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Harkin Describes Real World Benefits of Affordable Care Act Days Before Second Anniversary of Law

WASHINGTON—Today, Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor and Pensions Committee, spoke on the floor of the Senate to commemorate the second anniversary of the signing of the Affordable Care Act, the health reform law that he helped to craft.  Harkin cited the real world impact of the law for individuals like Emily Schlichting, a University of Nebraska student who suffers from a rare auto-immune condition, and Ross Daniels and Amy Ward of West Des Moines, who would have reached their  lifetime caps had it not been for the law.

Below are his full remarks as prepared for delivery:

“Two years ago, President Obama signed into law what I believe will be remembered as the most forward-thinking and humane reform of our health care system since Medicare.  When the Affordable Care Act became law, I said: We have made America a more compassionate, and more just society.  I believe this with even greater conviction now.

“Over the last two years, States, in partnership with the Department of Health and Human Services, have moved ahead decisively to implement the law.  The results have been striking.  Through the Patient’s Bill of Rights, every American is now protected against the infamous and abusive insurance company practices of the past, making their existing coverage stronger and broader.  Put another way, because of health reform, Americans now have protections that every Senator in this chamber has enjoyed for years.

“These protections are tremendously important to the physical and financial health of American families.  Emily Schlichting, a University of Nebraska student, suffers from a rare auto-immune condition. Listen to what she said at a Health, Education, Labor and Pensions Committee hearing last year: 

‘I believe that allowing young people to stay on their parent's insurance gives us new freedom to work toward our goals without going uncovered. But even more important than that is the fact that the Patient’s Bill of Rights makes it so that I can’t be denied insurance simply because I have a disease I can’t control.  Young people are the future of this country and we are the most affected by reform – we’re the generation that is most uninsured.  We need the Affordable Care Act because it is literally an investment in the future of this country.’

“So far, the law has extended coverage to more than two and a half million young people like Emily, who can now get coverage on their parents’ policy as they begin to enter the working world.

“Emily is one of millions of Americans with disabilities and chronic health conditions who will benefit from other provisions in the law as well—provisions banning pre-existing condition exclusions and ending lifetime limits on health insurance benefits.  The law banned lifetime limits on health insurance benefits for more than 100 million Americans, ending the days when an insurer could cancel your coverage just when you needed it most – when you got sick.

“This can sound like insurance jargon until you consider the real world impact for folks like Ross Daniels and Amy Ward, from West Des Moines, Iowa.  After developing a rare lung infection on a summer trip, Amy needed intensive treatment, including a course of medication at $1,600 a dose.  Her insurance policy had a million dollar lifetime limit – without health reform’s ban on these limits, the couple would have had to declare bankruptcy. 

“After this experience, Ross can’t understand why opponents of the law want to repeal it – he says “it is hard for us to believe that so many of the GOP candidates would have us go back to a time where an illness like this would have forced us, or any other family for that matter, into bankruptcy.”

“The Affordable Care Act also created a new option for States, the Community First Choice Option, that will give States an enhanced federal match when they allow people with disabilities participating in the Medicaid program to receive the long-term services and supports they need at home and in the community.  This is an important step toward ending the pernicious institutional bias in the Medicaid program, which leaves too many Americans with disabilities trapped in nursing homes and other institutions because of a lack of alternatives in the community.

“The Affordable Care Act puts an end to one of the most egregious of insurance company abuses – cancelling insurance coverage right when you need it, based on a technical paperwork error.  Gone are the days when a California insurer, using computer programs and a dedicated department, would cancel policies of pregnant women and the chronically ill, only because they submitted expensive claims.

“Two years ago, I fought to include a whole range of provisions in the Affordable Care Act with the aim of transforming America’s sick care system into a genuine health care system, one that emphasizes wellness, prevention, and public health – keeping people out of the hospital in the first place.

“Every insurance plan is now required to cover evidence-based preventive services that will “head off” many illnesses, caring for them in the nurses’ office rather than the emergency room.  The costs of preventable disease consume 75% of health care spending annually, dollars that could be used to build roads, schools and create jobs.  Chronic disease is also a prime culprit in the relentless rise in health insurance premiums, and it contributes to the overall poor health that places our nation’s economic security and competiveness in jeopardy.  Thanks to health reform, more than 80 million people in both Medicare and the private insurance market can now get vital preventive health services – like mammograms, colonoscopies and cardiovascular screenings – for free. 

“I fought especially hard to include the Prevention and Public Health Fund to invest in community prevention.  All across America, this fund is investing in proven, locally developed programs that promote health and wellness – for instance, by improving access to fresh fruits and vegetables, increasing physical activity, and decreasing tobacco use. Earlier this month, the Trust for America’s Health released a remarkable study showing that a five percent reduction in the obesity rate could yield more than $600 billion in savings on health care costs over a 20-year period.  This study is the latest confirmation of what common sense tells us: prevention is the best medicine, for bodies and budgets alike. 

“And at the heart of health reform is a long overdue promise to all Americans: If you work hard, play by the rules, and pay your fair share, you will never go to sleep worried that you can’t afford to see a doctor or pay your family’s medical bills. 

“The Affordable Care Act will – for the first time – give 94% of Americans access to affordable health coverage that can never be taken away.  It will put an end to the tragic, relentless increase in the uninsured. 

“No longer will insurers be able to turn away those who need coverage the most – those with a preexisting condition.  It is a sobering fact that nearly half of non-elderly Americans have some type of preexisting condition, such as high blood pressure, arthritis or heart disease.  Right now, health reform prohibits insurers from denying coverage to kids based on a preexisting condition, and, in 2014 when the new insurance exchanges are up and running, adults will have the same protection.

“Insurance exchanges will give citizens of every State access to affordable, comprehensive coverage through a transparent, understandable marketplace. Modeled on successful prior State efforts, the exchange is a “one-stop shop” for health coverage.

Individuals within certain income limits and small businesses will receive tax credits to make premiums affordable, and people eligible for Medicaid will be enrolled automatically.  Small businesses, whose premiums have increased 85% on average just in the last decade, will be able to give their employees unprecedented choice among plans. 

“According to the nonpartisan Congressional Budget Office, small business coverage purchased through an exchange will – and I quote – ‘have lower administrative costs, on average, than the policies those firms would buy under current law, particularly for very small firms.’

“For the majority of Americans with health insurance and small employers who offer it, the biggest concern for decades has been cost.  Premiums for family coverage have more than doubled over the last decade.  The law addresses this challenge head on. 

“The Medical Loss Ratio requirement fights premium hikes by requiring all insurance plans to spend at least 80 percent of premium on medical care or health care quality improvement – or refund consumers the difference.  More than 74 million Americans are protected by this provision, and up to 9 million could be eligible for rebates this year worth up to $1.4 billion.  Average rebates per person could total $164 in the individual market.

“Through the law’s rate review program, States are getting new resources to review premiums and deny unreasonable hikes.  And, for the first time, insurers nationwide must publicly justify any rate increase of more than ten percent. 

“Regulators have been using these powerful new tools to push back on insurance companies – in Connecticut, for example, the state stopped Anthem Blue Cross Blue Shield, the state’s largest insurer, from hiking rates by a proposed 12.9 percent, instead limiting it to a 3.9 percent increase.  And in Oregon, regulators cut almost in half a proposed 22% increase by Regence.

“In addition to slowing premium growth, the Act takes bold steps to control the underlying costs of medical care.  Paul Krugman – the Nobel Prize-winning columnist – posed the question:  What would real action to bring down health care costs look like?  He said, real action “would include things like giving an independent commission the power to ensure that Medicare only pays for procedures with real medical value; rewarding health care providers for delivering quality rather than simply paying a fixed sum for every procedure; limiting the tax deductibility of private insurance plans” – and, I would add, emphasizing wellness, disease prevention, and public health. And then Krugman asks:  What do all of these things have in common?  They are all in the new health reform law.

“Let me talk about a few of the ways that the Act brings down the cost of care.  It creates payment incentives to encourage care coordination and quality, reduces or eliminates incentives that encourage inefficient, low quality treatments.  A broad array of economists agree that excessive, wasteful spending in our health care system approaches $700 to $800 billion a year, more than %5 of GDP – that’s a lot of room for improvement.  We took that opportunity to transform the chaotic health care marketplace into a true system that serves patients and is fiscally sustainable.

“Many experts have argued that higher quality care does not have to be higher cost care. I couldn’t agree more.  For example, study after study shows Iowa provides both a very high quality of care compared to the average and spends among the least per capita.  Indeed, path breaking work by researchers at Dartmouth has shown unmistakably that high health care spending is associated with worse health outcomes.

“The law builds on this insight by rewarding groups of providers that meet quality targets and reduce costs.  Many of our highest-performing health systems – like the Mayo Clinic or Geisinger Health System – have achieved extraordinary results with similar models.  CBO estimates that by incentivizing more hospitals to deliver the kind of high-quality care that the Mayo now delivers, we will save $5 billion.

“The law takes other important steps to pay for quality not quantity. 

“The Innovation Center, created by health reform, is hard at work on a pilot program to bundle payments to hospitals, doctors, and post-acute care.  Instead of paying a fee for each service to each provider, Medicare will pay a lump sum to a group, which will encourage care coordination and remove the incentive to generate needless, expensive services and tests. 

The law also takes steps to reward those who are providing the best care.  The Medicare “value-based purchasing” program – which will start this fall – will pay hospitals, and in future years, physicians, based on their performance on quality. 

“The Act also helps physicians provide the best care possible by investing in new research that compares medical treatments so that doctors and patients will have the best information when deciding which treatments will work for them.

“While we certainly should reward the best care, we also should refuse to continue paying for bad care. That’s why the law reduces payments to hospitals with high rates of hospital-acquired infections.  These infections are among the top 10 leading causes of death, and they drive up the cost of health care by $33 billion per year.  Starting this year, Medicare will reduce unnecessary hospital readmissions by providing payment incentives that encourage practices that avoid complications that lead to preventable readmissions.

“By controlling federal health care costs and transforming how we deliver care, the Affordable Care Act reduces the deficit by more than $120 billion in the first decade, and by more than $1 trillion in the decade after that.  It’s always an Alice In Wonderland moment for me when our Republican colleagues talk gravely about the debt and the deficit – but turn right around and vote to repeal the best deficit reduction measures we’ve seen in decades!

“Speaking of political theater, next week, the United States Supreme Court will hear arguments in a lawsuit challenging the constitutionality of the law.  I’ll have more to say about these misguided legal attacks in the coming days, but let me just say that this is clearly politics through other means.  What reform’s opponents could not accomplish in Congress – taking health security away from millions and putting insurance companies back in control -- they now seek to do through the Courts.  The leaders of this effort are working from a time-honored script:  every progressive reform in this history has been subjected to well-funded, and futile, legal attacks.  Opponents of the Voting Rights, Civil Rights, and Social Security Acts sought to undermine the work of the people’s representatives through precisely such a strategy.  They failed then – and they will fail now.

“In closing, I speak today to celebrate the remarkable progress that we achieved in just two short years – and I look forward with hope and optimism to the future.  When federal and state governments, health care providers, insurers, and other partners work together to serve patients, we can make the promise of health reform an enduring reality for millions.”