they have to go into poverty to get health care insurance or be able to find some employer. if you are self-employed, you are stuck. it's a tough cycle that we are in. in some ways, oklahoma is the canary in the coal mine. we are raising our hand and saying, this is really serious for us. this is what everyone said would happen, we are experiencing now. it's actually happening there. my question, really, is for mr. wieske as well. you talk about things wisconsin has done in the past. we have done a lot of things in our state in the past, no longer allowed to do. if you were given the ability for your state to be able to say here is some flexibility to be able to take care of people, is it your assumption your state would say only the federal government cares about people in my state, we don't care. or is it an assumption the state would say there are people in

desperate need. give us the flexibility and we will fill that void. >> the flexibility governor walker has shown and the state legislature said yes, we would want to take care of our state. we have done that. we have expanded. we are a different expansion state. 100% poverty where the state is covering a piece of that. for the first time, wisconsin, everybody in poverty is covered under medicaid. wisconsin started down that road. we would love more flexibility to do it fully. >> what would that look like, practically? what are the plans and options you put in place? >> we need to look at what the options were, but i think we would probably, to a large part go back to the high risk pool we had in the past. i think it was well functioning. it did a good job of taking care of folks with medical conditions in the state and it was a good funding procedure for subsidies. we had a good program to provide

coverage for folks in need. if you look at the rates that i highlighted in my testimony, if you move them to a reasonable level, if a 21-year-old doesn't get a 75% increase or more in wasa and a 21-year-old in milwaukee doesn't get a 78%, they are more likely to join. there would be a number of thing that is help lower the rates and bring more competition. we are facing the same thing that ohio is. we have 15 carriers and we have expanded. service areas and where folks are covering has been in t turbulance. more carriers are offering coverage off exchange than on. that's a reflection of the fact that, you know, it just doesn't work for them.

our exchange carriers have literally lost, capitalized ones, millions of dollars in value from surplus. so, eventually, they are going to be at greater risk. >> we have dropped down one carrier. at the same time, several of our rural hospitals have closed in the last several months. others are on the brink of that and is a very, very difficult time for them to be able to manage what's happening right now and the requirements put on them. as we watch rural hospitals close, physicians retire early, other physicians merge into hospitals, other hospitals merge and watch insurance companies around the country merge, we are not watching a healthy future for where we are in health care. we can say we are sustaining where we are now. but we can see quickly where things are going and it is not a healthy market in the days ahead. i appreciate all your testimony for being here and being part of this. >> thanks senator lanford.

>> i can't tell you how many doctors in wisconsin said they are retiring early and they told their kids don't go into medicine. some of them paid them incentives not to do so. it's a sad state of affairs. senator ernst. >> thank you mr. chair and thanks to the panelests. commissioner gerhart, thanks for being here. it's great to have someone representing iowa and sharing our concerns on the panel today. i enjoyed your testimony only because it's the same thing i have heard over and over again as i'm traveling across iowa. what i don't enjoy about that is the fact that the stories being shared by our wonderful iowa families are stories of hardship and what the aca has done to their families. we all have very serious concerns about how our families will be able to continue to

afford the affordable care act. those insurance policies. i hate to say i agree with you, that iowans and folks across the country are in a situation where they are attempting to decide, do i pay for my mortgage or purchase health insurance? i have heard that time and time again. it's either a mortgage payment because the insurance costs are so much more than previously. is it a car payment? a truck payment? a tractor payment? there are so many considerations families are making they didn't have to make a number of years ago. a family of three in a county in iowa reached out to my office to share they are paying $8,000 annually for two policies, one with a nearly $6,000 deductible and the other with a $2500 deductible per person. based on initial rate requests,

they received notice that one plan is expected to go up 37%. the other plan, 46%, putting them over $10,000 in premiums for next year. one family member already took a second part time job off the farm that barely covers $8,000 premium expense now. the family has had very few medical costs so far this year and rightly asked me, why, as healthy participants do they face these increaseses? you mentioned shocking statistics. we know that aetna found that 5% of spenders drive 60% of costs. can you explain a little more in detail what federal policies are driving this? >> sure. carriers have to have one individual risk pool for the individual market and, again, if you have a catastrophic claim or

a series of them, it drives the whole pool. in iowa, at least, we have significant claims with a family driving upwards of 10% in one individual pool. we had a functioning high risk pool. the industry used to have that up to $20 million annually. now that is put in the backs of two insurance carriers. that pool is driving a lot of the rate. i heard it in my public hearing on the issues where folks were really upset. to give you an idea, a family of five, soon to be six, if i want to buy a plan in des moines, iowa, it's $26,000 a year. that's the cheapest, silver plan. it is a cost issue. people have to make significant decisions. >> absolutely. we do hear it all the time as i'm out traveling across the state. thank you for that. as i mentioned, iowa families are paying a lot for these premiums and they have those high deductibles and other out

of pocket costs. the one thing i hear commonly from folks that reach out to my office and to me, they didn't realize what their deductible meant when they bought the plan. others asked why they are paying all this money in premiums when they will never reach the deductible. i understand lower premiums on the front end generally mean higher out of pocket expenses and cost when accessing services, but can we help consumers look beyond the price and focus on the benefits and network associated with the plans in this high premium environment? is there a way to do that? >> it's difficult, to be honest. we have a lot of consumer education around the deductible issue. $13,000 for a family not having insurance, they don't have $13,000 in their checking account if they use it. it's a difficult issue. we tell folks to shop around. some counties, one option, not a

lot of choice, to be honest with you. the plans are more narrow, they might be cheaper. we have joint ventures that are like an accountable care organization. putting a risk in the provider community, the doctors have skin in the game to keep the patient well. we have to look at prescription drugs, cost, transparency. insurance was fixed through the obamacare and now a carrier has to pay out 80% or more. we didn't look at the actual cost. until we look at the entire system of health care, we are going to have this dialogue for a long time. >> i have share third-degree story with you, too, about a young, beginning farmer that really, his plan was canceled. a $300 plan. it was perfectly acceptable to him. it was canceled. it didn't meet the requirements of the affordable care act. it was replaced with a plan, the cheapest he could find was $700, so a $400 difference each month.

that was his truck payment there and his deductible was $10,000. he said i don't have $10,000 if something should happen, i don't have it. so, it's hurting our families. it's hurting those that are just starting out in the work force if they are self-employed. it targets many of our farmers and ranchers across the state. it's been very, very difficult for us. we could go on and on. i know you had mentioned a solution for the high risk pool. you mentioned the particular family that's had about $12 million of costs, which is a significant concern. can you explain a little bit more about what that risk pool, your solution to that risk pool would be? >> my idea is given the carrier's predictability of pricing is critical.

a carrier with no lifetime limits, no annual limits, you get a catastrophic claim and your whole balance sheet could be disrupted. so, you know, our theory is, if those folks went into some other pool whether they are state backed or federal backed where their coverage would still continue, they pay the premiums, if you told the carriers, you can pick a number. you have to pay the first million. you are on the hook for $500,000, $1 million then it goes to a pool of a societial spend. that makes more sense. in iowa, the risk is not that big. you get a catastrophic claim in a pool of 21,000 and it hurts everyone in the pool. we talk about more how that works. i'd be happy to explain that further when there's more time. >> thank you. >> thank you senator ernst.

i'm not quite sure whether every state's high risk pool is funded the same way. wisconsin's was a surcharge on everybody's insurance, correct? >> it was a surcharge. it was paid by the insurers and medical providers agreed to discount a portion of the contribution. >> rather than, you know, have the adverse affects as commissioner gerhart is talking about, pool everybody, everybody that is, you know, basically allowed to operate insurance in the state pay premiums. the system worked great. when i was running my business, we go to renewal. maybe somebody had cancer, they are not dropped from coverage, but they weren't offered coverage. we have the high risk pool. they weren't denied coverage, immediately qualified. there's a menu of different types of coverages, different deductibles and out of pockets. we could come up with ones

identical to our own group plan, comparable prices. it's a system that worked well. it is a complete risk pool sharing. nobody had to raise their rates to protect themselves. it actually worked. i want to talk about, because it is true, when you are facing a total cost, you know, literally, i'm talking $1400 per month. you are getting up into the $15,000 to $16,000 a year plus the deductibles. you are talking about $20,000 or more before you get insurance. what i'm seeing in the state, people are telling me, they are dropping coverage. people that always had health care coverage, always were responsible, they simply can't afford it and won't take the risk. what is the risk other than a catastrophic instance. i would like all of you to talk about that phenomena in your own states.

start with you, lieutenant governor. >> so, in ohio, the high risk pool that existed just immediately before obamacare was implemented was subsidized by the government. it was set up and run by the government and subsidized by the federal government. it was different than what was explained in wisconsin. >> how did you get that done? >> that was before my time. bft, before my time. so, it is different. however, we did regulate the insurance side of it because it was basically underwritten by an insurance company in northeast ohio. i will tell you, it was a unique arrangement, but we had disputes with hhs. in particular, there were two disputes during the time i have been in office. one related to premium levels or looked at the cost of the high risk pool and the premium to sustain the high risk pool and hhs refused to accept what we

believed was justified. of course we believe it puts the high risk pool at risk, then obviously the consumer ultimately is harmed. i will tell you the second disagreement we had with regard to the high-risk pool was whether or not certain individuals would be eligible for coverage under the high risk pool. ultimately, we disagreed. the insurance company ended up having to file a lawsuit against both us, the department of insurance and hhs to make a determination about which direction they were supposed to go. >> always strings attached to federal funding. >> yes. >> speaking on the individual market with such high premiums and deductibles, they are not taking insurance. how big of a problem is that in ohio, wisconsin, iowa and. >> it's been a year and a half ago, a small business owner in central ohio, her comment was the premiums are what they are.

she said, but if i get sick, it's going to cost me $12,000 out of pocket in addition to what i have already paid in premiums in order to receive coverage. i don't have $12,000. i can't afford to get six. >> we are seeing the same thing with people subsidized by obamacare because of high deductibles don't access care because they can't afford it. commissioner wieske? >> first, i would note the uninsured rate, the methodology they used changed. we may not be talking apples to oranges as far as numbers go. that's a fear of mine. wisconsin has a low uninsured rate. this time, that's where we typically landed, sixth of higher for uninsured. >> real quick, in 2010, 94% had insurance. 89% full-time, 5% part-time.

in 2004, 94% has insurance, 89% -- it hasn't changed. >> it's been the same in wisconsin. we are fortunate. our market is becoming less competitive. the individual market has grown because of obamacare. the scary thing is the large group market and small group market have shrunk. we expect it to shrink because they are moving into unregulated plans. it is their per ogtive. the small group market shrunk by 35,000 folks. if you factor in the changes in medicaid and the loss of a high-risk pool, it's not a gain, it's actually a drop. >> are you talking employers self-funding and starting their own -- >> correct. >> -- within their operation? we have innovators in wisconsin doing that. >> there were 200,000. we are okay with that.

there were 200,000 folks in fully insured plans that moved from that to self-funded. the question is why were they fully insured and why did they move to self-funded? the reason is obamacare. we are supportive of employers providing coverage. i don't want to imply that. it's a concern when you see the sea change shift and cause zed by a federal law change. that's where we are concerned. i think, as far as folks going without coverage, we are seeing this consistently in wisconsin. we are hearing about people can't afford coverage. we are hearing from the legislatures, we are hearing it from consumer lines. we don't have good numbers on that. we are hearing this as a phenomenon. based on what we see, we really haven't seen the individual market grow as much as you would expect given the subsidies, 80% subsidies, et cetera that indicate there's been movement in getting private coverage.

>> having insurance is not the same as having access. bottom line. >> correct. >> senator carp ore. . >> i think we are going to try to conclude around noon or so. thank you for joining us. i have a question for the record that i'm going to submit for you, governor taylor. if you could respond to that, that would be great. i'm going to ask commissioner kreidler just to think out loud. we heard a fair amount about risk pools. give us a short list of things you would recommend that when the elections are over, we are in a new year, new congress, new

president, what are things you recommend we do at this end and meanwhile, what are things the states could be doing, should be doing at your end? >> senator carper, i appreciate this question. i think what i have noticed in the discussion we have been holding this morning is that there's more of a focus right now on what we could do to make the system work better. one certainly is that the concept of having a form of a risk pool that would help mitigate the exposure insurance companies would have so they don't wind up with particularly very sick people or their people are much sicker, there's an adjustme adjustment. they can have the benefits of a much larger risk pool rather than the people that bought just their particular policy. it's a step in the right direction. it's starting to look at what we can do better than what we have right now. another one --

>> let me look at the other panelistin panelistings. nod your head yes or no if it makes sense. thank you. three nodded their head yes, one vigorously. >> you made mention of massachusetts. one of the area that is would help a lot and it really goes to the questions that have been raised about affordable that we have heard. where everybody is sensitive, we are on the front lines when those people have problems, they are calling us and registering their sentiment on the issue. that is something that massachusetts has which is the ability to move into what is referred to as active purchasing and standardized plans, value plans as they are sometimes -- >> what does that mean? i think i know, what does that mean? >> we were at an international meeting and we had a professor from harvard who is on the exchange board in massachusetts. it really is trying to make sure that those medical services that

are really high value, meaning that you don't want people to delay, whether it's hypertension or diabetes, you want to make sure they are getting the services. bring down the out of pocket expenses, the co-pays. make it easier to get those services. they have such a profound impact on the level of health of that individual. i think the states are in a unique position to be able to experiment along these lines. massachusetts and california moving in that direction. i'm hoping i can take that issue to my state legislature in january to have the ability to do it. we did it in california and massachusetts. they have their own state exchanges. we do, too. i would like them to have the kind of power to get in and explore what we can do, improving the value of the plans making sure the important services are not impeded because of the out of pact costs. >> give me one more good idea.

>> i would have to tell you from a federal perspective. obviously, strongly encourage because of the impact it had is principal medical driver and the rates i'm looking at right now in the state of washington, that's pharmaceutical. the more that can be done to address that very tough issue and i understand that profoundly. at the same time, we are really out of line with other countries. we really need to bring down those costs. stabilizing the market is very dependent on bringing down the cost curve down so it doesn't rise as fast. if we don't do that, getting everybody insured, the affordable care act doesn't matter. we'll be back to what we had before, a system that is failing. we need to bring down the cost of health care. >> thank you. i want to go back to something that my friend john mccain said during his visit to our hearing

today. john mentioned, senator mccain mentioned we pass the affordable care act on a party line vote. what he didn't say, though, we had the longest mark up in history on the finance committee prior to that, we voted on dozens, i think scores of amendments, republican and democrat. he did not mention two close friends spent over a half year together before their colleagues, two democrats and two republicans to try to find a bipartisan compromise. three of those people, republicans had pressure not to find a compromise. they ultimately were compelled not to find a compromise. i was there. there were three very fine republicans and three good democrats as well. there's a lot of pressure on my

republican colleagues just not to find the middle. the clinical health committee, they spent a full month deliberating the law on a bipartisan basis. the house held 79 bipartisan hearings and mark ups on the health reform over the period of an entire year. they held dozens of public meetings and hearings. they accepted hundreds of republican amendments. the health education labor, pension committee held 14 bipartisan round tables, 13 bipartisan hearings on health care reform. that committee considered nearly 300 amendments and accepted more than 160 amendments, many offered by our republican colleagues. the finance committee held, meanwhile, 17 round table summits and hearings on health reform -- negotiations for a

total of 53 meetings on health reform. our committee held a seven-day mark up of the bill. that's the longest mark up in 22 years resulting in a bipartisan 14-9 vote to approve the bill. finally, the finance committee mark up resulted in 41 amendments to the bill including 18 unanimous consent without objection. as to the liability, the insurance plans, my friend senator mccain did not say they lodged their rights when they did get sick and needed it the most. in those days, premiums went up by 10% or 20%. i just want to put those things on the record. the issue of competition for our witnesses, if i could. one of my early mentors when i was state treasurer was a

successful businessman in delaware. but, his name was ernie. he ran a very successful fiber fabrics business in our state, in fact in several states. he had a saying, it's not original, but he said competition. first it makes you sick, then it makes you better. i think what we need here is competition, not just on the insurance side, but on the providers side. we heard some ideas as to how to do that. i think second thing that we need is to make sure we have a purchasing pool that insurance companies can actually afford to insure and make sure it includes a mix of people, healthy and unhealthy people. we talked a bit about these different idea zs. go down the row, if we could. governor taylor, on the -- one

good idea that you think would enhance competition either for the insurers or providers, please. very briefly. >> from the insurers perspective, less regulation. open market and consumer choice and let insurers write the type of coverage that individual consumers want to purchase. sock kay. thank you. >> this is the same thing in wisconsin. we are seeing relative lly homogenous rules. similar structures, similar provider network issues they are doing narrow networks. they are doing that to deal with the risk pool. so i think they are constantly changing their service areas to reflect that. finding a way to get better competition and less regulation would free up and bring more carriers in the market. that's what we have seen in every other line in wisconsin.

>> thank you. mr. gerhart. >> let the states have more flexibility. another is the accountable care organizations and the alignment of the providers and having skin in the game to keep the patient live and healthy is something we need to focus on. >> thank you. in my state, we are seeing the care. in your states are they formed as well? >> we have quite a few in iowa. >> we are looking at a different model in wisconsin, but increasing partnership with the medical providers. >> okay, thank you. >> some. >> okay. all right, commissioner? >> i think what's been talked about here is allowing insurance companies to be able to innovate and make changes without being unduly impeded. at the same time, you need to have the standardization so they maintain respective standards. you don't want them gaining the

system to get the healthy people at the expense of the less well. it's very harmful to the market and certainly to the individual group market that we have right now. so, it's really starting to have some standardization here. standards, at the same time, you have to allow them to invo nate. one of them is going to these narrow networks, which we have an obligation to make sure there's a network there to provide the services and promises made with that policy. allowing them to go there and go to a highly managed plan that we are seeing trend right now in the marketplace. it's an innovation to hold down cost, but needs to make sure they don't game the system at the expense of the whole system. >> all right. i may have said this earlier in the hearing, but i want to say it again. we compete with a lot of nations on earth. they are competitors. one of our strongest allies, but

very strong economic competitor is japan. for years, i remember learning this when it was my second year on the finance committee, 2009-2010. one thing we learned in competing with the japanese, they were spending 8% of gdp for health care cost. 8%. we were spending 18. japanese were getting better results. people live longer, they have lower rates of infant mortality than we did. they spend less money, getting better results. at that point in time, we had 40 million people going to bed at night with no health care coverage. nothing. you could go to a hospital, maybe, emergency room and try to get something. for many of them, nothing. we had some heart wrenching stories about individuals who are having, you know, a hard

time affording the premiums and making sure they could have coverage for themselves and their families. there are 40 million people, not just ones or twos, 40 million people in a situation like that. we can't forget them. we can't forget them. i'm not going to and i don't think you want us to do that. i'm not smart enough, my colleagues and i here, even if we all tried to figure it out together aren't smart enough to figure out thousand take a very good idea and make it an even better, not just idea, but program. and one that entails the partnership of not just the federal government, not just the states, not just the governors, lieutenant governors commissioners, the providers. this is what we call an opportunity for all hands on deck moment. it's what we used to say in the navy. that moment is going to come, i

think, sometime in january. when the general quarters go out on the ship, my hope is a lot of folks, including people in this room, people i serve with, will be new in the senate. new in the white house. they will answer that call as well. we'll do, what we do best as a country when we prevail. that is to work together. we have done it. we need to do it again. we did it. clean up medicare advantage. we did it to clean up medicare prescription. we need to in this case as well. thank you mr. chairman. >> thank you senator carper. looks like you went over your time. appreciate you holding down the fort here. kind of along similar lines of people taking a look at enormous premium increases, out of pocket

deductible and dropping coverage. i want to talk about people gaming the system. we heard reports of because under law you can sign up for and go through the open enrollment period, sign up for health care. never pay a premium, have coverage three months, which is federal government, if they are paying the the premiums, providing the subsidies and quit. have insurance three out of 12 months, is that something you are seeing in your states? kind of quick answers, i have a number of questions. >> i don't have a specific example of that but it's certainly a concern. i can tell you, speaking with providers in a hospital organization yesterday, one of which was a rural hospital who recently filed bankruptcy. those kind of issues are significant especially in rural communities where they have less ability to absorb those times of losses. >> do you see it in wisconsin? >> we do. we have heard from the insurers, yes. >> is that a growing problem? >> i think it is.

yes. >> mr. gerhart? >> we have heard that and also the special enrollment period as well. lack of oversight. the claim i discussed was special enrollment. we are seeing 100% to 200% more on average. >> again, people are smart. the more they see it, the more they will do it, correct? >> congressman kreidler? >> special enrollment has been an issue. purely from the standpoint of being a regulator, you look at it and say, if you want to stabilize your market, you can't allow people to have multiple opportunities to go into the market. i think that's in association across the country we have spoken out and said we do not like the idea of having, the extent of special enrollments we see because it is harmful to the

quality of the overall market. >> you mentioned the term stabilize markets. one of the signs of a market stabilizing is if the price was declining over the years. certainly what happened in wisconsin is enormous price increase, that first year with the market. but, nationally, i'm going to quote individual -- a study between 2015 and 2016 on an individual market. some raised 12% to 16%. they are looking at 25%-26%. that's going in the wrong direction. that's not a sign of a stabilized market. anybody want to talk about that or dispute the figures? again, part of the problem we have discussing this, it's hard to get good, solid metrics. things are all over the map. looks like you want to say something. >> in 2013, in my confirmation,

i thought we would have a stable market. it's not stabilized. we are looking at 100% rate increases. our individuals purchasing insurance went down. now it's 184,500. we are seeing fewer people buying their own coverage, even our uninsured rate has gone down because of medicaid. >> fewer people participating in the high risk pool, they are going to self-select. it makes it a less stable system. commissioner wieske, did you -- >> that's correct. this is typical when you see certain types of reform. when you hit this year, the third year and moving to the fourth year, look at a number of other reforms, the third to fourth year you see the spike and start to see what is called the death spiral in some of the markets where the rates are increasing and the risk pool is getting worse and worse. >> one thing about obamacare is

it is really affecting the individual market. less so on the group market. speak a little about that. from my standpoint, fortunately, group market has been able to operate and not seen. senator portman talked about the cost shifting from the individual market because they can't recover and shift over to the group markets. can you speak to the dynamic there commissioner wieske, you talked about people moving plans out of the group park to other plans, completely self-insuring and leaving the market. i would like all of you to kind of talk about that dynamic between the individual market and the group markets. what's expected in 2017 and beyond. we'll start with you lieutenant governor. >> so, i don't have numbers to speak specifically as far as z enrollment and the shift from the individual market or group to individual. i think it's human nature to move to the past of least resis

tense, what is going to cost me the least amount of money. we have not seen quite the trend that you are commenting on with regard to employers going to self-insured plans. however, i do expect that to change. i think we will see more of that going into the future, especially as, where, even if we stated that a 12 or 13% premium increase, which is significant, our largest increase was the first year, 51% on average increase in the first year. even if we thought we could get to the point where we are stabilizing premiums, we are not stabilizing the market and the carriers where you have 19 counties with one carrier, you are not stabilizing your market. so, i think, again, i don't feel like we have this stability in the market and your point is, are you shifting -- are you cost shifting? for all intents and purposes, that's what a pool dust, they cost shift from one individual to another for all intents and

purposes for insurance purposes. i don't think we could give you any numbers to speak specifically to our policy, the individual market shifting or vice versa. >> it's obvious, politically, the number of provisions, the more harmful provisions of obamacare were imp limited in delayed fashion. are there additional profissions about to kick in that will affect that group market? >> i think for wisconsin, the end of the transition policies, so, you know, the president's promise to have a plan and keep it, then at the end of, just before 2014, he allowed some transition policies. in wisconsin we allowed that. in the small group market, roughly twice as many individuals in the small group market in transition policies and grandfathered policy that is are not obamacare compliant than there are in obamacare single risk pools. when we get to the end of 2017,

all those plans, unless they do another extension will go the way of the do do and so that will create a big sea change in the market for us. >> you will see a cumulative price increase, what we have seen since 2013, correct? get them all in one year. >> any consumers who have not participated. we have 46,000 folks. they will see whatever the rates are in their particular counties. >> if you take a look at what i said, based on the numbers from manhattan institute, the lowest demographic group, the premiums increased 1.8 times, the highest more than three times. that's the effect you are going to see in the small group market. bam like that, in 2018, hit them like a ton of bricks. >> for those in the transition market, yes, significant increases and same in the individual market. they will see significant

increases next year, yes. >> that's something people need to understand. senator portman? >> thank you, chair. i have a question for the group. i don't want to hold you much longer because you have been patient with us and i appreciate the input we have. you have smart people on the panel here who are going to hopefully help us unravel this and come up with a better system. some of you have seen yesterday, i joined colleagues to provide affordable health options act. it basically says if you are a family in an exchange and you are in a situation as is the case of 25% of our counties in ohio, all the counties in oklahoma, apparently, where you don't have choices, you can go outside the exchange. use the subsidy to go outside the exchange to buy insurance. to me, you know, not the ultimate solution here because i think the whole system needs to be reformed, but it's the stopgap measure that is needed

to give the folks i represent from the other state that is are seeing less competition a little bit of choice. again, cost and quality being what comes with more choice. what do you think about that? i know there's potential problem with the tax credit and you know, we need to work on that. what do you think about that as a concept to say, okay, let's let people at least go outside of the network here to be able to get insurance when their choices are so constrained? >> senator portman, thank you for the question. the more choice we can give consumers, the better. the more we can eliminate overly burden regulations to allow the free market to work so consumers can choose the type of plans they want to purchase for the prices they can't afford to pay, i think the better off we are. i certainly would support an option to give consumers more choice to purchase health

insurance. >> i would note that governor walker in wisconsin sent a letter asking for this in 2013 as well. we are very supportive. there doesn't necessarily make sense why a consumer should have to send all their private information and run everything through a, you know, a federal exchange in order to get, you know, subsidy if it's insurance subsidy, that might be something we can look at broadly and there is sense -- we don't do this for anything else. i think it makes a lot of sense. >> sounds like something we would support, absolutely. >> my principle concern would be one of making sure the market isn't somehow compromised by allowing people out and what that would do to the integrity of the pool itself by doing that. the idea is to get as many people covered, whether they are in a rural area, which is not going to be well served by --

they weren't well served before the affordable care act. it's an on going problem in rural communities. we want to make sure they are not made second class citizens from the standpoint of having the choices in a free market they have. it's a task for all of us regulators and certainly for congress. >> clearly, it's exactly the objective to avoid that. that is currently happening. i don't know how washington is looking at it going forward, but certainly in a place like ohio, we are seeing fewer and fewer choices. that second class citizen you are talking about is unfortunately happening within the exchanges. i will say, you know, there's counties where there aren't necessarily insurance companies willing to write at all. we may not have one in ohio, yet, but i'm told talk to the lieutenant governor taylor, we may have that situation in our state, too. it's getting dire.

we have to figure out this is one to provide flexibility to get the care they need. do you want to comment, lieutenant governor? thank you very much mr. chairman for another round. i appreciate all the information you guys provided today. i hope you stay in touch. >> senator peters. >> thank you, mr. chairman and thank you to each of the witnesses for being here and providing good testimony as to what's happening in your states. i certainly appreciate the comments of my colleagues here, particularly senator portman, talking how we need to be bipartisan. we have to figure out how to deal with these complex issues and doing it in a collaborative way. i hope we are at the point where we can get away from this partisan divide that has prevented us from dealing with the health care system in this country where folks think we just repeal or we just keep, we are well beyond that debate now.

the affordable care act is not going to be repealed. that doesn't mean it's perfect but there's a lot to celebrate as well. we are in a position to celebrate what's not good and fix what's not so good and take it in a practical, common sense kind of way, roll up our sleeves to do that. it's important as we have that debate to remember that the health care system wasn't all that great before the affordable care act was passed. the reason it came out is because of significant problems that existed in terms of access, in terms of cost. in my state of michigan, prior to the affordable care act pa passing, the statistics i saw was growing 15 times faster than wages. it was not on a sustainable course prior to the affordable care act. at the same time, large numbers of people that did not have insurance. in this country of ours, people

that got sick, they might mean personal bankruptcy and ruining their family. i think it was the number one cause of bankruptcy that someone got sick. how can we accept that kind of system that existed before affordable care act and anybody, if they have a pre-existing condition can get the health care. to me tharks is where the american people are. it's certainly a popular option, probably the most popular option they know. if they leave a job and lose health insurance and have a pre-existing condition, they can get health care coverage. they are not in a system where they are out of luck. it will freeze up people from an entrepreneurs perspective. you can get insurance and go off and start your own business and if you have a pre-existing condition, your family is protected. your children are protected up to age 26. if i look at michigan, the numbers between medicaid expansion and the marketplace and the chip, some where around

700,000 people after the aca now have health insurance. they didn't have it before. so, i think that's significant and we should celebrate the fact we have 700,000 people that now know they have coverage and protection should they get sick. but, having said that, nothing is perfect. i have never seen a perfect bill in my years as a state legislature and now in congress. i have never seen a perfect bill. i don't think one exists and never will exist. you have to go back and refine it and try to find the changes. so, along those lines, a lot has been talked about with competition, which i am troubled by as well and the lack of competition and how it doesn't bring prices down. first, for lieutenant governor taylor, you have been particularly outspoken with concerns of reduction of competition and you said in your testimony, we need to make sure it continues to be robust. under your role as an insurance

commissioner, do you have the authority to hold public hearings? >> yes, in some cases, i do, senator peters. >> so, were you asked to hold any public hearings about the merger between humana? >> yes, we were, senator peters. >> did you hold any of those public hearings? >> i did not. >> here we have two major insurance companies and i think you talked about how some places in ohio have just one insurance company. and now you've got two major providers in your state combining, which means less competition. you've talked a great deal about how we have to keep robust competition. so -- and it was my understanding a number of groups in ohio asked you to hold public hearings because there were concerns this merger was going to reduce competition, raise cost, decrease network adequacy. it was going to hinder success to the individual market in ohio. why did you choose not to hold those hearings on the merger?

>> thank you, senator peters. i was referring to my policy expert. the law in this case would not have permitted us to hold a public hearing because they had met the requirements under the law to proceed. there is no specific require -- there's no specific statute that would have said that we could have or should have held public hearings in this particular situation. >> sorry. are you working to change that law in ohio? >> no, i am not. >> do you think it would be good to have public hearings before a major merger of the magnitude we're seeing in ohio which would limit competition? >> obviously, as you well know, each state deals with these types of acquisitions and mergers differently. but they also impact states in a different way. so where you may have a merger

of two very large insurance companies obviously being reviewed pie treview ed by the department of justice where a determination will be made on its face in total, whether or not there are competitive issues, states deal with this individually. and individual states may have a different impact on overall competition. so where ohio may be less impacted by that particular merger from a competitive perspective, you might speak to another commissioner of another state where they would -- they would express more concern because of the nature of the market that they hold within that state and the type of business that they write. and where -- and how it might impact competition. >> so it sounds like it's a good reason you should have public hearings in your state because every state is different. you certainly want to understand how mergers would impact your state and i think the people of ohio would be interested to have that kind of transparency. when we're talking about

consolidation and what's happening, i particularly am concerned. i'm sure my colleagues have received all sorts of correspondence on what's happening with drug manufacturers. the recent epipen situation where you have a drug that really hasn't changed much in years as far as its composition and yet we've seen a 400% cost increase by the drug company. now we understand drug companies need to charge a fair price to have research and development and develop products and we all agree there has to be some return to them. but when you have a drug that's been out in the marketplace and has not changed and you see 400% increase that is then passed on either to the individuals who buy it or to the insurance companies that have to cover it. i just had a group of dermatologists in my office earlier this week. they're seeing 400%, 500%, 600% increases in basic creams. things that may have cost what they were saying $4 or $5 in the past are now several hundred for

a tube of cream for dermatologists with these drug companies that are increasing these prices. open to the panelists and maybe mr. kreidler, what should we be doing, and to the others, what should we be doing to rein in these outramgous price increases from drug companies when there isn't even a change in their product n it's at the end of their life cycpsychcycle and th just benefiting. >> i ask unanimous consent the panel be given like two minutes to respond, please. >> two minutes, max. >> thanks. thanks a lot. >> two minutes to respond to a major reason why health care costs are going up in this country. >> you could have started your question with that. two minutes and then if you have

further comments -- >> mr. chairman? >> all of us have appointments. i've got constituents waiting for me. i appreciate the fact you want more time than you're allotted to. the rest of us have been here all morning listening to this testimony. i also appreciate the fact that you want an answer to your question but you could have asked that question rather than asking a question totally unrelated to this hearing. so i just want to state that for the record as well. and i'm happy to stay and keep the constituents wait, but i hope we can keep to our time and i hope measures would show up to be able to listen to the testimony and hear from these experts rather than taking their time here at the end. >> i was here, and i was here and heard the testimony from these folks. i did leave to vote. i'm sorry that i went to vote, but it is one of our requirements, senator portman. >> i understand that. i'll give you two minutes, but

let's go. i also have another hearing. anybody want to respond and start the clock. >> at the department of insurance we regulate the business of insurance. we do not regulate health care nor do we have any authority over the regulation of health care costs. >> okay. anybody else want to comment on that? >> it's the same in our state. >> same in our state but i would agree, prescription drugs, in particular, specialty drugs, is a major, major issue. >> i would absolutely agree, and i think it's important to keep in mind before the affordable care act we were seeing rate increases going up faster than what we're seeing right now. so this is not a new feature. and i think it's been well stated by all of the committee members, mr. chairman, that we really need to start to focus on how to make this work better. >> ides suggest'd suggest fda r. uses to take 10 years from discovery. now it's about 14 years.

there would be a good place to start. governmental reform at the fda. senator carper, did you have additional questions? >> a pretty easy one. maybe yes or no. we talked a bit today about the value of having states increase their coverage under medicaid and the positive effect in terms of making the marketplaces work better. and as a former, you know, ohio statesman who cares a lot about ohio, i follow what goes on there. follow my friend kasich as well from afar. but your testimony, and i applaud him for having made the change in ohio that a lot of other states have made. but your testimony does not acknowledge the important role that the affordable care act played in allowing states to expand medicaid. and i would just ask for -- is this something that you support the medicaid expansion in your home state of ohio? >> to address the reason -- >> is that something you support? i know the governor has.

>> there's no statement here because i do not regulate medicaid. it's a separate agency and i support the governor in the decision that he made. >> you think he's done the right thing? >> i support the governor in the decision he's made. >> i want to thank all the witnesses. in the spirit of bipartisanship, here would be my suggestion for a fix. eliminate the individual mandate. return a little freedom to americans. let the states define what insurance is. that's the vision of our founding fathers. that would return choice to the american public. and then i'm happy to do the cadillac tax. so there would be my little olive branch. you want to do bipartisan reform to fix this, eliminate the individual mandate, let the -- put the states back in charge defining and regulating insurance products. eliminate the cadillac tax. that would be ape good place to start. thank you for your thoughtful testimonies, for traveling here today. i do have -- i'd ask unanimous consent to enter a statement by

christina corieri, advisory to arizona governor deucey. with that, the hearing will remain open for 15 days until september 30th, 5:00p.m., for the submission of statements for the record. this hearing is adjourned.

next, researchers talk about how to prevent cancer. then a debate between the candidates in the utah governors race. after that, a debate in the montana governors race. now cancer research specialists discuss the importance of preventive measures in areas such as obesity and tobacco use. the forum was hosted by the bipartisan policy center. this is just over an hour. >> morning, everyone. welcome to the bpc.