agencies subject to guidelines that are published by the national institute of standards and technology for when you do an i.t. project. and so you have to be prepared with mitigation strategies in case something doesn't work exactly the way you expected. but we will be up in operation october 1. >> can you tell us about how you're developing those mitigation strategies and are those coming long? >> yes. so it's really a constant process of, as you to the bill, i'm not expert on i.t., but as you do the bill you to testing, you see how things are going, you come up with strategies to how you're going to do with, for example, suppose you get a lot more applications that come in on day one than we planned for. so you have to have redundancy, you have to be prepared for that eventuality. so those are the types of things we're doing. >> thank you. >> now recognize the gentleman from texas for five minutes, dr. burgess. >> thank you, mr. chairman. mr. cohen, let's go back to that

quote about which contingency plan you have to implement. implement. the secretary was here last week and asked her about contingency plans and she said there are no contingency plans. everything will be ready. so which is a? everything will be ready, or you are planning for contingencies? >> everything will be ready, but we're also planning for anything that women go into operation, if situations come up that we need to address, we will be ready to address the situations and make sure that the experience for american consumers is as seamless and as good as it can be. >> committee would benefit from seeing some of those contingencies. let me just ask you this. would it be fair to say that closing the enrollment on the pre-existing condition insurance plan, was that he contingency? >> closing enrollment on the preexisting condition plan was something that we did because it was the prudent thing to do in light of effective at a certain amount of money, $5 billion --

>> was that he contingency plan to can close plan to this committee was will unaware of less just because i think we're looking very closely. >> here's the point. the secretary comes in says there are no contingency plans. you are telling me it a year ago there was a contingency plan. >> i didn't say that but i didn't say that. >> it sounded like you said that. if we take it a context which we will. that's how it will be reported by your friends in the press over here. look, we've got to level with each other. people are going to be counting on you to do your job on january 1. you have raised questions. your main health i.t. guys, he raised questions about whether the central hub will be ready. and then you look at what

happened in the existing condition plan, there's a word that goes around. i learn new words in this at all the time, some of them i can say here, some of them i can't put the word that keeps coming up is the scoping. so are you actively discussing reducing the scope of the a formal care act when the rollout occurs? >> no. >> i remind you, you are under oath. so when we call you back in your next you to talk about this, there is no plan to narrow the scope of the affordable care act? >> we, we have, we intend to implement -- implement fully different water. we've announced already some portion that will build off until 2015 at this point i don't is that any descoping of the affordable care act. >> you look at the people who wanted to sign up for the pre-existing programs and they have been descoped out of the availability of the program, have they not? >> well, the preexisting condition program although it

was meant to be temporary and circumstances of those people really point to exactly what we needed the affordable care act. those people were not able to get health insurance coverage at all spent building a bridge doesn't do any good if it doesn't get the other side. these people now fall into this chasm, and that's a problem. what about the shop exchanges that were much extolled as a virtue of the affordable care act and now those are going to be delayed. not delay to put you on have one choice, the competition that was advertised amongst these. i think that's what senator rockefeller was talking about. weidman, this was a serious -- >> let's be clear. employers will have choice. they can choose among the plants that are available in the shop, and we believe employers will have more choice under the i affordable care act before the day before. the one your transition affects only employees a choice to with employees -- employers can offer more than one plan.

>> that sounds like a narrowing and scope the least to me, maybe it doesn't other people but it does to me. so let me ask you a question about taking the money from the prevention for. did someone in your department make the decision to fund these navigators? >> within cciio, no. >> who made the decision? >> the secretary. >> so can you press talk about how your department has been using the money that the secretary moved from the prevention fund? >> the portion of the prevention fund money that cciio is using goes to the $54 million funding opportunity for the navigator branch. >> so with the take of the money from the prevention fund? >> i'm not aware that at this point, no. >> but it's the secretary who has the transfer of authority under the law. so unless she were to level with us, and i promise you didn't -- i promise you she did last week,

we would have, you have no way of knowing we would have no way of knowing. that secret is locked up with the secretary. >> the gentleman's time has expired. i now recognize mr. waxman for five minutes. >> thank you, mr. chairman. it's so amazing to me the republicans are complaining that money was taken from the prevention program to help pay for the implementation of the affordable care act after the republicans denied the administration funds to implement the affordable care act. it's like the kid who killed his mother and father and instead, well, i've got to be careful, you have to care for me because i am an orphan. they are the ones are repeating this legislation from being implemented and forcing the administration to make these kind of choices. but they are now making a conscious choice to take the prevention public health fund to pay for a short period of time for this pre-existing envision

insurance program that is supposed to go out of existence at the end of this year. this preexisting condition entrance program, ortiz said, was part of the of for the care act but it wasn't something the republicans offered in the law. as part of the a formal care act they vote against it in the figure of this year cciio, your agency, announced enrollment would be suspended to ensure that the programs funds which were capped with bill to pay the claims of existing and released at this is what happens when you capped a program. they want to cap medicare. they want to cap medicaid. that means if you run out of money you run out of services. now, was this decision made because, well, why was the decision made? >> you stated it. we have a certain amount of money that was authorized for the program.

our number one priority was to make sure that those people who are already enrolled in the program got continuity of care to the entity or. >> so we're talking about 107,000 enrollees, isn't that correct? >> it's at least that many, yes spent these individuals will be able to receive their benefits throughout, to the end of this year? >> correct. >> and am i correct that the pcip program was meant to be a temporary bridge to full implementation in 2018 were in chairs would be barred from discriminate against people with preset tuning cache decreases condition? >> that's right. >> those individuals who cannot get access now be able to get access to affordable call the health care when the aca goes fully and effectively ingenuous? >> that's right. they will be able to turn them away or charge them away just because they are sick. >> to be quite amazing that the

republicans suddenly want to champion a program for a few months which is a bridge until people get to what is a much more sane way to handle the matter. people with pre-existing program to the end of the year, we don't pay all their expenses, do we? to have to buy their own insurance. >> that's right. >> is that going to be the same price as other people's insurance? >> under the pcip program is about the price of other peoples people's insurance today. unlike state high-risk pools with the cost to enrollees is typically much higher. >> we talked about the affordable care act being fully implement in 2014 but many key benefits and protections the law already in place to i want to ask you how americans are already benefiting from the law. the aca prohibits insurers from denying coverage to children with preexisting conditions right now, isn't that correct? >> that's right. >> how many children are the with pre-existing health

problems? >> as many as 70 million. >> 70 million people. you'd have to great of fun for them. we decide they will have to be covered right now, the others covered in january. january. >> that's right. >> covered without being discriminated against. the law also bans lifetime coverage limits, chris? >> it did. >> when did i go infect? >> december 2010. >> how many americans are benefiting? >> approximate 105 million. >> also in some of the insurance industries most harmful abuses including policy decisions, mr. koh, for folks who are not experts in ancient industry tell us what are these? >> so, insurance, before the affordable care act, insurers often had a policy of what is called post claimed underwriting. so they would wait to see if someone got sick and start having a lot of health plans, then it would go back to look at the application and see if they could find something in the application that maybe was

mistakenly entered a that was incorrect and then they would say we are going to take away your policy, retroactively so we don't have to pay for any of those claims. >> so when republicans voted against the affordable care act, they were voting to let the insurance companies do this recession which is taking away her insurance coverage when you need it, either you paid for? >> that's correct. >> thank you. >> the gentleman's time has expired. i now recognize mr. scalise for five minutes. >> thank you, mr. chairman. appreciate you having this hearing. thank you to mr. cohen, for coming. yesterday i was in my district before i flew back here to d.c. and there was a panel on the health care law that was held at a local hospital in my district, and i was one of the people that was speaking on that panel and there were a number of people in the health care industry, people that have insurance. it just seemed to be an underlying theme that continue to go through that room that nobody is ready for the law. nobody knows how it's going to

work for them, and most people are really concerned that the good health care they have, they are in jeopardy of losing. and again this is something i hear all the time when i'm back in my district talking to small businesses, talking to families who have helped to that they're having real concern whether not they can keep it. are you out of touch with this, or do you hear these real concerns? i've talked to my colleagues in other states and they hear the same thing. thing. >> i think it's important to keep in mind that for the many millions of americans who have health care through their employer who had employ more than 50 people, they are largely unaffected by the affordable care act. >> i will give you an example. i met with the owner of whole foods. they have something like 30,000 employees. belt -- very well respected company national. but they have health care that there employs like. it's a very highly successful plan. they have managed to control cost. they beat the industry average and yet they still provide a

plan that their employees like. under the current law from what they see their plan is not even eligible. their 30,000 plus employees that have good health care they like are right now at risk of losing that coverage. the old promise if you like what you have you can keep it? it was broken to those 30,000. that is one example. are you even aware that? >> i can't speak specifically about -- >> real-life example of a real company that they well respected company that has good health care. their employees really like and they are right now at risk of losing it because of this law. i want to walk through some specifics that we've been seeing come and start with a pre-existing coalition, condition insurance probe drama. y'all did actually stop taking new enrollees in that program, right, because it ran out of money? >> we stopped taking new and rose to make sure we wouldn't run out of money. >> the early retiree reinject broken, that was supposed to

last until 2014. i think it was discontinued in 2011, is that right? >> i think the success of the program showed a great new -- >> so enrollment is closed? it is so successful people can n get in it right a? >> we are playing -- paying out claims are now based on money coming back to his. >> can someone and role in it today? >> no. >> so they can't an olympics some requirements of the small business health auction programs were delayed, correct? >> the shop will be operating in october. the one provision -- >> by gigi delay some of those provisions? >> one aspect of the shop which is the don't speed the class program, that was supposed the obama cares long-term program. that was repealed by congress, wasn't? >> that's not one of mine. >> is not what anybody anymore because he got repealed by congress it was so bad. hopefully none of this is yours anymore because we could repeal the whole thing. but i want it one more the. attended in an requirement that we were hearing horror stories about that was getting ready

take effect against part of obamacare, horror stories were so bad that congress, republican and democrat alike repeal that, too, right? >> that's what understanding. >> it's not your problem anymore because we repealed the. there's five examples, fairly small components but then you here telling us that probably the largest component that you're going to have to deal with, and that's these exchanges, they are going to be ready to you think they'll be fine in a couple of months. i just 85 examples of programs that were either delayed, closed enrollment because they were not ready for prime time or just outright repeal because they're so bad. you will tells the biggest part is going to be okay? >> we are on track and i can just point to the successes we've had so far in developing -- >> i just highlighted five examples of failures. in fact, i don't know if you notice, one of the lead architects of obamacare, senator baucus just last week said quote i just see a huge train wreck

coming down. he's not even running for reelection but he just said that last week. do you dispute what he said last week about the health care law? >> we are on trac and on schedule to dish on track to the prom is there's a train coming on you -- at you on the track. someone that was helping push this thing through said it's about to be huge train wreck. >> we we read help millions of americans enrolled in quality, affordable health care. >> i hope you are ready to do with these millions of americans to do with this train wreck that is about to come. they don't how they can keep a health care they like and that's a big concern of mine. yield back. >> the gentleman's time has expired. now recognize mr. tonko for five minutes. >> thank you, mr. chairman. thank you for appearing before the subcommittee today, and the affordable care act prevention and public health fund has been subject to ongoing attacks since their inception under the

affordable care act. the republicans have repeatedly sought to repeal or drain those funds to they argue that it is a slush fund and that the reasons are being used in a properly today for public health lobbying efforts. let's take the opportunity to set the record straight exactly how the prevention fund is or isn't being used. i know the prevention fund isn't under your -- can you give us a general overview of the hhs agencies and public health programs and activities that again and will be supported through the font? >> so, i would be happy to try. that is not directly my area and i would be happy to get back to you with information on that, i do know that the fund has been used extensively in tobacco cessation, and wellness programs, and in other programs designed to get preventive care to people. and with respect to the work that we are doing, we know that

when people have health insurance, they get preventive care and they can't care for the illnesses that they do have earlier and they get better treatment and it's more cost-effective. so i think that the use of the public health fund to help stand up these exchanges and make people, make sure people know about them and take advantage of the benefits that they had offer is really, yeah, right within the scope of what the fund is intended to do. >> thank you. to state and local governments receive any of the dollar's? >> you know, i don't know the answer to that, i'm sorry. >> is there a way you can check? >> be happy to, yes. >> is any of the prevention fund being used by its grantees to support local lobbying efforts of? >> no, not that i'm aware of but again i can check into that and get back to you spent what is the departments post on use of federal grant dollars for lobbying? >> is not permitted.

>> with respect to using this fund to help government the affordable care act and government to help implement the interest markopolos, idou and thst of themistraon are in y difficult position. because republicans in congress have refused to provide any funding to support this critical program and help the application work smoothly, hhs was forced to leverage and reallocate existing resources to provide short-term and immediate funding. so my question is, can you please explain to us how the secretary has used her transfer authority to help government the affordable care act? >> the secretary has used the statutory authority that she has to transfer funds within hhs. she's used some funding from those ashes mentioned, and she's used some funding from non-recurring expense fund, particularly for i.t. projects, and those are the sources that she is used in addition to the imitation fund that was

contained in the affordable care act. >> and the i.t. project that you're talking about, would be discussed the work we're doing to get the marketplace is ready for october. >> for october 1. and how will hhs ensure the programs supported by the prevention fund won't be negatively impacted due to the reallocation of the fund's? >> obviously the president's budget for 2014 requests additional funding for the work that we are doing so the hope is that going forward we will get that funding and will be able to rely on that rather than having to use any funding out of the prevention fund. >> i thank you for your response. the prevention fund is a significant, smart and worthwhile investment. obviously, in improving health situations for customers and reducing costs. it's unfortunate that you have to reallocate some of these

funds to pay for implementation. i think it's unfortunate that my republican colleagues have been so unwilling to provide the basic funding requested by the administration to intimate health care law. i appreciate the insight that you're provided today. if you can get back to us with some of those other concerns, that would be appreciated. this down payment is the effort to provide for better outcome and to achieve the ultimate goal in the affordable care act. with all of that, i think you. >> thank you. >> with that, mr. chair, i will yield back. >> thank you. the gentleman yields that. i now recognize mr. harper for five minutes. >> thank you, mr. chairman. mr. cohen, thank you for allowing us this opportunity on very important issues that we need to discuss and i want to follow up on what the gentleman from louisiana just asked you about the preexisting condition insurance program, the fund where we stopped enrollment,

where you had to stop enrollment. i was under the impression it was stopped because the money was exhausted, but you said you stop so you wouldn't run out of money. would you explain that in a little more detailed? >> sure. as of any program like this, claims committed to have to get paid out over a period of time. so we have to project forward for the people that we have enrolled in the program now, we need to make sure that we can cover their costs speed you anticipated projected or -- >> for the rest of you. so we look at how much we spend and how much we have and we know we can't go be on what's been appropriate. that was the basis for the decision. >> how much money was left when it was close, when enrollment was stopped? >> you know, i would have to go back and get you those precise numbers. >> can you provide that information? >> i would be happy to. i would prefer to go back and get you that information.

>> preexisting them i think everybody here is always concerned about preexisting. but before, or even before the imitation of this, the largest insurer in my home state already provided pre-existing coverage for dependent children up to age 25, not quite 26 by 25. and those things where there and available. but what i want to know is you said there's not enough money left so you had to stop, but isn't this money we're talking about today, that she has a table to her, could not some of that had been use for navigators or something else? didn't she have the authority to transfer some of that money that was available to her the billions of dollars available to her to help process -- prop this program up for pre-existing? >> that's not something we've looked at, congressman come but i'm sure we speak i don't know what i need you to provide an inch. we know that's the truth but she has the ability. that money is available. the money is almost like a slush

fund for her to use. and so we're going to do what should've been done which is to take this money that is there available to use to help these people that are sick and to help those with pre-existing. i me, how can we say that some of this money has been used for pet neutering project, and some other was used for lobbying efforts regarding soda taxes to me, that's unconscionable that we would use money for something like that, but yet denying care to those that are in most need. so i would encourage you to even now as this is going on, there are funds available within the program that could be shifted over to preexisting but we're going to take it with legislation today that it's interesting, even though someone at the site have been very critical, there are many health advocacy groups, patient advocacy groups that support this bill that is going to come up for a vote later today.

i would like to talk now for a minute about the sequestered impact if we could. we've had this administration canceled white house tours, but yet have concerts that cost over $400,000 of taxpayer money. we vetted and easter egg roll. were going up i guess another congressional white house christmas ball. all these things are done. tsa talk about long waits at the airport, even though they ordered $50 million worth of new uniforms before sequester kicking. so i think the public realizes the political gamesmanship that is taking place in this. i want to know what you've done as far as the sequestered, how that is impacted you, and if there's anything there that we should expect as far as furloughs or impact on patient care. >> within cms, we have been working very hard to avoid the necessity for furloughs. we are under a hiring freeze so i can't higher, i can't replace people who leave.

which is a serious issue for me in terms of trying to run a program where people move onto o other jobs, i can't hire to replace them. and there have been, you know, we have applied to sequester according to the advice we've been given across the board as we are required to do. >> i'm almost out of time but are you telling me then that this administration is -- vital to public safety in this country but yet you are not furloughing anybody in your agency? >> in effect we are because we can't, we can't replace people. >> that's not the singapore talking about at least a 15% furlough of current air traffic controllers resulting in delays and perhaps safety concerns. but yet this has been a selective political item by the administration. i yield back. >> i never recognize the gentleman from texas, mr. green, for five minutes. >> thank you, mr. chairman. i share my colleagues concern but when that's the question was

past it was passed by huge bipartisan vote, and you can't go for something to say oh, i wish it wasn't happening because it's happening, whether it be cms or tsa or anywhere else. but let me get health exchange's. i have requested relating to changes, i think we both share. people have access to the care they need. your agency has for lisa series or letters to issues relating to qualified health plans, q. h. peace and the insurance exchanges and the essential committee partners. in your letter you stay cms urges issuers -- do you agree that it's important that pcb such as many health centers can be considered as an answerable part of the qualified health plans? >> just spent and is seen as encouraging that? >> we are. >> another related question but

i will submit that for the record. on the topic of premiums we heard repeated last month concerned about the potential rate increases under the affordable care act. concern that there'll be some people may and healthier young men who will pay higher premiums under the affordable care act than they pay an individual market. i'd like to understand more detail first, can you tell us a bit about how rates are structure for different groups and individual market now based on factors such as age, sex and health status? >> yes can. so in the market today can issuers are allowed to vary rates depending on the health status of the person whether they're sick and are expected higher costs. they are allowed to charge women more than men and treat being a woman as appeasing -- >> so older and sicker people pay more and women pay more for health care right now? >> that's right. >> how would the rates be structured under the affordable care act going to affect?

>> health status will be able to be used as a factor. gender won't be use as a factor. age stoken these as affected by the impact is limited compared to what it is today. and where you live can be used as a factor. >> so under the affordable care act the risk pool cannot charge more for women and those with ongoing health conditions, they are limited on how much they can charge older people more than younger people, great? >> that's correct. >> i know there are groups like young healthy nails that look like they might pay higher premiums, my understanding is a number of factors that mitigate the screen increases, first these individually qualify for medicaid so they are able to receive coverage without paying premiums, is that correct a? >> yes. >> in addition the affordable care act now allows young adults to remain on the parents health care until 26. >> correct. >> that was part of the affordable care act. >> it was spent as i recall being here in 2009 there was not

a republican vote to moving that to 26 usual. but anyway, let me go on. what about those were not on medicaid or their parents health plan? am i correct to qualify for tax credits or premium assistance that will reduce their interest caused? >> correct, up to 400% of the federal poverty level spent to what extent will this impact? >> it will be significant. >> finally individuals under the age of 30 may purchase so-called young and invincible plans on health insurance exchange i know you to think that way when i was in my '20s but since i've now joined medicare lester i know i am not. can you tell me how these plans will work and how they will reduce caused? >> absolute. that's a high deductible plan which means that for your typical doctors visit it will cover it but it's something cities were to happen come you become ill or in an accident it will cover you and those plans weeks but will be very affordable for young people. >> the affordable care act contains a lot of new tools like rate review and the medical loss

ratios. i come from the state of texas and we typically don't regulate anything in health insurance except policies. to me one of the best reforms in the affordable care act was the 80% loss ratio. because as an employer of a small business years ago, i was not sure that the premiums we were paying were coming back in medical benefits. but we'll had 13 employees. we didn't have a choice but now that small employer will know that 80% of the premiums will come back in the medical benefits. >> that's exactly right, and insurers have to pay back over $1 billion in rebates to consumers and businesses in 2012 because of the program. >> and again like i said, that seems like one of the best reforms although the a lot of things in there. and again, he donated say this but i also know that we tried to work on the built on our committee and we did have a markup, and again, i didn't expect many republicans to vote for. none of them did, but there were a lot of good things in the affordable care act that people

would talk about on a bipartisan basis for decades but i realize i'm out of time, thank you, thank you. >> the gentleman's time has expired. now go to the gentleman from texas, mr. olson, for five minutes. >> i thank the chair. and good morning, mr. cohen. >> good morning. >> i don't have to say this, but i'm going to say anyway. i've been elected three times by the people of southeast texas, my home, to be a member in congress, their representatives. and quite frankly they are frightened. i don't use that word lightly, but they are frightened about obamacare. and what is going to do to their health care. will it become more expensive? while they have access? will they keep it? many promises have been made and many have already been broken. they want and deserve answers to my questions, slight ask you to respect them and direct --

directly answer the questions i asked. in a prior life i spent nine years as a staffer in the training center. i know what a filibuster look slicker i haven't seen one today, so thank you for that. but if i smell a filibuster i will abruptly interrupt and ask a question so thank you for that. but i'm confused. i mean, last week right in this room the secretary said that there are no contingency plans for the state base exchange. you today are saying there are some plants. so are their plans come contingency plans or arthur not plans, yes or no? >> we will be ready to operate october 1 of 2013. we are preparing for the eventuality that different parts of the system that we are building may not work perfectly and may need to be improved, and those are the kind of plants

that we're working on. we're doing testing and we're doing everything that we can to make sure that everything works as well as possible, but we know that in any large project is okay, that's good. you are preparing for the worst and planning for the best and hoping for the best, correct, yes or no? >> we are -- >> preparing for the worst -- >> we are realistic and the planning and we will be ready spent okay. one for the question. i've talked to many family businesses back home about obamacare. and its impact on their business. these guys provide health insurance to their employees, and every single one, every single one has told me, congressman, i provide health care for my employees because it's good for my business. it's a recruiting tool, retention tool. is this thing goes down, it will cost me any were offered from five to eight, $9000 per employee per year. if the health care bill comes to

pass and exchange to work out, i will dump my people in exchange is because they will pay two, $3000 fine. that's much more better for business. they are waiting because they want to do good for the employed but they'll have to because the market will demand that the are you prepared? question, have you got out in america and heard this complaint, concern from small businesses? >> i have spoken to small business owners, and representatives of small business associations. i think it's important to keep in mind that the operator small business of health insurance has been declining dramatically over the past decade and more because it's not affordable. and that was before there ever was a affordable care act. i think there are a number of very important provisions in the law that will make coverage more affordable for small businesses, one of which certainly is the tax credit that is for eligible employers that can be up to 50%

of the cost of providing health care to their employees. >> every business i've talked to in the situation have said they are planning to drop their health care insurance. it's stark contrast to what you think i know what you're saying but again the bottom line on america is there are going to be changes. people will lose their health care because of obama could one final question. my state of texas is going on the federal exchange and so enrollment on october 1 full outgo january 1. one of the problems is our eagerness to impose a one size fits all solution to solve our problems. it won't work with state exchange. my parents live in vermont to a retired of the come and i can assure you that vermont challenges are much different than texas challenges. hack, texas has a one size fits a problem with in the state. honey, the valley has a high epidemic of diabetes. west, texas, has a high epidemic

of skin pledged to urban environments have more asthma, more issues in that area. so how do you address these differences? would have some, whether that changes address the differences is because i figured texas is one of the highest uninsured rates in the entire country, and the affordable care act and medicaid expansion and exchanges offers an opportunity to texas to get a lot of those people enrolled in coverage. we welcome texas involved with us in partnership with us as many, many states have to develop a marketplace that is best suited to the needs of the people of texas. >> the gentleman's time has expired. now turn to the gentleman from florida for five minutes. >> well, thank you, chairman murphy and ranking member degette for calling the string because i think it's very important that we have substantial oversight of the implications of the affordable care act. the good news is that so far families across america have seen vast improvements already.

even before the marketplaces are set up and people are in data control in health and sugar so let'the ones that are popular iy commute is come young people aged 26 now can stay on their parents insurance. that is meant a meaningful change to over 3 million young people across america. medicare has gotten better. it's gotten stronger. whether it's your prescription drugs that are more affordable or the new preventative services when you going for checkups. that's a very meaningful change for our parents and grandparents. than the one that doesn't get as much attention but should are the rebates that have come back from insurance companies. in the state of florida alone, 1.2 million florida families have gotten an entrance repay because of the terms of the affordable care act that say, you know, when you pay your premiums and your co-pay, that money should go to actual health care and health insurance rather

than profits and marketing and ceo salaries. that has brought back to the state for $123 million right back into the pockets of florida families at a time when they could really use those extra couple hundred dollars. so thank you for the. now we're on the cusp of such a positive change for families across america. so many that have not had access to this important doctor visits or being able to call the nurse and get the checkups they need, or with a chronic condition, get a significant health care service they need. so i would ask you about the outreach efforts, especially the navigators, we talk a little bit about that already today. this is going to be a very substantial effort as hhs begins the outreach and rollout, how you inform families about signing up, about how you educate families and small businesses about their insurance

options. i know that some are concerned that some of the affordable care sre og into fund these outreach efforts, but how else are we going to get, are we going to educate everyone? i think it's all hands on deck. we need the insurance companies here. we need community groups, the committee health center, doctors, nurses. and what i here at home as ready to join in this effort. but could you talk about, just set the stage for this. we have 50 million uninsured in this country. people are hungry for information, wouldn't you agree, to do -- could you talk about your, right at the outset, what you're going to be doing in the coming months? >> thank you. i would be happy to. first of all as you mentioned, the $54 million for grants to community or decisions and church groups and indian tribes and other groups that serve as

navigators, we are allocating that money based on the number of uninsured in each state. so we will try to put that money when we need it the most. in addition to that there's going to be sort of the media campaign, just to get people to understand more about the law and the benefits that they can bring to them. and we we directing people to go online to healthcare.gov where, beginning in june, the call center will be up and healthcare.gov will be changing its focus to be a consumer site that will be there to provide information to consumers and help them get ready for the steps that they will need to take beginning october, for an roman. and as you mentioned, i'm hearing a tremendous amount of excitement out there in the community for found -- from foundations, from the insurance companies that have a real incentive to get people to come by their products. so i think there's going to be a multifaceted effort to make sure that people know what's in store

for them. >> in looking at the states that have such high numbers of uninsured, california, texas, new mexico, florida. florida, we have about 25-25% are uninsured, to not have health insurance. so these are going to be critical areas. in many of those areas, english is not the first language. could you talk about american citizens that don't, your outrage in bilingual and diverse communities? and then i do think it's important to insurance agents and brokers involved. if i have a large outraged event with a commuter else and, doctors, nurses, and i have the brokers there is there, they are not enough get back and participate in those? >> thank you. on the language side one of the qualifications for being an advocate is that you be able to be made in cultural and

linguistic layup rockaways. we're expecting to get applications from groups that will specifically target specific groups that are not english language proficient. we are working very closely with the agent broker community. i've had a number of meetings their trade association and with the agents and brokers directly and we've come up with a way for agents and brokers to be able to enroll people through the marketplaces and we are expecting to play a very significant role, particularly with regard to small business where as they do today. >> thank you very much. >> are you asking for perhaps a written statement? i think that you would like to know that as well to help her people speak with yes. i think it's important, all hands on deck speaks to you will get back a written response? >> sure. >> the given much. i now recognize the gentleman from virginia, mr. griffith, for five minutes. >> thank you, mr. chairman. i was surprised people that you talk to, there's an excitement out there.

excitement i find in my district is kind of like the excitement that mr. olson that in his district in texas, is people are scared and they are concerned. and i've got businessmen who come to me and say, i do know what i'm going to do. do i let off some of my employees in order to get down under 50? what do i do? the commonwealth of virginia which i represent has indicated they will have all other part-time employees go under 29 hours so that they won't have to cover them on insurance. you know, it's becoming kind of interesting to see because you have come and people who are promised if you like your insurance you can keep it, but just recently i think within the last 48 hours, a proposal passed in the state of washington out of the senate, it's probably not going to pass the house, but it passed out of the state of washington where they currently cover employees down to 20 hours but they will take their state employees and move them into the exchanges as proposed under the

plan. they would give him $2 per hour bonus in it would help defer the costs of premium cost but they will be able to keep the insurance they had. and i wonder what your thoughts are on that the folks are being post out of the plan they like because the states -- look, let's face. of the state can't afford it, a lot of business can't afford it either. .. >> they can keep the insurance that finish. >> well, the employer can keep it, but in this case they're look at moving the employees off of that plan and into the

exchanges because it will save the state of washington $120 million. >> obviously to, i don't know specifically what's happening in washington. i think there are a great number of factors that go into employers' decisions about how many hours their employees work and how many employees they employ. health care is certainly one of those. but we know that under the existing system which has been broken employered have found it difficult or impossible to get affordable coverage particularly with a small employer. just one employee who has a serious illness can drive the cost for that employer to the point where the employer can no longer afford to provide that coverage. that can no longer happen under the affordable care act. >> well, let me tell you what's going on. i will tell tell you that the excitement you referenced is excitement of the negative, not of the positive. and i'm going to quote now from the olympian, their dot.com or online publication, becae t c wy lawmakers -- talk about that

same bill, but this person was opposed to that bill. worker-friendly lawmakers such as democratic senator karen frazier of thurston county called the bill, quote-unquote, premature. why, you ask? because the precise benefits, again, quoting ms. frazier, senator frazier, because the precise benefits available under the exchanges are still unknown. she said there is a chance that some workers could not afford coverage and plunge their families into poverty. now, that's a democratic state senator in the state of washington who fears putting state workers into the exchanges because they won't be able to afford the coverage. how can you tell the american people and how can you tell senator frazier that she's wrong and that she has no reason to be fearing, and is that the kind of excitement you're hearing? that's the kind of excitement i'm hearing in my district and, obviously, senator frazier, a member of the democratic party,

has that same fear coming to her from her constituents. how do you respond to that, sir? >> i don't know about her particular concerns, but tax credits will be available to people that will make insurance coverage more affordable gunning in 2014 -- beginning in 2014 than it is today. >> and that argument was made on the state of floor in the state of washington, and ms. frazier wasn't convinced. thank you, sir, i yield back my time. >> general mcneal's back. we now recognize mr. butterfield for five minutes. >> thank you, mr. chairman. thank you, mr. cohen, for coming to be with us today. hopefully, you have wrought with us -- brought with you some very important information we can all benefit from. as you may know, i represent a very low income l district in north carolina. in my whole state we have about one and a half million people who are up insured, about one-third of those, 500,000 of those are poor people, and about 10% of those live in my congressional district.

and so i've listened to the questions and answers here today, and i can tell you that in my district -- i can't speak for other districts, but in my district, there is a lot of excitement about the affordable care act. the people that i represent are looking forward to it, including business people. those who are rational, those who have taken the time out to study the benefits of the affordable care act for their business. once they understand it, most if not all of them are ready to embrace it. but i want to just take a few minutes to drill down on the navigator program, because you know and i know that that is so critically important. i see the navigator program as community-based individuals who will to out into the community and go to untraditional places, barber shops and beauty salons and even knock on doors to find people who would qualify for the exchange. is that correct? >> that's exactly right. >> these are not elitists, these

are not people who will sit behind a desk and push some buttons. these are people who will actually beat the pavement and go out and find people to, first of all, to inform them about the benefits of the program. >> that's right. and ideally, people who already have a track record and history of helping people in those communities. >> would this include knocking on doors, canvassing neighborhoods? >> absolutely. >> all all right. and when a door is knocked on and an individual is found who would potentially qualify for the program, what happens next? i guess there's an informational session with the individual, but once the navigator determines that this individual qualifies for assistance for the tax credits, what happens next? do you take them by the hand and take them to some central location and process a claim? >> i mean, ideally the easiest way to get people signed up is

online. so ideally, navigators would help folks who may not have access to a computer at home, you know, go to the community organization's location and help them through an online process, which can be done -- >> well, let's divide it into two pieces. let's say the citizen has a computer in their home. would the navigator actually stay in the home, assist the individual -- >> they can help them walk through the application, exactly. >> at the request -- >> of the person, of course. >> and if a citizen does not have, does not have access to a computer, then the-and-a-half gater will enable -- then the navigator will enable the individual to go to an office? >> ideally. or, you know, people can apply -- there is a paper application, and people can apply with a paper application. so a navigator could sit down with someone across the kitchen table, go over the application and do it that a way as well. >> then will the navigators see it through to completion? is there a procedure for making sure that the individual follows

through? >> there can be a procedure for the navigator finding out whether, what the result of it has been. >> all right. now, from what i can gather, if an individual, let's say a single, healthy, childless adult who makes $20,000 a year and that individual would qualify for tax credits through the exchange. but an individual who makes $10,000 who is single and childless and healthy would qualify for medicaid. but if a state has declined the expansion of medicaid, the $10,000 individual will have no access to insurance, is that correct? >> they can still go into the exchange. >> even if they are under 100% of the federal poverty line? >> they then -- they won't be -- those people won't be getting a tax credit. you're correct. >> but can anyone under 100% of poverty go into the exchange?

>> yes. year in income, if they have the capacity to pay for the exchange, they can go into it? >> correct. >> so if a family member wanted to assist that low income individual, they could do that? >> they could do that. >> all right. all right. thank you very much. i yield back.ñ0pí(w:7÷

>> under the law. >> right. >> for the average consumer that has health care today, are their premiums going up or down? >> i think we have to wait and see when the plans submit their rates -- >> but that's not, but that's not what the president prompted. -- promised. the president promised that supporters would see lower costs. so are people going to see increases or decreases in their premiums? >> i think at this point we have to wait and see what -- how the rates come in for 2014. over time people absolutely will see lower costs as we see more competition in the system, a broader risk pool, and if you look at the overall health care costs that people have to absorb given tax credits, lower cost sharing, they will see lower costs. >> so -- well, who's going to see lower costs? what demographics are going to see lower costs?

is it going to be the young? is it going to be men? is it going to be women? is it going to be seniors? who's going to see the lower costs? >> well, we know that women today can be charged up to 50% more than men just because they're women. so, yes, women will see lower costs. and we know that, um, older people can be charged often five or six times as much because of their age x that's going to be limited. so they will see lower costs. >> are anybody's premiums going up? >> i think we have to wait and see what the rates look like -- >> that's a, that's a theme that has per is cysted if this -- persisted in this law, wait and see. pass it, and then let's see what happens down the road. i tell you what, that's a dangerous way to navigate a ship like america's economy. you know, in the -- you also write that these programs will keep premiums in the individual

and small group markets reasonably priced. what's a reasonable price? surely you've got some idea what a reasonable price is. >> you know, sitting here today i don't have an answer to that question. we can certainly, um, come back. i think what i can say is that we know that over the last couple of years health insurance premiums have been going up at a lower rate than they had been for decades before. i mean, the health insurance premiums have been going up by double digits year after year after year, and that's -- >> but the american people were promised two things. they were promised that if they liked their current coverage, they could keep it and that costs would be lowered. you have confirmed to me that you don't know that to be true anymore. you don't know. you're having to wait and see. >> for 2014. over time, over time, you know -- >> well, i just asked you that, were premiums going up or down, and you said you don't know.

>> for 2014. >> okay, let's look out longer tt. are premiums going up or down? >> i expect that premiums will go down relative to what they would have been -- >> for who? >> -- without the affordable care act. >> for who? >> for everyone. without the affordable care act, they would be going up higher. >> so then you must know what defines some reasonable costs. if you know they're going down or you think they're going down, you've got some idea what that range is. what is reasonable? >> the primary factor that goes into what a health care premium is, is the cost of medical care. that's the primary drive of health care costs. so in order to have premiums truly go down, we need to address the costs of medical care. and the affordable care act and the administration have a number of different ways -- >> we have a very different -- >> as far as my program -- >> we have a very different understanding of what's driving the cost of health care, because in my opinion it's the bureaucracy that has now set itself up in washington to

oversee one-sixth of our economy. let me -- i've only got a little bit of time left. on the application one of the questions that the applicants are asked is do you think the employer's kohage is affordable -- coverage is affordable? do you think the employer's coverage is affordable. why do you ask this? what is affordable health care in your opinion? >> it's defined in the statute. the question's asked because it's one of the eligibility requirements, and it's defined in the statute as up to -- depending on what your income level is, up to 9.5% of your income. >> so affordable in your opinion is 9.5 which is almost 10% of a person's income for health care. >> it's not my opinion. it's what's in the law. >> well, what is your opinion of what's affordable? >> i don't, i don't have an opinion. >> well, that's -- oh, that's good with. that's -- gotcha. i yield back. >> gentleman's time's expired. now go to the gentlelady from

illinois, ms. schakowsky, who's recognized for five minutes. >> well, mr. cohen, it's not surprising that from the republican side of the aisle the relentless drum beat of opposition to the affordable care act or obamacare as i proudly say goes on after 33 efforts to repeal -- successful, to repeal the entire bill. but i would challenge my colleagues on the other side to go out and explain to at least some of their constituents, for example, the parents of children with pre-existing conditions that they want to take away insurance to them, that annual and lifetime coverage limits should be reinstated, that the rescissions of policies should once again go into place, that all the preventive health services without cost sharing ought to go back into effect,

that the student -- the young people that are on their parents' policy, forget it,e off. you explain that to them. that the medical loss ratio requiring insurance companies to actually pay for health insurance, health coverage, um, should be changed. and tell women tat we think you should be discriminated against. that's a good idea. that about i don't know how many billions of dollars we over to collectively pay more in health insurance. and so, you know, you can list five problems with the program, and, you know, we can list many, many more good things. and we'd like to work with each other to try and correct them rather than just complain. no. the program is not perfect. i wanted to can you, we're just

months away now from full implementation of obamacare's coverage, and the administration has requested additional resources to implement the law. and those requests have been ignored. and it seems to me the refusal of my republican colleagues to appropriate hhs adequate resources to help implement the law is limiting our efforts to inform americans about obamacare's exciting new coverage options. and let me just say that when the part d was put into effect, $600,000 was spent by the bush administration for blimps to talk about, you know, just for blimps alone. so could you explain how cecile would use additional resources that the administration has requested to implement the law and how might the refusal to appropriate adequate resources

hinder the ability of consumers to know about october 1st? >> thank you, congresswoman. we certainly would welcome the ability to provide more grants to navigators out there in the community. we'd welcome the ability to do more outreach ourselves to, you know, as you know, um, there has been a lot of misinformation about this law. people really do need to understand the benefits of it and what it can do for them. and so with the president's budget request, um, we certainly could use that money to do more outreach into the community and make people, make sure that people understand what the law is and how it can benefit them. >> you know, and i would just like to say to my colleagues you talk about the fear in the districts, and to the extent that there are some problems with the bill, if we could sit down and work together and figure out how to make it better. but a lot of that fear is the

misinformation that has been quite deliberately sent out. you watch fox, it's hard not to be scared about obamacare and what it might do to you. so i would suggest that the fear mongering that is going on about this law which has now been yup the united states constitution that will bring up to 30 million people of the united states of america to be able to have health care that will help us join the community of nations in the world that declare that health care is a right of the citizens of their countries. you know, we could use the help. all of us could use the help. all americans could use the help to perfect this legislation, and i yield back. >> thank you. the gentlelady yields back balance of her time. now recognize the gentleman from colorado, mr. gardener, for five minutes. >> thank you, mr. chairman. thank you, mr. cohen, for your time with us this morning.

my colleague said there's fear mongering on this bill, but i read an article the other day that the roofers' union backtracks on obamacare and wants repeal or reform of the bill. so i don't think this is right-wing fear mongering. i think when you have a union that's very concerned about obamacare and wants its repeal or reform, i think that's where we have significant concerns that must be addressed. mr. cohen, are you familiar with richard foster, the actuary of medicare? >> i know who mr. foster is, sure. >> are you familiar with testimony he gave before the house of representatives' budget committee a year ago or so? >> generally but not specifically, no. >> in that testimony he talked about the two central promises of the health care law that were unlikely to be fulfilled. one, that the bill will not hold costs down and, two, that it won't let everybody keep the current insurance if they like it. would you degree with that assessment? >> well, i think as i've said, i do believe that costs will be

down relative to where they would have been without the affordable care act. >> so that's an increase then. >> well, if medical costs increase, then the cost of insurance is going to increase. but at least people -- >> so the promise is that it will keep costs down. >> relative to what they would have been without the law, a at least people will have -- >> so what you're saying is we will expect cost increase. >> at least people will have the security of knowing if they have a serious illness, their care will be paid for, which they don't have today. >> we are talking about cost increases. >> well, for someone who has never had health insurance before, to talk about an increase -- >> what about the person who does have health insurance? are they going to experience increases? >> there are factors that will cause costs to go down, there are tax credits that are available -- >> are you insured through the federal system, or do you have outside insurance? enter i'm insured through the federal insurance. >> has your insurance gone down or gone up? >> you know, i don't want even remember what happened. i think we had a small increase this year.

but we've had lower increases in the last two years than we've had for a long time before that. the fact that health insurance us not new. i mean, tat's -- health insurance -- >> but i think the promise that was made in the health care bill, if i'm not mistaken, the promise was made that this would lower the cost of health care. >> well, i think it will be relative to where it would have been. >> so this is like the washingtontwstep, you're actually decreasing the rate of increase, is that what you're saying obamacare has done? >> i believe health care insurance, and if you look at the total out-of-pocket costs people have to absorb will be low or than it would have been without the law. yes. >> so that's an increase in the -- >> it may or may not. >> what is an acceptable increase? what are you anticipating under in this health care bill? >> for women who have had to pay 50% more than men, you know, the effect will be to reduce their costs. for people who have had to pay out of pocket for -- >> reduce their costs even though there are cost increases

from year to year? it's just you're saying that, at youe sayings, oh, it might not increase as much. >> i think it's going to depend on a number of factors including the underlying costs of medical care. >> well, let me ask you this then, will obamacare reduce the cost of health care? >> it will relative to what it would have been without the law, yes. >> but health care -- but you're saying then that health care will increase. >> that will depend on factors that are external to the affordable care act. it will depend -- >> maybe i'm not canning the question very clear. will health care costs be less next year after the implementation of this bill? >> i think that will depend -- >> yes or no. >> i think that will -- i can't answer the question. i don't know what's going to happen next year. >> i don't know what's going to happen to the underlying costs of medical care, what doctors charge, what hospitals charge. >> what about insurance that people like? if they have their insurance and they want to keep it, are they going to be able to this. >> they can. if they're in a grandfathered plan and the plan doesn't change

significantly, they can keep that coverage, and it's not affected by the affordable care act. >> so you're saying if you like, right now people across this country who have been told they're not going to be able to told their insurance, they're being misinformed? >> they're misinformed if they don't understand that if they're in a plan that was grandfathered as many people are that they can keep that coverage, then, yes, they are misinformed. >> so if the employer switches the plan because of this health care bill, then they get to keep their old health care? >> employers can keep their employees in a grandfathered plan and not be affected by the provisions of the affordable care act. >> do you know which plans were grandfathered? and the health care bill requires them to change the plans, though, doesn't that mean -- and no, no. the law doesn't require them to change the plans. that's the whole point of being grandfathered. you don't have to change it. >> so these employers will never have to change their health care

plan that they're offering. >> as long as the plan does not significantly in terms of the benefits they offer -- >> or what's required by the health care bill. >> time's expired. >> then they can keep a grandfathered plan, and they do not have to comply with the provisions of the affordable care act. that's what grandfathering means. >> gentleman's time has expired. now to the gentleman from missouri for five minutes. >> thank you, mr. chairman. mr. cohen, thank you for being here today. i've got to say that if rod serling walked through that door right now, i wouldn't be surprised, because he could walk through here and say you have now entered the twilight zone. there cannot be so much difference in interpretation, i don't think, other than it's inexplainable. it is twilight zonish, if that's a word. we have friends of mine on the other side of the aisle, a good friend that just spoke a moment ago, ms. schakowsky, she, to

paraphrase, said the republican side of the aisle, on the republican side of the aisle there is a relentless drum beat of opposition. and my other very good friend over there, gene green, said something to the fact that the people across america have seen vast improvements in their health care. and i think from the questions you've seen today, that's not what some of us are hearing. so i want to start with a couple of yes or no answers, if i may, on some things democrats have said. see if you agree with them. democrat senator, max baucus, said, and i quote: i just see a huge train wreck coming down because of bumbling implementation. yes or no, do you agree with that? >> i do not agree with that. >> let's move to another democrat senator. let's move to tom harkin, senator tom harkin and, mr. cohen, yes or no, do you agree with senator harkin that this administration should not be raiding prevention fund, raiding the prevention fund for

funding exchange expenditures? >> congressman, i really am not going to express a view on that. that's not a decision that i made. >> you can't answer a yes or no question whether or not you agree with a statement that a democrat statement made? >> i can't. i don't have -- >> you can't, you don't want to, you don't know if you agree -- >> i don't have a view. >> you don't have a view whether you agree with a statement that a senator made? >> i don't. >> i really don't know what to say. i guess i'll wait for rod serling to come through the door. >> that would be the second coming of rod serling, i think. i think he passed away. >> the way things have been going here, i wouldn't doubt it. i mean, i could see it happening. this morning, according to politico pro's white board, senator harkin blasted hhs secretary kathleen sebelius at a

hearing this morning. it was after we had started this hearing. blasted sebelius for using prevention fund money to pay for insurance navigators saying the obama administration is treating preventive care as an afterthought. to quote the senator: i'm sorry to say this administration just doesn't get it. and this is a democrat. this is not the republicans' drum beat. first of all, it was a $5 billion raid last year on prevention funds, harkin said, referring to the payroll tax extension president barack obama signed into law last year that kept five billion from the prevention fund. this year it's another $332 million raid. it's sort of like the prevention fund is sort of an afterthought. i want to ask you one more time. do you agree with senator harkin that this administration should not be raiding the prevention fund for funding exchange expenditures, yes or no? >> you know, i would have been happy if congress had appropriated funding for us to do the work that we need to do,

and, you know, that didn't happen, and so the secretary made decisions under her authority, and i don't have an opinion one way or the other as to those decisions. >> no. who would you direct me to? let's say for a minute that i have staff that come to me and say we're a little confused, what's our health care going to cost starting 2014, what government agency would you direct me to to get their questions answered, what they're going to be paying for health care next year, my taffe if. >> well, if your staff is covered by the federal program, then i think the information that they would want to get would be from the program that is administered through health care. >> fehb or whatever coverage -- >> opm maybe? >> could be. >> well, we have tried relentlessly. it --se i have -- you laugh at

>> no, no. >> my staff's not laughing. and it's a very serious concern for me. when you have staffers on this hill that have got college educations, some of them have law degrees, and they're living two and three people to an apartment because the cost of living up here to get by. and they come to me with a legitimate question on what they're going to be paying for next year, they're thinking about leaving government service, they're thinking about taking jobs other places, it's a very serious thing. so we have tried and tried and tried to get the answer on what they're going to be paying. opm cannot tell us. >> and i didn't mean to minimize it, congressman. i was only smiling because i can't help with opm, obviously. i wish i could, but i can't. >> i gave rod serling five minutes, and he didn't make it, so i yield back. >> recognize the gentlewoman from north carolina for five minutes. >> thank you, mr. chairman, and thank you, mr. cohen, for being

with us today. i do have to go back and just reiterate some of the points that have already been made and just get some clarification from you. um, one, going back to the closing of the pre-existing insurance -- now, it's april. when was that closed? >> it was closed for the federal program in february and for the state programs in march. >> okay. and so those individuals who would be utilizing those dollars for their pre-existing condition coverage will not be able to do so until january 1st? >> new enrollees -- the existing enrollees are unaffected, but new people who would be coming into the program will not be able to come into the federal, into the piece of program unless we are able to, yes, until january. >> as it is right now. >> as it is right now.

>> okay. you know, this is the confusing part about it, because especially my, you know, colleagues across the aisle continuously try to paint us -- us, meaning republicans here on the other side -- as the ones who are interfering with anyone getting pre-existing coverage, and, you know, looking at it from an unsympathetic standpoint, however this program has been cut off, and they support that. and here we are attempting to pass legislation to actually help those individuals. i'm just -- >> so are we? >> this is my time, you had your time. i'm perplexed by that, and you clarified that for me. i just want today clarify that we are talking about months of time that individuals would go without care. also for clarification purposes, in the discussion you were having with mr. johnson and then also with mr. gardener, you

stated that as of january 1, 2014, that health care premiums will go down. is this correct? >> no. what i think i said, what i -- what i believe is that, first of all, we don't know yet what premiums are going to be for coverage in january of a '14 because plans are just now submitting those rates to their insurance departments for approval to the exchanges with respect -- >> okay. but, sir, that was not the promise. the promise that was made continuously when this was being implemented was that health care premium costs would go down. and so i am asking you under oath today as you see it, you -- so you are no longer standing behind that statement? you are now saying that it is finish that we are, we do not know and probably more than likely seeing health care insurance premiums going up, is

that correct? >> no, that's not correct. what i think i said was that for 2014 we need to see how the rates come in. and over time i believe that the affordable care act will result in lower overall costs of -- >> and what, so what do you base that on? because cbo has done, you know, a culmination of studies which showed, and i'll just cite north carolina, that north carolina health care premium rates will go up by 61%. so what are you basing your data, and if you do have studies that show this, i would like for you to submit them to the subcommittee. >> i'm basing it on the increased competition that will exist in the new marketplace compared to what we have today where in many states -- >> but that could exist with or without the affordable care act going into effect. you know, we in congress could enact many be, you know, pieces

of legislation and are working on just that to help increase competition amongst the health care -- >> well, it could, congresswoman. but in most states today, in many states today the individual and small group markets are dominated by one carrier that has 60, 70, 80, even 90% be of the market -- >> and that could be easily remedied, that could be easily remedied with legislation. we don't need this massive takeover of health care increasing rates by 61% for my, for those who i represent in north carolinament -- north carolina. you know, there again i would really hope that you would be able to gather some data and, again, under oath saying today so you are basically saying i am incredibly unclear as to what will happen with health care rates as of 2014. >> for most americans, the millions of americans who are covered by insurance policy through their employer that's in a large group, they're not going to see an effect from the

affordable care act one way or another. >> okay m well, my time is up s and i don't want understand even what you bait that on. >> if i could ask the gentleman, you asked a question about while he was under oath about prices going up or not going up, and you didn't get a chance to answer that question, so i'm going to give you a moment to answer that question with regard to you had -- it was previously stated that prices not going up, you said you couldn't guarantee that. you were going to elaborate on that statement. >> i seem to have lost the thread. >> all right. >> mr. chairman, let me ask. mr. cohen, did you ever say -- >> mr. chairman, i think i'm next in the queue. if you don't mind -- >> i'd ask unanimous concept to -- listen. the priest -- previous questioner advised the witness he was under oath and then asked him a question and refused to let him finish answering that question, and i think that is inappropriate for this hearing. >> well, i just asked if he would like -- >> so, mr. chairman, i think that the witness should be

allowed to complete his answer. >> i just did that, and -- >> well, i'm not sure what the problem was. >> right. >> that was my problem. >> i will be more than happy to -- >> can i ask you to submit that question for the record? >> i think it is wrong for members of committee to try to put the witnesses in a perjury track -- >> that's why i'm -- >> no, ma'am. >> they come in here, and they're trying to help -- >> no, ma'am. i am clearly restating that the gentleman is under oath and that he couldn't -- he was not answering the question. my question -- >> i'd like to ask is if the gentlelady would submit that question -- >> i'd be happy to answer for the record. >> we'll be sure exactly what you were answering, ms. ellmers, thank you so much. recognize the gentlelady from tennessee for five minutes. >> thank you, mr. chairman. sir, you've been patient with us, and we do appreciate it. i want to go to your statement you made i think in response to mr. harper's question about over time you thought the insurance costs would come down.

and this is something that i always watch very closely because i'm out of tennessee. and you're probably familiar with the program telephone care, and i know i've worn out all of my committee members here talking about tenn care or and asked secretary sebelius about it repeatedly. and i just want to let you know that it seems from what we have found, what i have found in my research -- and i've been working on this since we got tenn care as a test case for hillary care in 1995. and bear in find it quadrupled in cost over a five-year period of time. but, sir, what we found is there is no example where these near-term expenses are going to yield a long-term savings. if health care. in health care. and if you do have those examples, i would love to see them. because through all of this debate of obamacare, nobody has been able to show one. not with public option care, not

with guaranteed issue, not with community rating, not with any of this in new jersey or tennessee or hawaii or anywhere else. not with any of these cms waiver programs. there is no example where you decrease costs, you increase access and you get better outcomes. so if you can prove us wrong on that, then, you know, feel free to bring forward an example. do you have an example? >> congresswoman, i think for the person today who doesn't have health insurance coverage and doesn't know how they're going pay tear medical bill -- their medical bills and worries about going into bankruptcy because their child is sick, i think for that person a lot of this discussion is really irrelevant. and we -- and that's what we're going to change. >> okay, let me ask you this, i want to ask you a question about the navigators. is it true that the navigators cannot have health care or health insurance experience? >> no. >> that is not true? >> that's not true.

>> okay. because that been part of the understanding that is out there. also on your increased competition theory, i've got to tell you what we've seen in tennessee, when you have government control, when it is government control, that's what runs people out of the marketplacement -- marketplace. >> well, this isn't government control. this is a commercial marketplace -- >> i beg to differ with you. let me give you a few examples of what is happening in tennessee. yesterday, of course, the rate filings in maryland shows that small group coverage increases are going to go up 145%. and, um, we've got examples in tennessee that we have been polling our companies for this year and next year. this year they're going up anywhere from 26% to 132%. we're seeing 40 and 50% increases expected for next year in the young adult population.

the survey we have here at energy and commerce committee is looking at 145-185%. families have already seen their insurance go up $3,000 per family since this law was passed. so what do i tell people that are coming to my town halls and saying but the president promised my premium was going to go down $2500 a year. what do we tell these people? >> i think you tell them that they should shop on the marketplace to find the plan that is best for their family and is the most affordable for them. and that's what we expect to be able to provide for people. >> but it's going to cost them more. >> i think the health care costs have been going up year after year after year long before we ever had obamacare. so it has nothing to do -- the fact -- >> the percentage is, the percentage is greater. and i think that you probably are aware of that. do you believe that the increases are tied to the taxes and the mandates in obamacare?

do you believe that's any of the driver? >> the impact of the taxes on health care premiums is very small, by all account -- >> $165 billion is small? >> the impact -- >> you think $165 billion in taxes has a small impact on premiums? what do you call large? how would you classify small and large? >> we have a reinsurance program that's going into effect that is estimated to reduce premiums from what they otherwise would have been by 10 or 15%. >> let me ask ask you a little bit by that. i would like to know if you find it ironic that we are now subsidizing insurance purchased while at the same time we're making insurance more expensive by the mandates and taxes that are being piled on this? thus, we've got increasing

subsidies, and we're putting taxpayers on the hook for even higher federal spending. do you find that odd or ironic? >> i think that americans are paying for the costs of uncompensated care today. when people show up at the emergency room and they don't have coverage and they get treatment, those costs have to be passed on to all -- >> so you're comfortable with costs going up? >> and so we're going to -- >> i yield back. >> -- we're going to move to a system where we have much more insurance coverage. we're going to spread the costs over more people, and that will be to the benefit of all americans. >> i thank the gentlelady from tennessee. i might also ask on that issue of uncompensated care, i hope that's an area you'll submit more questions for the record. i ask can unanimous consent that the written opening statements of members be introduced into the record, and without objection, the documents will be entered in the record. in conclusion, i'd like to thank all the witness and members who

participate inside today's hearing which would be you, mr. cohen. i remind members they have ten business day toss submit those other questions for the record, and i ask that mr. cohen respond promptly to our questions. i appreciate you being here today. i'm sure we'll be seeing you again soon. thank you very much. >> thank you. >> committee is adjourned. [inaudible conversations] >> i went in, i walked into the little kiosk, and i said i'm bob ney here to report. guard came up, as we walked down, he said, oh, i knew one of

your campaign managers ino. i said, okay. [laughter] got down in there. the guard said, here, you have some hate mail. it was from california, i remember, and massachusetts. you have some hate mail waiting on you. they gave me the mail. you go through, the most embarrassing part of the strumdown, and then i got into the intake, walked into prison down into the courtyard. the warden, i won't use the language i do in the book, but the warden told the man that's supposed to take me around get away from him, he can find his own way. and i'm sitting there not knowing where to go, where i'm staying, what clothes to get. you're in these pajama pants, and some of -- another prisoner said where's your escort who's supposed to take you around? i said, i don't know, some little guy in a suit yelled some foul language. he took me in the back way of the laundry room. i walk in, and a man is sitting there, and he said are you the congressman? and i said, used to be. he said, are you a republican, aren't you?

and i said, well, republicans put me in here, you know? i have to pull up some humor in the situation. he said, well, i was the payor of east cleveland, welcome. i'll you some clothes. >> more with former ohio congressman bob ney sunday at 8 on c-span's "q and a." >> a live picture inside the rayburn house office building on capitol hill. we're here for a hearing with food and drug commissioner margaret hamburg before a subcommittee on her agency's 2014 budget request. the fda is requesting $4.6 billion including $296 million for food safety. we also expect to hear about the impact of sequestration budget cuts which the agency's projecting could result in 21 few or -- 2100, that is, fewer food inspections, a delay in implementing the food safety modernization act and slower approval times for new drugs. we expect this hearing to get under way in just a moment.

live coverage here on c-span2. [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> good morning. i would like to welcome everyone to the subcommittee today and like to welcome especially dr. margaret hamburg, commissioner for food and drug administration. joining the commissioner today is mr. norris cochran, the deputy assistant secretary for budget of the u.s. department of health and human services, and jay tyler, fda's chief financial officer. welcome to all three of you. the work that you and your colleagues at fda perform touches the lives of every american, and we appreciate the dedicated service that each of you perform on a day-to-day basis. with that said, there are many challenges that face fda. compounding pharmacies, drug shortages, food-borne illnesses,

dietary supplements are just some of those challenges. from where i sit, i see another challenge, and that is the pause at which fda moves guidance, rules and regulations through the process. in addition to the budget request, i want to focus today on this bureaucracy that just can't seem to produce crucial guidance even though the science is evident. for example, usda's dietary guidance for americans on seafood consumption for women who are pregnant have been in place since january of 2011. however, for the past two years this subcommittee has repeatedly asked fda to finalize its seafood consumption guidance with no indication of closure because this issue is tied up in a bureaucratic in-fighting at the department of health and human services. this type of delayed response causes frustration with congress as well as the millions of women who need answers on in this and ore important matters. -- and other important matters. turning to the budget, don't

quite understand why the budget was submitted so late given the fact that the basis for the request was the fy-'13 continuing resolution that was signed into law on september the 28th, 2012. the result is a simple request of -- repeat of last year's budget. in this budget could have been shut submitted much earlier, and there would have been more clarity regarding the present requests than there are currently. on monday of this week, we asked the food and drugging administration to provide something as simple as a table that shows the proposed changes between the final fy-13 enacted levels and the fy-14 budget request level. other agencies within the subcommittee's jurisdiction provided that to the committee more than two weeks ago without us even asking for it. unfortunately, we just got the information from the fda well after the sun went down last

night. this is a basic budgetary information that fda should have provided to the subcommittee without asking, and fda should provide it upon request without delay. overall, fda is requesting $4.7 billion for fy-2014 of which 2.6 billion is in discretionary budget tear authority and 2.1 billion is in user fees. once again fda is requesting new user fee authority for food imports and food facility registration and inspection. these particular fees total $226 million. these fees do not appear to enjoy the same level of industry support as the prescription drug or medical device industries gave to their programs, because the food industry believes this, too, to be a food safety tax. it seems that fda has failed to communicate to the industry what, if any, performance measures fda would use in managing this program.

these fees are not currently authorized, and the chance of congress authorizing this, i would say, would be very slim. with that i would like to turn it oh to the gentleman from california, our ranking member, mr. barr. >> thank you very much, mr. chairman. and i welcome, also, the commissioner here and want to thank her very much for coming out to the salinas valley to see how fresh produce is grown and produced right in the field. they're still talking about your visit and how you kind of compared the fact that you had to dress up in a suit and hair net and gloves in order to go into the fields, it was like going into an operating room. and that's why we're trying to keep our fields very healthy and clean. i want to, mr. chairman, i think it's all -- we've all criticized the administration for a late budget, but we also need to criticize ourselves. congress never even produced a

budget. we never --we haven't had a bill of this committee since 2012. and before that the only time we'd had it was in 2010. so, you know, the president's supposed to base his budget on what congress approves the year before, and i hope we can remedy that. i would also just suggest that we -- i think we need, in this committee ought to give the fda the flexibility, the authority to use the user fees. these user fees are being paid by private sector to get a job done, and they can't get the job done because we have an unintended consequences of budget cuts and sequestration. so this is money that's in the bank, it's sitting there, and we ought to give it as we have in so many different ways. we did it for our parks to allow them to keep the fees and use them, we've done it in, you know, look at the way we even have to qualify to run for

congress. you have to pay a fee at the local area, and they get to keep that fee for running the elections department and so on. so this is a fee that's been collected. the private sector's going to get really frustrated, really discouraged that the government isn't being a fair partner. and i think, you know, if you believe in private enterprise, they're coming up with paying these fees because they want answers to their questions. and we ought to allow the department to use the fees they're paying for that purpose. so i look forward to this hearing, and i think that's something we ought to try to work on as a committee. >> thank you, mr. farr. we're fortunate to have the full committee chairman, mr. rogers, with us today, and i'd like to recognize him for any opening remarks he may have. >> thank you, chairman, for recognizing me. good morning. commissioner, thank you for being with us today. to discuss the fiscal '14 budget request for fda.

in other subcommittee hearings, i've already lamented the fact that this budget request is woefully late and won't get our nation back on solid financial footing, but we will persevere. before i comment on your budget, let me hasten to thank you for fda's recent decision that prohibits generic, crushable oxycontin from coming to market without abuse-deterrent technologies. unfortunately, drugs misused are a recipe for disaster. and advocates across the country salute you for your leadership in shepherding this landmark decision on generic painkillers. thank you. as you know, the abuse of prescription drugs -- particularly opioid pain pills -- is our nation's fastest growing drug threat. so, so great, in fact, that your

colleagues at the center for disease control have called this crisis an epidemic. just as fda must responsibly address other epidemics such as h1n1 and meningitis from steroid injections, you must also closely monitor drugs entering the market including the prescribing patterns and potential abuse and aversion. last week's decision by your agency will surely save lives, and i hope it's a sign of things to come as it relates to our nation's very serious pain pill addiction. undoubtedly, the fda is a critical partner in getting this multifaceted health, law enforcement, patient access and education issue under control. i'm anxious to hear from you today about how we can build on this success story. and what other steps fda can

take to beat back on the abuse of prescription medications like rescheduling our most widely-prescribed and abused painkillers. hydrocoe dope combination drugs -- hydrocodone combination drugs and limiting these prescriptions to severe pain only. now to your budget, commissioner, the fda is seeking nearly 4.7 billion which is 633 million above the fiscal -- 622 bill above the 2013 level. far from a given considering the president's unwillingness to truly engage on discussions to address our real cost drivers without talking more about taxes. toward that end, this budget assumes the inclusion of six new user fees including one for

registration of food facilities, a fee likely to be passed on to consumers. as you can imagine, this committee and the general public has little ap -- appetite for food fees. i'm sure we will discuss this issue at length as well as your recent comments about the effects of sequestration on food inspections. and the recent court order for fda to move forward on the implementation of the food safety modernization act. so we look forward to hearing from you this morning. >> thank you, chairman rogers. we -- just bear in mind we have votes today, so we don't expect -- i don't expect votes to be called for close to another hour, so we should get well into the hearing, and i'll make a big dent into the hearing, and we'll just see how long we go. sometimes the floor schedule is very unpredictable, so we may be even later before we have votes.

so with that, your full statement is entered into the record, but at this time we'd like to recognize you for your opening at the same time and comments before we go into the questioning aspect of the hearing. >> well, thank you very much, and good morning, ranking member farr and, certainly, chairman rogers and all the members of the subcommittee. i do want to congratulate you, congressman, on your new position as chairman. and i also do want to thank the subcommittee for your past investments in fda which have helped reduce the gap between our budget and the demands of our increasingly complex mission. congress has given fda the responsibility for a vast range of products that are central to the health, safety and wellbeing of every american from pin after and breakfast -- spinach and breakfast cereals to vaccinations to new medicines to treat killers like cancer and hearse decide, americans rely on products overseen by the fda every single day.

we also recognize that those who produce our nation's food and medical products are vital components of the u.s. economy as is a strong fda. history shows that when the public trusts fda's oversight in the products we regulate, these industries flourish. conversely, when products cause serious high harm, it can resuln severe economic damage across the industry involved to fenders and nonoffenders alike. i want to mention some of our measurable accomplishments this past year. in 2012 fda approved 39 novel medicines, the highest number in over a decade, and the majority of these drugs were approved in the united states before anywhere else in the world. some in as little as three-and-a-half months. the number of drug shortages were cut in half compared to 2011. we successfully turned around a decade of lengthening medical device reviews and backlogs. working together with 45 state and territorial partners, we

conducted more than 158,000 inspections of tobacco retailers to insure that they're not selling cigarettes or smokeless tobacco products to minors, and we published our first two food safety proposed rules as part of the implementation of the historic food safety modernization act. and i might add that fda is a smart investment and a bargain. consider that the products we regulate represent more than 20 cents of every dollar that consumers spend on products in the united states. but if you look at our budget in terms of the ba or public dollars, every american effectively pays only about $8 a year for fda services. and while fda continues to oversee a multitude of products vitally significant to all of us, our job has become increasingly demanding. first, we're in the midst of dramatic changes in the way that foods, drugs, biologics and devices are produced and reach the american public. we're witnessing revolutionary

advances in science and technology that hold such promise to improve health and prevent disease, yet also bring new scientific and regulatory complexities. and we're facing the globalization of our food and medical product supplies, demonstrated by a quadrupling of imports over the past decade. second, congress has continued to expand our responsibilities with new laws including fisma, the most sweeping reform of our food safety laws in some 70 years, the family smoking prevention and tobacco control act, the landmark legislation giving fda the responsibility to regulate tobacco products, and most recently the passage of the fda safety and innovationing act which, among other things, creates two new user fees to speed the review of more affordable versions of drugs essential to holding down health care costs and new regulatory strategies to increase our efficiency and effectiveness. as we look at our fiscal year

2014 budget needs, we must respond to the demands of complex and increasing responsibility while recognizing the realities of a constrained economic environment. thus, we must focus on a set of key, mission-critical programs and activities and leverage limited resources to the greatest degree possible. the president's proposed fiscal year 2014 budget request is for over $4.6 billion which includes 2.5 billion in budget authority and 2.1 billion in user fees. this represents an 821 million increase over fiscal year 2012, 2012,52 million of which is budget authority and 769 million in user fees including two new user fee proposals for food safety and cosmetics. a central component of the budget request, as noted, supports our efforts to implement fisma and create a modern food safety system based on prevention rather than responding after a problem occurs. fda's committed to working with

industry and our partners at all levels of government to put in place the necessary risk-based, flexible system that recognizes and respects the varying needs of different components of the food enterprise. i want to thank you for the 0 million in one-time no-year money that was part of the recent cr which will help us to continue our outreach and activities. for fiscal year 2014, our budget request is 43 million and 225 million in proposed user fees for food facility registration, inspection and imports. as you know, congress has long endorsed the use of fees to help support government agency work especially work that meets specific industry needs as well as benefiting the american public. a broad coalition of industry groups supported enactment of fisma because they knew they will benefit from a food safety system that works effectively to prevent food safety problems and strengthens consumer confidence in the food supply.

we cannot build this modern food safety system including the new mandates for import oversight without the funding laid out in the president's budget. we look forward to dialogue with congress and all of our stakeholders to shape a fee proposal that is fair, workable and advances both industry and public interest. in addition, we must respond to and harness modern science to enhance the pipeline of new and better, safer medicines and advantage seens. we're asking for -- vaccines. we're asking for 18 million to continue our efforts to consolidate professionals on the white oak campus including requirements of the three bioscience labs and other facilities. without these funds, the labs cannot be used, and the 300 million cost of constructing them will be waste pped. we're -- wasted. i believe our fiscal year 2014 budget efficiently targets our needs focusing on programs that are essential to providing americans with safe food and

effective medical products that they expect and deserve. i look forward to answering you questions today -- your questions today and working with you in the coming year. thank you very much. >> thank you, dr. hamburg, for your testimony and, again, for being here this morning. let's jump right on into the budget request for fy- 14. your testimony says that you're asking for an additional ten million which is above the fy-12 for overseeing safety of products from china. and that you'll add 16 new inspectors in china. question is, is that the same $10 million that was provided in the current cr for those activities? >> yes. and i apologize for the confusion with the budget. this process has been a complex one this year with the work on developing fiscal year '14 going forward as there was uncertainty about funding levels for fiscal

year '3. but we're asking -- '13. but we're asking for a continuation of that ten million to continue our earths to oversee -- our efforts to oversee food and drug safety in china, imports from china. so we're asking for a continuation of the base that was now established with an addition of ten million in the fiscal year '13 budget. not an additional 10 million op top of that. >> there is $3.5 million in the request, again, above fy-12 for medical countermeasures. >> uh-huh. >> did the committee already provide this funding as part of fy-13? >> again, that is the continuation of the base. we do need that additional 3.5. we needed that 3.5 million in fiscal year '13 to really, um, round out the program that we need to implement this important

area to advance medical countermeasures' availability for the american public. we need to continue that money in the base in fiscal year '14. >> all right. according to your testimony, fda is seeking an additional 43 million to carry out responsibilities under the food safety mod be earnization act which you referred to if your opening comments. fy-13 cr provided fda with an additional 0 million for food -- 40 million for food safety. does this replace -- this 40 million request replace the one one-time 40 million that was provided in the current cr? >> well, i think in fiscal year '13 the addition of 40 million is vitally important. we want to continue that in the base, and if that would be to occur that there'd be 40 million and we could get an additional three million to make 43 million in fiscal year '14, that would

be terrific. i should note that the 40 million in fiscal year '13 was one-time, no-year money, and that is important in terms of our ability to use it effectively. because we do need those resources, but because they came late in the budget cycle, we would have of a hard time spending all of it within the fiscal year time frame. but we do need and are counting on those resources. >> let me -- you've mentioned the white oak facility also in your opening comments. fda is seeking 17.7 million for the white oak facility. again, this committee provided these funds as part of the fy-13 cr, continuing resolution. furthermore, fy-13 requests for these funds were described as a one-time request that would complete the $300 million

investment at white oak. again, is this the same 17.7 million that was provided in fy-13? because the reading of the budget justification looks like the money is for the same thing that was asked for and received in fy-13. >> unlike the other two issues we've just discussed, this would actually be a continuing need, an additional need in fiscal year '14. there are further requirements for fully outfitting the laboratory, training the individuals, making sure that we have certification, adding critical components to make the laboratory work such as the loading docks for, um, delivery and pickup of materials, hazardous can material handling services, etc. so those are, actually, additional needs on top of what was in the fiscal year '13 -- >> okay. yeah, let me just clarify.

looks like from the request that it's for the same thing, so if we need some additional justification -- >> we would be very pleased to work with you and your staff to clarify, and, again, i apologize for the confusions that may have arisen in the budget process. >> okay. let me recognize mr. farr. >> i want to follow up on the comment i made about the fee structure that you're collecting fees, but you're not allowed to spend them. what kind of a backlog do you have with not being able to spend those fees? >> well, you know, of course we're just beginning to implement the sequestration cuts. but with it creates a very serious -- but it creates a very serious concern for us. we carefully negotiated with industry around a set of critical program goals and priority areas for work and performance measures to track our progress towards achieving those goals, and without the full funding, um, that was

evaluated as necessary to achieve those goal cans we, obviously -- goals we, obviously, will fall behind and it will have implications for a number of important activities in terms of ped call product reviews -- medical product reviews, training and recruitment of -- >> what will that do, what will that do to the private sector who's seeking approvals? >> well, i think it is troubling to them and to us that there were agreements made including starting two critical new user fee programs in generics and biolodge you cans that will make a rell difference to the -- a real difference to the american people, and those monies are being collected from industry, but they're going into, um, a bank, the treasury department, i guess, and they can't be used to support our programs and activities. at the same time, they can't be used offset the debt as i understand it. so that i think it's a troubling situation that compromises our

ability to move forward in critical areas of mutual importance to industry and fda and, of course, to all of our stakeholders that depend on our products. >> mr. chairman, i would hope that we might be able to look at that just like we're looking at giving some flexibility to the air traffic controllers, like we gave flexibility to the department of defense plus a lot more money to the department of defense. we ought to give the flexibility in these fee structures to be used for the purposes for which their collected. let me ask you about the countermeasures that the chairman asked you about. three years old since you began the countermeasure initiative, and congress is always looking for ways to measure the success of these federal programs. has the fda approved any drugs, biologics or diagnostics to treat chemical, biological, radiological or nuclear threats since establishing the mcmi? >> yes, we actually have made enormous progress going forward

in some key areas of activity. we've had a number of important new drug approvals, antibiotic for the treatment and prophylactic plague, an antibody to treat anthrax and to prevent it under certain circumstances, botulism antitoxin which can make a real difference both in response to a potential biological threat and also naturally-occurring disease. a number of important influenza diagnostics to help us address the potential of a pandemic threat as well as seasonal flu. we've also readied a number of products for use in an emergency. they're not fully approved but can be used as part of an emergency use authorization when there is a public health crisis including a drug to treat smallpox and a smallpox vaccine. so these are very important advances. and with respect to the three new drug approvals that i

mentioned, they have actually all included a pediatric indication which has been a serious gap in some of the public health preparedness and medical countermeasure availability opportunities in the past. so it's an area of, i think, real progress that will make a difference to the american people. >> yeah. my question was going to be geared toward children, and you've answered that one. i'm pleased to see that we're moving forward with that and, hopefully, we can strongly support you in that. um, one of the questions that comes up is the backlog on sunscreen. we -- my brother-in-law was a surfer, very active guy who got melanoma and died in our house with melanoma, and we went through all of those, that suffering that families go through. and it would just shock me that we haven't done any new sunscreen approvals for a number of years, decades. and i hear there's eight pending sunscreen applications, and one

of them have net been approved -- have yet been approved. none of them. so what's taking so long? >> well, weav made some forward progress on issues of labeling and some other aspects of assessing safety and indications for an appropriate use of sunscreens. this issue that you describe is a priority for us, and, you know, we are trying to move forward with respect to both availability and safety of sunscreen products and their ingredients. ..

the highest priorities. and process is in place to try to move forward. i know with respect to the overall regulation of sunscreens and to enable us to really apply the best possible size with respect to safety and ingredients, and also issues around using data that's been collected in other settings as well, including overseas. we will follow up with you. >> mr. rodgers? >> thank you, mr. chairman. commissioner hamburg, as we discussed last week by phone, and other times, i'm thrilled by the fda's decision to keep

crushable generic oxycontin off the market. young people especially were crushing those time release pills, 12 hour pill, crushing it, injecting it and getting the immediate hide from a 12 hour dose all at once. so i salute you for that. that will keep very dangerous drugs off the street and out of our kids hands. from a legal perspective, fda determined that the reformulated oxycontin, the non-crushable one, did, in fact, possess abuse deterrent characteristics. and that the original, crushable formulation was indeed removed for reasons of safety or effectiveness, end quote.

now, that decision dealt with oxycontin, product. how many other drug manufacturers currently have applications for abuse deterrent formulations? >> you know, there is another product that is being looked at in that context, not in terms of the specific new application but, but in terms of whether or not it in fact meets the criteria for abuse deterrent. this is an important area and one of our hopes is that we can better incentivize industry to work with us to develop models of reduced deterrence to strengthen the existing approaches such as the one used by purdue in their product but also develop new approaches because we think it needs to be

dynamic as unfortunately abuses will no doubt figure out ways to overcome some of the abuse deterrent strategies. so we put out a guidance, i think you know, about how we think about the criteria for meaningful abuse deterrent, and we are continuing to really try to work with industry to encourage more innovation in this area. we would like to see more product applications before us spee-1 standards will you apply in deciding whether these drugs will be approved and labeled for abuse deterrent? >> it's outlined in the guidance, and i regret to say there are four criteria i recall but i don't think i can reproduce them for you here. but the critical issue is whether, in fact, it can be demonstrated that they do what they say they do. in fact, they behave in ways that will significantly reduce

the ability to crush and inhale are crushed, melt, or otherwise liquefy for ejection these products. and we need to sort of see it scientifically in the laboratory context and also some evidence in terms of actual clinical experience. >> we want to be sure the same standards are applied to generics and others as was applied to oxycontin. >> absolutely. >> and i'm sure you agree with that. >> i do. cacounty just underscore that, it's important just because a company claims it is abuse deterrent doesn't mean it is. so it's in everybody's interest that we try to have standards so that we can really achieve the goal. we don't want the standards to be so high that nobody can actually need them. we want to incentivize industry to work on these kind of

products. >> well, you're doing good work in this regard because the center for disease control calls it an epidemic. it's comin killing more people n car wrecks. especially young people. and so your decision so far i think will save lives. let me ask you quickly about rescheduling hydrocodone combination drugs. in late january, the fda drug safety and risk management advisory committee voted almost to the want to tighten restrictions for prescribing hydrocodone combination drugs. you don't have to follow the recommendation but uncut figure out whether not you will. i hope you do. emergency room visits involving hydrocodone rose from 38,000, in

2004, to 115,000 in 2010. these drugs are often taken in combination with other drugs and/or alcohol. one of the most popular think what's called a holy trinity, combination of hydrocodone with a sedative like valium, and a muscle relaxants. the current schedule three classifications for hydrocodone projects a false sense of -- among some patients and doctors that like it in more lortab are less potent, are less habit-forming and, therefore, less dangerous than oxycodone, painkillers, which are scheduled to. prescriptions for schedule to mack trucks can be called and.

you need is adopted get a new prescription for each refill after 90 days. no automatic refill. as a result of almost every opioid painkiller is considered a schedule ii drug, and more carefully regulated, the most abused narcotic, hydrocodone, is missing from that list. so we've, i've made, pleased by a letter to come and am wondering when you will decide this issue and where you think it's going. >> well, it's an ongoing process as you know. we did have advisory committee, and, of course, you know, important information is discussed, and they made a recommendation to us. we are looking at the information presented in that committee, and other information that has come into us from a

range of stakeholders, with frankly different perspectives on this issue and trying to address the important issue of balance of access to critical medicines for legitimate medical needs, and you're the potential, as you know, for abuse and misuse. we will be making a recommendation soon. i can't really speak to the direction that we are going or the specific timing, but i can assure you, congressman rogers, when the decision is made as i did with the other abuse deterrent issue, i will reach out to you and let you know. >> i think you and i thank you for reaching up to me when you made the finding on oxycontin. finally, mr. chairman, on the matter of the labeling of the opioid narcotics, which up until now has can be used for moderate to severe pain. i think it's misled doctors and patients that it's not as

addictive a drug as it really is. we've been playing with fda, i have, now for about 10 years to restrict the labeling on oxycontin drugs and so on, to just severe pain which it was intended for a think in the first place. it's a great drug, a 12 hour release of people out horrible pain, terminally ill patients. but it's been thrown out there for two weeks and toothaches and everything else. not misleading people but it's not as habit-forming and difficult to kick as it really is. can you tell me when we might get some sort of indication of what may happen on changing the labeling to strike a moderate? >> well again, congressman, as you know we are in a process of

consideration of these important issues and what is the appropriate management of acute and chronic pain with respect to this class of drugs. and had a public meeting to hear presentation and get expert and public comment on these issues. we are reviewing that. we take the issue very, very sagely. we believe that fda labeling and indications for use is an important component of what needs to be of course multifaceted strategy to address this really critical and important public health problem. we are actively engaged, i want to commend you for the leadership that you've taken on this issue, and others in terms of really making sure that adequate attention is paid, is paid and there's a sense of urgency. we do feel that, and are working

hard to really address it in a meaningful scientifically-based way. >> well, it's not, it shouldn't be a very difficult decision. i can't imagine why we would want to keep moderate pain labeling for such a dangerous drug. that's proven a killer. around the country. congressman frank wolf and i, 10 years ago, chain up to the fda and testified about this very issue, removing moderate on the label, which invites doctors and patients to use it for less than, less than severe pain. and nothing happened. that was 10 years ago. so we have been sort of a lone wolf out there in the forest crying for help. and now we have some help.

we are not alone anymore. citizens petitions submitted to the fda this summer, clinicians, researchers, health officials, all of them asking fda to change the way opioid narcotics may be prescribed. they argue that without proper labels on prescription painkillers physicians would be more aware of the safety concerns and effectiveness of certain opioids before unnecessary prescribing highly addictive narcotics to patients for minor pain. so there is a growing consensus i think out there to do this and do it now. >> we have, for you and your concern, we taken very seriously, and those of other stakeholders as well. as you know we have taken steps with respect to some aspects of the labeling of opioids, the rams, that's been applied to the class of the opioid drugs are

voluntary requirements. part of that on an physician education which i think is absolutely key your we are hong to be legislation that will be mandatory training as part of the dea licensing for physicians who use these products. because they are so powerful both ineffective treatment with indicator but also the potential for abuse. and we will be coming forward with specific responsibility -- response to your question pricing. >> i thank you. thank you for being here. >> thank you, mr. rogers. we've been joined by the ranking member of the full appropriations committee, and i will recognize you for any opening statement and also any questions that you may have at this time. >> thank you, mr. chairman. and welcome, commissioner hamburg. we are indeed fortunate to have a person of your caliber in this position. thank you very much. this week has been a lot of attention paid to the damaging

effects of the sequester on the faa and commercial air travel. of flight delays are an inconvenience and represent real economic losses to individuals, families and businesses in new york and across the country, we can't ignore the real and dangerous effects of the sequester in other areas of our budget, especially when they have a profound consequence of public health. some frozen tv dinners to medical countermeasures to address the nuclear threats to new drugs that treat major causes of death like cancer and heart disease or the american people rely on fda and its expertise to review and approve products they use every single day. the repercussions of congressional inaction to the sequester are clear at the fda. the agency will undertake 2100 fewer infections, which is at an 18% decline compared to last

year. the implementation of the 2011 food safety modernization act will be further delayed, meaning we can continue to expect an estimated cost of $75 billion annually in lost productivity and medical expenses, and new drugs that reduce pain and sustain life will take longer to review and approve, robbing sick americans of improve quality of life more times with a loved one. by decreasing investments critical to our economic competitiveness, these across the board budget cuts are having a severe impact across all sectors of our economy. we must replace reckless and indiscriminate cuts with a renewed focus on jobs, economic growth, and a balanced fiscal package that creates a long-term deficit reduction. and i just want to say, i look forward to a day soon when chairman rogers and i can work

together in a bipartisan way and really address the serious issu as a result of sequestration and bring about regular order and do a budget that makes sense to the american people. we know that the discretionary budget is at its lowest level in the last 45 years as a percent a gdp. that's unacceptable. so, i guess i made my message clear. let me ask you a few questions. first of all, millions of americans with gluten intolerance have been waiting for the fda to finalize the standard for gluten-free labeling. of course, it took me five years to get bipartisan support for just labels on food, which is food allergies, et cetera. in 2004, the food allergen labeling and consumer protection act that i authored became law. one of the provisions required e

the fda to create a gluten-free labeling standard by august 2008. nearly five years past the deadline, and nine years since the law was signed, i'm still waiting for the administration to finalize the rule. i know that the rulemaking process is complicated. fda must work with omb and others, but when will the rule be finalized which will give those the peace of mind that the foods they purchased are truly gluten-free? by the way, no matter what state you everyone seems be going on a gluten-free diet. so it would be really helpful if we could be assured that what is declared a gluten-free really is gluten-free. >> well, you're right. this is really important problem and does turn out as we learn more about the nature of celiac disease and also broader nutritional concerns that a gluten-free diet is benefiting more and more americans.

and it is critical that people have that information about the nature of the product and what a gluten-free. i had hoped i might have been able, a hearing at this moment in time to have been able to speak to the rule actually having been issued. it is in the final stages of administrative review, and i really do believe that you will see it soon. i promise congressman rogers on another matter, the first call i make will be to you when we finally get it through. >> i think it is really, really important. another area that event particularly concerned with as we all have is drug compounding. the safety of products sold by compound pharmacies, particularly following last year's deadly meningitis outbreak is a serious concern. and effort to crack down on unsafe facility, the fda has

recently conducted a number of inspections of these pharmacies. could you share with us your findings? >> yes. we did recently undertake a fairly aggressive effort to do about 31 surveillance inspections of facilities that we consider potentially high-risk because they were making sterile injectable products, and we knew about them either because of past problems, because the states telling us that they thought they should be on the high risk list, or in some cases what we learned, nina, from the public and the media. and we also did another set of four cause inspections in relation to reports that we're getting in of actual concerns about products. i would have to say that those inspections were very concerned because we did find real sterility concerns at many of the sites.

i would underscore that these are facilities that most ar required to register with the fda because they are compounding pharmacy, but, so they are not routinely inspected by us. but when we went in and looked at the standards for still processing, there were very real reasons for concern. we actually undertook a number of recalls of products that we thought represented a more imminent risk, and we certainly believe that it underscores the importance of a more, a stronger, clearer regulatory and legal framework for oversight of these kinds visited. i think it's also really striking that even in light of recent events, we had real trouble with a number of these inspections going in, having our authorities questioned in two cases were actually had to go to the court to get administrative warrant so we could do the full inspections and have access to

the records that we need to both assess what they were making and their business practices, and really understand the risk. so we have indicated a very serious and urgent desire to work with congress, to create new, stronger, clearer legislation, to provide the oversight of the systems that i think the american people deserve and expect. >> well, i certainly hope, mr. chairman, we can continue to work together to resolve this huge challenge. i've been told in talking with some people, since last year deadly outbreak there been recalls, reports of additional serious infections, cases of reported blindness, loss of the i associate with use of repackaged for off-label treatment, of wet age-related

macular degeneration. so as a clinician i would assume you would agree that certain areas of the body, such as the eye, the brain, the spinal column, are least able to defend against infections enough that any repackaged or compounded products which are injected into these areas, if they have compromised sterility, have a higher likelihood of resulting, causing injury or even death, so i would hope, and i will conclude, mr. chairman, that the fda would consider prioritizing its oversight while we're working on regulation, and enforcement activities to focus on those compounded or repackaged products that pose the most significant risk to patients based on such risk factors. and would all patients benefit from a single quality standard relating to sterile injectables?

>> we definitely believe that there needs to be clear, explicit standards for still practices that apply in a uniform way. in terms of fda regulatory oversight, we think we can provide the greatest benefit in terms of what the risks are by addressing, as you know, sterile injectable products, those facilities that are making sterile injectables in advance of our without a prescription and selling across state lines. we think represent the category that really presents the highest risk to the american public, though we think that, you know, clearly any steel product should be made in accordance with sterile procedures. >> well, thank you mr. toomey. it seems obvious. it's shocking to me that this is such a huge issue out there. it's costing people their eyes.

in some cases their life. and enormous expenses and trying to treat. thank you very much, and thank you. >> commissioner, thanks for being here today. as we have this discussion about how to properly handle the sequester and how to resolve budget reductions that you are facing, you know, it's interesting to note the federal government continues to grow and at significant rates this year, the federal government will have more tax dollars from the american people than any other time in history, yet we're still running record deficits. and so i think we all know that, as you endeavor to try to figure out how to do more with less, and you're getting greater and greater requirements put upon you, based on implementation of the obama health care bill, the new laws passed by congress, those are additional requirements that your agency did have some time ago. that's what the private sector has had to do with so i know you get there. but just in context why we have this debate and think about how

to handle these reductions, for most of the american people they've had to deal with much more than is them lost their jobs, had hours cut, salaries cut. i talked to a constituent yesterday who is having her hours cut because her employer doesn't want to have or have over 30 hours to pull that under the health care bill. to huge problems in the economy. some of which have been creative i policies that have been pursued by congress over the past few years that increase mandates on businesses, increase the cost of doing business and want to talk about a couple of those and have a few questions for you. one of the index on the economy have been billions of dollars in unfunded mandates, a trillion in taxes on the health care law. we just raised taxes and genuine but if those weren't enough, we now have federal foo food labelg mandates would you know your agency is engaging on the local grocers and convenience store owners. all this is of course bad for the economy, job creation, drives up the cost of doing business. one of the mandates on the idea was to try to help those

requirements coming from health care law, the affordable way to be unlimited. so i guess i would ask him where are the we on the food labeling requirements what are we working hand-in-hhand-in-h and with their grocers convenience store owners to ensure that these health care mandates that are required by law to come down the pike, that you had to create rules for can be done in the most cost-efficient manner as possible? and do we know what the impact is in terms of the outputs that these convenience store and grocery store owners will have to pay? >> the health reform act did include labeling as you know for change in 20 oh more and also sort of vending machines when there are 20 or more, by the same owner. and we have been doing rule-making on that, and it has been extended process with propose rules, notice and comment, and we are now working through all of the comments that

we've gotten in that process to put forward the final rule. one of the challenges of this, to be frank, has been really define what is a restaurant like establishment. a restaurant seems very straightforward, and i initially thought that implementing this was going to be, one of the easy test before the fda but it's been enormously complicated. some of the issues about convenience stores, box stores, movie theaters, different kinds of facilities that so prepared food have all been part of the discussion and consideration and we attempted to look at both the public health impact and, of course, the economic analyses required to look at the requirements for implementation, trying not to make an excessively burdensome rule but one that will have meaning and reflect the spirit of the legislation. so we will be, by the end of the

calendar year, i think putting out the final rule on manual labeling. >> do we know what the cost to comply is? i've seen some reports saying up towards a billion dollars on groceries and convenience stores. does your agency have an idea of what this will cost at how can the fda help reduce those costs because there have been there is estimates out there as people have sort of thought about different models for how the contours might be defined in terms of the broad array of restaurant like establishment's. you know, the final determinations have not been made in terms of which kinds of facilities will be in and which won't be -- >> we will break away momentarily from our live coverage of this hearing to take you to the floor of the senate. a short pro forma session is scheduled to the senate wrapped up legislative work last night

and return for an online sales tax do. live now to the senate floor the presiding officer: the senate will come to order. the clerk will read a communication to the senate. the clerk: washington, d.c., april 26, 2013. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable tim kaine , a senator from the commonwealth of virginia, to perform the duties of the chair. signed: patrick j. leahy, president pro tempore.

the presiding officer: under the previous order, the senate stands adjourned until 10:00 a.m. on tuesday, april 30, 2013. adjourn: