Transcripts For CSPAN3 Hearing Examines Impact Of Rising Premiums On Health Insurance Markets 20161011

This hearing will come to order. The subject of the hearing today is the state of the Health Insurance markets. I want to thank all the witnesses for your thoughtful testimony for traveling here. Its a beautiful city. You brought beautiful weather by the way. It is not quite as hot and humid as it normally is. I really do appreciate you coming here on a very important subject. Truth of the matter is, the reason i decided to run for the United States senate is because of the health care law. I come from the private sector. Understand marketplaces and i understand what works and what doesnt work, and i was concerned about the harmful effects. It is coming true. The problem that certainly i think all of us have had in evaluating the Patient Protection Affordable Care act is the complexity of the data. There is not just one overall metric that you can point to and say hey, you know, it is not working. There are some metrics, i think some powerful ones. So you know, absent that very simplistic type of metric to evaluate the success or failure, i think probably the best way of doing it is the way you devaluate any kind of product or program. Private sector, we do expenditures, reviews, managers say this is what we expect if we invest this money. So i think maybe the best way to take a look and start out of hearing with my opening statement, which by the way, i have an opening written statement, i would like to enter that into the record, ill en it enter yours too, is to take a look at what the promises that were made and how did those promises were those promises fulfilled or not. There were three primary promises made when people were considering debating, discussing and finally passing the Patient Protection Affordable Care act. The first one was pretty famous. Ill quote, this is from president obama, and he made this promise 31 times. If you like your Health Care Plan, youll be able to keep your Health Care Plan, period. You can be able to keep it. Well, there are all kinds of figures, again, how many millions of americans lost their Health Care Plan. Ive seen them as high as 8 million. But lets be conservative and go to the urban institute. Their most recent study say 2. 6 million americans lost their Health Insurance plan. In wisconsin, certainly we had something called the high risk pool. Everybody that wrote, anybody involved in the writing of the Patient Protection Affordable Care plan knew high risk plans will be eliminated. So i think there are more than 20,000 wisconsinites on the high risk pool and the authors of obamacare, they knew those individuals were going to lose their Health Insurance plans. I had a couple early on with right, this was in the fall of 2008 call me in a panic. His wife had stage four, i believe it was lung cancer. He was suffering and being treated for prostate cancer. They obviously were losing their high risk pool plan. They were paying about 700 a month, 767 per month for insurance in the high risk pool, which is very competitive. That was a program that actually worked very well in wisconsin. The cheapest, first of all, they tried getting on healthcare. Gov almost 40 times and couldnt, because that was a disaster when it was first tried to be initiated. Finely called our office, seeking help. We did guide them to a couple of the Insurance Companies that will be on the exchanges. The cheapest plan they could find was 1,400. But again, that couple lost their Health Care Plan, contrary to president obamas repeated promise that that wouldnt happen. The second guarantee. If you like, that means, again, quote president obama, that means no matter how we Reform Health care, we will keep this promise to the american public. American people. This promise. If you like your doctor, you will be able to keep your doctor, period. I dont think anybody would stand, you know, stand up and say thats been true. People have lost their doctors. We have a couple in marinette who have lost their doctor. I want to read this quote here. The only plan they could afford under obamacare meant they would lose the doctor they had for over 15 years and the quote was, now i have to see a physician, i have never even met. Broken promise number two. I think the third most famous promise was as a candidate, president obama repeated, in an obama administration, well lower premiums by up to 2,500 for a typical family per year. The truth is, back in 2008 when he was running as a candidate, according to the kaiser foundation, the average family was paying about 12,680 per year. The latest figure by the kaiser foundation, average family paying 18,421 per year. A 5,462 increase, since president obama made that promise, 43 , and you can look year by year. Obviously thats the largest increase, because health care continued to increase. Even from 2013, the implementation, the year before obamacare, 16,351. And today, it is 18,142. Thats still a 1,791 average increase across the board. So obviously, the average family has not seen a 2,500 per year reduction in the health care, and again, ive got specific examples. Janice, from scooner, wisconsin. Wrote me and said that prior to obamacare, she was paying 276 per month for health care. Her latest quote was 878 per month. Thats a 185 increase. And we had a woman, a young woman young mother, a nurse. Her husband, when both were working, they loved their jobs. But because of the increase in premiums, and they went from about 500 a month to 700 to 1,200, thats 140 increase, the only way they could afford insurance, they werent getting it through their employer, having to buy it on the market. The only way they could afford insurance is if she quit her job so the income was lowered so they could qualify for the subsidy. Broken promise number three. The really sad part is this was known. The authors, the people who supported obamacare had to know that those promises could never be kept, i just want to quote a number of quotes by jonathan gruber, who certainly is one of the individuals involved in the authoring of obamacare. Politifact called him an architect. One of many paid almost 400,000 to consult, he was talking about the cadillac tax. Here is his quote. He said we just tax the Insurance Companies, they pass on higher prices, that offsets the tax break we get and it ends up being the same thing. Here is really the important quote. It is a very clever, you know, basic exploitation of the lack of economic understanding of the American Voter. He went on to talk about the cadillac tax and said, quote, and this is jonathan gruber, one of the architects of obamacare. He said americans were too stupid to understand the difference. He also said the lack of transparency is a huge political advantage. And basically called the stupidity of the American Voter or whatever, but basically that really was, really, really critical to get anything to pass. Thats a pretty sad state of affairs. But thats the truth. Thats what happened. Now, i just wonder, just kind of ask the question, weve got some agencies in the federal government, one set up under dodd frank called the Consumer Protection bureau. We also have the ftc. They take a look at Consumer Fraud, try to protect the consumers. I just wonder, kind of wondering, i wonder what they would do with the kind of enforcement action they would take against an Insurance Company that sold a product an insurance product, hey, listen, once you buy this thing, youre going to be able to reflew this forever. If you like it, can you keep it. And then in the fine print, well, thats not true. In addition, said, hey, this Insurance Plan allows you to keep your doctor, period. Youre going to be able to keep your doctor, but in the fine print, well, not if that doctor isnt part of the network that were going to cover. And three, that if you buy this Health Care Plan, whatever youre paying last year, your premium will go down by 2,500, and instead they went up 1,700 or 5,000. I just wonder what these federal regulatory agencies would do to an Insurance Company that engaged, and let me be clear what this administration did, it was a massive Consumer Fraud. Thats what it was. Thats what obamacare, obamacare is a massive Consumer Fraud. Were going to be taking a look at that today. Ill probably be asking the deputy insurance commissioner from wisconsin kind of his thoughts and how we handle that in wisconsin during my questioning. So i want to thank the witnesses for coming. This should be an interesting hearing. I think it is a very important hearing. Because this obamacare law is costing american taxpayers a whole lot of money. We all want we all want people to be covered by health care. We all want people to have access to be able to get high quality insurance. But we didnt have to completely make remake the insurance and Health Care Markets to try and fill that gap. And help those individuals who we all want to help. And i think were going to see this is not working. Those promises were certainly not lived up to. And so again, i want to thank the hearing, the witnesses and ill turn it over to Ranking Member, senator carpenter. Thanks very much, mr. Chairman. Welcome to one and all. Who is from ohio . Ohio state graduate. I used to think delaware was a little town just north of columbus. I later found out it was a whole state. And i moved there and they let me be their congressman and senator and governor. I sit here and welcome you all today. Give the governor my best. A handful of senators, democrats and republicans, believe it or not, will gather in a room not from the senate floor, something we do almost every thursday that were in session. For maybe a half an hour or so, but take part in a bible study led by a guy who used to be an admiral. He was the chief of chaplains for the navy and marine corps. Gary black, he is our Senate Chaplain today. Democrats and republicans, amazingly sit there, read in the same read, read the scripture, pray together, share things with together and talk about all kinds of things. Chaplain black will ask how our faith should guide us. How should our faith guide us in the work that we do here and at home . Its a good question. Its a real good question. Almost every week he reminds us of the two greatest commandments, that is to love our neighbors as we love ourselves and to treat others the way we want to be treated. And the chaplain often invokes matthew 25 calls on us to focus on the least of these. The least of these in our communities. Im just going to paraphrase it today. When i was hungry, did you feed me . When i was naked, did you clothe me . When i was thirsty, did you give me the drink . When i was sick or imprisoned, did you visit me . When i was a stranger in your land, did you take me in . Matthew 25 doesnt say, however, the following things. It doesnt say when my only source of health care was a crowded emergency room, did you help me . Matthew 25 doesnt say, when i turn 22 and can no longer be covered by my Parents Health care, were you there for me . It doesnt say when i can no longer find Health Care Coverage because of a preexisting condition, did you do anything about it . It doesnt say when i was denied Health Insurance because i happen to be a woman of childbearing age were charged an arm and a leg for that coverage, did you go to bat for me . Most of us are people of faith, different faiths. I think we can all agree on one thing which is we have an obligation to treat people the way we want to be treated. I believe that. I think my colleagues believe that. I think most of the people in this room believe that, and i like to think most of the people in our country believe that. We need to find ways to meet that moral responsibility to the least of these in ways that are fiscally sustainable. Just about every american president since harry truman has sought to find ways to do just that. They believed in their hearts when people in this country are sick or in need of health care, they ought to be able to see a doctor or a nurse or both within a reasonable amount of time. Im certain most if not all of our colleagues believe that if not most of america believes that. So why has it proved so hard to do . My mom and dad used to say the hardest things to do are the things most worth doing. This is a hard thing to do. This is a really hard thing to do. Our efforts can be turned into a 30second commercial and used as political weapons against president s or members of congress to do what we all know in our heart is the right thing to do. The Affordable Care act is not perfect. Im not perfect. None of us. Ive never written a perfect law. My guess is truth be known neither have my colleagues. When the election is over, we need to go to work to do just that. Stop carping about it. Carping is one of my favorite verbs. Having said that, the Affordable Care act has sought to ensure Better Health care for all americans. People who may have never been had access to health care now have the opportunity to choose a Health Care Plan to do just that. The individual mandate didnt send people to purchase these planned as a Insurance Companies arent left with a pool of people to insure that are largely older, sicker, and more expensive to ensure. In this room today there are witnesses and members of congress that represent the states of delaware, ohio, washington, iowa, wisconsin, and more. The rate of people without insurance in our states has fallen by almost half since our respective marketplace has opened. All the people may now take their child to the doctor. Its not only life changing. It can also be life saving. Because of the Affordable Care act, a million americans have access to health care who didnt have it before. Our own uninsured rate is less than 1 . Americans now have access to free Preventive Health care screenings. The vast majority of the people in the marketplace by their Health Insurance for less than 100 per month. This progress has been realized while extending the life of the Medicare Trust fund by 11 years. I find it more than a little ironic that weve been deadlocked over a law thats unknown to most is built on a couple of sound republican ideas. Health Insurance Marketplaces and the individual mandate. To my friends on the other side of the aisle, they are my friends, your willingness to walk away from the policies your party once championed is dumb founding to me. Especially when those same policies are beginning to make a difference, a positive difference, in the quality of life for americans. Mitt romney revolutionized health care in massachusetts by creating an Insurance Marketplace and requiring citizens to eventually obtain coverage. These ideas go back even further. In 1993, a republican senator introduced legislation that established a mandate for Health Insurance purchasing pools. In fact, it had some 20 republican cosponsors in the senate. Some of them still serve here today. Fastforward to 2009. My first year as a member of the finance committee and our new president called on democrats and republicans to try to achieve what previous president s talked about doing for more than half a century. Instead of coming to the table, in the end Senate Republicans sadly chose not to engage. The president and the rest of us soldiered on and finally passed this historic law that all of us acknowledged wasnt perfect, but a good deal better than continuing to do nothing. Like any new major federal program, adjustments are going to need to be made as one is implemented. Weve had a hard time finding as many willing partners in this as we would like. There used to be a time when republicans and democrats would come together to make Bipartisan Health care reforms. Some of us were here when we did just that. We created the Medicare Part d Prescription Drug program. There was a lot of blowback on that. What did we do . We fixed it and made it better. Thats not what weve done with respect to the Affordable Care act. Time and again, our republican friends have blocked funding for proper implementation and i think common sense improvements. Republican governors and state legislators in 19 states have refused to expand medicaid not john kasich, tell him i said that leaving millions of americans without coverage an increasing marketplace premiums for millions more. Sad state of affairs when it seems the only Health Care Votes were allowed to make are ones to repeal the Affordable Care act. Ill close with these words. In a couple months, thankfully, americans will go to the poles to elect a new president and new members of congress. I talk almost every day with delawareans who wait in anticipation for that day to arrive. Some of my colleagues feel that way too. Once that day has arrived and a new congress as well as a new president have taken their oaths, we need to go to work to make a good idea everyone better, like we did with part d, like we did with medicare advantage. We need to embrace the three cs. Communicate, compromise, and collaborate. We need to embrace the words in the preamble of our constitution. It starts off we the people of the United States in order to form a more perfect union. We need to get to work making the Affordable Care act better. We can do that. I know we can. With the right leadership, i believe we will. In doing so, well have in the words of mark twain confounded our enemies and amazed our friends. Lets roll. Thank you, senator carper. Its 54 days, but whos keeping track, huh . [ laughter ] chairman mccain is stepping away from the Armed Services committee hearing. He would like to say a few words. I thank you, mr. Chairman. I would appreciate if my complete statement be made part of the record. I was entertained by the statement from my dear friend from delaware, but to somehow call on republicans to work with you to fix this disaster after on the floor of the senate, you did not allow a single amendment, not a single amendment by the republicans. Its the first time an Entitlement Program has ever been enacted on a strictly partisan basis. You had your 60 votes. You rammed the 60 votes down our throats. So now that its been an abysmal failure, you want us to come and help you bail it out. We want to replace it. We dont want to fix it. We want to replace it because its been a complete failure. My state is probably the best example that i know of. We now have 14 of our 15 counties with one provider. Do you remember if you like your doctor youll be able to keep your doctor, period . If you like your Health Care Plan, youll be able to keep your Health Care Plan, period. Nobody will take it away, no matter what. Of course, that turned out to be a lie. Ever since americans have been hit by broken promise after broken promise and met with higher costs and less choices, and poorer quality of care. Let me tell you my home state of arizona is hurt. Were talking about next november 1st seeing as much as 65 increases in premiums for our average citizens. Were now talking about young people who are now opting clearly to pay a fine rather than to see these dramatically increasing costs, and of course the cost of health care continues to skyrocket all done on a pure partisan basis. I remember the victory dance that you guys performed after passing obamacare over without a single republican vote. And so now the chickens have come home to roost, now the answer is wont the republicans join with us and fix this problem. Give me a break. We need to replace it. We need to fix it. And we need to go back to the fundamental principles of economics, which is not take money from healthy young people in order to take care of unhealthy older people. That was the fundamental broken premise. The next step, i guarantee you, is going to be you guys want to go to a governmentrun health care system. That will be your answer, which in europe is a twotiered system between those who are wealthy and can afford their own health care. And those who are not who will have a substandard level of care. Mr. Chairman, i would like to have my statement included in the record, but the people in my state are hurting. The people in my state are hurting. We have 15 counties. Only 14 of them theres only one provider. For a period of time, we had a county with no provider. Now Blue Cross Blue Shield has moved in. Is what is happening in my state is that if you like your policy, you can keep your policy . If you like your doctor, you can keep your doctor, period . No one will take away your health care. Of course, we have people scrambling all the time as understandably these providers have hundreds of millions of dollars in losses. They cant afford to stay in the Affordable Health care business. I thank you for holding this hearing. I thank the witnesses. If the senator from delaware and his Democrat Friends want to join together with us, yeah, lets throw it where it belongs, in the trash can, and start all over and give people an Affordable Health care system that they can live with and will not be the situation as exists in my home state of arizona. I thank you, mr. Chairman. Thank you, senator mccain. It is a tradition of this committee to swear in witnesses. If youll all rise and raise your right hand. [ swearing in ] thank you. Please be seated. I think our first witness, Lieutenant Governor mary taylor. Thank you, mr. Chairman. Im really thankful we have mary taylor with us. Shes a true expert. Shes a cpa first. Had 16 years in the private sector before she decided she wanted to get into public service. She started on the city council where she did a terrific job, so much so she got elected to the state house. Then she became our state auditor and the first state auditor ever to be a cpa. She transformed that office and was acknowledged nationally as having put together a cuttingedge 21st century Auditing Office in ohio. In 2011, she was sworn in as our Lieutenant Governor of ohio. She has two other jobs. She has passed the common sense initiative, which has been a big reason for ohios economic success during the kasichtaylor administration. Second, shes the director of the department of insurance. Here youve got a cpa with a private sector background, government background, who is actually in charge of our Ohio Department of insurance. She has some very specific statistics and numbers of whats happened with our premiums. The individual market has gone up about 91 . With regard to obamacare exchanges, i believe the number is that increase next year. Who can afford that . Shell have the opportunity to talk a little bit about whats actually happened in our Health Care Market in ohio, what it was before the Affordable Care act and what its been since. Lieutenant governor, i knew there was something i liked about you. Fellow accountants. Thank you very much, mr. Chairman. Thank you for the opportunity to testify before the senate of Homeland Security and Governmental Affairs committee. My name is mary taylor. Im the Lieutenant Governor of ohio as well as the director of the Ohio Department of insurance. Today will provide testimony regarding ohios experience related to the Affordable Care act. As the director of the Ohio Department of insurance, i am responsible for regulating ohios Insurance Market. The seventh largest in the United States. Ohio is home to more than 200 Insurance Companies and more than 1600 do business in the state representing 76 billion in annual premium. For years, we have taken great pride in the competitive Insurance Market we have in ohio across all lines of insurance. Under the leadership of both democrat and republican administrations, the Ohio Department of insurance has been a fair and thoughtful Regulatory Agency providing the certainty and predictable industry is looking for to be successful which in term benefits consumers. Because our market is so competitive, the most recent data shows the auto and Home Insurance premiums are below the National Average and are ranked 12th and 9th. Im here to focus on Health Insurance and what is happening in ohio. Prior to implementation of the aca, ohioans benefitted from a large selection of insurance carriers with more than 60 Companies Selling Health Insurance products in ohio. Consumers could buy plans with a wide variety of coverage options. Unfortunately, since before the law was implemented, i and many others across the country, including members of this committee, pointed out the aca would not work as promised. Studies conducted in ohio at my request showed premiums would go up, consumers would lose choice, and the market would suffer from turbulent and disruptive changes. Fastforward to today and the new aca era we live in. In 2016, 17 Health Insurers sold products during open enrollment. Next year in 2017 only 11 companies will offer Exchange Products. This dramatic decrease in participation can be put into better perspective within looking at a county by county comparison in ohio. In 2016, every one of ohios 88 counties has at least four insurers selling Exchange Products during open enrollment. In 2017, 19 counties will have just one insurer and 28 counties will have just two. Fewer options give consumers less opportunity to get the coverage they need. Dramatically increasing premiums makes the problem even worse. Based on the final rates approved for 2017, the average premiums for individuals buying on ohios federally run exchange have gone up 91 since 2013. As insurers have fled the exchange, recent statements from hhs indicate everything is fine. Premiums around the country are increasing, but the response is consumers are being shielded by tax subsidies that will offset the cost. The cost of those subsidies will continue to rise as premiums continue to increase and the american taxpayer must shoulder that burden. I think most of us agree americans should be able to purchase Health Insurance without facing barriers because of preexisting conditions. We agree more can be done to improve the system to increase accessibility and promote Better Outcomes for patients. However, the aca is not living up to the promises made. In ohio, less than 250,000 people purchased Health Insurance through the federally run exchange in 2016. If you consider there are 11. 6 Million People living in ohio, the means we have that means we have completely up ended the Health Insurance market, forced consumers to buy coverage they dont want or need, place significant regulatory burdens on job creators all to offer taxpayerbacked insurance to 2. 15 of our population. We need to increase access by reducing costs instead of forcing everyone to buy more expensive coverage that in many cases they dont need or want. We need to decentralize the power of washington who quite frankly dont understand insurance or how to regulate it as my colleagues and my predecessors across the country do. In ohio, we have ideas to help improve our Health System without destroying the free market as the aca has done. We believe there is a better more inclusive way to design reforms that increase access without driving up costs, but we need the flexibility to do it. It is my hope that with the help of Congress States can once again to have the power to implement positive change. Thank you for the opportunity to testify before the committee today, and i would be happy to answer questions, chairman, when you choose. Thank you, Lieutenant Governor. Our next witness is mr. J. P. Weiske. He is the deputy insurance commissioner for can i say great state of wisconsin in a hearing . I think i can. He has served as a deputy insurance commissioner since 2016. Prior to his appointment, he served as the office of the commissioner of insurance legislative liaison. Mr. Weiske. Thank you, mr. Chairman and distinguished members of the committee. Last week at church, the prodigal son was the parable that was discussed as well as the parable of the lost sheep. One of the concerns that we have as we look at our Insurance Market is in wisconsin we did, in fact, take care of the lost sheep. We did, in fact, take care of our folks. You highlighted our high risk pool and our high rates pool, provided excellent care for the sickest among wisconsinites. They could choose any doctor. Unfortunately, obamacare ended that. That was 20,000 people that were thrown into the marketplace that created additional problems. In our market, the individual market has grown to 272,000 people from 200,000. However, with the 200,000 we had in the market prior did not include our high risk pool, did not include our folks who are in our existing Medicaid Program where wisconsin expanded it beyond the federal requirements. In addition, we had a number of the reforms in wisconsin, so we didnt need the passage of obamacare to protect the adult dependents. We had to move back our adult dependents to age 26 because we expanded it to 27 in the state of wisconsin. Our Large Group Market and Small Group Market has dropped by 30,000 people from 2013 to 2015. Our large market has dropped from 1. 2 Million People down to a Million People. Most of that Large Group Market has moved into the largely state unregulated space. I think we have a number of concerns with the way our market has been hit. On top of that, we have seen a number of frustrations from a consumer standpoint regarding the rollout of obamacare and the continuing problems for consumers as we continue to regulate this market. So we actually had to delay the end of our high risk pool by several months because of the disastrous rollout. We had to delay the movement of folks off of the Medicaid Program into private coverage because of the disastrous rollout. On top of that, were getting consumer complaints that talk about the interference of the Health Care Exchanges with folks and their private coverage. Specifically when people want to terminate their coverage or make changes or add folks to their Insurance Plan, they no longer are just able to do that and call the Insurance Company and make those changes. They have to call a federal bureaucrat and ask for permission in order to get that done. That takes time and it creates errors and it creates problems. In fact, last year i will highlight one other issue we had an insurer contact us when the federal government asked them to take money out of all of their consumer accounts. They had made a mistake, and they had undercharged consumers. And at christmas time, the federal government had ordered them which they would not do in writing to take money of the accounts of the consumers, pull it out of the accounts, in order to pay the back premium. Insurance regulators dont let Insurance Companies charge back consumers when they have undercharged them. We actually had to issue an order to protect our consumers to prevent the direct pulling of Bank Account Information from consumers at christmastime. On top of that, were seeing in this next year this auto reenrollment process which is illegal in the state of wisconsin. We have 64,000 people in the state who will be losing their coverage because not just because of market withdrawals. Because of service area changes. Those 64,000 people will be autoreenrolled, information sent to another carrier, without their permission. Their private information will be sent to another private medical insurer without their permission by the federal government. Its going to be a hugely fraudulent, potentially fraudulent, and problematic area or our wisconsin consumers. 64,000 of them potentially who could see these numbers change. In short, we have seen a number of issues in the state of wisconsin, and we felt we did an excellent job protecting consumers prior to the aca. Weve continued to try to protect them from the damage of aca. When we roll into 2017, i will highlight there will be approximately 200,000 people who will be newly on obamacare that are on transitional plans in our state, so the damage is not yet done. In short, wisconsin believes that the damage obamacare hopefully isnt permanent and were hoping for a solution that moves this problem back to the states for us to fix it. Thank you. Thank you, mr. Wieske. I believe senator ernst would like to introduce our next witness. It is my honor to introduce nick gerhart. Nick has served our great state as commissioner since february 2013. And we appreciate your service, commissioner. And he also serves on the National Association of Insurance Commissioners executive committee. It makes him an excellent witness for us to today to talk about this important topic. Thank you, commissioner, for traveling to washington, d. C. To share your expertise with this committee and the audience members. Thank you, commissioner. Thank you, mr. Chair. Good morning, chairman johnson and Ranking Member carper and the esteemed members of the committee. It is an honor to be here. I want to focus on the duty of an insurance commissioner, the rates and whats happening at the Kitchen Table to the members of our state, and the highlights to fix some of these issues. I did submit written testimony which is a much longer outline of those potential fixes. As an insurance commissioner in the state of iowa, were a state of 3 Million People. We know the folks these are impacting. The 75,000 iowans that are getting rate increases, i know them at church. I see them at the grocery store. I want to share a story of a good friend of mine. He had a good corporate job. He left that job. His name is gregory bailee. When he got his notice, he called me because he knows me and was not very happy obviously. I hope were still friends. At the end of the day, he understands whats happening here. His wife and he are making significant decisions like do they downsize their home. I hope we can have some productive dialogue on potential fixes. We improved rate increases from 19 up to 43 . In a state of 3 Million People, thats a pretty significant number of iowans this is going to impact. The rates have been up 100 since the implementation of the Affordable Care act. Im not here to say it was working that great before. Rates were going up before as well, but i think we have ideas and solutions to make it better. What were seeing a very high concentration of risk in this individual risk pool. We had a high risk pool that was functioning pretty well as well. We have expanded medicaid, but a lot of the folks in this population is a lot like a medicaid population. We have commercial insurers working to insure these medicaid population folks. One claim is generating about 18 million in costs. Its about 12 million. That one claim is 10 of the 43 increase. So that one claim and that risk pool costs about 808 per member of that risk pool. You can see theres really no protection from that kind of catastrophic claim. That claim and a few of our smaller regional carriers would put them almost insolvent. We were the first state that had to take over one of the failed coops on Christmas Day in 2014. That caused a lot of disruption as well for 120,000 members in iowa and nebraska, so folks are a little bit skeptical right now about the market. Well have 23 counties, i believe, with one provider. There are issues of less choice. The products that are seeing the most traction in the market is what is termed as a narrow those plans are fine. I think my family would buy one if we had the option to buy one, but it is a Narrow Network plan. We dont know who is going to sign on the 23rd of this month to be on the exchange or not. I also want to highlight a few fixes. We talked about the three rs in my written testimony. Risk corridor sunsets, i would think we would want to keep it that way. Risk adjustment. There are some new rules that look encouraging. Im waiting for the carriers to comment on that. The reinsures does a sunset. It did help to stabilize the market a little bit. We would encourage the committee and the members of this body to look at this idea of high risk pools and maybe push it back to the state. Were going to look at 1332 waiver potentially to try to make iowabased solutions for iowans. We think thats the best way to do it. If youre seen one Health Insurance market, youve probably seen all Health Insurance markets. We feel pushing it back to the states to have more control makes a lot of sense. I would like to conclude its an honor to be with you all. I will answer questions at the right time. Thank you. Thank you, commissioner. Our final witness is the honorable mike kreidler. He is washington states insurance commissioner. He served in the house of representatives representing washingtons 9th congressional district. Thank you very much, chairman johnson, Ranking Member carper, and members of the committee. Im the longer serving insurance commissioner in the country currently, and its a position that means that ive served for ten years before the Affordable Care act and six years now. Because it is the law of the land, ive been working diligently to implement it to the fullest extent possible in the state of washington. It has had a profoundly positive impact on the state of washington not without problems, but profoundly overall very positive. We really need to look back at what it was like in that environment before health care reform. We have approximately 7 Million People in the state of washington. Nearly a million of them were uninsured. That was 14 of the population. We were experiencing Something Like 2 billion a year in uncompensated care. Thats care thats being paid for, but its coming at the expense of other payors who are absorbing those costs. We also had a robust market at the time before the Affordable Care act. Some 11 insurers in the individual market. But if you looked at the products out there, none of them in the individual market covered maternity or covered Prescription Drugs. For many people, they would find that a serious shortcoming. Today, we are down to 7. 3 uninsured. Thats nearly a 50 drop since the Affordable Care act came into effect, and weve taken the 2. 3 billion in uncompensated care and dropped it down to 1. 2 billion. Almost 80 of the people inside of our exchange and were looking at approximately 300,000 people excuse me 170,000 people inside the exchange. A comparable number on the outside. Of those inside the exchange, 80 receive a subsidy. 154 plans will be offered to consumers for 2017. The rates that came in were higher than what we had anticipated at 13. 5 , their request. No one ive approved. Well know better in october what that final number will be. But it is higher, and its certainly something that was not unexpected. When insurers started in 2013 in submitting their plans, they had no idea exactly what they should end up charging. Now they cover maternity and drugs and they didnt before, so it was a real change. Theres still kind of a learning phase here, but double digit rate increases are no surprise. It was something more common before the Affordable Care act. In 2014, as i said, it was really just a guess at that point in time. No one wants to see rate increases Going Forward at least of all if youre statewide elected like i am and have to have direct accountability to the state of washington, but one of the things we really look at is the kind of changes Going Forward. One of those things if we want to make it work better that i would identify is weve got to make sure that premium relief to consumers is something is there and perhaps even more so than what we have currently. We also need to stabilize the Health Insurance markets Going Forward. Number one task for us was to get everybody covered. That was the first step. The second step, which is critically important, we have to do a much better job of holding down health care costs. One of them would certainly would be to help hold down Cost Increases were seeing in Prescription Drugs. Thats the number one driver right now in the plans that came forward to us for 2017. Another from a national perspective, make sure those 19 states that havent expanded medicaid. I would also say that weve got to make sure that those states that have nonconforming plans out there, so you have a break up of the risk pool by virtue of nonconforming plans and conforming plans to the Affordable Care act, they all need to meet that same standard. Washington is working diligently to make sure we embrace fully the Affordable Care act reforms. Holding down premiums is the next big factor to stabilize the private market. Immediate steps need to be taken to accomplish this if we want to make this sustainable in the future. Weve got to address that second part. Get them covered, number one. Number two, stabilize the market. Thank you, mr. Chairman. You said was it 18 increase is whats been requested on average . 13. 5. You said that was not an expected no surprise. You were in that position. You heard obama say his health care would reduce Health Care Plans by 25 hunt00 per family. Did you believe that . I have to admit there were a number of claims during those discussions that i didnt embrace in totality. Commissioner wieske, its very difficult trying to figure out exactly what these average increases are. I know Manhattan Institute has done a National Study by state. Ive looked at that. Our biggest cost increase in terms of the individual obamacare market is 80 in the first year. The lowest increase on one of those demographic groups is about 1. 8 times. There was an 80 increase. If you were paying a buck, now youre paying 1. 80. The highest is over 3. I want to go to the point in terms of what would happen to the state of wisconsin. I kind of raised the issue on a National Level with cfpb or the ftc. In the office of commissioner, what would you do, because i know we have laws in wisconsin that you are authorized to bring proceedings against those who engage in unfair marketing practices, unfair inducements, which is kind of a tax penalty would be an unfair inducement, unfair discrimination, how about restraint of competition, and extra charges. Things like the cadillac tax. That really describes obamacare. Again, going back to the question i asked, if there is an Insurance Company that made those claims, like your Health Care Plan, your doctor, 2500 reduction, what would you do as deputy insurance commissioner in the state of wisconsin . There would be a couple of things. First up front, i dont know if wed let the insurer do that because they would go insolvent because they wouldnt be able to meet those obligations. Those promises are not deliverable. I think we would have a concern if the insurer filed those with us. If they filed it from an advertising standpoint, we could consider that unfair trade practices. Wed have concerns and take actions against the insurer because those are promises that an individual insurer could not deliver. We had a number of carriers who wanted to make promises on rates over time. We did not allow them to do that. Unfair trade practices, another term would be Consumer Fraud . It would be a fraudulent advertisement to consumers. Thats unlawful, right . Correct. I guess when its passed by the federal government, i guess that becomes legal Consumer Fraud. It appears so. I want to get back because i was shocked by a couple of your stories here. Describe again, the federal government forced to you to recover undercharged premiums . We actually have the order that we can get you a copy of. A particular insurer made a mistake in their rate system. So their recording system was correct, but the rate system was incorrect. When people got their rates, the money was pulled out of their accounts, an incorrect amount. A lower amount was pulled out. Just stop. Again, had that just occurred with a private company, would that private company have been allowed to go back in and pull money automatically out of those accounts . They wouldnt have even asked. They would have expected most companies are good companies. They wouldnt expect that and they certainly wouldnt ask their regulator if they could go back six, eight months to pull money of consumers accounts. When i first got involved in this, i called aca, obamacare, the greatest assault on our freedoms of the lifetime. This certainly speaks to that. Talk about exactly whats going to happen, individuals without their approval, what is going to happen exactly with autoenroll . A consumer who is currently in a plan with a Health Insurer exiting the area will have their information sent by an insurer chosen they have the option to choose it, but an insurer chosen by the federal government. And enrolled in that plan. That information will be sent to the insurer, who will then contact the consumer and ask them for premium. Arent there laws against unauthorized transfer of medical information from one party to another . Weve made that argument to our good friends in the federal government. We have sent a letter indicating all the legal arguments, including federal laws we feel are broken in sending peoples private medical information and Financial Information from one private insurer to another insurer. So without the coercion of the federal government, an insure would not be able to pass that information to another insurer without the insured permission, correct . Correct. That insurer would be breaking the law. Absolutely. Once again, this is legal we dont think it is legal. The federal government is doing it on their own account. Correct. Wow. Lieutenant governor taylor, i want to talk a little bit about the reduction in choice because thats pretty stark. 60 companies down to 11. That wasnt supposed to happen under the aca, was it . Wasnt competition supposed to flourish . I come from a free market. I would have love to have been monopolous because of competition. Were seeing consolidation in the Health Care Industry across the board, but in your state you certainly have an example of that. Absolutely, mr. Chairman. Unfortunately, we are seeing consolidation nationwide. We know there are a couple cases pending regarding mergers of large Insurance Companies, but even more than that when you look at whos still left in the Market Selling on the federal exchange in ohio, we had 60 companies prior to the aca you could choose from, any individual could choose to purchase their insurance from, versus what were going to in 2017 to 11. The even starker fact is when you look county by county. I spent all day yesterday in zaynesville in ohio. Theyre one of the counties that will have one insurer. I dont call that a choice. Thats one insurer