thank chairman mccall for this. and chairman katko took over this committee after he came in and on behalf our our colleagues i'd like to thank you congressman katko and the rest of my colleagues and committee staff who worked very hard over the last six months. i won't repeat a lot about what's already been said but the thing here is that we're dealing with an enemy. people ordinarily want peace but in this case we're dealing with an enemy who wants to concur and cause a lot of harm. the threat of the course over the last six months evolved over the course of our eyes because interned radicalization popped up and things were happening all over the place. so the most important thing

about this report is what it shows us is we've got a whole lot more work to do so that we can confront this threat and hopefully we know our committee has come together in a bipartisan fashion but this is an issue that should have no party lines because this is an american issue we're talking about safety to our people and hopefully we can convince the rest of our colleagues to move forward together to confront this crisis. >> thank you congressman vela. the chair recognizes mr. hurd from texas. >> thank you chairman and ranking member thompson, the chairman katko, that was pleasure working alongside of you. i spent almost -- over nine years as an undercover officer in the cia. i was the guy in the back alleys chasing al qaeda and the taliban and having seen enemies like that up close and personal and seeing what isis has evolved into is scary. there are clear and present danger to the united states and

we need to do everything we can to stop them in their tracks. one of the shocking things for me in a good way was information sharing has improved since i joined the cia in 2000. that was good to see but there's still more work that can be done. chairman mccall and chairman katko eluded to our european partners who needed to do more and using the information that we're sharing with them but one of the scary things about isis is their ability to leverage social media to get their message out. they're influencing and touching millions of people a day and we need to counter that message and they're inspiring folks by saying "come to syria for an adventure." but you're more likely to get a bomb dropped on your head than finding adventure in syria so our men and women on the ground are doing a great job but we need to be more aggressive in syria so i'm looking forward to continuing the work of this committee. and making sure we protect the

men and women in the united states of america against this scourge. thank you. >> congressman hurd, the chair recognizes congressman loudermilk. >> let me thank you chairman mccall and congressman katko for allowing me to be part of this extremely important task force. i think the work we were doing came to full recognition to us the 245 our major concern is terrorist attacks on american soil while we were on our middle eastern and european trip was when the attack in garland, texas, occurs and it was a wakeup call how important what we were doing is. because we're talking about protecting americans on american soil. these foreign fight yooers, those we know of and don't know of come back here. they're looking to do attacks on american soil. is one of the challenges we're looking at, how do we better protect americans? how do we multiply our forces on the ground? we have better cooperation between the various law enforcement agencies than we've

ever had but we have a lot of improvement. the way we can have a force multiplier is better cooperation between our local law enforcement and first responders and those federal agencies. we've made improvement there but there's more improvement that we can make as well and that's one of the areas i focussed on after hearing about the texas attack is how can we better improve? how do we integrate those local law enforcement who already have boots on the ground? they know their neighborhoods and communities and can provide intelligence to the federal government as well as the federal government use those resources better. we'll look at how to better improve that. georgia has done a good job through their fusion center and cooperation but we have found ways we can do that better. thank you for allowing me to participate. >> the chair recognizes the gentlelady from arizona ms. mcsally. >> thanks, chairman mccall, ranking member thompson and chairman katko.

it's been a pleasure and honor to be appointed to this task force and the work we have done has been exactly what my freshman colleagues and i said we came near do which is solve problems to protect america and impact the future of our country as far as the security goes. while congressman hurd was chasing guys on the ground, i was shooting 30 millimeters out of a-10 against this kind of threat while i was serving in the air force for 26 years and this threat has grown and metastasized into something that is much more nimble and we have to catch up. they are -- the terrorists are acting at the speed of broadband while we're acting at the speed of bureaucracy. we talked about the numbers but those are the numerator but we don't know the denominator. there are so many unknowns. we don't know who's been radicalized and who's sitting at home getting radicalized on the internet so this is a very serious and sophisticated threat and we have to be much more nimble and responsive and i appreciate the work of this task force and the recommendations we have in order to move this forward. we have to be doing a better job

between us and our allies to address this threat and be more nimble. we have to do a better job within the agencies of our federal government. while we have 10,000 irs agents make sure you don't taken a improper home office deduction on your taxes we have less than two dozen individuals focusing on countering violent extremism. that won't work for us. we need to step up our game. we need better information sharing and more flexibility and nimbleness to respond to this and also between federal, state, and local officials and civil society. we have to step up and do this together but we need a strategy and these recommendations will address these shortfalls. so we look forward to continuing to work to address this threat and keep america face. >> the choir recogniair recogni congressman from texas. >> thank you, mr. chairman. prior to coming to congress i had the opportunity to serve as a terrorism prosecutor. in fact, i served by special

appointment in the largest prism financing case in u.s. history so i know well the dangers homegrown terrorism present. i'm grateful for the opportunity to have served on this task force but the main take away we have to focus on here is the lack of a national strategy in combatting foreign fighters and the vulnerabilities that has created. it's my hope that our report, its findings and recommendations are not simply filed away but become the foundation for a national strategy in dealing with this problem by both the executive branch and the legislative branch and i certainly intend to make it part of my focus and part of my mission as i go forward in congress. so thank you for the opportunity to be on this task force and i appreciate the leadership that all my colleagues have provided by on this issue. thank you. >> people always ask me what keeps you up at night and it's

really the individual we don't know about. we have a lot of good intelligence, i think the fbi and homeland security are doing a great job identifying the threat both abroad and within the united states but it's a case we don't know about. the foreign fighter who traveled to syria and came back to the united states, as chairman katko says, the ticking time bomb. it's a case of the individual radicalizing over the internet that could pop up and kill americans. it's the chattanooga case. we had no flags, we had no warnings, no warning signs. that keeps me up at night. we have a lot of work to do. i think this report will go a long ways towards protecting americans here in the united states. we have to have a strategy to deal with this. both a military strategy abroad, a political solution but also a

prevention strategy here in the united states to stop this threat so that we can carry out the mission of this committee to protect the american people. so with that i'd like to open it up for questions. i believe is jj green with wtop is first. [ inaudible question ] >> reporter: what we've been hearing for three or four years, we know about this threat and we know about them using social media and the images that we've seen what they're capable of and we all know it's a big problem. so i wonder if you would give us an example of the number one thing that needs to be done that the american people can actually see some concrete results from

immediately? what is the one thing that -- the top thing that can be done that will see some results immediately that you recommend? >> well, i don't think there's one simple solution to this problem. as we traveled abroad to the middle east seeing the threat we were in baghdad a week before they took over ramadi, met prime minister netanyahu, went into europe. the security gaps they have in foreign travel in europe that can get into the united states a real threat but the radical sags over the internet. when you have 200,000 isis tweets per day going out to thousands of followers in the united states everyday to kill military, to attack military installations it's really hard to get around that from a security skand point we've done a good job trying to stop that but it's the internet capability

that's very different from the days of bin laden where now you have this new generation that's very adept at social media. i would say a couple things. we were very fortunate to take out the military strike of the number one isis cyber commander sending out these directives but there will be others to follow after him, i think the prevention piece that's been pointed out has been severely overlooked. we spend billions of dollars to both kill terrorists and keep them out of the united states we spend very little focus on prevention from within. outreach to these communities. but in mose of these cases like

ta tamerlan tsarnaev was kicked out of his mosque for being too radical but that wasn't picked up by authorities. i think if we have better outreach to the communities, ranking member thompson and i have passed a bill out of committee to combat violent extremism. it needs to be more of a prior to and focus within the administration. i'll open it up to any members who would like to respond to tha that. >> i'd like to follow up really quick with that. >> sure. >> reporter: i'm interested in your take on how this adversary has changed since 2000 because that's one of the issues we've heard a lot about is that we've been engaging them like we're still stuck in the al qaeda post-9/11 days when in reality they're a whole other generation of digital warriors out there is what i've been told so i'm interested in your view. >> they're not hiding.

isis is a very new phenomenon from the al qaeda of the early 2000s and their ability to reach out to new people, that means they increase their surface area of attack in ways that we can understand their networks but you can still stop them the same way we stopped al qaeda in afghanistan. in december of 2001 when the fall of kandahar, the any southern afghanistan which was the head of the -- the headquarters of the taliban, we killed two-thirds of al qaeda leadership and pushed out the taliban out of the entire country and there were only 400 americans on the ground, 300 special forces, 100 cia officers. we were able to accomplish that because of a superior air power that the world had ever seen and relationships with groups on the ground, northern alliance, different pashtun groups. and that framework exists in

syria and that's how we should be looking at our strategy on stopping them down there but we have to counter their message as well. there's a spanish professor that's now at georgetown who was highlighted -- he's looked at about 800 campaigns that isis is using and they're using imagery from tv shows like "person of interest" movies like "american sniper," video games like "call of duty." and when you look at the media that isis is producing it almost almost like these popular images that we've seen and we don't have this whole of government effort on countering this violent extremism. it can't just be the united states, it has to be our sunni arab partners in the region helping to leverage the message as well. so we're falling down on the midwest messaging game where isis is superb.

>> you stated that 300,000 foreign fighters have gone into syria in iraq? >> 30,000. >> reporter: excuse me. where did that number come from and what numbers are they mostly coming from? >> that's from basically the federal law enforcement members, intelligence community, they've developed those numbers. let me just emphasize, those are the ones we know about. you don't know what you don't know. when it comes to 250 americans, that's just the ones we know about, many of whom have returned to the united states and we're very concerned about that as well. they're really coming from all over the world. they're coming out of europe and northern africa, they're coming from australia, they're coming out of indonesia. so what you're dealing with is sort of a global jihad phenomenon that we're seeing

these radical islamists filling the power vacuums left in northern africa and the middle east primarily and then recruits coming out of europe. we have a lot of these cyber warriors, for instance, coming out of the uk. junaid hussein was a british citizen who traveled to raqqa which is where they're operating out of. so i think that's the -- to me the frightening thing is that the fact that it is a global phenomenon. that this is not just confined to the old days iraq and afghanistan. this thing is metastasizing all over the world now. predominantly in northern africa and the middle east. but we're seeing it spread throughout europe and australia and we don't want to see that spread into the united states. >> reporter: you mentioned at least 40 u.s. fighters have returned. where are they and what efforts is being made to find them?

>> we think about 50 have come back. look, if we can arrest these individuals we do if with under the constitution cannot charge them with a criminal offense, providing materiel support, we have to monitor them. but, again, if you don't -- we don't good intelligence on the ground in syria. we don't have good human intelligence so it's really hard to know who has traveled. i give the fbi and homeland great credit for stopping a lot of this and arresting almost 70 isis followers in the united states. these are astounding numbers, though, and you can only stop it for so long and if we don't have good human intelligence on the ground to identify who has gone to the battlefield and who has come back, that's a hard threat to stop and it's hard to -- as a former federal prosecutor, you have to have evidence to charge

them and if we don't have that good human on the battle ground to know they joined the enemy it's very difficult to prosecute that case. >> reporter: [ inaudible question ] >> well, i think it's -- good intelligence can stop this and the intelligence sharing within our european partners is key to this. tsa has ramped up their security precautions. there was a threat from the corazon group. the istanbul airport is the epicenter for the foreign fighters. 40 million people go through that airport per year. for a while they turned a blind eye because they were fighting

assad. who they don't like. now they're screening inbound but the outbound screening isn't where it needs to be and we're concerned about that outbound traffic coming out of the region to western europe and possibly the united states. i would i would argue europe has a real problem. until the european parliament passes new legislation to vet they're going to continue to have this problem. not to mention the syrian refugee crisis we're witness today. >> reporter: you talk repeatedly about the need for greater international cooperation. you said we don't have good human intel on the ground. now we're seeing russians moving into syria, the russians, the iranians, assad regime, iraqis all working together on intelligence. are we talking about potentially working with people we don't particularly like? we don't particularly trust?

is that going to become necessary? they have a lot of intel. they're not our friends. does that change some of the recommendations in your report at all? >>. >> well, i think russia has filled a power vacuum. i think we've had a failed foreign policy and strategy that led to this in terms of dealing with assad or isis so with that vacuum we have russia coming in forming a geopolitical alliance between iran and syria and ca calling check mate on us. i will say the one thing we have in common with the russians is our dislike for the terrorists. they have chechen rebels. the boston bomber is a chechen rebel. they have the northern caucus region and i think they swlu is happening in the caliphate and the islamic state is becoming such a great threat and no strategy out there to deal with it effectively that they're

stepping into it. and they're also filling the power vacuum. the complication is their obvious support for asat and as long as he remains in power he remains a magnet for the jihadists. i've said the long term solution has to be a military and political strategy but also dealing effectively with assad. i hope the president as he visits with mr. putin today and the united nations can work out a strategy to effectively work to eliminate the threat of isis but also to find a way to remove assad from power. whether it be a graceful exile or other means but that has to be a part of this overall evasion. >> you talk about legislation. what might that look like? >> i thisty biggest one is having a national strategy. that's the biggest piece of

legislation. the other is trying to close the security gaps we see in europe. but the fact that we don't a strategy, we have a combatting violent extremism bill that i would like to see come to the floor to deal with this problem on the home front. you have to deal with the problem over there but you have to deal with in the the homeland as well and this radicalization over the internet is becoming increasingly a problem. when we went on our trip to the middle east and europe the big focus was foreign fighters and when we came back it was my god they're radicalizing over the internet and there are hundreds of thousands of these missives coming out per day to radicalize americans. it's a very difficult challenge for law enforcement in this country not to mention as was indicated earlier the idea that they can go into dark platforms to community kacate.

they're very savvy. they get a hook on the internet and then they get into what's called a dark platform to communicate and we can't see those communications even if we have a court order. you can't stop a threat that you can't see and if they can communicate in darkness that makes the threat even higher is and we need to shine a light on that darkness. that's another piece of legislation that we'll be looking at is how can we change that so we can monitor these communications. if someone in raqqa, syria, is talking to someone in new york about conducting a terrorist attack and we can't see that communication that puts americans in danger. >> reporter: [ inaudible question ] have you worked with the administration or discussed with

them or other u.s. agencies to talk about where to go from here? >> the ranking member and i talked to lisa monaco, the homeland security advisor to the president. i think she recognizes the threat level here. i know she's had discussions with turkey, an important nato ally in this fight against isis over there. i believe as was said earlier that this needs to be a sunni airplane fight against the sunni extremists. under american leadership with our special forces embedded but it has to be the sunni airplane. it's their backyard. stepping up to the plate to defeat the sunni extremists. for too long we've carried the water there and 1 h 00,000 u.s. combat, we're the infidel over there and i don't think there's a political appetite for that

but i do think an indigenous force under american leadership in nato with our forces embedded is the best strategy to defeat this threat. >> reporter: you talked about a couple pieces of legislation. where are they? is there support for passing anything in the senate as well? >> well, we just came out with this report and so the next step is to identify the legislative steps necessary and also dealing with the other key committees. i think, again, this is one of those issues that as the ranking member indicated this is about protecting americans. this should not be a partisan iss issue. these bills should be able to pass through the house and the senate even given their 60-vote rule for god's sake, if we can't

pass this legislation what can we pass? i think the white house would invite this type of legislation. john if chairman katko wants to comment any further. >> as you go through it, there's 32 key findings and those findings will be the genesis of the legislation so if you look at the findings you can see what we've already talked about. if you want more specifics to the various federal agencies and officials, if we look at page 56 of the report it lists the different places we briefed with, state department, fbi, justice, homeland securitul . >> reporter: how much an indictment is this against the obama administration's policy. you said the lack of the strategy as you put it, does it

fall squarely on the white house or the dodd? >> i'm not trying to make a partisan attack. we're just telling the truth. the threat is reel: you can try to down play it but the threat is real to the homeland. when you look at the numbers, they don't lie, the stats are real in terms of the numbers of foreign fighters i've described. tens of thousands of them many americans the thousands of followers in the united states, the hundreds of thousands of isis directives over the internet per day. i'm very concerned about our security and so i would hope the president would take this as an opportunity as he meets with our foreign partners and mr. putin to resolve this crisis because if we don't handle it over there, if we don't address it

honestly and call the threat what it is and know that it's a real threat we won't be able to eliminate the threat and therefore the american people will always be at greater risk. and that's all we're trying to accomplish. we're not trying to throw partisan jabs, we're just speaking the truth about the threat level and what we think needs to be done to stop that threat both overseas but also from coming into the united states so they can kill americans. thank you. on the next "washington journal" we'll continue our coverage of the republican effort to defund planned parenthood. democratic caucus chair javier becerra will weigh in on the democrats' approach to the issue and the upcoming change in gop leadership as well as the budget and the possible shutdown. then congressman john fleming, a member of the conservative freedom caucus on federal

spending, funding for planned parenthood and the contest to replace outgoing house speaker john boehner. "washington journal" is live every morning at 7:00 on c-span and we welcome your comments on facebook and twitter. the house arms services committee considers the department's cyber strategy wednesday. we have live coverage of that hearing at 10:00 a.m. eastern here on c-span 3. a signature feature of book tv is our all day coverage of boong fairs and festivals from across the country with top snon fiction authors. here's our schedule. in early october, the southern festival of books in nashville. the weekend after that we're live from austin for the texas book festival and near the end of the month we'll cover two book festivals on the same weekend -- from our nation's heartland it's the wisconsin book festival in madison and back on the east coast, the boston book festival.

at the start of november we'll be in portland, oregon, for wordstock followed by the national book awards from new york city and at the end of november we're live for the 18th year in a row from florida for the miami book fair international. that's a few of the fairs and festivals this fall on c-span 2's book tv. next, a hearing on state health insurance markets. a house subcommittee is examining the on going management and implementation of the affordable care act. this is two hours.

good morning, the subcommittee of oversight and investigation convenes this hearing today to examine the state health insurance marketplaces established under the affordable care act. we seek to understand is sustainability challenges these state exchanges continue to face. the centers for medicaid and medicare services has awarded $5.51 billion to the states to help them establish their exchanges. let me repeat that. the states receive $5.51 billion in federal taxpayer dollars to set up their own exchanges yet the j.c. yay had no specific definition of what a state

exchange was supposed to do or what it was not supposed to do. this is compensation without limitation. since the funding for these exchanges came from the entitlement side of the budget there was no oversight throughout the appropriations process. there was no budget with the state exchanges rather grand money flowed freely and rewarded bureaucratic "innovation." no one wanted to make sure that didn't create more government bloat. in fact, the states represented in our panel today -- california, kconnecticut, hawai, massachusetts, minnesota and oregon were rewarded over $2 billion of federal program dollars. oregon has already pulled the plug on its state exchange and hawaii is in the process of doing so. the faucet of establishment grant money finally turned off at the end of 2014 when state exchanges were supposed to be self-sustaining. despite this enormous taxpayer investment, state exchanges are still struggling. they continue to face it

problems, lower-than-expected enrollment numbers and growing maintenance costs. here are just a few more recent headlines from news articles on the state exchanges. "obamacare exchanges are a model of failure." "nearly half of obamacare exchanges face financial woes." in another one "obamacare's failed state exchanges." the alarm bells are not only being sought in the media -- sounded in the media, earlier this year the department of health and human services office of inspector general alerted cms acting administrators that the state exchanges may be using federal establishment grant funds for operational expenses which is prohibited by law. hhs's oig urged them to develop clear guidance to the appropriate use of grant funds. the guidance that followed was still vague, permissive and lacked real word examples.

in fact, cms has seemed more focus on doling out taxpayer dollars rather than overseeing how the dollars are spent. the u.s. government accountability office just issues a record demanding cms conduct more oversight over the it projects. gao found they did not document, define or communicate its oversight roles and responsibilities to the states. further, cms often did not involve vessel haven't executives to improve federal funding for state's it marketplace projects and although cms established a process for testing state systems, these systems were not always fully tested. we have a pnl of witnesses today representing state exchanges with its own challenges and circumstances. the state of hawaii was awarded $205 million but the governor announced its hawaii health connector does not generate

"sufficient revenues to sustain operations" and will shut down. the commonwealth of massachusetts accepted 234 million for its health connector but enrolled only 13% of its goal the first year, temporarily placed individuals in medicaid because it couldn't determine eligibility and cost massachusetts abestimated $1 billion in additional funds. the state of minnesota initially received $155 million to launch its state exchange, the exchange received an additional $34 million from cms in part to fund ongoing fixes to the it system. despite this infusion of funds, minnesota has announced it would revert to an old system next year or minnesota care premiums because of the continued exchange problems. the state of california received over $1 billion in federal grand dollars to establish its exchange, covered california, the most of any state.

despite call center and web site woes, california had the highest enrollment of 2014 but only retained 65% of its 2014 enrollees. this year's california's enrollment numbers reached 1.4 million, falling 300,000 short of expectations. cms awarded the state of connecticut approximately $176 million in federal establishment grants and as of september, 2015, approximately 96,000 individuals were enrolled only 50% enrollees were previously uninsured. oregon received money for covered oregon. despite this heavy investment covered oregon was dissovrled early this year and transferred its responsibilities to the department of consumer and business services. the state is currently operating as a federally supported state-based marketplace and relies on healthcare.gov. so we're here to understand the challenges these state exchanges

face. why are they struggling to become self-sustaining given the extraordinary taxpayer investment? is it a lack of accountability or oversight? where has cms been and are they encouraging fiscal restraint or taking a hands off approach which has allowed money to be spent uncontrollably? and where an exchange has decided to shut down has cms tried to recoup any federal grand dollars? lastly, are the exchanges doomed to fail? hopefully we will get answers to these important questions so i thank the witnesses for testifying today and i recognize the ranking member from colorado for five minutes. >> thank you, mr. chairman. i think we can all stipulate that some states have struggled with the technological hurdles of setting up their own marketplaces. we all knew the affordable care act would face challenges in some aspects of implementation and i've been saying for a long time that it's this committee's

role to conduct oversight and improve that process so i'm glad we're having the hearing today. i hope we're not hoping the state exchanges fail. i hope we're hoping that we can improve it and we can make itlá better. i think despite the fact that we had a rough start in many places, the aca is working and has greatly approved access to high quality lelt insurance coverage. in the last five years, we've made preprogress in helping millions of americans throughout the country gain access to quality health care. here are notable statistics. since passage of the law five years ago, 17.6 million previously uninsured individuals have gained health coverage through the aca's virs provisions. nearly 10 million consumers have enrolled in state and federally facilitated exchanges.

about 2.7 million of those individuals use state exchanges to select private plans. according to newly released data, the uninsured rate fell from 13.3% to 10.4% from 2013 to 2014, representing the largest single year reduction in the ininsured rate since 1987. in 2014, hospital uncompensated lower than 2013 levels as a result of exchange coverage and medicaid expansion. the aca also improved health care delivery systems, hospital readmissions are down and indicators of patient safety like hospital acquired conditions have improved significantly. all of the states before us today have taken significant steps to improve health coverage for their residents. their uninsured rates have plummeted due to efforts to implement the affordable care

act. despite the technical and financial challenges that confronted ay hawaii. its uninsurance rate has fallen and it stands at 5.2%. in just a few years since 2013 minnesota has reduced the number of people without health insurance by more than 50%. their uninsurance rate is one of the nation's lowest at 4.6%. massachusetts which already had one of the nation's lowest uninsurance rates in the country is down to just 3% in 2015 which is a 38% decrease since 2013. connecticut which now has a robust state-based marketplace cut its uninsurance rate by 60%. in connecticut the uninsurance rate is 5% and california, which also had one of the lowest -- the highest uninsurance rates in thecountry, it was 21.6% has also managed to drop

its rate by 45% since 2013. now the uninsurance rate is 11.8% in california. and finally, oregon which had one of the nation's highest uninsurance rates of 20% in 2013 also reduced its uninsurance rate by 55% to 8.8% today. how did this all happen? how did states managed to insure so many millions of people? the affordable care act has really provided these tools. so as we discuss call centers, web-based portals and all these other things, let's not forget that the affordable care act is really working to achieve its goals. i want to thank our californians for joining us, mr. chairman, and i want to yield the balance of my time to ms. matsui from california. >> thank you very much for yielding. peter lee, thank you for coming to testify today. and let me reiterate, the

affordable care act is working. california is an early adopter in so many areas, not to least of which is health care. we have moved from paying for volume to paying for value. and to inform our system to make sure that everyone has access to quality affordable health care. covered california is an integral part of that, i'm happy to say over 41,000 in my district of sacramento and nearly 2 million americans obtained coverage from 2012 to 2014. that's a reduction in the rate of uninsured. in sacramento, in 2012, 18% were uninsured. in 2014, it was down to 12%. that rate is likely to be lower in 2015. we need to continue to work to bring those numbers of uninsured down. by supporting the advancement made by covered california and other exchanges not by moving

backward. thank you, and i yield back. >> gentle woman yields back. i know mr. walden who's not a member of this committee wanted to sit in this hearing and has the right to do so. you will be recognized for two minutes. then you can yield to mr. walden for two minutes? thank you. >> i was a practicing physician before, and i just want to talk about the insurance rates. coverage does not guarantee access to health care. deductibles are up. premiums are up. the cost is being shifted to the people. the uninsurance rate may be down, but the access, i would argue, has not improved traumatically. if you're a schoolteacher or other middle class employee, if you have a $5,000 deductible, do you have affordable health insurance? i would argue that you do not. in many states, physicians aren't taking new medicaid patients. i know this, because i'm a

physician, and i talk to physicians all the time. in fact, many physician aren't taking new medicare patients let alone medicaid patients. in fwoeking onion insurance rates is not the only parameter to look at when you're looking at the ability of our citizens to access quality affordable health care and i yield to mr. walden. >> thank the gentleman and the committee for letting me participate in this hearing. when i was in state legislature in the oregon health plan itself was passed. when i became a majority leader we realized there would be a lot of work to put together the plan, and i chaired it. i concur with those who think we need to do more to reform the delivery of health care and access to it. i have a pretty good record on doing both. mr. chairman, i want to thank you for holding this hearing on this issue, though. mr. allen, thank you for coming out from oregon. as you know, oregon received $305 million in federal grants

to build cover oregon. only california and new york, states with about nine and four times the population respectively received more. so we've got a lot of money out there. the exchange was launched with much fanfare. i heard kitschy long-live oregon. when the lights went off and the curtain went up it failed to cover a single person online in one city. not one person was able to sign up that way. oregonians were forced to sign up using paper applications. the state decided to abandon the i.t. platform and move on to to healthcare.gov. eventually, they shut down the entire program, which it did on june 30th. hundreds of millions of taxpayer dollars apparently down the drain. last february, chairman upton, murphy and pitts and i requested

information. many questions about oregon remain unanswered. . how did this happen? who was in charge? what can be done to make sure this never happens again anywhere in the country? we're sell awaiting the answers, frankly. going forward, the mover to federal exchange poses a whole new set of questions. mr. allen, i underspan you weren't there running this thing. so we're not here to point fingers. we're here to get answers as to how this happened and what we do now and how we're going to fund the next phase of this. i still don't have a clear understanding of what happened to $305 million establishment grants, and did cms even try to recoup this? did they do their due diligence? in spite of your repeated assurances that oregon exchange is financially self-sustaining, i think there are questions over

how the state will pay the federal government for using health care dofr when it's required to do so in 2017. i know you state that the increases are a matter of rebalancing itself. the collapse of cover oregon, though, is clearly an epic disaster for oregonians and for taxpayers across the united states. frankly, the aftermath hasn't inspired additional confidence in our state government or cms, i'm deeply disturbed about the role of the former governor, who has had to resign, and the role of his campaign consultants in calling the shots. so i hope the hearing will help us learn more about what happened, why it happened and what steps can be taken so that this kind of debacle never happens again. >> i yield back. and we represent mr. pallone for five minutes. >> over five years ago we passed

the affordable care act and fundamentally changed the health care system in this country, we expanded access to health care pour millions of americans and ensured that no individual could be denied coverage for arbitrary or discriminatory reasons. we guaranteed that insurance companies were in the business of making our citizens healthier, not just making a profit. and we strengthened the program and put it on firm financial footing. today my republican colleagues will tell a different story. we'll hear a lot about technical glitches, inefficiency, broken irmts t. systems. we're just to listen to the republican sigh, we are led to believe we poured money down the drain. no doubt there are lessons to be learned from the imminimum entation. make so mistake, the affordable care act is working. we are seeing successes

throughout the country and the data is there to prove it. recent census data shows that the uninsured rate has decreased. states that chose to embrace the full measure of the law and expand the medicaid programs and establish state-based marketplaces have seen the greatest gains for their citizens. and this success is true for the six states that we have joining us here today, despite early technological challenges in some of these states everyone here today has expanded access to care and significantly lowered their numbers of uninsured. it's important to look at how state-based marketplaces could be run more efficiently and effectively and how we can enhance the health care delivery system this this country, but let's do this with an eye for improvement, not as an eye to score political points. let's have a discussion on how to reach the remaining uninsured. and how to best address the

challenges that remain. with that, i'd like to yield my remaining time to split between congressman kennedy and representative capps. i'll initially yield to mr. kennedy. >> i want to thank the ranking member for yielding. it is always nice to see a familiar face amongst our witnesses at hearings, and i'm pleased to have a chance to welcome louis gutierrez, mr. gutierrez throughout his career has championed the use of technology to help government do its work better, whether it's as our commonwealth's executor or the executive director of massachusetts health connector. particularly when it comes to health care. in his latet role, he's worked diligently to ensure massachusetts maintains its status as a state with one of

the lowest uninsured rates in the country. as the rate continues to fall nearing single digits thanks to the affordable care act, i'm looking forward to hearing more about your efforts to make our system more efficient and effective as well as any best practices that you've encountered that could be applied across this country. thanks so much for being here. yield back. >> remaining time to ms. capps. >> thank you. to the ranking member tor yielding and letting me, also, letting me waive onto this sub committee for what i know to be a very important discussion. i wanted to come and personally welcome mr. lee, the executive director of covered california which is my state's health insurance marketplace which has helped connect so many of my constituents with health insurance. you know, california made a conscious decision to be an active player with the affordable care act imminimum

meantation. there have been efforts to make california a leader. we have cut our state's uninsurance rate by 28%. pretty remarkable in my opinion. california shows that when a state is invested and buys into the stakes of the affordable care act, prices can be held under control, quality plans can be made available for purchasers. i look forward to hearing how covered california could serve as a role model for states looking to get the best value for their residents while promoting high-quality care. and i'll yield back to the ranking member. >> thank you, gentle lady. i know we asked for u nnanimous

be entered into the record. the committee is holding an investigative hearing and has a practice of taking testimony under oath. do any of you have any objections to testifying under oath? and all the witnesses say no. the chair advises you that under the rules of house and committee, you have the right to be advised by counsel. do you have a desire to be represent by counsel? and all decline. do you swear the testimony you are about to give is the truth, the whole truth and nothing but the truth? >> yes. >> thank you. all the witnesses have answered in the affirmative. you are now under oath and set fort in forth under the united states code. >> we'll begin with mr. allen. make sure your microphone is on

and pull it very close to you. >> make sure the microphone's on. is the light on? pull it real close. >> thank you, chairman murphy, ranking member degette. my name is patrick allen and i'm the director of the oregon department of consumer services. we're the state's consumer protection agency. while supporting a positive business climate in the state. my agency's responsible for regulating banks, credit unions, mortgage lenders and other nonano non-depository programs. and oregon osha as well as statewide construction standards. as of 90 days ago. after a brief transitional period, the department assumed responsibility for oregon's state-based health care marketplace. i appreciate the opportunity to

be here today and to talk about the health care services in oregon and my agency's plans going forward. you have my written statement, so i will briefly summarize with three points. first, oregon's marketplace is successful. nearly 70,000 oregonians enrolled in coverage during open enrollment for 2014, despite needing to navigate a hybrid paper and automated system. using healthcare.gov that number rose. the rate in uninsured in oregon declined from 14% to under 9%. oregon's health insurance marketplace is healthy, competitive and sustainable. for 2016, 11 companies will offer oregonens 120 various plans at various coverage levels.

we're in the process of rebalancing the market to ensure its long-term sustainability. and while the percentage increase has been significant. the result tants rates are very comparable to those available in neighboring markets of california and washington and remain very affordable. third, the marketplace as run by the state of oregon is efficient. we as a state agency are able to operate the market lace with about 60% fewer staff than the previous organization. we're completely financed by an assessment on participating insurancers with no state funding or taxpayer funding involved. we have adequate financial capacity to pay a reasonable technology cost to the federal government or a private

membership should that be necessary. >> this is allison o'toole from minnesota. you're recognized for five minutes. you now the drill with the microphone. >> good morning chairman murphy, ranking member degette. my name is allison o'teal and the interim droechlt of minnesota's online health insurance marketplace. thank you for inviting me today. i am honored to share with you the success we've seen in minnesota. let me begin with an update on how min sure has benefitted us. for the purposes of background, i want to provide the committee with a full picture of where we

are today. since october 1, 2013, more than 500,000 minnesotans have use the min sure to shop and procure affordable insurance. minnesota has the lowest rate of uninsured in state history. in our first year, the uninsured rate dropped by a whopping 40%. and now nearly 90% of minnesotaens are covered. and i'm pleased to report that min sure is financially sustainable. we have a balanced, conservative, sustainable budget that's based on real numbers and real experience. and we've come a long way since our launch two years ago. the last 18 months have brought measurable progress, along with a dope commitment to transparency and accountability. and most importantly, we're making a difference in the lives

apartment health of minnesotaens. minnesotans like richard dean, a cattle farmer who with his newly-purchased coverage went to the doctor for the first time in year, discovered he had cancer and was able to successfully treat it. today richard's cancer free. and like jake sanders. he and hess wife have three small children. one who's had a pre-existing condition since birth. min sure allowed jake to find a lower cost policy for his family, and today he knows his son will be covered. covering more minnesotans has always been our foundational goal since day one. and min sure's technology performance has improved dramatically since then. after lots of hard work, there is a night and day difference between the first and second enrollment periods.

call wait times fell and our dedication to improving min sure continues today this is important to us, because we think no one should struggle to find a health insurance plan that fits their needs. it's also important in making sure minnesotans can live their lives and folk on the important things like going to work, taking care of their families and starting a business, instead of worrying about how they're going to pay for big medical bills. as we approach min sure's third open enrollment period, there's plenty of work ahead. our i.t. firms are hard at work improving website performance and ensuring a positive consumer experience. there's also a strong focus on improving mirn sure's functionality. one final point that sets us apart. in minnesota, our state recently created a 29% bipartisan health

care task force of health care and community leaders who will help address questions like access to care and financing. minnesota's taking oversight and accountability seriously, and i'm thankful to these people for their thoughtful approach to addressing many tough questions that remain for our health care programs. thank you again for inviting me here today. as min sure's interim ceo, my eyes are squarely focussed on preparing for the current enrollment period, improving the experience for minnesotans and making sure that as many people as possible take advantage of the products mirn sure has to offer. we want to see people like richard and jake and their families get the care they need and deserve. i look forward to your questions and thank you again for having me. >> thank you, ms. o'toole. now we recognize louis gutierrez. >> chairman murphy, ranking

member degette, good morning. thank you for the opportunity to testify regarding the massachusetts health connector authority, our state-based marketplace. my name is louis gutierrez and i have served since february of this year following the election of massachusetts governor charlie baker. as the new state administration took office, massachusetts was through a second attempt to implement health insurance enrollment system. while proficient eligibility was completed, a range of back office enrollment functions remained under development. much of this year has been devoted to stabilizing operations and completing the systems foundations to complete massachusetts's state-based market please. upon taking office, the baker

administration moved into effect several changes to the connector authority. first, it altered the structure, placing the health and human services as chair. the secretary of health and human services also oversees the state's medicare. and it helps with the successful coordination between the exchange and the state medicaid agency. second, it replaced management, hiring for experience and large-scale system implementations, along with a new chief operating officer, a woman distinguished in massachusetts payer operations. third, it appointed an outstanding program management lead to lead the combined health insurance exchange, medicaid intergreated eligibility systems and implementation effort. fourth, because the exchange and

eligibility initiative is shared between the health connector and the state's medicare organization, it reestablished a formal governance structure led by the state medicaid agency, the health connector and the state's central technology division. fifth, it undertook a six-week operational processes. and to lay a path for resolving existing problems. and finally, it completed the process for transferring individuals from temporary coverage where they had been placed in 2014 to appropriate placement in either qualified health plans or medicaid. the health kerkt is now better situated to service the need the of residents of massachusetts. for 2016, we have 11 issuers presenting 83 qualified health plans on the connector, and 25 plans across issuers of

qualified dental plans. we have 40,000 qualified dental plan enrollees. massachusetts is one of five states with less than 5% uninsured. we have significantly expanded customer service components for this fall's open enrollment period with 200 additional customer service hours, including evenings and weekends so that users may update their applications and not need to call the call center. massachusetts believe that states need flexibility to continue to innovate health care. we could not provide to the low income populations without the flexibility of the marketplace.

for example, our program which had subsidies for those earning less than 3% of the poverty level. we recognize the definition of small business size. going forward, there are potentially more seamless ways to integrate a medicare and subsidies. it is important that states be offered the chance to make this haw work better for everyone. massachusetts remains committed to make sure that those who need insurance can obtain it both now and in the future with the state-based market mace as one component of that strategy. thank you. thank you, mr. gutierrez. now we turn to mr. jeff kissle. >> thank you. honorable members of the oversight and investigation sub committee. it's a pleasure to come before you to report on the activities

of the exchange, but before doing so, i'd like to explain the health care environment in hawaii to help you understand the context of my remarks. yes, hawaii has among the lowest insurance rates in the nation. this is, however, because of the passage of the hawaii pre-paid health care act of 1974. at that point, the state undertook as a matter of policy the responsibility for providing access to health care and wellness resources for virtually every employed resident of our state. over the past half century, both democratic and republican administrations in hawaii have not only supported the provisions of the act, they've developed substantial resources and focussed on leading the insurance and health care industry to actually delivering these services to an ever increasing percentage of our population. the evidence of our success is clear. hawaii is not ranked among the states with the lowest rates of diabetes, yoe weisity, infant

mortality and other critical public health care metrics. our population, however, enjoys a longer life-span and by any measure, healthier outcomes faced by a diverse and cultural mix. i believe this is a result of our ability to develop excellent health care access and secure its viability through the pre-paid health care act with its employer mandate to provide insurance. in this context, the pass average the affordable care act was widely viewed as an opportunity to extend access to health care and wellness resources to even more of hawaii's population. for the most part, that effort's been successful, taken together, the expanded medicare program and the affordable care act have reduced hawaii's uninsured rate, already low, by more than half. unfortunately, a lavg planning, unclear business process design

and utterly inadequate program management at technology systems were implemented resulted in excessive spending and delays in delivering the important services to the people who most needed it in our state. since i became executive director of our team at the hawaii kerkt we've come a long way of achieving the forward-thinking health care act with the provisions of the affordable care act. our business processes now utilize technology to support a well-trained outreach team of workers as they assist our customers with the enrollment process. this change in approach converted our computer systems to a resource rather than a barrier to entry. in december 2014, we produced a comprehensi comprehensive, ten-year strategic business plan, a copy of which is attached to this testimony. it detailed a report on our condition, the activities, sustainability required by both the affordable care act and

state enabling legislation. it also presented both the advantages and the challenges as the exchange commenced its second full year of operations. in that plan, we explained to cms and our state administration how we would meet sustainability and other important requirements of the affordable care act. we recommended a financial approach that relied on debt financing and generating enrollment, revenue from about 70,000 enrollees at the rate of $12 million a year. i'm pleased to say that our enrollment in 2014 and 2015 increased by more than 400%. it is nearly now 40,000. moreover, the hawaii health care kenter was able to add thousands of individuals to the expanded medicaid program further reducing the costs of our community. even though we were able to overcome first year technology challenges, it became clear to all of us that the cost of maintaining, upgrading and ultimately replacing the technology had the potential to

exceed its initial cost. while the federal government funded the initial cost, the people of hawaii are responsible for the op going costs. after consulting with cms, our state administration elected to migrate to healthcare.gov as a supported, state-based exchange to ensure continued access to qualified health plans for our residents. i fully understand the basis for that decision as the risks of operating independently are greatly mitigated by the assistance of health care dofr technology and support from cms. we're continuing to work to harmonize the affordable care act with hawaii's frame work to provide outstanding health care to virtually every resident and when necessary, any of the millions of visitors we welcome to our state each year. we thank you for your time, your interest in improving the quality of life in our country

by addressing this important issue before the people of the united states. i look forward to any questions you have. >> thank you. and now recognize mr. peter lee, the executive director of covered california from the state of california. >> good morning chairman murphy, ranking member degette and des tinge wished members of the committee and the members from california, matsui and capps who were able to join you, but it's a hop or to be here in front of you before the sub committee to speak we've had in california implementing the affordable care act. this landmark legislation has dramatically changed health care in california and in the nation by putting in place new protections that benefit all americans. i'm pleased to address how covered california is working. what we consider to be the keys to our success and how we are actively working to improve what we are doing in california. first, let me note that california's a state that embraced the affordable care act from day gun. we were the first to establish a

state-based exchange. that legislation was passed with a republican governor and democratic legislature. since then, some of the tools we've put in place to build on are being an active purchaser. covered california chooses which plans to participate. we negotiate with them to make sure the rates, their quality, their networks provide the best value to consumers. second, we provide standard benefit designs. covered california sets the benefits so they benefit consumers. in california in the individual market, you will not see consumers surprised by not getting access to care because they didn't pay a deductible first. that's a standard that we have placed that primary care access is not -- the health care is competing on apples to apples bases. third, california has expanded its medicaid program. under governor jerry brown and our legislature deciding to expand medicaid has meant that

millions of californians have had the benefit of coverage they would not otherwise have had. so in california the affordable occasion a care act is working. 65% of voters say that and say they have seen the affordable care act working in our state, first and foremost because of strong enrollment. there's an additional 500,000 that have had coverage in the last year and a half that aren't covered today. that's not because they're uninsured. they're now with employer-based coverage or medicaid or medicare coverage. but exchanges across the nation are providing a safety net and a weigh station of individuals moving into the employer-based coverage with other options they did not have before. this is part of why all of us will have about a one third of our population turn over every year. we are now the glue holding together the employer-based system in public programs. in california, insurance rates are under control.

for 2016, the average rate increase in california will be 4%. in 2015, the average rate increase was 4.2%. two years in a row we've proven the nay sayers wrong. this comes on the heels of years of double denl iterate increases in the individual market. and let me make clear that in california the ben fisheries of those low rates are not just those in covered california, but the entire individual market. we have 1 million individuals that buy insurance not through covered california. they benefit from our negotiating on behalf of consumers. how did we get there? we have a good risk mix. we have a judge myoung mix, a d mix that reflects the population of california and we take that to the tune of $300 million of premium savings by showing the plans, the data that there's a good risk mix. they've demonstrated that in the

rates they've put before californians. coming forward in 2016, there's going to be more plan choices. we'll be expanding from the 10 plans to 12. we are adding oscar. the vast majority will have four, five, six plans to choose. but we don't think more is always better. we pick plans. we make sure that they're delivering value and they're building on the platform that congresswoman matsui noted of making sure that tweer' changing the delivery system and lowering costs for everybody over the long term. that's the future that we need to be looking for, building a delivery system that puts patients first, makes sure care is delivered when they need it. we still have work to do, and i look forward to taking your questions as we talk about our path forward in the future. thank you very much. >> thank you in lee. and now finally, we turn to mr.

jim wadleigh of access health connecticut. you're recognized for five minutes. >> good morning chairman murphy, and members of the sub committee. thank you for this opportunity to offer testimony as you examine the condition of several state-based health insurance marketplaces. my name's jim wadleigh, one of the nation's best in healthiest state marketplace. access health connecticut was established in 2012 by governor malloy, lieutenant governor weman. interest le their leadership has been critical to our success. so, too, has the commitment of the access health connecticut team. sense we launched our state-based marketplace two years ago we've worked together to meet the unique needs of our citizens. today, i'm pleased to report that 760,000 state residents and

small business owners have used the exchange to enroll in qualified health plans and medicaid. we've exceeded federal enrollment goals by more than 200%. we've cut connecticut's uninsured rate in half from 8% to less than 4%. that's 128,000 people who are now more likely to go to a doctor. we've worked with connecticut's insurance commissioner to keep costs down. rates for our most affordable plans have remained flat for the last two years. we no longer use state or federal funding for operating coarse. how d -- costs? >> how did we achieve this? a pound of prevention is worth a pound of cure. we kept things simple and stayed true to our mission. our exchange is considered a national model because of its straight-forward design and ease of use. over 96% of access health connecticut customers say they

are satisfied. the development of the stable, user-friendly website was overseen by an executive leadership team with a passion for health care and decades of experience in the industry. we set priorities, established clear business requirements and tightly managed scope of this project. to reduce the number of uninsured residents we conducted extensive research and partnered with numerous state and community-based organizations. this helped us better understand and reach those individuals and family most in need. we used creative, award-winning tactics while sticking to a simple enrollment message. in addition to putting feet on the street, we opened store on main street. taking a page from apple's customer service playbook, we provide fry, professional guidance in a personal touch to help consumers navigate the complexity of health insurance. the success of these stores has exceeded expectations.

not even the blizzard of 2015 which dumped two and a half feet across the state could keep people away. our year-over-year foot traffic in january more than doubled. access health connecticut is the first state exchange to intergreat closely with our back end systems. this nationally recognized award-winning apps allows customers to look at accounts, purchase plans all from the palm of their hands. our ability to collaborate across boundaries for heal insurance -- we were honored tor creating a multi-channel, no wrong door experience for consumers. solid technology and a commitment to exceptional consumer service has made us a model for other states. connecticut isn't just ahead of

every other state, it's in its own league entirely. we will continue to collaborate with other state-based exchanges as we did with maryland to share our expertise, business practices and technology. we will continue to innovate and develop new strategies that expand access to health care, promote health and wellness and eliminate health disparities. we will continue to explore new opportunities to reduce costs. safeguard our long-term financial stability and keep premiums affordable to all consumers. and we will never lose sight of why we do this. it's for hard-working people like walter who operates a dry-cleaning shop in connecticut. once he hit 50 and developed a chronic health issue, his insurance company began raising his rates. through access health connecticut, walter found a cheaper plan that allows him to keep his own doctors and afford

prescriptions. he's living the american dream and has the peace of meepd knowing that he can't be drop because of age or pre-existing condition. thank you for the privilege of appearing before the sub committee. i welcome the opportunity to answer any questions you may have. >> thank you, mr. wadleigh. i recognize myself for five minutes. i'm going to ask a number of questions, so please answer them quickly, if you could. first i want to ask each of you if your state has spent any federal establishment dollars for your state exchange. >> allen? >> i do not believe so. >> ms. o'toole? >> no. >> mr. gutierrez? microphone please. >> we have not spent outside any written authority from cms. >> mr. kissle? >> we have one item that we are trying to reconcile with our auditors before spending it. it's in a segregated account. >> mr. lee? >> we are spending establishment funds to continue the final establishment of our exchange,

federal dollars, but no operational funds. >> mr. wadleigh? >> no. >> can i ask each of you what your operational costs are this year for the exchange, mr. allen? >> for the current state fiscal year which began july 1st, our operational costs are about $12 million. >> ms. o'toole? >> thank you, mr. chair, sorry, i'm having trouble with the microphone. we are about the same, and i'm happy to provide the committee with a full balance sheet of our budget. >> thank you. mr. gutierrez? >> we are still in a very much a build year. our operation and billed expenses within the kerkt are on the order of about $65 million. >> mr. kiss el? >> a little over $8.5 million. >> our total budget is about $330 million. i don't have it off the top of my head >> and mr. wadleigh, would you know?

>> our total budget for the year is $28 million. and roughly $18 million of that is dedicated to operational costs. >> so, with all that, and i would appreciate, this committee would appreciate if we got more detailed odditied information as to what your costs are. i'm curious, have any of your states worked out what it's costed per enrollee? mr. allen? >> yes, our exchange is funned entirely through an assessment on -- >> no i mean in terms of how many enrollees does your state have? >> right now we have 107,000. >> and how much have you spent so far for operational and establishment expenses, state and federal money? >> are you referring to since the beginning of the program? >> yeah. >> i believe that's on the record of $305 million. in federal grants, and there's a bit more now. >> if you added state to that as well.

>> i would have to add state as well. >> you can get that information for us? >> ms. o'toole? >> you have to keep your microphone on. >> i'm very sorry. mr. chairman, i'm happy to provide you a balance sheet. we can e-mail -- send that to the committee right away. >> mr. gutierrez, do you know what you've spent for established and operational costs per enrollee? >> not offhand. we'd be happy to provide that. >> mr. kissle, do you know? >> i do. it's a very large number. over $50,000. but i want to point out with respect, chairman murphy, it's like saying that the first year's use of a freeway is only for the people, the cost of the entire freeway is only for the people who use it for the first year. >> i got that, mr. lee? >> we have no the done a per enrollee cost, but i note that we've managed over $10 billion of premiums in the first year and a half, and we anticipate over $7 billion in premiums next year. and the $1 billion from the

federal government have established -- >> i need to know in terms of your establishment operational costs per enrollee, do you now that number off hand? >> no i do not. >> mr. wadleigh? >> no, i do not. >> i know different costs up front. but of your states, who's keeping and who's turning it over to the federal? who's maintaining your state exchange? oregon you're getting rid of yours, right? >> queewe're using the federal. >> ms. o'toole? >> keeping minnesota. >> retaining massachusetts. >> moving to healthcare.gov. >> california's managing our system. >> connecticut is keeping our system. >> you're getting less and less federal subsidy, right? so that will mean more and more to the states. so that's going it continue on. mr. kissle, in your testimony you were critical of project hawaii. >> when i joined in october

2014, i examined the project which had had a miserable track record, and i admit that. and i looked at the project management tracking tools, and they were virtually nonexistent. the project was not tracked. it really defined what the end game and goals were. and i was very disappointed, because i came out of the infrastructure business. and i worked for companies that built projects. we built roads, bridges, bases and bombs for the departments of transportation and the department of defense. and these departments had extensive resources for tracking, monitoring and verifying project progress. >> from some of the testimony it sound thes like it's all re rainbows and unicorns. it's not rainbows and unicorns.

it was a mess. there was some mess ups here. some big ones that cost taxpayers billions of dollars, and we'd much rather hear from people who say yeah, let me tell you the problems and how we addressed it. >> thank you, mr. chairman. mr. allen, yes or no, are you denying that your exchange had problems? >> no. >> ms. o'toole? >> no, i'm not. >> mr. gutierrez? >> no, i'm not. >> certainly not you, mr. kissle. mr. lee, did your exchange have problems? >> absolutely not. ours had some problems on the way. >> mr. wadleigh, i don't now, it may rainbows and unicorns for you. did you have problem withes? >> yes, we did. >> what we're talking about here is how do we recognize those problems and move forward to

focus it. i start with you, since you're our model student, mr. wadleigh. if you want to talk very briefly about what problems you saw and what you've done to move through those, i think that would be very instructive for us. >> thank you for the question. so i think, as we've looked at the challenges from the onset of this very large project, which really, it was. we saw some of the challenges being time wise. we saw some of the challenges being management of scope. could we deliver everything that we needed to deliver for me in a ten-month period? no, the answer was we couldn't. so we went back to the drawing board a number of times to review everything that we needed to implement for the october 1st, 2013 time frame and

deferred functionality out to later months for us that we knew that would not impact our customers. and ultimately that came back around as some of our key decisions that we made, unbeknownst to us, that's really -- >> and are you continuing to try to refine and improve the efficiencies in your system? >> every day. we -- >> thank you. mr. lee, i only have 2:57, so could you answer the same question? >> yeah. very briefly. very tight timelines for a big i.t. build. >> timelines were a big issue. >> absolutely. >> were they a big issue for everybody else? yes. >> yes. >> mr. allen? mr. gutierrez? >> i was not there, but it's my understanding yes. >> the other big problem that i know we all had to address was consumer misinformation and disinformation, the afact of the availability of affordable

exchan exchanges. this is a huge challenge. we're working with literally 12,000 insurance agents, faith-based groups, but that outreach challenge is something we've addressed but continues to be a challenge. >> that's true in my state of colorado by the way. mr. kissle, you've been there about a year now? >> yes. >> what did you do before that? >> i was in the infrastructure business, most recently, i ran the gas utility in hawaii. >> so have you of seen a utility or system like this that didn't have issues that continually had to be addressed and updated? >> absolutely not. and the way you do it is take the connecticut model and perhaps the california model, and you roll it out gradually. you increase functionality. when we first started to make airline reservations we couldn't get a seat assignment online. now you can get umbrellas in our drinks. >> it costs extra for those umbrellas. mr. gutierrez, your state had a

lot of issues, what are you doing to remedy those issues. >> i have a belief that large i.t. projects really need strong governance, and we tried to address governance. >> ms. o'toole? >> thank you. some of the same things that you've heard already. we in minnesota early on took on two self-evaluations of ourself to make sure we identified problems and could focus resources where they needed to be. and we have made tremendous progress in two years, and hundreds of thousands of minnesotans have enrolled with relative ease now. we also put in much stronger governance process and procedure in place. >> mr. allen? >> thank you,. 's mention as i mentioned, i've had control for 90 days.

>> so you've focof fixed the wh. >> yeah. to put this on a different path, we're now laser focussed on delivering marketplace services in an efficient and furngsal way and moving forward that way. >> thank you. thank you very much mr. chairman. i yield back. >> mr. griffith? >> i know we're talking about state exchanges today, about this time two years ago we were arguing whether the federal system was ready to be unrolled with its plan, and so forth. and i noted with some interest, mr. kissle in your written testimony, i quote, i'm pleased to say that as of june 2015, according to turning point, our independent validation contractor, we were the only state-based exchange to have succ93ully passed a testing scenario providing third-party validation that we have a working i.t. system.

mr. chairman might want to get the federal folks in here and see if they can pass that same kind of test. and i think it's interesting that hawaii is the one that has passed it. not withstanding that success, not withstanding a ten-year plan to get the finances in order in june, the governor decided to shut down hawaii health connector and also not withstanding, i should note, $205 million in federal establishment grant dollars. now for folks back home, that's the money to get started on the program, isn't that correct? the state health exchange? >> that is correct. now we've committed or spent only $140 million of that and don't have plans to spend the entire $205 million. >> you're not going to spend the rest of it on establishment. where does the money go? come back to the federal government? >> some of it we don't plan to

spend. about $5 million to $7 million will be spent on decommissioning and shutting down the system. then additional money on new enrollments for policy year 2016. >> for enrollment. >> the outreach for establishment to greater increase the enrollment. >> how much do you anticipate that la will be? >> it's about $7 million. >> so you're going to have tens of millions left over. what happens to that money? does that come back to the federal government or to the state of ooiz. >> it remains unspent. it's not drawn from the federal government. >> thank you very much. is hawaii undergoing a rate increase for health insurance plans? >> yes, they are. the two main providers, the blue cross blue shield provider has announced a rate increase for qualified health plans of about

46%. >> wow. >> and keiser has announced an 8% increase. >> so one's got a 40% and one's got an 8%. which one's dominant in the market? >> blue cross, blue shield has about an 85% market share. >> do they cover the entire state? >> yes. >> does keiser cover the entire state? >> virtually the entire state. some of the rural areas they don't. >> we've heard testimony that except for rural areas, and i guess hawaii would be a rural area for most of it, there aren't that many players. >> that's correct. the average working person, it's those two players. >> do you know of any states who have higher than a 46% increase? >> i do not, but the reason for this is we, we have a really well-balanced insurance community and it's been 50 years in the making. and when the affordable care act

policies were introduced, the insurance companies experienced a lot of negative selection. the sickest people enrolled first. we're a tiny little state with a very fragile economy. many of our businesses, and we don't have national players in hawaii, need that, need that extra protection to provide the safety net that we have against sars outbreaks and other, you know, the swine flu and other kinds of things that are devastating to a small economy like ours. >> appreciate that. i noticed in the testimony, i believe, mr. wadleigh, that you had indicated that the rates for our most affordable plans have remained flat. and that raises, in my mind, as a former practicing attorney, if your most affordable plans have remained flat, you don't tell me about the others, does that mean everybody else is getting a big increase? >> so all of our plans, both on

and off the exchange are, have to have the same rates, so the benefit, the state-based marketplace has created has allowed, forced the off-exchange plans to fall in line and have to be more competitive as well. >> so, your affordable plans have remained flat, but you have some other plans that have not remained flat? is that what i'm reading? that's the way i read that. >> sure, sure. so there are always going to be plans, when you get into the platinum group that are much richer. >> and i apologize, because i see that my time is up, but i will note that you are not claiming that the plans went down $2500 from what people were paying before. i yield back. >> gentleman yields back, recognize mr. yarmuth. >> thank you, mr. chairman, and i think all the witnesses for their testimony. i'm not going to talk about rainbows and unicorns. in kentucky we prefer to talk about thoroughbreds. kentucky has had one of the

truly successful and mostly problem-free experiences with the affordable care act in our exchange called connect. and our govern and his team deserve an awful lot of credit. we had a glitch the first morning of the operation of the exchange for about two hours, and access was limited. beyond that, we've been pretty much problem free. and our experience is that we have insured now more than 500,000 people under the affordable care act through our exchange and expansion of medicaid. in the two years of operation. and that's in a state of 4.4 million. we've reduced the uninsured rate by 50% statewide. in my district, we've reduced the uninsured rate by 81%. there are only slightly less than 20,000 uninsured citizens in my community of 750,000, which is a little less than 3%

uninsured rate. so how's that happened? it's because of the outreach that we all talked about. connect had people in every county fair and every neighborhood social meeting at the community health centers, you name it, where people gathered, they were there explaining and helping people enroll. so i'm very proud of that. as a matter of fact, it's been so successful in kentucky that one republican state senator has suggested that we try to expand the exchange to other states. so we may be coming after your business pretty soon. additionally, just since i get to act like a witness here and talk about our experience, we do have this year three new insurance companies coming into the exchange, which is positive now. our consumers will have, i think, either six or seven choices of providers, there are three new insurance companies in the private marketplace. so the market is actually expanding in a lot of ways, and i think most importantly, earlier this year our governor

commissioned the deloitte firm to do an assessment of what the economic impact of the affordable care act would be over the next five years. and die loit came back and said that over the next five years the affordable care act would create 40,000 new jobs in condition k kentucky, would create additional economic activity of $32 billion. and an impact over the state of $800 million. i think in virtually every sense of the word, the connect operation and our experience in conditi kentucky has been very positive. we've had screenings for breast cancer increase by 111%. cervical cancer by 80%. and physical exams are up 187%. but all of this is really not as important as the human impact,

and, as ms. o'toole mentioned, a couple of her clients, like to read a letter from one of my constituents, a woman named kim adkins. and she wrote, my dau ter sarah adkins is one of the young adults on our insurance policy until she is 26 years old. he is still unemployed and looking for employment. on january 9, 2011, that bill, the aca, saved her life. one of her kidneys shut down and almost went septic. if she wasn't on our insurance, she would have waited or not gone to the hospital at all. the doctor told her if she would have waited an hour later, she would have lost a kidney or died. that's what this is all about. this is providing quality, affordable care to our citizen, and i think, very proud, once again, of kentucky and the experience we've had there, the progress we've made, and i thank you for the work that you all are doing in your respebtive states as well, because this is one of our, i think, can be one

of the true success stories of congress and the federal government, that we have created this new way to insure americans, thank you for your work and your testimony and i yield back. >> first of all, i'd like to thank all of you for doing what you can on behalf of the citizens of the state that you represent. all of us want access to quality affordable care. that's not in question. and i also agree the states should have more flexibility. indiana used healthy indiana plan as a way to cover our low-income medicaid patients and using a combination of federal funds as well as state funds from hospitals across the state that agreed to kick in so we could expand coverage in a state-based program that's actually hsa based that is working. mr. allen, state of oregon was awarded $305 million in federal

tax dollars, correct? >> yes. >> did they spend all the money? >> a little less than the full amount, but there was some unused grant funding at the end of oregon's term. >> and all of that went for cover oregon? >> all of the money was used to establish the health insurance exchange in oregon which was actually the grants were partially to cover oregon, partially to the oregon health authority. >> so none of the money was spent on anything else other than attempting to establish cover oregon. >> correct. >> so could you provide us with an itemized accounting of all the expenditures of $305 million that was spent? is that possible? >> i can. >> so let it be noted he has agreed to provide the committee with an itemization of expenditures, and from past history frequently we get one page from people with four things on there. we'd like to have a really in detail itemization of where the money went, that'd be great. also, there are a lot of good things happening out there.

and a lot of things that need to be changed. mr. lee, what percentage of your people are on silver plans or above, approximately? >> about 75%. >> okay. so 75% of the people then have no deductible for primary care and 25% still have -- >> but even at the bronze plan in california, everyone in bronze, which is the 60% value have three visits to primary care not subject to deductible in addition to the preventive care. >> thank you for that testimony. because in your testimony you said silver and above. i would like to point out. i understand that the private sector plans are, you know, are still there. but, you know, federal sub dags of health care plans competing with the private sector makes it pretty hard to compete for the private sector in may a hike was

approved to help fund its operations, is that correc operation is, sthaeshs? >> yes, it is. >> mr. gutierrez. at some point massachusetts had to put 300,000 people in the medicaid program, and are all those people still there? when you were working to establish the exchange? that there was a, the template, your website had issues, and i'm assuming all that's been resolved and the people who went into medicaid temporarily are all out of that. >> all of those temporary medicaid members have been redetermined into either qualified health plans or medicaid. >> great. and ms. o'toole, do you still have a backlog of about 180,000 public insurance renewals in the system? >> thank you for the question

congressman. we do not. it has been resolved. >> you do continue to struggle some, obviously. again, i applaud all of you for what you're doing. the goal of our committee is to find out where we need to make improvements. minnesota announced they're going to revert to the old system for medicare because of mirn sure's problems? >> that is true just for a short period of time. and that is we have prioritized that functionality for the very beginning of 2016. >> okay. great. and why, i guess. you've totally turned yours over to the federal exchange now. because the information i have, you've extended it to october 2016. originally health connector was shut down for insufficient funds. >> the outreach will extend through open enrollment. and then the corporate affairs of our independent non-profit will wrap up. and it will take till october to do the accounting and the like. >> okay.

great. mr. chairman, i yield back. thank you. >> mr. tonko, you're recognized four five minutes. >> let me thank all of our witnesses for joining us today and presenting good information. i know that some state-based marketplaces have faced challenges in building and managing their i.t. platforms. these challenges are well publicized. what is less well-known, perhaps, is the efforts that state-based marketplaces have in implementing and tailoring the aca to their own citizens. so i'd like to ask our witnesses, so what is your state-based marketplace doing to ensure that consumers in your state are receiving culturally and ling westically appropriate outreach as well as health care? mr. allen? we might start with you and go across the table. >> thank you for the question,

congressman. that's, in taking over responsibility for the marketplace, that was the exactly the number one question that landed, landed with us was given the success we've had in oregon in driving down the rate of uninsured, the remaining possiblelation is relatively small but relatively harder to reach. and so we have made the decision to move from a wide media broadcast advertising approach to something that's much more tailored that works through community partners, organizations that work in communities of color and other areas, much more targeted kinds of technology, outreach to try to work hard to get to those geographic and demographic populations that are amongst the hardest to get insured. >> thank you, ms. o'toole? >> thank you, congressman. happy to answer that. what we've learned in minnesota is with the remaining uninsured, like mr. allen said, they are harder to reach.

we have 26 statewide grantees who work in every community around minnesota to help reach out to these populations and enroll them. we're really proud of that. and i, we pair them, also, with enrollment centers around the state that are sponsored by brokers. so we're trying to come at it from all angles. and we've learned this is not an easy desis for people. so they need help and they need resources there. >> three principle items. we're focussed on ethnic might yeah, dealing with the hispanic, portuguese and asian communities in pockets throughout the state that are underinsured. second, our selection of navigators and walk-in centers for this fall is specifically targeted towards underinsured communities. because commute hasmassachusett

mandated insurance mandate, they would not share with us. they are able on our behalf to notify uninsured residents of their opportunity to become insured through the state-based marketplace.