>> balance sheet if we pay 90% of the dollars -- >> now, the next issue that arises is important. i'm a doctor that works in a public hospital for uninsured. when people are put on medicaid, my line gets longer. california is like a case study in this right now. you and i know this. but they receive $2 billion a year for the next five years to expand medicaid coverage, but their deficit has reduced the -- and the dentists are down to $12 a visit and providers have filed lawsuits to stop this, but your office has filed a friend of the court on behalf of california while acknowledging that low reimbursement does affect access. i have been struck that we have the form of insurance without the power of it. can you respond how if california's paying a dentist 12 bucks to see somebody we don't really have access, how do we defend that and how will we improve that under the aca? >> i think the reference that

was made to the increase for medicaid providers to medicare rates is part of the strategy. we understand that -- >> now, of course it doesn't affect dental because that's not a medicare covered benefit. so dental i presume will stay -- >> i'm sorry. yes. about dentists -- >> because it's heterogenous, won't cover the specialists. >> well, it covers primary care. >> that's for two years. >> it is built into two years in terms of the overall budget. but there's no question i think that the concerns about provider rates and medicaid are ones that we share. as you know -- >> i know we share that, but how can the aca make it better as it's increasing cost in absolute dollar? california is already going bankrupt as acknowledged by the administration. and yet, somehow as we increase absolute cost and put more people on, we'll somehow improve rates?

i continue to follow that. >> i would say a lot of the folks right now are entering the healthcare system at various points with no reimbursement strategy whatsoever. so medicaid rates may be too low in many instances, but i would say it's better than no rate at all which is being absorbed in some way in those same budgets that you're talking about. >> $12 a doctor's visit is not. fair statement? $12 is way below the threshold for somebody covering their costs and it seems as if the aca is providing the form of insurance without the power of it. >> this is a state/federal partnership and decisions are made at the state basis. we are trying to work with states to make sure that they don't deny access to beneficiaries based on slashing provider rates. >> it seems inevitable at the policies. but i'm out of time. i yield back. >> mr. guthrie is recognized for five minutes. >> thanks for coming this morning.

i want to touch on what my colleague from kentucky, congressman whitfield was talking about on the community transfer grants. there's evidence they're being used to lobby pending positions and i would agree that if you look at the language in the budget you're striking the language that was put in the appropriations act. but you do leave no part of any appropriation contained in this act shall be used to pay the salary expenses of federal, state, but you do leave in for locals. congress and the state legislature, but you strike local? so you take that language out so it seems that you're -- that the proposal of the grant access to the local because it says in the law that no money shall be enacted by congress without express authority by congress. so it appears the way i read this that you're asking for authority at the local. but anyway, but the current law the way i read it, now that's going forward. obviously it's not enacted because it's a proposed budget,

but the grants were put out under the existing laws as you said. i think you said it applied to you but not the grantee when at the end of his comment. you said that the language applied to us, i guess meaning the government. but not the grantee? i'm not exactly sure what you meant by that. i was going to ask you about that. >> the original language that has been part of the law that we have administered and had our grantees administer it applied to grantees lobbying the federal government. that's part of the underlying law. that was prohibited. what is added to our appropriation bill in 2012 and what i was trying to explain is that no new prevention grants have been issued under this new language and we are retraining grantees is that prohibition for grantees to lobby at the local level or the state level is now an additional piece of the law that was not part of the

underlying statute. that's new. we will administer the directives to grantees to comply with that. there have been no funds that have been issued under the new law and i think the pages of examples which began to be recited were grantees who are lobbying at either the state or local level, not lobbying the federal government. >> okay. well, it says -- the current law that you cannot use the grant money intend ed to influence any member of congress or jurisdiction to favor any ratification policy or appropriation. so i don't think -- current law doesn't limit you to congress. it's any lobbying. because u.s. code 1913, so the point is -- that's the way i read it. well, i have it. it says any member -- a member of congress, a jurisdiction or

any official of any government to favor or oppose vote or otherwise. maybe that's the misunderstanding because in the recovery act on the website, one is connecticut said a grass roots coordinator spent 163 hours to advocate smoke free policies. there are several others. and in idaho to address obesity through nutrition and says working for proposals in the 2012 legislation for vending machines in the schools. i can give these to you. then in the grants -- so that was the recovery act money and then it's gone to community transformation grants. and in the grant proposal says they want to past 70 policies to enforce affordability. then the new york public funds they want to lobby for the tax on the sugar sweetened beverages.

having said that, my reading of the law is it's a ban on any -- but is the department thinking it's only federal government? >> again, congressman, i apologize. i do not have the existing statute here. i would love to answer this question. i can tell you fy-12 appropriations through congress that we just have added new language. >> right. >> the new language which was not part of the underlying law applies to grantees at the -- >> based on -- >> it didn't cover what is covered in the new language. >> that may be where we -- i'm agreeing with you that the money that -- you haven't seen grants out with the appropriation language in section 503 -- i know you hav h read it, i agree with you, you need to read it. but any member of congress or jurisdiction or any member of any government.

and i think that would be city and state governments and if that's not the case i would like that in writing. appreciate it. >> chair thanks the gentleman and recognizes gentle lady from tennessee ms. blackburn for five minutes. >> thank you, mr. chairman. madam secretary, thank you for staying with us to take these questions. i want to ask you about section 220. and we had section 220 the president supposedly -- >> section 220 -- >> of the obama bill -- >> affordable care act? >> yes. >> and the president said we'll have transparency and open government and this was a major push. fiscal year 2012 bill that the president signed included section 220. this was an important thing we're going to have transparency. going to let you know where the money gets spent. on this bill.

yet, we get the 2013 budget and section 220 has been removed in its entirety. so we have a lot of concerns about what is happening with the transparency components and how the money is going to be spent. so i would encourage you to look at this and see if you can find out what has happened with the money that was going to be designated to transparency. we'd like to have an answer to that one if you do not mind. >> i would be glad to do that. >> thank you. i appreciate that. and in light of that, in trying to keep track of where the money is going with this bill, you and i have talked about ten care and the lessons that should have been learned from ten care the public option healthcare. one of those we repeatedly or i repeatedly discuss and i know you didn't think this was a

traditional public option program, not sure what we think is a traditional publici option, but nonetheless, your estimates for the obamacare bill were to be a trillion dollars in spending and now i'm looking at the figures for 2014 through 2023 as being a $2 trillion estimate. so you're already running ahead of estimates. forbes is looking at these programs, these grant programs being about 30% over budget. forbes had an article out on that. so i want -- you know, our problem with tin care, madam secretary, was that within five years it had quadrupled in its costs over the original estimates. so how do you see this playing out and what accommodations are you and your team making for this program doubling and then possibly quadrupling in its anticipated costs?

>> well, congresswoman, i would be happy to try and get you an answer. i don't know what you're quoting. i don't know what it's based on so i would be delighted to get you a specific answer. we don't think that the program will double or quadruple in costs. we tried to give as accurate an estimate as we could at every -- >> let me ask you this -- >> two years in we are underspending a lot of the estimates, not overspending. >> as we worked on this legislation, i asked repeatedly if you had any example where spending these near term -- ramping up the near term expenses had resulted in long-term savings. to my knowledge, you had no example of any program that showed where ramping up these near term expenses would yield a long term savings. were you ever able to find an example because you're running over budget. you have got a budget that has increased 25% since 2008.

your estimates are running ahead of what they have been and we are at record spending record deficits, record debt in this country. so if you ever came up with that example i sure would like to see it and i have some constituents that would certainly like to see it. let me shift gears for just a moment. i want to go to your narrow religious exemption rule and a what i think is a fee for faith principle that is out there. "usa today" had a -- an op-ed, an editorial and they made the comment that not only had you crossed the line on religious liberty, but you had galloped over it. i just have to ask you, madam secretary, did you all consult the department of justice before you made this decision?

>> which decision are you referring to? >> religious liberty, the first amendment. >> which decision are you referring to? the promulgation -- >> the mandate to the catholic churches. i think you know what i'm talking about. >> we have consulted with a number of people. did we consult before we finalized the rule on prevention? >> yes, ma'am. >> with the department of justice, no, we did not. >> you did not. okay. thank you. my time is expired. i yield back. >> chair thanks the gentle lady. chair recognizes the gentleman from pennsylvania, dr. murray for five minutes. >> thank you, madam secretary. i want to follow up on the religious freedom first amendment issue as well. i just want to be sure. if an employer is saying that he or she cannot find it in their conscience in terms of practicing their religion that

they cannot pay for a plan or have a plan that allows for or requires provision of abortion patient drugs and therefore do they pay the $2,000 tax for not having it or the $3,000 tax for having a plan in violation? >> there is no penalty attached to the provision of preventive care. there certainly are penalties for employers who don't comply with the law. there also is no abortifacient drug that's part of the fda approved contraception -- >> that's not true. >> well, the scientists -- >> is the morning after pill or something like that an abortifacient drug? >> it's a contraceptive drug -- >> yes or no? >> it is not an abortifacient. it does not interfere with a pregnancy.

if the morning after pill were taken and a female were pregnant, the pregnancy is not interrupted. >> that's your interpretation. >> that's what the scientists -- >> we're not talking about scientists here. we're talking about religious belief. in a religious belief that is a violation of a religious belief based upon those in that religion. let me expand then. so if an employer says i cannot have this plan provided for by the employer, whether it's paid for directly or someone says it's going to pay for by somebody else, do they play the $2,000 tax or $3,000 tax per employee? >> the rule which we intend to

implementation will require the insurance company, not a religious employer, but an insurance company to provide coverage for contraceptives for employees who choose to access that -- >> ma'am, that's not what i'm asking you about. this is very important. this is a first amendment issue. which you keep talking about these things in a different way. let me try and help to make this clear. if -- one of the things that i think you say is that if an organization has people within the organization that are not part of that same faith value system, that they therefore couldn't claim an exemption, am i correct in that? let's say catholic charities has employees who are not catholic or a jewish hospital may have doctors who are not jewish or catholic charities may provide services to non-catholics. that they therefore could not claim a religious exemption. is that correct? >> they will fall under the secondary rule of the religious objection to the service.

>> but under that they still have to provide the objectionable medical services. >> absolutely not. the religious employer who objects to contraception because of religious beliefs will not provide, will not pay for, will not refer employees to an objectionable service. on the other hand, the insurance company -- >> ma'am -- >> will provide the service to -- >> let me make sure i understand this correctly. if a child in school -- >> upholds religious liberty -- >> no, no, you're wrong. you're wrong for this reason. you're setting up a rule that not even jesus and his apostles could adhere to. jesus was jewish and said, you know what, because you're not bringing religious people into the fold you can't do this. what you're missing here is

because someone else is paying for it somehow it makes sense. if i go to a tire store, it was three, three get one three tires. i know i'm paying for the extra tire by the other three being pumped up or the costs going up somewhere else. it is one thing -- i'm searching for ways to help you understand it. whether or not you have someone else pay for it or under the guise of being free, as long as it's imposed on someone to have this available that is still a violation of their faith which gets into the first amendment. i don't understand why this isn't clear. >> well, first of all, i think that the tire analogy is not quite accurate. >> who's going to pay for -- who's going to pay for the -- >> providing -- we know because it was done in the federal employee -- >> who pays for it? there's no such thing as a free service. >> the reduction in a number of

pregnancies is, compensates for the cost of contraception. the overall plan -- >> by not having babies born we're saving money? i want to get this on the record. so you're saying by not having babies born we're going to save money in healthcare? >> providing contraception as a critical preventative health benefit for women and for their children reduces health care -- >> not having babies born is a critical benefit. this is amazing to me. i yield back. >> family planning is a critical health benefit -- >> you said avoiding pregnancy. >> according to the institute of medicine. that's again -- >> it's about religious freedom. >> the chair recognizes the gentleman from new jersey, mr. lance, for five minutes for questions. >> thank you very much, mr. chairman. madam secretary, the president's budget requests the level of exclusivity for follow-on biologics, reducing it from 12 years to seven years. and i think that that might be

counterproductive and i'm wondering whether you would be willing to re-examine that. and in a bipartisan basis, this committee has repeatedly willin a bipartisan basis. this committee has repeatedly shown that it favors the 12 year period. >> well, i think, mr. lance, this is a important and on going dialog. to make sure that we have companies that can in fact make a profit when they find a successful strategy and opportunities for patients to have an affordable option that could be life saving is i think, what is at risk here. and certainly i think there's a difference of opinion of whether 12 years is the appropriate

time, whether seven years adequately compensates companies and yet, makes a more cost affordable option available. >> thank you, i would encourage you to work with us on that. >> i would be glad to. >> and i appreciate any work we can do together on. that we are hearing from those that have to implement the new summary of benefits and coverage requirements that the time period may be difficult to meet given the fact that employers and plans need to get this done. if they don't comply there are significant financial penalties might the department consider any sorts of delay of the nonenforcement period? >> again, the essential health benefits are a critical component. we put out detailed guidance because we were hearing from a lot of states and insurers and others saying tell us what is going on. i think the strategy of a bench

mark plan already marketed and dm place in a state is a, really accelerated strategy. this is not something that has to be started from the ground up. this is an ability at a state level to choose a plan the most popular, small employer plan, the federal health benefit plan, a state health benefit plan that is in place, is marketed, is priced at the state level. we made it very clear in the guidance that is this is what we intend to propose, trying get as much discussion going on and we will be issuing it in the near future. >> regarding the supreme court argument on the health care legislation, undoubtedly, the s -- does your department have lawyers that are involved in the

argument or is it exclusively the solicitor general? >> it's the solicitor general. >> i yield back, thank you madam secretary. >> thank you, very kind of you to provide additional time. madam secretary, you were here before, and we talked about the difference of a voucher and support. you had trouble showing the difference. the subsidy is not coming in the form of a check or cash to the household, there will be an acknowledgment that there's help available to help you purchase your insurance in the exchange, so that could be regarded as a voucher or a coupon. you get a discounted price for your health insurance. premium support, i don't know, you might have your insurance flew the federal employee health

benefits plan. that is premium support, where the feh bp takes proposals from all the different insurance companies. there's in fact a bill, hr-360, members are going to be required to buy their insurance in the exchange after 2014. members of the federal agencies are exempted from that requirement. you, in fact, could experience the world of a voucher versus premium support by supporting hr-360, which moves all members, staff and administration and agencies into the exchanges. is that an idea? >> we would be happy to look at it. >> i would appreciate your response. >> chair, thanks gentlemen. that concludes the first round of questioning. we will now go to dr. christianson, he is a member of the committee, and he has sat

patiently through the hearing. five minutes. >> thank you, i appreciate the opportunity to sit on the hearing and your generosity in allowing me to participate. welcome, madam secretary. >> thank you. >> your being here gives me an opportunity to formally and public cally thank you for the efforts that the department is taking under your leadership, to end inequality in health care and health status through your national strategy. on the other hand, i want to say briefly that the 2013 budget raises concerns about our ability to meet the goals that you have set out. but i also know that across the budget that president obama has worked with agencies to, wherever there are cuts to take steps to ensure that important program activities are not really cut as might appear. that they do not suffer. but are covered in other ways

and five minute does not give me time to go through areas of concern, but would you meeptd mooet -- would you meet with us to talk about that and make sure those program activities are not cut? >> i would be pleased to do that, as you know, we have tried to work carefully with members of congress who share our concern about the health disparities issue present around the country and we have lots of strategies and agencies hard at work closing those gaps and for the first time ever have a national strategy on health disparities that is a real action plan. so we would be delighted to go over that with you and meet with you about it. >> thank you and the president's budget proposes a single blended federal matching medicaid rate. i'm sure that different opinions are about that.

i think it's time for the territories to have the same methods used to set the match. and we had that in if house version of the health care act. the senate greagreed to it but was not gotten done, if given the authority, would you be supportive of setting the match according to the way the states are done on the average income? right now we are a 50/50 match in statute. and that is very difficult. would you be supportive of having the authority to set our match as the states are set? >> well, we would certainly be happy to work with you. i know it's a huge issue for the territories and the islands, we are working on that. the frame work does not allow us to do that. and we do not have the budget to do that currently. so we would be happy to pursue that discussion. >> and if we went into the blended rate, if that does take

place, it's my understanding you need about two years of history to be able to make the determination, so it would be helpful, we would not mind going into the blended rate if that is the way we were going to go. just one more question, there are two new institutes at the nih, one that you mentioned and the other is national institute for health disparity, the second, the budget for the national institute for minority and health disparities is one of the lowest of all of the institutes. and that is despite the major initiatives that we have to eliminate health disparity. is there language in the budget or would you accept language to bring the national institute of minority and health disparity research on par with the other

snu institu institutes? and i know that program was transferred to the institute but even if funding was not sufficient to support the research centers. so it remains under funded under the institute. so i -- is there language that would bring the national institute on minority and health disparity research on par with did others or would you be willing to accept that language? >> again, congress woman, i think you identified that the transfer with staff and budget has significantly enhanced this whole effort over where we were two years ago. it -- we would be happy to work with you around ideas and strategies for continuing improvement but there has been kind of a big move forward i would say from where we were when we began this conversation. >> okay. but my understanding is that it's still under