look closely at this. 
The reality is that the term ``special enrollment period'' 
suggests the exception to the rule, a tiny thing. One in five 
of the enrollees comes through these SEPs. They are 
disproportionately expensive, so more than one-fifth of the 
costs are coming through this. They are disproportionately 
likely to stop paying their premiums, so cost-shifting comes 
from this.
    It seems to me a simple matter to make sure that if those 
phenomena are going to happen they should happen only with 
people who are genuinely eligible for the coverage.
    Mrs. Blackburn. Thank you.
    I yield back.
    Mr. Pitts. The chair thanks the gentlelady.
    And, without objection, we will go to Mr. Flores, who is a 
member of the full committee, for questions, 5 minutes.
    Mr. Flores. Thank you, Chairman Pitts. I want to thank you 
and Ranking Member Green for allowing me to be part of this 
important hearing today.
    This hearing is about finding solutions that will better 
the healthcare outcomes for our constituents. And one of the 
issues before us today is grace periods, which we are trying to 
address in my legislation as set forth in H.R. 5410.
    As I understand it, under current law, patients with 
subsidized exchange plans have up to a 3-month grace period to 
maintain coverage when they don't pay their health insurance 
premiums for a given period of time. During that 3-month grace 
period, the plan they subscribe to cannot discontinue the 
service for the nonpayment of premiums.
    Given this payment structure, this means that patients 
receiving the advanced premium tax credits can pay for only 9 
months of health coverage but receive a full year of coverage.
    Ms. Turner, is this correct?
    Ms. Turner. Yes, that is absolutely correct. And a growing 
number of people are doing that, as studies are showing, and 
it----
    Mr. Flores. We will dig into that in a minute, so thank 
you.
    Mr. Holtz-Eakin?
    Mr. Holtz-Eakin. Yes.
    Mr. Flores. Ms. Collins?
    Ms. Collins. No, that is actually not correct. So if they 
don't pay their premium in the first month, their claims cannot 
be paid and----
    Mr. Flores. No, no, no, no. Are they receiving coverage? 
They can go to the doctor, right, during months two and three 
and get treatment, correct?
    Ms. Collins. But their claims are not covered.
    Mr. Flores. Go read the----
    Ms. Collins. Their claims are not covered.
    Mr. Flores. Go read the law. It does say that.
    And my second question is, in the first month, the plan 
must cover claims. And here is where you are correct, Ms. 
Collins, is that in months two and three, the plan may hold the 
claim, but the patient is still insured. And that is where you 
are incorrect. And after 3 months, the plan may finally 
discontinue the coverage and reject the claims from the second 
and third months, and then the provider, the doctor, is on the 
hook to recoup the outstanding payments from the patient.
    So three questions for you.
    The first one is, what effect does this have on the 
economics of health care? The second one is, what effect does 
this have on premiums? And the third one is, what effect does 
this have on the providers, our doctors, to their cost and how 
do they have to recoup that?
    So, Ms. Turner, again, on the economics of health care.
    Ms. Turner. I think, in particular, that we have to look at 
doctors because doctors and hospitals are on the hook for this. 
And one of the things that that does is discourage them from 
wanting to take exchange patients.
    Mr. Flores. Right.
    Ms. Turner. And so that is going to wind up having access 
problems, if people have a history of not paying their claims, 
because people are often repeat offenders in misusing this.
    Mr. Flores. Now also, what happens--let's say, if a doctor 
has to provide 12 months' worth of procedures to a patient, 
let's say you have got a chronically ill patient, but 2 of 
those months the doctor doesn't get paid for that. What does 
the doctor do with that 2 months that they have to charge off?
    Ms. Turner. Yes, they eat the cost.
    Mr. Flores. And what happens then?
    Ms. Turner. Their practices are increasingly threatened by 
nonpayment of premiums--or of bills and----
    Mr. Flores. How do they recoup it? They are not----
    Ms. Turner. They have to go after the patient.
    Mr. Flores. OK. But if the patient doesn't pay, then what 
happens? They have to raise the cost for everybody else. Right?
    Ms. Turner. That is right.
    Mr. Flores. OK. Mr. Holtz-Eakin--and what effect does it 
have on premiums, Ms. Turner? I am sorry. I didn't mean to--on 
premiums.
    Ms. Turner. Well, of course, it increases premiums because 
that has to be built in.
    Mr. Flores. OK. Mr. Holtz-Eakin, on the economics of health 
care.
    Mr. Holtz-Eakin. Costs are incurred.
    Mr. Flores. Right.
    Mr. Holtz-Eakin. And they will be paid in one form or 
another somewhere in the system.
    Mr. Flores. Right.
    Mr. Holtz-Eakin. They simply don't disappear.
    Mr. Flores. And so, theoretically, premiums would go up to 
offset the loss, the high claims but low premium receipts. 
Right?
    Mr. Holtz-Eakin. The insurers piece, they will try to raise 
premiums to cover theirs. The providers' piece, they will try 
to raise price to cover theirs. And if they can't do that, they 
will stop seeing those patients or leave practices entirely. 
You will have fewer providers, costs will go up anyway.
    Mr. Flores. OK. So this law is supposed to be about 
fairness, yet doesn't this 3-month gap work as a penalty to 
patients who follow the law and follow their plans and pay for 
12 months' worth of coverage as compared to those who get 12 
months of coverage but only pay for 9 months? Mr. Holtz-Eakin, 
does that sound fair to you?
    Mr. Holtz-Eakin. No. Deliberate gaming of the system is 
inappropriate.
    Mr. Flores. OK. Ms. Turner, does that sound fair to you?
    Ms. Turner. Absolutely not. And it is going to discourage 
the people who want to play by the rules from doing so.
    Mr. Flores. Ms. Collins, does that sound fair to you?
    Ms. Collins. There is very little evidence that people are 
gaming the system. If anything----
    Mr. Flores. Well, I disagree with you on that because I 
have got--I am not running out of time here. As Mr. Holtz-
Eakin--this is in response to you, Ms. Collins. As Mr. Holtz-
Eakin points out, this same report goes on to say that 57 
percent of the patients who stopped paying for coverage are 
medium or high risk, and roughly have the patients admitted 
that they stopped paying for their plan in 2014 as well.
    So, Mr. Holtz-Eakin, as you note, and the current process 
could easily allow individuals to take financial advantage at 
the expense of other paying consumers and taxpayers. What 
defense is there in not closing this gap?
    There is not any. OK.
    And I will just end by reading a quote from Ms. Turner's 
testimony that I found to be particularly alarming, and that 
is, ``Abuse of the grace period is undermining the concept of 
insurance and driving up the cost of coverage for others.'' If 
we all bought 12 months' worth of car insurance and only paid 
for 9 months, then we would all wind up paying for 12 months of 
car insurance somehow somewhere.
    So thank you, Mr. Chairman. I yield back.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
the first round of questioning.
    I have a UC request. The statement by America's Health 
Insurance Plans submitted for the record. Without objection, so 
ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. We are going to go to one follow-up per side.
    The chair recognizes the ranking member, Mr. Green, 5 
minutes for a followup.
    Mr. Green. Thank you, Mr. Chairman. I appreciate the chance 
to do a followup. Again, I want to be sure we are trying to get 
more--the whole point of the Affordable Care Act was trying to 
expand coverage. The three bills limiting grace periods, 
special enrollment periods, prior authorization, and age rating 
would make it much harder to get and even to keep coverage. And 
I understand the churn because that happens every day. People 
buy auto insurance and then they get their card, in Texas, 
because you have to have mandatory liability, and then they 
cancel. And that is part of the system, whether it is 
Affordable Care Act or the private sector.
    So my concern is, Ms. Collins, would these three bills 
limit that opportunity to get more coverage instead of less 
coverage? Again recognizing it is a checkerboard. Because if 
the states didn't expand their Medicaid, even though for the 
first 3 years it would be 100 percent reimbursement--which, by 
the way, I introduced a bill that would require Congress to do 
it instead of just--because all my legislators said: Well, how 
do we know you are going to do it? Well, let's put it in the 
law and make sure that happens.
    But will these three bills limit the ability to expand 
coverage under the Affordable Care Act?
    Ms. Collins. It will definitely limit enrollment. Requiring 
people to provide documentation before they enroll in a special 
enrollment period will definitely moderate or modulate people's 
ability to do that. There is an under use, if anything, of 
special enrollment periods among people who are eligible for 
them, particularly people who lose their jobs. So they are 
experiencing gaps in coverage. We know there is much more 
likely to have a cost-related access problem or not get care 
when you have a gap in coverage.
    So that would definitely--and the reduction in the grace 
period would also make it likely that people wouldn't--and I 
think most people probably think when they don't pay a premium 
in one month that their coverage is over. So allowing people, 
making sure people are aware that they have a 3-month period to 
make up that premium would ensure that they are able to 
continue that coverage throughout the year rather than just 
drop it and be uninsured for the rest of the year.
    Mr. Green. Well, I have to admit when I first saw the 
posting on these bills, I thought: Well, good. We are getting 
to some level that we can work on the problems with the ACA and 
expand coverage at the same time. And I think my colleague from 
Oregon mentioned, we might be able to work on the grace period, 
to match it with some other Federal--like some other Federal--
but that is not going to happen.
    And again, I think the bottom line when we do some day get 
into saying, OK, let's fix what is wrong with the ACA, the goal 
still ought to be to make sure we have more coverage. Because 
that is what the intent was and--of the bill or the law now. 
And I would hope that is the intent, to provide opportunity for 
people to have health care in our country instead of making it 
harder. And, again, the free market will do it.
    If I owned an insurance company, believe me, I would want 
to make sure everybody was healthy. We used to have examples--
for seniors, for even Medicare Advantage I heard: If you can 
walk up these two flights of stairs, we will say you are 
Medicare Advantage. That is not something we need to do. People 
need health care no matter what their illness is.
    Now, again, ratings is ratings. And age is age. But the 
whole goal is to expand the coverage for people who don't have 
it. Because right now we are paying for it. The private sector 
is paying for it. If someone shows up in our emergency rooms in 
Houston and maybe--and uncompensated care fund, I think they 
may get 10 percent of whatever they--but believe me, those for-
profit, even nonprofit, are somehow going to get reimbursed 
from someone, whether it be through the regular insurance 
market, the folks who have it. But to get those folks to have 
something, even if it is just Medicaid.
    Thank you, Mr. Chairman. I will yield back.
    Mr. Pitts. The chair thanks the gentlemen and now goes to 
Dr. Burgess, 5 minutes for a followup.
    Mr. Burgess. Thank you, Mr. Chairman.
    Ms. Collins, earlier this year the news reports were that 
UnitedHealth Group was withdrawing from covering in the 
exchanges. Do I understand that correctly?
    Ms. Collins. That is right.
    Mr. Burgess. Do you know why they made that decision?
    Ms. Collins. Well, if you look at the data on UnitedHealth 
Group, they were very uncompetitive in most of the markets that 
they were operated in. So they were rarely the second lowest 
cost silver plan in most of the markets they were operating in. 
So they actually were probably not the choice of many consumers 
just because they weren't pricing very competitively.
    Mr. Burgess. Or perhaps they were pricing more sanely 
because--clearly, if a big group like that thinks they can make 
money in the system, they are likely to stay. And if they think 
they are going to lose money, they are likely to withdraw. Do 
you think they saw something that the other companies didn't 
see earlier on?
    Ms. Collins. Well, they had very little experience in the 
individual market prior to entering the marketplaces. So they 
knew less about their risk pool than some of the other carriers 
that had more experience in the individual market, so which 
might have been reflected in their higher premium rating.
    Mr. Burgess. Might have been, but they also may have had 
the ability to peer over the horizon a little bit. Now, a 
company that does have extensive experience in the individual 
market in my state, in Texas, Blue Cross Blue Shield, and they 
have asked for a 60-percent increase for next year. Does that 
seem reasonable that they would come in with that sort of 
request?
    Ms. Collins. It seems very high. Again, these are 
preliminary rates, so they will be adjusted by regulators 
through the rate review process. And it is very unlikely that 
consumers would end up paying that size of increase, both 
because they may choose to enroll in different plans that are 
lower priced in Texas or that the tax credits will actually 
protect them from that kind of increase.
    Mr. Burgess. Yes. But someone like myself who is in the 
individual market in an unsubsidized plan, there is no 
protection from a subsidy. You either pay the price or you 
don't buy the product. Right?
    Ms. Collins. Right. But if you have other choices that are 
lower priced, then we have evidence that about 43 percent of 
people switched plans last year.
    Mr. Burgess. I don't mean to interrupt you, because time is 
short. What evidence do we have that the number of choices in a 
marketplace like Texas are going up?
    Ms. Collins. The plan offerings between 2015 and 2016 were 
relatively stable. We do know that most carriers--UnitedHealth 
Group is an exception, really, to the rule. Most carriers are 
committed to the marketplaces in 2017.
    Mr. Burgess. I guess we will find out if that is correct.
    Let me just ask a couple of questions on the 90-day issue, 
because you made some comments earlier in the testimony that on 
the nonpayment part, after we have gone the 30 days, the 
carrier is on the hook for the first 30 days, I believe you 
said, then beyond that the insurance carrier is no longer on 
the hook for that. But the recipient, the insured, perhaps they 
would be required to pay the part that now was in arrears. Is 
that correct?
    Ms. Collins. Right. So if they didn't pay their premium in 
the first month, and they don't pay in the second month or the 
third month, they are responsible for continuing to pay the 
premium in the first month, but they also have to pay their tax 
credit back in that first month. The claims that they incur in 
the second and third months would not be covered by their 
insurance coverage. So by restricting--and by the design of 
that, of the grace period allows people who have fluctuating 
incomes, low income, who can't come up with the premium payment 
in that first month, it gives them time to make up that--to pay 
that premium. It makes providers happier because their second 
month they will get coverage for their care. Third month, be 
able to get coverage for their care. Cutting it off at one 
month, they will continue to get care but have no health 
insurance for that care. Providers would be on the hook too.
    Mr. Burgess. But let's talk about that 60 days after the 
first 30 days. That insured is no longer receiving the tax 
credit in those months. Is that correct?
    Ms. Collins. The carrier receives it, but the insured is 
not covered.
    Mr. Burgess. Is the carrier then required to pay that tax 
credit back?
    Ms. Collins. The insurer has to pay the tax credit back, if 
the premium is not paid in the second or third month.
    Mr. Burgess. Does any portion of that recovered tax credit 
go to offset the cost of the care that was delivered to the 
insured that was being carried during those 30 days? 60 days?
    Ms. Collins. In the first month.
    Mr. Burgess. No, I am taking about specifically the second 
or the third month, the second--the 60-day outlier part of 
that.
    Ms. Collins. Right. The carrier is not responsible for 
covering the claims in the second and third month the premium 
is paid.
    Mr. Burgess. So is any portion of that recovered tax credit 
from the insurance company, does that go to somehow offset the 
cost of the care that was delivered?
    Ms. Collins. I do not think so.
    Mr. Burgess. Yes. And that is inherently the problem here. 
And as much as--with all the affection that I have for Dr. 
Holtz-Eakin, doctors generally cannot increase their prices. We 
generally work under contracts. I know it is supposed to be a 
free market, but generally we sign contracts with insurance 
companies to provide at a set fee. So it is very difficult--
particularly for the individual provider to raise fees to cover 
that which was not covered by the time the patient was in 
arrears.
    I thought you turned me off because my time was up. You let 
me go on. I do want to again thank the panelists for being 
here. It was an important hearing. I am glad we have had this 
opportunity today.
    Thank you, Mr. Chairman, and I yield back.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
the questions from the members present. We will have follow-up 
questions in writing that we will provide to you. We ask that 
you please respond.
    I remind members that they have 10 business days to submit 
questions for the record. That means they should submit their 
questions by the close of business on Friday, June 24.
    Very interesting hearing, interesting back and forth. We 
thank you very much for your presentation today.
    And I understand, Ms. Turner, we should wish you happy 
birthday today. Thank you for spending your birthday with us.
    Without objection, this hearing is adjourned.
    [Whereupon, at 11:28 a.m., the subcommittee was adjourned.]
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