Transcripts For CSPAN2 Senate Finance Cmte. On 2019 Health Human Services Budget 20180220

Planning and autism. He talked to senator or in chairs the committee. The committee will come to order. Before i begin i wantto discuss on behalf of the committee how we all feel. In light of yesterdays events in florida. I was personally horrified as i watched the news unfold yesterday, that though i was also moved to hear some of the stories of the heroism displayed by some of the students and teachers at the school. In times like these i know that the thoughts expressed by those of us far away can sometimes seem empty and meaningless in the face of such a terrible tragedy. I will simply say i am praying for all those affected by these acts of senselessviolence. That of course includes a member of our committee will i know is mourning the loss in his own state. May they all find peace, healing and a speedy recovery. I welcome everybody here. And todays hearing which will be our third and final hearing on the fiscal year 2019. Currently, we already have the treasury secretary and the acting irs commissioner before us and today we are talking with secretary as are from the department of health d and Human Services. I want to thank you for being here and welcome back. Its been a little over a month since you last appeared. This can cause nervous reactions. You are still very new to your position but were glad to have you back and you have a lot todiscuss. This committee has amassed a number of legislative victories. We want to take a few minutes to highlight these accomplishments as many are within hhs jurisdiction. Last month asa result of countless hours of work by this committee , Congress Passed a six year chip extension. A few weeks before we added another four years to that extension as part of the bipartisan budget act. That is 10 more years of chip ending which is quite frankly , a historic accomplishment. Senator ted kennedy and i created the chip program more than two decades ago and despite always enjoying bipartisan support, at no point in the programs history we been able to deliver this much certainty t and security to the families of children who depend on chip. I want to commend my colleagues on both sides who joined in this effort and who share in the success, especially my colleague from oregon. Again, i want to thank everyone on this committee worked on this bill. Most notably, our Ranking Member. Senator wyden as well as senators isaac and warner were key in the drafting and passage very important bill. It doesnt end there but the budget bill also included family partisan family safe by sending Substance Abuse and Mental Health services that have been preventing children from entering foster care. All of the success assessment to bipartisanship and prove that it is possible for both parties to find Common Ground and Work Together. As always, there is more work to be done and i am optimistic that we can be just as effective in the coming months. Of course these recent achievements will remain there not implement it. I look forward to working with you as is process moves forward. Id like to take a moment to look at how the president s budget would recognize the need to eliminate wasteful spending. I write in our National Debt and focus on protecting americans at home. I appreciate the president s budget take steps towards a course correction that will hopefully lead to more economically sound future all all still ensuring highquality and accessible healthcare. One of the key in critical assumptions of thes president s budget is a repeal of obamacare. The budget bakes into this appeal and replaces it with the state basedtr grant system. The initiation estimates this would save more than 675 billion that is a with a b. Many of on the committee, all of us on the public inside, share this desire toba repeal obamacae we have actually done great work on rolling back major elements of the socalled affordable cae act. This congress starters are text from bill zeroed out the individual mandate tax and recent budget bill the socalled medicare extenders and repealed the independent payment Advisory Board and in that same bill we extended previous delayslu on other obamacare taxes including medical device tax the Health Insurance in the socalled cadillac tax. As a budget points out we are not quite there yet and i hope we can take additional steps in the future and i look forward to continuing our discussions on how we can stop the skyrocketing cost of care and a governed way. Beyond the critical repeal and replace efforts we also need to start getting serious about medicare and medicaid forms. Both of these programs need to be put to more sustainable paths so that we can fill the promises of these programs for future generations. I know that any time a republican mentions the fiscal predicament of medicare and medicaid we are essentially asking to be accused of robbing the elderly and low income families with their healthcare but none of these scare tactics will improve the outlook of our federal health care programs. That will take some hard work in hopefully we can find a task over there as well. The secretary, duringur your confirmation hearing youem emphasize that addressing arising drug prices would be one of your t Top Priorities. As you know, p we spent quite a bit of time on this issue working to ensure that we have innovative and access to highquality medications. It can be tricky to balance the need to encourage the investment new and effective drugs and treatments but also we work to make sure that those in need can obtain access to potentially lifesaving and life improving products. Some have made a crusade out of scapegoating the companies to develop drugs andlo treatments d when this almost singular focus prevails the result is policy that tends to be less than perfect to put it charitably. We saw an example of this in last weeks bipartisan budget act that increased the discount that manufactures were required to provide under the socalled donut hole in Medicare Part d. I have a voice in opposition to inclusion of this provision in the budget. Excuse me. In the c budget agreement on the set for last week. I am working with my colleagues to share my concern on the increased manufacturing and discount provision to mitigate its impact. We should all strive and further is this budget is a member of other drugrelated policy proposals and i am for the administration to take care to take a balance between access and innovation. It is a balance that i hope you all strive to achieve. Secretary is our, you also address the Opioid Crisis is another one of those Top Priorities and im happy to see that the president s budget stresses the importance of working together to fight this epidemic and the cdc estimates that each day our country experiences more than 100 opioid deaths and my home state has been especially hard and while the drug has risen over the past decade were starting to see a shifting tide thanks to the leadership of many officials in my state. With that said they need federal help andse i know that many in congress including several members of this committee have been outspoken leaders in this effort and i cannot commend them for their works. We are committed to continuing our Bipartisan Committee process to address the Opioid Epidemic especially through mandatory Program Proposals that can bring about meaningful and enduring change tod the system plagued with issues. Mr. Secretary, i look forward to working with you in the coming months as we look to solutions to address this crisis and hope that we continue our bipartisan efforts to curtail this strain of tragedies. To close lettuce to say as we know it is Congress Responsibility to pass a budget and the president s proposed the tone and sets provides us with the baseline for debate. I hope we can Work Together to implement many of the commonsense forms we been debating for a so long. I hope we can continue to work to set aside our differences in order to find beneficial solutions. I look forward to having an open and frank discussion with secretarys are about other matters and before i close because we were unable to get a quorum yesterday if at any hearingime during the it quorum is present i intend to pause the hearing and moved to vote on the nomination of mr. Dennis shea and cj mahoney. Thereafter we will resume the hearing and with that let me now turn to the ranking minority, Ranking Member for his opening remarks. Thank you very much mr. En chairman. Mr. Chairman and collie 818 School Shootings this year and im just going to begin by saying when is enough, enough we watch these young people from the high schools and i heard one in effect say we are kids and we cant fix this. You adults get over it and deal with it. And that to me is a central to what we arere talking about this morning because well a talk abt healthcare. And what weve been hearing on the news is it sure sounds like there are a lot of young people that are frightened about what can happen at their school. We deal with lots of bills and lots of amendments and like those students said time to get over it in time to act and we have learned in the last 24 hours enough is enough. Mr. Chairman, i want to pick up first on the point you made because in the last couple of weeks on the healthcare front did you note that weve had some very positive developments here in the last few weeks. If you had told me in the winter of 2017 that we would have a ten year chip reauthorization everybody would have said what planet is this person residing on. The chronic care bill and i see senator isaacson who was with me on day one and senator warner is not here but senator isaacson is in his room and we launched to his credit pull together a Bipartisan Group and lets make sure we understand, colleagues, with this chronic care is all about. Chronic care bill is about updating the medicaid and medicare guaranty and modernizing the program to deal with where most of the money will be spent in cancer and diabetes and Heart Disease and strokes and when i was director of the [inaudible] it was a different medicare program. Party for hospitals, part b for doctors and that was that. Because colleagues like senator isaacson and warner in our Bipartisan Group said when you have 10000 people turning 65 every day and it has been happening for years and years to come you got to dig in and chairman hatch made that possible i want to think the chairman and of course, a lot of people who work in the child for field are saying that the Families First bill wasl what they had been dreaming about for three full decades and now theyve come together in the last couple weeks and i want to thank you for that, mr. Chairman. Now, on a not so positive note the budget season is at hand again so the trump agenda of healthcare discrimination is back. Im going to go through the examples. Start with discrimination against americans for preexisting conditions. People who have preexistingn conditions count on having a robust private Insurance Market with strong Consumer Protection but the trump budget offers is chaos in the private Insurance Market and o the elimination of key Consumer Protections. The budget embraces the old Graham Cassidy proposal and that lived the mercifully short life last fall because in this room we blew the whistle on the fact that it didnt lock in production for those who have preexisting conditions. On top of that the initiation is giving green light to junk insurance policies the revised the worst insurance abuses of the past such as skimpy coverage and dollar limits on care. Millions of people with preexisting conditions the Trump Administration seems dead set on making the care they need unaffordable and inaccessible. Next on the agenda of healthcare discrimination is discrimination against women. You get rid of the Consumer Protections and return to an era where 75 of insurance plans in the individual market dont coverro Maternity Care or birth control. Under theud trump budget which arbitrarily attacks key providers, plan parenthood in others, millions of women lose the right to see the doctor they trust and the doctor of their choosing. Send the trump agenda of garretts Commission Goes after americans who walk in economic tightrope. 1. 4 trillion cut from medicaid and zillions of k americans outf the program in a scheme to white cap the programs especially in the guaranty of care for those who qualify for medicaid. Now the Administration Reportedly is discussing lifetime limits for americans of medicaid. Both sides use to agree that lifetime limits of healthcare were absolutely wrong, no exception. The ban on lifetime limits the Affordable Healthcare Act was one of the core protections and republican, republicans said they ought to stay introducing lifetime limits in medicaid raises the frightening question of what happens when someone maxes out after Cancer Treatment at age 45. Will they be on the street in kept out of nursing home benefits . We will be discussing that. Finally, the trump agenda healthcare discoloration turns against older americans. Slashing medicaid to the bone and slashing the program into a cap program is a extraordinary threat to welfare of older people. Medicare helps to pay for two out of three seniors in Nursing Homes and essential for homes to count on police care. Even for older people at age 62 or 63 there is bad news. Trump budget hits him with an age tax allowing Insurance Companies to charge them far higher rates than they charged others. Bottom line the agenda of healthcare discoloration is out in force in the central budget and in my view it is a comprehensive plan to drag the country back to the days when the Healthcare System was basically working for people who are healthy and wealthy and everyone else was on their own. Finally, we are going to i am sure talk about the question for Prescription Drugs. President famously talks about how Drug Companies work quote getting away with murder. Those are his words, not mine. The president said they were getting away with murder by setting drug prices so high. Way he talks about the problem americans thought he was going to come out swinging with Big Solutions to the challenge and the plan released last week i still dont see a solution to the fundamental issue, Drug Companies set prices that are way too high. There is not a debate about the fact that the system is broken and needs reform. If pharmaceutical companies can come out of the gate within unaffordable prices patients will i suffer and i dont see where you fix that with some efforts to play catchup. The trump Prescription Drug plan lets pharmaceutical Companies Keep on to borrow a phrase getting away with murder. Finally, a lot of what the ministration puts forwardks last week looks familiar. On the pharmaceutical side some of it is borrowed from legislation and i propose a recommendation that for outsiders. There is value inni these ideas and theres an opportunity to move on a bipartisan basis but that is not what the American People were promised. The American People were promised a muscular approach, a position where the American People would know that their government was on their side and helping them deal with this question of they are getting clobbered as the pharmaceutical window when they go in to get their medicine. I will wrap up by talking about different parts of the secretary agenda vital to kids. Chairman hatch and i have both mentioned family first and very proud of that effort because too long the Child Welfare system was basically been about splitting families apart. That is what family first seeks to reform because instead of just two lackluster options leaving young people in a family setting where they were still with his problems were sending them off to a future of uncertainty in foster care we have said we would allow to design space ways to keep Families Together and families healthier. They can use Foster Care Services to fund Mental Health and. The programs with the goal of preventing a prolonged slide into the crises that end with families breaking apart. I share chairman hatch is about thee Opioid Epidemic and it was good that additional funds were made available in the recent budget agreement and now weve got to do is make sure that the department moves quickly so the states can get away from business as usual and deal with the epidemic. We look forward to hearing from you, projects publicly. They indicated in our pre nomination hearing that he was going to take the initiative of being in touch on a regular basis and to discuss issues is already shown he is serious about that the call here recently. I appreciate it and look forward to our Work Together lets try to make it look like what has happened out of this committee and the last couple of weeks and lets make less of it look like the agenda of healthcare discrimination that i believe is what the budget is all about. Edthank you, mr. Chairman. Thank you, senator. We are joined by alex is our, secretary for human health and services. Thank you for taking time for what i know is a tremendous schedule and for you appearing here today. Because we heard very eloquent introductions over month ago ill keep my introduction short into the point. After graduating with his law degree from Yale University esther is our clerked for Justice Scully on the Supreme Court and later became a partner at wiley ryan and fielding for being general counsel at hhs back in 2001. Then in 2,102,005 he was served as secretary at hhs where he served ast the chief Operations Officer for the largest civilian Cabinet Department in the United States of america. In our government with over 66000 employees and a budget of nearly 700 billion. Following his service at hhs secretarsecretary azar from thee sector as a Senior Vice President of Corporate Affairs and communications at eli lilly and comedy. He eventually went on to become president of lily usa llc largest affiliate of eli lilly. Last month secretary azar was confirmed to his current role as secretary of hhs. The secretary we are grateful to have you here and grateful for your time and grateful for your expertise and grateful for the service you have already given and are about to continue to give him please proceed with your statement. Chairman hatch and rankingt member wyden and members of the committee. Thank you for inviting me here today to discuss the president s budget for the department of health and Human Services for fiscal year 2019. Id like to begin by joining chairman hatch and Ranking Member wyden and expressing our deepest sympathies and prayers for the victims and their iefamilies in florida. Its an honor to be here today and honor to be able to serve as secretary of hhs next to the support of the members of this committee. Our Mission Today atsc hhs is to enhance and protect the health and wellbeing of all americans. Its a Vital Mission in the president s budget clearly recognizes that. The budget makes significant Strategic Investments in hhs work in boosting Discretionary Spending and the department by 11 in fy 2019 to 95. 4 billion. Among the target investment thats an increase of 747 million to the National Institutee of health, a 473 million increase for the fda and the 157 million increase over 2018 funding for Emergency Preparedness across the department. President s budget especially supports a particular priority that we played out. It issues that the men and women of hhs are hard at work on already. Were fighting the of your crisis, increasing the affordability and accessibility of Health Insurance, tackling high price of Prescription Drugs, and using medicare to move our Healthcare Systems in a value based direction. First, the president s budget brings a newin level of commitmt to fighting the crisis of opioid addiction in overdose that is stealing more than 100 american lives from us every single day. Under president of hhs is already dispersed unprecedented resources to support access to Addiction Treatment in the budget would take total investment to 10 million to address the Opioid Epidemic and related Mental Health challenges. Second, we are committed to bringing down the skyrocketing cost of Health Insurance especially in the individual and Small Group Markets so more americans can access ands qual quality, operable healthcare. This budget recognizes that this will not be accomplished by onesizefitsall solution from washington and will require giving states room to experiment with models that work for them and allow customers to purchase individualized plans that meet their needs. That is why the budget proposes a historic transfer of resources and authority to the federal Government Back to the states empowering those who are closest tohyicou the people and can best determine their needs. The budget would also restore balance to the Medicaid Program data structure that has driven runaway costs without a commensurate increase in quality. Third, drug costs in our country are too high and president of recognizes this and i recognizes and we are doing something about it. This budget haspr a draft a proposal to bring down drug prices especially for americas seniors and we propose eight by part to further improve the already successful medicaid part d program. The major changes will straighten out incentive that too often Serve Program middlemen more than they do our seniors and over the next ten years adding to savings that we are already generating reports to Medicare Part b payments under the 340c drug discount program. It also proposes further reforms in medicaid and Medicare Part d to save patients monies on drugs and provide a strong support for fdas efforts to spur innovation and competition in generic drug markets. We want programs like medicare and medicaid to work for thepeg people they serve. That means empowering patients and providers with the right incentives to pay for health and outcomes rather than procedures and sickness. Fourth departmental priority is to use the tremendousst power we have to medicare is the largest purchaser of medical services in the United States to move our whole Healthcare System in this direction. This budget take steps towards that by limiting price variation based on where care is delivered rationalizing payments that positions hospital owned Outpatient Facilities supporting investment in telehealth and advancing the work Accountable Care organizations. The future of medicare must be driven by value, quality and outcomes of the current thicket of opaque, unproductive incentives. The president s budget will help accomplish pretty important goals at hhs. First making the programs we run really work for the people they are meant to serve including by making insurance affordable for allrig americans. Second, making sure our programs are a sound fiscal footing that will allow them to serve future isnerations, too. Third, making the necessary investments to keep americans safe from Natural Disasters and infectious threats. Making our programs work for todays americans and sustaining them for future generations in keeping our country safe is the sound vision for the department of health and Human Services and i am proud to support it. Thank you, mr. Chairman. As you may know the finance committee is undertaking a bipartisan process to identify ways to address the Opioid Crisis or epidemic in medicare and medicaid so that the right incentives exist for addressing pain and addiction. When you testified for this Committee Earlier this year you mentioned that addressing the Opioid Epidemic would be one of your Top Priorities. I am personally pleased to see a number of proposals included in the president s budget on this particular topic. Im sure you will do that. We commit to work this committee to find Bipartisan Solutions to address this epidemic within medicare and medicaid . Absolutely, mr. Chairman. I appreciate that. I will not ask any further questions at this time. We will turn to the Ranking Member. Thank you very much, mr. Chairman. Im going to start, mr. Secretary, as we talked about this matter of junk insurance in particularly what seems to be an Administration Plan to greenlight us. I recognize that this didnt essentially commence on your watch but you are there now so i got to make sure we will have a sensible policy. What junk insurance is all about gis making sure that Insurance Company can charge more for people with preexisting conditions and include arbitrary caps on the amount care. In a lot of ways junk insurance turns back the clock and when i heard this the first thing i thought about when i was the director of the great there was it was common for an older person to 15, 20, 25 policies that were sold to supplement their medicare called medigap. Finally, we wrote a bipartisan law senator dole was very helpful in it which drain the swamp, an appropriate phrase for the time. Now i look at what seems to be bbubbling up again from a different population group, not seniors, but the same sort of thing that we will greenlight policies that are properly called junk because they arent worth the paper they were written on. Idaho has to seem the most active effort and once again people spending hard earned money on a plan they need only to find that they are being ripped off by insurers. So, thus far blue cross idaho is the only insurer was applied to sell the junk plans. Ive got the application here and it looks all about finding out if people have preexisting conditions so they can discriminate against them. Charge the more. All the questions in section five a deal with that issue. Have you been pregnant restaurant have you been tested for allergies . Have you had a claim over 5000 . If an insurer is following the law banning discrimination against those with preexisting conditions what are all those questions about . So, senator wyden, lifting the media reports about the blue plan request in the actions in idaho. I have not yet seen plan or have received any type of waiver request and i can assure you that if we dosre receive that ad if it does progress forward youll be looking at that very carefully and measuring it up against the standards of the law because it is our duty. I appreciate that and i know this is new for you and this is the first impression. As i understand this is not a waiver and in effect, idaho is saying we will do this and we will do it because we are state that wants to do it but there is a federal law, something i have fought very hard for and it was right in the heart of the bipartisan proposal and the centerpiece, seven republicans airtight protection for those who have a preexisting condition and now this will be all about and when we talked in the office and i said you will not be sitting around reading paperback, this will be a question of whether the department is going to say federal law which protects people from discrimination against preexisting conditions controls or idaho can start something that has moved to america back towards yesteryear where we can have integers beat the stuffing out of people with a preexisting condition. Twentyseven. Pursue this. Because i think that this case is really being watched. This is the one that is really going to determine whether states can just that it really going to determine whether statess can just on their own say were going back to yesteryear. So this as very, very substantial implications, and what id like to do, to things, mr. Chairman, i like to ask unanimous consent to enter the blue cross of idaho Application Form into the record. That would be my first unanimous consent request. My second request is to enter in a letter to the secretary 15 organizations the ribs that millions of patients expressing serious concern with essentially the points im talking about, that idaho is breaking a federal law. In other words, the first ive heard about i said maybe this is a waiver, complicated. Ive been very interested waivers. This isnt a waiter. This is just say we are not going to do it. So i want to enter into the red a letter from the 15 organizations that represent millions of patients expressing the concern i have with idaho breaking the law, the harm on patients, theim implications, tn is it acceptable to you that you will get back in some way to outline how the department instance to pursue this within ten days . I am very happy to get back. I do want to commit on the ten days because this has to run through a process of first i guess they applyo to idaho. Idaho will have to decide its own thing under its laws that it has. And then anything would presumably come to us. Ill be happy to work with you and be very transparent about that process. I dont want to prematurely be involved before theres even a matter in controversy at the state level. So all weve seen is a press report that the blues have submitted an application can i do whether it b would even be approved by idaho or certified as compliant under the ac. Its just a question of timing. I can assure you we will be looking very the right time looking very searching against the legal requirements. Im over my time. Heres what concerns me. They are not planning to come to you and ask permission. They made the argument that they can just do it on their own. So this idea that we are going to just sit in our offices back here and wait for somebody to tell us all, were going to discriminate against it with preexisting conditions, that will not cut it with me. Doesnt cut it. How about if we say i will be told how the department is going to pursue this within 30 days . I hope, believe that would be acceptable. My only issue is i need a case in controversy. I need to know theres actually action happening. I dont think with any difference about the need of the department to be engaged. That will be very helpful to the sender. Senator crapo. Thank you, mr. Chairman. And thank you for being here, secretary azar. I am from idaho, and im very familiar with what i had who is doing. And once in, this is like groundhog day. Every time a new idea for how to fix the Health Care System comes out it is accused of eliminating preexisting conditions as well as every other possible attack that can be trained up against it. I think its appropriate for you, mr. Secretary to come to see what is developing anybody we carefully. I would encourage all of my college review what is actually being done rather than just jumping right back in, and my good friend from oregon and i worked very closely together on many, many issues. I look forward to o working with you on this issue. This plan as a understand it does not eliminate the preexisting conditions. When we did that grahamcassidy proposal was made, the attack was that as we give great responsibility responsibly to states to be that incubator ofo new ideas, new approaches to health care, that is going to get rid of preexisting conditions. That is going to drive people out of the marketplace, that is going to cause people to lose their insurance. The reality is, the efforts being undertaken by the people in idaho is one to protect and expand the opportunities and access that people have two insurance of their choice. Insurance that will work for them. And yes, it does move away from the notion that the only insurance policy anywhere in america should be able to buy is one that this committee or this congress or this federal government the size they can buy. Fortunately, in the tax legislation that we just passed weli eliminated the tax penalty foran people who do not want to buy the product the federal government wants to for something. And now the states are seeking to have some flexibility. In your testimony you talked about the fact that we want to encourage the state to experiment and that Additional Resources are going to be provided to the states to allow them to experiment. I i understand what the law is. As i evaluate this i dont see of violation at all. Idaho is still providing obamacare compliant plans for anyone who wants too purchase them. But they are allowing others to have options. If the idea that people in america can have options, comply with all the obamacare mandates for anyone who wants it, but allow others who want to buy a different kind of insurance policy to have an option, the idea that that is a direction that we should choke off right at the beginning is one that i resist. I which is like, i know you cant, on the item situation specifically but i would just like your observation on the notion that we need to facilitate, incentivize and provide Additional Resources to the states so that they can do exactly what many states are trying to do right now, which is to find a way to give their citizens greater choice and greater access. Thank you, senator. As you said i think any consideration of a state proposal or any matter like this requires great deliberation and caution and care in assessing it. So i just simply cant state of you based on media reports around a states program. But i think what we are here is a cry for help. Its saying that we are right now with her individual market because of the structure we have is not serving enough of our citizens and are too many citizens who simply s cannot afford the insurance packages that we have in p a program the statutehe way is the site and what its been implemented. So thats why its so important that we work to give states flexibly so that we try to offer for those 28 million americans who cannot afford access to the individual market, Affordable Care act lands, that they they can have other options to choose from that may meet the needs and also try to fix whats in the program also help make that as affordable as possible working together with the a congress. Thank you. Ill conclude with an Observation Deck in addition to the program that my colleague from oregon referenced, i expect that idaho like many of the states is probably going to apply for a waiver or two from hhs with regard to some aspect of federal law as states are starting i think increasingly to seek the flexibility that they can get from the federal government to do this kind of Creative Work on our Healthcare System to help us find the right path to provide the best and the most effective and efficient and inexpensive insurance that we can find. And i would just encourage you not just with regard to any applications that idaho provides but with regard to all 50 of the states as theyti seek to ask you under the authority you have to grant waivers to allow them to do this kind a of thing and to work to improve our healthcare markets, that you give those applications very careful consideration. Thank you. Y y senator carper. Thanks, mr. Chairman. Several of my colleagues have expressed the remorse and sorrow over the latest mass shooting down in florida, parkland, florida. I share that. I grew up in, or in and grew up in West Virginia, family of hundreds. My dad introduced me to hunting at a very young age. Got my first bb gun when i i ws about ten. My first shotgun, my grandfather died and he willed it to me. I use for many years did my dadw was a gun collector and sold guns and tilted into this of his life down in florida. I believe, my family believes in the Second Amendment to the constitution, the right to bear arms. I want to say though i am tired, sick and tired of opening a hitting like this and we express our remorse in yet another mass shooting. This has to end. My dad used to say we ought to use some common sense dick in this case we got you some common sense with respect to guns and gun legislation. Senator finance legislation thats called no fly, no buy guilt. If you cant, if youre on a terrorist watch list, you shouldnt be able to buy weapons. We cant even get that passed, its a sad commentary. Colleagues, weve a got you some common sense and use our hearts. Enough ofes these expressions of remorse. I know their heartfelt but enough. Thats not what we heard you tok about today. I just want to say, mr. Secretary, congratulations to you. They could for the dialogue and the conversations that we had during the nomination process. Thank you for the conversation we had earlier this week and i look forward to that is what it sometimes we vote our hopes over our fears he and i voted for you for your confirmation out of my hopes. We have this moral obligation i talk to you about come to my colleagues about until theyre sick of hearing it. We have moral obligation to the least of these and that includes make sure people have access to healthcare, everybody. We have a fiscalwe imperative me sure were doing it in a fiscal responsible way. Among the ways we do that is the chip program, congratulations mr. Chairman, on this latest extension of your creation that with ted kennedy. As former chairman of the Governors Association with mark one who is chairman of the ndaa we know a little bit about what states can do and are given some flexibility. By the same token people can buy cheap insurance and its not worth the paper its written on. Weve got to be careful and be mindful of that. I want to talk a little bit our efforts to move away from feeforservice payment to a valuebased system, after sector. Before i do that i want to mention despite the efforts of administration i would say undermined, even sabotage or Insurance Market places almost 9 million americans, over 95 of the of the robust population in 2007 signed up for insurance plans for 2018. Americans support, and what to keep the Affordable Care act in contrast to the present budget proposed to repeal the ac and replace it with a proposal that eliminates somebodys that make Health Insurance more affordable and cuts more than 1. 4 trillion and medicaid. I know. I know youre not in the administration when this committee reviewed this proposal somewhat to make sure you know nearly every patient group, every physician group, everyl Hospital Group come Health Insurance group strongly oppose the president proposal. More than twothirds of governors urged congress to pass that proposal. The Brookings Institute found more than 20 million americans could lose insurance if we go that path. Individuals with preexisting conditions could lose, would lose the guarantee of affordable Health Insurance. And with that much concern, you think it might be worthwhile to first reexamined this proposal in work Work Together with our patients, doctors come Healthcare Providers to make some substantive changes before offering this idea up again . So on this proposal, our concept is of course to change it to a 1. 2 trillion Grant Program to the states that still retains protection for preexisting conditions, maternal care, newborn care, Reconstructive Surgery after vasectomy are certain coverage for those under the age of 26 on family plans. Mastectomy. Im happy to work with youeril n details to see if we can make this program work and have it make sense. Where we are is a wiki for so many people its a challenge. I would work with whatever the congress is giving me to try to make it as affordable as possible for individuals as much choice as possible. We like to pursue legislative change to see if this can be the approach because insurance is so complex i dont think from the federal level we can do it all. Your colleague senator cardin has a statement that is taken a very different approach. Other states have taken different approaches. I love the laboratory of states trying in this very complex area. Very good. Mr. Chairman, the administration is, or secretary cohen has offered a couple of ways to stabilize the exchanges. The administration up until now has been hellbent on undermining the exchanges. Destabilizing the exchanges. I want to thank you for encouraging developments, and let say i think there are some things we can Work Together including reinsurance but well talk about that. Thank you. Senator senator from georgia. Thank you, mr. Chairman. I can testify that you hit the ground running because her first week and on the job you on the phone Long Distance with me talking about the cdc and appreciate that very much. Ve i also know that you probably had no hand in the crafting of this budget because you were not on board when he was drafted or least you sought after it was done. With regard to the centers for Disease Control and prevention in atlanta, ime deeply concerd this as a 1 billion reduction reduction in funding for cdc from 11. 9, the 10. 9 billion at a critical time for our containment laboratories and researchor and development that stunned as well as our preparedness at cdc. Cdc was on the job ready to go when the ebola hit. Did need additional appropriations. Appropriations came later. We stopped an epidemic which couldve been a disaster not just in africa but around the world. Cdc was the first people on the ground when the anthrax broke out after 9 11, 2001 in washington against members of the senate and the house. They are the Worlds Health center, our protection, our safety b blanket. Its the finest system there is an to cut cut them by almost 10 in one fell swoop to me is unconscionable. Have you had a time to look at thisoo cdc budget where you word to get it to an appropriate level to meet the needs we place on every single day . Senator, you know that care give to cdc and the valdai placed in a both domestically and internationally. As a i i look at the budget fo, the biggest part of change really is our two transfers that are part of the reorganization that was begun at hhs. One is to move the leadership of the Strategic National stockpile in the budgeting under the assistant secretary for preparedness and response. Just move where it reports to pick it doesnt change the atlanta aspect but moves what report to. Thats one major chunk of the others the National Institute for Occupational Safety and health in ay grid that, again that moving the change its leadership to be reporting to the National Institutes of health because of the research function. Net net its actually about 100 million reduction on the operations at cdc. What im really proud of is that we able to get the cdc budget regularize in our proposal. Weve been operating out of the prevention fund. We have moved it over to 909 of discretion, moved that oversaw the core operation at cdc are now regularize in the budget and dont just sit there as a pay for it as a look of the legislation. I think thats really critical for the longterm stability of the cdc that we show thats not variable each if t its built io the base of operations. I share the commitment and look forward to working with you on cdc. As we transition to a new director, cdc is in a transitional leadership role, we dont need it lose focus of newborns at the agency and see to it we are finding that to the level the need to be. The containment laboratories, again, its time we did some replacing and thats were all the bad, bad pathogens are out there. A lot of young people risk their lives everyday working with a Dangerous Things trying to protect us and we want to make sure those laboratories are a safe as possible. Yes, sir. In the legislation on chronic care we also had another bill that went through last night when the train left the station. One of them was reimbursement for Home Infusion. You are probably familiar with, legislation or portal for long time and has a deadline of january 1 of next year for you to develop reimbursement on part b to c to those reimbursements are Home Infusion take place. It is a real reduction in cost to us because Home Infusion is a lot better than hospital infusion in terms of its cost as well as a better place for the patient receive care. Will you work with me to see to it that i generally first we get that in place that reimbursement account . Certainly. Im not familiar with that but i will work with you to make sure we get the job done and done. I dont expect you to be familiar with it but i would never leave here without making sure you are yes. One last point on that. The graduate medicalr Education Programs were consolidated in the budget, medicare, medicaid and childrens graduate medicated program at the one program the net decrease in appropriation. Those programs are fantastic for creating good physicians and do physicians and healthcare for children and the elderly. Will you work with me to see we can get the maximum appropriations appropriate to meet the needs off the people of the United States for graduate medical education . Absolutely. What wereng doing with the proposal on graduate medical education is to try to pull the three different streams together and give flexibility a make sure were able to invest in specialties and underservedde geographic areas that need it the most. Right now we are very ossified from 1996 Program Levels in terms of thing stuck there. Grant flexibility to ensure the money, scarce when is where needed most. Id be happy too work with you n that. Look forward to working with you and wish you the very best. Thank you, senator kirk senator cardin. Thank you, mr. Chairman. Its a pleasure to see you here. I want to talk about a few issues in the president budget following up on some of our conversation from your confirmation hearings and discussions weveve had. You and i talked about our commitment in regards to Minority Health and Health Disparities. The institute of my new health and Health Disparities at the National Institutes of health, and offices for Minority Health included in the hhs, i was disappointed to see that where we have put more resources into nh, and ie support that strongl, there was a reduction of resources at the National Institute for Minority Health and Health Disparities and reduction of resources at the office of Minority Health within hhs. Can you just share with me the rationale of those budget cuts and reassure us of your commitment to the mission of Minority Health and home disparities . Yes, senator. Thank you for raising that. The nih issue, if i could id like to get back to you on that because i wasnt familiar in the 40 days on the job, at that cringe at a level within the nih budget. We delighted we were able to keep nih funding at the level it is that we are proposing. I dont know about some of the ups and downs. Id like to get back to you on could get on the office about health, one thing, it still scares and tight budget and five and when they would try to do was prioritize direct servicet delivery programs and actual scholarship and underserved areas promotional activities around health professions. As we looked across the budget, the approach is is delivering direct care in Minority Community or is this supporting the development of Health Professionals who will serve in underserved areas to scholarship and reimbursement programs . That was the thesis that we could operate from, and more general programmatic activities sometimes would have been emphasized against those in the budget tradeoffs that get made. Its not, certainly not a minimization around my door health programs. Its the tradeoff and focus on Service Delivery. Thats helpful. If you could work with our office and that we are aware of your strategies, because i think together we could be more effective we want to make sure you have the resources you need and able to deal with the nation that we believe in reducing disparities. Absolutely. I i which is caution on anotr area in regards to the budget and posing some additional costs on Emergency Care which turns out to be nonemergency conditions. My concern here is that we are seeing an attack on the prudent laypersons standard in the private Insurance Marketplace. Congress has passed legislation on this to make it clear that if its prudent for you to seek Emergency Care, its going to be reimbursed. We are very happy if you end up in the emergency room that the condition is not lifethreatening, thats good news, but then you might get a shock when you get the bill and recognized it as not being paid by your Insurance Company. So the policies in the Government Programs become particularly important because they are used as goalpost by the private companies. It looks like youre not imposing additional coping and costs on Emergency Care, where the individual medical and into the room for proper reasons but now find theres a cost issue which could be used to deter people from seeking care who need it. So i believe you were referring to her suggested proposal thats in the budget that would allow for medicaid copays for emergency room visits that are determined to have been in this use of emergency room visits. I agree with your i did know it was misused. I thought if it turned out to be nonEmergency Care. Yes. The standard, we would need, we would want to work with you to make sure any legislation is done in a commonsense way. There is zero desire to deter anyone from going to Emergency Rooms for care that they ought to be going into and we need to make sure theres enough of a cushion thats common sense and that doesnt as you said create a situation where it deters people from going in what they ought to go in. Thank you. We worked a long time on prudent layperson laypersons standard. Horrible practice in the private sector that were jeopardizing people so one last point i would like to make. And that is disagree with the budget on the medicaid cuts and the basis behind the medicaid cuts. I just want to raise one issue, i would urge you to be very careful about. We dont have longterm care policy in america. The states have the lions share of the burdens under the medicaid system for longterm care. To the extent that we put more pressure on the states on Medicaid Programs, we jeopardize longterm care which is a critically important to our seniors and america. I just think its important that whatever policies we adopt at the federal level, we are mindful of the negative impact it could have on care for seniors. We would like seniors to be able to pay for the longterm care. We would love them to have thirdparty coverage. Most do not and, therefore, fall under the Medicaid Program. If we put too much of a strap on the Medicaid Program, were going to jeopardize longterm care for our seniors. Thank you centered. Senator portman. Thank you, mr. Chairman. Secretary, thank you for coming before us. I think you are now fully in place and its great to see the good work that you are already starting to do. I know youre very interested in this issue of Substance Abuse and particularly the opera crisis. We have talked about at some length and i would ask you a couple questions about that. First with regard to the funding, i noticed additional funding for sand ship it would also body in the fiscal year actually increase the funding for the comprehensive addiction and Recovery Act Program over the authorization level. We have 2679 for fy 17 which was only roughly 181 authorized because we think this evidence programs are we ought to be directing some of the funding rather than just throwing money after the problem to find what works, and this is the right kinds of treatment programs can longterm recovery program, prevention programs helping our first responders. My question to you with the president s budget indicating that h as would have additional funding with our recent ajit indicating that there could be 6 billion directed towards this effort over the next two years would you support additional funding for this evidencebased programs under the recovery act . I dont know where our break and is on the additional 3 billion in 18 and 3 billion where a cow locating we are allocating in 19. 19 if i could get back to see the funding towards those particular programs, but im just delighted by the support of congress and of the president and the amount of funding here we are going to be able to support our addiction and treatment programs at the stork levels. We already put more money out last year than ever before in history to help with the Opioid Crisis, and then with these two years funding and the 10 billion total, im excited to be able to work with all of you on these efforts. Again, i would say that the 267 million that was unprecedented that we appropriate for this fiscal year is a relatively small amount compared to the 10 billion you say that a chest was budgeted without specificity as i see it in your budget and we want to work with you to be sure that funding is used for evidencebased programs that really work. We have an example one that works and im concerned your budget will make less effective and thats the drugfree communities act. I was the author of this many years ago in houston maybe i have a bit of a bias toward it but also spent nine years as chair of our local coalition which is funded initially with seed money from this program, over 2000 Community Coalitions have been formed in response to the drugfree communities act which potentially provides a matching fund almost seed money for a short time. We required these coalitions by where Performance Measures so we know whether theyre working or not. We think this is very effective prevention and Education Program at the time of an opera crisis it seems to us to be excepted the wrong thing to do to take something thats working and risk its ability in the future for moving it from in the case of your budget ondcp to hhs to combined with other prevention programs that are different. I would ask you to take a look at that, if you can explain to me away think it ought to be moved and be interested to hear what i would hope you would not promote this idea. I frankly dont think congress will go along. I hope they dont. Im going to fight against it. If it aint broken lets not try to fix it and particularly at a time when we need desperately to have more prevention and education out there. It is just to pay the money for the function already is. I dont believe and i know its in no way the emphasis of the program it was much more function over where it is already getting done. I believe that is the case and will be happy to confirm that. Again, its gone back and forth years and it was at doj and nature just administering some of the original grants in the grant making goes out but the direction comes from the ability to take an interagency approach and it does involve a number of interdepartment in agencies with professional education efforts. I hope you take a look at that because it is working in a time where you need more help than ever. I thank you again for your service and my time has expired. Again, appreciate the fact that you stepped up look forward to working with you on the of your crisis and other matters. Senator soon. Thank you, mr. Chairman. Six, thank you for during this period the Administration Budget strikes some constructive balances you have, emphasis in important priority areas, like senator portman has alluded to opioid abuse, research and treatment. I hope we will be doing more to understand the root causes of addiction, as well as treatment of addiction. I think we have a long way to go. Also, ideas about lowering the cost of drugs and medical research generally is all good but i also want to commend you for addressing a huge huge fiscal challenge that we have which i think your budget does address and i was going to ask you to comment on the moment and that is dealing with the unsustainable spending of our entitlement programs. Just think we cant underscore enough that you cannot tax your way out of the problem and there is no revenue solution to federal Government Spending programs that are growing faster than our economy as ultimately tax revenue can never for long bro at a rate faster than our economy. It strikes me that one of the central places to begin to address this is with medicaid, in part because it is the biggest Net Expenditure Program in the federal government and theres no dedicated revenue stream so as with Social Security and medicare so they have a huge outlet and the growth has been stagnant and in 1980 the federal spending on medicaid was 2. 4 of our budget in half of gdp today it is 10 of our budget and two Percentage Points of gdp. Yesterday the cms actuary report on National Health expenditures check that medicaid will continue to grow at 6 a year, 6 . Nobody believes that our economy will grow it 6 so what that means is it will continue to consume an ever greater share of federal spending in the economy if we dont do something about it. One of the things we might consider doing about it is restructuring this program so that there are federal caps on spending on a. Per capita basis and this of course is completely bipartisan idea. First, floated seriously by president bill clinton supported by donna and howard dean and the American Academy of pediatrics and at one point every democrat in the United States senate supported establishing these capital caps and restructure a medicaid. Your budget, as i understand it, further would allow this. Per capita cap to grow when you are tied to a measure of inflation that we might be able to keep up with the cpi you. The net effect of that is that medicaid spending every year would grow in medicaid spending for beneficiary would grow but it might just grow at a rate that we could afford that we could keep up with. I think it is critical that we tied us to giving states more flexibility to discover more effective ways to deliver services. My colleague and i discussed this yesterday. How important and how many opportunities there are to encourage the development of more ways to deliver healthcare services. I wonder if you elaborate a little bit on how you envision this reform idea and how it would still work for those who need this program if that is the necessary criteria of anything that could possibly be considered successful and if you would care to elaborate on how appropriate setting and i know you touched on that a moment ago how that might fit into and welcome your thoughts. Thank you senator. The president budget goes exactly along the lines of the concerns and the solutions that you just expressed and it adds into it also helping to fix the concerns that we have run individual marketplace. Changes medicaid to allow for these per captia grants to states so that they would have flexibility in how to run their medicaid but they would have the skin in the game to run the program but within a budget. It would combine money in a one point to trillion Dollar Program out to the states that would allow for coverage of what we currently call Medicaid Expansion as well as the individual market so money that could be used to determine what real effective mechanisms to provide afforda choice tailored insurance for individuals that would still have protections for preexisting conditions, maternal care, newborn care, et cetera and so that is what i think is one of the really constructive aspects of this budget is putting all those people together and give the state a real tool to create for schools that can create sustainable, affordable insurance for the future. Even for medicaid would grow from 400 billion to 450 billion so it still look for and it would grow because inflation adjusted. A mckenna to work with congress on this as possible idea. Thank you very much. Report to work with you. Thank you, mr. Chairman. Senator whitehouse. , chairman. You looked lonely down there at the end of the panel. I know. Its a long way down here. Im sure secretary azar will have a creek in his neck because he is to transport to see me. When we met in my office i showed you, i think, one of my favorite charts which is this one which shows the cbo estimates for total federal medical expenditure in the red line along the top was depicted total federal medical expenditure as of 2010 and then before the correct when in fact in time went on in it turned out that instead of that red line would actually happen was that remind and then here in 2017 cbo did another forecast to go from this. Dot forward, the green light here, and the newer forecast and as you know from our budget process we think in ten year increments in the budget process so this green area is this ten year budget window from 2018 through 2027 and in the. We reduced, anticipated, federal costs by 2. 3 trillion. According to those estimates. Now, i dont know how that happened and i got a staff but theyre not like your staff and i think it should be a matter of urgency to try to rethink hard about why that happened and i hope that you will take a look because we can find 3. 3 trillion in federal Health Care Savings without the pain on seniors and other beneficiaries that is the goal worth fighting for. My sense of it to go from the global scale down to local has a lot to do with Delivery System form and payment. I want to focus on the group that i mentioned in our meeting the medical Provider Group, a primary care Provider Group in rhode island which was one of the earliest, tinier acos and in the five years that they have been in aco they have reduced their cost for every patient for every year for 700. They werent high flyers to begin with and in 2016 which is the year we got the last complete [inaudible] for they were down 700 for the previous measure but they were down thousand dollars from the average. Its not as if they were one of the most expensive people saving but they were doing better than average when it began and they still saved 700 a patient every year. The patients couldnt be happier, i can tell you firsthand. Those savings came from Better Service and better care. It seems to me that if you take 700 a patient a year you spend that across the Healthcare System you start to look at numbers like 3. 3 trillion but theres a connection perhaps between the payment reforms that empowered coastal medical to change their means and practices to save that money and better serve their patients and that big production savings that we are seeing so i just want to like that for you. We saved cms 28 million with what the coastal medical people did and 28 million is not a lot to you but you probably have to put an e and 7m in that but in small rhode island from one Provider Group to save 28 million is significant and when you add in the multipliers nationally and i think theres a big game here. I really want to work with you on this and i would urge that the more we talk about repealing obamacare and having those fine if that is what you want to do. I dont its good policy or good for the recipients and i dont think that is good at all what i dont want is for you to get so involved in that fight that you wont work on the Delivery System piece which i think is strongly bipartisan and completely beside the obamacare wars and i think the people who want to repeal and replace obamacare the most want to go back and repeal and replace the acos. They have an explosion from their home state doctors and providers they tried so i think this is a safe, bipartisan place where Real Progress can be made and i just want to take my time with you today to urge that and we are counting on a visit to meet the doctor and his coastal medical team up in rhode island. We have other primary care physicians who are producing similar results and theres a lot of excitement and satisfaction around that. If i could say i totally agree about the need for value based transformation is a bipartisan issue we can improve quality and increase cost and make our programs more sustainable. I give you fair warning but ill be harassing your folks at the staff level for more information out of the program and the program preservation. I hope i get the answers to my questions. Thank you. Senator cantwell. Thank you. Welcome secretary azar. You mentioned in the discussion with our colleagues how the proposal encourage medical training in Community Clinic where most positions actually care for patients and how would help the Community Clinic that are not under the current cap . So in terms of his is the Community Health Center Program on gm e that youre referring to, senator . Your proposal to change the structure. Year. Im just trying to understand how it would address a couple of things that are in the need area which is communitybased clinic training and Teaching Hospitals that arent under the current, you know, cap program. Right. We are not proposing a change to the Community Health center base Training Program that we have. Those are separate. These are the medicare, medicaid and the [inaudible] run Childrens Hospital programs on gme that puts those together so that we dont operate under these artificial 1996 based caps and instead can really focus on the providers that help train our position and get them to both make sure we are funding in the underserved specialties and areas for many physicians the most. Including primary care. Absolutely. As well as underserved areas. How can we make sure that we are dedicated money to get training the positions that are or will serve in areas that are lacking in appropriate position here. Okay. If you are saying you are willing to take on the big behemoth of these east coast teaching institutions and having most of the capacity, i am all with you. Okay . Because the divergence of medicine and where we are going we need to train physicians and all sorts of ways. Im all for that. I dont like the fact that you have cut the program because for my estimation of what i see in the Pacific Northwest in our shortage in the whole notion of having a medical home and we are very excited about medicine and preventive so that positions are being trained on what you would describe as a way to drive value and get offered a feeforservice. What about that number is why cut the program when we probably need a four or five times that amount . One of the philosophies we have is to try to move one of the programs were right now we have medicare carry the burden across the whole of their profession. How do we make medicare more sustainable and we our proposals are stretching out the life of the program for another eight years as a result of it and its chapters. I will admit that. Right now were having medicare and Medicaid Fund graduate education that private insurers, commercial people get the benefit of so there is a bit of recalibrating in their from the federal taxpayer perspective and medicare, medicaid that transition to cut that back of it as a result its 48 million off of where we stand right now. But if you examine the shortage in the need you would require of commerce to both the number . I would have to do so within our budget target so that goes up Something Else has to go down. Thats the ageold challenge of these budgets. Okay. Please mark me down is very counter to what senator to meet just said. I believe that we have a growth in our medicare, medicaid population because we have a burgeoning baby boomer population that is reaching retirement and the notion that somehow we should cut medicare or block grant medicaid as the way to save dollars just because the population is growing because of the demographics is wrongheaded. Now do i think theres efficiencies that you and i have had a talk about rebalancing is one of those and thats a huge, huge savings but the notion that somebody after giving away billions of dollars tax breaks wants to come here and says now we have to block grant and medicaid as the only solution because it is growing in numbers because of the demographics is, i just dont agree with this is my providers have told me in hospitals they view the block printing proposal as nothing but a budget mechanism to cut medicaid. So, what they do support is the efficiencies that were driving in the northwest and implementing those in the system which are driving doesnt want to stay home and get longterm care . My colleague just mentioned and doesnt want to do that but that one third of the cost and if you could comment on rebalancing from nursing home care communitybased care as a big savings for some individuals institutional nursing care is meets their needs and is what they need but i am, as i said, at my confirmation hearings a firm supporter of the notion of homebased care and these alternative ways, i believe to save us money and i believe for many can be the best solution and it can be the way to age with dignity so i am very supportive and very much want to work with you on ways we can generalize that more across the United States. I appreciate that and im very good about what my colleagues we have been suspecting that this is what might happen after the tax bill passes and that people will go back to trying to block grant medicaid and mark me down is very opposed and basically a much we are already doing the job they were already doing the job of reducing the cost. The notion that someone wants to create a budget mechanism to cut off medicaid my providers in the Community Services they were not supported. Thank you, mr. Chairman. Senator nelson. Mr. Chairman, thank you for the kind comments several of you guard to the slaughter of 17 students and teachers. Senator rubio and i will be addressing this issue on the floor of the senate at noon today. Mr. Secretary, i want you to know that you are a very prepared individual and you are a fine person and when you were here on your confirmation hearing i asked you several questions about medicaid and medicare and you sidestepped the questions about cuts and now coming forth a few weeks later with the budget, sure enough, you have about 1. 4 trillion over ten years in cuts to medicaid and that will ship cost to the states and the states will have to plug the holes by raising taxes or cutting other parts of the budget that they are responsible for like education, a state alternatively, could choose to cut medicaid benefits or drop people from the programs or cut payments to providers. How would you expect a state like florida that has a big population to afford to cover the higher cost . On it medicare, one thing that i would want to emphasize is we are proposing to congress to make some changes they are and how we do various payments to providers and we are not suggesting changes that would impact the beneficiary. The only once we have that would impact beneficiaries is around drug pricing that we think would have a positive effect for beneficiaries terms of their outofpocket spending. What we do is the net changes to medicare that we proposed is 250 billion over ten years which is about 2. 8 reduction but just to give a sense of perspective that takes medicare which is growing at 9. 1 annual rate over that tenure. And changes that 28. 5 rate of growth. Now youre talking about desperate. My question was medicaid and let me ask you then on medicaid for example, veterans rely on medicaid. 70 of seniors in Nursing Homes rely on medicaid in florida. So capping medicaid benefits could lead to states cutting these Veterans Benefits and the seniors. What do you say to that . We believe the states are in the best position to decide how to get the money to allocate among various populations so for instance there would be core medicaid continues and rose from 400,000,000,253,000,000,000 over the tenure. We replace medicare expansion and Affordable Care act individual Market Program with a one point to trillion dollar grant to the state that is very flexible in his on the expansion population in the states then do not have that 10 copayment, federal matching, they would have to come up with to do that. It gives them flexibility and its bound money for them in that sense. That is what is typically the case with a block Grant Program or turning it over to the states. My state is subject to hurricanes, puerto rico is subject to hurricanes and we saw what has happened with medicaid. It has to respond to a Public Health emergency in a Natural Disaster and if your response is that further medicaid would be provided after a hurricane fact is that congress waited five months before passing disaster aid for hurricane victims five months and 32 months after flint, michigans lead poisoninr answer is in you provided it and we have a significant difference. Let me ask you the specific question. States they stay 1. 3 billion in higher medicaid drug cost with the introduction of the then, new, hepatitis c drug sold in 14. By cutting medicaid are you suggesting that states should cover not cover these kinds of breakthrough treatments that cure chronic conditions in common with high cost . Absolutely not. This of all the case is a really good example of how all of our Payment Systems are really not equipped to deal with what we would call curative therapies and in that scenario i look forward to working with you on the committee on our Payment System is it just get into the notion of a highcost drug that we would pay for but get the benefit over the course of their lifetime from a single years expenditure. We need to be creative in our programs including the commercial marketplace and how we handle product in the future like that. Mr. Chairman, in closing i just want to point out that in a gross state like your state especially my state that is growing at 1000 people in day where we educate the doctors and then we dont have the residency programs and they end up going and doing their residency outside of the state of florida and we have borne the cost of educating them and when you start cutting 48 billion in cuts over ten years to the graduate medical education payments it will severely hurt a state like ours that is a gross state that desperately needs those residency programs to keep our doctors. Thank you, mr. Chairman. Secretary, good to be with you. I guess you been on the job about a month. Fourteen days. Fourteen days. Okay. Less than one. We are grateful youre here and you and i have the discussions before and certainly in this setting about medicaid. Our approach to it differ so i want to raise in the context not just of the program but also what i believe the in menstruation has been trying to do with hard to medicaid and secondly some pennsylvania specific challenges. When i think about the program both the core medicaid in the expansion i try to think about it in terms of people that are infected. In our state there are lots of ways to describe more than 2 Million People covered but you can also think about it in with the numbers, 40, 50, 6040 of the children mania, the of individuals with disabilities or state, and 6 individuals who are in nursing home residents. As you tell thats a big, big number. For three big numbers. Interstate we have 48 Rural Counties out of 67 and just in those Rural Counties 180,000 people the benefit of Medicaid Expansion for their healthcare. Another way of looking at it is the horror which you know well, the horror of the. Epidemic and the overdose that comes with that as well related overdoses. Just in pennsylvania we look between 15 and 16 the overdose death rate is up some 37 . It is higher in the lower 40s i guess the rural areas. If you are in need of your roots in Cambria County thats one most counties among many not among a few where the overdose death rate has gone way out. Ninetyfour just in Cambria County in 2016 so i raise all of that because medicaid is critically important for states. Its especially important the Medicaid Expansion part of this story is especially important to deal with the crisis. It is basically the number one pair for those treatment in services. My real concern is. Number one is the administration, i believe, the more than a year now has been sabotaging the Affordable Care act, taking a measured action, doing everything he can to find the particular act in the absence of getting full repeal by way of legislation. I would hope that you would put an end to that. Secondly, it appears to be an effort in the budget to use the budget process over time not only to cut medicaid medically but to end the Medicaid Expansion. I would ask you two questions. One is will you commit to any sabotage to the efforts of agency like yours and secondly, tell us about the impact of the budget on medicaid in particular, Medicaid Expansion. Thank you, senator. On the first point as we have talked about before you my commitment that i in my department will work to make Health Insurance as affordable as possible have much choice people and meet their needs as we can it to do so faithfully within the law of the programs we have. Im about making our programs work as best as they can. I can tell you the team around me has that same commitment to do so. Now we may, you and i, me disagree about what might work and what wont work in our understanding about economics and Insurance Benefits multiple function. Our desire is the same. I want as many people as possible, as do you, to have access to affordable healthcare that will help those who cant afford it get access within our fiscal constraints. We certainly share those goals. On the second point of medicaid just to present at the ad i hope the goal is that no one loses coverage. Our goal is to make sure that we have access to affordable insurance and they have choice of those packages. On medicaid you mentioned populations that i do care a lot about and i care about all but those children and the disabled and the elderly in Nursing Homes. One of the really odd incentives of the way the expansion was done is created april 1st incentive because of the differential matching from the federal government to actually prioritize the expansion ablebodied new entry populations over those traditional medicaid populations so i am concerned and i hope that we can reorient medicaid to fix those counter incentives there that are in what we might call traditional medicaid populations there. I do worry about that. I just hope that we are not at the point we are talking about access but people covered by medicaid do not lose it, all those folks that have a disability, all the children, althoughs in Nursing Homes. Mr. Chairman, for your indulgence one more minute you probably have not seen this but it was in history but i have a letter essentially about what states are applying for blue waivers and i will read one sentence the letter and i hope you will take a close look at this in provider response. At the end of the first paragraph i say i urge you to project medicaid waiver application from states that would further briefings. Limit, restrict or block americans guaranteed access to affordable coverage. I just hope you take a closer look at that and provide a response. I will, thank you. Thank you hello secretary azar. Is one of the [inaudible] of the Graham Cassidy ill open up that. What i suspect it is true that they really dont understand the legislation because what we have been speaking to, Graham Cassidy address. For example, one of my colleagues said that there has been a problem after Natural Disasters that there was not dollars made immediately available for medicaid for those who are impoverished because of the disaster and of course under Graham Cassidy we have every three or six months registration in which the state would say hello, these books are now eligible and we now get money for them. And he would get money on a riskadjusted. Person in raleigh and the state only gets money if they enroll someone aligning the incentive to. It acknowledges something which i have to say i was surprised that others are now acknowledging who are in the Obama Administration which is a status quo is not working. I just got an email from bill frist, if you will one of those emails everyone gets, the United States care in which a group of people including andy levitz, melanie bello, pat conway, tom, democrats who are concerned and in the abominable station nominated or actually served saying the status quo is not working. It is interesting they are defending a status quo which is not working and addresses to say how its not. States and the individual market if they are not getting in subsidies no longer afford insurance. Folks in louisiana are paid as much as 40000 a year for premiums. Get that. 40000 a year. People like andy and melanie are acknowledging that some folks arent that and this is not sustainable. Its not sustainable for states. Organ is having to pass new taxes in order to pay for the state share of Medicaid Expansion. I heard one person who say opposed it said that we are excluding unions but we are taxing individuals and Small Businesses and they are the only ones without lobbyists. Those who help lobbyists pay the tax for everyone else organ having pass new taxes to for the Medicaid Expansion. Graham cassidy told states that if you cant afford the match you dont have to put it up when other thing i will note that senator nelson of florida was concerned about the effect on the state and under Graham Cassidy florida would have gotten 15 billion more than under current law to care for those who are poor and poorly insured in their states. Why someone would pose as a doctor who took care of the uninsured for 25 years why someone would oppose the five excuse me 15 billion more over ten years to care for the poorly insured in their states i have no clue. No clue whatsoever except the dogged determination to support status quo. That said, now i will get to my question. I heard an intriguing conversation yesterday and dont know if it is true but i would like your thoughts that medicaid best price actually drives up the cost of healthcare excuse me medicines for everyone else. When medicaid best prices put into place only one out of 11 americans were covered by medicaid but now one out of four americans are. By the way this is not because of demographics as adjusted earlier because this is not age based but rather because of expansion under obamacare. There is one quarter of the population getting the best price has an hydraulic effect which you lower the price here does medicaid but in turn it raises the cost for everyone else. What are your thoughts about that . Center, thats a perceptive observation and i think its something we have to be careful of not just what we talk about drug pricing but when we talk about our hospital, physician services, with medicare and medicaid if we and up underpaying the market what Natural Market forces would lead to we would see higher rates in the commercial space, for instance. Then we have the cross subsidization process. I get that but thats obviously a major emphasis of the Obama Administration. Does medicaid pricing increase that cost . If we underpay in medicaid it will increase cost elsewhere. Let me ask one more thing. Related to that i was also told that some states have carved out the pharmacy benefits from their managed care contracts and carving out that allows them to get the rebates and they are preferential going to namebrand drugs, the higherpriced drugs because it increases their rebate as long as the federal taxpayers pay 90 in the Medicaid Expansion it is a good deal for them. Sure it increases the what the federal taxpayer pays state gets more rebates. Have you observed this. I have. There is a bit of a person centered in the medicaid system to carry branded drugs because of the rebates are so high compared to generic drugs and so from the Program Perspective it can be beneficial to the state Medicaid Program to receive the branded rebate as opposed to paying the reimbursement to the pharmacy which is trying a generic drug at a low price and its an oddity in the system. So we have misaligned incentives. We need to work on that. I will say and is a close that the Graham Cassidy aligned consensus and it does not incentivize the states to do that sort of trickery to pose, if you will, the federal taxpayer in order to make money for the general fund of the states but simply ultimately drive up costs for everyone else. Thank you and i may have a second round center seven oh. Thank you, mr. Chairman. I dont know where to start. I greatly respect my colleague we just spoke with such a different view of the world in terms of healthcare and its not a commodity and should be a basic human right. We all get sick. Its not like you can choose to buy a car or not by a car. I would love everyone to buy a new car from made in michigan but if you dont, it will not affect everyone elses rates going up and so on. Healthcare is just very different because we are all human and we all get sick. Let me say one other thing. I had not intended to when we mention status quo this is the new status quo under the Trump Administration where there are no lecturing patients and no requirements of share in their own health care responsibilities. We are back to junk plans, people buying insurance that may not cover basics and they dont know it until they get sick and folks walking into Emergency Rooms without insurance and everyone else will pay for it. Thats what we call uncompleted care and that is what it used to be. People were being involved in responsible in terms of when they can pay for their Health Insurance state of michigan actually save hundreds of millions of dollars last year and group market rates were flattened for a lot of Small Businesses in michigan and so on. Very different view of the world i look forward to debating that as we go on. I do want to start with something that is positive that i have seen in the budget and a lot of things i disagree with certainly as it relates to the view on medicaid and what that means for seniors and families in children in michigan when we see these cuts. Part of the budget agreement the caps agreement included a muchneeded 6 billiondollar investment over two years in combating the Opioid Crisis in Mental Illness which is a major focus for me and has been. I want to acknowledge the fact that in the budget hhs budget actually recommends expanding what senator and i have been working on a certified behavioral clinics, health clinics. Been able to do what Behavioral Health what we have done for Health Centers and one of my biggest frustrations has been the fact that we literally pay for Service Providers to provide physical healthcare but for Mental Health or Addiction Services we do something we would never do which is we provide service until the grant runs out. I cant imagine if someone needs heart surgery that the doctor would say gosh, i would love to provide your surgery but the grant iran out. We do that every day for Mental Illness. We know this is part of multiple things that need to happen around violence and even thought yesterday. This is, i believe, and all hands on deck moment. I want to. Per se that we appreciate that it is in the budget have begun eight states have been fully funded as demonstrations across the country, minnesota, new jersey, oklahoma, oregon, pennsylvania and we are working to expand that and i like very much to work with you as we move forward to expand comprehensive services in the community including 24 hour Psychiatric Services and facilities so people are going either to the emergency room or to jail which is exactly what is happening right now. I look forward to working with you on that. I am concerned though that we go on to talk about opioids and Mental Health that when we look at the change, the cuts in medicaid, this time about 1. 4 trillion and we can talk about grants again but again this sort of big grants rather than small grants but i am very concerned that the medicaid cut would really make it difficult for us in michigan and across the country to fight the Opioid Crisis as well as expand what we need to do in a Mental Health. In fact, expanding what we call the health and michigan what we would and healthy michigan the Addiction Treatment gap would decrease by 50 and Substance Abuse funding would be cut over 5 billion across the country. Has hhs modeled the effect of the medicaid cuts on individuals with Substance Abuse or Mental Health disorders . So, not to my knowledge but certainly the point you raise are important concerns that we want to work with in any legislative package alongside medicaid reform ensuring that what were doing there is adequate resourcing arounds abuse treatment do you believe that Mental Health and Substance Abuse treatments should be included in all healthcare plans . I believe so but Mental Health or the Mental Health parity requirements would provide that i would need to look at the statutes and i am believe thats part of that. We do have Mental Health parity but i authored the language in the aca to make sure that this was included in everything because it hasnt been happening up until then and is part of the essential benefit package that would, as i understand it, be eliminated under the kind of approach that the large but grant is being talked about so i am very concerned about that. What would you suggest if people lose coverage under the budget and if they go through what would you recommend to the state of michigan and those right now that does billy need services. The challenge we have now is for 28 million americans we have is simply not affordable for them as senator cassidy was speaking about that the status quo is leaving tens of millions out through unaffordable options so we want to Work Together to try to get what can we do to build stable, good affordable, tailored options for individuals out there because that status quo is working for as many people as it ought to. I would just close by saying its been a year and half under new initiation of the very aggressive approach, i would say more on health care and multiple changes that are raising cost so the status quo today is a new status quo based on actions that have been done and ramifications that will continue to be felt as new insurance rates come out based on what has been done as part of the tax bill as well as decisions to rollback efforts to keep healthcare affordable. I do want to say also at some point we can debate how medicaid pricing is the reason Drug Companies are dramatically raising their prices and that was part of what you are saying in terms of the pricing i would have Major Concerns about that. I certainly did not mean to be saying that that is the reason. It certainly is an economic and its an economic incentive and thats what we have to do with addressing how do we address [inaudible conversations] senator menendez. Thank you, mr. Chairman. Mr. Secretary, welcome. In new jersey one in the one children are diagnosed as having autism spectrum disorder, much higher than the National Average of 168. Is it true that the fiscal year 19 budget zeros out a program that has been of great interest to those in the Autism Community care zack program . I do not know that graham in particular, senator. Im 14 days into this and so i know we have several programs that is part of just prioritizing direct care delivery direct Service Delivery and underserved care there are programs that simply we had to not recommend funding because let me help you out because youve been on the opportunities but ive been longer. It is zero in the budget. In fy 18 the congressional justification was that the department believe the same services could be provided to the states the maternal and Child Health Block grant and you know thats the same reasoning today. As i said, the challenges we have is we are part resizing direct service care im asking a specific question. Is it your view that the congressional justification fy 18 that the services can be provided parent and health child but grant is presented zero in the budget. I do not know if that is the reason why the budget was prepared that program zeroed out. It is more likely the fact that it is not a direct Care Service Program and other expenditures of money and scarce fiscal environment tough choices have to be made. They have a tough life as it is and it only those taxes. Their children are trying to fill their godgiven capabilities and families that are enormously challenged with that reality. I have a feeling that is the justification but the problem with that is if you cut funding for maternal and Child Health Block grants as well so i dont know how you think that states are best positioned to replace the education training, research, authorized by the autism cares act withs funding for the programs that supposedly [inaudible] that you can claim that you propagate the progress i didnt claim that. When i told you is that the programs we prioritize our programs backed with support programs we had the d prioritize against others and [inaudible conversations] they are not backed brought the committee but front door. They provide Clinical Care in service and we had to privatize. Let me ask you. How is it when i wrote qs bars in your confirmation i specifically asked you about working with me on reauthorization the autism cares act and he provided a big answer saying you are fully committed to implementing the lowest under laws passed by congress and improving access in this vantage communities that your answer. Explain to me how the zero out funding to implement a law passed by congress and signed into law by the president allows you to do that. In the budget your member of the senate part of setting the targets that we have to operate within and we operate in that a budget. Be a tradeoff in the. [inaudible conversations] there is not limitless money, senator. I know. Thats not why we should spend out tax cuts for the wealthy people in this country and maybe we wouldnt be having this debate werent spending tons of money and other things outside of our Healthcare System but it is simply inexcusable to take a community that is so challenged that the law specifically directs the department to engage in and then you zero it out and then you how do you think limiting them medicaid at the same time restrict Medicaid Funding to states are going to deal with hospitals will do that. That is a continuation of the medicaid disproportionate Share Hospital payment plans that are part of the Affordable Care act and we continue to scale down there and we will be putting out one point to trillion dollars in the budget of the American Healthcare Grant Program so that we have alternative insurance vehicles should be the alternative as with the Affordable Care act the disproportionate Share Hospital it is not a scaling down its on the limitation. Elimination. Zero, nada. Its not a scaling down. I expect you to enforce the law and the law on autism is very clear and i will challenge this administration to respect the law in the. Thank you, mr. Chairman. Senator brown. Thank you, mr. Chairman. Secretary, welcome. I concur with senator menendez and what he is saying about the tax cut and how you are taking away so much so many people that are whole lot less privileged and members of the senate. Going after the healthcare law a year ago and republican approach the deficit by billions of dollars and this is the congress the care so much about deficits when there are democratic president s but not so much with now and then you cut programs to millions of working families to pay for those tax cuts. Its morally reprehensible what you think the same thing. A few months ago mr. Secretary, the first lady in Kellyanne Conway and this is a facility in West Virginia called police place which provides treatment for babies born with neonatal abstinence syndrome and we have a similar facility in kettering, ohio right outside of the call to purchase path that is placed on keeping Families Together and helping both moms and babies overcome addiction and withdrawal. I introduced it last year the number of members in this committee including my colleague from ohio called the crib act where legislation would provide state and medication programs possibility to reimburse and i understand yesterday you all announced weve improved three of and services in West Virginia and ill ask for your commitment to ensure and whether it be for helping us pass the crib act. When you commit to doing that . Senator, i dont know that particular wave of approval but im happy to work with you and governor if they have a request that it goes through the especially process as possible to comply with our weaver requirements. Absolutely, seems a noble purpose to make. Thank you. I appreciate the effort you proposed some initiatives that would lower the cost of drugs in medicare and medicaid and is part of this Budget Proposal for my agree and support but can you as you point to a force of Pharmaceutical Company to lower the list price of the drug and we americans who rely on that desperate. That is one of the things we trying to do in the Budget Proposal is the downward pressure on the list price of drugs and its that catastrophic coverage in part b is changing the incentive structure. Right now the government is on the hook for most of the cost once the Senior Citizen gets to catastrophic coverage. We propose to us that so that the insurer is on the hook for that and that will have more incentive to follow the program tran companies to keep the list prices down as is to now they have incentive to those higher prices to drive into the catastrophic coverage and offload that expense on to us. That is certainly one of them and this is just one step of working on the drug pricing and this is the one that is in the context of budget and medicare and medicaid. Many more things were working on and the ideas you have around list price ways we can reverse i would love to work with you and thats is a difficult challenge. It sounds and i perceive that but it seems like we rely on middleman and none of these policies go after the pharmaceutical industry. Your farmers players who set the spices in the first place and none of these guarantees and i understand you work with Insurance Companies and none of these prices guarantee lower drug prices to rely on insulin who are insured by medicare or medicaid and nothing will help that we can see so far help individuals pay for drugs out of pocket and you cant benefit from a rebate policy. It seems that menstruation that promised that it would make the Drug Companies stay until the president executives came out and sang a different song and i was the eo friends but it seems the omission left out of the Budget Proposal that directly [inaudible] we need to do better ready to partner with the president. I know the Ranking Member wyden is willing to do that to go after pharmaceutical companies that wont reduce Patient Choice and i hope you will take us up and are willing to join us. There is a suite of proposals here that will dramatically reduce Senior Citizens [inaudible] in part b were proposing inflation cap on the list prices so if you increase the price above inflation just like in medicaid the Pharma Company will get there will be lower reimbursement paid out to our medicaid but we have a whole suite that will dramatically reduce citizen sends out of product pocket and getting their part b drugs which position administered drugs and i love to preview and sit with you about that because basically theres a lot you could get behind. That is good news but thats medicare so what about everyone else. Lots to do. Senator food. Thank you, mr. Chairman. Secretary, thank you for being here today. I picked it what you laid out and addressing drug pricing opioids in reducing regulatory burdens. While it is not the Jurisdiction Committee i want to point out that i eight the attention to health servicing and written testimony on that topic. It was great to see the proposed funding for ihs. However, as i said money cant solve those problems and one thing id hope to see included in the budget was a legislative proposal signaling the and ministration interest for working for reform. Like the restoring accountability in ihs act that we have discussed previously so my question is that legislative solution is something that the administration will continue to work with us on . We will certainly work with you on that. I have not been able to get deep into it yet myself but happy to work with you on it, senator. Thank you. As you recall, we talked after confirmation hearing about interim finding role about the application of bidding rates of non competitively bid areas for medical equipment and i realize that youve only been sworn in for a couple weeks so i get that but i want to ask to provide a status update for when that role will be finalized whether the president s Budget Proposal and Competitive Bidding which projects more than 6 billion and saving takes that rule into account. I would be happy to that. The proposal we have in the budget i hope is sensitive to the concerns and im very focused on the concern of rural providers in rural citizens access to Durable Medical Equipment and so the proposal we have is the dme bidding be targeted toward the area in which it is bid so rural and also so that the winners get compensated at what their bid was as opposed to being pulled down to median if you happen to win and be entered into the process. I am concerned about access and affordability and role areas to the dme program and so i hope is to work on legislation approaches here we can solve that problem. Good. That is what we like the issues you talked about where we like to see the progress with respect to that issue. I am encouraged by the proposal to reduce burdens and eliminate low value metrics and meaningful use. They will not only have reduced reporting burdens but maybe none under that program where we would be able to independently look at data are self to determine their compliance with the program, rather than they have to report anything but i think its a significant regulatory relief effort. To follow up, can you speak to or address the current all or nothing approach. Want to delve more into the current status of where we stand on meaningful use. Its important to be not so much meaningful use but inter operability. It wont was a lot of good if we have electric format if they dont communicate. My focus is how do we get those connected. But i just make sure you answer that accurately. Thank you. We will continue to work with you and your team. Senator scott. Thank you for being here. I will ask another question you may have answered in a different way for the last time you and i had an opportunity to discuss opioid was at your first during. Congratulations and condolences as well. We talked about the importance of addressing the growing opioid abuse from the bottom up in the local level. In South Carolina, its a place where a lot of people come to vacation, myrtle beach but its also the place where weve seen the highest opioid related deaths in the state. Your response to my question on the crisis, you mentioned there isnt a one size fits all approach to opioid treatment and prevention programs. How does your Department Plan to use the money to customize and create more flexibility for local jurisdiction to play a more Important Role in addressing the challenges that we see. So just by way of example, the 3 billion initially that we allocated in the 2019 and we are proposing, we would have a 1 billion in grant from the state charter Response Program so very flexible for the states to compromise. That the doubling of the current funding the 500 million. Year. That is very flexible and you can really work with communities, coming up with communitybased customized approaches. Another program we are really interested in in is investing a hundred 59 and role Substance Abuse programs to try to develop novel methods of care in more Rural Communities because of distribution of resource issues and another 400 million that goes through quality incentive work with our Community Health centers that are localized. Thank you very much. Im not sure youve address the question on wellness. One of the things weve done over the last years talk about the access to Health Insurance. We talked about the cost of Health Insurance, whose insurers, whos not insured, whose underinsured. There are a lot of costs aroun discussion around the cost of healthcare. Unless we spend more time talking about it we wont be able to address the actual challenge of Health Insurance. Many of the issues we face, the cost continue to rise around issues of the morbidities of diabetes and obesity and cancer and these are explosive drivers of our healthcare costs. When it comes to making Healthy Habits so we can prevent some of the challenges we see, that to requires a bottomup approach. I know in South Carolina some of the programs we see our programs that work with nonprofits, churches, synagogues, whether its the ability to create Wellness Programs at your local Community Nonprofit or planting Community Garden spread we found they have been successful in South Carolina. What you plan to do this year to empower and encourage states to invest in the space of Wellness Programs. Senator scott, i think you put your finger on one of the more important drivers of healthcare costs in our system which are the social and behavioral determinants and we help provide alternatives to medical spending healthcare spend and also on the behavioral side, can we create adequate incentives or flexibilities on the behavioral side. When i was at hhs we were involved in helping to create greater flexibility through hipaa to allow employers and insurance plans to create greater financial incentives. If you have other ideas of things we can address, barriers wer with our program, id love to learn more about that they think it would be more constructive. There been a number programs that focuses on healthy alternatives and how do you make what it is that we find to be incredibly tasty but may not be very helpful longterm. I look forward to having that conversation. Thank you, mr. Chairman. Thank you. Mr. Senator we have these two folks, me and the Ranking Member will ask another set of questions and then you will be free. When we first observed, not related to you but someone earlier had criticized the tax cut and job provision which doesnt allow state and local taxes, excuse me they were criticizing the jobs act as a benefit for the upper income but the same senators who say that also complain about the salt tax provision. That disproportionately affects the welts on one hand you can have the wealthy getting taxed more and on the other hand have a bill that benefits wealthy but thats one of the congruity of our debates appear. Secondly theres a couple debates about Graham Cassidy that i have to address. We maintain the Mental Health benefit, we encourage permission such as auto enrollment which could increase enrollment relative to now, we allow pooling of the individual market and medicaid pools which im told would lower premiums by 20 therefore making insurance more affordable. Folks on the left dont seem to care about those middleclass families paying 40000. Year. The criticism of the status quo, it still includes the individual mandate. Is all this is a reason that they are saying we need to do something different. Now, to another question. We spoke earlier of the part d revision, reducing the exposure for beneficiary. By reducing the mandates pharmaceutical Companies Must pay. My concern is that these rebates that they pay count toward the true outofpocket costs and if you will, its pushing the senior into the catastrophic part of the Medicare Part d benefit. When they have to increase the rebate they just increase the cost of the drug. If we are going back to our earlier discussion, if youre not on medicare and youre not on medicaid, you will pay a lot more. If you are counting your rebates toward a true outofpocket cost than the taxpayers are paying more. Im not sure im seeing this as a great benefit for society at large. What are your comments please. The proposal that we have are around drug pricing, i think we need to look at them as a holistic set of all five parts because they Work Together in an interrelated way. First we would require that the rebate that the Drug Companies are paying the drug plan the offer to the Senior Citizen at least one third of that benefit when they arrive at the pharmacy pointofsale. Its a real outofpocket benefit on them. Secondly would have a genuine outofpocket maximum in part d for the first time. Right now, evening catastrophic coverage, Senior Citizens have to take 5 which can be a lot of money for that will now be zero. Would also fix this incentive we have for the federal government is picking up that catastrophic care at the tune of 80 and reverse it so that the Insurance Company pays 80 and we pay 20 in the future. We would also have that true outofpocket cost, the question that you raised, we propose that we would not count the coverage gap payments from the Drug Companies against true outofpocket cost creating a continued incentive for the plans to not hustle the beneficiary to unload them but also to have higher list prices to get them there. Finally, for a low Income Subsidy seniors,. [inaudible] im glad you explained that as a package it sounds better. Lets go back to what i discussed earlier about the hydraulic effect on those who are not on Medicare Medicaid. Now we have Medicare Medicaid both of which are getting large rebates and or discounted pricing and taxed upon the cost of drugs when back to the state. It causes the drug company to raise prices and make that up, is that going to increase the price that the person whos either paying cash through small business, group plan or through the individual marketplace pays for their drug. I dont believe the mechanisms we are proposing would have that effect because what were trying to get at is the outofpocket for the patient which is much more matter between them, the Insurance Company and us. We want to get the outofpocket for the patient down and then it reversing the incentive on list price. The net could even remain the same to the program level, i do hope we will keep good incentives to keep driving our net prices down as we do. Its the list price that we have to reverse every incentive for the higher list price weve got to try to flip those incentives backwards on that. This is a starting point on that and i will keep working with you to come up with other ideas that we can contain or pull back those list prices and create financial incentives and Market Forces that will actually at those list prices down. I was following you on everything up until the past 45 seconds. We will have a followup conversation on that. Senator wyden. Thank you, mr. Chairman. Mr. Secretary, i want to come back to what senator brown said, and do very quickly because we talk about spending a lot of time to really dig into these issues. Seniors, people in organizations like the work ive done with the gray panthers over the years, they talk about how theyre getting clobbered when they go to the pharmaceutical window. Senator brown asked you about that. I heard seniors talking about it. You said you know, what were going to do is we are going to change the incentive, change the incentive for the middlemen. As you know, i have legislation to do that. Thats a key part but what senator brown was saying, and what im saying, we will talk more about in the future, you cannot solve this problem if you let the manufacturers off the hook. That is what the budget does and that will be a topic for another day. My question for you deals with something our colleague and someone i admire, congressman david talked about in ways and means about this question of apgar, this important rule, the adoption of foster care kids, this rule as far as i can tell has been blocked or put on hold for something of this nature, this gives us Critical Data by calmly foster kids get terrorized in the sex trafficking system. We really want to get this out. Are you supportive of this, will you work with us question like this is what congressman davis is talking about. It and have a chance to follow up from his comment. That was the first i heard of this issue, obviously i want to learn more from you about that and work on this if thats the impact we want to be doing everything in our power to sell that question. Good. The reason this is so important is, as you know, number of us are supportive of the states having a bigger role in these kind of areas, but we have to know whats going on at the state level and have this kind of information and partnership. And then, because my friend is here, i am going to put into the record and the two of us talk often. I will actually put it in the record because i suspect will come back to that. I had received information from doctors and hospitals were concerned that Graham Cassidy did not protect people with preexisting conditions. My colleague said thats not right. They meanwhile but thats not right. Sitting on the far end of the table was a representative from the cancer society. They looked at me and my colleague and said we know something about preexisting conditions, this doesnt protect people with preexisting conditions. The reason im going to put it in the record as i want my colleague and others to have a chance and be part of the debate. Since Graham Cassidy has come up several time, im particularly concerned about the trend started by idaho to go back with junk insurance. I want them all to have a fair chance to comment on this and put into the record what ive just given a shorthand description and im sure my colleague sees this issue differently but at least we will be picking up when we left when we actually have our hearing. That is rhetoric, not based on facts. Thank you to my colleague and all others who participated. Appears will not attain a quorum so will postpone the markup to occur during a roll call vote of the senate at a location to determine theyll be off the floor. I want to thank secretary a czar for attending and thank all my colleagues for participation. I ask that you some of them by the close of business next thursday. Without this hearing is adjourned. [inaudible conversations] coming up later today on our companion network cspan, a discussion on politics and race relations. It starts at 4 30 p. 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