Can Work Together as we go through the Implementation Phase to find out what is wrong with the program and if we can make some changes to fix it. Let us do it and let us do it in a bipartisan fashion. It is too big a program and too important to too many people to do that. Having said that it does appear that it is working. Let us not keep beating a dead horse. My beloved friend who gave us the beginning of our efforts today. Madame secretary, i see reports that consumers receiving plan cancellation notices from their Insurance Companies saying that plans are no longer available. Does the aca require Insurance Companies to discontinue the plans that people had when the law was passed, yes or no . Not when the law was passed. No, sir. Thats the grandfather clause. Thats because the plans existed prior to passage of the law are grandfathered in as you have said . Thats correct. So if an Insurance Company is no longer offering a certain plan, thats because that Insurance Company made a decision to change their policies and that caused them to take away the grandfather status from their insurance purchasers, is that right . Thats correct. Now, madame secretary. I want you to submit for the record a statement of what it is we can do about Insurance Companies that run around canceling the policies of their people and i dont have time to get the answer but i want to get a very clear statement from you as to what you can do so we can take some skin off some folks that have it coming. Madame secretary, its my understanding that these decisions of a business character are most common in the individual Insurance Market and that much turnover already exists and existed prior to the enactment of the legislation. Thats correct. Is that correct . Yes, sir. Is it correct that 35 to 60 of the enrollees in individual market leave their plan after one year for Different Reasons . A third are in less than six months in the individual market and over 50 are in for less than a year, yes, sir. Now, in the cancellation letters which move around from the Insurance Companies, some Insurance Companies are suggesting an alternative plan at a higher price. Do they have a right to do that . They have a right to do that, sir, but consumers have a right to shop anywhere to compare plans and they have choices now that theyve never had before and some Financial Assistance coming their way for 50 of those people. No right to enforce that demand on the Insurance Company . No one is rolled over into a plan. Individuals for the First Time Ever will have the ability to compare plans, to shop, and to make a choice inside or outside the marketplace. Looks to me like the Insurance Companies are trying to inflict on their customers the view that this is their right and that this is the only option available to them, is that correct . I think that Insurance Companies would like to keep their customers. Having said that, customers for the first time have a lot of choices. The Insurance Companies have no right to enforce that view on customers . Theres no rule that says you have to stay with your company or be rolled over gentlemans time has expired. Gentlemans time has expired. Chair recognizes the gentleman from texas, mr. Barton. Before i ask my questions, we have a former member of the committee on the democrat side from the great state of kansas in the audience. We are glad to have you. Madame secretary, were glad to have you too. Thank you, sir. Theres a famous movie called the wizard of oz and in the wizard of oz theres a great line. Dorothy at some point in the movie turns to her dog toto and says were not in kansas anymore. Madame secretary, while youre from kansas, were not in kansas anymore. Some might say that we are actually in the wizard of oz land given the parallel universes we appear to be habitating. Mr. Waxman and most of those on the democrat side think things are great. You apparently although you did apologize and you have said its a debacle, you also seem to think that the Affordable Care act is great. Myself and others have a different view. Ultimately the American People will decide. Now, last week when the contractors were here, i focused my attention on the apparent lack of privacy in the website. If well put up the first slide that i had last week. If we can. This is what is public, madame secretary. Its basically a disclaimer that says any unauthorized attempt to upload information or change information on the website is prohibited. It really doesnt say anything about privacy. You do have to accept that in order to go forward with the application. The next slide shows whats not public. This is in the source code. We tried to determine this morning if it was still in the source code but pointed out the website is down. This is much more frightening to me. It says you have no reasonable expectation of privacy regarding any communication or data transiting or information stored on the system at any time or any lawful government purpose, the government may monitor and intercept, search and seize any communication or data transiting or stored on the Information System. Any communication or data transiting or stored on this Information System may be disclosed or used for any lawful government purpose. Cheryl campbell of cgi federal said she was aware of it but it wasnt her responsibility to put that in the source code. Were you a aware of it and was it your responsibility to put this in the source code . Mr. Barton, i did not put things in the source code. I can tell you that its my understanding that that is boilerplate language that should not have been in this particular contract because there are the highest Security Standards in place and people have every right to expect privacy. All right. Now, the last time we could check, this was still there. You are given almost Unlimited Authority under the Affordable Care act to administer it. Will you commit to the committee and to the American People that, one, you do want to protect their privacy and, two, you will take this out and fix it and make sure that it doesnt have bearing on people that try to apply through the website. Yes, sir. We have had those discussions with cgi. It is under way. I do absolutely commit to protecting the privacy of the American Public and we have asked them to remove that statement. It is there in error. It needs to be taken down and we should be held accountable for protecting privacy. Thank you, madame secretary. I sincerely appreciate that and im sure the American People do too. My last question or really a comment. I introduced hr3348 saying lets make this system voluntary for the first year since weve having so many problems and let the American People decide. What at that means is if People Choose not to participate, they will not be charged the penalty for nonparticipation. Would you support such a reasonable approach to this while we work out the problems in the system . No, sir. Okay. Thats an honest answer. Gentlemans time has expired. Chair would recognize gentleman from new jersey, mr. Pallone. Thank you, mr. Chairman. I know were not in kansas but i do believe increasingly were in oz because of what i see here. This wizard of oz comment by my colleague from texas i think is particularly aa pro given what we see on the other side. I dont know how you keep your cool with the gop trying to scare people and bring up red herrings. Im going to ask you a question about that. Before that, i want to say this whole idea brought up today that somehow policies are being canceled and people dont have alternativ alternatives, its just another red herring. What my colleagues on the other side forget is this is not socialized medicine. This is in fact private insurance in a competitive market. If im an Insurance Company and all of a sudden everyone else is selling a better policy with benefit benefits at a lower price, i cant continue to sell a lousy policy that doesnt provide benefits and cost more because ill be out of the market so thats whats happening here. Insurance companies are canceling lousy policies with high prices because they cant compete. Thats whats going to happen when you have a private Insurance Market, which is what we have here. We dont have a government controlled system. We have private markets. So i just want to make that point. I have to drill down on what mr. Barton said here. Before reform, the individual Insurance Market was dysfunctional, premiums would shoot up if people got sick, coverage could be canceled if they had a preexisting condition, and they did not have secure quality coverage. Now, i heard my republican colleagues say that Patient Health insurance will be at risk in this application process and this is flat out also. A giant leap forward for protecting Health Insurance by taking it out of the insurance application process and banning discrimination based on preexisting conditions. Mr. Barton again is raising this red herring just like the cancellation of insurance by talking about privacy. Madame secretary, prior to the aca when people applied for insurance coverage, did insurers make them provide an invasive medical history but because the law bans discrimination based on preexisting conditions, they do not need to provide this information in their applications. Please comment on the privacy issue and why its irrelevant. In the past, any individual american who was in an employer based coverage, in government coverage like we enjoy in medicare and medicaid and a variety of plans, thats about 95 of insured americans had no medical underwriting. Had group protections. Had consumer protections. The people who were outside that consumer protected space were individuals buying their own coverage in an individual market. Medical underwriting demanding Health Records and often going through extensive doctor interviews and getting Health Records were a standard for that market. Pricing could very widely dep d depending on gender and Health Condition, people could be denied coverage and were frequently. Thats the market that is currently being reformed with consumer protections. If a person had a policy in place in march of 2010 like that policy and the Insurance Company made no changes to disadvantage the consumer, those policies are in place. You keep the plan and that goes on. For people that had a medically underwritten policy, were paying more than their neighbor because they happened to be female, could not get their Health Condition for a fixed hip written into their Insurance Plan, theyll have a new day in a very competitive market. 25 of the insurers are brand new to the market offering competitive plans. Mr. Chairman, could i just ask that this document put it into the record without objection. Chair would recognize mr. Hall. Thank you, mr. Chairman. Madame secretary, i think congresswoman blackburn asked you about the federal government and how much they spent today and theyre spending some money as we speak, arent they . Its down right now, isnt it . You project ongoing problems . Im sorry, sir. Im having a hard time hearing. She asked you how much it had spent today and im asking what you expect to pay in addition to that on the repairs that the website is going to require and they require them as we speak here. So those are things you projected and you knew they would happen and they will happen. But you looked ahead and you have some estimate of what is going to happen. Yes, sir. And going to cost. For our two major contractors who are ussi, subsidiary of united and for cgi, there are obligated amounts. For cgi who is in charge of the entire application, there has been 197 million obligated and that is to last through march of 2014 and as i said before about 104 million has been expended in that obligated amount. Im going to try to be here in 2014 to make sure your testimony is correct, okay. Im just joking with you. Okay. And were you born in kansas . I was not. I was born in cincinnati, ohio. I married a kansan and went to kansas. I was in the third grade there. I thought i saw you on a tricycle one day. It was an illusion. Let me ask you a question, have you ever rejected a financial bail from one of the contractors . Have you ever . Have i ever rejected a financial bail from one of them . Sir, again, our i guess you can say yes or no. Our Accounting Office does a routine audit and review of every bill before they do it. I do not personally. I want to be very accurate that i dont personally pay contracts, negotiate contracts, by law and by precedent thats really illegal for someone who isnt a warranted contract officer to engage in the debate or discussion around federal contracts. How much has the Administration Spent on the exchanges in total . Not just healthcare. Gov but all of the exchanges . Sir how difficult is that figure to give me or if you cant give it to me, could you send it to me . I would like to get it to you in writing very quickly. Madame secretary i dont know how much time i have left but i would like to talk about a couple businesses in my district who are struggling with how to move forward. One is a manufacturing and one is pet boarding and training business and one has 85 employees and others have 46. This is another example of the government picking winners and losers. Were the losers. There is no way i can be competitive if i have to raise prices to cover 170,000. Do not pay penalty. Raise prices and go out of business. Layoff 35 employees and move more production from this country and heres a quote from the other. Since they are high labor low margin business cannot afford to pay insurance for employees were forced to close our business through bankruptcy because there are heavy financial obligations that continue whether we operate or not or five enough employees to get under 50 employees. Even if we close the location, we cannot escape many expenses such as rental agreements. What am i supposed to tell these people . Well, sir, i think that in the employer market, about 95 of all American American businesses are exempt from any kind of requirement to cover employer employee insurance, and they are outside the law. They continue to be outside the law, but they will have new options for those who want to cover their employees and some new tax credit possibilities. For large employers, about 96 of them already cover their employees, and as you know, the penalty that your constituents refer to is not a penalty that is imposed in 2014. It is being discussed with businesses about what kind of information will be exchanged hes going to use the gavel on me if you dont hush. Gentlemans time is expired. I yield back my time. Gentlemans time is expired. Gentle lady from california . Thank you, mr. Chairman. Welcome, madame secretary. Youre a distinguished woman. You have distinguished yourself and your state, the offices that youve held, and now working for the American People, and i salute you for it. I want to really congratulate my republican pals for being absolutely, 1,000 consistent. You love whats wrong with the website, and you detest whats working in the Affordable Care act. And i think that is on full display here. But lets get back to the website, because thats what the hearing is about. Its my understanding that november 31st is a hard date for having everything up and running. Do you have now hhs did testify in september that they were 100 confident that the site would be launched and fully functional on time on october 1st. Do you have full confidence in this new date . It will take until november for an optimally functioning website. The only way i can restore confidence to get it right is to get it right. So i have confidence, but i know that it isnt fair to ask the American Public to take our word for it. Ive got to fix this problem, and we are under way doing just that. But are you confident that i think i said november 31st, which is i thought which does not exist, but november 30th. You have confidence in november 30th . I do. Is there any penalty to qssi or cgi for not delivering on what they promised . Well, i think the, as you can see, we have a obligated funds for a contract. We certainly have not expended all those funds, and we expect not only the cms team, but our contractor partners, to fulfill their obligations. But if they fail to fulfill their obligations, i dont know whats in the contract, is there a penalty . There isnt a builtin penalty, but i can tell you that paying for work that isnt complete is not something that we will do. Qssi, as you know, has taken on a new role as integrate tor of the hub that they built and have in operation, is working extremely well, not only for the federal exchanges, but all the statebased markets are using the hub, and thats why we had confidence in their ability to actually take this next roll on and coordinate the activities moving forward, which have to be driven with a very clear set of outcomes, very accountable timelines and deadlines, and they will be helping to manage that process. On the issue of security, there was a Security Breach that arose recently that i read about, at any rate. And what i think is very importa