care law that went into effect in 1974. that is part of the issue. . saw the letter sent let's begin. how much money did the state actually is? we spent $57 million. extende was a request to so that you could spend the -- but themount state has been denied that, is that correct? >> that is correct. would bech money

returned to the federal government or do you get to continue to use? >> in addition to the $57 million that has been spent, we have obligated an additional $50 million. that means we have about $100 million of federal grant mo ney that has yet to be spent. we are working with cms. we want to be careful about how we use taxpayer's dollars. it will be used to the extent our uniqueo fit marketplace.

>> you have read -- reported that the whole ie connector -- hawaii connector cannot self maintain. i think that was in line with a request to the hawaii state legislature for state funding of $15 million per year to continue the connector. we are going through a process to figure out how we can reduce those expenses substantially below $15 million. >> the state is aware that it has to kick in to cover the excess costs of the connector. >> i think it is important to put it in on text. because of the prepaid health care act, all small businesses

in the state already have businesses -- insurance for their employees. there is very little incentive for them to leave. us andncumbent on looking that -- in looking at that marketplace reality to reduce the hurdles and our system is much as possible. there is said to be 100,000 total uninsured in hawaii. the only number that can be enrolled as about 33,000. is that about right? yes. whoe are other people currently have insurance or might be able to find better quality or lower-cost insurance through the exchange. the potential is probably bigger

than the 33,000. if i could have a little bit of leeway here, mr. chair. thank you. the thing i really wanted to get to is a level of frustration i have had with your predecessor. i was not here when we voted the aca. i do know that the aca has an exemption for hawaii. it is anticipated in the original law because of our prepaid health care act. what have you done or what does it mean? we have not done a response on that. i do know there is a movement in avail ourselves of section 13-32 of the aca, which is an exemption from the provisions. -- if i caned to be

find my section here -- it is called the waiver for state innovation. why haven't the state or connector looked at this? our state health and the aca are not meshing well. it does not take into account the uniqueness of the law. would you agree with me that that is the fundamental problem? >> that is correct. we are very anxious to take advantage of the innovation waiver. we wish it would occur earlier. >> what about the exemption in

the law itself that exist today? why haven't we availed ourselves of that? or is there a way that you can go to the secretary of health and say, wervices have the waiver in the law and we know that you probably qualify for it in 2017. why haven't you done that? to thenly refers exemption we have. the scope of the aca is much bigger than that. legala complicated evaluation. >> and we have not done that yet? >> i know it is under consideration by the legislature and the state administration. we are trying to assist with that.

>> this is something you inherited, but notwithstanding people at home are very frustrated with this. and they are very embarrassed. i would appreciate it if you would keep us apprised. it has always been a question that we have constantly asked why have an exemption and a law, , when we are the example for that exemption. wouldn't you agree? thank you very much. >> welcome to this panel.

could move beyond the partisan -- if there are things to be fixed, why not come together and try to fix them? if there are things to be celebrated, why not intellectually be honest and celebrate them. if you go into a subject matter unrelentingly for years in opposition, then you're probably going to have the kind of problem with today's hearing. , thee majority staff memo hearing purpose, it says the current enrollment numbers of obamacare are significantly lower than expected. actually, they are significantly higher than expected. -- met the highest stretch number cbo set for them.

they're at 7.1 million and counting. of any of you think brand-new program from scratch in less than six months than enrolled 7.1 million people? anybody? no. not even california. ms. yang, massachusetts, the individual mandate that we have ann romney care and obamacare do you know where its wellspring was? it came out of the heritage foundation it was a conservative republican idea enshrined in both the massachusetts.

people need to take ownership for decision-making. they have to have some skin in the game. newt gingrich said he opposed the clinton health-care was because it lacked an individual mandate. , today, because of partisan politics, that individual mandate is now referred to as socialism. do you have an individual mandate requirement in massachusetts? >> absolutely. >> is it working? >> absolutely. >> what is the population of uninsured in massachusetts? it was about three percent.

we are very optimistic that number has shrunk. we expect that number to be less than three percent. that not the second lowest uninsured population in the united states. >> a thought was the first. >> you are more successful than i thought. in terms of the website, i heard the testimony that websites are not the same as the exchange. websites sometimes do have glitches, unfortunately. did massachusetts have glitches when it started? absolutely. the website that we launched looks nothing like the website

that we had prior to the aca. pre-aca website went through a journey, from a performance perspective and functionality perspective. technology is meant to evolve over time. it is meant to be innovative and improved as we gain experience, as we react to the markets. -- experienced challenges with the website, we were not panicking. we have worked through things like this before. but it doesicated, not beyond technology. we need to identify the right vendor come up with the right team in place, and we can fix it. >> the goal was never to have a

perfect website. it was to get people enrolled. the website is a method, not an end. >> look no further than massachusetts. fortune ofhave the having a state-of-the-art modern website. we had something simple, but easy to navigate. we did not have the benefit of .he aca website aca's about coverage in massachusetts is demonstrating it. one of the things asserted by my friends on the other side of the tole who are never going give this ever a positive margin of any kind is that the number of people enrolled is masking that it equals or is

who have the people got health-care coverage. how many people are enrolled in california again? >> first to cover california directly in our plans is 1.2 million. 1.9 million enrolled in medi-cal. we don't know, and this is one of the things is up for discussion, the number of people that are rolled directly with their health plans and affordable care act compliant plans with essential benefits. we think that for the vast majority of the individual market that converted on the plans this year, and come to our marketplace, they were suddenly eligible. now they are the and -- in the individual marketplace. >> enrollment in california is not exceeded by the number of people who lost their private insurance plans? >> this idea that you but lots of coverage. the vast majority of kept their coverage with an existing pan or

-- with an existing plan -- the term of loss coverage, people converted coverage. >> is this a brand-new phenomenon? apparently for the first time ever in history, people are losing their coverage, and insurers are canceling the coverage. >> what is new is that no insurance company can turn people away that knock at their door. once knew is that people cannot be turned away because of their health condition. health plans cancel policies at their whim previously. if people left jobs they were left eventually without insurance, etc.. we are in a new set of circumstances, but not this of circumstances that people changing types of coverage are losing coverage. >> thank you. mr. chairman, you been generous and i yield back. >> let me run through a few things here. the way your agency set up for the funding stream. how is your agency funded?

is a general revenues or percentages? i would like to just quickly know how it is funded in the days ahead. currently we are only funded by the federal grant. we also have a two percent fee that is assessed against all plans are sold in our marketplace. >> of the two percent fee is what covers that, and then plus whatever general revenues allocated. >> yes. >> a premium assessment across all state regulated insurance. >> what is a percentage? >> is about $40 million a year. >> was a percentage?

>> whatever it is, it works out to about $40 million. >> three percent, five percent, 0.2%? give me a ballpark figure. >> it is probably in the one percent -- in the 1%-2%, and is all state regulated. >> we have historically been funded with a combination of state funding the general fund. insurance carrier administrative fees. the reason is because of the one hand we serve as a dissipation channel that really provides -- distribution channel that really provides backroom function for the insurance company. at the same time we perform policy responsibilities in service to the state. we envision that model will continue hosting aca. we do not have expectation of additional federal funding to support the administration.

we have not yet made a decision at this point in terms of the fee presented historically. it is between 2.5% and 3.5%. >> ok. >> our ongoing revenue is going to be based on a carrier administration fee. the current fee is on a per member or month base, which is a little over four percent premium. we will be adjusting that on an annual basis based on what our revenue needs are. >> per member per month, is that the individual who holds a policy? where is that? >> is built into the premium. >> $13 90 five cents? >> this enables health plans to lower their costs, because our cost per acquisition of what it means to enroll an individual is far less expensive than it used to be in the individual market. the individual plans have a reduction and there is no longer any underwriting costs because

there is no underwriting. >> it is amazing how people will be a path to your door if they will be fined. that does help for enrollment. i'm not being critical of you. there's definitely a good promoter. >> actually, when we talked to thousands i'm serving, for the vast majority, the penalty is not and incentive. the incentive is finding health care that is affordable. versuse of the penalty the factor. it is a small minority. for some is a factor, but for a small minority. >> there was a deadline that we face as well. >> chairman, we are funded through an assessment policies sold through the insurer. that is up to 3.5% assessment. >> this is per policy is sold through the system, not all. in maryland it is everybody, right? every insurance company. just was so being sold to the system. >> thank you, mr. chairman.

going forward, our financing is based on a 2.5% premium sold through the exchange. >> as you have enrollment coming through, open enrollment just ended and another is opening up next year. you're looking at a budget, based on what is coming at this point, and what you have, is the agency sustainable? is the target there to be able to make? >> right now, the target is sustainable at the level that we have enrolled and the protection is going forward. as many of our colleagues have spoken, you do have to manage the expense side to match the revenue side. we expect that with the enrollment we have we can do that. >> and chairman, yes, it is sustainable. >> is absolutely sustainable and we will be balancing both our

expenses and revenue. when you look at the 1.2 million that have enrolled, we are very confident we can have a very good proposition in california. >> i also believe we will be sustainable. we have 30,000 qualified health care members. we also have over 100,000 commonwealth care members. we also have 5000 small businesses. and lastly we have 138,000 subsidized members in transitional coverage. we expect a meaningful percentage will be exchanged as well. >> yes, we believe it will be sustainable. >> sustainability for hawaii is going to be a challenge. we are trying to figure out how we adjust expenses and other ways to increase revenue. >> most of the states have found a way to get the balance. i would assume your interaction with other states. you know other states and having issues?

>> no i do not. any state that has a small population like we do and a small number of uninsured will be facing the same kind of challenge. >> ok. mr. van pelt, i want to talk about the co-ops. that is a new invention as well. obviously, that is in the middle of the market heard several of you have co-ops in the market. oregon health and health republic, both of those names ring true there. each receive $60 million to start up as a co-op. are you familiar with how they're doing and how they're functioning within the exchange? >> no, i can get that information for you. it has been relatively low enrollment numbers. >> how's that working? the initiative was, the initial perspective was to create some nonprofit that is sitting out there so if compete, or the would go into places to market would not go. have you experienced that they are good competition for the

others? >> we have had a very good turnout in terms of profit, taxable nonprofit and not-for-profit plans. i can't say there has been much discussion or analysis of the impact of the co-op. >> when you say there's not much discussion or analysis, can you tell me if there's any sense of relief that the co-ops are there? we would not have met articles about them? >> i don't believe so. i've not heard any of that conversation. again, the way or the way organ -- oregon market has worked with both interest of the profits and all kind of health plans, i don't believe it is felt that this has been a void that they specifically filled. >> same for massachusetts and maryland in maryland has evergreen, massachusetts has minuteman. is that correct? >> yes. >> how's that working and functioning?

this is a new invention. >> we are glad the minuteman was interested in competing in the massachusetts market. this is not the first time we have had a new entrant into the market. >> to not many enrollees did have this point? -- do you know how many enrollees they had at this point? >> i will have to find out. >> their goal was 37,000, is what they had hoped to enroll. >> i would defer to you on that. >> just try and figure out. again, it was a hundred 56 million dollars given to start this co-ops. so hopefully going to an area that was underserved. i'm trying to figure out in massachusetts if there was a meeting in need of underserved and whether hundred 56 million goals -- and where the $156 million goes.

>> we work collaboratively with minuteman. to my best knowledge, they continue to be very interested in competing in the massachusetts market. i would just say that as you know, massachusetts is artie well served in terms of the insurance company. we have great coverage and many carriers competing. >> that was my interest. they have quite a bit of competition already. >> minuteman comes in with a low model that could offer additional options for members to shop around. we continue to believe that they are able to deliver that once we have the functionality. >> anything we can fill in the gap on? >> i would say it is probably too early to answer the question

about investment. >> $65 million to help start the co-op? is quite a bit of competition in maryland as well. >> maybe not as much as in massachusetts. i would say that evergreen is really focused on the control of costs through very aggressive primary care approach. >> do you know how many they have signed up at this point? >> their signed up on the order of a few hundred. their prices were higher than the market leader. i think that hurt them in the first year. but i think there is in the small-group market where the prices are more competitive. it is going to take a couple of years to really understand the role and see whether they are able to succeed. >> when problems came up, as you approaching deadlines, getting to october the first, was a key person that you're supposed to communicate with or that would give you something to sign off? who was the point person you are

to report to that said here, we have some issues, we don't know where we are, we are still working through our testing for security. we are not launching well. we have to have a delay, whatever it may be. who is the point person? -- who was the point person? >> we had a specific person. her main point of contact. is amandar name cowley. >> this was a separate person? the name was amanda? >> cowley. >> somebody had to sign off. >> mr. chair, similarly, i believe the contact at the time was amanda cowley.

>> i do not have that information today. i can get that for you. >> amanda cowley is the director of state exchanges. she was -- we also had a state officer who dealt with day-to-day responsibilities for making sure all the elements were approved. >> amanda was a point of contact. we were in constant contact with the entire cms team. >> mr. matsuda, i don't think you are there at that time. >> i will provide that on the record later. >> we have a document, and i will get your copy of it, it says for policy development, this is a piece that walks through, as far as how you're getting the core, as massachusetts was walking through this.

again, i want you to get a copy of it. we can talk later. this is an august document, talking about the website and how things are working. browsing anonymously was a good. submitting an application was ago. eligibility determination no go. shopping, no go. enroll, no go. quoting information, no go. there were, of the 70 core functions, only five were -- 17 core functions, only five were assessed as a go in august. was there a conversation at some point to say, we have a lot of no gross here. here, let's stall, let's delay. if so, who that go to, to be able to say. we may need some extra time. >> a couple of things, mr. chairman.

i can explain this document. this appeared to me with a steering committee minutes document to report the discussion that took place at the time. we did go through the comprehensive evaluation of the readiness of the system before we deployed the system on 10 one. -- on october 1. this is a record of each component which ultimately led to our decision to deploy we did deploy and also what we did not deploy on october 1. >> was is something you held to account to to keep them informed? >> as a mentioned, we are in constant indication. -- communication with cms. >> the who is what i'm looking for. amanda cowley was the director -- >> amanda cowley was the

director for state exchanges. also her team, that included our state offices. >> this is been a long day. i have a million more questions. we will follow up in the days ahead. i do appreciate you coming, and for the conversation. you are all working very hard. no one has tried to push back and say you not working hard or try to make something work. the frustration is that this is a round peg in a square hole at times. we are trying to function with this. we assumed we were going to get a waiver for it. we did not get a waiver for it. having that flip and some a working state plan had to be punched to try to get into a website that was working, we had all the chaos of that as well. what you're doing and what you're trying to deal with is honorable. i appreciate your service on that area the mess that surrounds all this in the law

and trying to execute a law that has many many complicating and conflicting parts in it, is a major issue. i think we will continue to be a major issue. with that, grateful for a time to be here. and we are adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> next, q&a.

then "washington journal." then, the u.s. house of representatives gavels in. today, a discussion about the approach by states, regions, and private industry to control greenhouse gas emissions. >> in our joint services agreement, we are really active to read we are involved. really where you make your money in the local market. that operation is not cheap. this is not for the faint of heart. because this is what we needed to get people back to our

station, we put that back in place. their financial support, i alone could not support these figures. storm in southe carolina. almost off the air for 16 hours. to get a generator was $400,000. these are the kind of expensive you cannot calculate. there is no way that i could survive this without the insurance services in the shared services agreement. sec rule that owners cannot control more than one station in the same local market. more tonight on "the communicators."

>> this week on q&a, author and former "rolling stone" columnist matt taibbi discusses his new book, "the divide: american injustice in the age of the wealth gap." -- american injustice in the age of the wealth gap." >> matt taibbi, the "washington post" did an article about you in 2005, and they called you a "gonzo" journalist. is that the way you describe yourself and if so, what does it mean? >> i was approached by a publishing company and asked to edit an anthology of gonzo journalism, and i took the project because i wanted to talk -- gonzo journalism only seems to apply to that one writer, hunter thompson.