March 23,2015

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Hatch on Obamacare’s Fifth Anniversary: It’s Time for a Change

In a speech on the Senate floor, Utah Senator Says, “The President’s health law is a failure on its own terms. The law is named the AFFORDABLE Care Act - the promise to reduce the cost of health care is right there in the name. And, by any measure, the law has failed to live up to this promise.”

WASHINGTON – In a speech today reflecting on Obamacare’s fifth anniversary, Finance Committee Chairman Orrin Hatch (R-Utah) detailed the law’s numerous failures – including its inability to address costs – and called on lawmakers to chart a path forward to repeal and replace the law with patient-centered reforms.

   “The five-year anniversary of the Affordable Care Act is hardly cause for celebration.  But, it should be time for all of us – particularly those who supported the law at the outset – to reflect on the last five years and decide how we want to move forward when it comes to our nation’s health care system,” said Hatch.

The complete speech, as prepared for delivery, is below:

   Mr. President, today marks the fifth anniversary of the signing of the so-called Affordable Care Act.  Of course, few people are actually celebrating. 

   Five years.

   That’s a long time. 

   More than long enough for us to evaluate the impact of the law to determine if it is working.  And, on that question, I think the answer is clear:  The President’s health law is NOT working.  Not even close.

   Most Americans recognize this, Mr. President.  They’ve seen how the law has failed to deliver on the many promises that were made at the time it was passed.  And, they want a change.  I’ll have more to say on the change in just a few minutes.  For now, I’d like to take some time to talk about the lessons we’ve learned over the last five years.   

If you think back to 2009 and early 2010 when Obamacare was being debated in Congress, you’ll remember a number of promises that the law would actually reduce the cost of health care in this country. 

   Those were big promises, Mr. President.  After all, costs represent the biggest barrier to health care in the U.S. and are, by almost all accounts, the top concern for health care consumers.  You simply cannot adequately reform health care without reducing costs. 

   And, on that count alone, Obamacare is a miserable failure.

   For example, under the law, we’ve seen premium spikes.  Studies have shown that the health law increased costs in the individual insurance market by as much as 50 percent in 2014 alone.  And, this year, we’ve already seen a four percent increase for benchmark plans in the health insurance exchanges.  Moreover, a recent report by Avalere Health found premiums in the most popular exchange plans increased by an average of 10 percent in 2015.

   In addition to these spikes, which some might try to write off as isolated, premiums have increased faster overall under Obamacare.  According to a recent report by the National Bureau of Economic Research, 2014 premiums in the non-group health insurance market grew by 24.4 percent on average compared to what they would have been had the law never been passed.

   Looking to the future, costs are projected to continue going up.  According to the Congressional Budget Office, premiums will increase by about six percent per year over the next ten years. This increase can be attributed to a number of factors, including high demand for expensive medical care, higher provider rates as enrollment increases, uncertainty created by haphazard regulatory changes under Obamacare, and the failure of the plans to attract enough young and healthy consumers. 

   Of course, none of these increased costs are surprising, Mr. President.  Despite the promises made by the President and his allies in Congress that Obamacare would actually reduce costs, numerous studies and projections indicated that costs would be on the rise after the law was implemented.  Indeed, those of us who opposed the law have been noting this almost non-stop for the last five years.

   As you can see, the President’s health law is a failure on its own terms.  The law is named the AFFORDABLE Care Act – the promise to reduce the cost of health care is right there in the name.  And, by any measure, the law has failed to live up to this promise. 

   Of course, the failure to bring down costs isn’t the only problem we’ve seen with regard to Obamacare.  Another major problem is the lack of security and failed oversight of the online marketplace, which has put consumers’ personal information at risk of fraud or theft. 

   It started with a lack of preparation.

   Two government watchdogs – the GAO and the HHS Office of Inspector General – found that was given a greenlight to launch even though it was not adequately secure. 

   It continued with weak security. 

   Shortly after the launch of the exchanges, GAO found security problems in state computer systems that link to the federal network and warned “increased and unnecessary risks remain of unauthorized access, disclosure, or modification of the information collected and maintained by” 

   CMS did take action to lower those risks.  But, even with those changes in place, the HHS OIG remained concerned about security issues, including the use of encryption technology that didn’t meet government standards. 

   I was one of the first members of Congress to note these security problems.  And, I introduced legislation to address some of them.  Sadly, with the Democrats in charge of the Senate, the legislation didn’t go anywhere.  And the results were predictable. 

   In late 2013 and early 2014, cybersecurity experts warned that the website was vulnerable to hacking.  And, sure enough, in July of last year, the site was hacked, resulting in the upload of malicious code. 

   These security problems are a prime example of how careless and haphazard the Obama Administration has been as it has tried to implement the Affordable Care Act.  Sadly, there are even more examples – many of which directly impact the lives and livelihoods of the American people.

   As this tax season has commenced, we’ve seen how the health law – and the administration’s poor management of it – has resulted in frustration and delay for hardworking taxpayers.

   Let’s talk about that frustration.

   According to H&R Block, in the first six weeks of this tax filing season, 52 percent of customers who enrolled in insurance through the state or federal exchanges had to repay a portion of the Advance Premium Tax Credit that they received under Obamacare.  That same report found that individuals, on average, are having to repay about $530, which is decreasing their tax refunds by an average of roughly 17 percent. 

   Now, let’s talk about delay. 

   On February 20, 2015, the Obama Administration announced that, due to an error in the health law, they sent out about 800,000 incorrect tax statements relating to Form 1095-A, meaning that hundreds of thousands of Americans may be seeing delays in their tax refunds this year.  

   These are just some of the problems hardworking taxpayers are facing as they try to deal with Obamacare during this tax season. 

   And, while the ramifications to taxpayers are significant, the overall impact on America’s budget is even greater.  The total overall cost of Obamacare so far has numbered in the tens of billions, and we’re barely through the first phases of implementation. 

   In numerous areas, taxpayers have been left on the hook for funds that were doled out for Obamacare to states, corporations, and contractors with little to no accountability.  Unfortunately a significant portion of that money resulted in no benefit whatsoever to the taxpayers. 

   Last week, the Finance Committee held a hearing on the anniversary of Obamacare where I noted five specific misuses of taxpayer funds that have resulted from Obamacare.  In just these five areas, roughly $5.7 billion went to projects that added NO value. 

   Those examples of wasteful spending bear repeating here today:

1. Failed State Exchanges:  According to CRS, $1.3 billion in taxpayer funds have been spent on state exchanges that failed and were never operational.  

2. Consumer Oriented & Operated Plans (Co-ops):  CMS has loaned $2.4 billion to 24 co-ops, one of which failed before it enrolled anyone.  When all is said and done, nearly half of this money will be lost due to defaults or artificially low interest rates and CMS has no plans to recoup any of the funds, meaning a total cost to taxpayers of around $1 billion.  

3. Website:  The failures of the federal insurance marketplace are well documented.  Despite fixes that eventually came to the website, the total cost of the failed enrollment system surpassed $2 billion.  

4. Serco: This contractor was awarded $1.2 billion to manage paper applications during the first enrollment period of the health care law.  Of course, very few of the applications received were on paper and Serco employers had little to do.  One former employee of the company felt ashamed after leaving the company and reached out to the St. Louis Post-Dispatch, saying: “I feel guilty for working there as long as I did. It was like I was stealing money from people.” 

5. Marketplace Navigators:  The administration has spent over $120 million on the Navigator program for the 2014 and 2015 open enrollment periods.  With enrollment in the exchanges surpassing 11 million individuals, the efficacy of the Navigator program has yet to be determined. The overall value of the Navigator program is, at best, inconclusive, and, at worst, it represents more wasted taxpayer dollars. 

   These are just five examples of the misguided, poorly defined, and improperly managed aspects of the health care law.  There are, of course, many others. 

Finally, Mr. President, there are the unilateral changes the administration has made to delay, extend, or modify elements of the Affordable Care Act without action or even input from Congress.  I’ve been on the floor a number of times to talk about the overreach on the part of the administration when it comes to implementing Obamacare, so I won’t go into excruciating detail today. 

   We all know those abuses have taken place.  It’s no secret. 

   Without statutory authority, the administration twice delayed the employer mandate.  They created a transition period out of thin air so that the President could pretend that his promise that “if you like your health care plan, you can keep it” was not a lie.  And, there have been numerous other exemptions and special enrollment periods created to help the administration avoid negative fallout from patients and the business community. 

   All told, the Obama Administration has made literally dozens of unilateral changes to the health care law, apparently recognizing that, as drafted, the law is as problematic as its critics have said. 

   Mr. President, I could go on.  But, I think I’ve sufficiently made my point.

   The so-called Affordable Care Act is, by any objective measure, a dismal failure.  While its proponents continue to cherry-pick favorable data points in order to fool the American people into thinking the law works, the majority of us know the truth: It’s time for a change. 

   It’s no secret that I support a complete repeal of the President’s health law.  But, a simple repeal isn’t good enough.  We need to replace Obamacare with health reforms that will actually work.

   That’s why I’ve joined my colleagues, Senator Burr and Chairman Upton of the House Energy and Commerce Committee in unveiling the Patient CARE Act, a legislative proposal that will actually reduce the costs of health care in this country. 

   Our proposal is a serious, workable solution to the problems caused by the Affordable Care Act.  And, it’s out there for everyone to see.  I want to once again encourage all of my colleagues to look it over and provide us with your thoughts and input on our ideas. 

   Once again, Mr. President, the five-year anniversary of the Affordable Care Act is hardly cause for celebration.  But, it should be time for all of us – particularly those who supported the law at the outset – to reflect on the last five years and decide how we want to move forward when it comes to our nation’s health care system. 

   I think I’ve made a pretty compelling case for why the current law isn’t working and why we need to go in a different direction.  I hope that, eventually, my colleagues on the other side of the aisle will reach this same conclusion.

   I yield the floor.