Jessica M. Karmasek Sep. 19, 2013, 4:00pm

WASHINGTON (Legal Newsline) -- South Carolina Attorney General Alan Wilson testified on Capitol Hill Wednesday about his concerns, and those of a dozen other state attorneys general, regarding the Patient Protection and Affordable Care Act's new health insurance exchanges.

Wilson testified at a joint hearing of the House Committee on Oversight and Government Reform Subcommittee on Energy Policy, Health Care and Entitlements, and the Subcommittee on Economic Growth, Job Creation and Regulatory Affairs.

The attorney general was one of 13 attorneys general who sent a letter to U.S. Department of Health and Human Services Secretary Kathleen Sebelius last month.

The attorneys general -- including those from Alabama, Florida, Georgia, Kansas, Louisiana, Michigan, Montana, Nebraska, North Dakota, Oklahoma, Texas and West Virginia -- told Sebelius they are concerned about consumers' private information being protected under new health insurance exchanges, set to go into effect next month.

In their eight-page letter, the attorneys general raised eight areas of concern and asked Sebelius a series of specific questions about steps the agency will take to ensure citizens are protected.

The attorneys general called the current privacy protections -- written into DHHS' rules governing programs that assist consumers with enrolling in the new exchanges created as part of the federal health care law -- "woefully inadequate."

They argue people collecting information will be placed in positions of trust and will have access to a wide variety of personal information from consumers.

"Our letter outlined 21 simple, time-sensitive questions related to consumer protection and fraud prevention concerns associated with HHS Navigators and the implementation of the Affordable Care Act," Wilson told lawmakers this week.

"My testimony today has nothing to do with the merits of the Affordable Care Act. It has everything to do with the first obligation of government, the security and safety of its citizens, and sharing with Congress the need to indefinitely suspend implementation of the Affordable Care Act until security risks are mitigated; privacy protections are provided; and legally mandated deadlines are properly met."

Wilson said in order for the new law to adequately determine the eligibility of consumers for exchange subsidies, it must create a data hub that connects databases from seven different agencies, including Medicare, Medicaid, the IRS, Homeland Security, the DHHS, the Veterans Administration and the Social Security Administration.

"Last week, the Centers for Medicare and Medicaid Services confirmed the ACA's data 'hub' complies with federal standards. However, the hub has not been beta-tested, independently verified or properly audited by the Inspector General," the attorney general told lawmakers. "More troubling is the fact senior DHHS technology officials lowered previous standards earlier this year by saying, 'Let's just make sure it's not a third-world experience.'

"When it goes live on Oct. 1, it may not be a third-world experience, but it will be a con-man's all-you-can-eat buffet overflowing with a gold mine of sensitive information from the agency databases I just mentioned."

Wilson contends the information in the hub should be "guarded as if it were gold in Fort Knox."

"The hub should be required to exceed minimally adequate protocols, which have allowed the records of more than 20 million veterans to be compromised during at least eight hacks of the VA's unencrypted computer system between 2010 and 2013," he said.

The attorney general said last month's letter was prompted by the fact that DHHS is not requiring groups receiving nearly $67 million in grants to properly screen, train or conduct background checks on those individuals who will be entering sensitive information into the hub.

"The only requirement for navigators is that they complete 20 hours of online training, less than most states require for a driver's license," he said.

"The first obligation of government is maintaining the safety and security of its citizens. Ironically, the implementation of a federal program, designed to provide health care to all Americans, puts us all at severe risk because it is riddled with scams and security breaches. Americans should not have to barter their privacy and financial security for health insurance."

Wilson continued, "Thus far, the Administration's implementation of the Affordable Care Act undermines a fundamental responsibility of the federal government -- the security of its citizens. Until HHS answers our questions and rectifies this matter by properly safeguarding Americans' personal information, Congress must suspend implementation of the ACA."

The 13 attorneys general sent a Freedom of Information Act request to DHHS Aug. 21, seeking information related to the concerns raised in their letter, sent Aug. 14.

Their original letter requested a response from DHHS by Aug. 28.

West Virginia Attorney General Patrick Morrisey said earlier this month the attorneys general are disappointed with the federal agency's lack of response.

From Legal Newsline: Reach Jessica Karmasek by email at

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