that briefing on c-span.org. florida governor rick scott says he won't extend voter registration due to hurricane matthew. clinton campaign says the hurricane is cutting four days of voter registration in florida. registration there ends on tuesday. ..

the presiding officer: the senate will come to order. the clerk will read a communication to the senate. the clerk: washington, d.c., october 7, 2016. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable ted cruz, a senator from the state of texas, to perform the duties of the chair. signed: orrin g. hatch, president pro tempore. the presiding officer: under the previous order, the senate stands adjourned until 9:00 a.m. on tuesday, october 11, 2016. october 11, 2016. >> and now a parent the state insurance commissioners appearing before a senate committee to discuss how health insurance markets benefited by the federal health care law. this thing was led by senator

ron johnson who chairs the homeland security and government affairs committee. this is just over two hours. [inaudible conversations] >> good morning this ring of the settlement security and government affairs committee will come to order. the subject of hearin of the hes the state of health insurance markets. i want to thank all other witnesses for your thoughtful testimony for traveling here. it's a beautiful city. you brought beautiful weather by the way. it's not quite as humid as it now is but i appreciate you coming year on a very important

subject. truth of the matter is the reason i decided to run for the senate was because of the health care law. i come from the private sector. i understand marketplace of. understand what works, what doesn't work. i was concerned about that are harmful of the own real people, the facial production affordable care act would actually result in. it's coming true. the problem certainly all of us have had in evaluating the facial production affordable care act is the complexity of the data. there's not just one overall metric that you can point to and say hey, it's not working. there are some metrics. i think some pretty powerful ones. absent that very simplistic type of metric to evaluate the success or failure, i think probably the best way of doing it is the way you evaluate any kind of product or program. i come from private sector. you do capital expenditure

reviews and managers would say this is what we expect if we invested this kind of money. maybe the best way to take a look and start up again with my opening statement which i've got a written open statement of it like of that into the record. i will into your schedule a me too. it is literally to take a look at what the promises were made and how do those promises, or those promises fulfilled or not. there were three primary promises made when people were considering debating, discussing and finally passing the patient production affordable care act. verse one was pretty famous and i'll quote. this is from president obama when he made this promise 31 times. if you like your health care plan you will be able to keep her health care plan, period. you can keep it. well, there are all kinds of figures begin how many millions of americans have lost their health care plan. i've seen the messiahs i think maybe 8 million but let's be

conservative and go to the urban institute. their most recent study said about 2.6 million americans lost their health insurance plan. in wisconsin we have something called the high-risk pool. everybody that wrote come into beebut involving the right of te patient production and affordable care plan new high-risk lines going to be eliminated. i think more than 40,000 wisconsinites are on the high-risk pool and again the authors of obamacare, i'll just start calling obamacare, then you those individuals were going to lose their health insurance plans. i had a couple early on, this was in the fall of 2008, call me in a panic. is why that stage for i believe lung cancer. he was suffering, treated for prostate cancer. they were losing their high-risk pool plan. they were paying $700 a month,

$767 a month for insurance and high-risk pool which was very competitive. that was a program that actually work very well in wisconsin. first of all the tried to get healthcare.gov almost 40 times and couldn't. because that was a disaster when it first was tried, initiated. finally, called our office seeking help. we did guide and a couple of the entrance companies that will be on this exchange is pick the cheapest but they could find was $1400. but again that couple lost their health care plan, contrary to president obama's repeated promise that would not happen. the second guarantee, if you like, that means again quote president obama, that means the matter how we reform health care, we will keep his promise to the american public, american people. this promise, if you like your doctor you be able to keep your doctor, period. i don't think anybody would

stand up and say that that has been true. it levels the doctors. we have a couple in marinette who have lost their doctor. i want to read a quick quote. the only plan they could afford under obamacare meant they would lose the doctor they had for over 15 years and the quote was, now i have to see a physician i have never even met. broken promise number two. i think the third most famous promise was as a candidate, president obama's repeated, in an obama administration we will go premiums by up to $2500 for a typical family per year. fashion we will lower premiums. the truth is when he was running as a candidate according to the kaiser foundation, the average family spent about 12,006 or $80 per year. the latest figure by the kaiser

foundation and average them as being $18,142 or you. that's a $5462 increase since president obama made the promise. you can look it year by year. that's the largest increase because -- even from 2013 the implementation, the year before implementation of obamacare and 16,351, and today is 18,142, still at $1791 average increase across the board. so obviously the average family has not seen a $2500 per year reduction in the health care. i've got specific examples. janice wrote me and said that prior to obamacare she was paying $276 per month for health care. our latest quote was $787 per month. that's 185% increase. we had a woman, a young woman

who, a young mother, she was a nurse. her husband operated in the hvac industry. they both were working. they loved their jobs but because of the increase in premiums, they went from about $500 per month for $700 -- to $1200 per month. a $700 increase, the only way they could afford insurance, they were not getting through the employer, having to buy the individual market, only way to could afford insurance is if she quit her job so the income was lowered for another so they could qualify for a subsidy. broken promise number three. the really sad part about this is this was known. the authors, the people who support obamacare had to know that those promises could never be kept. i just want to quote a number of quotes by jonathan gruber who was certainly one of the individuals involved in the offering of obamacare.

politifact called in an architect. one of many architects of obamacare paid almost $1000 by the decision to cancel. he was taught about the cadillac tax. is his quote. if we just ask the insurance companies they pass on our prices that offsets the tax break we did and did in so doing the same thing. and here's really the important quote. it's a very clever, you know, basic exploitation of a lack of economic understanding of the american voter. he would wan on to talk about te cadillac tax when he said quote, and this is jonathan gruber, one of the architects of obamacare, somebody who knew what he was doing, said quote, americans were too stupid to understand the difference. he also said the lack of transparency is a huge political advantage. i basically called the stupidity of the american voter or whatever, but basically that really was really, really, really critical to getting the

thing past. that's a pretty sad state of affairs but that's the truth. that's what happened. now, i just wonder how much is kind of ask the question, we've got some agencies in federal government one set up under dodd-frank called the consumer protection, or consumer financial protection bureau. we also have the ftc, to take a look at consumer fraud to try to protect consumers. i just wonder, just kind of wondering, i wonder what they would do, they can enforcement action to take against the insurance company that sold a product and insurance but said hey, once you buy this thing, you'll be able to renew this forever. if you like this plan you can keep it. and then in the fine print, that's not true. in addition said hey, this insurance plan allows you to keep your doctor, period. you can keep your doctor, but in

the fine print said, well, not if that doctor isn't part of the network that we're going to cover. and three com if you buy this health care plan, what if you're paying less cheer your premiums will go down by $2500 is did your premiums went up $1700 or $5000. i just wonder what these federal agencies would do to an insurance company that engaged -- let me be clear what this administration did. it was a massive consumer fraud. that's what it was. that's what obamacare, obamacare is a massive consumer fraud and we will be taking a look at that today. i will probably be asking the deputy insurance commissioner from wisconsin kind of his thoughts on how we handle that in wisconsin during my question. so again i want to thank the witnesses are coming. they should be very interesting hearing, a very important hearing. because this obamacare law is costing american taxpayers a whole lot of money. we all want, we all want people

to become health care. we all want people to have access to be able to get high quality insurance. but we didn't have to completely remake the insurance and health care markets to try and fill that gap. and help those individuals who all want to help. and i think we're going to see this isn't working, those promises were not lived up to. and so again i want to thank the witnesses. i'll turn it over to our ranking member, senator carper. >> thanks. thanks to much, mr. chairman. welcome to want it all. who of you is from ohio? i am an ohio state graduate at a used to think that what was a little town just to of columbus. [laughter] i later found that it was a whole state. and i moved there and to let me be the congressman, treasure, governor, senator and city today with my colleagues to be able to welcome all of you today. tell the governor i said hello. an old friend. giving my best. a little after noon today a handful of senators, democratic

and republic is believe it or not i'll gather in a room not far from the senate floor something we do almost every thursday that we're in session. for maybe a half an hour so we will take part in a bible study led by a guy just be our admin the navy, deigned very black, our senate chaplain today. they are democrats and republicans amazingly sit there, read in the same room, read the scripture, pray together, share things with each other and talk all kinds of things. invariably doing those conversations, chaplain black will ask how our faith should guide us here almost every, how should our faith guide us. in the work we do here and at home. it's a good question. it's a real good question. at almost every wiki reminds us of one of the two greatest commanders we've all heard and that is to love our neighbors as ourselves, to treat other people the way we want to be treated. chaplain black often invokes matthew 25 as well.

we may not recognize that light weight but you will and second because matthew 25 calls on us to focus on the least of these in our community. on go to paraphrase a today. when i was hungry, did you feed me? when i was naked did you close the? when i was thirsty did you give me to drink? when i was sick or in prison did you visit me? when i was a stranger in your land, did you take me in? matthew 25 doesn't say, however, the following things. it doesn't say when my only source of health care was a card emergency room, did you help me? matthew 25 doesn't say when i turned 22 and could no longer be covered by my parents health care, were you there for me? it doesn't say when i could no longer find health care coverage because of a preexisting condition, did you do anything about it? it doesn't say what i could

afford the medicine evidently to old adage up to be the kind of parent that my children needed, e.g. lend a helping hand? or it doesn't say when i was denied health insurance because i happened to be a woman maybe of childbearing age are charged an arm and a leg for that coverage, did you go to bat for me? most of us are people of faith, different faiths. i believe we all agree on one thing and that is we have a moral, an obligation to treat other people the way we want to be treated and we also have an obligation for the least of these who live among us. i believe that. i think my colleagues believe that at the most other people in the room believe that another like to think most of the people in our country believe that. because our nation's budget deficit, while down, has been great reduce, it's still too large, and we need to find ways to meet that moral responsibility to the least of these in ways that are fiscally sustainable. just about every american president since harry truman have sought to find ways to do just that. they believed in their hearts that when people in this country

are sick or in need of health care, they ought to be able to see a doctor or nurse or both within a reasonable period of time. i am certain that most, it not all, of our colleagues believe that, too, and i'm sure that most americans believe it, as well. so why has it proved so hard to do? my mom and dad used to say, the uses of the hardest things to do other things most with been. this is a hard thing to do. this is a really hard thing to do. and for another jesuit the time we might try to do something about it, meaningful, our efforts to be turned into a 30-second commercial and used as political weapons against presidents or members of congress who try to do what we all know in our heart is the right thing to do. i will be the first to acknowledge that the affordable care act is not perfect. i'm not perfect. none of us are. i've never written a perfect law. my guess is truth be known, neither have my colleagues. this legislation included improved. when this election is over, we need to go to work to do just that.

stop carping about a. carping is one my favorite verbs. [laughter] stop carping about i just go to work having said that, the affordable care act has sought to better ensure access to health care for all americans. how? in part by creating state-based health insurance marketplaces where people who may never before have had access to health care now have the opportunity to choose a plan that helps them get healthy and stay that way by participating in large purchasing pools not unlike the ones that federal employees have participated in for decades. the individual mandate that encourages people to purchase these plans is a well-tailored incentive that helps these marketplaces grow and thrive so that insurance companies aren't left with a pool of people to ensure that are largely older, sicker and more expensive to insure. in this room today, there are witnesses and members of congress who represent among others the states of delaware, washington, ohio, iowa and wisconsin.

the right of people with insurance in our states on average have followed by almost half since our respective mark places open. almost half. for the delawareans, washingtonians, ohioans, iowans and wisconsinites who may now take their child to the doctor, this is not only life changing, but it's also life saving. and these life-changing effects aren't being felt only in our states. today, because of the affordable care act, 20 million more americans have health insurance. who didn't have it before. are uninsured rate is less than 9%, an all time low. americans now have access to free preventive services like cancer screenings and yearly checkups. and the vast majority of people in the marketplaces buy their health insurance for less than $100 per month. less than $100 per month. this progress has been realized while extending at the same time the life of the medicare trust fund by 11 years. i find it more than a little ironic that we have been deadlocked in partisan fighting for years over a law that is unknown to most is actually

built on a couple of sound republican ideas, health insurance marketplaces and the individual mandate. to my friends on the other side of the aisle, your willingness to walk away from the policies you once championed is dumbfounding, especially when those very same policies are enabling us to begin making a positive difference in the quality of life for so many americans. a quick refresher for those who don't remember, republican presidential nominee, governor mitt romney, revolutionized health care in massachusetts by creating an insurance marketplace and requiring residents to obtain coverage. in fact, these ideas go back even further. in 1993, republican senator john chafee introduced legislation that proposed an individual mandate and the establishment of insurance purchasing pools. that bill looked a heck of a lot like the affordable care act we are discussing in this hearing. in fact, it had 20 republican cosponsors in the senate, some of whom still serve here today. fast forward to 2009, my first year as a member of the finance

and the first year of a new administration. our new president called on democrats and republicans to try anew to achieve what previous presidents talked about doing for more than a half-century. but, instead of coming to the table and pursuing a productive discussion about how we could expand access to health care for millions of americans, in the end senate republicans chose not to engage. but, the president and the rest of us soldiered on and finally passed this historic law that all of us acknowledged was imperfect. but a good deal better of continued to do nothing. like any major new federal program, adjustments are going to need to be made as it is implemented. unfortunately, we've had a hard time finding many willing partners in this effort. there used to be times when republicans and democrats could come together to make bipartisan health care reforms. some of us were here when we did just that. we created medicare part d, the prescription drug program, and we fixed it. we made it better. we created medicare advantage. there was a lot of blowback on that, too. what did we do? we fixed it.

we made it better. we did not together. that's not what we've done with respect to the affordable care act. time and again our republican friends, and they our friends, have blocked funding, properly mentation and i think commonsense improvements. republican governor to state legislators in 19 states have refused to expand medicaid, not john kasich. tell them i said that. leading millions of americans without coverage increasing marketplace premiums for millions more. it's a sad state of affairs when it seems sometimes that the only healthcare votes we're allowed are ones to repeal the affordable care act completely, leaving nothing in its place, and leaving americans with nowhere to turn besides a hospital emergency room. i'll close with these words. in a couple of months, americans will go to the polls to elect a new president and members of congress. i talk almost every day with delawareans who await with anticipation for that day to arrive. some of my colleagues feel that

way, too. once that day has arrived ago, and a new congress as well as a new president have taken their oath, we need to go to work to make a good idea even better. like we did with part d. like we did with medicare advantage. we can do that. we need to embrace what i call the three 'c's' communicate, compromise and collaborate. we need to embrace those words in the preamble of the our constitution to remember it starts out we the people of the united states, in order to form a more are african union. and we need to get to work making the affordable care act better. we can do that. i know we can, and with the right leadership i believe that we will. in doing so we will have in the words of mark twain, compounded our enemies and amazed our friends. let's roll. >> thank you, senator carper. by the way its 54 days, but who

is keeping track? [laughter] >> chairman mccain to study with an armed service committee hearing and he would like to say a few words spent i thank you, mr. chairman and i appreciate my complete said to be made a part of the record. at msn i was entertained by the statement of my different from delaware, and we are very dear friends, but to somehow now call upon republicans to work with you to fix this disaster after on the floor of the united states senate you did not allow a single amendment, not a single amendment by the republicans were about t the it's the first time an atomic program has ever been enacted without come on a strictly partisan basis. ..

a complete failure and my state is probably the best example that i know of. we now have 14 of our 15 counties with guess what, one provider. do you remember, if you like your doctor you'll be able to keep your doctor, period, if you like your healthcare plan, you'll be able to keep your health care, period. no one would take it away no matter what. of course, that turned out to be a lied. broken promise after broken promise, less choices, poorer quality of care, let me tell you, my home state of arizona is hurt. we are talking about next november 1st seeing 65% increases in premiums for our average citizens. we are now talking about -- we are talking about young people who are now opting clearly to pay a fine rather than to see these dramatically increasing costs and, of course, the cost

of health care continues to skyrocket all done in a pure partisan basis. i remember the victory dance that you guys performed after passing obamacare over without a single republican vote and so now the chickens have come home to roost, now won't the republicans join with us and fix this problem, give me a break. we need to replace it, we need to fix it and go back to the fundamental principals of economics which is not take money of young people to take care of unhealthy older. now, of course, the -- guaranty you that the next is government system which in europe is a two tier system for those who are wealthy and those who will have

a sub standard level of care. mr. chairman, i would like to have my statement included in the record but the people in my state are hurting. the people in my state are hurting. we have 15 counties, 14 of them. there's only one care -- one provider. if for a period of time we had a county with no provider. bluebluecross blueshield has moved in. if you like your doctor, you'll be able to keep your doctor, period. no one will take away your healthcare? of course, we have people scrambling all of the time as understandably, these providers have hundreds of millions of dollars in losses. they can't afford to stay in the affordable health care business. i thank you for holding this meeting and i thank the witnesses and if the senator

from delaware and democrats friends want to join together with us, yeah, let's throw it where it belongs in the trash can and start all over and give people an affordable healthcare system that they can live with and will not be the situation as exists in my home state of arizona. i thank you, mr. chairman. >> senator, mccain. it is a tradition this committee to swear in witnesses so if y'all with rise and raise your right hand. do you swear the testimony you will give before this committee will be the truth the whole truth and nothing but the truth so help you god. thank you, please be seated. i think our next witness, our first witness lieutenant governor taylor. >> thank you, mr. chairman. i'm really thankful we have mary taylor with us. she's a c parks first, 16 years in the private sector before she decided to get into public service. she started in our city council

where she did a terrific job so much she got elected to the state house and she became our state auditor and first state auditor to be cpa, she transformed the office and acknowledged nationally as having put together a cutting edge 21st century. she's got two other jobs, one is on regulation called the common sense initiative, big reason for ohio's economic success surge the kasich-taylor administration and then second she's the director of private insurance. here you have cpa with private-sector background, government background who is in charge of our ohio department of insurance and has gotten involved in the affordable care act. you're going to hear from her. she has interesting statistics, specific numbers as have

happened, 91% with regard to obamacare exchanges, who can afford that? she will have an opportunity of what's happening in the market, so i'm really glad she's here. >> lieutenant governor, i knew there was something i liked about you. lieutenant governor. >> thank you very much, chairman johnson, thank you for the opportunity to it have before the senate, homeland security and governmental affairs committee. my name is mary taylor. today i will provide testimony regarding ohio's experience related to the affordable care act specifically in regard to premium changes, market shifts and other trends since 2013. as the director of the ohio department of insurance i am responsible for regulating ohio's insurance market.

the seventh largest in the united states. ohio is home to more than 200 insurance companies and more than 1600 business in the state representing $76 billion in annual premium. for years, we have taken great pride in the competitive insurance market we have in ohio across all lines of insurance policy. under the leadership of both democrat and republican administrations the ohio department of insurance has been fair and thoughtful regulatory agency providing certainty and predictability industry is looking for to be successful which in turn benefits consumers. in fact, because our market is competitive, the most recent data shows recent auto and insurance premiums are below the national average and ranked 12th and ninth. but i'm here to focus on health insurance and what is happening in ohio. prior to implementation of the aca, ohioans benefited from the large selection of insurance carriers with more than 60 companies selling health

insurance products in ohio. consumers could buy plans with a wide variety of coverage options and the corresponding premiums to go with that coverage. unfortunately since before the law was implemented i and many others across the country including members of the committee pointed out that the aca would not work as promise. studies conducted in ohio at my request showed premiums would go up, consumers would lose choice and the market would suffer from turbulent and disruptive changes. fast-forward to today and the new aca era we live in. in 2017 assuming all companies approve today sell in the exchange by the ohio department of insurance enter into contract with hhs. only 11 companies will offer exchange products.

in 2016 everyone of ohio's 81 counties had at least four insurers selling exchange products during open enrollment. in 2017, 19 counties will have just one insurer selling exchange products and 28 counties will have just two. fewer options give consumers less opportunity to get the coverage they need, dramatically increasing premiums makes the problem even worse. based on final rates approved for 2017, the average premium as senator has said have gone up 91% since 2013. as insurers have fled the exchange recent statements from hhs indicate everything is fine, premiums around the country are increasing but the response is consumers are being shielded by tax subsidies that will offset the costs.

the cost of those subsidies will continue to rise as premiums continue to increase and the mesh taxpayer must shoulder that burden. i think most of us agree americans should be able to purchase health insurance without facing barriers because of preexisting conditions. we agree more can be done to improve the system to increase accessibility and promote better outcomes for patient, however, the aca is not living up to the proms made. in ohio less than 250,000 people purchased health insurance through the federally run exchange in 2016. if you consider there are 11.6 million people living in ohio, the means we have -- that means we have completely up ended the health insurance market, forced consumers to buy coverage they don't want or need and burdens oh on job creator all to offer taxpayer insurance to 2 at any time 15% of our population.

we need to increase access by reducing costs instead of forcing everyone to buy more extensive coverage that in many cases they don't need and they don't want. we need to empower states to design systems that's suited for their populations instead of forcing one size fits all mandate. in ohio, we have ideas to help improve our health system without destroying the free market as the aca has done. we believe there is a better more inclusive way to design reforms that increase access without driving up costs, but we need the the flexibility to do it. it is my hope that with the help of congress, states can once again have the power to implement positive change. thank you for the opportunity to testify before the committee today and i would be happy to

answer questions, chairman, when you choose. >> thank you, lieutenant governor. our next witness is mr. jpwyski, department -- can i say great state of wisconsin? i think i can. deputy commissioner since 2016, prior to his appointment as deputy insurance commissioner he served as office commission liaison and public information officer. >> thank you, chairman johnson and ranking member harper and distinguished members of the committee. last week at church we had par -- parable that was discontinued is we took care of lost sheep, we didn't take care of our

folks. you highlighted our high risk pool providing health care for the sickest and subsidies for the sickest and as well as those who have medical conditions and choose any doctor. unfortunately obamacare ended that. that was 20,000 people that were thrown into the marketplace that created additional problems. in our market the individual market has groan to 272,000 people from 200,000, however, with the 200,000 did not include existing medicaid where wisconsin had expanded it beyond the federal requirements. it did not in addition we had a number of reforms so we didn't need the passage of obamacare. we had to move back our adult dependence to age 21 because we had expanded 27 in the state of

wisconsin. our small group market has dropped by 30,000 people since obamacare, 2013-2015. our large group market has dropped from 1 million -- 1.2, almost 1.25 million people down to a million people. now, most of that large group market has moved into the -- the largely state unregulated space. so i think we have a number of concerns with the way our market has been hit. on top of that, we have seen a number of frustrations from a consumer standpoint regarding the rollout of obamacare and the continuing problems for consumers as we continue to regulate this market. so we actually had to delay the end of our high-risk pool by several months because of the disastrous rollout. we delayed the movement of folks off of the medicaid program into private coverage. on top of that, we are

consistently getting calls from consumers and consumer complaints and consumer complaints division that talk about interference with healthcare exchanges with folks in private coverage specifically when people want to terminate coverage, when they want to add folks to their insurance plan, they no longer are able to do just do that and call the insurance company and make changes, they have to call a federal bureaucrat and ask for permission in order to get that done. and that takes time and it creases errors and problems. so we have seen a number of regulatory issues. in fact, last year, i will high light another issue. we had a consumer had insurer contact us when the federal government asked them to take money out of their consumer accounts. they made a mistake and undercharged consumers and at christmas time ordered them to take money out of accounts of

consumers in order to pay the back premium. insurance regulators don't let insurance companies charge back consumers when they've undercharged them. so we actually had an issue in order to protect our consumers to present the direct pulling of the bank account information from consumers. at christmas time. on top of that, we are seeing in this next year the auto reenrollment process which is illegal in the state of wisconsin. we've indicated that it's illegal. we have 64,000 people in the state who will be losing their coverage because not just because of market withdrawals but because of service area changes. those 64,000 people would auto be enrolled and sent to another carrier. their private information would be sent to another private medical insurer from one to the other without permission by the federal government. it's going to be a hugely

fraudulent, potentially fraudulent and problematic area for our wisconsin consumers. 64,000 of them potentially who could see these numbers change. in short, we have seen a number of issues in the state of wisconsin and we felt we did an excellent job protecting consumers. we continue today try to protect them of the damage of aca, when we roll to 2017, i will highlight there will be 200,000 people that will be newly on obamacare that are in traditional plans in our state. the damage is not yet done. in short, wisconsin believes that the damage of obamacare is hopefully not permanent and it's moved back to the states so we can fix it. >> thank you, mr. weiske. >> thank you, mr. chairman. it is my honor to introduce to the committee today iowa insurance commissioner nick,

nick has served our great state as commissioner since february 2013 and we appreciate your service, commissioner, and he also serves on the national association of insurance commissioners executive committee. the commissioner house administration credentials and professional background make him an excellent witness today to talk about this important topic. thank you, commissioner for traveling to washington, d.c. to share your expertise with this committee and the audience members and your perspective on iowa's health insurance markets, thank you, commissioner. thank you, mr. chair. >> thank you. good morning, chairman johnson and the members of the committee. it's an honor to be here to share our views in the state of iowa. i really want to focus on a couple of things in my short time. i want to focus on the duty of an insurance commissioner and the rates to what's happening to members of our state and really a couple highlights to fix some of the issues and i did submit

written testimony which is much longer outlining the potential fixes. as an insurance commissioner in the state of iowa we are pretty local. 3million people, we know the folks that these are impacting. 75,000 iowans that are ready to increase 43%, i know a lot of these folks. i see them at church and grocery stores. a lot of them are friends. i want to share a good storyover -- story of a friend of mine. he has two children in third grade and second grade and a lovely wife and when he got a notice he called me and he wasn't happy and at the end of the day he understands what's happening here and his wife, they are looking in making significant decision, do they downsize their home, go without coverage, these are impacting all of our constituents. in our state we recently

improved rate increases to 19% to 43% impacting 75,000 iowans. rates have been up about 100% since implementation of the affordable care act. i'm not saying it was working before, rates were going up as well. if we have ideas and solution to make it better. what we are seeing is a very high concentration of risk in the individual risk pool. we had a higher risk pool that was functioning pretty as well. we have expanded medicaid but a lot of the folks in this population, a lot like a medicaid population and so we have commercial insurers working to insure some of the medicaid-type population folks and to give you an example one claim is generating $18 million in cost, even with the discount for the providers $12 million. that one claim is 10% of the 43% increase.

that one claim and that risk po $ protection from that kind of a catastrophic claim. ly tell you that claim and few small region carriers would put them insolvent. we were the first to take over one of the failed co-ops. we had to take over a co-op, first one to fail and so that caused a lot of disruption as well for 120,000 members in iowa and nebraska. folks are skeptical about the market. we will have 23 counties, i believe, with one provider, we will have about half a county with two providers in the exchange and so there are issues of less choice. the products that are seeing the moaks traction in the market is a narrow network product so you have a concentration with one group of doctors that you could use and, again, those plans are fine. i think my family would buy one if we had the option of buying

one. we really don't know who is going to sign or not to be in the exchange. we will know in the next couple of weeks. we talked about written testimony, risk adjustment and risk corridor, i would think we would want to keep it that way. it department work that well. risk adjustment, new rule that cms put out that those look encouraging and a way for carriers to comment on that. but the reassurance is a provision that actually wow and helped stabilize the market a little bit. we are going to look at a 1332 waiver potentially to try to make iowa-base solution for iowans. we think that's the best way to

do it. and our issues are not what washington or texas or wisconsin ohio would have. so we feel that pushing it back to the states to have more control makes a lot of sense. so i would like to conclude with it's an honor to be with you all. i will answer any questions at the right time, thank you. >> thank you, commissioner. >> mr. kreidler served since 2000, he served in house of representatives representing washington's ninth congressional district. congressman kreidler. >> thank you very much, members of the committee. it's a position that means that i served ten years before the affordable care act and six years now and because it is the law of the land, i have been working diligently to implement

it to the fullest extent possible in the state of washington and i can tell you even though i heard different stories, it's had a profoundly impact on the state of washington not without problems but profoundly overall very positive. we really need to look back at what was like that environment before healthcare reform. we have approximately 7 million people in the state of washington, nearly a million of them were uninsured, that was 14% of the population. we were experiencing $2 billion a year in uncompensated care. that's care that's been paid for but it's coming at the expense of other payers that are absorbing those costs. we also had a robust market at the time before the affordable care act, some 11 insures in the individual market. if you looked at the products, none of them covered maternity or prescription drugs and for many people they would find that seriously shortcoming.

today we are down to 7.3% uninsured, nearly a 50% drop but since the affordable care act came into effect and we have taken the 2.3 billion in uncompensated care dropped it down to 1.2 billion. almost 80% of the people inside of our exchange and we are looking to at approximately 300,000 people. of those -- excuse me, 110,000 people inside the exchange. comparable number on the outside. 80% of them now receive a subsidy. today we are looking at for 2017, 13 insurers in the marketplace offered to consumers in 2017. the rate that is came in were higher than we had anticipated at 13.5%, their request, not what we have approved.

we will know in october what the final number will be. it is higher and certainly something that was not unexpected when insurers started in 2013 submitting plans, they had no idea exactly what they would wind up charging. it's a democratic change. now they cover maternity and drugs. it's a real change. they're still in a learning phase here. double-digit rate increases are no surprise. we saw it very commonly, much more so before the affordable care act. and 2014 as i said it was just really a guess at that -- at that point in time. no one wants to see rate increases going forward least if you're a statewide elected like i am. but i think one of the things

that we really look at is the kind of changes that are going forward as commissioner was talking about, one of those things if we want to make it work better that i would identify was we've got to make sure that premium relief to consumers is something that is there and perhaps even more so than what we have currently. we also need to stabilize the insurance -- health insurance markets going forward. number one task for us was to get everybody covered. that was the first step. the second step critically important we got into a much better job of helping to hold down healthcare costs. as i look at changes can make a profound difference and helping stabilize the insurance market, one of them would certainly to be uphold down the cost increases we are seeing in prescription drugs. that's the number one driver right now and the plans that came forward to us for 2017. from a national perspective,

make sure those 19 state that is have expanded medicaid do so. in the state of washington we had 595,000 people that are now insured that previously did not have health insurance through the medicaid program. i would also say that we've got to make sure that those states that have nonconforming plans out there so you have break-up of the risk pool by virtue of nonconforming plans and conforming plans to the affordable care act. they all need to meet that same standard. washington is working as i said diligently to make sure that we fully embrace the affordable care act reform and provide those to the people of the state of washington and holding down premiums is the big factor to stabilize private market. media steps need to be taken to establish this. if we want to make this sustainable in the future, we have to address that second part. get them covered number one and number two stabilize the market.

thank you very much, mr. chairman. >> let me start with you, you said 18% increase is what's been requested on average? >> 13.5. >> 13.5. you said that was not an expected no surprise. you were assuming that position, you heard candidate obama say his health plan will reduce $1,200 per family, did you believe that? >> i had to believe that there were a number of claims made during the discussions that i didn't as a professional regulator necessarily embraced in totality. >> commissioner,weiske, it's very difficult to try to figure out what the average increases are. i know manhattan institute has done national study by state. i've looked at that. our biggest cost increase in terms of individual obamacare market was in the first year but as i put the numbers together based on the expected increase again for this year, the lowest

increase for -- one of the demographic books since incemción of obama is 1.8 times. you're paying a buck, now you're paying 1.80. the highers is over $3. i want to go to the point in terms of, you know, what would happen to the state of wisconsin? i kind of raise the issue on a national level with cfpb or ftc. what would you do because i know we have laws in wisconsin that you are authorized bring enforcement proceedings against insurers that engage in unfair marketing practices. that's defined as misrepresentations, unfair inducements, a tax penalty would be an unfair inducement. unfair discrimination, i don't know about that.

we have definitely seen that and extra charges like the cadillac tax, attempt to unduly influence employers. that really describes obamacare. going back to the question i asked if there was an insurance company that made those claims, 2,500-dollar reduction, what would you do as deputy insurance commissioner to the state of wisconsin? >> so i think there would be a couple of things. first up front i don't know that we would let the insurer do that because they would go insolvent because they won't be able to meet the obligations, those promises are not deliverable. i think we have a concern if the insurer filed those with us. if they filed from advertising standpoint, i think we would consider that unfair -- unfair trade practices and we have concern and take action against the insurer because those are promises that any individual

insurer could not deliver. in fact, we didn't allow them to do that. we have done that over a number of years. >> unfair trade practices, that would be another term, consumer fraud? >> it would be a fraudulent advertising to consumers. >> in the private sector that's unlawful? >> correct. >> when it's passed by the federal government, i guess that becomes legal consumer fraud? >> it appears so. >> i really want to get back because i was shocked by a couple of your stories here. describe again the federal government forced you to recover undercharged premiums? >> so there was a particular insurer and we actually have the order that we can get you a copy of, a particular insurer made a mistake in their -- in their rate system so recording system was correct but their rates was incorrect. money was pulled out of their accounts, an incorrect amount, lower amount was pulled out.

>> had that occurred to private company, would that company have been allowed to pull money out of accounts? >> they wouldn't have even asked, they wouldn't have asked us to. they would have expected -- most companies are good companies, they certainly wouldn't ask regulator if they could go back six to ailgt months and pull money out of consumers' accounts. they wouldn't ask that question. >> when i first got involved in this i called aca, obamacare greatest assault in our lifetime, this speaks to that. talk exactly about what's going to happen individuals without their approval, what is going to happen exactly with auto enroll? >> so a consumer who is in currently in a plan with a health insurer that's entering area or market in its entirety will have information sent by an insurer chosen, they have the

option to choose it by the way. so that information will be sent to the insurer who will then contact the consumer and ask them for premiums. >> aren't there laws against unauthorized transfer of medical information from unone party to another? >> we have made that argument, we have made that argument to a good friends in federal government, we sent a letter indicating all the legal arguments including federal law that is we feel are broken in sending people's private medical information, private information from one insurer and financial information, by the way, from private insurer to another private insurer. >> insurer would not be allowed to pass the information without the insured's permission? >> absolutely not. >> that insurer would be breaking the law? >> absolutely.

>> once again this is legal -- >> we don't think it's legal. they are treating it -- >> they're doing it on their own account. >> correct. correct. >> wow. lieutenant governor, i want to talk about 60 companies down to 11? that wasn't supposed to happen under the aca, wasn't it? weren't competitions suppose today flour snish i would loved to have been monopolists, competition is best realized when you have a lot of competitors. that's not what's happening here . >> unfortunately we are seeing consolidation nationwide, of course, we know there are a couple of cases pending regarding mergers of large

insurance companies but even more than that when you look at who is still left in the market selling on the federal exchange in ohio as you've already stated, we had 60 companies that prior to the aca you could choose from any -- any individual could choose from versus we are going to 2017 down to 11. i think that at which i stated in my testimony, the starker fact is when you look county by county. i spent all day yesterday primarily in ohio and they are one of the counties that will have one insurer. i don't call it a choice. i met with a lot of people in different variety of audiences and crowds and it seems to me that everyone knew that that was what was going to happen under obamacare starting in 2017. they're very concerned, in fact, one gentleman asked me, isn't there something that you can do

or your national association which we are all members of and unfortunately, no, the answer is no. >> i think you mentioned in your testimony, did you have an overall average amount that since obamacare your insurance has increased? >> 91%. >> 91%. senator carper. >> thank you, mr. chairman. let me just start by saying a number of states, many states as demonstrated by the commissioner of washington today have fully embraced the healthcare law and have seen great significant benefits for most of their residents and i request that -- that statements from insurance commissioners, market leaders help the secretaries from several states including rhode island, california, virginia and delaware are entered into the hearing record. i think all of these -- i would make that suggestion.

>> without objection. >> the affordable care act is working in their states, lowering the uninsured rate and the second point is that would be made is medicaid expansion has been critical to lowering the cost of private insurance and improving the health of their residents. that's a point i don't think we have made very well here today and i will turn to that later. i want to -- a little bit i want to respond to some of what my friend senator mccain said but i will hold off for now. if i can ask a couple of questions, if i could, commissioner and congratulations on being the largest insurance commissioner in the country; is that right? >> that's correct. >> pretty amazing. what percentage of your population was uninsured before 2010 when the affordable care act was first passed?

any idea? >> yes, at the time and as we look back over time, over at least a decade or two that we have the information, at the time of the passage we were at 14% and we've reduced that now down by nearly 50% reduction in the number of uninsured in the state of washington, profound positive effect. >> thank you. were individuals with preexisting conditions able to purchase comprehensive and reliable health insurance for a reasonable cost? >> no, no they were not able to purchase. there was the high-risk pool available to them but there was a preexisting condition waiting period so if you had been diagnosedder, you would like to treat it right away. you had to wait up to a year before you would have coverage. and those days women were charged for insurance based on gender and if so any by how much? >> actually in the state of washington we have a state law that prohibits it unlike a number of other states so there could not be a difference in the

rate charge between men and women. >> okay. how would this affect the risk pools and health premiums in your state? >> well, it would devastate those pools because you would have the healthy holding out until they got sick and then opting in or hoping they could when they started to become ill. if they, of course, hit an emergency-type treatment they're in a real problem. the rest of the individuals where you have sick pool of individuals dependent on health insurance. insurance doesn't work really well when you're only going -- ensuring the people who really need it and allowing them to come in at a later date. >> one of my guiding principles is to find out what works and do more of that.

as a previous governor and chaired the national governor's association center for best practices, i said to my cabinet in delaware, trying to wrestle with a particular problem, some other state and some other governor has dealt with it or maybe lieutenant governor has dealt with this issue successfully. let's find out who did it and how they did it and whether it's transferable to delaware. when they launched the program under governor romney, my recollection was that in terms of addressing lack of coverage, they addressed and the plan as i recall a lot of people got coverage. what they didn't do well out of the starting gate was address costs and you mentioned this a time or two in your statement. one of the things that i recall learning lessons from massachusetts and i'm going ask you to share what those lessons were but one of the things it took a while to the penalty, if

you will for people that didn't sign up, like my kids, my sons 26 and 28 year's old. those who didn't sign up, it took a while for penalties to rise to a level that said, i might as well get coverage and help better provide to insurance pool to serve. a lot of things you had a lot of people in massachusetts and frankly in our states today who haven't had health care for years. they are not in good shape and once they have health care for the first time maybe in their lives they're using it and that has had an impact on -- on utilization, impact on cost for insurers and they're trying to recover those costs. they didn't have much experience. they didn't know what it would be. it was playing in the blind trying to figure out what the rates would be without any kind of real experience. anything you can share with us, lessons from learned in massachusetts that might guide us as we go forward for the country?

>> i think a number of us have looked to massachusetts and their experience and see a running start with the affordable care act under governor romney and one of them certainly was having an adequate penalty so you incentivize people so they didn't hold out until they needed health care. i think the other is that you can't allow, you to minimize the ability to get into health insurance coverage outside of the open enrollment period. so you really encourage people, you know, if you get a bad diagnosis, you want to get treated right away. you don't want to have to wait months before you have the coverage that you need. so that was an important part. also finding interesting in massachusetts did too, and that was that there was a prediction that the emergency rooms would be overrun with the expansion particularly with medicaid expansion in the respective states. we had the same prediction. the actual impact was that we

had an opposite. 10% reduction and people entering emergency rooms in the state of washington and that was also reflected in massachusetts. the reason is that when you go in there with a nonemergent issue you're told, if you go to the clinic down the street it's going to cost you a lot less than getting it from us and it's remarkable how people were sensitive to that price indicator. there are a number of lessons like that that were learned. >> lastly, you mentioned in your testimony the need to promote competition and give us one or two really good ideas that we might -- that have worked in your state and you think might work at others. >> number one is you have to stabilize the market. if some things came out of the affordable care act is having essential benefits, out of pocket expense limitations, beyond that you have to make sure you consolidate the risk

pool, insurers needs stability, they're going to gravitate to that. if it looks predictable they are more willing to enter the market and that's where you get more competition. i think that's part of it. even if it meant taking some pushback such as canceled policies that we had out there rather than trying to apply cpr to them to bring them back, we wound up saying, no, those are out of the market and have really helped to stabilize the market, those are the kind of changes that insurers are looking for and it gives us the kind of predictability we would like to see. >> thank you so much. >> senator portman. >> thank you, mr. chairman and it's been a very interesting discussion. look, our healthcare system wasn't perfect before the affordable care act but as indicated pretty much every

speaker today even you and i appreciate you saying this, many of the pledges and promises that were made haven't been kept and you could say well that's because of overpromising and it still means that this is an improvement. for a lot of my constituents it's not an improvement and created more problems for them. it is people losing their insurance. we didn't even talk about the co-ops and the committee has done a good job on that as well as subcommittee. pretty much every few weeks another co-op goes under. and so this is -- this has been tough for people. i've got 30 specific examples here of constituents out of the hundreds we have gotten because we have a portal on our website where people can tell us their experience, i won't go through all of them because we don't have time but all i can say it's not just a theoretical issue but

it's about people's lives and ability and inability to get insurance that covers them and so i think you've done a good job lieutenant governor talking about the numbers, behind those numbers are people. here is chad, the plan we had when obamacare sign today law, companies said no longer able to do it due to law passage, didn't meet requirements of the law. promise today keep plan if we liked. he promised lower rates, our premiums have risen 92%, he said. we keep raising deductible. i have health coverage because deductible is like 5 to 6,000 so that means we don't have coverage. we need to do this in a bipartisan basis. that wasn't done by obamacare

who senator mccain was here. i wasn't here but i saw it being shoved through. competition is going to help with that too, right? so let's -- let's talk about competition for a second. you've given us troubling testimony today, lieutenant governor taylor and you talked about the fact that you're seeing a big increase next year. i think you said these rates were about a 12 to 13% rate increase. i mean, who can afford that? you said gone up 91% since the 2013-2014 time period. >> yes. >> wow, what do you see happening in the future? what's it going to be in 2018, five years from now? what do you think is going to happen if things don't change? >> well, it's really hard to predict the future but if we look at the past and what's happened over the last several years, my biggest concern for the next couple of years is that

we still aren't going to have a stabilized market because as we continue to lose carriers on the federal exchange, that obviously creates turmoil within the market that it's in that particularly district or that region and that creates a lot of chaos and where there's chaos it's hard to price products. where that happens obviously it's the consumer in the end that gets harmed because they are going to pay for or as has been stated by some of my colleagues, a strength -- shrinking provider network as we are seeing in ohio where we just don't have the provider networks that consumers in ohio are used to. my concern over the next years, early study may have predicted that the market would stabilize by now, unfortunately that has not happened. i'm not certain that that's going to happen in the next year or two either.

>> well, it habit stabilized. what's interesting in your testimony it has gotten worse and very recently it has gotten worse. 17 companies in 2016 were improved for health care in the federal exchanges, only 11 have decide today offer plans in 2017? >> that's correct. >> you would expect stabilization and instead we have the opposite. how many now have only one insurer? >> let me do the math. 19. >> that's about 25%, i think. >> yes. >> only one insurer. i know that, again, it's complicated area, there's lots of debate about, you know, what we do, but just the lack of choice and the lack of competition. it relates to cost but also quality of care.

recently there was a group called the kaiser foundation that put estimates on this and they're saying 19% of enrollees could have a single insurer by next year, increase in cost substantially, double-digit increases and cost for people that can't afford it. 86% of obamacare premiums were subsidized by tax dollars, so people say, well, i'm not on the exchange. most people aren't on the exchange. it doesn't affect me, it does affect all of us because we are taxpayers. the other thing the happening in ohio and around the country, is these insurers who can't make a profit under the exchange because of the way they were structured are doing what? they are all staying in business, they're either leaving exchanges which you see aetna just left ohio but they are cost-shifting, bad news your

costs are going up dramatically. deductible, copays, premiums, everything. if you are sub sud size by that, that helps you clearly but the taxpayers are obviously paying that but then also we have the situation where if you're in an employer-base plan which is where most of us are, you're seeing increase in your as well because these companies aren't going out of business, right? do you have any evidence where there's cost shifting because they can't make it because they are losing money, i assume we have numbers on those. but they aren't -- these companies aren't in trouble because they are cost-shifting on to the private employers. that's a concern that's outside of all what we are talking about today, really. >> right, senator portman, i think it was aetna. 400million-dollar loss on their

exchange, federal exchange business. and so i think that just using that number, you know, clearly there are some insurers that are finding it very difficult, to populations are sicker in the polls than they expected and they are having a hard time with the premium increases to keep up with the actual costs. i think one of the things that have been said here, if i could, what's not been dealt with is the cost of health care and premiums are driven by the ultimate cost of health care so where we originally thought the affordable care act or obamacare was going to place some emphasis on addressing the cost of health care and reinforcing healthy behavior and getting people healthy and keeping them healthy instead of only treating them when we are sick, that's not what we are seeing happening in the marketplace. the exchange business, there are certainly some insurance companies that could write it in

a profitable way, i think that more of them than not are finding that it's a lose for them. they have to make a conscious decision, business decision. is it such that they can continue to offer health insurance on the federal exchange even though they're writing at a loss and if decide to do that, how long can they continue to bare those losses before it's a decision they can't do any longer? >> my time has expired but i appreciate your expertise and being a cpa and understanding how the insurance works and looking into the broader dynamics of health care which was not done in the affordable healthcare act. that's what we have to do in this place and in a bipartisan basis unlike last time and come up with something that makes sense in the real world so you do have the ability to provide people with affordable, high-quality health care. >> as providers, taking

reimbursements, costs shift to private sector. the other point i want to make too is you talked about the hundreds of letters that you've got and we all have talking about individuals being harmed. i don't know about you but i hear more and more people on the individual markets just taking the risk. they simply can't afford the premiums, they look and getting high premiums can high deductibles and high out of pockets and are going, what's the point. they are taking the risks on themselves. i'm not sure if you have seen that in ohio but i have seen that in wisconsin. >> a year and a half ago i talked to my daughters, doctor, and asked him point-blank, why are you no longer practicing medicine after this year, why

are you closing your office to which he said, for two and a half years in a row we have try today make this work and every single month for the last two and a half years we have lost money. i can't keep practice open and do this. the new compliance costs, the things that are happening, we can't stay open. so one of the great doctors in oklahoma city who has years of experience retired. he's not the only one. there's a lot of others and it's just not my family but other families. lieutenant governor, i can very much appreciate ohio experiencing since 2014 in 91% increase in premiums, i can understand that because currently border to border in oklahoma, 77 counties we now

have one insurance carrier, one, in the entire state. every other carrier has left. that one has requested the preyum increase for next year of 75% from this year to next year. one year increase. 75%. they could just withdraw. the hard part about it is and it's the dirty secret of the process for right now in the affordable care act is that certainly cms will approve the 75% increase because then we will have no carriers in the entire state and will move from one to none. when they approved the 75% increase, it will change dramatically for people that are 201% above poverty. for everyone 200% of poverty and below, the sub said i didn't say will kick, the taxpayer will

cover 75% increase but everyone from 201% to 400% the subsidies won't be near enough to cover them and those 400% and above will face the full brunt and people many my state will say i cannot afford and they will go pay the tax penalty when they would like to buy insurance but literally insurance now is so expensive in the state, even those who want to buy it, can't buy it anymore. this has a very direct effect on what's happening to families in my state. for those on the subsidies, they will not feel the effect, but those 200% of poverty and down. there's literally now a new incentive to say if you're 250% poverty, find a way to be able to get to a 199% of poverty or you will not be able to get health care.

that is the wrong direction to be able to direct our country. with only one option that's out there in my entire state, we are in a bad place. now our state used to run something called insurer oklahoma. we were told we couldn't do that anymore. we use today run a plan to be able to take care of those in greatest need. that's being pushed out. there are other solutions that are out there and ways to take care of this. supposedly the co-ops were supposed to rush into that space and provide the option. ..

and in some ways oklahoma is the canary in a coal mine. and we are raising our hands and say this is really serious for us. this is what everyone said would happen. we are experiencing now. it is actually happening there. so my question is, you talked a lot about state solutions and things wisconsin i has done in e past. we have done a lot of things in our state in the past, no longer allowed to do. if you were given the ability for your state to be able to say here's some flexibility built to take care of people, is it your assumption that the state would

say no, only the federal government cares about people in my state. we don't care about people in our state. or is it your assumption your state would step into the gap and saint there are people in desperate need in our state, give us the flexibility will be glad to fill that void? >> i think the leadership of governor walker has shown as well as our state legislature over the years which show yes, we would absolutely want to take care of our state. we've done that because we've expanded. we are a difference pension state. we are the state covering the piece of that for the first time wisconsin, everybody involved is covered under our medicaid plan. wisconsin have started down that road. we would love more flexibility to be able to do it fully. >> what would that look like practically? one of the plans and options? >> i think we need to take a look at what the options were but i think we would probably to a large part of back to the high-risk pool we had in the past.

i think that was well functioning. it did a good job of taking care folks with significant mental conditions. it was a good funding procedure providing subsidies. we had a good program under that you care to provide coverage for those folks in need. everything you look at the rates i highlighted in my tests but, if you move the rates back down to more reasonabl reasonable let when europe doesn't get a 75% increase or more in the first year in wausau, added 21 euros in milwaukee doesn't get a 78%, they are more likely to join the risk pool. in the end of the things that would help lower the rates and bring more competition. we are facing the same thing that is. we have 15 carriers and we've expanded, service areas and were folks recovering has been introduced the last of our market despite the fact where the highly competitive market, more insurers in wisconsin than most states. it's introduced.

more carriers are offering coverage often changed under its reflection of the fact it just doesn't work for them. our carriers have literally lost even the well-capitalized want millions of dollars in doubt you from surplus. eventually they're going to be the greater risk. >> we've dropped one carrier. several of her role hospitals have closed in the last several months. others are on the brink of that and it is a very difficult time for them to be able to manage what's happening in the requirements that are put on them. as we watch role hospitals close, physicians retire early, other physicians work in hospitals, the hospitals merge and watch insurance companies around the country merge come we are not watching a healthy future for where we are in health care. we can say we're standing where we are now, we can see quickly where things are going.

it is not a healthy market in the days ahead. i appreciate all of your testimony for being here and being a part of it. >> just a quick point, i can tell me doctors in's in wisconsin told me to retiring early. even worse there to the kids who always want to follow in the footsteps of among the dead, don't go into medicine. some of pay them insist that it is a. a pretty sad state of affairs. senator ernest. >> thank you, mr. chair. thanks to a panelist today, or eyewitnesses. commissioner gerhart, thanks to be the today. i enjoyed your testimony only because it's the same thing that i've heard over and over again as i'm traveling across iowa. what i don't enjoy about that is the fact that the stories that are being shared by our wonderful families are stories of hardship and what the aca has

done to their families. we all have very serious concerns about how our families will be able to continue to afford the affordable care act, the insurance policy. i hate to say i agree with you that i wins and folks across the country been placed in a situation where they're attempting to decide, to pay for my mortgage or the purchase health insurance? and die for the time and again. it's either a mortgage payment because insurance costs that are so much more than they were previously. is a car payment? a truck payment? is an attractive payment? there are some considerations families are now making that they didn't have to make a number of years ago. a family of three in iowa reached at the office to show that they're currently paying nearly $8000 annually for two policies. one with a nearly $6000

deductible and other with a 2500 deductible per person. and based on initial rate request to receive notice that one plan is expected to go up 37%. the of the plan, 46% putting them over $10,000 in premiums for next year. one family member already took a second part-time job off of the farm that barely covers $8000, the $8000 premium expense now. and family has had very few medical costs so far this year, and rightly asked me white house healthy participants to the key facing these increases? you also mentioned some pretty shocking statistic. we know that aetna found 5% of spenders drive 60% of costs. and can you explain a little more in detail what certain federal policies are driving

this? >> sure. carriers have that one individual risk pool for the individual market and again it had a catastrophic lane or a series of the midrise the whole pool. in iowa at least we've had significant claims of one democratic upwards of 10% in one individual pool. we had a functioning high-risk pool. what happened is the industry used to treat the high-risk pool up to the tune of about $20 million annually. now that, ma that pool is driving a lot of the rate. i heard in my public hearing on these issues where folks are really upset and even idea a family of five come into want to buy a plant in des moines, iowa, the cheapest plan of a fight with deductible is up $26 a year. that's the cheapest silver plan. it is a cost issue. people have to make significant kitchen table decisions. >> absolutely. and we do here at all the time as i'm traveling across the

state. so thank you for that. as i mentioned, i looked down, i looked him, i looked down at our thing about for these premiums and they still have those high deductibles and to the out of pocket costs. but one thing i hear commonly from folks can reach out commonly from folks can reach out to my office and reach out they didn't realize what to deduct will meant when they bought the plan. and others ask why there paying all this whe money brings when y will likely never reach the deductible. i understand lower premiums on the front end generally me how out of pocket expenses and costs with accessing services, but can we help consumers look beyond the price of focus on the benefits and network associated with the plans in high premium environment or is there a way we can do that? >> it's difficult and we have done a lot of consumer education around the deductible issue because i would stick to $13,000 for the aisle average, is not,

there are $13,000 into checking out to write a check if the user. it's a really difficult issue. we tell folks to shop around and sometimes the only one option, not a lot of choice to be honest. the plans are more narrow network. we have some new joint ventures that account like an accountable care organization. so putting some of the risk in the provider community makes sense for the doctors have some skin in the game to keep the patient will. we've got to look at prescription drugs, cost, transparency. insurance was fixed to the obamacare and not a kerry has to pay out 80% award in what group they are in. we did look at the actual cost. into a look at the entire system of health care a think we're going to be having this dialogue for a long time. >> yes. i know i have shared the story of a young beginning farmer that really his plan was canceled, $300 plan, which is perfectly acceptable to him. it was canceled. it did meet the requirements of the affordable care act.

it was replaced with a plan to the cheapest he could find was $700, for $400 difference every month which he was very angry but because that was his truck payment there. and the deductible is $10,000 he said i don't have $10,000. if something should happen, i don't have it. so it's hurting our families picketing those that are just starting out in the workforce especially if they're self-employed. it targets many of our farmers and ranchers across the state. it's been very, very difficult for us. we could go on and on. i know you have mentioned a solution for the high-risk pool. you mentioned the particular family that's had about $12 million of cost, which is a significant concern. can you explain that little bit more about what that risk pool,

your solution to risk pool would be? >> my id would be like commissioner, given tha that cas predictable prices could go and that carries predictable pricing is frequented by kerry with no less than limits, no annual limits, you get a catastrophic claims like that, and your whole balance sheet can be disrupted, sony very small regional carrier. what are three is if those folks went into some of the pool whether state backed or federal back, we're their coverage would still continue in some fashion can still pay the premiums, if you told the carries pick a number, say that they the first million, it doesn't matter what the number is that you would hook for 500,000 to 1 million, after that it goes to another pool that's more of a societal spent i think that makes a lot of sense. in smaller states like iowa the risk pool is just not that big so you get catastrophically like that in a pool of 21,000 it's going to hurt everybody in that pool. in a written test when we talk more about how that would work.

i would be happy to explain that further. >> wonderful. thank you very much. thank you. >> let me give you the opportunity. i'm not quite sure whether every state high-risk pool is funded this them with your applet wisconsin which is basically a surcharge on the buddies insurance, correct? >> it was a surcharge paid by the insurers and other providers agreed to discount which was a portion of the contribution and then -- >> so rather than have the adverse effects as commissioner gerhart is talking about the you pull everybody, everybody that is basically allowed operating interest in the state are paying brings into the. the system worked great. it literally worked great. when i was running my business would go to renewal and would be somebody made with cancer, they were never dropped from coverage but they were not offered coverage. but because a high-risk pool we would go there because they were not denied coverage, immediately

qualify. we purchased, there's a menu of different types of colleges, every deductibles, different out of pocket. with it almost always come up with one basic identical. it was a complete risk pool sharing and nobody had to raise the rates astronomically to protect themselves. so it actually worked. i do want to talk about because it's true, when you are facing a total cost, literally can't talk about $1400 per month communicating up into 15, $16,000 per year, plus you've got to deductibles of 6000, $7000, you are talking about having to pay $20,000 more before you get any insurance. what kind seen in the state, people telling this they are just dropping coverage. people that always have health care coverage, always were responsible. they dissing the can't afford it. they went to take the risk

because what is the risk other than a catastrophic incident. i like all of you to talk about that phenomenon and you on stage. start with you, lieutenant governor. >> so in ohio the high-risk pool that existed just before obamacare was fully implemented was actually subsidized by the federal government. it was set up and essentially run by the federal government and the subsidized by the federal government. so it is a little different it sounds like to me and maybe what was explained in wisconsin. >> how did you guys get that done? >> that was before my time. so it is different. however, we did regulate the insurance side of it because it was basically underwritten by insurance company northeast ohio. i will tell you it was a unique arrangement but we also had disputes with hhs, in particular there were two disputes during the time since i've been in office. one with a letter to premium

levels. our actuaries looked at the high-risk pool and the premium level necessary in order to sustain the high-risk pool and hhs refused to accept we believe was justified. of course, we can believed that push the high-risk pool at risk. and then the consumer ultimately is harmed. i will play the second is from that we had with regard the high-risk pool was whether or not certain individuals would be eligible for coverage under the high-risk pool. ultimately, we disagreed at the insurance company ended up having to file a lawsuit against both us the department of insurance and hhs in order to make a determination about which direction they were supposed to go. >> there are always strings attached to federal funding. i want you to speak to the phenomena of people on individual market with such high premiums and deductibles, they are just not taking insurance. i want to know how they got a problem is that in ohio, wisconsin, iowa and in

washington speak with a doctor and individual, about a year now to go, small business owner central ohio win. her comment to me was the premiums are what they are. she said that if i get sick, it's going to cost me $12,000 out of pocket in addition to what of our debate in premiums. in order to receive coverage. i don't have $12,000. i can't afford to get sick. >> we are also seeing the same thing people subsidize obamacare because i deductibles still don't access care because they can't afford it. commissioner wieske? >> first i would note the uninsured rate, the methodology that has been used has changed and some will not be talking apples to oranges of our networks compared that to continue my bulleted those numbers because wisconsin has had a very low uninsured rate which we landed six or higher

from uninsured rate perspective. >> i get information in 2010, about 94% had all insurance. 89% full-time, 5% part-time. in 2004, 94% had insurance, 89%. it hasn't changed. >> very consistent in wisconsin. we are fortunate for the because of our competitive market which is becoming less competitive. the individual market has grown because obamacare but i think the scary thing is a large group market a small group market have shrunk. we expect a large group market usually because they're moving into unregulated at least by the states plans which is their prerogative, and a small group market shrunk by 30,000 folks. and so if you factor in our changes in medicaid and the loss of the high-risk pool that's probably not anything in individual market as far as implement go. >> are you talking about employers self and starting

their own within their -- absolute innovative and wisconsin do that. >> there were about 200,000. we are okay with it. there are 200,000 folks in fully insured plans to move from that to self fund. the question is why within fully insured for and why did the movie to self-funded? obamacare is the reason. there may be a reason. we are support for employers provide coverage i don't want to apply that by any means but i think it's a concern when see that sort of seachange shift caused by a federal law change. i think that's where we are concerned. as far spokesman with the coverage we're seeing this pretty consistently in wisconsin and we think about the people just can't afford coverage. are hearing about from our legislators, from consumers who call our consumer lines. we don't have any good numbers on that but we are doing this as a phenomenon. and based on what we see we really have is in the individual

market grow as much as you would expect given the subsidies, 80% subsidies et cetera said it would indicate there's been removed but in getting private coverage. coverage. >> having interest is not the same thing as having access, bottom line. senator carper. >> i think the votes of start and we will come and go here for a while and try to conclude around noon or so. again, thank you for joining us. i have a question for the record i'm going to submit for you, governor taylor. and you could respond to that, that would be great. i'm going to ask commissioner kreidler just to -- thank you. commissioner kreidler can think out loud about disposing of the

steps states have taken. it is a short list of things you would recommend that when the elections are over, in a new year, new congress, the president of what are some things you would recommend we do at this and. meanwhile, one of some things states could be doing, should be doing actually and? >> i appreciate this question because i think what i've noticed even a discussion we've been holding this morning is that there's more of a focus right now on what we can wind up doing to make the system work better. one of them certainly is the concept of having some form of a reinsurance or risk pool that would help to mitigate the risk and exposure the insurance companies would have so they don't wind up with a particularly very sick people or many other people are much sicker, that is more an adjustment between the insurance. so they can protect their exposure and have the benefits of a much larger risk pool rather than just the people who

about the particular policy. i think that's a step in the right direction. that's starting to look at what we can do better than what we have right now. >> let me look to the other panelist you job -- we choose not yes or no if you think that makes sense? and not just. one vigorously. >> you also be mentioned about massachusetts. one of the areas that would help a lot, everybody goes to the questions they been raised about affordability that we've heard and i think everybody is a sensitive, particularly regulators because were on the front lines when those people have problems. they are calling us and registering. that is something that massachusetts, the ability true moving to what is referred to as after purchasing and standardize plans, value plans as are sometimes -- >> what does that mean? >> that means, we are just at a national meeting and we had a

professor from harvard was on the exchange court in massachusetts and it really is trying to make sure those medical services that are really high value, meaning you don't want people to delay whether its hypertension or diabetes or whatever it might be, you want to make sure they didn't those services. bring down the out-of-pocket expenses, the co-pays and deductibles to make it easier to get those particular services because if such a profound impact on the level of help for the individual. i think the states are in a unique position to be able to get along these lines. massachusetts, california is moving in that direction. i'm hoping i can take the issue to my state legislature this january so that we have that ability to do it. we did it both california and massachusetts have the own state exchange. we do, too. i'd like to have him have the kind of our so we can get in and explore what we can do improving the value of those plans.

>> give me one more good idea. for us, for the federal government. >> i would have to tell you from a federal perspective i obviously strongly encourage because of the impact it has principal medical driver on the rates are looking at right now in the state of washington and that pharmaceutical. the more that can be done to address that very tough issue and understand that profoundly at the same time we are really out of line with other countries. we really need to bring down those costs, stabilize the market is very depend on bringing down the bending the costcost go down so it doesn't e as fast as it historically has. we don't do that. getting everybody insured, the affordable to act exactly to better. we will be back before we had the affordable care act, a whole system that is the. we need to bring down the cost

of health care. >> thank you. going to go back to something that my friend john mccain said in an, during his visit to our hearing today. and john mention senator mccain mentioned we passed the affordable to act on a partyline vote. and i think what he didn't say, we had the longest marketing history on the finance committee. prior to the. we vote on dozens, scores of amendments, republicans and democrats. they did not mention that centers max baucus and chuck grassley spent over half a year together before the college, to democrat, did republicans to try to find a bipartisan compromise. through those people, republicans had pressure applied to them not to find a compromise. not to find a compromise. they ultimately felt compelled not to find a couple.

i was there and there's -- there's lot of pressure on my republican colleagues cannot find the middle. the help committee spent a full month deliberating the law on a bipartisan basis. the house of 79 bipartisan hearings and markups on health reform -- reform bill over the entire you. public meetings and hearings accepted hundreds of republican amendments. the health education labor pension committee held 14 bipartisan roundtables to 13 bipartisan hearings, 20 bipartisan walk-throughs on health care reform. that committee, the help committee considered a 300 in its accept more than 160, many offered by our republican colleagues. the finance committee held 17

roundtables hearings on health reform. the committee also held a 13 member briefings and walk-throughs. 38 meetings and negotiations for a total of 53 meetings of health reform. the finance committee held a market of the bill. i think that's the longest finance committee markup for 22 years resulting in bipartisan 14-nine backbone to approve the bill. finally find its current market result in 41 minutes, including 18 unanimous consent without objection. and as to the liability of the insurance plans, my friend senator kaine did not mention consumers brightly lost their consumer rights when they need it the most. in those days premiums to go up in some cases by as much as 10 0 or 20%. i just want to put those things on the record. i want to go back to the issue

of competition for our witnesses, if i could. one of my early mentors when i was state treasurer was a very successful businessman, alderman and democratic is also the chairman of the state pension plan. his name was ernie dammann. he ran a very successful business better state, in several states. he used to this thing, used to say obligation, first it makes you sick, then it makes you better. i think what we need here is competition, not just on the insurance side but on the provider side. we want some ideas on how to do that. i think the second thing that we need is to make sure the purchasing pool that insurance companies can afford to ensure that you make sure it includes a mix of people, healthy and unhealthy people. we talked a bit about this, offered a different examples but

let's go down the road if we could. governor taylor, just on the competition, 81 take a good idea, one particularly good idea that you think would enhance competition, either for the insurers are for the providers pleased. very brief. >> from the insurers perspective i would say less regulation. open market and consumer choice and let insurers write the type of coverage that individual consumers want to purchase. >> thank you. >> the same thing in wisconsin do we are sitting relatively homogenous plan designs because of federal rules. i think that's a bit of a problem. similar structures, similar provider network issues that they're doing very narrow networks and they're doing that to do with the risk pool. and then they're constantly changing their service areas to

reflect that. i think finding a way to get better competition and less regulation i think would free up and bring more carriers into the market. that's what we've seen in every other line in wisconsin. >> i'll give you two thoughts. at this date that the more flexibility your we were looking at waivers, when work with cms. another is the capital care organizations and the alignment of the providers and having skin in the game to keep the patient well and healthy i think that's something we need to focus on. >> okay, thank you. in my state was information of that lot of accountable care organizations. in your states are they being formed as well? >> we have quite a few in iowa, yes. >> we are seeing increasing partnership with medical providers. >> some. >> thank you. commissioner kreidler? >> i think what's been talked about is allowing insurance cup race to be able to innovate and make come offer changes without

being unduly impeded. at the same time we meet at the standardization so they maintain respect and. and. you want to insurance coverage gaming the system so they can to help the people at the expense of less well. that's very harmful for the market and certainly to the individual group market that we have right now. so it's really starting to have some standardization. at the same time you've got to allow them to innovate. one of them is going into these narrow networks which we have an obligation to make sure there's an adequate network to provide the services and the promises that are made with that particular policy. but allowing them to go there and come to a highly managed plans that we are seeing a trend right now in the marketplace. it's an innovation that can help hold down costs but it needs to make sure they don't game the system inappropriately at the expense of the whole system. >> i mentioned this earlier but

of want to say it again. we compete with a lot of different nations on earth. but our competitors. a lot of our strongest allies but also very strong economic competitor is japan. and for years i remember learning this when i was i think my second you on the finance committee, 2009-2010. one of the things we learn in a hearing was in competing with the japanese, they were spending 8% of gdp for health care costs. 8%. we were spending 18. the japanese were getting better results. april live longer. they had lower rates of infant mortality and we did. so spending less money, getting better results. at that point in time we had 40 million people going to bed at night with no health care coverage. nothing. if you want you to go to hospital, maybe emergency room and try to get something but for