were criticizing. it looked like they were walking away from negotiations. they accused each other of giving up. we are hearing that bernie sanders and jeff miller have reached a deal and come much closer. theire going to unveil proposal for how to fix it. and could actually get past sent to the president before the august recess. host: we will have coverage of that news conference. this is a $15 billion price tag. that, what are some of the highlights? anyou are going to see ability for veterans who have been waiting for medical care to leave the v.a. system and take care privately at the v.a.'s

expense. if they live far from a va hospital, 40 miles is the agreed-upon distance, you will secretary the.a. ability to fire senior managers accused of mismanagement. they can obviously fire those who are ill performing. timekes a very long because of federal rules about letting employees go and their process to appeal. this was one of the reasons the controversy started in the first place. v.a. more to come on this deal in the house and senate.

did address the immediate crisis of veterans being forced on the long waiting lines for health care. it strengthens the va so that we can put a permanent end to long waiting lists. it addresses the very serious problem of accountability and makes certain that this honest and incompetent senior officials at the va do not remain employed there and in addition and provide some other significant benefit for veterans and their families.

funding for veterans' needs must be considered a cost of law, and appropriated as charges that they. planes and tanks and guns are cost of war, so is taking care of the men and women who use those weapons in five battles. this was the funding mechanism contained was passed the senate with 93 votes and is the funding mechanisms. sufficient sums of money provided so that the va has the resources to be really and unacceptably long waiting time frames throughout the country. this bill does that by contracting out with private medical providers, community health centers, the department of defense facilities command this is something that was contained in the house of bills. we accept that language. this agreement consistent with the sender's mccain bill allows

the chance to live 40 miles or more from the va facility to get their health care outside. he should be able to go to a provider in your community. this bill in terms of dollars provide some $10 billion for contacting of health care and for those veterans and $10 billion. acting va secretary and many of the veterans organizations have made it clear that we need to make sure that va has the doctors and nurses and medical personnel and the space then need to provide $5 billion to strengthen the capabilities. this legislation consistent with bills passed and the house unanimously and in the senate authorizes funding and releases to seven major facilities in 18 states that will cost about a

billion and a half dollars. we have all been outraged by the distortion of data. this bill contains language which will allow the secretary to fire people immediately who are doing -- who are underperforming or line. it gives them a 21 day appeal to temper and. this bill also contains other positions and includes delivery of care to veterans who experience sexual trauma. then also let's all veterans qualify for in-state tuition. it also extends the program. in terms of money this bill will

provide $17 billion into va health care. a $5 billion offset. approximately $12 billion of the money. >> coming up in a few moments the white house ceremony awarding the national medal of arts and humanities. half an hour hearing on the health care law and federal subsidies for insurance providers. the latest report on the fiscal health of the social security and medicare. >> a couple of live events to tell you about tomorrow.

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[applause] >> thank you. take you, everybody. welcome to the white house. it has been to wonder years some says telemedicine made the portrait of george washington that ames and his room from the advancing british army. this is said a white house as always supported the arts. i am glad to say that michele has never had to save any paintings that i know of. but we do believe in celebrating extraordinarily talented

americans and their achievements in the arts and in the humanities. i want to thank the cheers of the national endowment of the arts and the national endowment of the humanities for there outstanding work. members of congress including a great champion of the arts. fossils -- [applause] >> the bird does not saying because it has an answer. sings because it has a song. each of the men and women that we honor today has a song literally in some cases. for others it is talents or drives or passion that is said

to share with the world. to my honorees, you did not cultivate your song for accolades or pods. i expect you to still be out there designing buildings, making movies and asking tough questions in interviews. we do honor you today because your accomplishments have enriched our lives and reveals something about ourselves and about our country. we can never take for granted the flash of insight that comes from watching a great documentary or reading a great man more or novel or seeing an extraordinary piece of architecture. we can't forget the wonder we feel when we stand before an incredible work or or the world of members we find on walked through the simple movement. the moments to help create,

moments of understanding or off or joy or sorrow and texture to lowlifes. they're not incidental to the american experience. they are essential to it. and that only congratulate you this afternoon, we thank you for an extraordinary lifetime of achievement. i will close by saying president lincoln called together a meeting of his cabinet to present them with the emancipation proclamation. but that was not the first item on his agenda. instead he began reading a love. a story called high handed outrage at utica. according to one often repeated account after you finished chapter lincoln laughed and laughed. his cabinet did not.

so he read them another chapter. you need this medicine as much as i do. to be clear i will not be trying this in my cabinet meetings since. certainly not if i am presenting something like the emancipation proclamation. but what lincoln understood is that the arts and the humanities are not just there to be consumed and enjoyed whenever we have a free moment in our lives. we rely on them constantly. we need them. like medicine. they help us live. once again, wanted thank tonight's honorees were creating work that i am sure would have met president lincoln's high

standards in this complicated world and these challenging times. you shared a song with us. or that we are extraordinarily grateful. it is now my privilege to present these metals to each of the recipients after their citation is red. [applause] [applause] >> the national medal of arts recipients julia alvarez. [applause] extraordinary storytelling, dreams of identity to my family, a cultural divide illustrate the complexity of navigating to whorl's and reveals the human capacity for strength in the face of oppression.

by[applause] karen brooks hopkins. [applause] >> the 2013 national medal of arts to brooklyn academy of music for innovative contributions to the performing and visual arts for overworn hundred 50 years ship is in the works about the status visionaries and emerging artists to take risks and push boundaries. [applause]

john harrison. [applause] the two dozen 13 national medal of arts workers supporting creative expression, decades of and generosity of enriched cultural life and helped countless artists from the singers, and musicians bring talents to center stage. [applause] [applause]

>> the 2013 for is contributions as a dancer and choreographer renowned for provocative performances that blandon eclectic mix of modern and traditional dance, creating works that challenge us to confront tough subjects and inspire us to greater heights. john candor. [applause] the 2013 national medal of arts for his contributions as a composer. for more than half a century he

has been lined broadway, television, and fell through songs that invoke romanticism and wonder, and capture the moral dilemmas that persist across generations. [applause] jeffrey katzenberg. the 2013 national medal of arts for lighting up our screens and opening our hearts their animation and cinema. embracing new technologies to develop the art of storytelling and transform the way we experience found. [applause]

maxine kingston. [applause] the 2013 national medal of arts to maxine kingston for contributions as a writer. her novels and nonfiction have examined the past of violence is our present, and therefore suspect in our understanding of asian-american identity of the shape our national conversation about culture, gender, and race. [applause]

albert. [applause] the 2013 national medal of arts for rethinking and remaking documentary film american call one of the pioneers of direct cinema offering authentic depictions of people and communities across the globe for nearly 50 years by capturing broader notions and representations' be his work reflects the until truths of our shared humanity. [applause]

[applause] >> the 2013 national medal of arts for one-of-a-kind voice and decades of remarkable music drawing from a broad range of influences defying expectations to cocker american radio waves and help pave the way for generations of artists. [applause]

>> the 2013 national medal of arts and not for their contributions to architecture and arts education. whether public or private their designs have a profound effect on the lives of those her interact. they're teaching and spirit of service that inspired their people to pursue their passions.

>> james terrell. [applause] the 2013 national medal of arts for his ground-breaking visual arts capturing the powers of light and space. t-bills experiences that force us to question reality challenging our perceptions not only of art but also of the world around us. [applause]

be the 2013 battle to mh abrams for broadening the study of literature. expanding our perception of the romantic tradition and exploring the modern concept of artistic self expression and western culture. [applause] >> excepting on behalf b allen dunlap.

[applause] >> the 2013 national humanities melts a humanitarian societies were sifting america's story. for more than two centuries we have amassed an unparalleled collection of historical american documents served as a research center for college and students alike and for generations of americans. [applause] >> david bryan davis. the 2013 national humanities metal to david bryan davis for reshaping our understanding of

history. dr. davis has shed light on the contradiction of a union founder of liberty yet existing half slave and half free. as examinations of slavery and abolitionism drivers to keep making more progress. >> williams the unarmed. [applause]

the 2013 national humanities metal for aligning our view of the world. fostering a global conversation based on the common values and experiences shared by all clusters helping to bridge differences and built just. [applause] >> darlene corkboard.

the 2013 national humanities metal for enriching our understanding of the african-american experience grew prolific scholarship and examining race, class, and gender and a shot of those girls of successes of african-american women have shaped the nation we are today. john paul jones. [applause] the two dozen 13 national and humanities metal for honoring nature and traditions of architecture.

as the creative mind behind evers and cherished institutions around the world mr. jones has designed spaces were the of the culture is reflected, the communities they serve and the environments they inhabit. [applause] [applause] be the 2013 national humanities medal for documenting the stories of african americans through from.

mr. nelson has expressed injustices' and i let it try of revealing new debts of our nation's history. [applause]

one of the first and visa was granted had to look her back in the day. and i know all of you. these amazing people. we are grateful to you. on behalf of michele and myself as we are taking pictures of the recipients and the families please continue to enjoy the reception here. thank you very much. [applause] [applause]

of. ♪ ♪ >> in a few moments a hearing on the health care law and federal subsidies for insurance providers. about an hour-and-a-half the latest report. the state to report on religious freedom around the world. >> on our next washington journal we will talk to mississippi said of doctor walker of the house senate deal on a veterans' health care bill in the ongoing debate over immigration and border security. texas democratic congressman will also weigh in on that va legislation and immigration. later anthony, of georgetown

university will discuss federal work force training programs. you can also join the conversation on facebook and twitter. washington journal live each morning and seven eastern on titov. >> former republican congressman . take your calls the e-mails command to reach for three hours and tune in next month for author, historian, an activist. a october supreme court an expert discussing -- discussing court sessions. michael korda is our guest in november, and in december american enterprise institute in-depth pawn c-span book tv television for serious readers.

>> coming up next hearing on the health care law and federal subsidies for insurance providers. this is an hour-and-a-half. >> the chair will recognize an opening statement. today's hearing is once again about protecting taxpayers and consumers from the consequences of the affordable care act, mainly the giveaway of taxpayer dollars to ensures. first, section 1342 of the affordable care act created what are known as risc corridors, a mechanism that will protect insurance companies from some of the financial losses.

it works by decreasing payments to plans whose expenses are below projections, those with healthier than expected and release and redistributing those dollars to plants whose expenses exceed projections, those with sicker than expected enrollees. if done in a budget neutral fashion taxpayers would have little to be worried about when it comes to risk. but while the administration has paid lip service to the program being budget neutral it has also indicated that regardless of payments and receipts hhs will remit payment as required under section 1342 of the affordable care act. come opening the door to what would essentially be the taxpayer funded bear love.

additionally according to the congressional research service in the plain reading of section 1342 law does not provide an appropriation for these payments . any payments are clearly an end run around congress and therefore illegal. the very idea assumes that there will be winners in the insurance industry whose gains can be shifted to the losers. however, the president's decision to selectively enforce provisions of the hca along with higher enrollment of older and sicker individuals than was originally projected could cause industrywide losses put in a taxpayer on the hook for billions of dollars in payments. the committee will consider legislation to protect taxpayer dollars from being unlawfully

given to health insurance companies and the recorder program. second, as we noted in previous hearings, the president promised numerous times that of the lecture health care plan you could keep it. however millions of americans experienced plant cancellations. the individual market last fall, and millions more will likely lose their employer sponsored plans in the future. dr. cassidy is common-sense bill , the employee health care protection act, would permanently grandfather all group plans issued by health insurers there were in existence in 2013 allowing consumers to keep the covers the like and giving small businesses better options than a ca compliant plans. i would like to thank our witnesses for being here today to discuss these issues. i yield back the balance of my

time and recognize the ranking member for five minutes. >> thank you, mr. chairman. i want to reiterate what i said an hour earlier. we have, i guess, two bills that are the subject of a hearing today. one of them coming h.r. 352 to the employee health care protection act is already designated or notice with a full committee markup on wednesday without even having been marked up in subcommittee. once again, i do want to object. i know that this is not an issue where we can stop the hearing, but i want to object to the fact that we are proceeding to market the bill in full committee without regular order having a subcommittee market. but beyond that today's hearing is nothing more that another of a service series of republican attacks on the affordable care

act. this time it is even harder to take seriously the words the gop have chosen to include in the title. it is quite ironic because the provisions of the ac that are being attacked at the very same policies republicans have included. no one is surprised since the passage of the hca. remember that the individual mandate was the republican idea as well. as the close of the election we will hear more and more about how it must be repealed replaced . specifically they are not made by made up policies the democrats decided to use. trust me, no democrat has any interest in bailing out the insurance companies. these policies are emplace legitimate reasons and only

because they are in the a ca are they controversial and considered in this negative light. let's recap the importance. in order for insurance pools to keep premiums stable and cost low it is critical to spread out risk. these types of mechanisms are not a new phenomena. they're used in all types of functions and, insurance systems. one great example is the use of the medicare part deprogram. the provisions were modeled after the party program which, of course was altered by the gop. republicans have their way that would repeal the program effectively create chaos in the marketplace over 10 million uninsured adults following the first open enrollment in the health-insurance marketplace. the rate for adults ages 18-64 to maturity 4% in september 2013

to 16% in april 2014. these results do not include the more than 3 million young adults who gained health insurance covers a their parents plan. we have done something pretty remarkable. millions of people and not just a number but actual people who cannot see a doctor. when no longer can be charged more than men for insurance. insurance companies must offer robust health coverage if republicans had their way we would go back to the days when insurance companies to drop some went for a pre-existing condition. almost all of the key reforms and policies are no emplace. here cahow. it is not a way to perfect it

the political stunt, stop trying to dismantle and come together across and improve historic benefits and protections. >> am i going to yield? >> if you want some time in? >> i yield to the zero men from texas. >> thank you me, mr. chairman. update their ranking member for the time. i was open as we had a vacation from efforts to attack and were actually built legislating and doing things our committee. these bills today, it seems like -- how many times we need to try to repeal the affordable care act. maybe it's just election father that we need to have.

we are seeing it every day. >> they key, mr. chairman. >> thank you very much, mr. chairman. we have three bills before us today. we have a hearing on them. all three bills are intended to undermine the affordable care act. that is exactly what they would do. i just want to point out that we have had over 50 votes on the house floor to repeal or undermine effectively repeal in the affordable care act. so we have a thing better to do? we would promise that by the republicans they would come up with the replacements. there were going to do that in 2011. then we heard it would come in 2012. since 2013.

in early 2014. and we were sure there would be a vote this summer. then it was the fall. now we hear we may not see a replacement until 2015 or 2017. it is clear that they don't have any productive ideas of there own to offer. appears that they decided to add to their 50 votes to repeal or undermine. they certainly are working hard to secure their place in history as the least productive congress in the history of this nation. i suppose all three of these bills before us today. the first bill says that any group health insurance plan on the market could be sold the -- sold in perpetuity. they don't have changed. now, they would not have to adopt all of the key protections for consumers and they're affordable care act.

protections that went into place this year such as the ban on annual limits. insurance companies used to do that, put a limit on how much you can spend each year. after that letter and you pay for it all. we want to go back and continue those plans. want to continue to allow plans that would charge a small business a higher premium because an employee has a pre-existing condition. those were changes we intended to make or did make in the affordable care act. if you want to keep your plan you can keep it. we provided for grandfathering in existing individual insurance plans. if they liked that covers they could keep it even though that insurance might be inadequate. it covered all the things that were required.

earlier this year mr. president went a step further. if change plans a premium stabilization program known as the risk corridors. this is modeled after the nearly identical program and medicare party that distributes a portion of profits and losses between the insurance companies. this was drafted by the

republicans on this committee as part of the party legislation. the bush administration's praised it repeatedly. helps keep party premiums stable and save taxpayers money. now that it is being used by the affordable care act we cannot continue these risk corridors. let's repeal them. before the administration announced that they would implement the risk corridors and a budget neutral fashion the cbo said that program would save taxpayers nearly $8 billion in just three years. the provision of law makes sense. it will keep premiums stable. we should not repeal it. well, mr. chairman, i think warm words scene is more politics. maybe it saves you in primaries

from the extremist in the so-called tea party, whatever, but we ought to do something worthwhile instead of passing bills that just undermine the dca. it is working finally. dahlia as a people have insurance. we ought to leave it alone. >> the gentleman's time has expired. the chair thanks the gentleman. as huge a memo from the congressional research service to the committee. an article from bloomberg dna. without objection so ordered. on our panel today we have three witnesses. let me introduce them. first, dr. stan, resident scholar at american enterprise institute.

dr. john only. mr. edmund coulson meyer, senior research fellow at the heritage foundation. thank you for coming. appreciate your time. your written statements will be made part of the record. >> mr. chairman, ranking member, members of the committee, would like to thank you for giving me the a virginity to discuss health insurance plan cancellations the materials changes pursuant to the protection and affordable care act. when obamacare became law four years ago the central claim made by opponents was not just that it would make some better off through redistribution of resources and more stringent

regulation but would do so without harming others except her new forms of income and capital taxation. presented the public but president obama and many other prominent members of a political party, the full committee ranking member just now. if you like your plenty can keep it. if you like your doctor you can keep him. a problem with the promises that it is not true. i will discuss a few of the more salient consequences of the legislation that undermine the veracity of that claim. in a certain sense no one is and it will keep their 2010 plan. they can no longer sustain limits on lifetime reimbursements. it drives up the cost of health insurance policies. in a very narrow sense the claim you can keep your plan if you like it is completely false.

more central to the discussion today, i think, our plans that have incorporated some of the more popular provisions like the ban on adjusting for pre-existing conditions or the lifetime reimbursements, the annual limits. the plans that are still being used and paid for. first of of want to note is no i think everyone realizes that the individual market millions of people who start out buying insurance they're received cancellation notices that may bear up -- their way will be as many as 9 million people losing the plans they had. it does not stop there.

many of those plans will change or disappear as well. of these covered workers about 18 percent work for firms other smaller than 50 employees and will not be subject to the employer mandate. in total is about 35 to 40 million covered workers in small group plans. the remaining 130-1 are and 35 million workers work for larger employers. all of those plans are affected in different ways. while the most obvious way is very similar to what happened in the individual market, many fully insured plans that have changed a little bit since the law was passed no longer insure

grandfather status and so they -- the firms that use to offer them all now be forced to purchase plans that are subject to new requirements. 30 million workers in the small group market to buy 75% of workers and medium-sized firms. 25 percent of large firms. in total that is about 45 to 50 million people. how large changes introduced is hard to establish it is unclear to what extent there will be materially affected. will we do know is that only very few plans are shielded from new rules and regulations. there are direct reasons why. for example, the costa plans will increase due to new taxes.

even though when millions of people receive their cancellation notices the individual claims that that will be it. it is a small, tiny portion of the population. it is certainly not true. there will be dozens and millions, if not more people who will see their plans change. >> the chair thanks the gentleman. five minutes for an opening statement. >> thank you, mr. chairman, ranking member, members of the committee. i am a research professor and i appreciate the opportunity to speak to the committee on issues relating to the affordable care act. two times in recent history that congress has introduced new

health insurance programs. 2003 and medicare modernization act. the prescription drug program. in 2010 the affordable care act created the program of health insurance exchanges and operates as part of a grant to a broader initiative. in both cases congress is building a new kind of insurance program out previously in operation. also in both cases policymakers were uncertain about how many plans which used to participate in the new program and how many americans would sign up for coverage, specifically policymakers were concerns that plans would be less likely to participate when they were unsure of how many enrollees the mine attack -- attract. if the plan did participate their will likely see higher premiums. to address these uncertainties the congress included a set of risk mitigation measures for more risk adjustment, reinsurance and risk quarters.

these measures were designed to out the new markets to run more predictably encouraging new insurers and stabilizing premiums as a program to cut started. here is a quick review. risk adjustment as a way to adjust payment to plan based on the health status of the individual and release. the idea is to make sure plans and enrollees are not penalized or rewarded. the effective risk adjustment avoids people being chosen. a means of ensuring the insurers up providing extra payments such as having more accidents or cancer diagnosis than the average plan. as with risk adjustment the intent is to make sure plans are not penalized for rewarded based on how many high-cost people they enroll and reduce incentives to avoid high costs individuals.

this quarter risk sharing involves the creation of funds of the plans with unusually high gains payback some of those gains and plans with unusually high losses are partially compensated to keep premiums affordable and reduce the risk base as the plans when from experience how to price themselves accurately. they are designed on a two sided pages to limit losses and gains. they underestimate cost to receive payments from the government to reduce but not eliminate loss. they overestimate caustic and make payments to the government to reduce but not eliminate the gains. plants maintain its share of the risk as accurately as possible. these risk mitigation measures have been used for nine years now. have they worked or we have had time to look at the data? the best measure of their success is there participation

by both health plans and medicare beneficiaries. the program is popular. ..

>> >> the continued affordable care act with three insurance has short-term measures although one could argue their reinsurance could be eliminated after nine years we could make a good case to establish a functional sustainable than robust market from both the first years. >> and of the chair recognizes five minutes for

the opening statement. >> fake you. i and the senior research fellow for health policy at the heritage foundation and the key for the opportunity to testify if today. the comments are my own not reflecting in a position. what we need to do is step back to look at the three programs to understand these are different tools for different purposes. if you have a mechanic or a builder there with have the tool box is using different tools depending on the job so of the bike to follow-up on the comments to clarify what i see is a different task that these are designed to address the reinsurance

is designed what we might call market selection risk of a choice between those are insured or not sure devil not going to great length but to say it is premised on the idea of the way the legislation is designed berry is the expectation those will of gravitate to the market and therefore impacts the existing market and transfers on to the new expanded individual market of that selection risk expectation. but the risk adjustment is really about individual selection risk. everything could be fine otherwise but with the ability to pick and choose as you do in the program and

that that could influence people's decision u.n. insurers touche try to avoid people who are sick or what not. so there is a risk adjustment mechanism. it is not new but has been around before elsewhere. less third in the subject of your hearing is the question what is the risk this is designed to address? it was observed this was designed to hold down premiums not necessarily. it is not designed to make the market balance out or spread that risk evenly that is what the other 02 or there for but this is processed and a loss to say we don't know and neither do

you what the real cost will be and we pay for most of it. that was the significance we could be off the mark so the government pays three-quarters has the profit is and las cahow sharing -- profit and loss sharing agreement. that did make sense with party because it was entirely new product with prescription drug -- drug coverage had not been done before there was no real relevant or suitable example for insurers to work off of because that was integrated and not stand alone and on the elderly consume the

drugs out 1/5 of rage as the elderly. said mr. hoadley was right but part d was also a new-product looking at this is a new program but the product is very old so at the end of the day i am not sure there is a rationale for this profit and loss sharing it is not hard to get to any tolerable rate but given the transfer of funds is more than adequate to cover egregious over under estimation if you look at the magnitude of the funds being transferred relative to the size of the market in 2014 was $28 billion and in potentially in 2014 that is

the huge amount of money even if you assume the market is substantial so those programs are more than adequate for those risks in the new program and there really isn't necessary for that program. think you know, . >> thank you to the witnesses for their testimony i will begin the questioning. should taxpayers be concerned that they will be liable for some insurance company losses under they see a program and please explain. >> the issue mr. chairman is of mike the reinsurance program that is a definitive

set amount of money or what is required to operate on a neutral basis with does not spend more a day and it takes it but this program is not explicitly required to operate on that basis so yes that is a concern the taxpayers should have. >> the congressional research services issued a memo questioning the ability of the administration to make payments under the risk corridor program for valid appropriation''. since it is congress's job to make law of the president's job to implement the law if it needs to be changed it is our job, given that the administration has tried to rewrite the health care law over dozens of times through regulations and executive orders and delays should taxpayers be

concerned the administration would once again ignore the rule of law to prop up the president's health care law? >> the administration has taken such different positions at different times on this provision at one time they said it would be budget neutral then they said they would not. so there is ambiguity that is congress's job to clarify >> thank you. at the end of 2013 millions of americans recede to notices from health insurers they could not renew health coverage under the aca many said it was restrictive only to the individual market and would not affect employer sponsored coverage. would you clarify if american workers could be subject to a non renewals by

employer sponsored plans also known as a plea and cancellation under the affordable care act? >> thank you mr. chairman. many american workers will be subject as i described with detail in my testimony tends of millions in this small group plans that will see those plans phased out as very few will continue to have grandfathers' status by the time the employer mandate kick san. the administration midrange estimate was by 201688% of all small employer plans would have lost grandfather status hit impressible would receive the same treatment as the individual market plans received last year.

so the problem -- to go to the employer not the individual it would be the same thing at what the market had but i am surprised honestly so many supporters of the law are not living up to the if you like your plan you can keep that promise but then to continue with the same story for these plans that ultimately suffer the same fate. >> some advocates of the aca said they were surprised about the planned cancellation issue at the end of 2013. wasn't that a central feature to impose federal requirements that many plans simply did not need? should it be wine have been surprised about the

cancellation issues? >> certainly not. to some extent beyond income redistribution one of the central goals of the legislation precisely was to impose wrote - - imposes requirement on as many as possible those requirements are very popular among the general public. some of them make a community features for example, are much less but it was always the intention those rules and regulations it shows how insincere the promise was. >> my time is expired. >> i want to say at the outset mechanisms used insurance systems this would not even be controversial if not under the aca so that

bothers me anytime the matter how normal its is it just becomes controversial with an effort by the republicans to destroy the aca. the driving principle is that they will cost taxpayers money but there is no evidence so they figure they can scream they allow enough it is true but the cbo shows just how silly those claims are the cbo looked recently and said the collections that the program would save 8 billion in just three years not even counting the savings of premium tax credits they said they implemented the budget neutral fashion so i

just want to ask dr. hoadley for their concerns of the taxpayer money and what can you tell us about the impact of taxpayers and what does that tell us? >> when the law was originally drafted it was done symmetrically. the ability could be wrong in either direction with that experience is every single year for which we now have data which is the first seven years of the program plans have made payments back to the government we're talking about a total of $8 billion so it as represented a protection to the taxpayer in the way it has played out.

>> again that is why this republican bill argument is flat wrong and a waste of this committee's time and the republicans don't have the facts on their side. the aca and medicare party boats have programs in seem very similar the republican friends seem to hate that program they claim it is un bailout but the and others say it made the government money and are more generous to the insurers and of course, the corridors are permanent although the other is the last three years in this is to the point where this is not controversial if not apply that aca so could you say more about the differencesyzíl3&ñy

there is an interest in protecting in both directions to set premiums if that is the way it works out. >> they claim that they are illegal and then currently wasting taxpayer dollars and then the department of health and human services talked-about the legal authority the law authorizes the collection of the user fees that alliance the guidance and this should not be a controversial program. sinecure time is expired when now recognize the gentleman from new jersey. >>.

>> i am a sponsor of the of legislation of the repeal. i do this because it is bad public policy and i would be deeply concerned about it. >> mr. haislmaier go into detail the difference between this program and medicare part d. >> be essentially the risk corridor program is between the government and the ensures that we share the profits and the losses we see deals like that of the time as a joint venture but the question in my mind is that appropriate?

i think a stronger argument is if that is appropriate medicare part tv and hear a and based on the following have medicare part d the insurers were doing something they had never been asked to do before with a totally new product that customers never bought anything like that. it is a different world then which these were applied and making adjustments to the market that has been around for decades them the government is adding subsidies for those who do that. so should the taxpayer at that point be involved in profit a and loss in did

issa ahmad elevated the the normal profit and loss wrist. >> thank you i am willing to give the another panelist time to respond to my question. >> i would argue the uncertainty was greater than the affordable care act with medicare part d over prescription in drugs people use those from one time period to the next great the need for broader health insurance is much more volatile i'll. there with some of the same questions from part d who will enroll? will there be pent-up demand?

and those boys without treatment to come in for treatment those kinds of uncertainties make it hard to set premiums. >> avaricious similar of a prior to arriving and understanding volatility for some time. from what mr. haislmaier has said. and respecting the views of all interested i want to ensure the public my sponsors of the legislation have deeply held beliefs that risk corridors should not be permitted in this

situation. >> with the appropriations a share, of medicare part d has the wrist corridor program that has a source of funds as you read the health care legislation it is not the case was a lack of appropriation but it is my legal judgment the administration cannot make payments with losses under the risk court your program. >> of a bite to submit for the record. >> i only have 15 seconds in december i ask for a secretary of hhs if it was legal to make subsidies to the federal exchange as opposed to the state exchange than she did not answer the question. that is not the topic this afternoon but now we have to

do have the split on the significant issue in the supreme court will eventually address the issue and in my judgment with statutory lot to move forward with the appropriation that has not occurred. >> now recognizing the gentleman from texas. >> dr. hoadley i know that you answered about the affordable care market in this the new prescription in drug program that aca informs the market so they are fundamentally different so the insurers can no longer discriminate based on pre-existing conditions that they can no longer offer with choate coverage the

does not cover hospitalization or disappears when they needed the most. and this means when pricing for a market coverage but could you go into more detail the wrist corridors necessary with part d and why they're also necessary for the affordable care act? >> one of the things that but if it is not needed if the plans could estimate their premiums accurately been no payments would need to be made then there is no cost in either direction there is the 3% court or for going higher or lower if they stay within that

estimate but the other point is you could make the argument that they were well into the program to be phased out and there is legislative authority to make the decision for cms to decide if that has been extended with the aca to have the last just for the three years. but there are ways of both programs to protect both the taxpayer against that uncertainty. >>. >> and in 2009 in the trust fund could not pay its bills through 2017 only three

years from now. but the report goes on to explain this improvement is on part of the reforms with the affordable care act so reflects broader trends through much slower growth policies through 2014 since the affordable care act the prices have risen as lower rates than any other period those 50 years. and better benefits and health care cost could you comment with medicare and aca? >> the one thing to take from that lesson coming out today with the trustee report is that turns out to

be true to the broader health care system as well why plans major now making plans back to the government so there is a linkage between the savings with health care costs generally and the potential to protect the taxpayer to make sure it benefits from that lower costs trend rather than the benefit going to the plan. >> i want to reiterate over the 15 months prices have risen at a slower rate than they have over the last 50 years. i will yield back my time but i hope we can work on legislation if there are problems with the ac a fix it let's don't strangulate after we see success after only 50 months of low law. i yield back my time.

>>. >> i appreciated. mr. haislmaier and the payment that would be made up bin year number two or three butted by year's three they are less than total payments owed the administration said people establish the new and future guidance how to calculate risk payments if they do not now ask -- match the payments in the final year of the program extra funds come from taxpayer funds where will hhs come up with it? >> i don't know where they will find the money it will either come not use the extent to transfer from other accounts there is some

revenue hhs received directly for user fees like clinical laboratory and things like that but you have to ask them. i don't know where they will get the money. >> when the rules for the wrist corridor were published the administration was willing to pay more than they collected subsequently changed to a budget neutral position is an anything again in the lottery interpret to not keep the budget neutral? >> that is why you have this issue there is nothing that prevents them in the authorizing statute there is the appropriations question it does not explicitly have this budget neutral in the authorizing statute spirit does the president's health care law required to pay the

muffled amount. >> i do not understand. >> does the president's health care law require hhs to pay the full risk corridor amount regardless of any shortfall? >> it could be interpreted that way. yes, sir,. >> does the risk court or incentivize plans to underbid those premiums in your opinion? >> that is one scenario where you could see losses in the program with a significant underbidding and the concern is the pressure on carriers to keep that down. yes. >> the administration claims the wrist corridor is nothing more than the user fee.

is it a user fee? >> no. the user fee is a different animal governed by different statute -- statute. it is a fee charged for a service the government provides to the user that is not generally provided to the public. the exampled you are most familiar with when companies go before the fda to get a drug approved they get the benefit of that regulatory approval so they charge of a user fee there is a statute in the books to encourage

. >> i yield back the remainder of my time.

>> things to go over like the legal aspect initially this cbo estimated the return to the treasury then glossed over it would not return rather full budget neutral subject to appropriations. that is a far cry from being but they note they initially called it $8 billion because of that care part d there were payments but i was told before the subcommittee it is now estimated it will request to over $1 billion more than day anticipate so now they require it is not

clear where that comes from and it is interesting they will call this a fee but then the president's budget he does not call this a fee. also of interest and never in the legislation is a call a fee but now it is called the fee. of the into a revolving fund that is not set up so there is no subject of a revolving fund in the legislation nor the fee but now we're told is toughie but the revolving fund does not exist but through the legal opinion but if the other side could do away with congress prerogative to appropriate and designator a revolving

fund that is set to the exercise i suppose that comes from being loyal to one's president. a shame. i am loyal to the constitution. and requires a authority for a revolving fund that the aca specifically does not include. so let me now conclude with another statement and now mr. -- mr. veuger. it is interesting. [laughter] the president and my congressional colleagues that if you like the health

plan you can keep it. 93,000 louisiana residents lost their plan because of obamacare and the president's promise to put a euphemistically brandon order to provide relief for those individuals the house passed keep your health plan act. the house must react to business is a and employees the health care protection act allows millions of workers in the crude market to keep the plan they like and i also think my colleague to introduce the bill while it is important with those mechanisms for companies in the private market or asking to follow

the constitution they have decided to ignore the of law and make payments to insurance companies without congressional approval the risk corridor program to make sure it is not a vehicle to ignore the constitution by the administration. i yield back. >> will recognize the of vice chair five minutes for questions. >> i want to thank our witnesses for being here. and also for the chairman to make time for us to have this hearing. and to bring this bill for word it is amazing to me with the legislative process for obamacare and the launch of obamacare and the failed rollout now the implementation where the

cost will be. as dr. cassidy was mentioning we're now hearing it is not really a tax but is a fee. dick goes to a fund but it seems what they're doing doing, they're not sure who to blame and i find it so interesting one of the biggest complaints we get is about insurance cost and access and an era networks and everything costs more then people will say now we hear the insurance companies want to you to bail them now. don't you dare bail them out. if you were with me in my district that is what you would hear.

much of this is based on the failed program. and i know mr. haislmaier you have look dash up that program and i know that it thrills he has grown weary with me. the failure of that program with the democratic governor to take it down it was too expensive to afford some mr. haislmaier who pays all these taxes and fees or regulation tax is zorach says fees and who eventually pays all of this? finigan consumer does when they purchase through their

tax bill. >> in those letters showing the insurance costs to the consumer would be reduced 2500 you find this anywhere? >> my colleague published a paper and we will update with new data and as expected the only states where you saw any measurable decrease of premiums where states that already made a worse mess of their market before it was enacted like new york is the prime example. when you made things worse i guess this is an improvement but everybody else saw increases. >> in tennessee we had had cost estimates of 18%. as you can imagine when we are busy with festivals and farmers' markets people are

not happy with that at all. talk for just a minute on the record as dr. hoadley mentioned part d have a bike you to talk about the difference of the wrist corridors for a see a and part d. >> it is very similar. the issue that i pointed out is simply whether it was appropriate to for the government to affect the underwriting profit loss risk in this market where someone could make the case given medicare was three-quarters government-funded as the totally new venture you could make the case that underwriting the profit and

loss risk might make sense but frankly the problem here is there is so many ways in the legislation were subsidies are hidden through the back door with little trust of the administration to implement this legislation that a lot of people with some degree of legitimacy are concerned this is another way for the back door deal looking at how this sets up insurers to reduce the copays and deductibles it is not transparent or accountable so the safest thing to do is make it pleded neutral by statute and if it is needed they will use it and if not they will not. >> we now recognize the

gentleman from louisiana. >> go through once more how they see a treat small businesses differently than those whose health insurer? >> small businesses that go into the marketplace to buy larger companies that sell venture to protect themselves from the rest. >> they protect themselves from the rescue imply there is a risk delving into the regulated market to upsize the costs that comes with the regulated market. fair statement? >> they're mobile sides but

if you are self ensuring it is under that aca as well. >> this seems it strikes me in general the cost increases of the mandated benefits in the non aca market. >> is more limited. that is fair. >> so the cost is greater on the smaller employer? >> that is fair to say so they are getting hammered the most? >> yes with the exception of microbrews that want to use a small that is fair to say. >> the cbo recently put out a study that they have lower the cost of coverage be coz there is wage reductions under obamacare and this was

by design. mr. haislmaier can you tell us the amount of money that is available through the reinsurance program relative to the size of the market that is in the exchange's? >> the reinsurance program makes available as much as $10 billion. >> $10 billion? >> $10 billion through 2013 that aggregate premium for the medical market was $28 billion. >> with the $10 billion subsidy? >> if you make various assumptions of the increased costs and enrollment or you

double that market he would give us $50 billion market spinning so 30 percent of that loss already covered. >> that is my point. looking at us situation of uncertainty there is that the insurers did not know how sick they would be. my point is there is the appropriation of ready in there and in the fact it will go to that individual. >> it is with that constitutional fashion. >> i am sorry i did not finish with my conclusion but the problem of the aca disproportionately has cost on smaller firms that we hope the does none seem reasonable as a remedy to

allow them to keep the policy if they like making keep better go to the regulated market. >> there is something to be said for that especially with the promises made to them when the legislation was presented and approved and not ruled out yet. >> so asking the president to keep his word to keep your plan would be reasonable. >> that is fair to say. >> we now recognize the gentleman from georgia. >> mr. chairman.mó$ró$vs

those would have been aware >> collect me interrupt you for a follow-up. that is that great segue. under the democratic majority.

there was knows the committee markup of the affordable care act there was also no legislative hearing, no subcommittee markup for full committee markup of the senate bill do you think it was responsible for washington democrats with something of this magnitude and could it have helped members realize that the law would lead off to plan cancellations for millions of americans if they just followed regular order? >> given us since it was reasonable to fast-track legislation it would not have passed otherwise regular order would have kept it from doing that. >> of course, as we know the

41st senator require them to invoke reconciliation which has never been done before or since. if we had done things in the right way for every member of congress had read every single word, every line, every page of the 2700 page bill we would be more likely to get their right. health insurance companies and the exchange expect nit - - net payments of $1 billion from the american taxpayer. isn't it true while the affordable care act and medicare part d contains risk for programs that is much more likely they have

to pay for some losses under the a affordable care actress corridor program has to that modernization of 10 years ago? >> it is too early to draw a conclusion but that the information that they have after a few months of operation is to have realistic expectation it just remains to be seen. >> you told us with the medicare part d that the taxpayers the essentially have benefited to the tune of $8 billion over 10 years? >> not the exact arithmetic more back at $8 billion.

>> blesses it is predicted and reported by health insurance companies they expect they get net payments from the taxpayer of the least $1 billion it is appropriate an opportunity to talk about the bills that my colleagues representative cassidy and others have to eliminate that risk corridor program to do something about if you like your health insurance plan you can keep it. period. no exceptions to say yes in that small group market that 2013 policy the people that like them that is very appropriate legislation i hope we pass in both houses and obama will sign it into

law. >> i now recognize the gentlelady from california. >> dr. hoadley i want to go back to your testimony the exchange across the aisle the differences between medicare part d and the affordable care act. is that mandatory or not? >> for people to sign up? >> it is a mandate. >> is medicare part d a mandate? >> it has the penalty that has the incentive. >> but it is not a mandate it is a personal choice every senior can take? also you pointed out that initially the risk corridor

was a three year temporary brisk corridor when put together? >> no. it was set up as a permanent part of the program but the amount of payments was greater in the first three years than the left the department with the option but to do after. >> then it continued? in your opinion you see the same thing happening with the affordable care act considering it is supposedly temporary? and an equity affordable care act it is good just for those three years. >> but they could make that change. >> know they could not. >> i want to point something out to day darrell i submit

these to report obamacare taxpayer bailout with the white house involvement in includes showing senior adviser to president obama valerie tear it directly intervene to to an insurance companies see a threat to increase premiums so must the white house acted. soap to this i would like to add this e-mail and report to our report today. >> i have not seen this report. >> cavelike to submit if possible. >> sure. but never like to reserve the opportunity to object.

>> we will wait until it comes down. >> so my point is this a subject based on how the program is going and mr. haislmaier as far as the risk corridor goes, you had mentioned some of the risk with the back door deal trying to keep it budget neutral as with medicare part d with a program that worked very well is that the effort to keep premium costs down? could this be a risk corridor? >> it is a legitimate concern clearly it is the administration as it tries to keep premiums down this

is an avenue to make up that money that is a concern and the way the statute is written they could exploit that ambiguity so that is why you could get rid of it so that it is not a budget neutral and clearly the potential is there but we don't know yet until we see the results. >> we can look back and look at how it is played out. >> in that 25 seconds that i have looking with dr. cassidy what members of congress may or may not have known to keep the health care plan do you believe the

president knew they could not keep their insurance plan? >> i don't know but i would hope that he knew. >> thank you. i yield back. >> has the staff to enable to get the report? >> do you have it? to make the problem i have this might understanding is he has not made this report public until we can see it. >> it was released today.

>> until today he had not made them public. >> i believe you adjust have not seen it. >> we will get it to you today. [laughter] we are objecting until we have seen it mr. chairman. >> . .

without objection we will enter it into the record. all right. i remind members that they have ten business days to make -- to submit questions for the record. i am sure the members will have follow-up questions for the witnesses. we will submit those to you. we ask that you please respond properly. members should submit their questions by the close of business on monday, august august 11th. >> thank you very much for your