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. . fact of the availability of affordable subsidies that makes care affordable is a huge challenge. one we continue to address because many californians are informed but many are still not. 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. kissel, 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. today we can order efrg everything down to an umbrella in your drinks. >> it costs extra for those umbrellas.down to an umbrella i drinks. >> it costs extra for those umbrellas. mr. gutierrez, your state had a lot of issues, what are you doing to remedy those issues. >> partly because of my background, i have a belief that large i.t. projects really need strong governance and we really tried to address ngovernance, nt just for project but for the overall business. >> 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. >> as i mentioned, i've had direct responsibility for the exchanges functions in oregon for about 90 days. >> so you fixed the whole thing. >> yeah. the assignment of those functions transferring from a corporation to a state agency was the most significant step policymakers did in oregon to put this on a lacer path. we're now put in the position of delivering marketplace services in an efficient and functional 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. kissel in your written testimony, i quote, i'm pleased to say that as of june 2015, according to turning point, our independent validation and verification contractor, we were the only state-based exchanges to have successful passed its i.t. blueprint testing scenarios 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 full $205 million, of course. >> as of june you've spent $140 million of the $205 million. >> that's correct. >> you're not going to spend the rest of it on establishment. where does the money go? 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 we'll spend some additional money on new enrollments for fiscal -- policy year 2016. >> for enrollment. >> the outreach for establishment to greater increase the enrollment. as we use health cahealthcare.g.

>> how much do you anticipate that 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 hawaii. >> 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. >> do you have any other players in your marketplace?

we've heard previous testimony that except for some rural areas -- i guess hawaii would qualify as a rural area for most of it -- there just aren't that many players. >> that's correct. the meds care advantage people are there. but for the normal health plan for 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 $2,500 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. i'm kentucky has had one of the truly successful and mostly kentucky has had one of the truly successful and mostl entucky has had one of the truly successful and mostly problem-free experiences with the affordable care act in our exchange called connect. and our governor 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 association 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 deloitte came back and said that over the next five years the affordable care act would create 40,000 new jobs in kentucky, would create additional economic activity of $32 billion. and have a positive impact on

the state budget of over $800 million. i think in virtually every sense of the word, the connect operation and our experience in kentucky has been very positive. we're getting incredible increase in preventative medicine. we've had screenings for breast cancer, increased by 111%. cervical cancer screenings by 88%. 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 daughter sarah adkins is one of the young adults on our insurance policy until she is 26 years old. she 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 skints. citizens. and i think, very proud, once again, of kentucky and the citi. 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 respective 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. so i thank you all 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 everyone to have

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. which is never subject to deductible. >> 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 subdiesation of health care plans competing with the private sector makes it pretty hard for the private sector to compete. that's part of the issue you. in may a 22% hike in the fee was approved. >> yes, it is. >> insurance companies got a higher fee. mr. gutierrez, is it true that i guess at some point massachusetts had to temporarily put 300,000 people on 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. >> it says despite additional funds, you do continue to struggle some obviously. again i aplayed 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 minnesota care because of msure's problems. is that true? >> 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 in hawaii, you've totally turned yours over to the federal exchange. because the information i have, you've extended it to october 2016. originally health connector was shut down for insufficient funds. recently extended through october 2016. true or not true? >> 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 linguistically 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 population 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. thirdly, there's an innovative program where because massachusetts has a state insurance mandate, our department of revenue knows who does not have insurance. they would never share data with u us. that's out of bounds. but they are able to on our behalf to notify uninsured residents of their opportunity to become insured through the state based marketplace. >> thank you very much. mr. kissel. >> we changed our outreach model from a media-driven model to a

personal model. we added marketplace assisters to speak the 15 or 20 languages and dialects of the people in the nations of the pacific rim, in addition to the cultures of america. we went from a call center to a personal outreach, although we still operated the call center. and we went into the areas where, for example, people have lost their homes due to economic conditions. we find that more than half of those families have one or two working members and we help them enroll in coverage. we also moved forward with the -- essentially what was -- i'm not a rocket scientist. the social security model where you have multi-layers of aid depending upon the needs of the individual. you can call, if you're sophisticated you can logon to the computer and if you need help, we in fact make house calls. my telephone number, personal

contact information, is on the website. >> wonderful. mr. lee. >> from day one we've done outreach which is anchored in local communities in a wide range of languages we continue to do that. the other thing, it is not just about outreach. it is about making sure care is delivered that's culturally appropriate and addressed equ y equitib equitibly. we have contract requirements to hold the plans to account. 3 of our 12 plans are among nine nationally recognized for providing culturally appropriate ca care. >> thank you for the question. we, too, have been focusing all of our outreach into our communities where we know that from -- in connecticut that our uninsured reside in basically ten zip codes so we can go right into those communities and work with those residents. >> thank you very much. >> thank you.

now recognize mr. flores for five minutes. >> i just wish we invited the d.c. exchange. still shows i'm ineligible for coverage. states continue to opt out of their self-exchanges, migrated to federal exchanges. we need to try to understand the impact on that. in order to do that we need to know how sustainable the state exchange are that are still in existence so ms. o'toole, would you tell me what taxpayers can expect from your state exchange over the next five to ten years and will it be sustainable during that time period? >> thank you for the question. i'm happy to answer it. like i said in my opening testimony, we are financially sustainable at this point. the -- our budget is balanced. it's based on real numbers and real experience. and the board of directors in march of this year has passed a three-year financial plan that looks out.

so we keep a close eye on this. something we're concerned about. and our board and our team is committed to living within our means. if we have to -- revenue has to match expenditures. if we have to make hard decisions, we will. i also mentioned in my testimony that we have a task force, bipartisan task force in minnesota that's looking into some of these issues that took it out of the legislative arena to have a more in-depth conversation throughout this fall and we look forward to that work continuing. >> mr. gutierrez? >> our current expense profile because it is still a buildout year is high and we'll need to reduce it making some hard choices along the way. but massachusetts is fortunate in that the connecteder authori authority was initially established with a reserve fund. we also have resources from our great tax and from the state

insurance mandate penalties as well as the carrier administrative fees. we have a diverse set of funding sources and bipartisan commitment to the effort. >> mr. lee? >> from day one we have over $200 million in the bank, a very strong balance sheet. a totally sustainable model over the long term. >> you talked about the assessments. what impact has that had on premiums in your state? >> compared to what health plans were spending to enroll people in individual market previously we think it reduces overall effect on the premium dollars. it is about 3.5% of premium but enrolling people in the individual market is very expensivend a prior to the exchange coming along plans were spending as much as 12% on commissions and a whole range of acquisition. i'd like to think we're the cheapest date in town, congressman. >> we, too, have a fully balanced budget that also right

now we have about $12 million to $15 million in reserves within our budget as well. >> what's the impact been on premiums in your state? >> the impact on our premiums related to the assessment as similar to california. we feel that it has allowed the marketplace to level off and compete evenly across the state. >> mr. kissel, what's been the -- excuse me, mr. gutierrez, what's been the impact on premiums in your state from the assessmen assessments? >> if i made a statement on that, i think i would be speaking without firsthand knowledge so i'd like to respond to that more fully in writing. >> that's fine. ms. o'toole? >> thank you, congressman. last year we saw rate increases on average of about 4%. our department of commerce in

minnesota reviews that so we don't -- that's an independent review process aside from our organization. they have not released rates for this year. that happens later this week. >> okay. would you advise after that happens? >> i'm happy to do so. >> thank you. given the short amount of time i don't have time for another question so i yield back the balance of my time. >> gentleman yields back. >> thank you, mr. chairman, for calling this hearing on this substantial reductions in the rate of uninsured americans under the affordable care act and thank you to all the witnesses here today and what you're doing for families across the country. when i think of the affordable care act i often think -- i think it is helpful to break it up into its pieces. first you have the consumer protections. the affordable care act brought. you have a piece on medicare. we strengthened medicare. then you have the policies and strategies to reduce the rates of uninsured all across the

country. so for consumer protections, the aca is working, we no longer have discrimination based upon a pre-existing condition like a cancer diagnosis or diabetes. that has been a godsend to families. the consumer protections that allow young adults to stay on their parents' policies, i've heard directly from many friends back home what a benefit that has been. and then insurance companies can no longer cancel you if you get sick. so that's -- there are others but that's an important piece. then under medicare, medicare is stronger. we invested savings into lengthening the life of the medicare trust fund. we're also -- we also are closing the doughnut hole, put money back into the pockets of our parents and grandparents through less costly prescription drugs. and then medicare's undergoing reforms so that care is provided in a smarter way.

but tlhen it comes to the rates of uninsured and it is pretty remarkable. this is important as well, when you think about it, for people who already have insurance. because what the afford ashl care act has done is help people take personal responsibility for themselves and make insurance more affordable. that way you don't have this cost shifting to people that do have insurance. so the recent census bureau report said that since the passage of the affordable care act five years ago, 17.6 million americans have gained coverage. and that from 2013 to 2014 we've had the largest reduction in the uninsured rate in america in 25 years. it's important to note that at the same time the rate of employer sponsored health insurance has remained constant. because that was kind of a

question mark going in. so, so far, so good. i'd really like to thank you all -- i've heard today little healthy competition among the states, how proud you are of some of the things you've been able to do. i certainly heard it from my colleague in kentucky where they've done a fantastic job. mr. lee, congratulations. since opening of the exchanges, california has provided a lifeline to so many families inle california through cover california, medical. what's happened to the uninsured rate in california? >> it's dropped to about 12%. one of the fifth largest reductions in the nation but it is also, if i may, your note that it's also for people that have insurance are seeing the benefits of lower rates. a million californians in the individual market that don't buy through us benefit from our two years holding rates down. i think your note on those benefits aren't just for the uninsured but it is also for insured people that are in jobs, that have insurance that's now

having rates kept in check. >> how are you working to insure that coverage remains affordable from this point forward and meaningful for families? >> one of the things we're doing at cover california, we're working with our 12 health plans to say how do we affectly affect care where it is delivered. in the end affordability is about delivering the right care at the right time every time. the movement that we've seen in congress, a common movement of moving from volume to value is something we are working with all of our health plans to change payment to promote primary care, to make sure people with chronic illnesses get the right care at the right time. that needs to be the focus all of us around this table have. as one of the other congress people noted, it is not just about giving people an insurance card. it is making sure people get the right care and that right care is delivered at the right time. that's going to be the key for all of us in reducing costs over

the long term. >> mr. wadleigh, you're here on behalf of access health connecticut and thank you for what you've done in lowering the rate of uninsured. tell us what's happened to the uninsured rate in connecticut and what's happened to your citizens? >> thank you, congresswoman. the uninsured rate in connecticut has been cut in half in the last two years. we see that it will continue to go lower. that has been very exciting. i would also say our next -- it's really what our next step, similar to what mr. lee has said. it really comes down to how do we start working through health disparitie disparities, wellness, access to primary care physicians. those are some of the goals we are working on right now. >> thank you. i yield back. >> we have an agreement that mr. waldon can go next in order

without objection. >> i thank the chairman. i thank my colleagues for that. i know you were each asked if there were trouble with your exchanges and you all wisely answered yes because it is never easy to roll one of these out. i just got to go to a oregon specific issue though but i'll ask each of you to put a highlight on this. did the governors in your states used their paid campaign political advisors to craft official communication and management strategies for the rollout or the termination of your exchange? yes or no? >> i don't know the answer if our governor did that or not. >> mr. lee? >> i have no information about how my governor used the staff. >> not to my knowledge but the governor is very courageously taken on the burden of this exchange by embedding it in all of the departments. >> mr. gutierrez. >> not under the current administration. >> ms. o'toole. >> thank you, congress plan.

i have no yfrinformation about that. >> i think mr. allen knows potentially the answer in oregon. >> congress plan, i was not directly involved in the management of the exchange and have no direct experience with that kind of involvement. >> good answer on your part. however, i want to introduce into the record mr. chairman, a series of newspaper articles that were acquired that investigative reporting that was done that clearly indicate that our governor at the time used his outside political campaign staff to manage and coordinate the messaging on cover oregon and maybe, worse than that, based on e-mails that have been made available foia, i think it is important for the committee to know as we investigate what happened to this money what happened in the behind the scenes apparently in our state of oregon. so mr. chairman, without objection, i'd like to have those entered in. mr. allen, do you know how close to completion cover oregon was

when they pulled the plug on it? >> congressman, i don't have direct knowledge of how close it was to completion. i do know there is on the record a technology assessment report provided to the cover oregon board at the time that the decision was made whether to move forward with that infrastructure or move to the federal marketplace that indicated that were they to choose to maintain that -- the existing infrastructure, it was already failing to meet benchmarks necessary to be available for open enrollment in 2015. >> so my understanding, it was about 90% done. >> i would have no -- >> you haven't asked. okay. how did oregon inform cms of its decision to migrate to healthcare.gov? do you have any knowledge? >> it >> i know this is a theme. >> i assume at some point -- well, do you know who oregon worked with or is currently working with at cms, either during this transition --

>> sure. we've been in most close -- most closely working with myra alvarez who just recently departed cms. i've been in close contact with kevin kunihan updating on transition issues as well as site visits and those kinds of things. >> what did cms require of oregon before allowing it to migrate to healthcare.gov? >> i don't have the answer to that. >> did cms conduct any forensic analysis on cover oregon or are they now? did they conduct an audit of their own? >> we did recently have an audit on the ground by the cms about three months ago. i should make a comment in that context earlier i said we have not used grant money for 2015 operations. there are actual tli two very minor elements that were identified in that audit we are working to resolve now. i wouldn't be able to characterize anything i'm aware of as forensic.

>> will that audit be made public by the state when it is completed or by cms? >> if not public, by cms. >> i'm sure the committee would like access to that either from cms or oregon. do you know if cms required oregon to return any of the $305 million originally awarded for the establishment of the -- >> other than the potential of couple of minor items i mentioned that we're in discussions with them about, no, i'm not aware of it. >> did oregon incur any additional costs whether it migrated to healthcare.gov? do you know that? >> i can get back to you. >> i realize -- but there has been going on a long time. as you know, it's dominated certainly on the minds of oregonians out there. now that oregon has elected to switch over to the federal exchange, will there be an attempt to recoup any of the

money to establish the state exchange? >> to recoup from whom by whom? >> well, the $305 million. >> we've been able to review grant documents. $300 million went for the entire setting up of the technology. $78 million of the $300 million for that function. i don't think there's discussion about a return because we've complied with the terms of the grant. >> wow. even though the exchange never was functional. >> congressman, the technology didn't launch but we were able to cover 70,000 people in the first year despite that. 100,000 people most recently -- >> did you actually use the exchange behind the curtain with paper input? >> correct. it was a hybrid paper aud matto

process. >> in terms of audit, does hhs or cms require an auddy of any of you into how you spent the money? >> we're required -- >> ms. o'toole? is that required by the federal plans due to an audit of how you spend the money? >> it's my understanding that we are required in massachusetts. we've had three straight years of clean third-party -- >> i'm just curious. required by the state or the federal government? >> federal government? ms. o'toole? >> congressman, we are subject to comprehensive oversight both in minnesota by our state -- >> i just want to know. yes or no. >> and the federal government. >> mr. gutierrez? yes. >> mr. kissel? >> it's a yes -- but. there is detailed self-reporting and certification and auditing. but it relies on our records so

that they don't go to the next level and look at our contractors' records to be sure that what we say has actually been done. >> there's limits. mr. lee? >> yes, there's reviews both by cms as well as by state level of our spending. >> mr. wadleigh? >> same thing. >> miss kapps. >> thank you, mr. chairman. states that created and run their own state-based marketplaces are testing new models for enrollment, insurance market oversight and consumer protection serving as hubs of innovation. the work being done there can serve as a model for other states and the federal government as the aca continues to be implemented. mr. lee, california has been a leader in the "active purchaser" model. can you explain what this is an how this has helped california -- cover california ensure access to high-quality affordable health insurance coverage? >> thank you for your

leadership, congresswoman kapps. first, we don't take every plan that wants to knock on our doors and be part of the marketplace. we review them critically and make sure they have the networks and systems in place to provide quality care. next we look at the rates and make sure they align with the quality of care we expect of them. finally we hold them to account for delivering quality care. that's all in the context of what we have which we think is critical and some of my colleagues up here have similar things which is standard benefit designs. right now in many parts of the nation consumers may buy the lowest cost plan, then find out they need to spend $3,000 deductible before they get care. that doesn't happen in california. that's because standard ben if it designs for both on and off exchange in the individual market we're reshaping the market so benefit designs are designed for consumers with be not for a health plan. >> thank you. does access connecticut have a standardized benefit package, how does it help consumers make

informed purchasing decisions? >> we do. thank you for the question. we have a standard plan designs for all of our individual tiers. we've found it makes it easy for our residents to compare and manies to apples whereas prior to this it was much more difficult to compare plans. >> thank you. one of the focuses of the aca is to transform the delivery system and improve quality care. as a nurse i find this goal to be incredibly important. bottom line really, especially as we reach the goal of transitioning from ra sick care system to one that promotes wellness. mr. lee, what efforts has cover california taken to improve the quality of care through better coordination, payment reform or other initiatives? >> thank you very much for that question. when we released our rates this year which were only a 4% increase we didn't just release the rates, we release background on how our 12 plans are doing better coordinated care, using telehelp, addressing wellness and prevention, addressing hell

disparities and health equities. these are requirements in our contracts with our health plans. they aren't just putting products on the shelf. they need to deliver on that promise of care. we think that's something all exchange should look at to make sure it is not just a card in the pocket but people are actually getting access to the care that's being improved over the long term. >> to each of you briefly, if you have something to add just so we get it on the record about initiatives going on in your individual states, if you want to add. >> thank you. a lot of similar experience. one thing we are doing differently in minnesota this year is adding a comparison tool. someone mentioned it earlier about premiums are just one part of the cost of care. we're trying to give consumers a more robust picture of like out of pocket costs and other costs that go into their care so they make better choices. it will be a new feature on our website for open enrollment this year. >> any other examples? or other initiatives? >> i would add quickly, i

mentioned we have 120 different plan options available for consumers through 11 companies in a market as small as oregon that's an incredible range of choice which actually becomes a problem for consumers. we rely heavily on agents and assisters to help people through that decision making process so they just don't go immediately to the lowest price plan when in fact their own circumstances may really dictate that a higher monthly premium but lower deductibles or co-pays would be a better option for them. >> are individuals opting to use those assisters? >> yes. >> or whatever the word is? anything else? >> i'd say connecticut very similar to the rest of my peers. we are doing something new this year working with all of our carriers. we've met with them to start collaborating on how we can help improve health literacy with all of our new customers who have previously been uninsured. similarly we have found that we needed a comparison tool to help our customers pick the right

tier versus the lowest price. >> in 17 seconds, mr. lee, what, if anything, has cover california done to encourage this right care at the right time? that's such an important area. >> one thing that i highlight is we have a partnership with our plans to promote what's called the choosing wisely initiative which is an initiative led by the clinician community to help make sure patients don't get unnecessary care but always get the right care. that's one that i'd highlight. >> thank you. yield back. >> thank you. now recognize mr. collins for five minutes. >> i want to thank the witnesses, too. it's been very educational. i think we all know this, everything we are all working on is a work in progress. with differing results and not being from any of your states, it's interesting to hear what you're saying. i'm from new york. we received 575 million to set up our state exchange. but somewhat disappointingly -- quite -- the inspector general of hhs last week revealed that

of a randomly selected number of applicants on our state exchange, that it investigated 62% were either improperly granted subsidies or the application was deficient in some other meaningful way. the most prevalent problems were inconsistencies in reporting their eligibility data, and their income. the website didn't seem to question those and applicants received subsidies that, frankly, they weren't entitled to. so before i get back to some questions on that, we also just last week, an insurer called health republic of new york which is a new york city based insurance cooperative. and a very significant player in our state exchange, especially up in westchester, new york, where i represent. health plans were effectively shut down because they were not

solvent. which means over 12,000 people in western new york which i represent are going to lose their health plans. here was the problem with health republic of new york. as a new insurer under the aca, that company received government assistance to cover start-up costs in return for providing more competition in the marketplace. but as you might suspect, their policies were not what the market could sustain. they cost too little and gave away too many benefits. these plans sucked in unsuspecting new yorkers by wasting taxpayer money and distorting the health insurance marketplaces. these new yorkers now have to find a new plan with staggering price increases that reflect the real rate of coverage for the aca mandated benefits. so while i know none of you represent new york, i'd like to know have your state exchanges been audited like new york just was by hhs where we found this 62% error rate and again

subsidies being given that were not based on eligibility or income? and if so, what did your states do? mr. allen -- >> we used the federal platform. >> we'll just skip you. there we go. ms. o'toole? >> thank you, congressman. not to my knowledge. i did see that report so i'm generally familiar with what you are talking about. not to my knowledge. i just want to note that we obviously take compliance very seriously. we have a robust team that's working on that and making sure that only eligible minnesotans are enrolled. >> well, that's what we would certainly hope for. thank you. mr. gutierrez? >> not to my knowledge on the formal audit. but we also have an in-depth validation program for our eligibility system. >> glad to hear that as well. mr. kissel? >> we have not been audited but we have -- we are a small community, and since everybody

has my phone number we're self-audited if that respect. the inquiries to us went from the thousands in 2014 down to a few dozen in 2015. we did have a problem and i think it is largely been resolved. the 1095 irs reporting process for us went very smooth ly >> glad to hear california is doing better than new york in that. mr. watley? >> thank you for the question. we, too, have had multiple audits from the gol, aig, and we

also take all those opportunities to improve our system. >> thank you. i don't think i have time for my other question, mr. chairman, so i yield back. >> the chairman yields back. we recognize ms. brooks for five minutes. >> thank you, mr. chairman. i apologize, i was at another hearing. mr. allen and mr. kissell, i guess i have a question for both of you. do you know whether cms posteripermits transitional cost dollars? and if you could tell me what transitional cost dollars are. >> i don't know the answer to that. we would have to get that directly to the commissioner. >> i have a check on it status, i believe it has been approved. these are for the enrollment of new members in healthcare.gov. it is for the decommissioning

and archiving of our existing technology and certain other items, including approximately $225,000 for the program management organization that the state has retained to manage the transition of our functions into both healthcare.gov and into the state departments, the operating departments. >> and was this a written policy, if you know, that hawaii is using? you're using your money, correct, from establishment to transition. >> correct. >> was this a written policy or was this something you negotiated? >> i don't know whether it is written, but i do know that we agreed on it with cms. >> and do you know what was the basis for that agreement? why did cms say that you could use your establishment dollars to transition? and what was the rationale? >> i can't speak for all of their decision because it

covered technology, it covered outreach, it covered a large number of issues. so far as outreach, it is only to enroll new members in healthcare.gov. we are bearing the cost of re-enrolling our 38,000 existing members into healthcare.gov. that's coming from internal state funds. >> and do you believe that this should be permitted? obviously, it's beneficial to hawaii, correct? >> let me answer the question by saying, in hindsight, we're learning an awful lot. had the regulations relating to small business health options been in place then that are in place now, hawaii never would have had to undertake to build the exchange, to support our prepaid health care act and harmonize it with the affordable health care act. this is the kind of issue that i think this transition will be later. >> and i apologize if these questions were asked, but why did your governor choose to shut down the hawaii health

connector? >> he worked extensively with cms administrators, and they came to the conclusion jointly that because we were an independent, reliable agency relying solely on issuer revenue, we couldn't get the critical funding. we went to the department of services and decided to bear the cost of essentially the deficit because we were not financially sustainable. administrators encouraged us to do this so that we could maintain insurance for qualified health plan recipients indefinitely in compliance with the affordable care act. >> was that your role? what was your role in that decision? >> because we're not a part of the administration, we're an independent corporation with separate board of directors. our role was to make the hawaii

health connector work. and we developed plans that did, we believe, make it work. we fixed the technology and we went forward with a financing plan that we thought would be workable. cms and the state decided that had too high a risk for our small and fragile economy, and they decided it was better to continue on the basis of moving to healthcare.gov. >> was there a contractor involved in that transition? >> there are contractors involved in the transition on behalf of the hawaii health connector, the state, and the medicaid agency to build the interface with healthcare.gov. >> so how many contractors are involved and how was that contract awarded? ? those contracts. >> we have two principal contractors involved at the hawaii health connector mostly in the archiving and

decommissioning of the process. there is a sole source contract with kpmg for building the interface. that's done in accordance with state procurement regulations. >> are there other contractors involved? >> yes, there are. health management associates is providing the pmo, the project management, for the transition. >> do you have any sense of the transition cost? >> i know that their initial contract is for 400,000. the state is going to have to spend its own money to embed these functions in the various departments. >> thank you. i yield back. >> there will be other questions. mr. kissell, you had just mentioned about other departments, the department of labor. i would love to know about other costs and what you anticipate future costs and how your states are going to absorb those additional costs. important for us to know that. so, in fact, i want to thank you all for being here today and

participating. members, i want to remind ten other business states to get questions for our records, and i ask witnesses to respond quickly and promptly to those questions. and with that, this committee hearing is adjourned.

here's what's ahead on c-span3. first of the hearing on the impact of the colorado gold king mine spill on small businesses. then lat veen president. labor party leader jeremy corbin. and homeland security secretary jeh johnson are interviewed at the ideas forum. president barack obama says the u.s. is becom