towards the ones that are still open. good afternoon. i'm at a howard with the lis health reform and i want to welcome you on behalf of senator bond, senator rockefeller, the board of directors to this program on health insurance rates including the market forces and the regulatory structures that affect them. every few days it seems we read about insurance rates for 2015

being proposed in one state or another so even though it seems we just got through a few weeks ago, insurers are already proposing their rates for the department of insurance for the coming year. what we are going to try to do today with the help of a group of panelists with analytical firepower is to help explain what those numbers mean and what importance we should place on them. one fact i would like you to keep in mind is most of the members you will be hearing referred to policies in what's called the individual market and in the year 2012 about 19 million people were covered in that market out of the 267 on

the elderly americans who have coverage from all sources. as interesting as this discussion will be remembered that it applies to about 7% of americans with coverage. we are pleased to have the commonwealth fund a century old philanthropy to establish a commonwealth and we are pleased to have as the moderator the vice president for federal and state health policy somebody with a lot of policy experience herself including on the staff of a couple of u.s. senators. rachel is going to start us off with a bit of complex topics of health insurance rates for 2015 and how they are shaped.

welcome to everyone. this is how you are choosing to spend your afternoon. thank you for joining us. this topic is a really critical topic of the moment. the briefing today represents an important part of the work to track and measure how the affordable care act is being implemented. we know the vast majority about 85% of the folks who are enrolling in the health plan for the marketplaces will be eligible for the premium subsi subsidy. it will be important to the consumers and the federal government. we want to help everyone understand what are the factors that are going into the numbers that you will see through the summer and the fall and i think it's important to keep in mind

that there's never been a systematic effort to analyze the data on the premiums nationwide looking at the individual insurance market and we will look at why some of the policies that are new and that are enabling us to do that. to understand the impact that they have made to the private insurance landscape we have to start by orienting ourselves to the baseline what we are measuring our progress against and so part of what you will hear today is the work supported by the fund got the doctor will discuss to provide a benchmark to compare the future trends and help determine if it is achieving one of its major goals providing health insurance to nearly all americans buying coverage at an affordable price. to recap i think most of us understand what some of the thae shortcomings were in the individual market prior to the aca. the rates of the market were

unstable and variable. there was an immense amount of variation across the country in terms of how the states regulated plans on the individual market which you can see on the slide. not every state conducted the review. some conduct that in the states with prior approval processes many of them had a period that meant the rate of the insurers were proposing went into effect unless they took action at any given time. public access to the review of the data was limited. only 13 states have access to their rates filings or the statistics and there is much variation in how the states made the review information public at all. so what that means is that prior we were limited in our ability to look across the plans to look across the state didn't look across the country to make conclusions about both of the adequacy of coverage as well as the affordability of coverage in the individual market.

so i think as we also know the regulation of health insurance in the health insurance market has stoically fallen. the affordable care act did provide rules for the federal government to contribute to this process. a major way that the affordable care inserted in the federal government regulation was providing grant funds to assist them in this new authority and responsibility to review and they justify certain rates. for example you see some of the highlights here and the kind of milestones that plans had to meet in the form of care act. about $250 million was made available to the states to use over five years to assist them in their rates review process. 43 of the 45 decided that if a part of those new resources that focus on making that information publicly available in a consumer friendly format. also in 2010.

they needed 85% and on the premiums of medical claims and quality improvement so that resulted in a billion dollars of rebates paid out in 2011 so we are starting to see some actual outcomes in these early provisions in the affordable care act. what this comes down to is the affordable care act aims to bring down premiums by transparency regarding premium increases and the minimum medical loss ratios. it's to keep in mind not a formal process for the proposed rate increases. instead, that health and human services is working with states to develop a process for the annual review of rates. they do not have the authority to deny the proposed rate increases. the theory behind this is that by opening the process up to the transparency will help enable consumer choice and competition

in the market. so, due to the change is made of the consumers now do have more complete access to systematic information about the benefits covered by their plans and the price of the players regardless of the state they lived in and importantly especially for this group, researchers and policymakers have the ability to make informed decisions based on standardized data to be able to look across the type and talk about it and think about what's been happening in that space. so why are we focusing on this now? what does this mean? as you know, as you may have noticed every week it feels like a few more states are coming out with proposed rates for 2015. they range from one insurance proposed decrease of 6.8% in washington to basically flat premiums in may. large double-digit increases in states like indiana and maryland. it is important to keep in mind

that states typically report the average premium rate and insurers requesting across all of the plans and we will talk more about this. it's a keekeep in mind these are proposed rates that the final premium rate could increase or decrease before they are final. and the main reason that we really want to focus on this today is that the majority of the releasing the rates in the summer leading up to the fall and the federally facilitated market spaces will also be releasing their 2015 rates in the fall as well and we will talk more about the regulation process as well. so we have an esteemed panel of experts to help us get under the hood of how the rates are set and what it means for 2015. the first panelist john gruber will discuss the latest report that such an important context for the premium rate it will continue to be released this summer into the fold. the american academy of

actuaries will describe the factors that go into the rate setting process with the major drivers of cost increases. david cusano on my right from health-insurance reform will provide more details about the regulatory process as well as the variation across the country and finally the vice president of federal shares and no stranger to capitol hill will provide an on the ground perspective of the nationwide insurer and insight into how 2014 have gone so far and what they expect for 2015. you can find full biographies in your packet along with contact information for these and other experts. with that i will turn over to doctor gruber. if i may cannot do a little housekeeping? i want to make sure that people know for example that if you want to engage in the twitter you can do that.

the half tag is -- hashtag is #2015. we have a new feature if you want to use the device which you need wifi access we have arranged for access for you there are instructions on each of your tables the username and password is on those instructions or i will get them to you. they are on there. there you go. okay. there will be a video recording of the briefing in a few days on our website al -- all health.or. the green one is a question card

that you can use to ask a question when we get to that part of the program. the blue one is important, and evaluation that we would like you to fill out so we can improve the programs as we go along. and if you are watching on c-span you can find all of these materials that we have distributive to the people in the room online on the same website, allhealth.org. >> thanks to the alliance for having me and i want to thank the commonwealth fund for sponsoring the work i will talk about today. i think the title of the sessions is at all. this is context. when we think about things in life we think of them in context so if it's 85 degrees today is that hot or not? that depends on the pattern of the weather in dc. if the redskins win that's pretty good given that last

cheer what you would expect. everything is about context and we are used to that yet somehow when we come to the policy we forget our basic human instincts. we don't mention it is historically okay and it's about where we've been for many years etc.. and i think of insurance rates are no exception. when people hear health-insurance rate they want to evaluate them in an abstract fashion relative to zero. zero isn't relevant. when we talk about health insurance rates and what we are going to see we should compare them to what scientists would call the counterfactual, what would have happened otherwise. that is the goal of mine report is to talk about with the counterfactual should look like. and to do so i'm going to rely on the data collected by someone else. i'm going to rely on the data that was collected by john and his colleagues at the national research center under the contract with hhs from 2010 to 2013.

this is important data because it is the first systematic data ever collected on the rates in the individual market. with the filed rate increases requests have been across the state into overtime and this is the first effort to do that. what they did is they had a sample. it was only reported for the states where they have at least 50% in the individual market. all of the states were not. they then took a sample of the remaining smaller insurers. and then they developed a set of weights based on the market share to get the weighted

representation of what the rates were in that state so the universities are the five largest insurers and a symbol of the small insurers and then they give you a weighted average. now, this is not perfect data. this is for an incomplete sample of states and incomplete sample of insurers. but it's the best data out there anand do most companies have collected to date. and it is the data that is best available for the period that we care about which is before 2011. so that should say the collective starting in 2008 coming off 2010. and the reason that matters is because the aca although it kicked him in january, they were very important aspects which started in 2011, and in particular in 2011 there was federal rate review of all insurance rates that were more proposed insurance rate increases of more than 10%. and as well as minimum loss ratio regulations, which really

shook up the individual markets. so if you want to think about what is pre- obamacare, we have to focus on before 2011. because really the individual market of 2011 and on reflects the effect of obamacare itself so i will focus on the 2008 to 2010 perco. just a summary of what we find from 20 of eight to 2010 there were high premium growth in the individual insurance market. overall indian growth averaged more than 10% a year in the period and growth rates were highly variable. with some states premiums rose as little as 3% and others as much as 21%. within the states there was even more variability in the insurers there was huge variability in the rates. and so the bottom line is that the premium rates for both rapidly rising and very variable and i will come to what that means at the end that way dot we

start by looking at the data. exhibit number three shows the average rate of premium increase in the individual market across the time and what you see is in these years rate increases very between 9.9 to 11.7%. basically they were increasing ten plus% a year. this was the sort of state of the world before the aca with consistent double-digit premium increases to let me be clear about what that means. this is for the same product over time. if you look at what people paid for their individual insurance that didn't quite go up as much because people were buying less and less generous policies to compensate for the increases. so if you look at what people paid it might have went up less when the doctor went up but if you look at the same policy and what was charged that is the first consistent finding here.

now, as i mentioned, they are not perfect. they have limitations and the coverage is not complete. so they say let's play with the data a little bit and see how robust the conclusion is. the first column is what we showed you and the second column is what if i only consider states where the data included more than 60% of the individual insurance market. the thir third column says whati only included the states that includes more than 80% of the individual insurance market and the final says what if i only included the states which have more than 60% of the market in every single year? this is to restrict the data to the results suffer from the coverage and the answer is no. you get the same bottom line. the same bottom-line results no matter how you cut the data which is low double-digit rate increases in the period. that is our baseline. that's the number of the winds. that is what we should be

thinking about when we see this coming out. basically single-digit increases means they've gone up less than before. the low double digit is comparable and it will be more than they were before. and that is the context in which we want to put these rate increases. that is the first point i want to make. the second point i want to make about variability and this is going to be hard for you to see so you might have to look at the packet. this shows the state rate of increase that had a large enough sample where they collected at least 50% of the market. this shows the state rate of increase. i don't expect you to memorize this, there will not be a quiz afterwards. the take away of the numbers are all over the map if you look at 2008 iowa had a 2.8% increase in illinois at 14.4%. you had a 5% increase and nebraska with 28% increase. the point is these numbers are

all highly variable. and what that means is that we cannot draw conclusions about the overall impact of a wound care on the market for the one state numbers. the states are going to be very variable. even further if you go to the next table where i show the grasp of the percentile of the change in the companies by state what i do as i take all of the observations for the one insurance company in one state and i grasp the distribution so for example if you look at 50%, and focus for a minute on the blue line, the 50th percentile of the premium increase was 10.8%. that is a typical firm increasing by 10.8% which is on the earlier table. but actually, for the 1% or more, the premiums actually fell by 9.5%. and for 1% of the firms at the upper end of a rose by more than 28%.

so there is a lot showing you how variable the premium changes were across the firms. that is the blue line. now the blue line is weighted and what the newspapers are reporting today. the redline says let's look at the data and ignore and ask what has happened to the premium increases. there you see even more variables. you have some reporting 50% or more premium increases. it turned out to the small fir firms. there is a lot of variability over time that says you couldn't learn anything from anyone that was released. certainly not if you don't wait. even if you do you can't learn a whole lot. it really takes a large sample of states to get a picture of what's happening overall nationally. okay. so really what i want to do with my zero seconds left is just

what i want you to take away from this is to conclusions. the first conclusion is in some sense what we start with the second point that i made we cannot draw the conclusion of what has happened in any one newspaper story or state. we have to wait to see. until we get the federal rates given how many of the federal exchange. even with all of the exchange is out. it's going to be hard to know what happened until we get the final set of rates for the exchanges. when we do get the rates on the right context to come back to the title of the session, the right context to interpret them as the double-digit increase before obamacare was passed. thank you. >> i will be providing some context. my role this afternoon will be to provide a very brief overview of some of the premium components and then talk about

some of the major drivers of changes 2015 premiums. in terms of premium components, the major factors are who is injured and what are their health costs. is it, in terms of who is covered in terms of their demographics and their health status. and then from that what is their health spending tax others include administrative costs, taxes and profits and laws and regulations can affect any or all of these different components. so i will be talking about three major drivers in the 2015 premiums changes and at the first of these is changes in expectations regarding the risk pool profile. when the insurers were developing the 2014 rates, they had to make a lot of assumptions regarding who was going to purchase coverage and with their health spending would be. there was a lot of uncertainty about those assumptions and now

we are moving into 2015 and there are still a lot of -- there is still a lot of uncertainty regarding that. in terms of what we know about the 2014 population, we do have some information regarding demographics but the information on health spending and status is still fairly limited so there is still uncertainty especially for the people who are newly insured so there is uncertainty moving forward, but the insurers and changes in those assumptions from the 2014 to 2015 could be affecting premiums. and we also have to keep in mind that insurers also need to make assumptions not only well is there an emerald the population that is healthier than we expected in terms of kind of crutch respect of what is happening in 2014 but also, looking forward to 2015 are we

going to get an increase in enrollment because of the increase in the individual mandate penalty. another couple of things that we need to think about when we are looking at the risk pool profile is the single risk pool requirements come into that means when developing premiums, the insurers have to incorporate the enrollment and claims only in spite of the exchange but also outside the exchange. a lot of the data that we are seeing coming out regarding the enrollment and the characteristics of the enrollees focuses on the enrollment and so we need to really kind of just think about that's not the whole story. another issue is the transitional policy for the compliance plans. recall that policy that was implemented late last year and allows the states to allow insurers to renew the compliance

plans. a insurers hain insurers had aly finalized their premiums when the policy was implanted so they couldn't incorporate the changes in the risk profile that would result from that policy. what could happen here is under the transition policy, people who were lower-cost might end up staying with and keeping their noncompliant coverage or people could move to coverage making the risk pool a little less healthy or high-cost van the insurers expected. in insurers like i said couldn't incorporate that into their premiums, but for the most part they are going to know ahead of time what if th is the policy oe states chose to continue the policy in 2015 and beyond so they would be able to incorporate that into the 2015 great. so you may see higher premium increases in the states that allow the transition role as opposed to the states that did not. and that is just one reason why

you may see th the state-by-stae variation in premium changes. other reasons could be reflecting different successive efforts into that kind of thing. the second major driver is the reduction in the reinsurance program funds. as over 2014 there's $10 billion that would be used to reimburse high-cost claims in the individual market. that amount will decline to 6 billion in 2015. and what happens here is the reinsurance programs offset the claims. and by doing that, that can lower premiums. so, the reduction in the insurance payment would result in a lover offsets to claims which will then in turn put upward pressure on 2015 premiums. i have an example here i'm not going to go into detail about it now, but i'm happy to drink the q-and-a if anyone has any questions. and the final driver is a

medical trend. as john talked about premiums, medical spending goes up every year reflecting an increase in medical inflation increases in utilization, so that is something that happens every year and the question for 2015 is well the recent slowdown in the trend continues of the insurers have to make assumptions about that when they are developing their premiums. so those are the major drivers. there were several other more minor drivers of changes including changes in provider networks, broad networks versus narrow networks can have an impact on changes in provider payments into those kind of things. i won't list all of these off but i would be happy to talk about them in more detail during the q-and-a. i passed the baton to david.

i want to thank the alliance for health reform and a wealth for the opportunity to be here. today i will wait for my slides to come up. a little difficulty. today i will be discussing the following topic. the review landscape prior to the affordable care act, the new requirements under the aca and the landscape in the interplay between the department of insurance and the state and federal marketplaces. so both state filing requirements generally fall into one of two categories. filing the views of the prior

approval. in the prior approval states they must submit rate filings in the department of insurance for the prior approval before they can charge those rates in the market. .. which in some cases actually

resulted in reductions in the filed rates. even having prior approval authority they were still able to engage carriers and put downward pressure on rates offered in the market. also important to point out that the rate review process prior to the aca included minimal transparency and consumer input. for example, rates generally were not published. the information included in rate filings is often considered to be trade secret and competitive information from the carriers perspective. there was also no mechanism for consumers to review rate sun missions and provide input. so the affordable care act sets forth national rate review standards in an effort to create consistency and transparency in the rate review process. so under the federal program hhs will review all rate increase unless it has determined that a state has an effective rate review program, in which case the state is responsible for reviewing the rates. as of april 16th, 201445

states and the district of columbia have effective rate review programs. it is important to note that the federal law does not authorize hhs to approve or disapprove rates. so to insure consistency with this federal limitation, hhs considers file and use states to be effective even though they do not have prior approval authority. but, with that said, based on research conducted by the kaiser family foundation in 2012, in the individual market four of the 17 file and use states and one state with no filing requirement still passed legislation to obtain prior approval authority. also important to point out that under the federal rate review program hhs provides a pool of $250 million in grant funding to states to improve their rate review programs. so what is an effective rate review program? to be an effective review state the state must receive sufficient information to review the rate increase and must interest at least 15 rating

factors identified by regulation when reviewing the increase. it must make a determination of the reasonableness of the rate increase. it must make the rate filing information available to the public which creates transparency. and it must provide a mechanism for receiving public comments on proposed rate increases which allows the public to have input. and it also must report the results of its rate reviews to hhs. so what has the impact of the federal rate review program been on the rate review process? well 43 states and the district of columbia received federal against to improve their rate review programs and new mexico provides a nice snapshot of how the rate review process is continuing to improve as new mexico's initiatives are similar to those in other states that have received grant funding. so new mexico has received approximately $7.2 million in total grant funding from hhs. that allowed them to pass legislation to allow improved

transparency. so new mexico posts their rate filings on line and the state conducts public hearings on rate submissions. the state plans to use cycle three grant funding to pursue more in depth analysis of coinsurance, co-pays and deductibles and analyze and publish pricing data in coordination with premium and rate filing information. >> david, can i ask you to clarify the difference between the rate information and the pricing information? >> right. so that's a great question. so the rate information is the information that the carrier files to justify the underlying, to justify the ultimate premium that is charged in the market. so if you pay, just, making up numbers, if you pay $500 a month in premium, that is what the issuer charges you the rate file something all of the data that supports how they get to that price. so in terms of the interplay between the departments of insurance and the state and federal marketplaces, the

departments of insurance are solely responsible for viewing and improving rates except for those five states that hhs determined do not have an effective rate review program. in which case hhs is reviewing rates in that state. so when you go on line to the federal and state marketplaces the premiums you see for qualified health plans offered reflect underlying rates approved by the department of insurance. while the exchanges or marketplaces do not have direct input and do not review or approval authority over the marketplace rates, the marketplace do create premium transparency across insurers which drives pricing competition among them and hopefully puts downward pressure on premiums for consumers. thank you. >> turn to liz. >> am i on? >> you are on. >> just want to thank everyone for letting me be here to join you as part of the panel and discussion to have some insurer perspective on what is going on, how we set our rates, how the

market has been working over the transition. and let me start by really talking about who wellpoint is. we are a large national insurer. we serve customers in every single state. we do business in many of our states, particularly in individual and small group markets. you see we're known as anthem blue cross or anthem blue cross and blue shield. we do business in new york as empire blue cross and blue cross and shield in georgia. we are the state's large post managinged care company through subsidiaries and map shows those folks. we are a third party administrator for large self-insured employers. we offer medicare advantage,

medicare part-d. we have a lot of experience across other markets but re are the largest individual and small group market insurer. we have a lot experience in this space. when you think about the aca, this is just simply an overlay of the states in which we're doing business in the medicaid market as well as in the individual and small group markets and an overlay with the aca impacts. so states doing medicaid expansion, states that are doing dual demonstrations. so where we are participating right now we are actually actively participating in two of the dual demonstrations in virginia and california. we're also working with states of texas and new york who are putting together their dual demos. we're also in six states that are expanded medicaid and we're participating in 14 exchanges. those 14 exchanges line up with our 14 blue cross-blue shield plans. it's a little bit messy of a slide but if you spend time studying it is pretty straight forward. we're in six state-based exchanges. we're in california, colorado,

new york, kentucky, connecticut, and nevada. those representative sent very varied and different experiences. we're also in nine federally facilitated marketplaces or partnerships arrangements with the federally facilitated marketplace. that is maine, new hampshire, georgia, missouri, ohio, wisconsin, indiana, and virginia. that's a long way of saying that we've got a lot of experience with a lot of different regulatory schemes. we have a lot of experience with a lot of different rules in terms of what is required under the essential health benefits. varied and different demographics of the population. so i think i was asked to participate because we've got a great breadth of experience. and one of the things that i think is very clear from the other presenters is that context is very, very important and so one point i'd like to make as we look at 2015 rates we can not forget where we were in 2014 and

going into the 2014 market we were looking at the for the most part a very different regulatory structure than most individual market insurers had experience previously. in most of our states we were allowed to rate based on health status, based on age, based on gender. we used those mechanisms and those tools to try to price our products to encourage people to come into our plans. there are, we were also looking at our risk profile and looking at how we maintain affordability and balance affordability with risk. coming into 2014 that had changed very significantly. the market rules had changed. we could not rate or price our products based on health status, gender. there is a limit of 3 to 1 in the age band. so it is a very, very different environment in which you're pricing your products. that was just one major factor. second major factor is new requirements in what you had to cover, essential health benefits

and some other requirements. a third factor, a third factor that i will mention is that, we did not know who the uninsured were and how the uninsured act. we had a good sense but we did not know that. so in wellpoint or our anthem company, anthem and blue cross companies started pricing our products we started with doing our research and so we looked at one, our broad individual market experience. who was already in the insurance market? and we drilled downtick larly in the three states in which we did business that had experience in guaranty issue community rated setting. so we are in new york. we are in maine. both of those were guaranty issue community rated. we're also in kentucky which had had that in place, repealed it and obviously under the aca has it back in place. so we looked at all of that experience. the third thing that we did, i believe is the biggest project although, our competitors have

not really talked about what they have done, we went out and did a simulated experience with about 60,000 uninsured americans. and it was a web-based experience. we walked them through a number of questions, asking them, what would motivate them to purchase insurance. what was important to them? looking at network, looking at formulary and tried to better understand how they were going to purchase and how they were going to behave in an insured marketplace particularly one where they have a subsidy and that is another factor we did not have with the exception of massachusetts which we did not do business in, we did not have subsidies in the marketplace either. try to understand how they make decisions particularly when they have subsidies to purchase coverage. we took all of that and factored it into our 2014 rates and one of the thick we said, we found as we did our research we thought that the individual market under these market rules with subsidies was going to be behave much more like a traditional small group market would look. so we actually started our rate

process, based on our small group rates in the past and tried to look at those and modify from there. really what you end up with in 2014 is guess. it is an educated guess. we tried to make it as well-educated as we could but but it's a guess. then you fast forward today and as we look at and file our 2015 rates, you have to ask yourself what additional information do you have? cori did a great job, you have a great information on medical trend. you have demographic data. we know who is in our plans. who selected our plans. what their ages are. their defender are. what their geography is, where they live in each individual states. those are the most concrete information we have. as she also mentioned we've got some medical claims data and some pharmacy data. i want to caution everybody it is difficult to draw broad conclusions based on that data

and i want to tell you why. medical claims data generally has up to a three-month run out period. that means that it can actually take up to three months from the date that you are provided a service by a provider before your insurer gets the claim. often doesn't take that long but it can take up to that long. so if you think about the open enrollment period and how far we are after the end of the open enrollment period, many people did not start having effective coverage if they applied up through the april 15th deadline through may 1st. so we don't have a lot of medical claims data. the medical claims data we have today, is going to be tend to be heavy on those who utilize services right away. those who had a pent-up demand. those who needed services or those who worked hard to get enrolled as of january 1st. we do have more, more up-to-date pharmacy data. pharmacy data is little more real time. again it is hard to draw broad conclusions how the entire, our

entire enrollment population is going to behave through the end of the year because it is early data. so we're, we're analyzing that. we use it a little bit but we won't really fully use that claims experience, data, until we price for 2016. another point i would like to make, this really is a transition. and so to one of jonathan's points, looking at context, think of not as one year or even a two-year process. you have to potentially think of this as three or four-year process until we get full claims data, full experience we can factor into our pricing. so long story short it is very difficult to draw broad conclusions about pricing for 2015 based on 2014 pricing. every company had different information. every company was making their best educated guess. similarly for 2015 they tried to enhance that but still is, still is very much an estimate. you also can't generalize as we said the averages over, over

what an individual's experience will be. so a at risk of now contradicting myself, one resource that i want to point you all to awe look at materials coming out about rates is some work mckinsey is doing. it is on their website which is on this slide. it is available to anyone in the public. i just went on today. this is a summary from a couple of days ago but they added two additional states. as states make information available they are putting you it up on their website. what i think you can see from this slide there is a great deal of variety in the experience across the board. so again don't draw individual conclusions about a individual person or individual state from this slide but i think it does point out a few interesting things. one, you have additional players coming into the marketplace. up here in the top corner they talk about carrier participation. they were 55, there are 55 carriers coming back into the market from a total of 56 across

a total of 10 states and additional 18 coming into the market. so again while we starting out from the beginning, because we wanted to go where our customers were, make sure we were serving our customers and try to limit disruption as largest individual market insurer there are additional folks who didn't get into the market right away who will come into the market and that will impact competition and impact pricing and rates. similarly there are additional products. we all learned who bought our products. did they like our products? are we introducing new ones, difficult ones? there is a change in number of products that are going to be available, when you look at premiums across all 10 states, don't draw broad conclusions based on data, it is upside and downside. when you look at individual bronze plans, silver plans, both lowest and second lowest, there are both changes downward in rates and changes upward in rates. people made educated guesses. they're now adjusting based on additional information and they

will have to do it again next year. then most interesting aspect of this slide that i will point out to you all before i pass it back for questions is really, that the premium alone in a market that is 80 to 85% subsidized, is not enough to look at. you also have to, if you are trying to understand the impact on individual consumers. you also have to look at how that pricing impacts the subsidy which is totally different element to this entire marketplace that didn't exist before. and so it is very, very interesting on this slide, it shows that about 78% of consumers, this is 175% of the federal poverty level, male, 40 years old, non-smoker. so again, depends on your background and your age, and your income, whether or not you will see upward or downward trend. but for this population, they're saying 78% of the people will see their subsidized rate go up and 22% will see it go down. interestingly enough, when you look at individual states, you

can see states that look like they have a big decrease in rates that still have an increase in subsidized, in amount, in the premium that the subsidized individual will pay. similarly, you've got states where you actually see increases in premiums overall but you see a reduction in the premium that is subsidized individual may pay. don't draw broad conclusions. we're still learning about this population. we're still growing, still change, still evolving. but it has been interesting and fun and we're really glad and proud to be supporting our individual market customers. >> great, thank you, liz. could i just ask, to the extent that you have a sense of this, when typically in the various states that wellpoint operates in did you have to file or are you going to have to file the 2015 rates? >> so thus far in all of our 14 states we have had to file. in one case we filed first with

the exchange before we filed with the insurance regulator. so in that case we have filed with the exchange but not yet with the insurance regulator. that is the state of california where there is active negotiation that takes place with the exchange before the rates go to the regulator. but in all of our states thus far we have filed. not all of them made them public yet. the other thing i would point out is, the other piece for folks to keep in mind when it comes to rates is that we often have to provide a certain amount of notice to our existing customers about the impact on their individual rate and that varies state by state based on state requirements. in the state of new york we actually have to send a letter when we file our rates as to what that filed rate request is. but in most states, once they are approved, we have to provide somewhere between 60 and 90 days notice on the individual rates. >> hence very few data on which to base those filings. >> thank you.

i've gotten us going. i didn't mean to usurp your prerogatives but we're now at a point where able to join this conversation. excuse me, we have microphones that you can use to ask your question orally in which case i would ask that you keep it brief, identify yourself and your institutional affiliation if you have one. and as i mentioned, there is a green card at each of your packages you can write a question, hold it up and it will be brought forward. rachel do you have any questions you want to get to before we go to the audience? >> sure. i've got one, to get us started. thanks to the panelists for laying the foundation for a really great discussion. several of you talked about variation among states both in the rates that are being released pre-aca as well as in 2014 and as well as how states regulate and how they operate their private insurance market but there is also quite a bit of variation within states.

in fact there has been some reports out this summer that suggest that maybe variation within states may even be increasing. so i was just wondering if you could each take a few minutes to explain what you think is going on there, what contributes to that, to the variation within states and what questions should folks such as staffers or other folks in the press be asking themselves when they see one published rate for a state to have really sense what that represents? >> go ahead, cori. >> i will start things off. i think one thing to kind of keep in mind when we're looking how rates may change for a particular insurer, or in a state, and how things vary within the state, well where were they in 2014 and then where are they in 2015 because you might see some convergence in rates. i know i have seen somewhere there is actually divergence in

some states with some new players coming in. that can affect some of the comparisons of rates but maybe if some insurers were really expecting a very unhealthy population in 2014 and now they're seeing some things like, well, maybe we overstated that and we're going to come down a little and vice versa. every insurer started off at a different place and it shouldn't be surprising then that their rate changes are different because they were starting off at different places. >> anyone else? liz? >> i will also add a lot of health care is still very local. as a blue cross-blue shield plan we serve everyone within the entirety of our service area. so most of the states which we do business we're actually in the exchange in every single geographic rating area. i think amongst all the insurers, many are in the same number of states but not in the same number of geographic rating

areas and what that brings is different behavior and different dynamics. so in an urban area, i know georgia is a state of ours that has gotten some attention, in urban area like atlanta metro area you have a lot of different providers, a lot of different providers competing, you have a lot of different choice and variation and very competitive marketplace for providers as well as for plans. in other parts of the state we may be only insurer or only one hospital, one hospital networks, one provider network. so a lot of the variation of us at least within the states has to do with the provider networks, has to do with the formularies, has to do with the underlying cost of care which automatically gets reflected in the rates. we can not lose sight of that, ultimately the rates are based on cost of care and the care utilized within the pool. that is one place where we see a lot of vary ages. >> david? >> i would add to that, liz's

point, from a rating perspective carriers have flexibility to include a geographic rating factor. liz said, may be across the entire state but will have different rating factor in that particular area so you end up with variability across the state because carriers can price based on geography. >> if i could add three quick things. the first point important to emphasize, we have to look at aggregates instead of anecdotes here. this will point up, so folks are going up a lot, some folks are going down a lot. we can't draw conclusions from any one filing. second point to emphasize, so important what liz said, this is three-year process really. that is how long it took to the got program fully up and running in massachusetts. that is what cbo reflects phase-in period of law. don't make much of one year results. we're halfway through a three-year process. the final point, rates are not

finalized yet. different companies may have different views to what extent this separating bid and to two extent this is where they want to end up and that could drive some variation as well. >> a non-expert can jump into this. i want to call attention to something rachel mentioned in her opening remarks which is this is the first time we've had the kind of transparency, therefore the availability of the data and that may in fact have an impact on the ultimate rates as jonathan alluded to just now. so, let's go to the microphones as they say on tv. >> i'm dr. caroline pollin i'm a primary care physician. my question is for jonathan, before 2014 and for the lady from wellpoint after 2015. it has to do with benefits. so for john, what did you do about the fact that the benefit packages were totally different? you could have a very thin plan

that had low premium and you could have the, you know, the whole nine yards executive program that would have a higher premium. and how much, the aca mandates, the 10 required benefits or whatever. how much variation is there in benefits going forward? i mean we know about the bronze and silver and that has to do with the degree of coverage, the premium but in terms of actual benefits how much variety is there still? >> let me see, for the before period that's a great point, there is huge amount of variation. that is why rates i'm giving rates of inincrease for a given product. this is average across all products for a given product. a mix of all of them. it is representation across all the different products offered in the market beforehand, what was the average rate of increase holding the product

characteristics constant. that's what we're trying to get at. >> to your question about after 2014, the variability in benefits i think you're correct, there is a much lower availability in benefits where you see more variability in coinsurance and deductibles as well as in provider networks and in the formularies and what i think you're going to see i think from insurers that we are competing more on customer service. we are competing more on value added things that we can do. our ability to help keep you healthy. help try to get you engaged in your health care in a more active manner but variability based on benefits is greatly, greatly reduced. >> you still offer gym memberships? is that an added value? >> i have to go look at what we offer in our individual market plans. i know that we continue to offer gym memberships in some of our

medicare advantage plans. again, sort of looking at those value add. how we keep people engaged and try to keep people healthy. >> thank you. >> yes, go ahead. >> bernadette fernandez with congressional reserve service. my question is about provider networks. so it's, from where we sit at crs we see a lot of reports and it may be more anecdotal, that some of the premiums that we saw for 2014 were artificially low and that is not my phrase, so please don't not attribute that to crs, but artificially low because of narrower networks. we're a little puzzled because we're not truer if this is truly what is going on in the marketplace or just a bunch of health reporters found people who are new to insurance so they had no concept of what a network was. so if anybody could provide some insight as to this issue, whether or not it is, for lack

of a better word, real. that would be helpful. and then specific question to elizabeth, also related to provider networks, in the march letter to issuers, that cms sent out, they mentioned that they were going to scrutinize network adequacy to a greater extent for 2015 than 2014 and i don't believe any additional information has come out from cms unless there is somebody here. who would like to speak on that? anybody? no? okay. no takers. >> before you go, i would want to put in a commercial. we are actually going to be holding a briefing july 21st, is that right? no, different, we're going to be doing a program on july 11th in which we look at some results from a survey that commonwealth fund had put together about the experience in exchanges and what's been going on there. and then later in the month we'll be doing an

explicitly-focused program on narrower networks so stay tuned. >> bravo. >> so, as the one who represents those who is putting together the networks i'll chime in but please feel free, i invite my fellow panelists to add on. i think that a lot of the focus around provider networks is that for many people value networks are something new, particularly from a blue cross-blue shield plan where you're used to a very, very broad network. . .

scrutinized very heavily through the regulatory process" in having our networks scrutinized by our regulators. so i can't speak to us. we aren't doing that. you're correct we haven't got an additional guidance on scrutinizing our networks but we are very conscious of the scrutiny on the networks and generally even in our smaller network products we are still covering around 80% of the hospitals in our state and at least around 70% of the primary care providers in our state so even though the network is in

some cases smaller than it has traditionally been as a company it is still a rather broad net work and we go above and beyond the adequacy standards in most of the states to make sure that we are also ensuring that we have adequate specialists, ob/gyn oncologist and such for key conditions. >> land wednesday from the consumer reports and my question is for the whole panel. we talked about providing the context but i think even more than year over year don't we want to know if the rage that has been requested reflects the robust efforts of regulators, insurers and providers to keep the cost low for consumers? the institute of medicine would claim 30% of health-care spending is wasthealthcare speny

50% that suggests that they are too high and in terms of figuring that out -- i'm sorry for the echo. there is a driver cory didn't mention which is the rate review contrary to the promise of the affordable care act it isn't a very transparent. in most states except a few exceptions the public cannot see the detailed justification for the rate increase. in the few states that happens such as oregon, despite the justification being public they have robust competition and the extreme scrutiny that the rates are given suggest they are trying to keep them low i every means possible so i would like for the panel to comment on the value of greater publicity of the entire rate filing and terms of keeping the rates low to get to the thing we really want to know which is are we actually keeping it as low as possible.

>> thank you. i think in terms of -- i didn't specifically mention the rate review is part of this is going onto the greater transparency of if not the complete rate filing such as david said. there is greater transparency in the rate that it's all. it's to better manage care and provide networks that have those high provider values in them that can keep the pressure on to keep spending low so part of the

idea behind the competition and the transparency is to get at this some extent. >> i would add to that i think the process is much more transparent as a lot of folks have mentioned there's going to be data out there to use that we have to be realistic from the pricing perspective it doesn't necessarily give them the leverage into so a lot of the tools that you are seeing venues in the networks is one way to try to get it to regulate what a provider charges a carrier and i think what you are seeing particularly john can speak to this in massachusetts they are trying to address the pricing issues and tie the reimbursement and healthcare spending to the increase in the consumer price index so there is a lot of questions about how to manage the costs generally and the rate

review process is a good way to get the data out there but the next step is to look at it globally and engage all of the stakeholders. >> i have a question. i am rebecca at will call. i have a question for elizabeth but also if anyone else wants to jump in that would be great. i wanted to ask what the average rate increase is your company is if you could share that with us and tell us about the impact in the program and second i wanted to ask about your level of enrollment. enrollment. are they about the same as they were at the end of open enrollment clicks are you maintaining all of your members and getting people through social enrollment periods? >> what was the name of the program in the second part? >> the risk insurance adjustme adjustment. >> i will try to do my best.

it's somewhat proprietary. we are not talking about the rates unless they are released publicly. what i will say as far up and some are down. some are up more than others and so i am happy to talk off-line about the specific states where the public and any of the particular increases or decreases you might be interested in. with regards to the three hours, that is the three risk mitigation tools that are in the aca in the risk adjustment and risk corridors but i would say in the impact on the pricing and how it is reflected in our products the reinsurance very clearly you can see it in our filings and it is something i think all the insurers factors into the pricing and it is designed to help transition the individual market from that

underage and market to a community rates market. the elimination of the health status rating could result in a significant premium increase and so the reinsurance program is designed as a transition payment of sorts to the plan to help mitigate those and helped the markets transition so that is included in the rate filings and i'm pretty sure it is included in all of the insurers rate filings. at this point in time we do not have enough information on the reinsurance, excuse me, the risk adjustment. i often use the wrong are at the wrong time. the risk adjustment program we don't have enough public information to know how we did compared to our competitors and the risk adjustment program is intended to spread the risk among the carriers so with one carrier receives all of the

high-risk individuals, there hih risk individuals, there would be a distributed payment that is made from the plans that received low risk individuals and then there's the risk corridor program. both risk corridors and risk adjustment we will not know what our payments are and have enough information to actually receive any payments until the summer of next year. we won't go through the full reconciliation process until late in the spring of 2015 and then tthen the payoff would come the process is completed and again it is very difficult to know under the risk corridor program exactly where we sit. when we said this publicly, we didn't price for the risk corridor doors or the products purposely to make or lose money for the risk corridor program.

i think we said in our last earnings there will be another one upcomin of coming i think wn the last earnings call that we had about a very small table that this time we didn't price for it and we will not know where we come out until next year at the very earliest. then i think the last question whether the level of enrollment and again i am happy to talk to you off-line about the overall levels of enrollment lead just revised upward of 750,000 enrollees through the exchanges by the end of the year. we continue to see through the special enrollment process a small number just like we went outside of the employers open enrollment. oh for people who lost coverage or had another type of life change so we do see a small study of enrollment.

>> i just want to highlight something that is. co. she said because the adjustment program is shifting funds between insurers when they are doing their estimates of what the costs are going to be a also have to figure out what is the market going to look like as a whole. what is enrollment not only for my plans but for the market as a whole that is that going to look like and that is even exacerbating some of the uncertainty that they are having when they are calculating the raids because they have to think about not only their particular experience but the experience in the market as a whole. >> you mentioned when they are instructed that includes both of the exchange plans and then on the exchange plans and we actually had someone ask about what changes that might have

contributed to him that all exchange compliance market. is there a difference and does it affect the calculation? >> to clarify when i'm talking about the single risk pool having to combine experience on and off the exchange, i'm talking specifically about the compliance plan. so when developing the rate for the aca compliant plans on and off of the exchange it's just those aca compliant plans. plans. the noncompliant plans that allow the transition they are treated separately. but what can happen is because now consumers have a choice in certain states by renewing their compliant coverage or purchasing compliant coverage they can decide what makes most sense for the end is less likely somebody that is a high-cost person could

benefit more by moving to a compliance plan whereas the low-cost people could stay with their old plan so that could mean the risk pool whether they are inside or outside of the exchange could be a little worse than maybe what was expected. >> if i could add on as well anything that we base them on today can change dramatically before we get to the end of the year because again remember we have that very limited medical data as is. so as we get more experience what we see today could change drastically. so it's difficult and if you do follow some of the wall street analyst is it's difficult to draw long-term conclusions be somewhat clear estimating today for various purposes. i just want to put that disclaimer on it. >> i'm an independent business of care communication consultant

and i have two questions and i think they are both free elizabeth at feel free. you are really getting the questions he was about. you talked about the considerations of pricing and i wonder to what extent you can comment on the role of specialty pharmaceuticals and possibly driving up premiums as we go forward. i will ask one question first. >> that's an excellent question and there is no doubt the cost of the high price specialty pharmaceuticals is a major driver. we have said that it's going to have a 100 million-dollar or more impact on us this year and it's only going to continue to go up particularly as there are several drugs in the pipeline so we used the example in the past it is in many ways a cure for

hepatitis c which is a fantastic thing and at the same time it comes at a high price point potentially for a very large population. exactly what the cost impact is going to be but not to have to estimate that it could be very sick if it can't. it's definitely been a driver and it's definitely something that we have factored into the rate and at this point, we don't see the mitigating factor for that right now. >> my second question is to what extent you can comment on whether some of the dynamics we are seeing in the individual market may be carrying over into the traditional group insurance market. i know there are several lines of business but i think some of this up and down uncertainty has to have some ripple effects overpricing and coverage on the commercial side and if that is something you can comment on i would appreciate hearing your

thoughts. >> that is a good question and somethinis something we are proy going to have to watch over the next few years. i think as we went into the exchange marketplace and into the world again where individuals were subsidized, one of the big questions that was around during the debate as well as since then is how well employers respond. will they increase their offer of coverage? will they pull back on their coverage? it is a little early to draw conclusions but it's something we are watching closely. i can't say that its factoring in thait's factoringin that i ce team. you want to trade questions on the card? i should say we have less than 15 minutes left.

so let me just ask you to keep those evaluation forms at hand so you can fill them out as we finish the program and also take advantage of the opportunity to ask questions at the microphon microphones. most of us have been talking about transparency and the importance of it in a market. although there is a question that. for the smaller firms how do you see the balance between the regulatory barriers and entry and the transparent pricing requirements and then what do we think at the end of the day of the impact on the prices going forward? >> i guess i view them as too important separate issues. the transparency issue is

obviously critical. i think that it can promote the entry of small insurers and other regulatory barriers that exist but we are setting up an environment people couldn't compete and shop. you can't have competition with no shopping. we set up the market with the shopping in massachusetts after a couple years we had a major mr injury in the markets for the first time in 20 years and a significantly brought rates down. down. a lot of the innovation is going to happen in the networks and that's where if you are a new insurer you come and offer the same thing. basically there's a big person in town. remember this is not the first time in our lifetime health-care costs have grown slowly. actually from 19,922,000

healthcare costs did not increase the share of the gdp over the decade and that is because they fell dramatically in the 1990s. the question is we are going to have the narrow networks this time or will policymakers lead worship and that is good to be the law to determine whether small insurance can come and compete because that is a lot of the way that they can happen. >> i want to add a point to that in terms of the entrance what you may also see his generally speaking for a lot of the larger carriers they have independent relationships with their provider networks and is so over time you may see providers saying this carrier is doing a narrow network and is a provider i can do that myself so you may start seeing some of it now where the provider organizations are entering the market as an insurer because then they can manage the pricing but they also

manage the delivery of care so that creates integration and efficiency so over time you may see more provider organizations potentially move to the carrier side. there is one minor aspect of that looking at the contracts are setting up and the quality indicators and the measurements into the motivators. i think we have the biggest primary centered care initiative going on right now to support them to both stay in the primary care field but also to be able to expand the reach and the hours and put together plans for

the members and patients so there is a lo a lot beyond the network or how many providers you have in your network and a lot more that goes to help meaningful is the relationship with the provider and are they doing the right thing for the patient at the right time and is it a medical home for the member and the patient. so a lot of focus and i hope you will talk about this in the next panel and the next briefing. there's a lot of focus on the size and the number but also it is the value and the quality that you are getting out of the relationship. >> the initial question is triggered by something that you said it is that people have traditionally switched plans in the individual market to avoid premium increases. how do you anticipate this translating now in the 2015

exchange market where people are going to see their premiums increasing especially to the benchmark plans for subsidies are tied to? >> would have ended before is the plans themselves became less generous than certainly what is going to have into the plans switching is a really important question. the issue the regulations about the enrollment in the same plan if they don't actively choose a new plan. i think traditionally we have seen low plans switching in the group context and the individual market that is left clear. i think that is critically important that we promote important decision tools as much as possible and techniques for individuals so that they can evaluate this. people hate choosing their insurance plan and taxes. and a couple hours can make a big difference in terms of people's financial well-being and i think we ought to be

setting up tools while they allow people if they really don't want to pay attention to continue rolling forward but promote as much as possible peoples choices and shopping because this will be a special, lots of new entrants, lots of new ways to look at things and new networks and its three mechanisms and i think it's important to promote the ability of individuals to switch given the right information and make active choices. >> i know this is what john meant that he didn't say it out loud. the importance of looking beyond the premium amount into the cost-sharing so having these tools that combine the premium may be expected out-of-pocket cost sharing that's what's important here. >> i want to emphasize in my own research we looked at medicare part d. when we first started

doing these exchanges and we found only 12% of seniors when you factor in the premiums and out-of-pocket costs they showed the lowest cost plan and a typical senior was about 30% of the voters on the table because they pay their premiums and not out-of-pocket costs so that they really important factor. >> aren't there high rates of reemployment in the plans? >> once people make a mistake they stick with the mistakes etc. promoting that initial choice in considering all the factors and also reevaluate their life circumstance changes. >> do you have any others that you would like to throw in? >> john green with the national association of health underwriters. of course i represent agents and brokers that are a great tool to help people navigate through that difficult system.

it is an important decision and itit's more than just picking on the price and said. there is risk tolerance and the health status and agents and brokers do know what the networks look like. some people choose the network for a lower price on purpose. it isn't necessarily a terrible thing that they would choose a narrow network in exchange for a low premium but i hate the thought of a decision on health insurance coming down to a tool it sounds like you press a button. i think that is something that should be evaluated each year. it would be malpractice not to book at other plans. >> i agree it's important people shop carefully. i do think that in a perfect world everyone would have their

handheld and talk through the choices. i think that computer-based tools can help them a lot in at least avoiding poor decisions. in a narrow subset they think there's isa lot of people makine poor decisions. people are getting tax credits and choosing bold plans when the silver plan should dominate. things like that that could help avoid those problems. >> i have a question here that would initially go to ms. hall. the questioner writes that insurers no longer of the have e administrative cost of underwriting and additionally with the marketplaces in place, advertising costs could be lower. how much do these changes affect the rates that the insurers are

calculating? >> i think that's what i would say is we have put a focus on reducing our overall administrative costs and year over year the trend among the industry as a whole is downward on all of those things. so how you parse that out may have changed a little bit so you may be spending a little bit less for example in underwriting but that doesn't mean you are not spending those administrative dollars to a very important part of your operations and let me just give you a very concrete example we've talked about publicly. in the first two days of january we had almost a million calls total just for our exchange products, just for our exchange customers and the average length of that they took in talking to

people about their benefits ended up their benefits and helping them get to the end place where they need to go because of less familiarity and glass experience with the individual insurance market place it took a lot longer so yes we may be spending a little bit less on some of those underwriting dollars that we've probably shifted of those dollars to working with our customers and helping them navigate the system. we talk about choosing plans. we are focused on helping our customers use their plans became sure they understand that. i think the other say anything i say is don't assume that we have produced those. we have a lot of people to reach. we have a lot of people who may not be native english speakers and who may not have tradition traditional, may not be watching

traditional television or receiving traditional mail as an advertising tool so we have had to get creative in how we reach potential customers. overall we are very focused on reducing our administrative costs but even more than that's tryinthattrying to make sure the spend them wisely. >> that is a medical loss ratio requirement in terms of having a certain amount of premium dollars collected that excludes a lot of the administrative cost of that she was talking about on the admin premium it's really not there because that's been kind of stripped out in a medical loss ratio requirements. >> we have time for one or two more questions. why don't we go to the microphone. >> iem in internet the national association of community health centers. you mentioned his delivery reform and i was wondering if there is than any data collected on payment reform and if that

has had any effect in the states working on the insurance premi premium. i know it's new so i don't know if it's been collected or not. >> i don't know anything underlining back to the premium and i'm not sure that we are actually going to see a reflection in the underlining premium yet. because again i don't think that healthcare cost growth has gone down but that is the ultimate goal. i don't know whether the increase will be significant. in thand the cost of care if wee successful we can bring down the cost of care and improve outcomes and there' there is a f data on improved outcomes. a little bit on reduced cost growth back to any premium.

>> whenever we talk about the cost control we would be humble and be patient. this is a long process we are really moving up the curb. the aca promoted them but it's going to take time. humble and patient are not two words that you use to describe your bosses so that's something that's important to take away from this today while we want to know the answer tomorrow and it comes to health care cost growth and things of that nature it will take some time to figure it out. >> that sounds like a pretty good place to stop reminding ourselves we should all be patient and humble. we will be patient until the next time we take up an exchange related topic which will be july 11 and we would ask you to be patient enough to fill out your evaluation forms while you listen to me to share my

thinking of the commonwealth fund for its support and active participation in the shaping of this program ask you to join me in thanking the panel for handling a really complicated topic in a really good way. [applause] there were some updates and changes in some of the slides. we will have the updated versions on the website at allhealth.org is not to by the e end they then first thing on monday. an audible conversations [inaudible conversations]

president obama said republicans in congress should have blocked or voted down every single serious idea to help middle class. he was speaking in minneapolis minnesota the state legislature recently approved of the 3-dollar minimum increase. here's a look at some of the president's remarks. >> if we do some basic things com,if we make some basic chang, we can create more jobs and strengthen the middle class and that is what we should be doing. and i know it drives you nuts washington is into doing it and it drives me.

the reason it isn't getting done is today even basic common sense ideas can't get through this congress. sometimes i -- i'm supposed to be politic about how i say things thaseethings that i'm fiy that i just want to see what's on my mind. say what's on my mind. so let me -- [applause] >> let me just be clear. republicans in congress blocked or voted down every single serious idea to strengthen the middle class. you may think exaggerating. what we go through the list. they said no to raising the minimum wage and fair pay.

some of them denied that there is even a problem that despite the fact women are getting paid 77 cents. they said no to extending unemployment insurance for more than 3 million americans who are out there working every single day for a new job despite the fact we knew that it would be good not just for those families working hard to try to get back on their feet for the economy as a whole. rather than invest in working families getting ahead they voted to give another tax cut to the wealthiest americans. don't boo by the way. i want you to vote. [applause] over and over again, they showed that they will do anything to keep in place systems that help the folks at the top but don't

help you and they don't seem to mind. and their obstruction is keeping a system that is rigged against families like ben and rebecca. i'm not saying these are all bad people. they are not. but i'm just sitting there talking to them about family and we get along just fine. many of them will acknowledge when i talk to them i know i wish we could do something more but they can't be friendly towards me because they would be run out of it -- by the tea party. >> the president returns to washington this afternoon and you can watch all of the speech on our website, c-span.org. c-span.org. this weekend on his maker, john

thune talks about the 2014 and 2016 elections and he also talks about the economy, iraq and transportation issues. issues. while just 10 a.m. and 6 p.m. eastern on c-span. so, it is a lawsuit that plays out between charles and david on one side though and frederick and other shareholde shareholders. this culminates in a board room showdown that charles and up boarding bill frederick and a couple some other company shareholders were essentially trying to expand the size of the board and this would have ended up the opposing charles as the chairman and they would have taken a greater role in the direction of the company. the end result is that he's

tossed out by his brothers and there is a dramatic moment in the book where the board has to sit down and decide his fate now a senate health and education committee hearing on campus sexual assault in how the federal law can be used to hold schools accountable and keep students safe. senators heard yesterday from education department officials and two sexua to sexual assaults now turned activists. the hearing is two hours. >> the senate committee will come to order. this i is is that you love and o inform's reauthorization of the higher education act. yesterday i released my opening thoughts on what a comprehensive authorization act should look like and i've asked all stakeholders to submit their

thoughts and comments by the end of the summer that's august 29 and continued to add to that proposal in today's hearing how best to proceed on that important topic. the focus of today's hearing campus sexual assault is a profoundly important one. too many students are being assaulted on the nation's college campuses. according to current research and estimated one in five women are sexually assaulted or were victims of attempted sexual of salt while in college. as we were here today to sexual assault doesn't just happen to women. approximately one in 16 men are victims of completed or attempted sexual assault. research also shows that speed students and students with disabilities may face a higher risk of assault. no student should have to end of her something so terrible as a sexual salt while they are in college. and today we will hear from the administration and survivors and a researcher about what they are

doing to make our college campuses safer for everyone. the hearing will also explore the higher education act entitled line and how they address issues related to campus sexual assault. the act provisions within the higher education act play a critical role in ensuring the proper reporting of the campus sexual assault and the appropriate support systems are in place for when these are thoughts of occur. one of the landmark civil rights are celebrated in the 42nd anniversary this week also plays a substantial role in ensuring that colleges have adequate processes in place to address reports for sexual assault. providing the victims they need with the support. today we hear of the work of the administration is doing to ensure that they meet title ix obligations. the act entitled line seek

different ways. i hope today's hearing will bring to light how we can make it easier to understand the obligations under both important walls. this issue has for far too long been swept under the rug, try to hide it. we have to address this forthrightly. we are getting more data that is coming forward. i read the testimony of the people testifying today there is compelling testimony in terms of how we need to change some of our systems to bring more of this to light, to provide colleges with the kind of flexibility that they might

need. the one thing that came to me in the testimony as i read more than anything else is that one size does not fit all. these are not all the same acts. they vary in intensity and approach and victims. they vary in perpetrators. they vary in a lot of circumstances so therefore perhaps one provision cut off all aid which isn't a deterrent at all. so we have to look for the deterrence of the adequate penalties and fines that the crew was setting up structures with coverage is so that they can prevent this, that is the best course of action of all and

let victims know that they have the course and the support systems in place so that they can report and bring this to light without the victim being a victim twice or three times over. so i hope that this hearing now we'll start that process where we can address this adequately in the higher education act reauthorization. i will turn to senator alexander for his opening statement. >> thank you to the witnesses for coming. we look forward to your commen comments. i was once a college president and i had have children in cole and went to college myself so we know that that's a very special experience when you hug your parents goodbye and turn students over to a college campus and the parents are anxious and the students are nervous and you hope everyone is

safe and everything is successful and the focus of the hearing today is that sometimes it turns out not to be true. so the purpose of what i think we should be doing today's find out what we in washington can do to help create an environment that phelps campus is discouraged sexual assault which is the subject of the case and then make sure if there are any requirements that we have from here in the campuses that they would be clear and they don't cause the campuses to spend their time filling in forms than an environment to discourage sexual assault. i think it's important to remember, too, the limits of what we are able to do from here on campuses in tennessee. the dean of students and president of the college and there are trustees all of whom

have the primary responsibility for the environment on the campus and for taking action. and if it is a public institution where three of the four students go there are legislators and the governor and i know that about the time i was president of the university of tennessee the state of tennessee passed a crime on campus bill which is modeled after the act in pennsylvania as child was murdered. just as we want gun free school zones in our 100,000 schools it is the responsibility of the community and the students and the school so whatever we do needs to make sure that we don't suggest to anybody that in washington we can make the campuses responsible for making the campuses safe. i don't think the country would want to look up here and to see

the united states senate that can't even balance the budget and can't even agree on how to consider an appropriations bill ought to be the one who you love to to be responsible for campus safety in 6,000 institutions with 7200 campuses and 22 million students. if my child were going to campus i would look to the dean of students and faculty and the environment on the campus first. but there is a role we have to play primarily because we along with the state helped fund the campuses and we have been playing that role. there is the act i mentioned just earlier, and these are the rules and regulations the campus administrator would have to consider in the proposed rules and regulations. the question that we would have is do these really help create the environment to discourage sexual assault or is there

something we can do that is more effective? and then under title ix there are responsibilities and guidance into steps we need to take. so, i am glad we are having the hearing and i appreciate the efforts of several of our senators and a senator caskill who is interested in this. i've met with her about this and one of the things i would suggest to the other members of the committee at least one of whom is the member of the faculty of the distinguished institution i think at some point we ought to have informal discussions with the people on the 7200 campuses who actually have the job of creating an environment for campus safety including sexual assault and responding to it appropriately and making sure the things we do from here are helpful and not burdensome which is sometimes

the case so i welcome the hearing and congratulate the senators that have made this a focus of their attention and i look forward to learning from both panels of witnesses. thank you mr. chairman. we will have to panels. the first panel will basically be the administration witnesses and then we will move to the second panel thread i'd like to start by welcoming the first witness the assistant secretary for civil rights in the u.s. department of education. prior to coming there she was the director of litigation at the public counsel with the largest pro bono law firm and before that she practiced a decade at the aclu of southern california serving as an assistant legal director. she also serves as a teaching fellow and supervisory attorney in the litigation program at georgetown university law center and she received her jd from law school and graduated from amherst college.

next is mr. james moore the manager of the compliance division in the u.s. department of education. mr. moore joined the department odepartmentof education in 1997s become a nationally recognized expert on the act and he also serves as a representative on the white house task force to protect students from sexual assault. both of your statements will be made a part of the record and we will start with you if you could sum up your statement in a few minutes and then we will open up for questions and answers. >> thank you so much members of the committee i appreciate the opportunity to share our work with you today. i'm the assistant secretary for civil rights at the united states department of education the enormously talented staff that i work with and i had the privilege of enforcing civil rights laws and schools including title ix of the education of 1972 and we have

made great strides in the 42 years since title ix became law with many colleges and universities having changed their policies and practices so that they are not discriminating and in compliance with the law and i applaud the colleges and universities for recognizing that the mission includes ensuring safety of the students on campus. still, sexual violence is pervasive across too many of our campuses. we are committed to ending the reality. we have investigated more than 100 institutions of postsecondary education and we've issued a policy guidance and delivered significant assistance to universities that have reached out to us. the president and vice president have prioritized this issue by creating the task force protecting students from sexual violence as last january.

one key deliverable i was from y office of the 52-point question and documents related to sexual violence so that we could answer the questions that have come to us from the community about ways to comply and what we expect in schools. we had already issued guidance in 2001 related to sexual harassment and then in 2011 this administration was the first to issue guidance sexual violence as a sexual issue in addition to that as i mentioned we've delivered technical assistance to colleges and universities about what they can do to deliver and we are pleased to use that tool you use all tools available and i would like to share recent examples in this area as the ways we've been able to achieve agreements to change the experience on campus.

we entered into an agreement with the state university of new york which is the largest institution in the country serving 219,000 students across 29 state operated campuses. so it was the largest impact you could have happened to the investigation and i am enormously impressed with the system for having the courage and leadership to come it across all of the campuses they would change their clothes to -- their policies on all of the campuses related to sexual violence and they've committed to open the case files to identify whether there is more relief that can be delivered to those that have come to them and what more should be done. they will report to us what it is in addition and if not, why not and we can evaluate whether they've changed the practices to ensure they are responding to those that come forward.

as part of our investigation we reviewed 159 case files to take a look at the way the university system had investigated the complaint and we had concerns so we are impressed with the system for agreeing to open the files and identify what if anything more should be done. another component of that agreement is for each of the campuses across the state of new york to bring in the community to evaluate what's more they need to be done and that recognizes as the chairman noted that there is no one-size-fits-all. it may not be the same that is necessary at stony brook so they are involving communities to identify what needs to be done at each campus to ensure the students were safe and they will report to our office what it is the community members have asked for and what if any changes they will make so that we can be a part of and shoring the full

community response and solution at the schools. moving from the large institution to a much smaller scenario this last spring we entered the agreement with the military institution that shows up 1500 students, so it has a much smaller campus and a smaller institution but also very significant concerns and very significant resolution that commits four training the change in policy at the campus and ensuring safety for the students on the campus even after some fairly significant facts that included the system that had a policy that required the students who became pregnant had to leave the institution altogether and could no longer be students there and that has changed but against that backdrop the institution failed to involve the coordinator when the senior cadet issued wire hangers and called them the abortion tools and the school hasn't taken steps to discipline

a student and ensure that the title ix were demeter was involved making sure the campus could be safe. that can be changed going forward and i'm pleased that the institution has agreed to enter into a resolution agreement to change the practices and the nondiscrimination follow those campuses debating moving from the large and the small to midsize also we entered a resolution agreement with the university on the next panel you will hear i'm really impressed with them agreeing to the training to rectify the situation where they've not had a coordinator at all during the course of the investigation and agreeing to make sure they provide interim relief for the students and investigate the complaints that come to them appropriately and that they change the policchanged the pold practices for example of including students prior sexual history as part of the investigation as we know which is inappropriate.

so we have entered into the very robust agreements in the universities on a variety of sites across the country in the enforcement space and we are proud of what the staff has been able to achieve and i look forward to continuing because it is so critically important that we change the current practice where there are people who think they don't need to comply with the law and we don't need to satisfy. i look forward to answering any questions and i appreciate the opportunity to share our work experience with you. it' >> good morning chairman and ranking member alexander and members of the committee my name is james and i managed the compliance division of the department of education. thank you for inviting me to discuss the department's role in forcing the act especially the implementation of the amendments in section 304 of the violence against women act reauthorization. college should be a special time in the life of every student in

the time of exploration, discovery and joyful memories but for far too many of our students they have been the night the best of their college experience because of the crisis of assault and other violent crime on campus. as you know, the act promotes consumer protection and transparency about crime and other public safety matters by promoting transparency and by requiring institutions to participate in the federal student aid programs to provide accurate and realistic views of campus crime on campus and in the surrounding area. it is a sensual that the campus safety and crime prevention information is providing students, parents and employees of the highest quality. members of the campus community shouldn't have to wonder if the crime information that is provided is accurate or have to worry but it's been purposefully

manipulated to create false impressions or protect the school's brand. they are often new to the community on the campus and anything that creates a false sense of security is dangerous. the two institutions accountable the department created a dedicated team to enforce the rules. the original team was formed in 2010 and in 2012 for the federal student aid realigned the team to strengthen it and make it more prominent within the office of program compliance. in a short team that team has had a significant impact on the way that institutions can't confront campus crime and they do it for the team is dedicated to the cause of campus safety and carries out its mission and its mind. the department is committed to improving the campus safety through a balanced approach of enforcement and the technical

assistance. one of our operating principles is that we will assist schools whenever we can. the campus crime program review process is a primary component of the enforcement effort. the division conducts the reviews to assess compliance with the department's regulations and also works with institutions to ensure the actions are implemented and sustained. most of them driven by complaints from the students who are always our best source of information and who help us understand how it is affecting their lives on campus. here i must pause to think the generation of student advocates and activists who developed a sophisticated understanding. they are using their knowledge to assist survivors and make their campus is safe for everyone. i also wan also want you to knoe supplement our complaint-based reviews proactive reply and delete compliance as part of a

partnership with the fbi. in addition from our office of program compliance conducts about 300 program reviews each year. most of those focus on financial aid compliance matters but we have added an act in drug-free schools and components to each of those views and we oversee the work of those teams do on these matters to ensure consistency across the country. .. and we conduct assessments of major -- to determine if institutions have complied with the clery act in response to those incidents. now, i would like to share with you a little bit of information about the recent work we have done to implement the violence against women act reauthorization components of the clery act. as you know, last week the department published proposed regulations that will fully implement the