>> kathleen sebelius on the health care hot seat, all eyes will be on the secretary of health and human service as she gets set to defend the affordable care act and it's problem-plagued website. she is testifying this morning before congress. good morning, and welcome to al jazeera america. i'm del walters. our special coverage starts right now. health and human services secretary, kathleen sebelius set to testify before the congressional hearing any moment now. she is being asked to explain the failures of the website and she will likely have to defend the health care act as well.

yesterday one of her top lieutenants provided congress a warmup for today's proceedings. eric holder has more. >> for the first time -- >> i want to apologize to you that the website has not worked as well as it should. >> reporter: a member of the obama administration apologized for the website that has been plagued by problems since it launched last month. the head of medicare and medicaid did not give specific reasons or numbers. those facts and figures are expected to come in another hearing when kathleen sebelius testifies later this morning. a hearing could get heated since some republicans have been calling for sebelius to be fired. >> these past 29 days have been nothing short of a disaster.

>> reporter: as republicans attack the problem-plagued website as representative of larger troubles -- >> the problem with obamacare isn't just the website, it's the whole law. >> reporter: democrats fiercely defending the law and the site. >> everybody needs to chill out because it is going to work. >> reporter: according to prepared testimony, secretary see -- se bealous has said, quote. see bealous is expected to blame the contractors. the lead contractors on the site said they only had two weeks in september to do end to end testing on the system. something they say should have

taken months. >> by the end of november the experience on the site will be smooth for the vast majority of users. >> reporter: the obama administration points out there are other ways to sign up, through call centers, paper applications and in person assistance in every state. eric holder, al jazeera. >> these are the live images coming from capitol hill. secretary sebelius seated just moments ago and she was surrounded by a sea of cameras. this is the beginning of the testimony. >> we look forward to a thoughtful conversation on a number of issues, including transparency and fairness. in the months leading up to the october 1st, launch, the secretary and her colleagues repeatedly looked us in the eye and testified that everything was on track. and despite the numerous fed

flags, they assured us that all systems are ago. >> there will be an introduction by the chairman and then the members of the house will also say that comment before we here secretary sebelius testimony. let's go live to randall pinkston. some republicans say she should lose our job. what are you hearing in washington? >> publicly the white house is defending secretary sebelius saying she has support of the president. and we are also reading that the president is rather steamed about this whole website crash affair. but at this juncture think about it, what it is the president's option. if he fires her, he has to get another secretary who has to go before the senate for

confirmation and that would be another headache, so the best thing to do is to try to let her get it online and working. and the president doesn't have a reputation for throwing his cabinet members overboard when they get into a little jam. he sticks by them, and that is what is expected to happen for secretary sebelius. but the jury is still out on whether or not she and her department can get the problem fixed. >> randall i want to let our audience know, that when secretary sebelius begins to testimony, i may be somewhat rude and cut you off so we can hear that. >> of course. >> also there is a question on whether or not the administration has a viable alternative to secretary sebelius. after all who would want this

job if she chooses to resign. >> that is one of the things we're hearing first of all the president doesn't want to have to go before the senate where the hearings will up doubtedly lead to more criticism of the affordable care act as well as criticism of his administration. they are already saying that the president didn't tell the truth when he told everyone that health care plans wouldn't change if they wanted to keep them. now we're seeing some recall ib ration of that. so the president has a mull tip policety of headaches around this whole deal and a new secretary would not be something that he would want to deal with. >> and we should point out that

kathleen sebelius is no stranger to the ways of politics. she was the governor of kansas. also she seems to be dividing the battle into the website and the policy itself. defending the policy saying, quote, the fact that the affordable care act delivered on its product . . . that seems to indicate that she believes in the product but not necessarily the rollout itself. is this a good strategy on the part of secretary sebelius? >> that's an interesting observation. because she was the insurance commissioner of the state of kansas. so she has some expertise in insurance matters, and her job over these past four years has been to put in place the policy, the rules, the regulations, all of the wording as it were. the website work was really left

to another unit of health and human services, medicare and medicaid. they were the ones in charge of securing the contractor to build the website. so she wasn't so hands on as with respect to the that. and the white house knows that as well. the president has been very pleased with how the secretary has built the structure for the affordable care act. and this is obviously a problem so if you have had someone who has been successful four times but bobble the ball once, do you toss them out because of that one mistake even though it is a glaring error. and the opinion seems to be that mr. obama would not do that. >> right now secretary sebelius is listening to henry waxman who likely is giving her praise.

although there is bipartisan it seems anger that he website has not rolled out as sterling as the white house would have wanted. we have also a guest in the studio who can provide incite on how we go to this point. and we're also joined by jason jeffries, the founder and ceo of blender box, an agency that specializes in websites. can this be fixed? >> yes, absolutely. if the issues are related to flaws and errors in the logic, that might take some more time. >> and jenny regardless of which side of the political aisle you may be sitting on, by all arguments this has been a nightmare politically for the obama administration.

>> absolutely. and one of the problems here is that we really need toe secretary to come out today and acknowledge that. i think that's really the thing she has to do and provide more specifics than her colleague did yesterday. and the big problem president obama has is he is in a no-win situation. if you listen to the calls that she be removed, who do you replace her with? he can't have the senate hold up a confirmation, because they'll relitigate health care again. so he has got to stick by her. it sounds like he will, and they have to get this fixed by november 30th, they are promising, which i think will be a tall order for them to fill. >> you do complain management. how do you fix something that is broken whenever on the other side wants it done away. do you cut the bait right away and say we have problems with this website, and then leave it

to the american people or say this is going to be a rocky boat ride for a couple of months and there may be smooth seas straight ahead. >> i think they need to acknowledge the issue tell us every day set benchmarks. i think you can't anymore hide information. and that's one of the things we're going to hear today probably from republicans. why aren't you telling us how many people have actually enrolled? i think they have to be much more transparent and honest about what occurred and set benchmarks and tell us when we're going to meet those deadlines, i think if they did that the american people may hang in there, but if they continue with this stall tactic, it is going to be a problem for them. so i would say honesty transparency and tell us how it's going to be fixed and how. and i think they should delay.

>> i agree. i think they botched the management of expectations and hot it was deployed, and you are right if they were transparent, if they did a phase rollout, if they said there is going to be a private beta test or some kind of phased approach, it might not have been such a political nightmare for them. >> and we're going to cause they are swearing in kathleen sebelius right now. >> the chair now advises you that you are -- i will now read you -- do you swear that the testimony you are about to give the truth, the whole truth, and nothing but the truth. >> yes, i do. >> you are now under oath and subject to the penalties set forth in title 18 section 1001 of the u.s. code. you may now give a five-minute

summary of your statement. welcome again and thank you for being here. you have got to use that mic. you don't know how many people want to hear you this morning. [ laughter ] >> thank you, chairman upton, member waxman and members of the committee. i left my position as governor of kansas four and a half years ago for the opportunity to continue doing the work i have been doing for most of my 35 years of public service, so expand the opportunity for all americans to have affordable health coverage. during my years as state legislator, as an elected insurance commissioner, as head of the national association of insurance commissioners, and now as secretary, i have worked on that effort that i care deeply about. there are still millions of americans who are uninsured as well as under insured. people have some coverage, but

no real protection from financial ruin and no real confidence they'll be able to take care of themselves and their families if they have an accident or illness, and for them a new day has finally come. in these early weeks access to healthcare.gov has been a miserably frustrating experience for many americans, including many who have waited years, in some cases their entire lives for the security of health insurance. i am as frustrated and angry as anyone with the flawed launch. so let me say directly to these americans. you deserve better. i apologize, i'm accountable to you, and i'm committed to earning your confidence back by fixing the site. we're working day and night and will continue until it's fixed. we have recently added new management talent, adzdy shunnal

technical expertise and a new general contractor to manage fixes across the system in two brood categories. performance, which deals with speed and reliability, and function which deals with bugs and problems in the system. our extensive assessment has determined that healthcare.gov is fixable. and i want to health line a couple of improvements. we now have more users successfully processing accounts. instead of the some users seeing a blank screen at the end of the application process. they can now see whether they are eligible for financial assistance and make more informed decisions. customers can now shop forplans quickly, filtering plans takes seconds not minutes. users are getting fewer errors and time-out messages, and the system has been strengthened

with double the size of servers, software that is better optimized, and a physical database which replaces a vertical system. i would suggest to the committee that if you read the statement of verizon who hosts the cloud service, it is the verizon server that failed, not healthcare.gov and it effected not only hhs but other customers. we have a plan in place to address key outstanding issues including fixing bugs in software, and refreshing the user experience so folks can navigate the site. and by the end of november, we are committed that the vast majority of users will be able to review their options, shop for plans and enroll in coverage without the problems way too many have been experiencing. but consumers are using the site

every day and continue to do so, and problems are being solved. but we know we don't have a fully functioning system that consumers need and deserve. we are still at the beginning of a six-month open enrollment which extents through the end of march and there is plenty of time to sign up. the average open enrollment for an insurance plan is two to four weeks, the new marketplace has a 26-week open enrollment, and those who enrole by december 15th will be able to access their benefits on day one. even with the unacceptable problems of healthcare.gov the affordable care act is working for millions of americans who are benefitting from new health security, young adults americans living with preexisting health condition, seniors on medicare. 85% of americans who already have health coverage are protected with new rights and benefits. the 15% of our neighbors and

friends who are uninsured have affordable new opsnuns a competitive market. and cost growth for health care is lower than it has been in years. millions of americans are clearly eager to learn about their options and finally achieve health security made possible by the affordable care act, and my commitment is to deliver on that promise. thank you, mr. chairman. >> well, thank you very much. yeah, if you -- the mic got pulled a little bit from you. i got to start this clock. i appreciate you being here this morning, and we worked with our leadership to see that we don't have votes on the house floor this morning so we won't be interrupted. i appreciate your time for sure, and in an effort to allow every member a chance to ask a question, we'll reduce the time

to just four minutes so hopefully we can get through all of the members here. so we have plenty of questions, so let's try to get through them. you know, i think everyone in america remembers the participate president's words. if you like your health care plan, you can keep it, period. under the affordable care act insurance policies would be grandfathered. a few months later, despite the president's word you at hhs helped promulgate a new reg, that it could be as high as 50%, the right to renew their own insurance plan. and i guess would there are a lot of us on this panel today

who are hearing from angry constituents who are being forced to go on an int ept website to shop for a new replacement policy. they are finding premiums often more than 100% of what they were paying before. some as high as 400% and rising deductibles as well. when was the president specifically informed of the regulation change? and if so, was it pointed out that this totally undermines his biggest selling point. i would note on the screen in a statement he made more than three years after the regulation change was promulgated the president said the first thing you need to know is this, if you already have health care, you don't have to do anything. yet the regulation changed months after the bill was enacted that are now causing,

perhaps, millions of americans to be denied the ability to renew their individual coverage. why was that change made? and did the president know it? >> well, mr. chairman there was no change. the regulation involving grandfathered plans which applied to both the employer market and the individual market indicated that if a plan that was in effect in march of 2010 stayed in effect without undually burdening the consumer with reducing benefits and adding on huge costs that plan would stay in effect and never have to comply with any of the regulations of the affordable care act. that's what the grandfather clause said. the individual market which affects about 12 million americans, about 5% of the market, they often have coverage for less than a year, a third of them have coverage for about six monks, and if a plan was in place in march of 2010 and did

not impose additional burdens they still have it. >> but why were regulations promulgated in the summer of 2010 that undermined the ability of those folks to resign up -- >> there were no regulations changed. we then began to implement the other features of the affordable care act, so if someone is buying a brand new policy, they will have consumer protections for the first time. many individuals are medically underwritten. that will be illegal. many women are charged 50% more than men. that will be eliminated. you can't lock someone out, so those provisions -- so if a plan is in place and was in place at

the time the president signed the bill, and wants to keep the plan those individuals are grandfathered in. >> we're learning in fact that folks who did have a plan who liked it, are being told that it is canceled. my time is expired. >> thank you, mr. chairman. i had to smile at your line of questioning, because everybody expected this hearing was about the website. that's all we have been hearing about is the website. but that's not the only complaint we have been hearing about since the affordable care act was adopted, we were told that millions of jobs would be lost and in fact there have been a gain of 7 million jobs. they said that -- that costs for health care would skyrocket, and in fact the opposite is true. they said there would be a massive shift to part-time jobs, and the evidence doesn't support that. they said tens of millions will lose their insurance.

but in fact everybody in this country is going to have access to health insurance because they won't be discriminated against. they stated would explode the deficit, and yet all of the reputable organizations have told us it is going to save us $100 billion over ten years. so we have had a litany of objections from the republicans about the affordable care act which has driven them to such a frenzy they even closed the government. so now we have you before the committee, and you are being asked -- i suppose later you will be asked about the website. but let me pursue this question about individuals have gotten notices that they will have their individual policies canceled. they are be able to get another plan, won't they? >> actually it's the law they

will get another plan. >> so we're going to end the worst abuses of insurance companies, we're going to create consumer protections in the marketplace that they will be able to buy a policy even if they have been sick in the past, that women won't be charged more than men, that we're not going to let insurance companies deny coverage because of preexisting conditions, and there will be an essential benefit package, so you are not just buying some things and not having other things covered, you will have the minimum that everybody should have. prescription drugs, mental health coverage, doctors and hospitals. >> i would say these are very important. as a former insurance commissioner, i can tell you that the individual market in kansas and anywhere in the country has never had consumer protections, people are on their own. they can be locked out, priced

out, dumped out, and that would happen each and every day. so this will provide the protections that we all enjoy in our health care plan. individuals in the buying insurance own, farm families, entrepreneurs, mom and pop shops, young adults have never had that health security. >> now they are going to have this health security, and most of the plans as i understand it, that they are no longer going to be able to keep don't meet all of the standards of the law. >> i think you may have heard pat geraghty who was on some of the sunday shows, and he talks about the fact that the florida plans want to keep their customers -- [ inaudible ] -- similar or lower cost. 50% of these 11 to 12 million

people qualify for a subsidy, qualify for financial help in purchasing insurance ever. >> the bottom line people with good coverage, like medicare, medicaid, employer coverage can keep that, people with grandfathered plans will be able to keep it. but if an slurns company sold you a new modified insurance policy after the date of enactment that does not meet the law standards, then those people will be able to go into the exchange and buy a real, solid health insurance plan that won't discriminate against them or anybody else. i think that's a good result. i'm pleased with it. and i think most people will be as well. >> the chair would recognize the vice chair of the committee, ms. blackburn. >> thank you, mr. chairman. madam secretary, before during and after the law was passed the president kept saying if you like your health care plan, you

can keep it, so is he keeping his promise? >> yes, he is. >> okay. what do you say to the 300,000 people in florida you just mentioned or the 28,000 in tennessee that cannot get health insurance joshgs their plans are terminated. he keeping his promise to them? >> first of all they can get health insurance. they must be offered new plans, new options, either inside the marketplace or if they don't qualify for a financial subsidy, they absolutely -- >> what do you see to nbc news who says millions are going to lose their coverage. >> in all deference to the press corps i think it is important to be accurate in what is going on and i would de -- [ overlapping speakers ] >> they will be offered new plans -- >> madam secretary -

secretary -secretary -- [ overlapping speakers ] >> what do you say to mark and lucinda in my district, who had a plan that they liked, but it is now being canceled. >> insurance companies cancel plans all the time. your -- >> let me move on. it's what they wanted. and i will remind you, some people like to drive a ford not a ferrari and some people like to drink out of a red solo cup not a crystal stem. i want to go to the cost of the website. this is what is happening with this website. we have had somebody in the back trying to sign on. it is down. it is not working. last week i asked for the cost from each of the contractors that were with us last yeeweek. can you give me a ballpark of

what you have spent on this website that does not work? what is your cost estimate? >> so far, congress woman we have spent about $118 million on the website itself, and about $56 million has been expended on other it to support the web. >> would you submit a detailed accounting of exactly what has been spent, and when do you expect constituents to stop getting these kind of error messages? >> i talked to the president of verizon over the weekend on two occasions. verizon hosts the cloud, which is not part of the cloud, it is a host for a number of websites. >> right. >> the verizon system was taken down saturday night into sunday, was down almost all day sunday. they had an additional problem that they notified us about

yesterday, and it continues on. so i would be happy to talk to the president of verizon -- >> let me come back to that. because i want to get to this issue of exactly who was in charge of this project. because you are now blaming it on the contractor and saying it is verizon's fault. so let me ask you this. did you ever look at outsourcing the role of the system integrate or, and -- obviously you did not from the contractors that we had last week -- you all -- they had several f different people, whether it was you or gary or michelle or henry, that they thought were in charge. so who is responsible for overseaing this project? is it you or your designee. >> let me be clear, i'm not blaming verizon. we own the site. the site has had serious problems -- >> who is in charge?

>> the person now in charge is -- >> who was in charge [ overlapping speakers ] >> -- was in charge -- >> at that team, who is the individual -- >> michelle snyder -- >> michelle snyder is the one responsible for this debacle. >> michelle snyder is not responsible for the debacle. told me accountable. i'm responsible. >> i yield back. >> the chair would recognize mr. dingle from the great state of michigan. >> thank you of your courtesy. i ask consent that i will be allowed to revise my marks. >> without objection. >> i would like to thank you, and welcome the secretary to a room in which her father served for so many years. i begin my questions according to an expert who i had enormous

expect. he said, as i mentioned earlier the new benefits and its implementations are hardly perfect. rather than trying to scare and confuse seniors, i would hope we could work together as we go through the implementation to fix the program. it is too big of program and too important to many people to let it fail. but having said that, and it does appear it is working. let us admit it, and not keep beating a dead horse. my beloved friend, mr. barton. madam secretary as he reports that consumering receiving plan cancellation notices from their insurance companies, saying plans are no longer available. does the aca require insurance

companies to discontinue plans that people had when the law was passed yes or no? >> no, sir. that's the grandfather clause. >> that's because the plans existed prior to the passage of the law are grandfathered in? >> that's correct. >> so if an insurance company no longer offers a plan, that's because that insurance company made a decision to change their policies, and caused them to take away the grabbed father status from their insurance purchasers; is that correct? >> that's correct. >> madam secretary, i want you to submit for the record a statement of what we can do about insurance companies that run around canceling the policies of their people, and i don't have time to get -- get the answer, but i want to get a very clear statement from you as to what you can do, so we can take some skins off of some folks that have it coming.

madam secretary. it's my understanding that these decisions of a business character are most common in the individual insurance market and that much turnover already exists and existed prior to the enactment of the legislation. >> that's correct. >> is that correct? >> yes, sir. >> is it correct that 35 to 67% of the enrollees in the individual market leave their plan after one year for different reasons? >> a third are in about -- less than six months in the individual market. and over 50% are in for less than a year, yes, sir. >> in the cancellation letters, which move around from the insurance companies, some insurance companies are suggesting an alternative plan at a higher price. do they have the right to do that? >> they have a right to do that, sir, but consumers have a right to shop anywhere to compare plans and they have choices now that they have never had before, and some financial assistance --

>> and they have no right to enforce -- >> oh, absolutely not. no one is rolled over into a plan. and in fact, individuals for the first time ever will have the ability to compare plans to stop and to make a choice inside or outside the marketplace. >> it looks to me the insurance companies are trying to inflict on their customers the view that this is their right, and that this is the only option available to them; is that correct? >> well, i -- i think insurance companies would like to keep their customers. having said that, customers for the first time have a lot of choices -- >> but the insurance companies have no right to enforce that view on the customer? >> there is no rule that says you have to stay with your company or be rolled over -- >> the gentlemen's time is expired >> -- when they come forward and tell you have to buy a new policy. >> that's right. >> the chairman would recognize

mr. barton. >> thank you, mr. chairman. we have a former member of the committee on the democrat side from the great state of kansas and we're glad to have you. and madam secretary we're glad to have you too. in the wizard of oz there is a great line, dorothy at some point in the movie turns to her little dog toto and says toto we're not in kansas anymore. while you are from kansas, we're not in kansas anymore. some might say we are actually in the wizard of oz land given the parallel universes we appear to be habitating, think things are great. and although you apologized, you also seem to think the

affordable care act is great. myself and others have a different view. ultimately the american people will decide. last week i focused my attention on the apparent lack of privacy in the website. it will put up the first slide that i had last week, if we can. this is what is public madam secretary, and it's basically a disclaimer that says unauthorized attempt to up load or change information on the website is prohibited. it wasn't say anything about privacy, but you have to accept that in order to go forward. the next slide shows what is not public. and this is in the source code. we tried to determine if it is still in the source code, but as was pointed out the website is

down. this is much more frightening to me. it says you have no reasonable expectation of privacy regarding communication or data transmitting stored on the information system. at anytime the government may monitor intercept any information on this website. cheryl said she was aware of it, but it wasn't her responsibility to put it in the source code. >> were you aware of it and was it your responsibility to put this in the source code? >> it was not responsibility to put anything in the source code. i can tell you this is

boilerplate language that is put in the source code. >> the last we could check this was still there. you are given almost unlimited authority under the affordable care act to administer it. will you commit to the committee and the american people that one, you do want to protect their privacy, and two, you will take this out, fix it, make sure that it doesn't have bearing on people that try to apply through the website. >> yes, sir, and we have had those discussions with cgi and it is underway. i do absolutely commit to protecting the privacy of the american public. in that statement is there in error, and it should be taken down. >> thank you, madam secretary, i sincerely appreciate that. i have introduced hr33-48 which

says let's make this system voluntary for the first year, and if people choose not to participate, they will not be charged a penalty for non-participation. would you support such a reasonable approach to this? >> no, sir. >> okay. that's an honest answer. >> gentlemen's time is expired. >> you are listening now to the live testimony of kathleen sebelius, she is the secretary of health and human services. a short while ago she was told she is not in kansas anymore, in defense of those from that region who always take objection to that reference, that book was written from a man in new york. our continued coverage of the hearing will continue in just a moment, we'll be right back.

>> welcome back to our live continuing coverage of the testimony of health and human services secretary, kathleen sebelius on capitol hill, she has been testifying now for about a half hour. i want to bring in our guest and get your thoughts before we go back to capitol hill and the testimony. so far two things seem to have emerged. one is they are saying there are two problems with the website. one was the foundation of the website and jason -- i keep getting your name wrong -- but she said it was with verizon. what did she mean by that. >> well ultimately there are three pieces. the data, and in this case those are millions of records.

if there is an error there, it might really look bad but it could just be a typo. the data is one thing, its integrity. the other piece of application, the code that the developers have written, if there is a problem there, that's a problem. the third piece is the infrastructure which is what verizon is responsible for. and if that goes down, that doesn't have anything to do with whether the code is well written, but that's what she is referring to is the hosting platform. >> and jeanie, how is she doing so far? you maintain she has stuck to script. >> yeah, she has stuck to script, although i think she has to be very careful about the finger pointing to contractors. she saids to say i am

responsible, we are responsible, we're going to fix it. we saw darrell issa this morning, contractors are pointing the finger back at the government. so number one she needs to take responsibility and i think she needs to be very clear on the fix. although as we saw from the first three questions, they are not focusing as much on the website. they are focusing on the recent news that policies are being canceled. so it's the other issues i think we are going to hear over and over again. >> are members of the committee also walking a tight rope. i remarked that dorothy you are not in kansas anymore, and i remarked that it is such an irritating thing for folks from the midwest to be reminded of

that. >> a very unfortunate way to start out. they need to be respectful, make their case, and they need to get to the point, but be very careful about alienating her. when you start out with something like that, you miss what he said at the end, why not remove the penalty and give them the choice to go in. as opposed to making these silly references to the wizard of oz and making this distinguished woman sit there and have to -- listen to the fact that she is now dorothy from the wizard of oz. it is a bad move on his part. >> that is why you are here. let's go back to the hearing now. >> -- cgi who is in charge of

the entire application, there has been $197 million obligated, and that is to last through march of 2014, and as i said before about $104 million has been expended in that obligated amount. >> i'm going to try to be here on 2014 to be sure that your testimony is correct. okay? i'm just -- i'm just joking with you. [ laughter ] >> okay. >> and were you born in kansas, mead, kansas? >> i was not. i was born in cincinnati, ohio. i married a kansan. >> i was in the third grade there, and i thought i saw you on a tricycltricycle. >> it was an illusion.

>> have you ever rejected a financial bill from one of the contractors? >> sir, again, i -- our -- >> i guess you can say yes or no. >> our accounting office does a routine audit and review of every bill. i do not personally. i don't personally pay contracts, negotiate accounts by law and precedent that's really illegal for someone who isn't a warranted contract officer to engage in the debate or discussion around federal contracts. >> how much has the administration spent on the exchanges in total? not just healthcare.gov, but all of the exchanges? >> sir -- >> how difficult is that figure to give me, or if -- >> i would like to get it to you in writing very quickly. >> madam secretary, i would like to talk -- i don't know how much time i have left -- but i would like to talk about a couple of

businesses in my community who are struggling to move forward. here are some quotes. the situation we're in is we would have to pay $170,000 in penalties under obamacare. we are the losers. there is no way i can be competitive if i have to raise my prices. here are the options do not pay the penalty, lose my job and go out of business. layoff employees, lose 35 jobs, and here is a quote from the others. since they are high-labor low margin business cannot afford to pay for insurance for our employees, we are forced to perhaps close our business. firing enough employees to get under 50 [ inaudible ] escape

many expenses such as rental agreements. what am i supposed to tell these people? >> well, sir, i think that in the employer market about 95% of all american businesses are exempt from any kind of requirement to cover employer/employee insurance. and they are outside the law, but they will have new options for those who want to cover their employees. for large employer 96% of them already cover their employees, and as you know, the penalty that your constituents refer to is not a penalty that is imposed in 2014. it is being discussed with businesses about what kind of information is exchanged and it will take place in 2015 -- >> he is going to use the gavel on me if you don't hush. >> time has expired. the chair would recognize the

gentle lady from california. >> thank you, mr. chairman. welcome madam secretary. you are a distinguished woman. you have distinguished yourself and your state. the offices that you have held, and now working for the american people and i salute you for it. i -- i want to really congratulate my republican pals for being absolutely 1,000% consistent. you love what is wrong with the website, and you detest what is working in the affordable care act. and i think that that is on full display here. but let's get back to the website, because that's what the hearing is about. it's my understanding that november 31st is the -- is a hard date for having everything up and running. do you have -- now hhs did

testify in september that they were 100% confident that the site would be launched and fully functional on time on october 1st. that didn't work. do you have full confidence in this new hard date? >> congress woman i can tell you that the assessment that we have made is that it will take until the end of november for an optimally functioning website. i know the only way i can restore con store confidence that we get it right is to get it right. sorry -- so i have confidence that we can fix this. >> i think i said november 31st, which does not exist -- but november 30th. you have confidence in november 30th? >> i do. >> is there any penalty to qssi

or cgi for not delivering on what they promised? >> well, i think they -- as you can see, we have a obligated funds for a contract. we certainly have not expended all of those funds, and we expect not only the cms team but our contractor partners to fulfill their obligations -- >> but if they fail to fulfill their obligations, i don't know what is in the contract -- >> i understand -- >> -- this there a penalty? >> there isn't a built in penalty, but paying for work that is not complete is not something we will do. qssi has taken on a new role of the integrator of the hub they have built, and the operation is working extremely well. and that's why we have

confidence in their ability to actually take this role on and coordinate the activities moving forward, which have to be driven with a clear set of outcomes, clear time lines and deadlines, and they will be helping to manage that process. >> on the issue of security, there was a security breach that arose recently that i read about. and what i think is very important here, because the issue of privacy has been raised and i think that that has been answered, because very importantly there isn't any health information in these systems, but there is financial information, so my question to you is, has a security wall been built? and are you confident that it is there and that it will actually secure the financial information that applicants have to

disclose? >> yes, ma'am. i would tell you that there was not a breach. there was a blog by a sort of skilled hacker that if a certain series of incidence occurred you have could possibly get in -- >> isn't that telling? >> and we immediately corrected that problem. so there wasn't -- it was theoretical problem that was immediately fixed. i will tell you we are storing the minimum amount of data, because we think that's very important. the hub is not a data collector. it is using data centers at the irs, homeland security, social security, to verify information, but it stores none of that data. >> thank you. >> the gentle lady's time as expired. >> let's take a moment to digest

everything that has been happening on capital hill. jason i want to start with you, and a specific line of questioning as to who was responsible for the decisions that were made. you have had clients. you roll out a website. who is ultimately responsible for the website itself in the day of launch. it is you as the contractor or the client as the person that is paying the bills? >> i would say it is always a shared responsible. >> who the final say? >> the client has the final say of when they are going to launch the site. >> so in this case the particular line of wing was who decided to move forward. it would be your experience that it was hhs. >> yes. i'm sure someone raised their hands and said wait a minute it

is not ready. and someone else said we're going to forward. and they are going to have to pay the responsibility for this decision. >> i heard this rollout was three times more expense than the rollout of apple. what do you have to say about that? >> it does concern me, and it doesn't surprise me. there has been a lot of talk in the blogs, and procurement. the procurement process for systems like this kind of yields contractors who know how to navigate that process, and doesn't necessarily make it accessible to smaller companies that might be more nimble and can do things with better tall -- talent, cheaper and faster. >> jeanie i have about 15 seconds left, but have these hearings been good or bad from the public standpoint? are they learning what they need

to hear? >> i don't think enough yet. it's going to be an uphill battle for the administration to deal with a very complicated problem. i think she needs to be more specific. i'm not sure it is going to come out in this kind of political theater. >> thank you for being with us. we're going to turn to the hearings after the break. kathleen sebelius facing a firey and sometime argumentative congress. we'll be right back.

>> the most important money stories of the day might affect your savings, your job or your retirement. whether its bail-outs or bond rates this stuff get complicated. but don't worry. i'm here to take the fear out of finance. every night on my show i break down confusing financial speak and make it real. >> again, this is our live coverage of the hearings taking place on capitol hill right now. that is health and human services secretary, kathleen sebelius. she is the head of the agency that oversaw the rollout of the affordable health care act, and the troubled website that has

been plagued with so many glitches. we're joined in studio, and we're going to be on the air for just a short while more. jeanie your thoughts? >> i think it is what we expected. i don't think we're going to get the details for the people on the right to feel comfortable. the bigger issue is the president's promise that people could keep their health care and this wouldn't cost people more. we didn't hear that today. the truth is 50% of those people with individual plans. they are going to be paying more. she really needs to address that issue and she hasn't. >> jason? >> i agree. i think the website can be fixed. i think it is a bit of a distraction. i think each day it will get better. the code won't be beautiful, but i don't think it has to be beautiful. it has to be secure and work, and'm