>> my colleagues at the end has testified about stronger, stronger, did review pennsylvania's regulations in 2010 and those regulations were reviewed very well by stronger. just recently buffalo and this may issued a report that in essence the upon that. that brought it current and that was work concluded there was a compelling case of pennsylvania's oversight of oil and gas regulation has been effective. we have a brand-new statute in pennsylvania again proving the agility of the state to act and our knowledge of her own state, act 13, which brought on new requirements regarding disclosure and we are one of the most forward thinking advanced disclosure provisions of any state in the union. for the first time ever requiring disclosure to medical professionals. and i heard what professor howarth said about the methane study and his methane study, and his criticism of my criticism of it, but i just have to note that

i'll have to take a number and get in line for the folks that are critiquing professor howarth report. that's part of the academic process and that's all there. that's what we should be doing. i do have to take some exception to some of the points. atmospheric benzene levels. i'm not sure what is talking about with return come with respect to chronic exposure and so forth the that's toxicologist an epidemiologist purview. the report that there've been several reported contamination of drinking water wells and surface aquifers in pennsylvania is just not true. that is simply not true. not even duke who had issues with the study. not even the duke study through a connection from any frac fluid being in the water of pennsylvania. methane migration, let me remind a buddy, methane migration has

been a creature in pennsylvania for generations. it's probably been a creature in other states as well. any drilling if it's not done right can cause contamination or can cause methane migration. that's why in pennsylvania we have our well casing regulation would put into place because we knew what it was like and we knew what was necessary on the floor. and i would agree with what professor howarth said, that this area is complex, it is evolving, it is difficult but that's and state should be on top of regulation. the states know how to react to these things, proven record in pennsylvania. we know the science and the state. we are not idiots in the states compared to the federal government for examples and as everything. that's not the way it works. i would take a little bit of a discussion point with the ranking member. the way environmental regulation works in this country is primarily based on state delegation. state running with the ball to regulate environmental matters.

and in terms of hydraulic fracturing, i talk about in my testimony the history is clear. the federal government has never indicated an interest in any administration, in the congress, nepa in regulating hydraulic fracturing until all of a sudden now there's a huge interest to get into it from various different aspects. that's all borne out in history of the safe drinking water act. that's all borne out in the bipartisan 2005 energy policy act which did nothing more than restate with a long-standing policy had been with respect to safe drinking water act, non-regulation of fracking. so with that i will conclude and look forward to questions and more discussion. >> thank you. yield myself for just a mom. want to bring a quick prop. this is shale rock. and for those of you other state regulators your very, very aware of the but sometimes we lose

track of that. when we talk about pulling oil and natural gas out of the ground, people used to conventional wells whether the pocket of will or a pocket of gas. the gas or the oil is not around. it's inside of this. how it gets pulled out in this process is technology that is impressive in the way it is done. to drill down, to put a well a mile deep, sometimes two miles long been underground through this rock just like this, solid rock. frac it with water and pull out of this oil or gas is revolutionary. this is why we have a tremendous supply coming online is because now we are actually pulling energy out of rocks. not out of a pool. not around this, from this. so it is somewhat a revolutionize thing we're seeing. but it's not new in the past couple years. mr. krancer mentioned as well in 2005 congress was very specific

on this, the epa had regulatory oversight over it, only if it had diesel fuels in fracking fluids but to leave that back up to the states as well. my question is, why has this become such an issue dealing with fracking right now? in the last couple of years, why has there been such a prize in so many areas about fracking? mr. howarth? will have to make response ashore because we're short on time spent as stressed in my testimony the ability to get that fantastic resource out of the shale, you're right, it's an incredible technology that it is new technology. so it is developed first in texas, somewhat in oklahoma, and the south areas which are very different from what's going on now -- >> i understnd. the right now there's been an incredible shift on it. this is been known over several years ago said since 2005. has there been some new

breakthrough? because the epa administrator has told us repeatedly that they have not found from epa a single site of groundwater contamination from hydraulic fracturing. >> i believe the epa probably told you was there not aware of a single case where the action of the fracking itself led to water contamination. there are multiple publicly known cases where there's water contamination associated with the development of shale gas or other type -- >> talking about from the surface. >> no, including from wells. there's a documented incidents of at least 1%, up to 6% of -- >> here's what i know typically. and there been some very, very public -- epa comes out and says we've got a major problem, we've got to take over in this area, they began testing all those wells and then comes back later, oh, that was just methane naturally occurring. that's a chemical that is already risen there. most recent on the 11th of

this year in pennsylvania epa quietly released what was initially a panic to say that frac fluids cause all that. that come back now and say we were wrong. that was not a source of the. so there has been quite a shift that has occurred. let me move on to a couple of other areas. >> if i could make one case. i met in contamination clearly is a result of hydraulic fracturing of these shale to the study in duke university published at the national academy of science, unambiguous. >> maybe you can pull some of that force and will be glad to receive it as well. epa has disagreed on several of those. methane is a naturally occurring substance that does move in the ground, just releases. is at the same in utah, in pennsylvania and oklahoma, same rock, same depth with water, same soils them are things the same in all three of the states? >> no, absolutely not.

you are not the same to cooperate, -- all on the service for on the duke study i take issue with professor howarth again. the duke study with very limited and other studies have come out including one from world pennsylvania which seem to lead to another conclusion to in your more fundamental question, why all this attention? i'm not going to go through it but there was a great articl about this called everything you've heard about fossil fuels may be wrong, and the new america foundation. it's all about what he thinks why all this attention is grown. it's because natural gas which used to be viewed as maybe a bridge fuel of fossil fuel that people don't like fossil fuel could hold their nose and get through, it is now could be the fuel of the century, and that has caused some dissidents among some significant interest groups, ergo, the pushback. >> you mention in your testimony that you've seen, and there's a perception, a shift of investment out of the west to

the east. i assume you mean out of blm land, and there's a fear that you have that you are about to loose the potential getting energy. is it because you're running out of energy in your area, or will it be the reason that there is this sense of investments moving away from your area? >> first of all, there's a tremendous resource of energy in our area but as i mentioned, there's 111 billion cubic feet of natural gas, all different resource. so it's not because a lack of opportunity. in fact, there's enough to help us move to great energy independence. but public policy definitely makes these changes. and we've seen investment shift just because of public policy. >> public policy, what do you mean? >> blm policy, having to do the way with lisa's, and those different types of policies that come out of bureau of land management. this is just another example.

when it becomes much easier to invest on private land compared to public lands, in my county or 50% am account is privately held. in the west much of our land is public land. so if we take that opportunity off the table, what are we doing to the national security and the opportunities of energy independence, when we have unneeded redundant policy. and then more to the specific question, at least not in our area, most of our wells are at least a mile deep. some of them will go a couple miles be. we are not dealing with shale gas. that's why again i think it's valuable that these decisions are made on the state levels because when you have a one size choose that all type regulation, and i will tell you i visited with consultants in some of the proposed rules make absolutely no sense your there's not time for that today. the states are best handled these policies.

>> thank you. i will recognize the ranking member, also additional two minutes. >> you are very gracious and i thank the chair. welcome to our panel. mr. krancer, i unfortunately had to be at a funeral this morning of a close friend, and i did not hear your testimony and i had described to me. but if i it directly to your testimony in essence is based on your experience in pennsylvania, hubley the other 49 states can also live with fewer state regulation, we don't need federal regulation in this particular area, is that an accurate characterization of your test when? >> i'm sorry. they so my experience in pennsylvania, pennsylvania is able to regulate fracking. they so my experience, my experience with other colleagues in other states that do this work, i'm convinced that they can do in the state.

it's not done in every state, and based on the expense of stronger from that's why we have groups like stronger that helped states do this. >> let me just ask. based on registered to testify, it sounded like pennsylvania has a robust regulatory framework. you cited, for example, chemical disclosure laws, and you do it works very well in pennsylvania, is that correct? >> that's correct. and i invite you to come visit pennsylvania and i can show you for standout works. spin and be glad to do. i went to high school in pennsylvania. got married in pennsylvania. glad to do it. but let me ask, does your expertise extended other 49 states the? surely you're not any position, or are you, to testify that you are satisfied based on empirical evidence that the other 49 states are as robust and i still gym as pennsylvania? >> i mean, that question is, i don't hope to respond to it because there's not other 49

state issues. many other states do not do fracking at all. the ones that didn't do it have the track record that indicates they can do it. oklahoma, texas, west virginia, ohio, et cetera. even if they don't have an existing program now, day, and i can say this as my experience as a state regular, are the best position to know their state, know what to do and get the regulatory plan that they need in their state. >> but you would concede at least as an intellectual, that there could be a state where fracturing is, in fact, occurring, that is not as robust and intelligent as pennsylvania? >> i mean, i could concede also that sasquatch is in the woods but that doesn't get us anywhere. [talking over each other] >> this is my time. the point is you don't have expertise with respect to the other states do you do in pennsylvania. >> that is a red herring because

you don't either. >> mr. krancer, the issue here is whether or not the federal government has a role. you testified you think he should not have a role. >> no, i don't think the federal government has a role. the issue is whether the federal government should have a preemptive role, or why shouldn't have a preemptive role. i'm here to say it should not have a preemptive role. we survey should have a role in which we discussed things together. i often communicate with my counterpart at region free, and i'm sure my other counterparts do that as well. the question on the table, ranking member, who is in a better place. are you in a better place in washington to tell oklahoma what to do? are you in a better place in washington to tell us in pennsylvania what to do? the bottom line -- >> thank you, mr. krancer. mr. krancer, figured i would simply say those are the kind of arguments that are used for generations against federal involvement. if we were talking 40, 50 years ago about, for example,

prologues -- jim crow laws and the south and the civil rights movement we would've heard testimony writer at this testimony -- it is my time. mr. chairman, i insist he adheres to the rules. this is my time. mr. krancer, i gave you the benefit of doubt and logic to answer as you wish. it's now my time. i believe that that philosophy is in error. i don't share it. >> that was in active in -- >> i insist on a regular order. >> i think you, mr. chairman. it has been proved false by history. that is clearly what this hearing is designed to give them as was beijing this month. i don't share the philosophy. the fact that you had a good expense in pennsylvania, i don't believe you can necessary extrapolate it to the rest of the country as you've indicated, you don't have the expertise actually to say here at this table under oath that you are

satisfied based on empirical evidence that all of the other states that are involved have similar, robust regulatory regimes. dr. howarth, you talked about nothing to help us understand, what's wrong with methane? cows exhibit methane. >> methane comes from lots of sources but the single largest source of methane to the atmosphere of the united states is human sources is natural gas but at least 39, 40% or more of methane pollution comes from -- >> so what? why do we care speak? it's an incredibly powerful greenhouse gas. it's low-hanging fruit in terms of trying to start to address global warming. if we get the methane under control, we are far better a long and co2. i can go into more detail on the. it also is a major ontributor to ground level -- i mentioned in my statement but i should point out that ground-level

ozone poverty causes 30,000 premature deaths at the united states every year. >> some at the of of itself is not danger. >> yes spent but it helps create increased level of ozone? >> it definitely -- [talking over each other] >> such as benzene which is also a contributor. >> is ozone regular by the epa? >> ozone definitely is regulated. ground-level ozone is regulated spent right here in the capital region i recall we are subject because we're not -- [inaudible] is that correct? >> that's correct. >> so that might be a concern. i'm running out of time but one of the other concerns has come up, help us understand the science a little bit. what do that reports of seismic events associated with the return i guess of fracking? >> absolutely. there's been an increase in earthquakes, relatively small earthquakes, still large number of small earthquakes in several

places, ohio, oklahoma, elsewhere. the u.s. geological survey after thorough study attributed this to disposal of frac return waste into ground disposal wells. it has changed the geology in such a way to increase the earthquake risk and it is seen to increase. i should point out the industry is moving more towards getting oil rather than gas out of shale because of the market consideration of the mulder the relative prices of the two, and the largest oil reserves in jail in the united states are in the central valley of california and in the los angeles basin. they are the earthquakes concerns and disposal of frac waste should give everyone pause spent i think you, and thank you, chairman, for your graciousness. >> mr. kelley. >> thank you, mr. chairman. and thank you all for being on the panel. and we do have great differences of opinion as to where we're going with this. i guess when i am back home in western pennsylvania, there's a great deal of concern about

federal government began getting involved in areas where those people in the states don't think they should be. why now? what's going on that all of a sudden the epa has to get involved in fracking. this isn't new. it's been going on a long time. we're talking about eight, nine, it's that far below the surface. this isn't right at the search i get concerned about that because we are about all this new technology. i know there's great innovation. just the horizontal drilling. but if you could, mr. krancer, you are from p.a. and we talked before. what's going on that is a public concern and what brought it about? >> i think it harkens back to the article i just mentioned i be happy to provide the committee. and also i do believe and i think madison wrote about this in the federal papers but there's a tendency of power to want more power, so that may be

part of what's going on here as well. >> i believe first of all we have to keep in mind that some people are labeling hydraulic fracturing, labeling all kinds of issues associated with oil and gas, drilling and production as hydraulic fracturing. there are certainly some issues associated with the rapid development of oil and gas in areas where it has not occurred before. that happen in the response of the country. it happened in certain areas -- >> this has been around. we never had this degree of concern before. i don't want to say it's epidemic. there's a large swath, so why this little town and one of so many other areas of? >> if you're asking me i could

talk for our, but i won't. the state had been taking care of conditions for a long time. all of a sudden the epa for reasons i have no idea decided in january that they have to come in, i spoke as a big brother or as a white knight, or whatever, to come into water testing a start supplying water to poor families. as representative langford correctly point out, it was interesting because the reports of no out the back windows, on a friday afternoon at about 4:00 and then they would die in the press to but up in four rounds and for nothing to actually even at midcourse they spent one windows already out of the superfund response fund which certainly could've gone a long way in northeastern pennsylvania on a lot of superfund projects. >> they tested 59 wells and found nothing to indicate that the fracking was causing --

>> more than that. they found no health impact whatsoever. when they came in the first place the integrated connection between hydraulic fracturing and what is to what they're looking for but i asked him specifically and they said no, we don't have a connection to spin if gas and dust, if the movie doesn't, i won't go to a document or, if the movie doesn't come out, it probably doesn't get on anybody's radar? >> it was put on the radar i believe i definitely movie history. >> and i think that sound science, totally in favor up. political science i wonder. because a lot of this is a result of if you don't succeed at first, try it, tried again. am wondering where going with this. at what point, what point does the epa walk away from this and what say we don't -- i don't pennsylvania you've done a great job. i don't oklahoma you done a great job. the federal government gets out of the way unless the state to take care of --

>> that's a great question. i've never been compared to jim crow or ever of jim crow for my views on federal-state relationship, but let's remember that if the history is the federal government has never shown an interest, whatever administration, whatever congress, whatever epa. that's with safe drinking safe drinking water act was about. that's what the 2005 energy policy was about. and that was a bipartisan act in which ken salazar and the president of the united states, current president of the united states voted for. >> this great abundance in the accessibility and affordability of natural gas has really had a great influence on the green agenda because this was supposed be the bridge to get us there and now we're finding out that instead of being the bridge, it's the bedrock of inky. it puts us in a position and to you and i talked earlier about this, i don't want to be in their fight with the rest of the world. we have natural resources like your provided by god, that we're not taking advantage of.

why in the world would we continue to keep the government's boots on the road of success in a great opportunity and jobs, for this country and the revenue. i know i'm out of time but i want to thank all for being you. i know it's frustrating, that we'll keep working on it and try to get to the bottom of it. thank you. >> thank you very much. i'd like to start with, i'd like to thank the panel for being here but i'd like to talk to ms. wrotenbery, singes my neighbor to the north in oklahoma, i'm from texas. exxonmobil put together a little graph that i wanted to share with you guys. is basically shut the drilling, about one feet under, typically hit groundwater, and i realize you might have a low difficulty seeing that, and then to protect the groundwater there are multiple layers of concrete. this is true in both conventional wells that go down and hit a pool of oil, or gas, or a reservoir of oil and gas,

as well as hydraulic fracturing. is that an accurate statement speakers yes. generally the way, yeah, the way the freshwater resources are protected. >> in a case where there's hydraulic fracturing as opposed to traditional, it's basically protected the same way. so similar risk of groundwater contamination exists for how we have been producing oil and gas since the civil war. basically. >> we've had -- >> obviously -- >> with a casing and cementing requires for oil and gas wells or any deck is the they have actually evolved and improved over the years. but basic principle throughout the history of regulation has been we case the well through the freshwater zone to isolate that. >> when you friday well, -- frac

a well, it is well, a couple hundred feet in o'clock? >> it varies. that's one thing, the geology -- >> but i mean you are talking hundreds of feet, not thousands of feet? >> it can be come in a few isolated areas, it can be very deep. typically though you're right. >> so the local regulators have a good understanding. >> and we have that map. have on our internet the maps that show the freshwater throughout the state of oklahoma spent so when you are fracking your traditionally much, much, much deeper. of you, we are talking miles. certainly and most texas cases it's at least a mile, sometimes two miles below the water table. so the chance of something migrating up through the rock going up two miles just defies common sense. that's an issue. let me go on and visit with

mr. mckee. you all, you have got to get blm permit. also in texas. what kind of like two weeks, months, but certainly not use in getting something permitted on private land. now, this is costing, i assume there's a cost associated with this, not just with jobs, is that correct? >> yes, that's correct. there's a study that shows that the investment on every well is about $6 million in utah. and so there's the mental -- mineral release royalties spent and when land is leased from the federal government, you pay a bonus to get the least to you by police? >> that's correct. >> that from everything that is produced, the federal government gets the royalties. so we get a percentage of all the oil, all the oil and gas and so forth, that we could use to pay for roads and highways.

that we could bring into the federal government to help balance the budget so it's a source of income we are losing as a federal government speakers absolutely. let me give one example. recently, about 6000 acres, a right to lease on those lands, it costs the bidders $48.6 million just for the 6000 acres, just for the right to trip the vendors a 12.5% royalty i comes into the federal government that is a sharing formula with the state, but that's a tremendous source of revenue. i indicate there were over $200 million of federal mineral royalties, out of my county. >> i also saw the transportation infrastructure committee and one of the ways we are looking for pain and maintain our degenerating infrastructure of roads, bridges, the interstate have a system is using that royalty money. so those delays are causing the american people -- costing the american people in need of repair, the safety of our

highway system. >> absolutely. >> let me go on to mr. krancer. are you from we are with the statement of the former region epa director when he said there was and epa's goal, or he wanted to crucify the oil and gas industry. do you see that as actually happening? >> you don't really want to lead me into that discussion, to you? spent i from texas. he was our epa got spent i met him once, no know what i have read. >> but do you feel like the epa is targeting, do you have a feeling you are targeting the oil and gas industry unfairly? >> well, i try to get my eye on my own court and what we are doing. i do see permits, delays in permit likes to i talk to this point about the rocket docket for regulations, historic regulations in error and so

forth, compared to the snail docket for getting permits done. >> i see i'm out of time. thank you very much, mr. chairman. thank you to the panel. >> we will do just a couple minutes of questions here to do some follow-up. i've seen some clarification on this, just a process question. new guidance has been released by epa getting with the diesel fuels issue, and epa's involvement has been traditional primacy in the oversight process for fracking in states. what i'm interested in is for you on how you are interpreting that, how this is working for the process of that guidance dealing with diesel fuels in fracking and expanding the definition of diesel fuels. does that make sense? i know this is in process, but just how does that go, what are you doing? >> it is in process. we are reviewing the document. i will say it does not directly apply to the state of oklahoma because we administered the uic program for oil and gas

operations. under section 1425 of the safe drinking water act. and so we have and though that different framework, but we are looking at closely because there's no doubt that epa will be coming to visit with us about how we address the various elements that are in that guidance. there are some key issues in there that can service. we're putting our comments together and we will be submitting those spin is a your assumption guidance will become a will, or is it your assumption this is just an opinion piece that would probably affect deal in areas that one of the private areas? >> we are concerned that epa will implement it as if it were able spent rule or not, it will apply? >> yes. >> mr. krancer? >> we talking about the blm rule or the diesel fracking permitting guide? >> both. >> let me say first i don't believe that's going to be an issue in pennsylvania. vessel information that we have that diesel fuel is being used

for fracking. i don't know whether they'll be an issue in other states. epa does have primacy of the uic program in pennsylvania and that's because we just don't do a lot of uic disposal but i think you hit the nail on it. we're to keep an eye on the country -- >> epa's current in the process of trying to redefine what the diesel fuel. that was my question to you. that conversation is ongoing. how are you processing that was epa at this point? >> we are watching it carefully because it is the proverbial nose in the camels 10. this is a 2005 energy policy act. it did exclude -- but if you define diesel fuel to be everything, then you probably have gone beyond what the luncheon and probably acted illegally. >> think. one quick question or ms. wrotenbery. a comment was an early about earthquakes in oklahoma based on fracking. direct tie on the. are you aware of earthquakes in the coal based on fracking

itself? >> we are working with a seismologist at the university of oklahoma and the oakland geological survey to study the possible connection between earthquakes and various types of oil and gas operations. any statements that have been made that there's been some kind of conclusive link our premature. spent our earthquakes in oklahoma common, small and quick? >> yes. we live in a seismically active area. and the records show that. >> thank you. i yield to the ranking member for three minutes. >> i thank the chair. mr. mckee, like you, i appreciate your service. did i understand your testimony

to mean that you felt that excessive federal regulation, blm regulation, had served as a pediment to job creation in your community? >> that is correct. >> what is the unemployment rate? am i pronouncing your county right? what is the unemployment rate stood was today it is only about 4% however, when the downturn in the economy happened, because we are an extractive community, we didn't know that there was even a recession going on as far as what we were feeling until we had new policies that came in and almost overnight, we lost a number of jobs because of new policy. spent by the 4.1% which is pretty low -- >> today it is 4%. >> 4%. how does that rank with other

counties in utah? >> we are among the best. spent my did in fact be the lowest rate in utah's because i would have to double check but i'm not sure. i know we're pretty good because we are in oil gas economy spent what percentage is federal and controlled lands because i know we're only 50% privately held but i believe it's about 59%. i think 17.5% tribe, and a little bit of state institutional trust lands. >> do you have any idea on that federal and how many leases have, in fact, permits, have been granted not not utilized? >> i know that there's a fairly strong backlog on committee process. i believe i was told there's over a thousand prevent doddering backlog that have not been able to issue because of the backlog issue. >> but in some cases it's also a utilization issue, isn't it, that some have been granted and

not use of? >> what i am told is bears, many times it's very difficult because sometimes these permit show up in a category as though they been issued but they're still waiting for government to finalize what they are doing so they get held up. >> obviously when things we been talking about today is air pollution. whether they can be attributed to fracking or whatever. yours is largely a rural county, is it not? >> it is spent one would normally expect a room -- a rural county would have relatively clean air. how does uintah county stack up in that regard? >> we do have come over all, our air quality is good with the exception of winter ozone. we do have winter ozone issue. and i would like, if i could just touch on that one moment. >> certainly. >> if i could disagree with my colleague to the left you. he indicated that fracturing was causing the use of hydraulic

fracturing was causing winter ozone issue. i personally have been very involved with this issue, meeting with state, and even in epa office up in denver, and with our roundtable discussion, extensive studies going on. i have yet here to the state a tie from hydraulic fracturing. >> i know my time is running out what i was stunned to learn that you actually topped los angeles on the number of occasions at 149 parts per million with respect to ozone. epa called it unearthly at some point. what is the cause of such high ozone levels? >> this study is going on. it appears, what i was referring to a moment ago, this is tied, appears to be, you know, a number of factors, scientists are still trying to learn about. one of the things they recognize

is it's tied with sunlight and snow. this past winter we didn't have very much no on the ground. we did not have any exceedances. we were well below the number. a year ago we had deep snow and the numbers were fairly high. so the jury is still out. >> i thank you very much. thank you, mr. chairman. >> now take a short recess to prepare for the second bill. panelists, thank you very much for being here and staying to two rounds of questions but i appreciate your time very much. [inaudible conversations]

>> [inaudible conversations] >> witnesses, thank you both for being here. nancy stoner is acting assistant minister for water, epa. mike pool is to be director of bureau of land management as of tomorrow. so the we are breaking u.n. official. we will try to be done before you're actually placed as acting administrator, is that all right? as i mention we do have votes shortly so we will try to get in both your testimony. and you with questions as ago.

with that, ms. stoner, we would be glad to receive your testimony. >> that afternoon, chairman lankford and ranking member connolly, and members of the subcommittee on nancy stoner, acting assistant administrator for water at epa. thank you for inviting me to testify before you today. >> i apologize. i did not swear everyone in. sorry. everything has to have some swearing in it. so if i could ask both you to please stand so we can swear you in. it is pursuant to committee rules. i apologize for that. would you please raise your right hands? [witnesses were sworn in] >> thank you. let the record reflect the witnesses have answered in the affirmative. i apologize for having to stall you at the mother. >> that's okay. i think i will pick up right where i stop at the epa in this of ministers recognize natural gas represents an important energy resource for our country. increase reliance on gas is the potential to create jobs,

promote energy security, lower energy prices and reduce harmful emissions to air and water. at the same time the administration is committed to ensuring that production receive an essay a responsible manner the we believe we can protect the health of american families and communities while enjoying the benefits of expanded national energy reserves. while states are the primary regulators of onshore oil and gas activities, the federal government has an important role to play by regulate oil and gas activities on public and indian trust lands. research and development and innovation to improve the safety of natural gas development and transportation activities and setting sensible cost effective public health and environmental standards. to implement federal laws and complement states safeguards. as the senior policy manager for epa's national water program, i'd like to highlight a few of the ep recent actions under the sacred water act and clean water

act. intended to ensure that natural gas production can remain protective of human health and divided. the safe drinking water act governs the construction, operation, permitting and closure of underground injection wells. for the protection of underground sources of drinking water. underground injection control, or uac programs, administered by epa or the states are responsible for overseeing these objections activities. however, the energy policy ac of 2005 excludes hydraulic fracturing from regulation under epa's uic program except when diesel fuels are used these fluids as propping agent at the epa has heard from both industry and the public that we should clarify the applicability of the permitting requirement for diesel fuels, hydraulic fracturing as well as how those permits should be written. in response, and in light of the significant increase in natural gas production in the united states, we have developed draft

guidance to clarify requirements under the safe drinking water act and to prevent the engagement of underground sources of drinking water from hydraulic fracturing using diesel fuel. the epa developed this guidance with input from industry states, tribes him and other federal departments and agencies. environmental organizations and the public. i'd like to emphasize that as is the case with all guidance, the draft document does not impose any new requirements. that draft clarified existing statutory and regular toward requirements and provides technical recommendations for applying uic class to requirements to the diesel fuel's hydraulic fracturing process. the guidance is intended to use by epa permit writers under the uic program and will be applicable what epa is directly responsible for the uic class to program. we're taking public comments on

the draft through july 9, and welcome comments from all affected parties and the public. in october 2011, epa announced a schedule to develop pretreatment standards for wastewater discharge or comment discharges produced by natural gas extraction from underground coal bed and shale formation. in addition, epa is assisting state and federal permitting authorities into marcellus shale region by answering technical questions concerning the treatment and disposal of wastewater from shale gas extraction. the epa has been conducting research to better understand the potential impact of hydraulic fracturing on drinking water resources, and that's the office of research and development of an conclusion epa's activities related to hydraulic fracturing help assure the public health and water quality remain protected of natural gas helps to go our nation's economic recovery and

security. thank you for the opportunity to testify before you today, and i would be happy to take any questions you may have. >> mr. pool. >> mr. chairman and members of the subcommittee, thank you for the opportunity to discuss the bureau of land management develop and of hydraulic fracturing roles on federal and tribal trust lands. the bom limits over 200 million acres of services and products at 700 million acres of onshore federal mineral states throughout the nation. together with the bureau of indian affairs would also provide permitting an oversight services of approximately 56 million acres of indian trust minerals. secretary of the interior ken salazar has emphasized that as we move forward, new energy frontier, the development of conventional energy resources from blm managed public lands will continue to play a crucial role in meeting the nation's energy needs. in facilitating safe, responsible and efficient

government of these domestic oil and gas resources is the bom's responsibility and part of the administration's broad energy strategy to protect consumers and help reduce our dependence on foreign oil. fiscal year 2011, onshore federal oil and gas royalties exceeded $2.7 billion. approximately half of which was paid directly to the states where the development of the tribal auto glass royalties exceeded $400 million, 100% of those revenues paid to the tribes and individual indians on the land on which the development occurred. oil and gas production show for mission scattered across the united states has grown considerably and is expected to continue in the coming decades. contributing to the success anklets technological advances, hydraulic fracking and horizontal drilling. the blm estimates approximately% of the wells drilled on public lands and indian lands are stimulated by hydraulic

fracturing techniques. the increasing use of hydraulic fracturing has raise public concern about the potential impact on water availability and quality, particularly with respect to the chemical composition of fracturing fluids and the methods used. the blm recognizes that some but not all states have recently taken action to address the hydraulic fracturing in their own regulation to one of the blm's key goals in updating its regulation of hydraulic fracturing is to complement these state efforts by providing assistance standard across all public and indian lands. the agency has a long history of working cooperatively with state regulators. rulemaking is not intended to duplicate very state or applicable federal requirements that the blm is intent is to encourage efficiency and the collection of data and recording of information. the development of this

hydraulic fracturing role includes consultation of the policy. this policy emphasizes respect and shared responsibility by providing tribal governments expandable to inform public policy that impacts indian land. january 2012 the blm conducted a series of meetings of the west whether significant development in indian oil and gas resources. nearly 180 tribal leaders were invited to attend these meetings held in tulsa, oklahoma, police montana salt lake city, utah, and framing to new mexico. 84 tribal members representing 24 tribes attended these meetings. on may 11, 20 of the blm sent over 180 invitations for continued government, government consultation to exchange information on development of hydraulic fracturing rules. as the agency continued to control with tribal leaders are out the rulemaking processes, responses from these representatives will inform our actions.

the blm's proposed rule is consistent with the american petroleum institute's guidelines for well construction and integrity. on may 11, 2012 the bom published the proposed rule in the federal register begin a 60 day public comment period. straightforward measures outlined in the proposed rules include, disclosure of chemicals used in hydraulic fracturing operations with the appropriate protection for trade secrets. assurance other well bore integrity to minimize the risk of fracturing fluids leaking into the nearby aquifers, and water management requirements to apply to fluids that flow back to the service as hydraulic fracturing has taken place. the hydraulic fracturing proposed rule will strengthen the requirements for hydraulic fracturing on federal and any trust lands ago to build public confidence and protect the health of american communities while ensuring continued access to resources to make our energy economical spent thank you i

needed to us by. of the happy to answer any questions. >> thank you. and thank you not only for your reinvestment but her oral test would four-line me to come on your pre-first day on the we are very close to calling for both the calling the votes right now that that will enter -- to interfere with our schedule. if you just hesitate for just a moment to see if they are about do that. [inaudible conversations] >> okay. looks like they are calling the vote. if they are, then we can do a round question and come back into a second round. or we can try to stall into both

rounds when they come back. so we can take this it away. we will pretend this is democracy for a moment and talk about it. spent maybe we don't take our full five minutes. >> then come back around? esther kelly? we will do three minutes in the first round on and then the second we would you like 18 minutes each or something like that. let's try to do that. will try to get going on us. we want to honor your time as well. let me kneeled -- let me yield to mr. kelly spent i thank the chairman. you know, i'm trying to understand the changing epa's interpretation of regulations. why is it not subject.

i'm talking specifically when we go into the diesel element of it. there was, those kind of fast-paced, was it not? it which is place on your website. it was a really the regular procedure taken. >> so this is a guidance document, so it is an interpretation of the statute and the regulation that imposes -- >> but i'm talking about the guidance document. >> i'm sorry? [talking over each other] on the permit for it. if using diesel in the fracking. >> yes. epa has on its website information about what is and energy policy act, including the fact that when hydraulic fracturing is done with diesel fuels, a permit is required. as in the statute and so we did include that information on our website, as you may know we did

have a lawsuit associated with that, which has now been settled. >> i understand but that's different from the document before, is that not true? it's changed. >> i am not sure that i understand your question. >> well, there is a letter from acting administrator stating that the use of hydraulic fracturing using diesel does not fall within the scope of the uic class ii program. now, that's before 2010. >> was that before 2005? >> no. this is before 2010. so the epa then decide to change that. just go on the website. it didn't go through the normal process is what i'm saying. >> it's not my understanding the agency changed its division between 2001 and 2005. into the house and one, week, there was a court decision that said that hydraulic fracturing

was within the class ii uic program. it was at that point the agency changed its response. >> without objection, mr. chairman i'm going to ask this letter he put into testimony. >> without objection. >> and i think the concern is that things change rather quickly. and that a process that all he said was not policy before becomes policy and does not go through the regular process. fracturing was not part of, all of a sudden it did become part of it spent we are implementing the 2005 statute with the guidance that has gone through, going through public notice and comment now, after a series of public meetings and discussions with a variety of different groups. we are undertaking a process but we agree with you that it is important, the involvement and wide variety of partners and stakeholders in the process.

>> i understand that is the intent of the whole process and that's why i wonder why it was fast trac. mr. chairman, my time is up. >> i recognize mr. farenthold. >> welcome to both of our panels. thank you, mr. chairman. just to clarify, i'm confused. epa is not proposing a general broad regulation of fracking tickets on proposing fracturing within statutory framework provided in the 2005 legislation and the subsequent court ruling. is that correct, ms. stoner? >> that's correct. we are interpreting the statute and the regulation. >> but it does not involve diesel. you're not recommend the process? >> that's correct. diesel fuels have been the

statute that's what we're implement them. congress includes the obligation on hydraulic fracturing operations using diesel fuel to obtain a permit and the guidance explains how to do that. >> this assertion of regulatory responsibility in this particular lane involving diesel was actually insisted upon, is that correct, or ruled upon by a court? >> the court determined that hydraulic fracturing was covered under the uic class ii program. that was in 2001. congress took action in 2005. that limited that permitting requirements only to a hydraulic fracturing using diesel fuel. and so what the guidance, proposed guidance does is indicate how that should be implemented. >> why did this take seven years from that legislation to today to get around to proposed regulation?

>> what we did initially at the epa was a memo, memorandum of agreement, with companies involved in coalbed methane hydraulic fracturing indicating they would not use diesel fuels. and what's happened is a shift in the industry so that there is now more hydraulic fracturing that is outside that realm of the coalbed methane. that's why the initial steps we took were no longer viewed as sufficient to comply with what congress asked us to do. >> are you aware of any cases where fracturing has come to a halt because of your regulatory rule? >> no, i am not aware thing. >> you, you are also proposing as an admission to regulate carcinogen dispensing or organic compounds but not nothing, is that correct? >> that would be an integral you're asking about. i'm afraid i don't know the answer to that question.

>> so you don't know the answer as to whether or not, my understanding is your not proposing anything with respect to methane. >> i'm sorry, i don't know the answer. we can submit that information for the record. >> you will recall earlier the professors testament to methane is a various -- a dish is concerned of his. scientist when he of fracking, and the reason is because it's part of a family of organic compounds. nothing in and of itself, it is a precursor to benzene and other carcinogens. mr. pool, do you hear mr. mckee's testimony from uintah, utah? >> yes, i did. >> he testified that essentially blm being the owner of 59% of the landmass in his county is really putting a crimp on their style and jump of the ability to exploit natural resources

because it is federally owned land and fairly controlled land. would you comment? i know this is your first day with this set of -- >> in terms of natural gas, it's when development. we've issued quite a few leases out there and was issued quite a few agencies. i think when it comes to leasing federal land, we have other important responsibility we have to address in terms of biological, cultural consideration. so when we go through the leasing process, or we go in a folder from a process we need to work with the operators. these jurisdictions will vary depending on the sensitivity of these resources. i know between i think between wyoming and utah we have about 6800 front blog that we've issued that have not taken action to activate those. i think there's a percentage of those in uintah counted them and i don't have the exact number.

spent a testimony essentially the thrust of the testimony of these officials was we don't need the federal government, why not just let for example, in this case utah regulate what happens on blm land. what's wrong with that? .. >> we got recommendations from the secretary of energy's natural gas subcommittee, all of which was helping the blm kind

of form late what improved standards should be developed, and we've looked closely at the state regulator and what they've been doing. the issue there is the state fracking regulations don't pertain to federal lands, and in many provinces of the west, we've got state land and public land. so we would like to think with the development of our proposed rule with the high degree of outreach and public input -- and that's still ongoing during the comment period -- that our regulations will be very much complimentary to and very much in alignment with what the states are doing as well. it's very important they be in line. >> thank you. thank you, mr. chairman. >> yep. mr. pool, let me ask you about that. the public lands, you're saying the state rules would not apply, so you're saying state regulations in utah would not apply to fracking -- >> that is correct. >> was there a consideration to

say that they would, or is there a need for blm to create a whole new group of regulators and go in and evaluate this? >> yes, sir, mr. chairman. i mean, our authorities come under both statutes, the mineral leasing act ask the federal land policy management act s. so our regulations have to be, basically, developed under those two statutes for us to enforce whatever requirements we want to impose on the operators. >> you had mentioned your regulations were very out of date. obviously, states keep theirs up-to-date. >> that's correct. >> is there a process where blm is going to -- >> our goal is to, in developing our proposed rule, we've looked at colorado, wyoming, texas, even arkansas, and we've taken into account some of the standards that they've developed over a period of time, and we're using their information along with, you know, more recent public information to finalize our rule. >> just one thing i'm going add,

i'd like to have unanimous consent to add to the record a letter from the governor of wyoming mentioning that he feels like the rules are very duplicative to what they already do in wyoming, and this is going to create two different sets and a little bit of frustration, so i'd like to add that to the record as well. we're going to be limited on time, they have called the votes, and i want to honor your time. how long will this add, this additional set of regulations to the process? how many days do you think it'll add? >> i don't have exact days, but i think the requirements somewhat i think they're very, they're very basic. you know, in terms of the constituents or chemicals used which primarily in many a water, sand-based solution we're asking the companies after they complete the fracking to -- >> this morning in testimony we heard there was an estimate that this would add up to 100 days in the process, and gwen if y'all

had -- i didn't know if y'all had set an estimate with that as well. >> i don't have it today, but we'd be happy to provide that. >> my concern is on the expanded definition of diesel. it's very clear that diesel fuels is included in the 2005. but if i drove a diesel truck, which i don't, if i drove a diesel truck and then poured kerosene into it, i would not consider that a diesel fuel be. if i pulled up and instead of filling up with diesel i instead put crude oil or how home heatig owl in there, it would not run. the definition's fairly clear, it's diesel fuels. the new expanded definition of diesel fuels appears, and that's what i want to have a dialogue about, many of the companies that are doing fracking saw the ruling in 2005, saw the statement from congress saying that diesel fuels will be regulated, so they shifted away

from diesel fuels. and this has the perception that because they no longer use diesel fuels, we have to redefine what is a diesel fuel to make sure what they are using is included. does that make sense? so crude oil, home heating oil, kerosene, how are those now suddenly diesel fuels? >> so in the energy policy act of 2005 the term diesel fuels appears, but there is no definition. >> correct. >> so this is the first attempt the agency has made to provide such a definition. it did so by looking at six chemical abstract service or cast numbers. there's six of them -- >> correct. >> -- very specific things, all of which are diesel fuels. diesel fuel number one, number two -- >> but they're diesel fuel number one, two three as designated by who? by epa or by some other group? for instance, petroleum distillates, that could be just about anything that's a petroleum product.

>> it's got a specific cast number that doesn't come from the agency. it's called crude oil/diesel fuel. kerosene is marine diesel fuel. so all six of them are diesel fuel, and that's where we got the six cast numbers from, is from that. and so that's where our proposed definition, we are taking comment on that. we feel like it's a very clear definition because it links specifically to those six cast numbers. >> um, i, i'm second guessing whether congress in 2005, of course, i was not in congress in 2005, none of us on this panel were, but i'm second guessing where congress in 2005 was considering crude oil a diesel fuel or as broad as petroleum distillates as a diesel fuel. that's a very broad definition. and that is the concern there, that this suddenly seems to reach out with a met and to be able to snag everything in it. one other quick comment, then i want a chance to share some additional time. why the redefining now, why blm

put anything the new regulatory environment now before epa has finished its study? we have a study due in just a few months to define whether there's even a problem. we just created a new series of regulates, we just greatly expanded what diesel fuel pertains to the common sense definition of what is a diesel fuel in the past before epa finalizes a study? >> the oid study will actually take a couple more years. we expect to have progress this year but not a final report this year. the information we do have about what congress did in terms of diesel fuels was that congress was focused on benzene, ethel benzene and compounds which are associated with all six of those cast numbers. so we're doing our best to interpret what congress was concerned about in terms of chemicals in underground sources of drinking water, potential risks there. and that's our proposed

description of diesel fuels and, again, it is out for public comment. >> will this be retroactive permitting when the new definition is done? >> the permitting requirements of the statute and the regulations apply now, but the diesel fuel definition is a propose bed interpretation of those would, of course, not be. >> so if a state doesn't abide by the guidelines, will they lose primacy in this? >> we don't intend to take away primacy from our state partners. we work closely with them on implementing these programs in a complementary way and don't intend to do that. the draft guidance applies only to those states where epa is the permitting authority under the uic program. finish. >> would this be mandatory in the blm area? >> it doesn't apply -- it doesn't differentiate between private lands and federal lands, but it does apply only where epa is the issuing permitting

authority for uic. states assume that authority, many states like oklahoma have assumed that authority, and it does not apply to those states although they may find it useful. >> right. mr. pool, obviously, that would be your decision to make in the days ahead. i need to give two additional minutes back to mr. kelly who only got three here. >> okay. and i thank the chairman. i'm going to ask you two things and, very quickly, mr. pool. the reason i ask because pennsylvania -- [inaudible] and i think you familiar with the movie gas land, yes? >> i'm sorry, familiar with what, sir? >> the movie gas land? >> gas land. i am somewhat familiar. >> okay. on may 11th a spokesman for the regional everything pa office said, now, they tested 59 wells endemic and found that the fracking had nothing to do with any contamination of the water. and he says this set of sampling

did not show levels of contaminants that would give the epa reason to take further action. the conclusion would be then that the epa doesn't need to be concerned anymore with the testing, so the water's safe, and it's not a result of fracturing, there's nothing that's been contaminated? >> my understanding is there is some limited additional sampling occurring to verify there's no public health concern, but that we have not found a public health concern to date. >> okay. so all the testing has turned up nothing that would determine the water has been affected by fracking? >> my understanding is we believe nothing required further action. >> okay, that's a settled issue. now, mr. pool, the president talks a lot about the increase in oil and gas. where's the increase taken place? has it taken place on the federal lands or where? >> i hi the blm and the public lands we manage is a major contributor to the production of natural gas and oil.

currently we have about 85,000 producing wells, 90% of which we do apply hydrolongic fracturing to maximize the economic recovery of the resource. >> but when we talk about the increase, there's been a huge increase. but most of it has taken place in the private sector, it has not taken place -- 96% of it, by the way, and we have a slide that shows that. look at this. so if we're talking about when the president's saying, wow, look at what we've done, but 96% of it the increase in u.s. oil production has occurred on nonfederal lands. so this really has nothing to do with the administration. >> well, as i mentioned in my earlier comments, we have a variety of statutes that we have to address when we offer -- >> understandable. >> -- for lease, and in recent years we have been much more measured -- >> this, was this -- do you think this chart's correct? >> congressman, i can't confirm

that. >> it's a crs chart, by the way. >> okay. >> i'm hearing all the time about this tremendous increase under this administration and the fact of the matter is it really has happened in the private sector, it hasn't happened on federal lands. so i think it just sometimes you have to clear those things up so that people actually understand what's going on. we talked earlier. i just have a problem with people who take credit for things that they didn't can have anything to do with, and i think that the general public never sees these things, and when they hear these numbers, oh, my goodness, this is incredible what's happened. it's happened through the private sector. it has not happened on federal lands, and when you look at 96 president has happened -- 96% has happened private sector. so there would have been some influence absolutely had nothing to do with it, and i'm sorry, we're really running short on time, so i appreciate the indulgence, thank you. and i thank you both for being here today. >> thank you -- >> as this hearing comes to a

close, we're moving on to a panel discussion on the insurance exchange, it's a key component of the health care law. maryland, virginia health secretaries will take part along with representatives from america's health insurance plan and families usa. the supreme court is considering challenges to the health care law and a decision is expected by sometime this summer. this is live coverage on c-span2. it's just starting. >> at pbs caremark to say a few remarks. >> thank you very much. thank you for having this breakfast, this health care briefing is going to be fantastic. as you said, i'm larry burton, i'm vice president of the cvs caremark government relations team, and a lot of us are looking at the supreme court decision and what happens. what's going to happen at the state level, what's going to happen to state exchanging? despite the coverage and dialogue about it, there's still uncertainty and confusion about what's out there in terms of choices. our own cvs consumer research has shown 78% of the consumers

we interviewed who would be eligible for the new health care insurance coverage have never heard of the state-based exchanges and where they're going to need to shop starting 2014. in addition, more than 60% of the responsibilities said they need help in choosing health insurance when the system changes. so with this backdrop, i think the panelists today are going to be providing us insights and interesting information in terms of what the choices are and also how government, how consumer advocacy groups and how private enterprise can partner together in looking for solutions in the future. so thank you very much. >> thanks so much. [applause] next we're going to bring out joanne ken nonwho is the deputy health care editor at politico pro, and we're just going to give you a very, very quick lay of the land of what we're watching over the next few weeks, and it's this. everyone's waiting on supreme court. [laughter] but there's, but there is other

stuff going on too. the fda use-fee bill just seems to be zooming on through congress. there are a few issues that are going to have to be worked out between the house and senate, but the house has passed its version. but we're really not expecting that to take very long or get tripped up by big issues. there is another, there is another pretty big health care vote that we're expecting on the house board probably next week, and it's a vote on repealing the medical device tax in the affordable care act. it's a pretty safe bet that that will pass. the only question at this point is whether there will be a lot of democratic support or not, and that depends on how it's paid for be. if you want to say anything jo ann -- >> [inaudible] >> no, it will not go through the senate. but in the meantime, yes, things are kind of at a standstill

waiting for the supreme court. are there any other big issues that you can think of? >> the supreme court decision. >> there we are. >> i guess one thing we want to see is does the supreme court really clarify things, right? what will we be writing about the day after? that's one of the things we'll be hearing about from the four speakers. it may not be totally black and white. >> and we're still expecting the most likely, most likely week that we might be hearing from the supreme court would be the last week of june, possibly either june 25th which is a monday or june 28th which is a thursday. and my daughter's birthday. [laughter] so that's the prediction. so if we can, let's bring out our panel. we're really pleased to have, again, dan durham, executive vice president at america's health insurance plan; bill hazel, virginia's health secretary; ron pollack, the founding executive director of

families usa, and josh sharfstein, maryland's health secretary. thanks so much. i guess let's, we'd like to start out with the state health secretaries and, bill, we'll start with you a little bit. if you can just give us, you know, kind of a bullet summary of where virginia is right now because the state just had a little bit more of a complicated history with the affordable care act than some of the others. >> i think complicated's probably the upside statement of the year -- understatement of the year. where we are is, basically, the governor, his instructions to me two years ago after the signing of the act was to prepare virginia. the general assembly passed a section i bill that said if there's an exchange, virginia will build and operate its own exchange. so under that authority we continue to plan even though it probably is a little unpopular. ask so it makes it -- and so it makes it very interesting. we clearly will, are waiting for

the supreme court to decide, you know, what happens. and we are challenged by things related even not to the ppaca, for instance, budget. if there are significant budget cuts to medicaid affecting our medicaid match and we have an influx of individuals, 425,000 in 2014 relate toss the medicaid match, virginia will have to pick that up. that's 1% is 40 million. over here across the potomac river those sound like small numbers, but for virginia, those are big numbers, and what does that say about the federal government's willingness to do the premium support in an exchange? long term i think that's a tremendous challenge. that being said, we have a group called the virginia health reform initiative, and between the advisory council which is now about to meet for its, i think, ninth time in the subgroups which have met 18 times, we have a fairly good

plan in place. we have done a lot of the technology infrastructure previously, we have upgraded our medicaid management information system, we now have a consumer portal that will be rolled out officially, completely through the state in june which would allow individuals to apply for benefits including medicaid. we have an rfp that was posted last friday to replace the eligibility enrollment system which will allow individuals to alie for medicaid -- apply for medicaid but also snap tanf and child care. anything that we've done technology wise we need anyway, and if health benefit exchange comes on the inreesed medicaid -- increased medicaid enrollment comes online, we are doing things that have made sense anyway. so that's how we get there. but the health benefit exchange technology module is also part of this rfp. we have, basically, zeroed and

will likely recommend to the general assembly an essential benefit package based on the largest small group package in virginia, and we have meetings set up to deal with how we want to deal with the shop exchange and so forth. so we've done a lot of the planning, and i think in some ways we probably are ahead of states that even are more in favor of the ppac which makes us in a weird position. suppose this thing ultimately fall bees apart, and the technology from the feds isn't there and virginia's done it when we don't want to. what do you do? [laughter] >> i was going to ask you about that, though, at this stage, you know, say the supreme court comes back, and the law is upheld, and, you know, the elections come about, and they don't really change anything. wouldn't virginia actually be ready to run your own exchange completely in 2014 based on where you are now? >> there are, there are some -- that's complex. i think if you saw the articles yesterday in the journal, you saw that people are worried

about the i.t., and a number of meetings everything has to go right to get there. but i think we are probably one of maybe that handful of states that probably could pull the i.t. piece off. now, the governance piece is entirely different, and that clearly can get set up, and those policies can be in place. but we're very sensitive right now to issues related to our insurance plans. they need information now so they can start doing their planning. so the sooner we get clarity around essential benefit packages, we are a little worried since that really hasn't gone through a regulatory process at the federal level as called for in the ppaca. we don't know where that's going to end up exactly. so there are lots of things out there that even if you're making, i think, a good faith effort like josh is doing to get this done, there are some challenges ahead. >> yeah, definitely. well, let's hear from josh then

because it sounds like maryland has been charging full speed ahead, and how do you think things stand at the moment? do you feel confident that maryland will be ready in 2014? >> thanks. well, first, relate me thank you and politico -- let me thank you and politico for hosting this event. i think the amount of commentary out there at sort of the pundit level is really high, and the number of articles and events like these where people are talking about what's actually going on, either virginia, or other states are not that high. so i think this is great. e certainly agree with dr. hazel that there are complicated levels, but i also believe it's not that complicated. fundamentally, maryland has looked at this as an issue of how we improve the health care system both for hundreds of thousands of marylanders who do not have coverage and face the inability to get care they need when they need it, and those are human stories i hear across the

state when i go on radio shows. that's fundamentally what this is about, and it's also about the cost of health care which is a real drag on the economy and jobs and really figuring out how we can turn the corner on cost. and right after this law was signed, governor o'malley set up a planning process that has involved everyone in the state who's been interested across provider groups, insurance brokers, um, advocates, really -- businesses, everybody. and very early on we saw the affordable care act as a great set of tools. not guaranteeing an outcome, but a great set of tools to help us address these fundamental questions of access and cost. that initially led to a recommendation that maryland set up its own exchange, and there is definitely an irony. i go to these various panels in other states where they are very against the affordable care act, and they're going to wind up with a federal exchange in their backyard, and we see it as a, um, you know, great set of tools, but we would like to

control our own destiny on it also. so there have been a couple laws that have passed the general assembly in maryland, we have a governance structure and a staff exchange, we have gone through an incentive process to go through a whole bunch of very important policy issues that the general assembly adopted, so we're set on all the different kinds of insurance rules and the navigator program and a whole bunch of details. people are very excited to see this work in the state. we also see the i. t. part of it as a big challenge, and we have completed an rfp, we have a team of contractors. doesn't make it easy, i've been doing weekly meetings since i started 18 months ago around the i.t., but it's important to realize what we're talking about. we're talking about people having the ability to easily get affordable health care. that is a huge value across both medicaid and the exchange. and so i think that we're really looking forward in maryland to a point where, um, people who,

people can get health insurance at an affordable price and as a result they're happier, they're healthier, they're more productive, and maryland really benefits. >> can i ask? >> yeah. >> one of the dynamics of this debate particularly in the conservative states is what you both alluded to, state control versus turning it over to the government. and in the conservative states you're the, one of a handful of exceptions, you're saying it does give us some tools to make it look the way we want it, and the other states i call them the over my dead body states. have the two of you been on enough panels together that you can each give two or three examples of why maryland and virginia are going to look different because assuming that we are in january '14 that the exchanges do open up, is there some decision you've made that's going to make virginia exchange because you are exercising local control look different? in the exchange or out of the

exchange or something that the audience will understand is a difference? >> i don't know. but there are, there are, there is a group of individuals who believe that the states should just stop all work now, default into a federal plan and assume the feds can't get it done. i -- that's not a bet that i would recommend to the governor that he take because i think that there's been a tremendous amount of work at the federal level. now, there are, there are decisions yet to be made that will impact whether this can actually be done or not. i would also want to say like josh, we are concerned about affordable health care and access to it. our concern is that this may not prove to be as affordable. i think that one of the problems folks are going to have in 2014 is sticker shock, and i'd be interest inside your comments on it because i've heard concern about the plans. and the access depends on

affordability. so part of our work in virginia's been to create a center for health care innovation which actually lives in the chamber of commerce. we feel that we have to align the private sector to move towards delivery system reform in this major way. now be, maryland's done that differently over the years because they do statewide sort of rate setting, and they have a different, more involved approach governmentally. now, to your question specifically we would have a facilitator exchange. i would assume that maryland would be a little more active in the negotiation of prices. but i don't know that. we would likely have a single mechanism for both shop and the individual policies. i don't know what decisions you've made in that regard. the, your benefit package may be different. those are places where within the framework that we know we're working in states can choose things that are different.

josh, i don't know where you are in those -- >> sure. we've decided not to merge the individual and small group markets. >> okay. >> we have a nonguaranteed issue. i mean, a guaranteed issue. we're not merging the markets from a risk standpoint, we're just running a single administrative structure in two pools. >> okay. well, i'm not so sure we would look all that different. one of the things we're going to be doing on the small business side is partnering with the private insurance brokers and agencies so they can integrate the exchange into their daily business. on the active purchasing side, the exchange has authority by the legislature to add additional requirements to the aca, but we haven't made decisions on whether we do that. our initial sense, it is very important to get this up and running with as robust participation as possible. after a few years, we can add on symptom active purchasing. i think it'll be interesting to see whether there are local variations, i'm sure there will be. we're interested in ways to

coses -- control costs, and i see the act as a relatively small piece of the be puzzle but an important one. if you don't have people getting access to care, it's very hard to fix the other parts of the system when there are people just stuck outside the system. but it's only one piece, and there are a whole bunch of things. we do, um, have a system around hospital pricing that is unique, but there are a number of ways it's been very helpful, and there are a whole bunch of other efforts that we'd like to get up and running. at a certain point in time, it may make sense for the exchange to engage with those. for example, if there's a great health care innovation out there that's really lowering costs, well, we want to encourage that. and i wouldn't be shy about using the exchange or medicaid to encourage that. my guess is dr. hazel would want to do the same thing. if he's got a tremendous innovation somewhere that's getting better outcomes at lower costs, you want to drive, you want to drive the use of that innovation. >> yeah.

our governors would be unhappy if we agreed about everything, it wouldn't be allowed. [laughter] so i think the likelihood in virginia with politics being what they are and the general prevailing thought is it's unlikely that the government would want to directly tell the exchange or give the authority to make changes to that. however, what we're use anything virginia to try to drive delivery reform is the innovation center changes in the medicaid policies that we have, and we are looking at using the state employee health plan as a model for what we would like to buy. and as you talk about pieces of the ppaca that are probably not as much on the fore front as the mandate decisions and coverage and so forth, you have the innovation center. and we, we are not so sure that there's a body of evidence that supports things like acos that are top-down driven because the building blocks in various areas of virginia, and i know in maryland too, are different. you cannot do in wise, virginia,

in appalachia what you can do in charlottesville or in northern virginia or tidewater. so the if you think of legos and building, you've got different building blocks to work with. and so we're trying to build from the ground up a delivery system that makes some sense, and we're not sure that there is yet an evidence-base bed model from top down that will work in all places. so we're spending a lot of time and number on that area as well -- energy on that area as well. >> i want to bring in our other panelists in just a second, but i want to remind everybody this is supposed to be an interactive conversation. so you should all have note cards that were passed out at the beginning of the event, and in a little bit we're going to get to questions. we're going to collect the notecards and pass them up this a little bit, and we're hoping that y'all have a chance to get some of your questions in as well. the other thing i want to mention is that for anybody who's watching the live stream on politico.com, you can follow

the conversation at hash tag pro hc. ron, i'd like to ask you as you listen to this and you look at the landscape of what the states are doing on exchanges, what are, what are your biggest priorities, your biggest concerns that you're looking out for right now? and are there states that you think might actually be better off with a federal exchange? >> you know, i think there's an interesting example with respect to virginia in terms of the overall landscape. so the story you hear -- >> not sure i want to be interesting, ron. [laughter] >> well, it's the way you are, so you've got your attorney general who is tripping all over himself to be the first be at the courthouse door, you've got a governor who doesn't have nightmares about exchanges, but nightmares or dreams about being a vice president. on the republican ticket. and who hasn't said the most

wonderful things about the affordable care act. and here you are doing great work. [laughter] you know, implementing the affordable care act. and there's a -- >> would you, please, not say that? retract all those statements. [laughter] >> well, you've got a tv camera here, you know, you're public. this is -- so, you know, a lesson here that's a really important takeaway from this discussion, and, you know, i have great admiration for what governor o'malley and josh are doing in maryland. but i think there's a very important political lesson from what is happening in virginia. so the story often these days is that, you know, there are going to be very few states that are going to implement these exchanges. you've only got 11 states that have enacted authority to set up exchanges. you've got two states that have

done this by executive order. you've got massachusetts which has been there, you know, even before the starting line was created. and so the assumption's, gosh, you know, you add those together, that's 14 states, there are other states that still might pass something, and so what i hear from reporters is, well, gosh, this is a tiny minority of states that are moving forward. and i think a key takeaway is don't only look at those states that have actually adopted legislation to set up an exchange as those are the only states that are going to actually have exchanges ready. and i think a better indication -- none of these are fail safe, but look at the states that applied for and received funding for the first stage of setting up an exchange.

and you've got 4 states -- 34 states that have done that. and there are some states that politically have refused, but they're still working to do so. and, you know, you look at some of the very conservative states where the governors are pretty bombastic about the affordable care act. you know, virginia, you know, is an example. certainly the attorney general. and yet behind the scenes there's work being done to set up exchanges. and so i would suggest to you that there are going to be a lot more states that are going to be ready to set up their exchanges come mid november when they submit the paperwork to hhs than you would assume by just looking at the states that have enacted legislation. you know, take governor christie

of new jersey. not exactly a shy guy when it comes to anything, let alone the affordable care act. and he vetoed the legislation to set up an exchange. and yet, you know, new jersey feels they've taken enough preparatory steps that, you know, if the supreme court moves forward and allows the affordable care act to be implemented, the exchanges be implemented, they think they're going to be ready. i'd say two other things if i may, dave. one is the fact that the federal government is now, in effect, providing greater flexibility about possible partnership bees, that makes a senate difference. so that mom -- significant difference. so that some states that may not have done the full panoply of things to implement exchanges by themselves, there are some opportunities for partnerships

that may not be the neatest way to do things, but i think it provides hope that we'll be ready to go come january 1, 201. and the last thing i really want to emphasize, and that is, you know, the affordable care act did not do everything. josh is absolutely right. it's an enormously important foundation. for the future of america's health care system. the one thing the affordable care act does that, you know, that, you know, makes my heart sing, um, is, you know, we've got 50 million people who are uninsured. and this is going to allow tens of millions of people to gain health coverage. and that's an important thing to emphasize in terms of what the states need to do. because it's one thing to have legislation with expansion of the medicaid program increasing eligibility particularly for the

adult population and then to have tax credit subsidies for people up to 400% of poverty which is $75,000 for family of three, $92,000 for a family of four. but you've still got to get those folks enrolled. and we have got to have enrollment-friendly systems in place, and there's going to possibly be a greater challenge with the partnership with maybe the states doing medicaid and the feds doing the exchanges. we've got to make sure it's simple application forms, that you can apply online, that there's no closed, you know, every door you can get your application in, and it goes to the right place. you're eligible for medicaid, you're eligible for a tax credit sub is ity. that is critically important, and that's got to be done absolutely right. >> um, we're going to get to audience questions in just one second but, dan, i wanted to ask you what's your perspective as

you hear -- what are the biggest concerns you're looking at with the exchanges, and do you have a sense of whether enough insurers will be willing and able to participate in the exchanges to make them viable markets, or could we see a problem down the road? >> and related, does it really matter for a health plan whether t the state ready or the federal running it for a couple of years or a hybrid where they're sharing responsibility? how offputting orer relevant to a health plan? >> all very good questions. from our perspective, it's very important that we have a true marketplace where the emphasis is on maximizing competition and choice. so consumers have the choice they need of innovative plan designs as well as employers in the small group marketplace. i think that has to be the focus be. we also believe the best place to do this is at the state level because the states know their local marketplaces the best. they have the experience, particularly with regulating health plans.

so we're glad to see states are moving forward at different rates and paces just because of their individual circumstance. we've heard a lot from josh and bill this morning about where their particular states are, and i'd like to compliment both of them because they've had a very open and transparent stakeholder process here, and the plans want to engage, they want to compete, and we have a lot of experience to work with states to make this happen at the state level. we're happy to see that federal government is bending over backwards to help states as well where they clearly say they don't want to duplicate efforts that are going at the state level, that's very important so we have efficient and effective exchanges. he was the partnership program that ron pointed out as well, and that's very important for states that may not be able to do the full-fledged exchange right away. so all those are important aspects. but other key things i want to emphasize that you mentioned that are important to health plans, and we heard this first from bill in terms of affordability.

it's key here. these plans have to have affordable premiums to attract individuals each with the subsidies. i mean, the sub is subsidies are important, but they phase out quickly. generous up to about 250% of poverty and then not so generous after that. if we don't have affordable premiums, then individuals and companies aren't going to participate. the penalty for not participating is not all that extreme, particularly in the first year. and so we have to focus on what josh was saying which is underlying health care costs of the affordable care act takes some important steps forward in that regard. but more needs to be done because premiums reflect the average cost of care, and if we don't have a better handle on controlling the growing cost of care in this nation, then we're not going to have affordable premiums. there are other important provisions in the health care act that push up the premiums in terms of upward pressure. we have this premium tax that goes in effect in 2014.

it adds about 3% to the cost of premiums. we did an analysis with oliver weinman, shows for a family in a small group plan, that's about $6800 over ten years. again, upward or pressure on premiums. we have the essential health benefits provision where they could be a significant -- depending on what states pick in terms of, you know, the ten plans that are available to them to pick from. if they don't focus on affordability, then those in the individual and small group markets could have a significant buy-up in premiums, so that's another important factor as well. and then there's age band compression where most states today, the vast majority, do not have a specific age ban that's based on actuarial justification. and typically for the younger cohort versus the older cohort, that's about a 6 to 1 ratio. overnight on january 1, 2014, that gets compressed to 3 to 1. what does that mean? for younger and healthier individuals, a premium spike. so you combine all those, and you have tremendous upward pressure on premiums, and so we

have to pay attention to that and what the effect could be. with regard to exchange, i'll go back to the importance of really having streamlined ec cha ings -- exchanges that are low cost. what the states do, what the states do best and let them use their local market knowledge and, you know, what works best for their constituents, and let's not, you know, have these very high-cost exchanges that are going to put upward pressure on premiums. >> okay. could i just add one additional piece to this that hasn't gotten a lot of attention is in virginia now we have 940 plus thousand people in the medicaid program, and the benefits in medicaid are largely federal directed. there is a benefits package that the fads have established that's been there a long time, and then the states can add extra benefits to it or nonmandated benefits. that mandated benefit structure is a fairly old one, and one of the concerns that we have is that as you move from medicaid

and people are at that incremental, we want people to be working and to work their way off of the public support, and what we worry about is the cliff effect when individuals go from medicaid and say, all right, i can get a job, i can earn those extra dollars. now i go into the exchange and the benefit package unless we choose a higher priced, less affordable benefit package package, there's going to be a barrier, i think, for individuals to work out of medicaid into the exchange. and that's something that congress is going to have to help us address, or we will -- we'll have a different type of insurance lock. >> i hear you. i mean, i think it's a good point because even having something for those individuals is a lot better than where we are now. right now it's a cliff when people -- >> it is. >> it's like, it's a cliff. so there may be a bit of a step down, but by comparison to where we are now, we hope to see that

problem get a lot better. >> i think josh and i were channeling one another. that was exactly the point i was going to make. but first of all, you know, when somebody is above or household is above 133, 138% of poverty and they're no longer eligible for medicaid, now they're going to be -- there are going to be significant tax credit subsidies, and they're provided on a sliding scale. and that's really important. by providing them on a sliding scale, it means those folks who are marginally above 138% of poverty are going to get a larger tax credit than those folks at 400% of poverty. so it's not going to be that significant a drop. but, you know, i really have to emphasize one thing. you know, the medicaid program which is the health care safety net program is more hole than webbing right now. prior, you know, in if advance of the affordable care act being

implemented. we treat different groups very differently. we treat kids different than their parent bees, we treat adults who are not parents totally different. so with respect to kids due to the confluence of medicaid and schip, in every state virtual the eligibility standard goes up to 200% of poverty. for a family of four, $46,000. for a family of three, about $37,500. for the participants of those kids -- the parents of those kids, the medium income eligibility standard among the 50 states is 62% of poverty. so we've got a huge portion of parents whose kids are getting public coverage, but they can't. and then with respect to nonparental adults, singles and childless couples, in 42 states

we do nada, nothing. and so this is an enormous improvement. you know, josh is right, the -- when he said before the affordable care act is not the be all and end all of what need to happen with respect to health reform. but it is such an important foundation for changes, and that's why it's so important that we get it right. we recognize that there are these issues with medicaid. that's not where i was going. but as a long-term solution, there are things that need to be fixed. >> and we, what i think may be the difference in virginia more than other states is we do really pride ourselves on low tax rates, of trying to be business-friendly, you know, you'll hear the governor, the most business-friendly state in the united states. we want these jobs to come into virginia. and when we see the human resource costs which include health care and taxes, the issue

is when are we no longer competitive internationally with the countries we're competing against; korea, the asian countries, china. and you look at a $14 trillion debt federally, and somebody's going to say who's going to pay for all of this over time? and i think where we philosophically have our differences is how much we can afford and how fast as opposed to is the system broken and does it need to be -- we absolutely agree with you there. and we do want to see improvement in health care. nobody argues about that. the question is, how much can we afford, how fast and still get this economy back on track. and there's always the perspective of what the economy is doing which is pretty stagnant still right now. there's a jobs report out any minute now that shows we're not bouncing back as quickly as we can. some of that is uncertainty and things that are unknown, and we

do have to get resolution quickly. and i think we would agree about that, sooner we get resolution, the better it will be. >> june '25. >> you think so? >> well, speaking of which, we want to get to some of the questions we've gotten from audience, and one of them, i think a really compelling one s is about one supreme court scenario. we're not going to go through all of them, but here's one to pond beer. supreme court comes back and says the individual mandate is unconstitutional, we're throwing it out, but that's all we're doing. we're not going to worry about the pre-existing condition coverage, policy issue, that's not our, that's not our job. all our job to do is to figure out what's constitutional and what's not. the mandate goes, the pre-exist being coverage is still in place. dan in particular, but also i want to throw this out to bill and josh, what do you do then? is it work signal. >> it's not workable, and we

made that clear in our brief to the supreme court be, that the market reforms that you talked about, guarantee issue, community rating and the like are inextricably linked to the mandate. so you sever the mandate, the supreme court has to sever the other market reform bees as well. and we have some real life experience with the states that we have eight states that have tried the market reforms without the individual coverage requirement in the 1990s. and the result was pretty much the same in every state. the market became quickly destabilized, premiums spiked, and individuals lost choice. in kentucky they started with 43 plans when they did these market reforms, and they went down to two fairly quickly. and so a lot of plans pulled out simply because they couldn't remain solvent in that kind of a marketplace. and that's really important. and so our point on this is once you break that linkage, the market reforms simply don't work, and that's what we've

argued to the supreme court. >> um, josh. >> i agree you can't call for car insurance from the accident scene, and if you have a situation where the rules are set up that way, the system's not going to work. i think that's one of the reasons that it's kind of infuriating to read on politico, not "the politico" part, but the content where people say, oh, the affordable care act goes down, we'll just make sure people with pre-existing conditions can get insurance. well, how are you going to do that? it's not so ease as, you know, waving a wand. you have to have a policy that supports that without destabilizing the market. so i think it's important for journalists who are covering this to challenge people who realize it's important for people to get insurance -- >> shall i take that as a challenge? [laughter] >> um, i don't think you were quoted. you know, but feel free to answer. but i think it is important to think about, you know, it's

pretty easy to say, well, i believe that everyone should be able to get insurance, but i don't believe this any mechanisms to create a market to, you know, make that possible. like, i don't think that's sustainable, and people should be called on it when they say that. in maryland in that kind of scenario, we bring people together, we figure out the right path for the state, we have some options at the state level, and we'd look at all of them and make a decision as a tate. >> you know, i want to just add a nuance to this conversation. it's not because of disagreement, but there is a, i think there's a nuance here. so i think much of what -- i support the individual responsibility provision. i think it's far preferable for people to purchase health insurance than to force their bills onto everybody else. i think that's a good, conservative principle. and, of course, it was created by conservatives, so they should rejoice with that.

but, you know, the commentary -- and dan has illustrated that -- is let's take a look at the states that have adopted a guaranteed issue and/or community rating but did not do what massachusetts did and did not have a mandate. and the experience is that premiums did go up. the nuances are as follows: number one, what the affordable care act does -- and i'm not, again, i'm not, ultimately, i'm not arguing with either of the points, but i think it's important to understand the nuances here, number one, the affordable care act does something different than those other states do, and that would be kept under the scenario you're talking about, dave. we're clearly trying to get younger, healthier people into the pool and keep them in the

pool. that's what the insurance industry is most concerned about, and they should be concerned about it. not just for their profit, but, you know, for having a good insurance system. one of the things the affordable care act does, again, not perfect, but it's different than what those states had done other than massachusetts is there are the tax credit subsidies on a sliding scale, and i emphasize that again because what that means is that younger adults who are in entry-level jobs or who don't have a job are going to get a disproportionate benefit from those tax credit subsidies. and be it doesn't mean there's no damage in terms of the pool. but it ameliorates the damage somewhat, and that's very significant. secondly, we will have alternatives under the scenario that you're talking about because i think everyone's going to want to ultimately protect

people who have got pre-existing conditions so that they don't continue to be denied coverage. and we could do a number of things, but the most prominent example that many of you in this audience would remember is that when medicare part d was created, we didn't require seniors to get prescription drug coverage. but the 2003 legislation essentially said when you delay getting coverage, you're going to pay a surcharge. again, not a perfect mechanism. again, you know, i don't think that argues against trying to keep the individual responsibility provision. but there are ways that we can ameliorate the damage. >> yeah, bill, i'm curious to get -- >> let me answer two questions. >> sure. >> okay, your question, first, and then the one that everybody will ask after that, and that is, okay, what will happen in virginia? urban institute which did the, probably the best projections of what would happen in massachusetts is doing some of

our actuarial work and predicts that without the mandate, everything stays -- individual premiums go up 15% in addition to whatever else happens. and i think that the message that we've carried to the attorney general and the governor has been from a policy standpoint health care policy insurance, these are definitely linked. if the mandate goes away, what we do is we look at enrollment periods, we look at penalties. we would have to look at things to make insurance more affordable for those who are being responsible. the folks who are being responsible putting their own money out as opposed to folks who are free riding, and we've got to cut into that somehow. i think we would agree that would be the next series of challenges. now, the question is, well, bill, if you believe that, why in the world are you guys suing? well -- >> good question. >> yeah, it is. i knew you were going to ask that. [laughter] i knew that. all right, let me -- and this is something because we do see the policy, but there are, there are

levels of priority in public policy. and our basic organizing principles of this country center around the u.s. constitution. what we agreed to as federal responsibility, what we agreed to as state responsibility and what we agreed to as individual responsibility. and this, this is our basic organizing document. now, in virginia we have actually been fighting about these things since before most of the other states existed. we had george washington and alexander hamilton, and we had thomas jefferson and james madison. so we do this internally and have done it for a couple of centuries. so call it bloodsport or whatever, we do believe that there are limits to what the federal government should be able to do. and that takes priority over the policy decisions that can be made. so if you talk to the attorney general which we have as we went through this, he will say, bill, he said the federal government

doesn't have the constitutional authority to do this. now, the state could. he said -- he will tell you, i think it's a bad idea, but he would say that the state does have the ability to do these things, and the federal government doesn't, nor should we allow them to have it. and that's sort of a higher order conversation in terms of the way we organize ourselves. and ron and i probably disagree about this. i can hear his head shaking even without looking. [laughter] the, the -- so that really is the fundamental thing. and then what we do at the state level is different, but the argument made that for the first time the federal government will coerce an individual to engage in commerce so that then that commerce can be regulated is what, is what is, i think, arguable. i mean, we can disagree, but i think it's a legitimate question that needs to be worked through and, hopefully, the supreme court will work through this and by the 25th or 28th tell us what the constitution says so we can

get on with doing what we need to do to improve the health care and the coverage for these individuals. >> do you want to rejoinder or not? >> you had yours in advance. i rejoined, you started it. [laughter] >> well, let's -- there'll probably be other chances to get back to this, but let's move on to some of the -- >> okay. one of the audience questions is, um, about transitioning the high-risk pool people. it's very confusing, as many of you know. there's the state high-risk pool, then there's the federal created by the health care law which are divided into the categories ones run by the states and the federal government. there are people who go out of existence january 1, 2014, how do you get them into -- some states don't have many people in them, so i guess you could put them in a cab and take them to enroll, but how do you transition those people to whatever the next type of coverage is, and what what's goo