March 19,2015

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Aaron Fobes, Julia Lawless (202) 224-4515

Hatch Statement at Finance Hearing on Obamacare at Five Years

WASHINGTON – Senate Finance Committee Chairman Orrin Hatch (R-Utah) today delivered the following opening statement at a committee hearing examining Obamacare’s broken promises and wasted taxpayer dollars, five years after the law’s enactment:

   Good morning.  Our hearing today will consider what has happened in the five years since March 23, 2010, when the so-called Affordable Care Act was signed into law. 

   In my opinion, this anniversary presents a perfect opportunity to take a look back and evaluate whether the promises that were made to gain support for the law have been kept.  It’s also a good time to look forward and consider the many unanswered questions that we still have about the impact and viability of the ACA.  

   At the time that the Affordable Care Act was enacted, there was great disagreement about whether it would effectively reduce costs or expand coverage.  Five years later, the people of Utah and others that I hear from are in total agreement about one thing with respect to this law:  It just isn’t working.  In fact, it is, by most objective accounts, an unmitigated disaster.

   The President and his allies claim that the law is a success, usually by cherry-picking particular data points and ignoring the larger picture.  Most often, they point to the number of individuals who have signed up for health insurance since the botched rollout of the website, somehow arguing that people opting to buy insurance under the threat of a government penalty is cause for celebration. 

   What they don’t talk about are the still skyrocketing health care costs that are hitting families across this country.  And, they also ignore the widespread frustration and delay caused by this law, which many Americans are finding out about during this tax filling season.

   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 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. 

   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. 

   Unfortunately a significant portion of that money resulted in no benefit whatsoever to the taxpayers.  Specifically, an analysis done by my staff shows that in just five areas, over $5.7 billion went to projects which added NO value to the taxpayers. 

   That is $5.7 billion dollars down the drain.  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. 

   The following five examples are some of the most egregious:

1. Failed State Exchanges:  According to the Congressional Research Service, $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):  The Centers for Medicare and Medicaid Services has loaned $2.4 billion to 24 co-ops, one of which failed before it enrolled anyone.  Taxpayers are set to lose nearly half of this money from default or artificially low interest rates.  CMS has no plans to recoup any of the funds, meaning a total cost to taxpayers of around $1 billion.  

3. Website:  The Obama Administration’s website became a pre-existing condition for many Americans who were forced to purchase insurance on the broken site or face a fine.  Despite fixes to, 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.  However, only a handful of the total applications received were paper applications, leaving Serco employees with little to do.  The waste was so apparent that a whistleblower who worked at the company 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.  The purpose of the Navigators is to provide individuals with information about health insurance, including signing up for the Health Insurance Marketplace.  The Kaiser Family Foundation estimates 2015 marketplace enrollment at approximately 11 million individuals.  The overall value of the Navigator program is, at best, inconclusive, and, at worst, it represents more wasted taxpayer dollars

   These five examples are just a handful of the countless misguided, poorly defined, and poorly implemented aspects of the Affordable Care Act.  We mark the five-year anniversary of its passage today, but it’s certainly no cause for celebration. 

   I want to thank our witnesses for appearing today to help discuss the impacts of this law, and I look forward to what I am sure will be a spirited discussion.