edition. moments from now, the health and human services secretary will be questioned for the first time since the troubled site went live a month ago. the stakes are personal. washington loves a scapegoat. the life in the theatrics of a good grilling of a public official. expect her to get beaten up as republicans broaden attacks from the dysfunctional website to the health care law. can she restore lost confidence in her own leadership? how vigorously will the democrats come to her defense or will they pile on? a preview of how the next few hours are likely to play out when the medicare chief was on the hot seat yesterday. >> do the millions of americans who attempted to use health care.gov, i want to apologize that the website has not worked as well as it should. this experience has not lived up to our expectations or expectations of the american people and it is not acceptable.

>> according to her prepared testimony, sebelius will repeat the last line nearly verbatim saying they have not lived up to the expectations of the american people. her remarks do not include a formal apology and she is expected to blame the private contractor who is built the site saying their work has not met expectations. overnight the house oversight committee released a report from the main contractor showing it reported concerns that the site was not ready for launch as far back as august. the status report was not a dire warning and was more of a list of things to do. republican lawmakers are demanding accountability. >> who is in charge of this? it was you? >> yes. i'm in charge of the program. >> there is a saying you have to inspect what you expect. were there expectations at all? >> how do you not know how many people have enrolled?

>> we will have the numbers available mid-november. >> i can guarantee we will have a system that is working. we will improve the speed of the system. >> excuse me. you say the system right now is working some >> i'm saying it's working, just not at the speed we want. >> as you saw sebelius is walking through the committee shaking happens with congress and taking her seat. as soon as it begins, we will take thru live. expect a bunch of questions and enrollment numbers and accountability. republicans are zeroing in on the nbc news report that the white house knew some americans would see policies canceled or changed because they didn't meet minimum standards. >> based on what little information is disclosed, it turns out that more people received cancellation notices for health care than have enrolled in the programs. >> like millions of americans,

they are being forced out of the plan that they like. the clock is ticking on a website that is broken. their health care is not a glitch. >> the white house emphasizes that those people who are canceled are a small slice of the overall market and they are getting better and more comprehensive plans and half will be eligible for subsidies. >> we are talking about the 5% in the country who currently purchase insurance on the individual market. that market has been like the wild west. it has been under regulated. the president was clear about a basic fact. if huh insurance that you liked on the individual market and you wanted to keep that insurance through 2010, 2011 and if you wanted it and if it was available, you could. >> the caveats were not in what

the president said. there were no asterisks or footnotes when he meat the comments. let's take you to the hearing room. mr. upton is speaking now. a michigan republican. >> they did not disclose them. sadly here we are weeks into enrollment and the news gets worse by the day. health care.gov was down last night at 5:00 p.m. and down on monday and crashed last weekend. even this morning when we attempted to view the site before the hearing, we were hit with an error message. this is more than just a website problem. that was supposed to be the easy part, remember? americans were assures their experience would be similar to other transactions like purchasing a flight or ordering a pizza. their sensitive personal information would always be secure. after more than three years to prepare, functions have been the norm and administration pivoted from saying they were on track

to setting a new target date of november 30th. for the few american who is have successfully applied, will the website glitches be provide come january 1st? americans are scare and frustrated. this situation should rise above politics. many spent hours or days trying to sign up. they continue to take time away from work or loved ones and made little progress. they may worry about being on the wrong side of their government facing potential penalties. i recently spoke to a woman from buchanan, michigan who was excited to sign up and since become disillusioned after spending hours on the phone and website with little success. there millions of americans coast to coast who no doubt believe the president repeated promises if they like their plan they can keep it. no matter what. they are now receiving termination notices and for those who lose coverage they like, they may be losing their faith in their government.

today's hearing is about fairness for the american people losing their coverage and seeing premiums skyrocket as high as 400%. this is about transparency. the administration boasts the number of americans that apply, they intentionally withhold precise enrollment numbers. why? these are critical to fully understand the status engaging the progress of implementation. the lead contractor testified only last week they had the data, but needed the administration's permission to release it. we asked the secretary for the figures and have not received a response. we hope to get one today. american people deserve answers as well as peace of mind that the promises will be kept. the secretary has an opportunity to embrace transparency and start restoring the public's faith in the administration and the government. i yield to my colleague ranking

member mr. waxman. >> i am pleased secretary sebelius is here today to discuss the affordable care act just like with medicare part d, the launch of the new website has not gone well. just like medicare part d, the early glitches in this roll out will soon be forgotten. a lot of discussion today will focus on that website. this is an important issue and i want to learn what the secretary can tell us about the problems being experienced and how they will be fixed, but we should keep this issue in perspective. the affordable care act is working. it has been improving the security of millions of americans for the past three years. because of the affordable care act, more than 7 million people on medicare have saved more than $8 billion on their prescription

drugs. more than 100 million americans have accessed free preventive coverage. no longer face lifetime limits on their coverage. over 10 million americans have received rebates from insurance companies and finally this january the worst abusers of insurance industry will be halted. never again will a family be denied coverage because their child has a chronic health condition. never again will individuals see their premiums shoot up because they got sick or face an unexpected medical expense. never again will a woman have to pay twice as much as a man for the same insurance. that is why allowing insurers to continue offering deficient plans next year is such a bad

policy. the law says all plans except those that were grandfathered in 2010 must meet the new consumer protection standards. if we don't enforce this policy, insurance companies can continue offering flimsy coverage that disappears when people actually need it and no one should want that. it is understandable that there will be a focus on what is not working, but we must remember what is working. the health exchanges are good plans and premiums lower than expected. 60% of the uninsured individuals shopping in the new market places will be able to get coverage for less than $100 per month and half of young adults will get coverage for less than $50 a month and since they

adopted the affordable care act, health care has grown at the lowest level in decades. the success of the affordable care act is due to the efforts of many people, but one individual more than any other is responsible for all the good that has been accomplished and that is our secretary sebelius. i would urge my colleagues to stop hyper ventilating. the problems with health care.gov are unfortunate and we should investigate them, but they will be fixed and every american will have access to affordable health insurance. thank you. >> thank you. before we swear in secretary sebelius, i want to clarify. the committee has two types of hearings. oversight hearings and hearings that focus on legislation and policy. the secretary testified

previously before the committee to discuss issues related to the hhs budget or other policy matters. as is with the case of all policy witnesses, secretary sebelius was not required to take an oath prior to testifying. the hearing is different. it is an oversight hearing and a long standing committee practice to swear in all witnesses at oversight hearings whether they are private systems or cabinet secretaries. >> i thank you for your comments and want to join you in explaining that the swearing in of the witness has been the oath that is the standard procedure when we are conducting an oversight hearing. it might be strange to have the secretary of health and human services sworn in and all witnesses in the oversight hearing are sworn in and that is our procedure.

>> thank you. i would like to introduce our witness for today's hearing, the honorable kathleen sebelius is the, appointed to this position in april of 2009 and was sworn in as the 21st secretary on april 28th, 2009. i will now swear you in if you would rise. as ranking waxman and i just discussed holding an investigative are heading and when the practice of taking testimony under oath. do you have objection to testifying under oath? the chair now advises you that you -- i will read you -- do you swear that the testimony you are about to give is the truth, the w40 whole truth and nothing but the truth. you are now under oath in title 18 section 1001 of the code.

you may now give a five-minute summary. thank you for being here. you have to use that mike. you don't know how many people want to hear you this morning. >> thank you, chairman upton and ranking member waxman and members of the commtee. i left my position as governor of kansas 4 1/2 years ago to continue work i have been doing for most of my over 35 years of public service to expand the opportunities for all americans regardless of geography and gender or income to have affordable health coverage. during my years as a state legislator and elected insurance commissioner and head of the national association of insurance commissioners and a two-term governor and now as hhs secretary, i worked on that effort i care deeply about. there still millions of americans who are uninsured and

under insured. people who have coverage for some price for some illness, but no real protection from financial ruin and confidence they will be able to take care of themselves and families if they have an accident or illness. for them a new day has come. in these early weeks, access to health care.gov has been a frustrating experience for way too many americans. including many who waited years and in some cases their lives for the security of health insurance. i am as frustrated and angry as anyone with the flawed launch of health care.gov. let me say directly to these americans, you deserve better. i apologize. i am accountable to you for fixing these problems. i am committed to earning your confidence back by fixing the site. we are working day and night and will continue until it is fixed. we added new management talent

and technical experties and a new general contractor to identify, prioritize and manage fixes across the system in two broad categories. performance which deals with speed and reliability and function which deals with bugs and problems in the system. our expensive assessment has determined that health care.gov is fixable. i want to just outline a couple of improvements we made to date. we have more users successfully creating accounts. we can process up to 17,000 account registrations per hour or nearly five per second. instead of the users seeing a blank screen at the end of the process, they can see whether they are eligible for financial assistance and make more informed decisions. because we improved performance, customers can shop quickly, filtering plans takes seconds, not minutes. they are getting fewer errors and time out mess ans as they

move through the application process and the system has been strengthened with double the servers and software with a physical database which replaces a virtual system. the chairman referred to adages this weekend and again yesterday. i would suggest to the committee if you read the statement of verizon who host the cloud service, it is the verizon server that failed and not health care.gov and it failed hhs and other customers. we have a lot of work to do. we have a plan to address key outstanding issues. it includes fixing bugs and software that prevented it from working the way it is supposed to and refreshing the user experience so folks can navigate the site with time out and slow response times. by the end of november, we are committed that the vast majority of users can review options for plans and enroll without the problems way too many have been experiencing.

consumers are using the site every day and continue to do so. problems are being solved. we know that we don't have a fully functioning system that consumers need and deserve. we are still at beginning of the-month open enrollment that extends through the end of march and there is plenty of time to sign up. the average open enrollment is two to four weeks. the new market place has a 26-week open enrollment and those who enroll by december 15th will be able to access their benefits on day one. even with the unacceptable problems with health care.gov which we are committed to fixing, the affordable care act by any fair measure is working for millions of americans who are about benefiting from new health security and young adults and americans with preexisting conditions and seniors on medicare. 85% of americans who already have coverage are protected with new rights and benefits.

the 15% of our neighbors and friends who are uninsured have affordable new options in a competitive market. cost growth for health care is lower than it has been in careers. millions of americans are clearly eager to learn about their options and finally achieve health security made possible by the affordable care act and my commitment is to deliver on that promise. thank you, mr. chairman. >> thank you very much. the mike got pulled a little bit from you. i appreciate you being here this morning and we worked with our leadership to see we don't have votes on the house floor so we won't be interrupted. i appreciate your time for sure and in an effort to allow every member to ask a question, we will be reducing the time for

questions to be just four minutes so hopefully we can get through all the members that are here. i'm going to be fast with the gavel. we have plenty of questions so let's try to get through them. i think everyone in america remembers the president's words. if you like your health care plan, you can keep it. period. the affordable care act insurance policies in effect on march 23rd, 2010 when the law was enacted would be grandfathered. a few months later despite the president's words, hhs helped promulgate a new red that in your own review showed it could deny as many as more than 50% and maybe higher. of those holding individual policies the right to renew their own insurance plan. i would guess that there were a lot of us on this panel that are

hearing from angry and confused constituents who are now being forced to go on to an inept website whether they like it or not to shop for a new replacement policy. they are finding premiums often more than 100% what they were paying before. some as high as 400% as i heard and rising deductibles as well. when was the president specifically informed of the regulation change and if so, was it pointed out that this totally undermines his biggest selling point? i would note on the screen and the statement he made more than three years after the regulation change was promulgated, the president said again so first thing you need to sudden this. if you already have health care, you don't need to do anything. he has been on the same page yet the regulations changed months

after the bill was enacted that are now causing perhaps millions of americans to be denied the ability to renew their individual coverage. why was that change made? did the president know it? >> there was no change. the regulation involving grandfathered plans that applied to both the employer market and the individual market indicated that if a plan was in effect in march of 2010 and stayed in effect without unduly burdening the consumer with reducing benefits and adding on huge costs, that plan would stay in effect and never have to comply with any regulations of the affordable care act. the individual market that affects about 12 million americans, about 5% of the market and people moving in and out, they often have coverage for less than a year. a third for about six months.

if a plan was in place in march of 2010 and did not impose burdens on the consumer, they have it. it is grandfathered in. >> why not let the consumer decide whether or not they want to renew it. why were regulations promulgated that under mined the ability for those folks to resign up which was one of the reasons for the large number of cancellations. >> we outlined the policy so people could keep their plan and we began to implement the other features of the affordable care act. if someone is buying a new policy today or last week, they will have consumer protections for the first time. many people in the individual market are medically under written and women are charged 50% more than men. that will be illegal. you cannot eliminate because of a preexisting health condition and dump or lock someone out. those provisions and if a plan is in place and was in place at

the time that the president signed the bill and the consumer wants to keep the plan, those individuals are grandfathered in and that's happening across the country in the individual market. >> we are learning that folks who did have a plan who liked it are being told it is canceled in the last -- my time is expired. let me yield to the ranking member. >> thank you, mr. chairman. i have to smile at your line of questioning because everybody expected this hearing was about the website. that's all we have been hearing about is the website. that's not the only complaint we have been hearing since the affordable care act was adopted. we were told by the republican friends that millions of jobs would be lost and in fact there have been a gain of 7 million jobs. they said that the cost for health care would skyrocket and the opposite is true. they said there would be a massive shift to part-time jobs and the evidence doesn't support that. they said tens of millions will

lose insurance and in fact everybody is going to have access to health insurance because they won't be discriminated against. they said we would explode the deficit and all the reputable organizations like the congressional budget office told us that it's going to save us $100 billion over ten years. >> now we have the committee and you are being asked later about the website. let me pursue this question about individuals who have gotten notices that they will have their individual insurance policiless canceled. they will be able to get another plan, won't they? >> it's the law that they must. continuous coverage is part of the law.

that wasn't the case in the past. >> the affordable care act. we will end the worst abuse of companies and create consumer protections in the market place that they will be able to buy a policy even if they have been sick in the past and women won't be charged more than men. they won't be denied coverage because of preexisting conditions and put lifetime caps and will be an essential benefit package. you are not buying some things and having other things, but the minimum that everybody should have. prescription drugs and mental health coverage and doctors and hospitals. are these important consumer protections? >> i would say they are very important. as a former insurance commissioner, i can tell you that the individual market in kansas and anywhere in the country never had protections. people are on their own. they can be locked out and dumped out.

that happened each and every day. this will finally provide the kind of protections that we all enjoy in our health care plans as part of a group and part of a plan that has prenegotiated benefits. we enjoy that health security and individuals in the buying insurance on their own farm families and enterprises and mom and pop shops and young adults have never had that kind of health security. >> now they will have the health security and most of the plans as i understand it are no longer going to be able to keep. they don't meet all the standards of the law. >> again, i think you may have heard pat from florida on the sunday shows. he talks about the fact that the florida plans want to keep their customers and have new plans to offer. they feel that a lot of people and these are his words, they will have a much better plan at

a similar or lower cost. they qualify for a subsidy and financial help purchasing insurance for the first time ever. >> people with good coverage like medicare and medicaid can keep that. people with grandfathered plans in the individual market can keep it. insurance companies sold you a new modified health insurance policy after the date of enactment that does not meet the law's standards and those people will be able to go into the exchange and buy a real solid health insurance plan that won't discriminate against them or anybody else. i think that's a good result and i'm pleased with it and most people will be here. >> the gentlemen's time has expired. ms. blackburn. >> thank you, mr. chairman. madam secretary, before, during, and after the law was passed,

the president kept saying if you like your plan, you can keep it. is he keeping his promise? >> yes, he is. >> what do you say to the 300,000 people in florida you just mentioned or the 28,000 in tennessee that cannot get health insurance. those are terminated. is he keeping their promise to them? >> they can get health insurance. they must be offered new plans and new options in the market place and if they don't qualify for a financial subsidy. they absolutely will have new coverage. >> what are do you say to nbc new who is said millions will lose their coverage. >> with all deference to the press corps and many will be here today, it's important to be accurate and i defer to the president of the plan. they will have ongoing coverage and be offered new plans. >> madam secretary, let me tell

you something. what do you say to mark and lucinda who had a plan they liked and it was affordable, but it is being terminate and now they do not have health insurance? >> insurance companies cancel individual policies year in and year out. they are a one-year contract with individuals. they are not lifetime plans and not an employer plan. >> let me move on. i will remind you, some people like to drive a ford and not a ferrari and some people like a red solo cup. you are taking away their choice. let's put the screen shot up. i want to go to the cost of the website. let's talk about the cost of the website. this is what's happening. we had somebody in the back trying to sign on. it is down. it is not working. last week i asked for the cost from each of the contractors that were with us last week. so can you give me a ballpark of what you have spent on this

website that does not work that individuals cannot get to? what is your cost estimate? so far we have spent about $118 million on the website itself and about $56 million has been expended on other it to support the web. >> would you submit a detailed accounting of exactly what has been spent and when do you expect constituents to stop getting these error messages. >> again, i was with the -- i talked to the president of verizon over the weekend on two occasions. verizon hosts the cloud which is not part of the website. it is a host for a number of websites. the verizon system was taken down saturday night into sunday. down almost all day sunday. they had an additional problem

they notified us about yesterday and it continues on. i would be happy to talk to the president of verizon and get him information about that. >> let me come back to that. i want to get to the issue of who is in charge of this project because you are now blaming it on the contractors and saying it's verizon's fault. let me ask you this. did you ever look at outsourcing the role of the system integrator and obviously you did not from the contractors that we had last week. they had several different people whether it was you or gary cohen or michelle snyder or henry that they thought was in charge. who is responsible for overseeing this project? is it you or your dez ig me in? >> let me be clear. i am not pointing fingers. i am

state of mich courtesy. i have a few questions i will be asking on behalf of writing. i will ask consent that i be permitted to revise my remarks. i would like to thank you and welcome the secretary to a room in which her distinguished father, former governor of ohio served for so many years. i begin my questions by quoteing for an expert for whom i have

enormous respect. i mentioned earlier the new benefits and implementations are hard to perfect. rather than scare and confusion, i hope we can work together as we go through the implementation phase to find out what is wrong with the program and if we can make changes, to fix them. let us do it in a bipartisan fashion. it is too important to too many people to do that. having said that, it does appear that it is working. let us admit that you know and not keep beating a dead horse. my beloved friend mr. barton who gave us the beginning of our efforts today. i have seen insurance companies saying that plans are no longer available. does the aca require insurance

companies to discontinue the plans that people had when the law was passed? yes or no? >> not when the law was passed and the plans have not changed. that's the grandfather clocks. >> that's the passage and the grandfathered in. >> that's correct. >> if the insurance company is no longer offering a plan is because that insurance company made a decision to change their policies and that caused them to take away the grandfather status from that insurance purchase. >> that's correct. >> i want to you submit for the record a statement of what it is we can do about insurance companies that run around cancelling the policies of their people. i don't have time to get the answer, but i want to get a clear statement from you as to what you can do so we can take

skin off folks that have it coming. madam secretary, it's my understanding that these decisions of a business character are in the insurance market and much turn over already exists and existed prior to the enactment of the legislation. >> that's correct. >> is that correct? >> yes, sir. >> 35 to 60% of the enrollees in the individual market leave their plan after year for different reasons? >> a third or less than six months in the individual market and over 50% are in for less than a year, yes, sir. >> in the cancellation letters which move around from the insurance companies, some companies are suggesting alternative plan at a higher price. do they have the right to do that? >> they have a right to do that, but consumers have a right to shop and compare plans and they have choices they never had

before and financial assistance. >> they have no right to enforce that on the insurance. >> no one rolled over into a plan. in fact individuals for the first time ever will have the ability to compare plans and shop and to make a choice inside or outside the market place. >> looks to me like the insurance companies are trying to inflict on their customers the view that this is their right and this is the only option available to them, is that correct? >> i think insurance companies would like to keep their customers. having said that, customers for the first time have a lot of choices because they can't be locked out. >> insurance companies have no right to enforce that on the customer. >> no rule said you have to stay with your company or be rolled over. >> the gentlemen's time expired. >> they tell you you have to buy a particular policy, is that right? >> absolutely. >> recognize the gentlemen from

texas. >> thank you, mr. chairman. before i ask my questions, we have a former member of the committee on the democrat side from the great state of kansas in the audience. we are glad to have you. madam secretary, we are glad to have you too. >> thank you, sir. >> there is a movie called the wizard of oz and there is a great line. dorothy at some point in the movie turns to her dog, to to and said we are not in kansas anymore. madam secretary, while you are from kansas, we are not in kansas anymore. some might say we are in the wizard of oz land given the parallel universes we appear to be in. they think things are great. you did apologize and said it's a debacle, you seem to think the affordable care act is great.

myself and others have a different view. ultimately the american people will decide. last week when the contractors were here, i focused my intention on the apparent lack of privacy in the website. if we put up the first slide that i had last week. this is what is public. it is basically a disclaimer that says that any unauthorized attempt to upload or change information on the website is prohibited. it doesn't say anything about privacy, but you have to accept that in order to go forward with the application. the next slide shows what is not public. this is in the source code. we tried to determine this morning if it was still in the source code and it is pointed out the website is down.

this is much more what i would say you have no reasonable expectation of privacy regarding any communication and data stored on the 234678gz system. and they will monitor and intercept information and data transit stored on the system. any communication or data transit stored on this system may be disclosed or used for lawful government purpose. cheryl campbell of cgi federal said she was aware of it and said it wasn't her responsibility to put that in the source code. were you aware of it and was it your responsibility to put this in your code? >> i did not put things in the source code. it's my understanding that that is boiler plate language that should not have been in this particular contract because there the highest security

standards are in place and people have every right to expect privacy. >> now, the last time we can check this was still there, you are given almost unlimited authority under the affordable care act to administer it. will you commit to the committee and the american people that you want to protect their privacy and two, you will take this out and fix it and make sure that it doesn't have a bearing on the people. >> we had the discussions with cgi and it is under way. we commit to protecting the privacy and asked them to remove that statement. it is there in. >> thank you. i appreciate that and --

>> if people do not participate, would you support such a reasonable approach to this while we work out the problems in the system? >> no, sir. >> that's an honest answer. >> the gentlemen's time has expired. >> thank you, mr. chairman. i know we are not in kansas, but i do believe we are in oz because of what i see here. this wizard of oz comment from my colleague from texas is appropriate given what we hear on the other side of the aisle. i don't know how you keep your cool, madam secretary with the continuous effort on the part of the gop to sabotage and scare people and bring up red herrings

and i think this privacy issue is another red herring. i will ask you a question about that. before that i wanted to say this whole idea that is being brought up that somehow policies were being canceled and people don't have alternatives is another red herring. what i think my colleagues forget is this is not socialized medicine. this is in fact private insurance in a competitive market. if i'm an insurance company and all of a sudden everyone else is celebrating a better policy with better benefits at a lower price, i can't sell a lousy policy that doesn't provide benefits and cost more because i will be out of the market. that's what's happening here. the insurance companies are cancelling lousy policies with high prices because they can't compete. that's what's going to happen when you have a private insurance market. we don't have i

government-controlled system. we have private markets. i wanted to make that point. i have to drill down on what mr. barton said. before reform, the insurance market was disfunctional and premiums shoot up if people got sick. the coverage can be canceled if they have a preexisting condition. i heard my colleagues say health information will be at risk in the process and this is flat out false. the aca makes a giant leap forward for protecting information by taking it out of the application process by banning discrimination based on preexisting conditions. they are raising the issues by talking about policy. it insures a long detailed invasive history and ban discrimination based on

preexisting conditions and they will not have to provide the op occasions. regardless of this clause, please comment on the privacy issue and why it's irrelevant. >> in the past, any individual american who was in an employer-based coverage and government coverage like the ones we enjoy in medicare and medicaid and the va and a variety of plans, about 95% of insured americans had no medical underwriting and group and consumer protections. the people who were outside that consumer protected space were individuals buying their own coverage in an individual market. medical underwriting and demanding health records and going through doctor interviews and getting health records was a standard for that market. pricing could vary widely depending on gender and depending on health conditions. people could be denied coverage

and were frequently. that's the market that is currently being reformed with consumer protections. if a person had a policy in place in march of 2010 like that policy and the insurance company made no changes to disadvantage the consumer, those are in place and you keep your plan and like it and that goes on. if you have a medically under written policy and paying more than their neighbor because they were female and could not get their health condition for a fixed hip written into it, they will have a new day in a competitive market. 25% of the insurers are brand-new and they are offering competitive plans. >> mr. chairman, could i ask that this document -- >> i will put it in the record. without objection. >> mr. hall? >> thank you, mr. chairman. madam secretary, i think

congresswoman blackburn asked you about the federal government and how much they spent to date. they are spending money as we speak. it's downright now as you know. you projected ongoing problems. >> i'm sorry, sir. i'm having a hard time hearing. >> she asked you how much has it spent today. i am asking what you expect to pay for the fixes the web website requires. those are things you projected and knew they will happen and will happen, but you surely looked ahead and have an estimate of what is going to happen. >> yes, sir. for our two major contractors who are qssi, a subsidiary of united and for cgi, there are

obligated amounts. for cgi in charge of the application, there has been $197 million obligated and that is to last through march of 2014 and as i said before, about $104 million has been expended in that obligated amount. >> i want to make sure your testimony is correct, okay? i'm just joking with you. >> okay. >> were you born in kansas? >> i was not. i was born in cincinnati, ohio. i married a kansan. >> i thought i saw you on a tricycle. >> it was an illusion. >> let me ask you a question. have you rejected a financial bill from one of the

contractors? have you ever? >> have i ever -- >> rejected a financial bill. >> sir, again -- >> i guess you can say yes or no. >> our office does a are you seen audit on the bill. do not personally. i want to be accurate. i don't personally negotiate contracts by law and precedent. that's illegal for someone who is not a warranted contract officer to engage in the debate or discussion around federal contracts. >> how much has the administration spent in total, not just health care.gov, but all of the exchanges? >> sir -- >> how difficult is that figure and if you can't give it to you. >> i would like to get it to you in writing very quickly. >> i would like to talk and i don't know how much time i have got left, but i want to talk about a couple of businesses who are struggling with how to move

forward. one is a manufacturer and one is ped boarding and training business and has 85 employees and one has 66. here are quotes. the situation we are in, we would have to pay $170,000 in penalties under obama care. this is picking the winners and losers and we are the losers. no way i can be competitive to cover $170,000. here are my options. do not pay the penalty and raise my prizes and go out of business. lay off 35 employees who don't have to pay the penalty and move more production to this country. reduce 35 jobs. here's a quote from the other. since the high labor and low margin business cannot afford to pay for insurance for our employees, we are faced with closing our business through bankruptcy though there obligations that continue whether we operate it or not. fire enough employees to get under 50, limiting our business

and even if we doze, many expenses such as rental agreements. what am i supposed to tell these people? >> i think that in that employer market, about 95% of all american businesses are exempt from any requirement to cover employee insurance, and they are outside the law. they continue to be outside the law, but they will have some new options for those who want to cover their employees and some new tax credit possibilities. for large employers, about 96% of them already cover their employees. as you know, the penalty that your constituents refer to is not a penalty that is imposed in 2014, it is being discussed with businesses about what kind of information is exchanged and will take place in 2015. >> he's going to use the gavel on me if you don't hush. i yield back my time. >> the chair would recognize the

general lady from california, miss eshoo. >> thank you, mr. chairman. welcome, madam secretary. you're a distinguished woman. you have distinguished yourself in your state, the offices that you've held and now working for the american people and i salute you for it. i want to really congratulate my republican pals for being absolutely 1,000% consistent. you love what's wrong with the website and you detest what's working in the affordable care act. and i think that that is on full display here. but let's get back to the website, because that's what the hearing is about. it's my understanding that november 31st -- is a hard date

for having everything up and running. hhs did testify in september that they were 100% confident that the site would be launched and fully functional on time on october 1st. that didn't work. do you have full confidence in this new hard date? >> congresswoman, i can tell you that the assessment that we have made is that it will take until the end of november for an optimally functioning website. i know that the only way i can restore confidence that we get it right is to get it right, so i have confidence, but i know that it isn't fair to ask the american public to take our word for it. i've got to fix this problem and we are under way doing just that. >> but are you confident that -- i think i said november 31st, which is -- >> i thought -- >> -- does not exist, but november 30th.

you have confidence in november 30th? >> i do. >> is there any penalty to qssi or cgi for not delivering on what they promised? >> well, i think the -- as you can see, we have a obligated funds for a contract. we certainly have not expended all those funds. and we expect not only the cms team but our contractor partners to fulfill their obligations. >> but if they fail to fulfill their obligations, i don't know what's in the contract, is there a penalty? >> there isn't a built-in penalty, but i can tell you that paying for work that isn't complete is not something that we will do. qssi, as you know, as taken on a new role as integrator of the hub that they built and have in operation, is working extremely well, not only for the federal exchanges but all the

state-based markets are using the hub and that's why we had confidence in their ability to actually take this next role on and coordinate the activities moving forward, which have to be driven with a very clear set of outcomes, very accountable timelines and deadlines, and they will be helping to manage that process. >> on the issue of security, there was a security breach that arose recently that i read about, at any rate. what i think is very important here, because the issue of privacy has been raised, and i think that that has been answered. very importantly, there isn't any health information in the systems, but there is financial information. so my question to you is has the security wall been built and are you confident that it is there and that it will actually secure

the financial information that applicants have to disclose? >> yes, ma'am. i would tell you that there was not a breach. there was a blog by a sort of skilled hacker that if a certain series of incidents occurred, you could possibly get in and obtain somebody's personal -- >> isn't that telling? >> and we immediately corrected that problem, so there wasn't -- it was a theoretical problem that was immediately fixed. i would tell you we are storing the minimum amount of data because we think that's very important. the hub is not a data collector, it is actually using data centers at the irs, at homeland security, at social security to verify information but it stores none of that data. >> thank you. >> we don't want to be -- >> the time has expired. the chair recognizes mr. shimkis.

>> welcome, madam secretary. before i start my questions, "the washington post" gave the administration, the president, yourself, four pinnochios on this whole debate of if you like the insurance you have, you can keep it. would you recommend to the president that he stop using that term? wouldn't that be helpful in this debate? >> sir, i think he used the term at the time that the law was passed -- >> and as of september 26th also. >> that's why we wrote -- >> so the answer is you don't believe -- >> i haven't read the "washington post." >> we'll hand this down to you so you can see it. have you ever shopped -- i know you have, but for a -- at a grocery store with a coupon? have you ever used a coupon? >> yes. >> so the coupon gives you the terms and conditions when you go to the checkout to get whatever is off the price of the goods. when you all added the c plan --

see plans now option, you in essence gave the user a coupon based on what they were seeing. the desire is let people know what the price is. however, as the news reported, and i followed up in last week's hearing, was that if you are under 50 years old, you get quoted the price of someone who's 27. if you're older than 50 -- if you're older than 50, could be 64, you get quoted the price of someone that's 50 years old. isn't that misleading? >> well, sir, the learn side of the website, which has been up since actually -- >> so that's truthful then? if you quote a price -- >> it is clearly a hypothetical situation that allows people -- >> on the see plans now option, are you saying that is a hypothetical? that's not what it says on the site. it says this is the price when you put in your age. and if your age is 49, it quotes

you as if you're 27. >> sir, the only way someone can get an accurate information about their price is to get their -- >> let me ask you another question. when did you decide to use this below 50 at 27 and above 50 at 50 years old? when did you make that decision? >> that was decided by the team. >> by who? who made the -- the problem with this whole debate is y'all won't tell us who made the decisions? >> i can tell you i did not design -- >> so who? >> the site. >> who made the decision on the 27-year-old quote for someone who's 50. >> i just said i will get you that information, sir. >> thank you. let me go to -- because it's misleading and the white house insists it didn't mislead the public and we find out you did. let me finish on this debate, another transparency issue. if someone, a constituent of

mine or someone in this country has strongly held pro-life views, can you commit to us to make sure that the federal exchanges that offer that is clearly identified and so people can understand if they're going to buy a policy that has abortion coverage or not? because right now you cannot make that determination. >> sir, i don't know. i know exactly the issue you're talking about. i will check and make sure that that is clearly identifiable. >> here's our request. can you provide for the committee the list of insurers in the federal exchange who do not offer as part of their package abortion coverage. >> i think we can do that, sir. >> well, you should be able to do it, so -- >> i just said -- >> no, you said if you can do it. >> i think. >> i think